To,
The Members of Shriram City Union Finance Limited Dear Members,
The Board of Directors ("Board") is pleased to present this
Report with the audited standalone as well as consolidated financial statements of the
Company for the financial year ended March 31, 2022 ("2021-22"). The
consolidated financial statements presented pursuant to section 129 (3) of the Companies
Act 2013 ("Act") and Regulation 34 of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 ("LODR"). The report on corporate
governance, management discussion and analysis and other annexures referred to form a part
of this Report.
1. RESULTS OF OPERATION
The summary of standalone and consolidated financial performance of the
Company for 2021-22 is as under. The details of financials are provided in the annual
financial statements.
'Rs in Lakhs
Particulars |
Standalone |
Consolidated |
|
Year Ended March 31, 2021 |
Year Ended March 31, 2021 |
Total Income |
6,53,039.23 |
5,73,843.47 |
7,07,749.10 |
6,16,188.06 |
Finance Charges |
2,53,252.52 |
2,13,388.43 |
2,81,312.56 |
2,34,105.03 |
Depreciation |
7,835.49 |
7,984.14 |
8,622.51 |
8,712.46 |
Total Other Expenses |
2,45,826.85 |
2,13,532.15 |
2,60,954.20 |
2,25,569.39 |
Profit before tax ("PBT") |
1,46,124.37 |
1,38,938.75 |
1,56,859.83 |
1,47,801.18 |
Total Tax expenses |
37,504.87 |
37,844.33 |
40,385.16 |
40,029.64 |
Profit after Taxation ("PAT") |
1,08,619.50 |
1,01,094.42 |
1,16,474.67 |
1,07,771.54 |
Paid up equity share capital (Face value of Rs 10/- per
share) |
6,662.80 |
6,600.50 |
6,662.80 |
6,600.50 |
Earning per equity share (Face value of Rs 10/- each) |
|
|
|
|
(i) Basic |
164.16 |
153.16 |
174.07 |
161.13 |
(ii) Diluted |
163.17 |
152.81 |
173.02 |
160.76 |
Appropriations/Transfers: |
|
|
|
|
Profit / Retained Earnings balance available for
appropriation |
4,66,285.25 |
4,01,606.68 |
4,86,288.03 |
4,16,019.16 |
General reserve |
(10,880.00) |
(10,250.00) |
(10,880.00) |
(10,250.00) |
Statutory reserve |
(21,760.00) |
(20,490.00) |
(23,132.01) |
(21,458.72) |
The above mentioned appropriations/transfers to different reserves in
2021-22 were proposed and approved by the Board at the meeting held on April 29, 2022 in
compliance with the requirements of regulations of Reserve Bank of India ("RBI")
and the Act. The Company being an NBFC registered with the RBI, is exempted from providing
details for loans made, guarantee given or security provided in ordinary course of
business as required under Section 186 of the Act. Thus, such details are not mentioned
here. Loans, guarantees and investments form a part of the Annual Financial Statements
provided in this Annual Report.
2. DIVIDEND
The Company follows its Dividend Distribution Policy enclosed as
Annexure - 13 and displayed on the website of the Company (refer Table 1) for
recommendation, declaration and payment of dividend. . The Board at its meeting held on
April 29, 2022 had not considered recommendation of final dividend. The table below shows
the details of dividend for 2020-21 and 2021-22.
Dividend on equity shares of Rs 10 each |
No of Shares |
Per share (?) |
Dividend Payout Ratio |
Dividend Pay out (Rs in crores) |
Date of payment |
Interim (2021-22) |
6,61,58,139 |
10.00 |
|
66.15 |
November 24, 2021 |
2nd Interim (2021-22) |
6,66,01,785 |
27.00 |
|
179.82 |
March 25, 2022 |
Total |
|
37.00 |
22.65% |
|
|
Interim (2020-21) |
6,60,04,322 |
10.00 |
|
66.00 |
November 27, 2020 |
2nd Interim (2020-21) |
6,60,05,022 |
10.00 |
|
66.00 |
April 19, 2021 |
Final (2020-21) |
6,60,05,022 |
13.00 |
|
85.80 |
August 21,2021 |
Total |
|
33.00 |
21.55% |
|
|
Dividend payout is subject to applicable deduction of tax at source. No
of shares indicate the numbers of shares existed on respective record date for payment of
dividend. There were no delay in payment of dividend/interim dividend during 202122. The
interim dividends declared shall be the dividend for the year.
3. CONTRACT OR ARRANGEMENT WITH RELATED PARTY AND ANNUAL RETURN
The Company has formulated an approved policy on Related Party
Transactions ("RPT"), which is displayed on the web site of the Company (refer
Table-1) which complies with regulations of RBI, the Act and LODR. There were RPTs during
2021-22. All the transactions during 2021-22 with related parties referred to in Section
188 of the Act, were on arm's length basis in ordinary course of business with
requisite approval of the Audit and Risk Management Committee ("ARMC"). The
details of RPTs as required under Regulation 34(3) and 53(f) of the LODR appear in note no
42 of the notes to financial statements. During 2021-22, the ARMC, approved the RPTs
requiring it's approval. The details of RPTs were filed with both BSE Limited
("BSE") and National Stock Exchange of India Limited ("NSE") on half
yearly basis during 2021-22. There were no material RPTs during 2021-22 with promoters,
directors, key managerial personnel or other designated persons in potential conflict with
the interest of the Company at large and these information were filed with both BSE and
NSE on quarterly basis on or before respective due dates during 2021-22. The details of
Annual Return in prescribed form MGT - 7 as required under Section 92 (3) and 134 (3) of
the Act is displayed on the web site of the Company (refer Table -1)
4. STATE OF AFFAIRS
The Company lends money to its customers through its different product
offerings and accepts/renews deposits being a deposit taking Non-Banking Finance Company
("NBFC") registered with the RBI. The Company has multiple product offering i.e.
Enterprise Finance/MSME Finance, Two wheeler loans, Loan against Gold, Auto Finance,
Personal loans. The Company continued acceptance and renewal of deposits from public and
lending to its customers as mentioned above with no change in business during 2021-22. The
business of the Company includes sourcing borrowers, understanding their loan requirement,
providing them appropriate finance, documentation of loans and receipt/recovery of loan
dues from borrowers. The Company is present all over India through its business outlets
concentrated in semi-urban and rural areas. Our customer centric approach continues to
bring us more number of customers resulting in higher business. 19.23 Lakhs number of
customers were added during 2021-22. Total number of customers and total number of
branches/ business outlets were 45.55 Lakhs and 986 respectively as on March 31,2022.
Total disbursements of loans under different products were Rs
26,14,032.32 Lakhs during 2021-22 (2020-21 : Rs 17,15,392.97 Lakhs). Income from
operations in 2021-22 grew up by 13.89% to Rs 6,52,675.60 Lakhs (2020 -21 : Rs 5,73,069.65
Lakhs) and profit before tax was Rs 1,46,124.37 Lakhs 2021-22 (2020 -21 : Rs 1,38,938.75
Lakhs). As at March 31, 2022 the total assets under management stood at Rs 33,18,576.13
Lakhs (March 31,2021: Rs 29,57,086.39 Lakhs).
During 2021-22, the total consolidated disbursements of loans under
different products were Rs 28,87,900.36 Lakhs (2020-21 : Rs 19,34,885.56 Lakhs).
Consolidated Income from operations in 2021-22 grew by 14.99% to Rs 7,07,297.38 Lakhs
(2020 -21 : Rs 6,15,097.69 Lakhs) and profit before tax was Rs 1,56,859.83 Lakhs in
2021-22 (2020 -21 : Rs 1,47,801.18 Lakhs). As at March 31, 2022 the consolidated assets
under management was at Rs 38,54,077.38 Lakhs (March 31, 2021 : Rs 33,50,031.08 Lakhs).
For lending and for other purposes ,the Company needs financial
resources ,which are met by borrowing money from banks/institutions, individuals and
others through public issue/private placement of non-convertible debentures
("NCDs"), acceptance/renewal of fixed deposits, issue of commercial papers, cash
credit/working capital loans and other loans. The summary of borrowings by the Company is
as under.
Rs in Lakhs
Year ended March 31, |
Deposits |
Privately placed NCDs |
Public issue of NCDs |
Term loans |
Others |
Total |
2022 |
6,82,838.64 |
6,12,611.69 |
38,902.41 |
12,60,240.96 |
4,68,587.86 |
30,63,181.56 |
2021 |
5,52,888.78 |
3,39,438.79 |
86,924.21 |
10,26,457.11 |
5,50,822.03 |
25,56,530.92 |
Balance outstanding on cash credit as on March 31,2022 was Rs 22,992.47
Lakhs (March 31, 2021 : Rs 35,847.57 Lakhs), Working capital demand loans as on March 31,
2022 was Rs 2,35,581.76 Lakhs (March 31, 2021 : Rs 1,76,515.34 Lakhs) and Securitisation
linked Term Loan as on March 31, 2022 was Rs 2,10,013.63 Lakhs (March 31,2021 : Rs
3,38,459.12 Lakhs)
The Company serviced all its financial obligations including
payment/repayments/redemption of different loans /financial instruments (principal and
interest) on their respective due dates during 2021-22. The deposits and debentures
issued/allotted in non-dematerialised form were redeemed on submission of the claim with
documents. 3,893 number of deposits amounting to Rs 6,616.72 Lakhs were outstanding to be
claimed or renewed on maturity as at March 31,2022. Subsequent follow-up by the Company
for repayments/renewals brought it to 2,228 number of deposits amounting to Rs 3,232.60
Lakhs on the date of this report. There were no deposits which had matured and claimed,
but were not paid by the Company. The Company takes steps to arrange for repayment/renewal
of these unclaimed deposits.
The Company is required to be rated by any of the rating agencies in
India for its different kinds of borrowings. Such ratings were undertaken and the ratings
obtained are mentioned in notes to financial statements.
There are no significant and material orders passed by the regulators
or courts or tribunals impacting going concern status and Company's operation in
future. For other orders, please refer to the notes to accounts on contingent liabilities
and report of the auditors. There were no material changes and commitments, affecting the
financial position of the Company which occurred between March 31, 2022 being the end of
the financial year of the Company and the date of this report The impact of pandemic has
been dealt with in the Management Discussion and Analysis annexed to this report as
Annexure - 3.
Frauds amounting to Rs 0.7 Lakhs detected during 202122 are reported in
notes to financial statements and the same were reported to RBI as required. The status of
frauds detected are reported in notes to financial statements. The ARMC and the Board had
discussed about the status of the frauds committed and existing. The Company has
formulated whistle blower and vigil mechanism policy for, in addition to other matters,
bringing frauds to light by the whistle blowers.
The Company, in the capacity of Financial Creditor, has not filed any
applications with National Company Law Tribunal under the Insolvency and Bankruptcy Code,
2016 during the financial year 2021-22 for recovery of outstanding loans against any
customer being Corporate Debtor. Thus, the difference between amount of the valuation done
at the time of one time settlement and the valuation done while taking loan from the Banks
or Financial Institutions along with the reasons thereof is not applicable.
5. SCHEME OF AMALGAMATION
The Board and the required Committees of the Board approved in their
respective meetings held on December 13, 2021, the Composite Scheme of Amalgamation and
Arrangement under Sections 230 to 232, read with Regulation 52 and other applicable
provisions of the Act for : (i) the amalgamation of Shrilekha Business Consultancy Private
Limited ("SBCPL") with Shriram Capital Limited ("SCL"); (ii) the
demerger of that undertaking from SCL, which is carrying on the business of Financial
Services, and the transfer and vesting thereof into Shriram Investment Holdings Limited
("SIHL"); (iii) the demerger of those undertakings from SCL, which are carrying
on the businesses of a) Life Insurance and b) General Insurance, and the transfer and
vesting of the same into a) Shriram LI Holdings Private Limited ("SLIH"), and b)
Shriram GI Holdings Private Limited ("SGIH") respectively; (iv) the amalgamation
of SCL (with its remaining undertaking and investments) with Shriram Transport Finance
Company Limited ("STFC"); and (v) the amalgamation of Shriram City Union Finance
Limited ("SCUF") with STFC (referred to as "Scheme" ). The application
for approval of Scheme was made to both BSE and NSE and the No Objection letter to the
Scheme was received from BSE and NSE on March 15, 2022 and March 16, 2022 respectively.
The Company filed application with Honourable National Company Law Tribunal, Chennai Bench
("NCLT") for the purpose. The updates on this subject will be posted on our
website.
6. CAPITAL, LISTING AND IEPF
As on March 31,2022 ,the paid up capital was Rs 6,662.80 Lakhs with an
increase of Rs 62.30 Lakhs during 202122 due to allotment of 622,994 (2020-21 : 2,100)
shares on exercise of options under Employees Stock Options Scheme ("ESOS") 2013
by the eligible employees. The disclosures required under SEBI Regulations on ESOP as on
March 31,2022 are set out in Annexure - 7 to this report. The Company has received the
certificate as attached in Annexure - 8 from the auditors of the Company certifying that
the ESOP Scheme is implemented in accordance with the SEBI Guidelines and in accordance
with the resolution passed by the members. No equity shares other than equity shares under
ESOS were issued to employees of the Company and there was no buy back of its shares by
the Company during 2021-22 In compliance with Section 124 (5) of the Act, the Company
transfers the dividend that has remained unclaimed for a period of seven years from the
date of its transfer to unpaid dividend account to Investor Education and Protection Fund
("IEPF"). An amount of ' Lakhs (2020-21: Rs 86 Lakhs) is lying in unpaid equity
dividend account of the Company. The unpaid dividends till March 31,2015 were transferred
to IEPF. The Company as provided under Section 124(6) of the Act, transferred all shares
in respect of which unclaimed dividends were transferred to IEPF during 2021-22. In
compliance with section 125 (2) of the Act, matured deposits, matured debentures and
interest accrued on these that had remained unclaimed/unpaid for a period of seven years
from the date it became due for payment were transferred to IEPF during 2021-22 as
mentioned below.
Rs in crores
Year |
Dividend |
Deposits |
Debentures |
Equity shares in nos. |
2021-22 |
0.110 |
0.092 |
1.541 |
3,802 |
2020-21 |
0.109 |
0.00 |
1.480 |
2,427 |
The Company has displayed the details of unpaid dividend on its web
site (refer table no-1). The Company also posted individual letters to the last known
address of the shareholder on June 4, 2021 and September 6, 2021 and advertised in
newspapers on June 5, 2021 and September 8, 2021 respectively. There will be no claim lie
on the Company on account of dividend, debentures and deposits which were transferred to
IEPF. However the investors can claim it from IEPF Authority by following the required
process.
The unclaimed equity shares existing in physical form available with
the Company/RTA, are dematerialised at the time of transfer to IEPF Authorities as
required under Regulation 34 of the LODR.
As required under Schedule V of LODR, the Company has opened equity
share suspense Account with NSDL titled as "SCUF - Unclaimed Securities Suspense
Account" for the purpose of transferring unclaimed equity shares held in physical
form. The Company will transfer after due verification the shares lying in the said
suspense account to the eligible shareholders on request for such transfer is received. As
on March 31, 2022 there were 475 (As on March 31,2021 : 475) number of unclaimed equity
shares in the said SCUF - Unclaimed Securities Suspense Account. The voting rights on
these shares shall remain frozen till the rightful owner of such shares claims the shares.
S. No Particulars |
No of equity share holders |
No of unclaimed equity shares |
1 Unclaimed equity shares as on April 1,2021 |
8 |
475 |
2 Shares claimed by shareholders during the Year |
|
|
3 Transfer of unclaimed equity shares to IEPF during the Year
as per IEPF Rules |
|
|
4 Unclaimed equity shares as on March 31,2022 |
8 |
475 |
The voting rights for the above said unclaimed equity shares shall
remain frozen till the shares are claimed by /transferred to the concerned share holders.
No equity share was issued with differential rights to voting, dividend or otherwise.
The listing fees to BSE and NSE for 2021-22 were paid on time. The
shares of the Company continue to be listed on BSE and NSE.
7. HUMAN RESOURCE
We highly appreciate the efforts of our employees at all levels for
their stellar performance year after year. The Company provides necessary training for
reskilling and for enhancing skills of our employees. In addition, different motivational
measures are taken in order to keep our employees highly motivated. We emphasise on
localisation of our workforce and encourage executive growth up the organisational ladder
within respective geographies. The relation between the Company and its employees have
always been based on mutual respect, openness, honesty, cooperation and trust. The Company
has formulated a policy on Prevention of Sexual Harassment of women employees in the work
place. The Company has also constituted and Internal Complaints Committee as required
under the Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal)
Act, 2013. There were no complaints received during 202122. The total employee strength of
the Company as on March 31, 2022 was 27997 with 1 1377 employees added during the Year. As
required under Section 197(12) of the Act read with Rule - 5 (1) and 5 (2) of the
Companies (Appointment and Remuneration of Managerial Personnel) Rule, 2014, the
information on remuneration is given in table 2.1 of the Corporate Governance Report and
other details are attached as Annexure - 1 to this Report.
8. SUBSIDIARY AND CONSOLIDATED FINANCIAL STATEMENTS
M/s Shriram Housing Finance Limited CIN - U65929TN2010PLC078004)
("SHFL") is the only subsidiary of the Company. SHFL is an unlisted subsidiary
with 85.02% holding by the Company in the equity of SHFL. The Company subscribed to the
rights issue of SHFL with 11,11,11,112 number of equity shares of face value of Rs 10 each
priced at Rs 45/- per share (including premium of Rs 35/- per share) aggregating to Rs
5,00,00,00,040/- during 2021-22. The Company does not have any other material listed/
unlisted subsidiary Company as defined in Regulation 24 (1) of LODR. SHFL is a housing
finance company registered under National Housing Bank ("NHB") and regulated by
Reserve Bank of India (Registration Number- 08.0094.11) with registered office at Chennai.
There was no entity which became or ceased to become subsidiary during 202122. The
entities shown in the Notes to Accounts under Related party disclosures as Associates are
treated as "associates" as per IND AS 24. The equity shares of SHFL are not
listed on any stock exchange, but has debt securities listed on BSE. SHFL follows April to
March as the financial year. SHFL mainly provides housing loans to self-employed and
salaried class in the lower and middle income category mostly in Tier 2 and Tier 3
locations in India with 103 branches. SHFL has 22,963 customers with loans in its
portfolio as on March 31, 2022. The total employee strength of SHFL as on March 31,2022
was 778. The Policy on Material Subsidiary(ies) of the Company is displayed on the web
site of the Company (Refer Table 1 for the link).
SHFL also provides loans against property and loans for housing
projects. The CAGR of loan disbursement of SHFL over last five years was around 23% with
total disbursement during the year being Rs 2,73,868.04 Lakhs. The total borrowings of
SHFL as on March 31, 2022 was Rs 3,89,667 Lakhs, out of which Rs 53,329 Lakhs was by way
of NCDs and the balance amount was borrowings from Banks, National Housing Bank, Financial
Institutions and securitisation through banks & financial institutions.
As prescribed under section 129(3) of the Act, the Consolidated
financial statements of the Company for 2021-22 were prepared in accordance with
provisions of the Act and LODR, which were audited by the statutory auditors of the
Company. The consolidated financial statements along with the report of the auditors of
the Company thereon are attached to this Report. Statement containing salient features of
the financial statements for 2020-21 in form AOC- 1 is enclosed to the financial
statements of the Company.
The annual accounts, annual reports and the related detailed
information on SHFL shall be made available to the shareholders of the Company and to the
shareholders of SHFL seeking such information at any point of time. In accordance with
Section 136 of the Act, audited annual financial statements, consolidated financial
statements and related information of the Company and the audited financial statements of
SHFL are displayed on the Company's web site (Refer Table -1) and the same shall be
kept at the respective Registered Office of the Company and SHFL for inspection by any
shareholder during business hours. Shriram Capital Limited and SHFL continued as promoter
and subsidiary of the Company respectively.
9. RESERVE BANK OF INDIA DIRECTIONS/ GUIDELINES
Being a deposit accepting NBFC registered with the RBI, the Company is
regulated by the applicable regulations of the RBI. The Company continues to comply with
all applicable regulations of RBI. The Company has formulated different policies and
appointed different officials in the Company as required under the regulations of the RBI.
The details of registration with RBI appear on note no - 1 to notes to the financial
statements. The Board confirms that the Company followed the corporate governance
standards prescribed by the RBI. The note nos 43, 46 to 74 and 95 to 96 and other notes of
the notes to financial statements contain the information required to be reported under
the regulations of the RBI. The Company accepts/ renews deposits as per regulations of
RBI. Being an NBFC regulated by the RBI the disclosure required under the Act with respect
to deposits does not apply to the Company The followings are the indicators of acceptance
of deposits.
Description |
March 31 |
|
2022 |
2021 |
Capital Adequacy and Reserve Ratio ("CrAR")* |
26.78% |
28.64% |
Net owned funds (? in Lakhs) |
8,27,252.84 |
7,30,641.50 |
Statutory Liquidity Ratio in (? in Lakhs) |
18.44% |
19.35% |
Deposits ( ' in Lakhs) including maturity payable |
6,89,455.36 |
5,59,045.60 |
* The RBI prescribes the maintenance of CRAR 15 percent and above.
Our principal source of liquidity are cash, cash equivalent, balances
in accounts with banks current/liquid investments ,undrawn sanctioned limits from
banks/institutions and cash flow from operations. We maintain sufficient cash to meet
strategic and operational needs. We understand that the liquidity in the Balance sheet
need to balances between return and risk. We believe that our working capital is adequate
to meet our current requirements.
10. CORPORATE GOVERNANCE
The Company follows the corporate governance practices and standards
prescribed under LODR, regulations of RBI, the Act and other regulations. Report on
corporate governance as required under Regulation 34(3) of LODR together with a
certificate for the purpose from the auditors of the Company confirming the compliance
with the corporate governance is attached to this Report (Annexure - 2). As required under
Regulation 34(2)(e) and 34(3) of LODR, the Management Discussion and Analysis on the
business of the Company is enclosed as Annexure - 3. As required under Regulation 17 (8)
of the LODR, a compliance certificate, duly signed by the Managing Director & Chief
Executive Officer and Chief Financial Officer on the financial statements of the Company
for 2021-22, was submitted to the Board at their meeting held on April 29, 2022 (Annexure
- 4). The relevant provisions of the voluntary guidelines are adopted in the areas deemed
appropriate.
11. BUSINESS RESPONSIBILITY REPORT ("BRR")
Regulation 34(2)(f) of the LODR requires top 500 listed entities based
on market capitalisation as on March 31, 2021 to include BRR as a part of the Annual
Report. The Company being one such entity, has included BRR in this Annual Report
(Annexure - 14).
12. CORPORATE SOCIAL RESPONSIBILITY ("CSR")
The Company constituted a CSR Committee consisting of three Directors
including two independent directors as required under Section 135 of the Act. The details
of the CSR Committee appear on the Annual Report on CSR. Annual Report on CSR activities
as required under Rule 9 of the Companies CSR Policy Rules, 2014 of the Act is attached to
this report as Annexure - 10. The CSR policy of the Company as recommended by the CSR
Committee, was reviewed and approved by the Board and is displayed on the website of the
Company (refer table 1). The CSR policy contains the areas of activities of CSR and other
detail as required under Section 134 (3) (o) of the Act. During 2021-22, the Company
undertook CSR Projects on health, education, skill development through implementing Agent.
The spend on CSR amounting to Rs 3,167.57 Lakhs (2020-21: Rs 2,195.23 Lakhs) during 2020-
21 were approved by the Board of the Company as recommended by the CSR Committee The Board
affirms that the CSR activities are implemented in accordance with CSR Policy of the
Company.
13. BOARD AND COMMITTEES
During 2021-22, the Company had optimum number of Directors with mix of
Independent and Non Independent. Board met 6 times during 2021-22. During 2021-22, the
meetings of the Board and Committees were held virtually through video conferencing at
Chennai to adhere to social distancing norms. The interval between two meetings did not
exceed 120 days. Members of the Board possess requisite knowledge and experience to steer
the Company. The brief profile of each director appear on the website of the Company
(Refer Table 1). The Company is immensely benefitted from the guidance, support and advice
of the members of the Board. The Board consists of directors possessing diverse knowledge,
skill and experience to enhance quality of its performance. The independent directors have
requisite qualification and experience to act as a Director on the Board. Details of
meetings of the Board and committees held during 202122 and the details of appointment,
induction, training, retirement and resignation of Directors/KMPs during
2021- 22 are mentioned in the Corporate Governance report (Annexure -
1). The Company complied with Secretarial Standards issued by the Institute of Company
Secretaries of India. The Board has Audit and Risk Management Committee ("ARMC")
and Nomination and Remuneration Committee ("NRC") as specified under Section 177
and 178 of the Act respectively. The Company received necessary declaration from each
independent director about his/her meeting the criteria of independence as laid down under
Section 149 (7) and 134(3) (d) of the Act and Regulation 16(b) of the LODR. A statement by
the Managing Director confirming receipt of this declaration from each independent
director of the Company is attached as Annexure - 11. There is no change in the
circumstances affecting their status as Independent Directors of the Company. The Company
received required deed of covenant initially at the time of appointment and declaration
during 2021-22 from the Directors as required under regulations of RBI. The Board on the
recommendation of NRC has formulated a policy for selection, appointment and remuneration
of directors, senior management personnel as required under Section 178 (3) and 134 (3)
(e) of the Act, the details of which appear in the Annexure - 13 and the same is displayed
on the web site of the Company (refer table 1). This Policy states the diversity of the
Board has laid down a framework for remuneration of Directors (Executive and
Non-Executive), Key Managerial Personnel and Senior Management Personnel. As required
under section 134(3)(p) of the Act and the LODR, annual performances evaluation of Board,
the Committees, Chairman of the Board and individual directors were carried out during
2021-22 based on the criteria and frame work adopted by the Board consisting of
participation, attendance, duties, obligations, contribution for effectiveness and related
matters of Board/Committee. The outcome of such evaluation done during 2021-22 was
discussed by the NRC/Board and both found it satisfactory. The Independent Directors
expressed satisfaction over the performance and effectiveness of the Board, individual
Non-Independent Directors and the Chairman. The Independent Directors played active role
in the meetings of Committees including Audit and Risk Management Committee
("ARMC").ARMC held separate meetings to discuss related party transactions and
to review policies of the Company. The ARMC also had separate meetings with Statutory
Auditors, Internal Auditors and participated in the meeting with Rating Agencies
separately. Each Director has given his/her declaration to the Company for not holding any
shares in the Company and having no relation inter se with any Director. Independent
Directors attend familiarisation programme on joining the Board and annually, the details
of which is displayed on the web site (refer table 1). Sri Umesh Govind Revankar (DIN -
00141189) was appointed as the additional director with effect from December 14, 2021
holding office upto the conclusion of 36th AGM and he has expressed his intention and
confirmed his eligibility to act as a Director of the Company, if appointed. As per
provisions of the Act and Articles of Association of the Company, Sri Ignatius Michael
Viljoen (DIN - 08452443) will retire by rotation and being eligible, has sought for
re-appointment at the ensuing AGM. He has expressed his intention and confirmed his
eligibility to continue as Director of the Company if appointed at the ensuing AGM. In
compliance with requirements under section 149(7) of the Act and Regulation 16(1) of the
LODR the Board has received the declaration from all the Independent Directors about their
independence and the Board is satisfied about it. During 2021-22, there was no change
(appointment/resignation) in the Key Managerial Personnel namely, Managing Director, Chief
Financial Officer and Company Secretary of the Company.
14. DIRECTORS' RESPONSIBILITY STATEMENT
The financial statements were prepared by following the provisions
prescribed under Section 133 (3) [Indian Accounting Standard ("Ind AS")] and
other applicable sections of the Act and relevant rules and the guidelines issued by the
SEBI and the RBI . Pursuant to Sections 134 (3) (c) and 134 (5) of the Act with respect to
Directors' responsibility statement, the Directors of the Company hereby confirm, in
the preparation of annual accounts for 2021-22, that :
(i) the applicable accounting standards have been followed and proper
explanations have been made in notes to accounts for material departures, if any;
(ii) the accounting policies have been selected and applied
consistently and reasonable and prudent judgments and estimates have been made so as to
give a true and fair view of the state of affairs of the Company as at March 31, 2022 and
statement of the profit and loss of the Company for the year ended on that date;
(iii) proper and sufficient care have been taken for the maintenance of
adequate accounting records in accordance with the provisions of the Act for safeguarding
the assets of the Company and for preventing and detecting fraud and other irregularities;
(iv) the annual accounts have been prepared on a going concern basis.
(v) internal financial controls to be followed were laid down, which
were adequate and were operating effectively and
(vi) proper systems had been devised to ensure compliance with
provisions of applicable laws, which were adequate and were operating effectively
15. AUDIT AND AUDITORS
Internal audits were conducted periodically during 202122 and the
reports thereon were presented to ARMC on quarterly basis. The Internal Auditor is
appointed by and is reporting to ARMC. In addition to others matters, internal audit
consisted of independent and objective assessment to monitor adequacy, effectiveness and
adherence to the internal controls, internal financial control, processes and procedures.
Internal audit checked compliance with extant regulations. Internal audit conducted
followed a Risk-based approach of Internal Audit (RBIA) by taking into account the RBI
guidelines and established practices. The ARMC regularly reviewed the audit findings and
the adequacy and effectiveness of the internal control measures. The Company has
documented its internal financial controls considering the essential components of various
processes, physical and operational. These include design, implementation and maintenance
along with periodical internal review of effectiveness and sustenance commensuration with
the nature of business and the size of operations of the Company. This ensures conducting
business in orderly and efficiently by adhering to the Company's policies,
safeguarding assets, preventing errors with accuracy and completeness of the accounting
records and the timely preparation of reliable financial information. The internal
financial controls with reference to the financial statements were adequate and operating
effectively. The Company's organisation structure, policy, authority matrix and
internal financial controls ensure efficiency of operations, protection of resources and
compliance with the applicable laws and regulations .The policies are reviewed
periodically and updated and systems are reviewed and upgraded. The internal financial
control is supplemented by internal audits, regular reviews by management to ensure
reliability of financial and other records to prepare financial statements and other data.
The Joint Statutory auditors of the Company, M/s R Subramanian & Company LLP Chartered
Accountants Firm Registration Number 004137S/ S200041 ("RS") and M/s Abarna
& Ananthan, Chartered Accountants
Firm Registration Number 000003S ("A&A") have submitted
to the members of the Company the attached Independent Auditors Reports for 2021-22 on
standalone financials and consolidated financials. Both the reports are unqualified,
without any reservation or adverse remark or disclaimer and thus the Board does not have
any explanation or comment. M/s SPNP & Associates, Company Secretaries (Certificate of
Practice No : 3310 and Membership No : FCS F4862) in practice, Chennai ("SPNP")
appointed by the Company as the secretarial auditors pursuant to Section 204 of the Act
have conducted audit and have submitted their report as attached in Annexure - 15 to the
Members, which is unqualified, without any reservation or adverse remark or disclaimer.
Therefore, Board does not have any explanation or comment on such Secretarial Audit
Report. Maintenance of Cost records and conducting of cost audits specified under section
148(1) of the Act are not applicable for the business activities carried out by the
Company. During 2021-22, neither RS and A&A nor SPNP reported to ARM under Section
143(12) of the Act any instances of fraud committed by officers or employees of the
Company. The Board appointed SPNP as secretarial auditor of the Company for 2022-23.
RS and A&A were appointed by the members as Joint Statutory
auditors of the Company from Extraordinary General Meeting held on September 8, 2021 till
conclusion of 36th AGM of the Company. M/s G D Apte & Co. ("GDA") had
expressed their intention not to continue as the Statutory Auditors of the Company with
effect from September 8, 2021 due to applicability of RBI circular no .DoS.CO.ARG/SEC
01/08.91.001/2021- 22 dated April 27, 2021 which states that only joint audit by firms and
auditors completed three years of tenor cannot continue as Auditors of the Company. GDA
had completed fours years and could not continue as Auditors and resigned from their
office vide letter dated July 29, 2021. RS and A&A have confirmed their eligibility
and have communicated their willingness to continue as auditors. Necessary resolution,
based on the recommendation of the ARMC and approval of the Board, to fix remuneration of
RS and A&A as Joint Statutory Auditors is proposed at the ensuing AGM. The details of
payment of Statutory Auditors fees appear in financial statements.
16. MANAGEMENT OF RISK
The risk management function of the Company help in identifying,
analysing, assessing, mitigating, monitoring and governing risks. The Company has a risk
management policy. A separate section in this report titled "Management Discussion
and Analysis" discusses about risk and its mitigating factors and the matters
required under Section 134 (n) of the Act. In the opinion of the Board, there is no risk
existing to threaten the existence of the Company. Report on risk assessment is presented
to ARM at its meeting by the Chief Risk Officer of the Company. The Board on the
recommendation of the ARMC appointed Chief Risk Officer ("CRO") of the Company
with requisite qualification and experience as mention in the regulations of the RBI. The
CRO reports to ARMC.
17. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNING AND OUT GO
Section 134 (3) (m) of the Act read with Rule 8 of the Companies
(Accounts) Rules 2014 specify the information to be furnished on conservation of energy,
absorption of technology and foreign exchange earnings/outgo, which for the Year are
furnished below. The operations of the Company are not energy intensive. However, adequate
measures for conservation of energy, usage of alternate sources of energy and investments
for energy conservation, wherever required were taken. The Company did not absorbed any
technology. There was foreign exchange earnings of Rs 184.66 Lakhs (2020-21 : Rs 190.28
Lakhs ). The outgo of foreign exchange was Nil (2020-21 : Rs 623.25 Lakhs)
18. ACKNOWLEDGEMENT
We thank our customers, share holders, investors, bankers, employees,
trustees, vendors, auditors, deposit holders and debenture holders. The Board expresses
its appreciation and gratitude for the guidance and cooperation extended to the Company by
RBI, statutory authorities and regulators. The Board acknowledges the guidance of M/s RS
and M/s A&A and M/s SPNP to the Company. The Board records the commitment and
dedication of employees.
For and on behalf of the Board of Directors |
|
Place : Chennai |
Debendranath Sarangi |
Date : April 29, 2022 |
Chairperson |
|