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Ujjivan Financial Services Ltd.

BSE: 539874 Sector: Financials
NSE: UJJIVAN ISIN Code: INE334L01012
BSE LIVE 15:40 | 18 Aug 321.10 0.10
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OPEN 318.20
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VOLUME 102299
52-Week high 484.00
52-Week low 285.00
P/E 28.07
Mkt Cap.(Rs cr) 3,843
Buy Price 0.00
Buy Qty 0.00
Sell Price 321.10
Sell Qty 25.00
OPEN 318.20
CLOSE 321.00
VOLUME 102299
52-Week high 484.00
52-Week low 285.00
P/E 28.07
Mkt Cap.(Rs cr) 3,843
Buy Price 0.00
Buy Qty 0.00
Sell Price 321.10
Sell Qty 25.00

Ujjivan Financial Services Ltd. (UJJIVAN) - Director Report

Company director report

To the Members

Your Directors have pleasure in presenting their twelfth Annual Report and AuditedAccounts for the year ended on March 31 2016.

Overview

The Company was originally incorporated as Ujjivan Financial Services Private Limitedon December 28 2004 at Bengaluru Karnataka India as a private limited company under theCompanies Act 1956. Pursuant to a certificate issued by the Reserve Bank of India("RBI") on October 31 2005 the Company was permitted to commence operations asa non-banking financial company ("NBFC") under section 45 IA of the Reserve Bankof India Act 1934. Since financial year 2008-09 the Company has been classifiedas asystemically important non-deposit accepting NBFC. The Company was grantedNBFC-Microfinance Institution ("NBFC-MFI") status by the RBI on September 52013. Subsequently the Company was converted into a public limited company pursuant to aspecial resolution passed by its Shareholders at the extraordinary general meeting("EGM") held on November 3 2015 and the name of the Company was changed toUjjivan Financial Services Limited. A fresh certificate of incorporation consequent uponconversion to a public limited company was issued by the Registrar of CompaniesBangalore Karnataka ("RoC") on November 26 2015. Subsequently a freshcertificate of NBFC-MFI registration consequent upon the change of name of the Company wasissued by the RBI on March 4 2016.

On October 7 2015 the Company was one amongst 10 companies in India out of a totalof 72 applicants to receive in-principle approval from the RBI to set up a small financebank ("SFB").

The Company completed its maiden Initial Public Offering (IPO) and its equity shareswere listed in NSE and BSE on May 10 2016. For further details on the IPO please referto the section "Initial Public Offering".

1. Financial Results

(in Rs )
Particulars FY 2015-16 FY 2014-15
Operating Income 10072506528 5993165034
Other Income 203599311 125635557
Total Income 10276105839 6118800591
Less: Operational Expenses
Personnel Expenses 1966507150 1327695558
Administrative Expenses 1021745656 654271391
Finance Charges 4234998782 2713806964
Depreciation 80245509 67417317
Provision For Doubtful Debts 252722624 210476682
Total Operational Expenses 7556219721 4973667912
Profit/(Loss) Before Tax 2719886118 1145132679
Less: Income tax 1035660245 468047354
Less Deferred tax (87961905) (80802636)
Profit/(Loss) After Tax 1772187778 757887961

2. Dividend

Based on the Company’s performance the directors are pleased to recommend forapproval of the members a dividend of Rs 0.50 per equity share for the FY 2015-16. Thedividend on equity shares if approved by the shareholders would involve a cash outflow ofRs 7.12 crore (including dividend distribution tax).

3. Transfer to reserves

The Company transferred Rs 35.44 crore to Statutory Reserves. Transfer of 20% of theProfit after Tax to the statutory reserves in accordance with the provisions of section 45IC Reserve Bank of India Act 1934.

4. Credit Rating

CRISIL has assigned the Company a grading of mfR1 (the highest grading for MFI) inOctober 2015. CARE has assigned a ‘CARE A’ rating (Reaffirmed)to Ujjivan inDecember 2015 for its Long Term Bank Facilities of Rs 3500 crore and has assigned arating of ‘CARE A’ for its NCDs of Rs 400 crore. ICRA assigned a rating of‘ICRA A-’ for its NCDs of Rs 75 crore and a rating of ‘ICRA A’(revised from ‘ICRA A-’) for its NCDs of Rs 90 crore.

5. Capital Adequacy

The Capital Adequacy Ratio of the company was 24.14% as of March 31 2016 as againstthe minimum capital adequacy requirements of 15% by RBI.

6. Corporate Governance

A corporate governance report is provided separately and forms part of thisDirectors’ Report.

7. Extract of Annual Return

In accordance with Section 134(3)(a) of the Companies Act 2013 an extract of theAnnual Return in the prescribed format (MGT-9) is appended as "Annexure 1"to the Board’s Report.

8. No. of Meetings of the Board during the FY 2015-16

During the Financial Year 2015-16 our Board has met ten times and the meetings of ourBoard of Directors were held on June 04 2015 September 11 2015 September 29 2015November 23 2015 December 11 2015 December 17 2015 December 29 2015 February 012016 February 15 2016 and March 17 2016. For further details please refer to theCorporate Governance Report which forms part of this report.

9. Directors’ Responsibility Statement

Pursuant to Section 134(5) of the Companies Act 2013 the Board of Directors of theCompany confirms that:

(i) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

(ii) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period;

(iii) the directors had taken proper and sufficientcare for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;

(iv) the directors had prepared the annual accounts on a going concern basis;

(v) had laid down internal financial controls to be followed by the company and thatsuch internal financial controls are adequate and were operating effectively; and

(vi) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company audit of internal financial controls and thereviews performed by management and the risk management and audit committee of the boardthe board is of the opinion that the Company’s internal financial controls wereadequate and effective during the FY 2015-16.

10. Declaration by Independent Directors

The Company has received necessary declarations of independence from each of itsIndependent Directors under section 149(7) of the Companies Act 2013 that he/she meetsthe criteria of independent director envisaged in section 149 (6) of the Companies Act2013.

All Independent Directors have submitted the declaration of Independence as requiredpursuant to Section 149(7) of the Act stating that they meet the criteria of Independenceas provided in section 149(6) of the Companies Act 2013 and are not disqualified fromcontinuing as Independent Directors.

11. Nomination and Remuneration Policy

The Company pursuant to the provisions of Section 178 of the Companies Act 2013 hasformulated and adopted a nomination and remuneration policy which is disclosed on ourwebsite at the below link-

http://ujjivan.com/html/ujjivan_policies.php

12. Auditors

(i) Statutory Auditor M/s Deloitte Haskins & Sells (Firm Reg. No. 008072S)Chartered Accountants were appointed as Statutory Auditors of the Company for 2 yearstill the conclusion of the 13th Annual General Meeting to be held in the year 2017. Theyhave confirmed their eligibility under Section 141 of the Companies Act 2013 and theRules framed there under for reappointment as Statutory Auditors of the Company. TheDirectors recommend the ratification of appointment of M/s Deloitte Haskins & SellsChartered Accountants as Statutory Auditors of the Company from the conclusion of theensuing AGM till the conclusion of the 13th Annual General Meeting to be held in the year2017.

(ii) Secretarial Auditor:

Mr. K. Jayachandran Practicing Company Secretary(ACS No. 11309 and Certificate ofPractice No. 4031) was appointed as the Secretarial Auditor of the Company to conductSecretarial Audit of the Company for the Financial Year 2015-16 as required under Section204 of the Companies Act 2013 and the Rules made there under. The Secretarial AuditReport for FY 2015-16 is appended as "Annexure 2"to theDirectors’ Report.

13. Explanations or comments by the Board on every qualification reservation oradverse remark or disclaim -

er made –

(i) Statutory Auditor’s report

There are no disqualifications reservations adverse remarks or disclaimers in theauditor’s report

(ii) Secretarial Auditor’s Report

The Secretarial Audit Report does not contain any qualification reservation or adverseremark made by Secretarial Auditor.

14. Particulars of loans guarantees or investments under Section 186

The Company has not given any loans and guarantees to any body corporate

15. Transaction with related parties

Information on transaction with related parties pursuant Particulars of contracts orarrangements with related parties referred to in Section 188(1) in the prescribed form AOC-2 is appended as "Annexure 3" to the Board’s Report;

16. State of the Company’s affairs

Ujjivan is a RBI registered NBFC-MFI Company based in Bangalore and is one of thelargest microfinance institutions in the country with the most diversified geographicalreach offering a comprehensive suite of financial products and services to theeconomically active poor.

On October 7 2015 Ujjivan received an in-principle approval from the RBI to set up asmall finance bank ("SFB").

The Company’s mission is to "Provide full range of financial services to theeconomically active poor to build better lives".

As on March 31 2016 the Company operates through 469 branches spread over 24 statesin 4 regions South East North and West - with an employee strength of 8049. TheCompany’s present borrower base is 3050369 has disbursed Rs 17749 crore since itsinception and the portfolio outstanding as on March 31 2016 is Rs 5064.40 crore(excluding the securitised portfolio of Rs 324.20 crore) ers a diverse range of loanproducts to cater to the specific requirements of its customers. The off TodayUjjivan

Company’s products can be classifiedunder two broad categories namely GroupLoans and Individual Loans. Depending upon the end use these products can be furthersub-divided into agricultural education home improvement and home purchase andlivestock loans. All of the Company’s assets under management ("AUM") fallunder the priority sector lending norms prescribed by the RBI.

17. Material changes and commitments if any affecting the financial position ofthe company which have occurred between the end of the financial year of the company towhich the financial statements relate and the date of the report;

The Company came out with Initial public offer (IPO) of 42023609 equity shares offace value of Rs 10 each for cash at a price of Rs 210 per equity share (including a sharepremium of Rs 200 per equity share) aggregating to Rs 882.50 crore comprising a freshissue of 17055277 equity shares aggregating to Rs 358.16 crore by the company("fresh issue") and an offer for sale of 24968332 equity shares aggregating toRs 524.34 crore by 8 selling shareholders.

Subsequent to the completion of the IPO the paid up equity share capital of theCompany got increased from Rs 1011860280 to Rs 1182413050. The Company’sequity shares got listed on NSE and BSE on May 10 2016.

The objects of the IPO inter alia was to augment the capital base of the Companyand to meet the future capital requirements of the Company arising out of growth of theCompany’s assets primarily the Company’s loans and advances and otherinvestments. Further the Company intended to reduce its foreign shareholding inaccordance with the requirements of the SFB In-principle Approval to set up an SFB. Postthe completion of our IPO and finalisation of basis of allotment the foreign shareholdingin the Company was brought down to 44.86% as on May 06 2016.

There has been no deviation in the utilization of the IPO proceeds by the Company.

18. The conservation of energy technology absorption foreign exchange earnings andoutgo in the manner as prescribed in Rule 8(3) of the Companies (Accounts) Rules 2014Conservation of energy and technology absorption

Since the Company does not own any manufacturing facility the particulars relating toconservation of energy and technology absorption are not applicable.

The Foreign Exchange earnings and outgo

There was no Foreign Exchange inflow and outflow shareholders for the dividend declaredin the FY 2014-15.

19. Development and implementation of risk management policy

Ujjivan’s Risk Management Committee consists of well experienced Directors fromdiverse background who bring in the best risk practices to the organization. The RiskManagement Committee which meets every quarter comprises of four Directors including anIndependent Director.

The Committee reviews the Risk Management Framework of the company and verifiesadherence to various risk parameters and compliances. The Company’s Risk Managementstrategy is based on clear understanding of various risks disciplined risk assessment andcontinuous monitoring. The Risk Management Committee reviews various risks which theorganization is exposed to including Credit Risk Interest Rate Risk Liquidity RiskOperational Risk and Regulatory Compliance issues. The Risk Committee approves and makesrecommendations to the Board regarding all its risk-related responsibilities includingthe review of major risk management and regulatory compliances.

The Company has in place an effective risk management policy which highlights thefunctions implementation and the role of the committee and the board.

20. Corporate Social Responsibility

The Corporate Social Responsibility (CSR) programs were started by the Company in theyear 2010. During the year Ujjivan CSR Team has mainly focused on the Government of India"Swachh Bharat Abhiyan".

A brief outline of the company’s CSR policy is disclosed on our website at thebelow link-http://ujjivan.com/html/ujjivan_policies.php

The initiatives undertaken by the Company on CSR activities are out in "Annexure4" of the Board’s Report in the format prescribed in the Companies(Corporate Social Responsibility Policy) Rules 2014. For other details regarding the CSRCommittee please refer to the Corporate Governance Report which forms part of theBoard’s Report.

21. Board Evaluation

The board of directors has carried out an annual evaluation of its own performanceboard committees and individual directors pursuant to the provisions of the Companies Act2013 and the corporate governance requirements as prescribed by Securities and ExchangeBoard of India (Listing Obligations and Disclosure Requirements) Regulations 2015("SEBI Listing Regulations").

Performance evaluation criteria for Board Committees of the Board and Directors wereapproved by the Nomination Committee of the Board at its meeting held on March 24 2015.The main criteria on which the evaluations was carried out were Director’s knowledge& expertise specific competency and professional experience board engagement andtime commitment.

The performance of the board was evaluated by the board after seeking inputs from allthe directors on the basis of the criteria such as the board composition and structureeffectiveness of board processes information and functioning etc.

The performance of the committees was evaluated by the board after seeking inputs fromthe committee members on the basis of the criteria such as the composition of committeeseffectiveness of committee meetings etc.

The board and the nomination and remuneration committee reviewed the performance of theindividual directors on the basis of the criteria such as the contribution of theindividual director to the board and committee meetings like preparedness on the issues tobe discussed meaningful and constructive contribution and inputs in meetings etc. Inaddition the chairman was also evaluated on the key aspects of his role.

In a separate meeting of independent directors held on March 17 2016 performance ofnon-independent directors performance of the board as a whole and performance of thechairman was evaluated taking into account the views of executive directors andnon-executive directors. The same was discussed in the board in their meeting thatfollowed the meeting of the independent directors at which the performance of the boardits committees and individual directors was also discussed. Performance evaluation ofindependent directors was done by the entire board excluding the independent directorbeing evaluated.

22. Details as required under Rule 8 of the Companies (Accounts) Rules 2014

(i) The financial summary or highlights;

(in Rs )
Particulars FY 2015-16 FY 2014-15
Operating Income 10072506528 5993165034
Other Income 203599311 125635557
Total Income 10276105839 6118800591
Less: Operational Expenses
Personnel Expenses 1966507150 1327695558
Administrative Expenses 1021745656 654271391
Finance Charges 4234998782 2713806964
Depreciation 80245509 67417317
Provision For Doubtful Debts 252722624 210476682
Total Operational Expenses 7556219721 4973667912
Profit/(Loss) Before Tax 2719886118 1145132679
Less: Income tax 1035660245 468047354
Less Deferred tax (87961905) (80802636)
Profit/(Loss) After Tax 1772187778 757887961

? Business Highlights:

47 new branches in FY 2015-16

12% growth in new customer outreach. 12 lakh NCA key trigger: Akarshan loansand Rewards and Recognition programs

Borrower base crossed the important milestone of 30 lakh 39% growth overMarch 2015

FY Disbursements at Rs 6619 crore 53% growth over PY

Loyalty loans added a significant Rs 445 crore to the portfolio

OSP Closed at Rs 5064.4 crore 57% growth over previous financial year

102% growth in IL business contributing to 13% of total OSP Secured Housingbusiness off to a healthy start closing with an OSP of 21 crore

• Profitability: Pre-tax profits - Rs 271.99 crore and post- tax profits -Rs 177.22 crore for FY2015-16

• Efficiency: Focus on improved TAT GL TAT down to 4.32 days and IL TAT at 6.3days. OER down to 7.1% on account of prudent expense management and healthy growth in loanbook)

(ii) The change in the nature of business if any;

None

(iii) The details of directors or key managerial personnel who were appointed orhave resigned during the year;

Sr. No. Name Designation DIN Date of Appointment/ Change/ Cessation Reason
1 Abhijit Sen Director 00002593 June 04 2015 Appointment
2 Nandlal Sarda Director 00147782 November 03 2015 Appointment
3 Sarvesh Suri Director 06760975 November 23 2015 Resignation*
4 Bhama Krishnamurthy Director 02196839 November 23 2015 Resignation*
5 Anadi Charan Sahu Director 06696504 November 23 2015 Appointment
6 Sandeep Farias Director 00036043 December 11 2015 Resignation*

* Nomination withdrawn by appointing Shareholder

(iv) the names of companies which have become or ceased to be its Subsidiariesjoint ventures or associate companies during the year;

None

(v) Deposits from public

During the year the Company has not accepted any deposits from public and as such noamount on account of principal or interest on deposits from public was outstanding as onthe date of the balance sheet.

(vi) The details of significant and material orders passed by the regulators orcourts or tribunals impacting the going concern status and company’s operations infuture;

None

(vii) The details in respect of adequacy of internal financial controls (IFC) withreference to the Financial

Statements

In respect of internal financial control the Board has adopted the policies andprocedures for ensuring the orderly and efficient conduct of its business includingadherence to the Company’s policies the safeguarding of its assets the timelyprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information.

Further the management regularly reviews the control for any possible changes andtakes appropriate actions.

23. Other disclosures

(i) Details of equity shares with differential rights

The Company has not issued any equity shares with differential rights during the year

(ii) Details of sweat equity shares issued

The Company has not issued any sweat equity shares during the year

(iii) Details of employee stock option scheme

The Company has established Employee Stock Option Plan (ESOP) for compensation to itsemployees being ESOP 2006 ESOP 2007 ESOP 2008 ESOP 2010 MD-ESOP 2010 and ESOP 2015.

ESOP 2006

The Company pursuant to resolutions passed by the Board and Shareholders on March 292006 and May 12 2006 respectively adopted the ESOP 2006. The ESOP 2006 was for a totalof 64000 Equity Shares for all the eligible employees of the Company. In accordance withthe ESOP 2006 each option on exercise would be eligible for one Equity Share on paymentof exercise price.

ESOP 2007

Pursuant to resolutions passed by the Board and Shareholders on June 9 2007 and July21 2007 respectively the Company instituted the ESOP 2007. The ESOP 2007 was for atotal of 189440 Equity Shares for all the eligible employees of the Company. Inaccordance with the ESOP 2007 each option on exercise would be eligible for one EquityShare on payment of exercise price.

ESOP 2008

Pursuant to resolutions passed by the Board and Shareholders on July 23 2008 andAugust 18 2008 respectively the Company approved the ESOP 2008. The ESOP 2008 was for atotal of 396680 Equity Shares for all the eligible employees of the Company. Inaccordance with the ESOP 2008 each option on exercise would be eligible for one EquityShare on payment of exercise price.

ESOP 2010 and MD-ESOP 2010

Pursuant to resolution passed by the Board and Shareholder resolutions dated May 172010 and July 12 2010 respectively the Company approved the ESOP 2010 and MD-ESOP 2010.The ESOP 2010 and MD-ESOP 2010 were initially for a total of 3484250 and 871060 EquityShares for all the eligible employees and the managing director of the Companyrespectively.

Further pursuant to the Shareholders resolution dated July 12 2010 the exerciseperiod under the ESOP 2006 ESOP 2007 and ESOP 2008 was aligned with the exercise periodtime frame mentioned in ESOP 2010. Pursuant to sub-division of the face value of theequity shares from face value of Rs 100 each to Rs 10 each on October 12 2010 and inaccordance with ESOP 2010 maximum number of shares available for being granted under ESOP2010 stood modified and the cumulative face value prior to sub-division remainedunchanged. Pursuant to resolution passed by the Board on August 12 2011 additionalgrants were approved under the MD-ESOP 2010 amounting to 378112. In accordance with theESOP 2010 and MD-ESOP 2010 each option on exercise would be eligible for one Equity Shareon payment of exercise price. and Shareholders on August 8 2012 and September 12 2012respectively the Company approved creation of a pool of 1243233 options under the ESOP2010 for the Financial Year 2011-12.

As on March 31 2016 the Company has granted 5283592 options under ESOP 2006 ESOP2007 ESOP 2008 ESOP 2010 and MD-ESOP 2010.

ESOP 2015

The Company pursuant to resolutions passed by the Board and the Shareholders datedSeptember 29 2015 and November 3 2015 respectively has adopted ESOP 2015. The aggregatenumber of Equity Shares which may be issued under ESOP 2015 shall not exceed 4782129Equity Shares.

Further pursuant to resolution passed by the Shareholders on November 3 2015 anaggregate of 779059 cancelled/ forfeited options as on March 31 2015 under ESOP 2006ESOP 2007 ESOP 2008 and ESOP 2010 were transferred to option pool of ESOP 2015 therebymaking the total employee stock option pool available being 5561188 options.

In accordance with the ESOP 2015 each option on exercise would be eligible for oneEquity Share on payment of the exercise price. As on March 31 2016 the Company hasgranted 1469800 options under the ESOP 2015.

The ESOP 2015 is in compliance with Securities and Exchange Board of India (Share BasedEmployee Benefits) Regulations 2014 (SEBI ESOP Regulations) the Companies Act 2013 andis implemented in accordance with guidance notes issued by ICAI and the relevantaccounting standards.

Revisions in the ESOP Schemes during the Year ESOP 2010 – Revision

During the course of time certain employees who held granted and vested options underthe ESOP 2006 ESOP 2007 ESOP 2008 and ESOP 2010 have resigned or deceased.

Pursuant to the resolutions dated December 11 2015 and December 15 2015 passed bythe Board and Shareholders respectively the exercise period under the ESOP 2010 wasamended by accelerating the exercise period under the ESOP 2006 ESOP 2007 ESOP 2008 andESOP 2010 to enable former employees or nominees of deceased former employee’s optionholders as applicable to exercise their outstanding vested stock options within a giventime frame.

As of March 31 2016 1342283 options are vested and unexercised by existingemployees of the Company and 71816 options are vested and unexercised by formeruntraceable former employees of our Company pursuant to the ESOP 2006 ESOP 2007 ESOP2008 and ESOP 2010 schemes.

ESOP 2015 – Revision

Pursuant to the resolutions dated December 11 2015 and December 15 2015 passed bythe Board and Shareholders respectively the ESOP Scheme 2015 was amended in order toalign it with the provisions prescribed under the Securities and Exchange Board of India(Share Based Employee Benefits) Regulations 2014 as amended.

ESOP Schemes Compliance Status

As on March 31 2016 the Company being an unlisted company was not required to becompliant with SEBI ESOP Regulations. Further ESOP 2006 ESOP 2007 ESOP 2008 ESOP 2010and MD-ESOP 2010 were adopted prior to the commencement of the Companies Act 2013.

The ESOP 2015 is in compliance with Securities and Exchange Board of India (Share BasedEmployee Benefits) Regulations 2014 (SEBI ESOP Regulations) the Companies Act 2013.

The ESOP Schemes are implemented in accordance with guidance notes issued by ICAI andthe relevant accounting standards.

The guidance note issued by the Institute of Chartered Accountants of India requiresthe disclosure of pro forma net results and Earnings Per Share (EPS) both basic &diluted had the Company adopted the fair value method amortising the stock compensationexpense thereon over the vesting period the reported profit for the year ended March 312016 would have been lower by Rs 28081792/-and the basic and diluted EPS would have beenrevised to Rs 19.80/- and Rs 18.88/- respectively.

Administration of ESOP Schemes

The Governance Nomination and Remuneration Committee of the Board administer theEmployee Stock Option Schemes formulated by the Company from time to time.

Option activity under the plans is as given as below:

Particulars March 312016 March 312015
Options granted beginning of year 3948420 4138088
Granted during the year (ESOP Scheme 2015) 1469800 -
Exercised during the year 817002 -
Money realized during the year by exercise of options 30837180 -
Options granted as of March 312016 4264392 3948420
Option exercisable at the year end 2578271 2312633
Weighted average of remaining contractual life (years) at the year end 1.11 2.09

Consolidated Summary of All ESOP Schemes as on March 31 2016

Particulars ESOP 2006 ESOP 2007 ESOP 2008 ESOP 2010 MD-ESOP 2010 Total (2006-10) ESOP 2015 Total
Options Granted 64000 189440 396680 3384300 1249172 5283592 1469800 6753392
Total Options Exercised 24509 82940 99590 527093 85000 819132 0 819132
Options Lapsed 35371 36730 124750 1423047 0 1619898 49970 1669868
Options Unexercised 4120 69770 172340 1434160 1164172 2844562 1419830 4264392
Options Vested and Unexercised 4120 69770 172340 1167869 1164172 2578271 0 2578271
Options Unvested 0 0 0 266291 0 266291 1419830 1686121

Options Granted to Key Managerial Personnel during the year

Employee Name Designation Options Granted Exercise Price (in Rs )
Ms. Sudha Suresh Chief Financial Officer 15730 146.35
Mr. Sanjeev Barnwal Company Secretary and Compliance Officer 3460 146.35

No Employee has received any grant of options exceeding 5% of the options grantedduring the year.

(ii) Appointment of Independent Directors

The Company in compliance with the provisions of Section 149 has appointed Mr. NandlalSarda (DIN: 00147782) as an Independent Director with the shareholders’ approval atthe EGM held on November 03 2015 in accordance with the Act.

He has been appointed for a term of five years from November 03 2015 to November 022020 on the terms and conditions as mentioned in his appointment letter; the extracts ofthe terms & conditions of the appointment of the independent directors has been placedon the website of the Company. (iii) Vigil Mechanism The Company in compliance withSection 177 of the Companies Act 2013 and Regulation 22 of SEBI Listing Regulations hasestablished a Whistle Blower policy / Vigil Mechanism for the directors and employees toreport genuine concerns or grievances about unethical behavior actual or suspected fraudor violation of the company’s Code of Conduct or Ethics Policy. The Company has avigil mechanism process wherein the employees are free to report violations of lawsrules regulations or unethical conduct to the whistle and ethics officer of the Company.

Name and Address of the Whistle and Ethics Officer

Ms. Carol Furtado – Head HR (w.e.f. June 01 2016)

Ujjivan Financial Services Limited

Grape Garden No. 27 3rd A Cross 18th Main 6th Block Bangalore 560095 Karnataka

Email- carol.furtado@ujjivan.com

Protected Disclosure against the Whistle and Ethics Officer should be addressed to theCEO & MD of the

Company and the Protected Disclosure against the CEO & MD of the Company should beaddressed to the

Chairman of the Audit Committee.

Name and Address of CEO & MD of the Company:

Mr. Samit Ghosh

Ujjivan Financial Services Limited

Grape Garden No. 27 3rd A Cross 18th Main 6th Block

Bangalore - 560095

Karnataka

Email: samit.ghosh@ujjivan.com

Name and Address of Chairman (Audit Committee):

Mr. K. R. Ramamoorthy

D - 302 Mantri Gardens

Jayanagar 1st Block

Bangalore - 560011

Karnataka

Email: ram@bankconsult.co.in

The confidentiality of those reporting violations is maintained and they are notsubjected to any discriminatory practice

The whistle blower policy of the Company is disclosed on our website at the below link-

http://ujjivan.com/html/ujjivan_policies.php

(iv) Remuneration details of Directors KMPs employees

Sr. No. Particulars Disclosures
1. The ratio of the remuneration of each Whole time director to the median remuneration of the employees of the company for the financial year CEO & MD: 34.81x
2. The percentage increase in remuneration of each director Chief Financial Officer Chief Executive Officer KMP % increase in remuneratio n
Company Secretary or Manager if any in the financial year MD No increase
CFO 15%
CS 12.5%
3. The percentage increase in the median remuneration of employees in the financial year; 15.19%
4. The number of permanent employees on the rolls of company 8049
5. The explanation on the relationship between average increase in remuneration and company performance The Company made a growth of 134% in its Net Profit and increased the remuneration of its employees by an average of 15% based on the recommendation of the HR & Compensation Committee of the Board.
6. Comparison of the remuneration of the Key Managerial Personnel against the performance of the company The Company’s revenue and Net Profit has grown by 68% and 134% respectively in FY 2015-16 in comparison to FY 2014-15. The average increase in remuneration of KMP in the FY 2015-16 was 9%.
7. Variations in the market capitalization of the company price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase over decrease in the market quotations of the shares of the company in comparison to the rate at which the company came out with the last public offer in case of listed companies and in case of unlisted companies the variations in the net worth of the company as at the close of the current financial year and previous financial year As on 31.03.2016 the Company’s equity shares was not listed.
The Company’s Networth has increased from Rs 736.45 crore as at March 31 2015 to Rs 1197.76 crore as at March 31 2016 an increase by Rs 461.31 crore.
8. Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration The average increase in the salaries of employees was 15% and the average increase in the managerial remuneration was 9%.
9. Comparison of the each remuneration of the Key Managerial Personnel against the performance of the company The Company’s revenue and Net Profit has grown by 68% and 134% respectively in FY 2015-16 in comparison to FY 2014-15. The average increase in remuneration of KMP in the FY 2015-16 was 9%.
10. The key parameters for any variable component of remuneration availed by the directors No variable component availed by our Directors
11. The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year No employee received remuneration in excess of the highest paid director
12. Affirmation that the remuneration is as per the remuneration policy of the company Yes

A statement showing the name of every employee of the company who-

a. if employed throughout the financial year was in receipt of remuneration for thatyear which in the aggregate was not less than sixty lakh rupees;

Mr. Samit Ghosh – CEO & MD

Sr. No. Particulars Details
(i) Designation CEO & MD
(ii) Remuneration received Rs 73.78 lakh
(iii) Nature of employment whether contractual or otherwise Permanent
(iv) Qualifications and experience MBA Bachelor of Arts He has been a part of the management teams at Citibank Standard Chartered Bank HDFC Bank and Bank Muscat. In the past he has also served as president of MFIN as well as the chairman of AKMI He holds a Master of Business Administration degree from the Wharton School of Business University of Pennsylvania.
(v) Date of commencement of employment Since inception December 28 2004 and First Director of the Company
(vi) Age 66
(vii) The last employment held Bank Muscat S.A.O.G. India. Chief Executive Officer
(viii) The percentage of equity shares held 0.99%

b. if employed for a part of the financial year was in receipt of remuneration for anypart of that year at a rate which in the aggregate was not less than five lakh rupeesper month;

Nil

c. if employed throughout the financial year or part thereof was in receipt ofremuneration in that year which in the aggregate or as the case may be at a rate whichin the aggregate is in excess of that drawn by the managing director or whole-timedirector or manager and holds by himself or along with his spouse and dependent childrennot less than two percent of the equity shares of the company.

Nil

Compliance of Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013

The Company is in compliance with the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 and has a prevention of sexualharassment policy in place. The Directors further state that during theyearunderreviewtherewasnocasefiledpursuant to the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013.

ACKNOWLEDGEMENTS

Your Directors wishes to gratefully acknowledge the assistance and guidance receivedfrom the RBI ROC Investors Banks Auditors Lawyers Accountants Suppliers PartnerNGOs Institutions and Foundations Police & Government Authorities Advisors and allour well-wishers. The Board also wishes to place on record their warm appreciation for thecreative and dedicated efforts of staff at all levels.

For and on behalf of the Board of Directors
Samit Ghosh Sunil Patel
CEO & Managing Director Independent Director
DIN: 00185369 DIN: 00050837
Date: May 25 2016
Place: Bangalore