You are here » Home » Companies » Company Overview » Bajaj Finance Ltd

Bajaj Finance Ltd.

BSE: 500034 Sector: Financials
BSE 00:00 | 26 Sep 7255.75 -250.95






NSE 00:00 | 26 Sep 7259.50 -247.65






OPEN 7445.00
VOLUME 65723
52-Week high 8043.50
52-Week low 5235.60
P/E 55.87
Mkt Cap.(Rs cr) 439,299
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 7445.00
CLOSE 7506.70
VOLUME 65723
52-Week high 8043.50
52-Week low 5235.60
P/E 55.87
Mkt Cap.(Rs cr) 439,299
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Bajaj Finance Ltd. (BAJFINANCE) - Director Report

Company director report


Dear Shareholders

Your directors present the thirty-fifth Annual Report along with the audited standaloneand consolidated financial statements for FY2022.

Sad demise of Shri Rahul Bajaj Chairman Emeritus of the Company

At the outset your directors express their profound grief on sad demise of Shri RahulBajaj the iconic leader of the Company who passed away on 12 February 2022.

He lived an extraordinary life. He was the architect of one of the most respectedbusiness groups in the country a vocal proponent of entrepreneurship and a voice of theindustry at large.

He stood for what he believed a man driven by values bold in both expression andaction. While he remained the torchbearer of a family legacy that dates back to thefounding days of our country he championed the creation of a new India.

While his passing away has left a huge void among us he leaves behind an unparalleledfoundation for all of us to build upon.

The Board of Directors ('Board') places on record its whole-hearted appreciation of theinvaluable contribution made by him to the spectacular success of the Company and theGroup over several decades.

Financial Results

The highlights of the standalone financial results are given below:

(Rs. in crore)
Particulars FY2022 FY2021 % change over FY2021
Total income 27871 23546 18
Interest and finance charge 7573 7446 2
Net interest income 20298 16100 26
Total operating expenses 7090 5016 41
Pre-impairment operating profit 13208 11084 19
Impairment on financial instruments 4622 5721 (19)
Profit before tax 8586 5363 60
Profit after tax 6350 3956 61
Retained earnings as at the beginning of the year 13487 10349 30
Profit after tax 6350 3956 61
Other comprehensive income on defined benefit plan (3) (26) (88)
Retained earnings before appropriations 19834 14279 39
Transfer to reserve fund u/s 45-IC(1) of the RBI Act 1934 (1271) (792) 60
Dividend paid (603)


Adjustment of dividend to ESOP Trust 1 - -
Retained earnings as at the end of the year 17961 13487 33

Due to rounding off numbers presented in above table may not add up precisely to thetotals provided.

Transfer to Reserve Fund

Under section 45-IC(1) of Reserve Bank of India ('RBI') Act 1934 non-bankingfinancial companies ('NBFCs') are required to transfer a sum not less than 20% of its netprofit every year to reserve fund before declaration of any dividend. Accordingly BajajFinance Ltd. (the 'Company' 'Bajaj Finance' or 'BFL) has transferred a sum of Rs. 1271crore to its reserve fund.

Pursuant to provisions of Companies Act 2013 (the 'Act') read with relevant rulesthereunder the Company being a NBFC is exempt from transferring any amount to debentureredemption reserve in respect of privately placed debentures including the requirement toinvest up to 15% of the amount of debentures maturing during the next financial year.However the Company maintains sufficient liquidity buffer to fulfill its obligationsarising out of debentures. In case of secured debentures an asset cover of over 100% ismaintained at all times.

Dividend Distribution Policy

Pursuant to the provisions of regulation 43A of the Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 (the 'SEBIListing Regulations') the Company had formulated a dividend distribution policy whichsets out the parameters and circumstances to be considered by the Board in determining thedistribution of dividend to its shareholders and/or retaining profit earned. The policy isannexed to this report and is also available on the website of the Company at


RBI vide its circular dated 24 June 2021 have laid down framework for declaration ofdividend by NBFCs. Accordingly the Board of Directors after taking into account variousaspects and in compliance with the said circular recommend for consideration of themembers at the ensuing Annual General Meeting ('AGM') payment of dividend of Rs. 20 perequity shares (1000%) of face value of Rs. 2. The total dividend for FY2022 is Rs. 1211crore.

The dividend recommended is in accordance with the principles and criteria set out inthe Company's dividend distribution policy. Total dividend proposed for the year does notexceed the ceilings specified in said circular/RBI Master Directions.

The dividend if declared at the ensuing AGM will be taxable in the hands of themembers of the Company pursuant to Income Tax Act 1961. For further details ontaxability please refer Notice of AGM.

The COVID-19 Pandemic

FY2022 was once again dominated by the COVID-19 pandemic as new waves of infectionswept across countries. In India the second wave (called 'Delta') proved far more deadlythan the first that struck in 2020.

The advent of the highly transmissible variant 'Omicron' in early January 2022 (thethird wave) spread much dread across the world. During this wave India's daily number ofreported cases peaked to nearly 350000 on 20 January 2022 and the active case load wasover 22 million as on 23 January 2022. Fortunately while highly transmissible Omicronwas not as clinically deadly as Delta. So while many got infected almost all got wellagain within a week or so without hospitalisation and mortality.

The impact of the second and third wave of the pandemic on the performance of theCompany and measures adopted to steer through this continuing crisis have been discussedin detail in Management Discussion and Analysis.

Working Results of the Company

The pandemic induced disruptions continued in FY2022 as well. The first half of FY2022witnessed a significant impact of the deadly second (Delta) wave of the pandemic -impacting performance of both business and debt management services. The third wave(Omicron) strain was more transmissible; however its impact on BFL's operation waslimited.

Drawing from its experience of FY2020 and the fact that the lockdowns were curtailed inFY2022 the Company remained open for business with a nuanced strategy on acquisition andunderwriting across all its businesses.

As a result BFL recorded a 29% growth in assets under management or AUM (core AUMgrowth is 26%) and 59% growth in profit after tax on a consolidated basis in FY2022 versus4% growth in AUM and 16% de-growth in profit after tax in FY2021. This was despitecontinued disruption in business and debt management services in the first half of theyear elevated level of credit cost and higher liquidity buffers. Return on average assets(ROAA) and return on average equity (ROAE) for FY2022 was 4.2% and 17.4% respectively on aconsolidated basis.

The Company's business model continues to generate healthy pre-impairment operatingprofits enabling it to withstand higher credit losses in times of stress such as these. Itremains well capitalised with a capital-to-risk weighted asset ratio (CRAR) of 27.22% ason 31 March 2022 - making it among the best capitalised large NBFCs in India.

As a result of its deeply embedded risk culture and robust risk management practicesthe Company's portfolio quality as of 31 March 2022 continues to remain strong despite ofrepeated waves of COVID-19.

BFL's consolidated Gross NPA at 1.60% and Net NPA at 0.68% are among the lowest in theindustry.

Using its robust risk management and portfolio monitoring framework BFL took enhancedcredit costs based on emerging trends across its different portfolios. It holds amanagement overlay provision for macroeconomic factors and COVID-19 of Rs. 1060 crore ason 31 March 2022.

The consolidated performance highlights for FY2022 are given below:

• Number of new loans booked: 24.7 million

• Core AUM grew by 26% to Rs. 192087 crore

• Total income increased by 19% to Rs. 31640 crore

• Net interest income (NII) rose by 27% to Rs. 21892 crore

• Total operating cost to NII stood at 34.6%

• Loan losses and provisions was Rs. 4803 crore

• Profit before tax (PBT) increased by 59% to Rs. 9504 crore

• Profit after tax (PAT) increased by 59% to Rs. 7028 crore

• Capital adequacy ratio as of 31 March 2022 was 27.22% which is well above theRBI norms.

Tier I adequacy ratio was 24.75%

With the experience of managing significant financial and operational disruptionemanating from the pandemic the transformational journey that BFL has embarked upon andthe exit momentum of FY2022 the Company remains confident of a sound growth trajectory inFY2023 and thereafter and hence remain a leading NBFC in India.

Resilience and agility are deeply embedded in BFL's culture. These cultural anchorshave enabled BFL to make swift and calibrated changes to its risk and debt managementpractices to regain its business momentum while maintaining strong vigil on its portfolioquality and adapting to changing customer preferences of post pandemic world.

For more details on the performance of the Company business segments and riskmanagement framework and initiatives please refer Management Discussion and Analysis.


BFL is one of the largest and most diversified NBFCs in India. It has worked withapproximately 57.6 million customers since it started its transformational journey inFY2008 from a mono-line captive lender to a diversified financial service business. Duringthis period the Company expanded its presence to 3504 locations with a distributionnetwork of over 133200 points of sale and also created a strong presence in the digitalspace.

BFL was among the early movers to transit to digital processes in the financialservices industry. It had already moved from 'Physical' to 'Phygital' in a seamless mannerand has embarked to move to the last phase namely 'Digital' in the last four years.

The Company believes that each customer is a critical asset in its growth journey andtheir satisfaction is BFL's primary responsibility - which it thrives to achieve throughan omnichannel strategy. Business transformation requires significant changes in operatingprocesses and core technology stack of the Company. It focuses on building an'omnichannel' model to deliver significant business velocity reduction in operating costsand significant improvement in customer experience. This model with an integrated offeringof products and services will enable BFL to become a 'moment of truth' enterprise for itscustomers.

Further details regarding the operations state of affairs and initiatives of theCompany are given in the Management Discussion and Analysis.

Subsidiaries Associates and Joint Ventures

The Company has two wholly owned subsidiaries viz.

i. Bajaj Housing Finance Ltd. ('BHFL' or 'Bajaj Housing') which is registered withNational Housing Bank as a Housing Finance Company ('HFC'); and

ii. Bajaj Financial Securities Ltd. ('BFinsec') which is registered with theSecurities and Exchange Board of India ('SEBI') as a stockbroker and depositoryparticipant.

During FY2022 no new subsidiary was incorporated/acquired. The Company does not haveany associate company nor has it entered into a joint venture with any other company.

The financial statements of the subsidiary companies are also available in adownloadable format under the 'Investor Relations' section on the Company's website at relation-annual-reports

The Company's policy for determination of material subsidiary as adopted by the Boardof Directors in conformity with regulation 16 of the SEBI Listing Regulations can beaccessed on the Company's website at Rs.scl=1&fmt=pdf

In terms of the said policy and provisions of regulation 16 of the SEBI ListingRegulations BHFL is a material subsidiary of the Company.

Performance highlights of the subsidiaries are given below:


• AUM as at 31 March 2022 was Rs. 53322 crore as compared to Rs. 38871 crore asat 31 March 2021 representing a growth of 37%

• Total income increased by 19% to Rs. 3767 crore

• NII rose by 36% to Rs. 1612 crore

• Total operating cost to NII stood at 29%

• Impairment on financial instruments was Rs. 181 crore. BHFL holds a managementoverlay provision of Rs. 211 crore as of 31 March 2022 on account of COVID-19 relatedstress

• Gross NPA and Net NPA were at 0.31% and 0.14% respectively amongst the lowestacross all HFCs

• PBT increased by 57% to Rs. 960 crore

• PAT grew by 57% to Rs. 710 crore

• As on 31 March 2022 capital adequacy ratio was 19.71% which is well above theNHB norms of 15%

During FY2022 the Board has approved a capital infusion up to Rs. 2500 crore toreduce leverage and fund accelerated growth of BHFL.

As on date of this report the total investment in BHFL is approximately Rs. 7528crore.


• The customer franchise as of 31 March 2022 was over 331000

• Total Income for FY2022 was Rs. 124 crore

• PAT was Rs. 17 crore

In order to support BFinsec to augment its business growth facilitate working capitalrequirements and building proprietary trading book the Company infused capital to thetune of Rs. 400 crore.

The total investment in BFinsec as on 31 March 2022 is approximately Rs. 670 crore.

For more detailed discussion on the performance of the subsidiaries and their varioussegments refer to the Management Discussion and Analysis.

A separate statement containing the salient features of the subsidiaries in theprescribed form AOC-1 is attached to the standalone financial statements.

Bajaj Finserv Direct Ltd. ('BFS-Direct')

BFS-Direct is primarily engaged in business of distribution of financial productsthrough its digital marketplace. BFS-Direct is registered with Insurance Regulatory andDevelopment Authority of India as a composite Corporate Agent for distribution ofinsurance (life and general) products in India.

During FY2022 the Company along with Bajaj Finserv Ltd. holding company made jointinvestments in the form of Equity shares and/or Convertible Loan or Security into EquityShares for an aggregate amount of Rs. 283.16 crore. Out of this investment in equityshare capital of BFS-Direct stands at Rs. 2.69 crore representing 19.90% of its capital.

It may be noted that BFS-Direct is neither a subsidiary nor an associate of theCompany.

Details of investment made in BFS-Direct also forms part of the financial statements.

Customer Engagement

The Company is committed to fairness in both form and spirit in its conduct withcustomers. One of the key aims of the Company is to communicate transparently its termsrights and liabilities to enable them to make prudent financial decision.

In line with the above the Company strives to create a culture of 'Customer Obsession'and endeavors to provide a frictionless experience across the lifecycle frompre-disbursal to closure of loan deposit accepting activities and other value-addedservices. The Company measures its Net Promoter Score to rate its customer loyalty. Thishelps the Company to gauge the outcome of its customer engagement efforts.

To strengthen the customer engagement and monitoring process the Board of Directorshave voluntarily constituted a Customer Service Committee in line with the requirementsapplicable to Banks. It is headed by an Independent Director. The Committee consists offollowing Board members:

1. Pramit Jhaveri - Chairman non-executive independent
2. Dr. Naushad Forbes - Member non-executive independent
3. Sanjiv Bajaj - Member non-executive non-independent
4. Rajeev Jain - Member executive non-independent

The terms of reference are:

• To oversee and guide implementation of service enhancement initiatives acrossthe Company.

• To review grievance redressal and issues bearing on the quality of servicesrendered by the Company to its customers adherence to the Fair Practices Code review ofawards under Ombudsman scheme and implementation of the internal ombudsman policy.

The Committee shall endeavor to meet at least once every six months.

In addition the Company has in place a Consumer Grievance and Protection Committeeconsisting of Senior Executives of the Company inter alia to conduct root causeanalysis for complaints and oversee the measures taken for grievance redressal ofcustomers.

The initiatives of the Company towards customer engagement are detailed in theManagement Discussion and Analysis.

Risk Management

During the year under review a revised Risk Management Policy/framework was adopted bythe Board.

This framework inter alia provides for principles of risk management riskgovernance organisation structure business control measures principle risks andbusiness continuity plan. The Management identifies and controls risks through a definedframework in terms of the aforesaid policy.

The Company continued to closely monitor new acquisitions and product portfolios tonavigate through the second and third waves of COVID-19 during the year and maintain riskmetrics at pre-covid levels.

Further in Q3 FY2022 the Company has changed its NPA classification criteria fromnumber of EMI outstanding to Days Past Due approach in line with the RBI circular dated 12November 2021 - 'Prudential norms on Income Recognition Asset classification andprovisioning pertaining to advances- Clarification'.

This change did not cause any negative impact on the Company's Gross Non-PerformingAsset.

The current composition of Risk Management Committee ('RMC') is as follows: Anami NRoy Chairman of the Committee (Independent Director) Sanjiv Bajaj (non-executivenon-independent director) Pramit Jhaveri (Independent Director) Rajeev Jain (ManagingDirector) Fakhari Sarjan (Chief Risk Officer) Sandeep Jain (Chief Financial Officer) andDeepak Bagati (President - Debt Management Services). Further details on RMC is furnishedin Corporate Governance Report.

More detailed discussion on the Company's risk management and portfolio quality iscovered in the Management Discussion and Analysis.

Business Continuity and Cyber Security

The Company continues to leverage its technological capabilities and operate in ahybrid model based on business roles and requirements. Multiple facilities like virtualprivate networks laptops for employees higher bandwidth availability and digitalcollaboration platforms etc. have enabled and facilitated operations in the'Work-from-Home' protocol where required. The Company continues to offer remote access foridentified IT vendors/partners to enable full resources for user support data centresupport application maintenance and testing. All key IT systems are compliant to ISO22301 Business Continuity Standard. Simultaneously the Company has initiated a phase-wiselaunch of its 3-in-1 application and continues its journey to become a digitalorganisation.

The Company operates all its critical internet-facing properties behind a well-knowncloud-based web application firewall to safeguard against web application attacks as wellas distributed denial of service attacks. Further regular vulnerability assessment andpenetration testing review of segregation of duties other audit and compliancetesting(s] have ensured that the Company's information assets are safe and secure.

As a part of the brand protection efforts and to safeguard customer's interest theCompany constantly monitors and where needed removes inappropriate/misleading socialmedia pages. An awareness programme is conducted for all employees using the digitalchannel regarding cyber security.

Public awareness campaign ‘Savdhan Rahein. Safe Rahein was launched acrossdigital and social media platforms to educate customers and the public at large onfinancial fraud risks and how to stay protected. Employees of the Company are required toundergo a mandatory online learning module on information security and affirm that theyhave understood these and are aware of the protocols to be followed. Regular informationsecurity related mailers are sent to all employees for awareness and training purpose.

The Company will continue its focus on security monitoring and incident responsethrough its security operations center.

A detailed discussion on information systems cyber security and information technologyis covered under Management Discussion and Analysis.

Directors and Key Managerial Personnel ('KMP')

A. Change in Directorate

i. Resignation:

Dr. Omkar Goswami with effect from 9 July 2021 and Ranjan Sanghi and Dr. Gita Piramalwith effect from close of business hours on 30 April 2022 resigned as non-executiveindependent director of the Company. The Board places on record its sincere appreciationfor the valuable contribution made by them during their tenure on the Board.

ii. Appointment:

• On recommendation of Nomination and Remuneration Committee ('NRC') the Boardhas appointed Pramit Jhaveri as an independent director of the Company for a period offive consecutive years effective 1 August 2021. Further shareholders have approved hisappointment through a postal ballot on 17 November 2021.

The Board is of the opinion that Pramit Jhaveri is a person of integrity expertiseand has competent experience to serve the Company as an independent director.

Pramit Jhaveri served as CEO of Citibank N.A. for over a decade. However this positionnot being one of the categories exempting such persons from appearing in proficiency testas per Companies (Appointment and Qualifications of Directors) Rules 2014 as amended hewill undertake the test within the prescribed time limit.

• The Board at its meeting held on 26 April 2022 based on the recommendation ofNRC appointed Radhika Haribhakti as an additional director and independent director for aperiod of five consecutive years with effect from 1 May 2022.

The Board is of the opinion that Radhika Haribhakti is a person of integrityexpertise and has relevant experience to serve the Company as an independent director.

Radhika Haribhakti is exempted from requirements of clearing the online proficiencytest pursuant to rule 6(4) of Companies (Appointment and Qualifications of Directors)Rules 2014 as amended. However she has on a voluntary basis appeared and cleared theproficiency test.

iii. Retirement:

Dipak Poddar ceased to be a Director of the Company from the close of business hours on31 March 2022 upon completion of his second term as an independent director.

The Board places on record its sincere appreciation for the valuable service andcontribution made by him during his long association with the Company.

B. Directors liable to retire by rotation

Rajeev Jain retires by rotation at the ensuing AGM being eligible offers himself forre-appointment.

Brief details of Rajeev Jain who is seeking re-appointment are given in the Notice ofAGM.


There was no change in the KMPs of the Company during FY2022.

Declaration by Independent Directors

The independent directors have submitted a declaration of independence stating thatthey meet the criteria of independence provided under section 149(6) of the Act read withregulation 16 of the SEBI Listing Regulations as amended. The independent directors havealso confirmed compliance with the provisions of rule 6 of Companies (Appointment andQualifications of Directors) Rules 2014 as amended relating to inclusion of their namein the databank of independent directors.

The Board took on record the declaration and confirmation submitted by the independentdirectors regarding them meeting the prescribed criteria of independence afterundertaking due assessment of the veracity of the same in terms of the requirements ofregulation 25 of the SEBI Listing Regulations.

Policy on Directors' Appointment and Remuneration

On recommendation of the NRC the Board has framed a Remuneration Policy. This policy interalia provides

(a) The criteria for determining qualifications positive attributes and independenceof directors; and

(b) Policy on remuneration of directors key managerial personnel and other employees.

The policy is directed towards a compensation philosophy and structure that will rewardand retain talent; and provides for a balance between fixed and incentive pay reflectingshort and long-term performance objectives appropriate to the working of the Company andits goals.

The Remuneration Policy is available on the Company's website and can be accessed athttps://cms-assets.

As per the requirements of the RBI Master Directions and SEBI Listing Regulationsdetails of all pecuniary relationship or transactions of the non-executive directorsvis-a-vis the Company are disclosed in the Corporate Governance Report.

Compliance with Code of Conduct

All Board members and senior management personnel have affirmed compliance with theCompany's Code of Conduct for FY2022.

A declaration to this effect signed by the Managing Director is included in this AnnualReport.

Annual Return

A copy of the Annual Return as provided under section 92(3) of the Act in theprescribed form which will be filed with the Registrar of Companies/MCA is hosted on theCompany's website and can be accessed at

Number of Meetings of the Board

Six (6) meetings of the Board were held during FY2022. Details of the meetings andattendance thereat forms part of the Corporate Governance Report.

Directors' Responsibility Statement

The financial statements are prepared in accordance with the Indian AccountingStandards (Ind AS) under historical cost convention on accrual basis except for certainfinancial instruments which are measured at fair values pursuant to the provisions of theAct and guidelines issued by SEBI/RBI. Accounting policies have been consistently appliedexcept where a newly issued Accounting Standard is initially adopted or a revision to anexisting Accounting Standard requires a change in the accounting policy. These form a partof the Notes to the financial statements.

In accordance with the provisions of section 134(3) (c) of the Act and based on theinformation provided by the Management the directors state that:

i. in the preparation of the annual accounts the applicable Accounting Standards havebeen followed along with proper explanation relating to material departures;

ii. they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year and of the profitof the Company for FY2022;

iii. they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

iv. they have prepared the annual accounts on a going concern basis;

v. they have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and are operating effectively; and

vi. they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and are operating effectively.

Audit Committee

During the year under review consequent to resignation of Dr. Omkar Goswami the AuditCommittee was re-constituted to induct Anami N Roy as member and Chairman in his place.Further Pramit Jhaveri was inducted as member of the Committee effective 1 August 2021.

The present composition of the Committee is Anami N Roy as Chairman and Sanjiv BajajDr. Naushad Forbes and Pramit Jhaveri as other members.

During FY2022 all recommendations of the Audit Committee were accepted by the Board.

The brief terms of reference and attendance record of members are given in theCorporate Governance Report.

Particulars of Loans Guarantees and Investments

The Company being an NBFC registered with the RBI and engaged in the business ofgiving loans in ordinary course of its business is exempt from complying with theprovisions of section 186 of the Act with respect to loans and guarantees. Accordinglythe disclosures of the loans given as required under the aforesaid section have not beenmade in this Report.

In addition to investment in subsidiaries and group companies which is covered abovedetails of major investments in other companies are under:

1. One MobiKwik Systems Ltd. ('MobiKwik'):

Pursuant to a commercial agreement with MobiKwik the Company was allotted 15389compulsorily convertible cumulative preference shares in tranches against receivablesaggregating approximately to Rs. 15.67 crore. Total investment in MobiKwik as on 31 March2022 is approximately Rs. 296.89 crore.

Further MobiKwik sub-divided equity shares of face value of Rs. 10 to face value ofRs. 2 and issued bonus shares in the ratio of 1:3.

The total equity shares held by the Company in MobiKwik is 7979440 equity shares(post giving effect to sub-division and bonus) representing 13.95% of its capital on afully diluted basis.

During FY2022 MobiKwik has received in-principle approval from SEBI in respect of anInitial Public Offer (IPO). The IPO size is Rs. 1900 crore out of which the Offer forSale (OFS) pool is approximately Rs. 400 crore. The Company has expressed its intention toparticipate in the OFS to the extent permissible under SEBI Regulations.

2. RBL Bank Ltd.:

The Company continues to stay invested in RBL Bank Ltd. Information regardinginvestments covered under the provisions of section 186 of the Act is detailed in thefinancial statements.

Employee Stock Options ('ESOP')

The Company offers stock options to select employees to foster a spirit of ownershipand an entrepreneurial mindset. Because of their nature stock options help to build aholistic long-term view of the business and a sustainability focus in the seniormanagement team. Stock options are granted to tenured employees in managerial andleadership positions upon achieving defined thresholds of performance and leadershipbehaviour. This has contributed to the active involvement of the leadership and seniorteam who are motivated to ensure long-term success of the Company. Grant of stock optionsalso allow the Company to be conservative in awarding fixed pay balance short-termincentives with risk considerations and build the focus on consistent long-term results.

During FY2022 number of options that could be granted under the scheme was enhanced by10000000 stock options convertible into 10000000 equity shares of the face value ofRs. 2 fully paid-up. Total option that could be granted under the scheme stands revisedfrom 25071160 options (adjusted for sub-division and bonus) to 35071160 options. Thetreatment of unvested and vested options at the time of retirement has also been amendedduring the year under review.

A statement giving complete details as at 31 March 2022 under regulation 14 of theSEBI (Share Based Employee Benefits and Sweat Equity) Regulations 2021 is available onthe website of the Company and can be accessed at

The Employee Stock Option Scheme 2009 adopted by the Company is in line compliancewith provisions of SEBI (Share Based Employee Benefits and Sweat Equity) Regulations2021.

Grant wise details of options vested exercised and cancelled are provided in the notesto the standalone financial statements.

The Company has not issued any sweat equity shares or equity shares with differentialvoting rights during FY2022.

Share Capital

During FY2022 2841894 equity shares at applicable grant prices were allotted toBFL Employee Welfare Trust under the BFL Employee Stock Options Scheme 2009.

As on 31 March 2022 the paid-up share capital of the Company stood at Rs. 121.09 croreconsisting of 605429233 equity shares of face value of Rs. 2 fully paid-up.

Related Party Transactions

All contracts/arrangement/transactions entered by the Company during FY2022 withrelated parties were in compliance with the applicable provisions of the Act and SEBIListing Regulations. Prior omnibus approval of the Audit Committee is obtained for allrelated party transactions which are foreseen and of repetitive nature. Pursuant to thesaid omnibus approval details of transaction entered into is also reviewed by the AuditCommittee on a quarterly basis.

All related party transactions entered during FY2022 were on arm's length basis and notmaterial under the Act and SEBI Listing Regulations. None of the transactions requiredmembers' prior approval under the Act or SEBI Listing Regulations.

Details of transactions with related parties during FY2022 are provided in the notes tothe financial statements. There were no transaction requiring disclosure under section134(3](h] of the Act. Hence the prescribed Form AOC-2 does not form a part of thisreport.

The policy on materiality of related party transactions and on dealing with relatedparty transactions was amended in line with SEBI (Listing Obligations and DisclosureRequirements) (Sixth Amendment) Regulations 2021. The policy is available on the websiteof the Company at Rs.scl=1&fmt=pdf and also forms a part of the Corporate GovernanceReport.

Material Changes and Commitments

There were no material changes and commitments affecting the financial position of theCompany which occurred between the end of the financial year and the date of this report.

Conservation of Energy

The operations of the Company are not energy intensive. The Company implements variousenergy conservation measures across all its functions and value chain which arehighlighted in the Business Responsibility and Sustainability Report.

Technology Absorption

The details pertaining to technology absorption have been explained in the ManagementDiscussion and Analysis.

Considering the nature of services and businesses no specific amount of expenditure isearmarked for Research and Development. However the Company on an ongoing basis strivesfor various improvements in the products platforms and processes.

Foreign Exchange Earnings and Outgo

During FY2022 the Company did not have any foreign exchange earnings and the foreignexchange outgo in terms of actual outflow amounted to Rs. 177.04 crore.

Corporate Social Responsibility ('CSR')

The CSR Committee comprises of three directors viz. Dr. Naushad Forbes Sanjiv Bajajand Rajeev Jain.

The Board at its meeting held on 26 October 2021 has appointed Dr. Naushad Forbes asChairman of the Committee with effect from 27 October 2021.

The CSR obligation of the Company for FY2022 is Rs. 120.89 crore (after adjustment). Ason 31 March 2022 total amount spent on CSR activities by Company is Rs. 60.01 crore.

As per section 135 of the Act read with Companies (Corporate Social Responsibility)Rules 2014 as amended the Company is required to transfer any unspent amount pursuantto any ongoing project undertaken by the Company in pursuance of its Corporate SocialResponsibility Policy within a period of thirty days from the end of the financial yearto a special account opened by the Company in that behalf for that financial year in anyscheduled bank called Unspent Corporate Social Responsibility Account.

Some part of the mandatory obligations for FY2022 remained unspent as the funding forongoing projects were delayed/reduced on account of COVID-19 pandemic and lockdowns.Besides few pertaining to COVID relief did not require anticipated funds as the thirdwave was not as severe as estimated thereby requiring it to be transferred to an UnspentCorporate Social Responsibility Account. Accordingly the Company has opened necessarybank account to transfer unspent amount of Rs. 60.88 crore.

Detailed information on CSR Policy its salient features CSR initiatives undertakenduring the year details pertaining to spent and unspent amount forms part of AnnualReport on CSR activities.

The CSR policy has been hosted on the website of the Company and can be accessed at

Further Chief Financial Officer has certified that the funds disbursed have beenutilised for the purpose and in the manner approved by the Board for FY2022.

Formal Annual Evaluation

Pursuant to section 178 of the Act the NRC and the Board has decided that theevaluation shall be carried out by the Board only and the NRC will only review itsimplementation and compliance.

Further as per Schedule IV of the Act and provisions of SEBI Listing Regulations theperformance evaluation of independent directors shall be done by the entire Boardexcluding the directors being evaluated on the basis of performance and fulfillment ofcriteria of independence and their independence from Management. On the basis of thereport of the performance evaluation it shall be determined whether to extend or continuethe term of appointment of independent director.

Accordingly the Board has carried out an annual performance evaluation of its ownperformance that of its Committees Chairperson and individual directors.

The manner in which formal annual evaluation of performance was carried out by theBoard for the year 2021-22 is given below:

• The NRC at its meeting held on 19 May 2020 reviewed the criteria forperformance evaluation.

The criteria is available on the website of the Company at


directorspdf Rs.scl=1&fmt=pdf

• Based on the said criteria a questionnaire-cum-rating sheet was deployed usingan IT platform for seeking feedback of the directors with regards to the performance ofthe Board its Committees the Chairperson and individual directors.

• From the individual ratings received from the directors a report on summary ofratings in respect of performance evaluation of the Board its Committees Chairperson andindividual directors for the year 2021-22 and a consolidated report thereof were arrivedat.

• The report of performance evaluation so arrived at was then discussed and notedby the Board at its meeting held on 14 March 2022.

• The NRC reviewed the implementation and compliance of the performance evaluationat its meeting held on 14 March 2022.

• Based on the report and evaluation the Board and NRC at their respectivemeetings held on 14 March 2022 determined that the appointment of all independentdirectors may continue.

• Details on the evaluation of Board non-independent directors and Chairperson ofthe Company as carried out by the independent directors at their separate meeting held on14 March 2022 have been furnished in a separate paragraph elsewhere in this report.

• During FY2022 the criteria and process followed by the Company was reviewed bythe NRC which opined these to be satisfactory.

Other than Chairman of the Board and NRC no other Director has access to theindividual ratings given by directors.

Significant and Material Orders

During FY2022 there were no significant or material orders passed by any regulator orcourt or tribunal impacting the going concern status and Company's operations in future.

Internal Financial Controls

Internal Financial Controls laid down by the Company is a systematic set of controlsand procedures to ensure orderly and efficient conduct of its business including adherenceto the Company's policies safeguarding of its assets prevention and detection of fraudsand errors accuracy and completeness of the accounting records and timely preparation ofreliable financial information. Internal financial controls not only require the system tobe designed effectively but also to be tested for operating effectiveness periodically.

The Board is of the opinion that internal financial controls with reference to thefinancial statements were tested and reported adequate and operating effectively. Theinternal financial controls are commensurate with the size scale and complexity ofoperations.


The Company accepts deposits from retail and corporate clients. As on 31 March 2022 ithad a standalone deposit book of Rs. 30289.52 crore delivering an annual growth of17.39% in FY2022. Deposits contributed to 24.62% of BFL's standalone borrowings versus25.84% as at the end of FY2021.

The consolidated deposits book as on 31 March 2022 stood at Rs. 30800 croredelivering an annual growth of 19% in FY2022. Deposit contributed to 19% of itsconsolidated borrowings as on versus 20% at the end of FY2021.

During FY2022 the Company accepted public deposits of Rs. 9264.53 crore. Publicdeposits outstanding as at the end of the year aggregated to Rs. 21184.07 crore.

Pursuant to provisions of the RBI Act 1934 the Company has created a charge onstatutory liquid assets amounting to Rs. 3910.12 crore in favour of the trustee for FixedDeposit ('FD') holders.

During FY2022 the Company accepted corporate deposits (CDs) of Rs. 17383.16 crore.CDs outstanding as on 31 March 2022 were Rs. 4253.48 crore.

During FY2022 the Company accepted other deposits of Rs. 4094.15 crore. Other depositoutstanding as on 31 March 2022 were Rs. 4851.58 crore.

During FY2022 there was no default in repayment of deposits or payment of interestthereon.

With a view to reduce unclaimed amount of fixed deposits the Company adopted thefollowing process:

• Wherever payment of deposit amount and interest thereon is rejected by bank ofthe deposit holder Customer Service Team calls the depositor to inform about rejectionreason and advise them the process for change of linked bank account;

• In addition SMS/Email/Physical letter are also sent to depositors to informthem of rejection reason(s) and advise them to initiate appropriate action for change ofbank details;

• Account payee cheque in the name of the customer for unclaimed amount isdispatched at customer's communication address (excluding deceased cases where settlementis to be done as per nomination/ survivorship clause);

• In case of death of depositors claim settlement process is advised to jointdepositors/nominee/legal heir as the case may be;

• Wherever the residential status of the depositors has changed from Resident toNon-Resident they are advised to submit updated FATCA/CRS declaration and to get theirbank details updated; and

• Assistance of Risk Containment Unit is sought to seek whereabouts of thecustomer wherever latter remains untraceable.

As on 31 March 2022 there were 23 FDs amounting to Rs. 33.96 lakh which had maturedand remained unclaimed and interest on matured deposits amounting to Rs. 1.89 lakh andinterest on active deposits amounting to Rs. 2.94 lakh had also remained unclaimed.


During FY2022 the Company has increased the borrowing limit from Rs. 160000 crore toRs. 225000 crore vide special resolution passed by the members on 2 March 2022.

The total borrowing as on 31 March 2022 is Rs. 123040.25 crore. The breakup of thesame is as under:

Particulars Deposits Bank Loans (TL/CC/OD/ WCDL) Non Convertible Securities Subordinate Debt Short-term Borrowings External Commercial Borrowing
Amount in crore) 30289.52 22348.78 52608.53 3845.77 8425.21 5522.44
% to total borrowing 25% 18% 43% 3% 7% 4%

The Company had established a Secured Euro Medium Term Note Programme for USD 1.5billion listed on Singapore Exchange Securities Trading Ltd. during FY2020 to be utilisedover a period.

Credit Rating

S&P Global Ratings have revised the credit rating outlook of the Company to'Positive' from 'Stable' while reaffirming the Long-Term Rating at 'BB+' and Short-TermRating at 'B' on 30 March 2022 on the ground of Company's continued sound financialperformance.

The brief details of the ratings received from credit rating agencies by the Companyfor all its outstanding instruments is given in General Shareholder Information.

Whistle Blower Policy/Vigil Mechanism

The Company has a Whistle Blower Policy encompassing vigil mechanism pursuant to therequirements of the section 177(9) of the Act and regulation 22 of the SEBI ListingRegulations. The whistle blower framework has been introduced with an aim to provideemployees directors and value chain partners with a safe and confidential channel toshare their inputs about such aspects which are adversely impacting their workenvironment. The policy/vigil mechanism has been revised recently and enables directorsemployees and value chain partners to report their concerns about unethical behaviouractual or suspected fraud or violation of the Company's Code of Conduct or ethics policyand leak or suspected leak of unpublished price sensitive information.

The concerns may be reported anonymously either through email or through a'Confidential Feedback Mechanism' which is reviewed by a Whistle Blower Committeecomprising senior management representatives from within and outside the organisation. TheAudit Committee reviews the functioning of the vigil mechanism/Whistle Blower Policy oncea year.

The Whistle Blower Policy is uploaded on the website of the Company and can be accessedat https://cms-

More details are given in Corporate Governance Report.

Independent Directors' Meeting

Pursuant to the Act and SEBI Listing Regulations the independent directors must holdat least one meeting in a financial year without attendance of non-independent directorsand members of the Management. Accordingly independent directors of the Company met on 14March 2022 and:

• noted the report of performance evaluation from the Chairman of the Board forthe year 2021-22;

• reviewed the performance of non-independent directors and the Board as a whole;

• reviewed the performance of the Chairman of the Board taking into account theviews of executive directors and non-executive directors; and

• assessed the quality quantity and timeliness of flow of information between theCompany's Management and the Board that is necessary for the Board to effectively andreasonably perform their duties.

The independent directors present elected Dr. Naushad Forbes as Chairman for themeeting. All independent directors were present at the meeting except Dr. Gita Piramal towhom the leave of absence was granted.

In addition the independent directors have a separate meeting with the seniormanagement team (SMT) during which the SMT is encouraged to express its views andconcerns pertaining to the business. Suggestions from the directors are noted by theManagement.

RBI Guidelines

The Company continues to fulfil all the norms and standards laid down by RBI pertainingto non-performing assets capital adequacy statutory liquidity assets etc. As againstthe RBI norm of 15% the capital to risk-weighted assets ratio of the Company was 27.22%as on 31 March 2022. In line with the RBI guidelines for asset liability management (ALM)system for NBFCs the Company has an asset liability committee which meets monthly toreview its ALM risks and opportunities. Further BFL exceeds the regulatory requirement ofliquidity coverage ratio (LCR) introduced by the RBI in FY2020. As against the LCRrequirement of 60% BFL's LCR as on 31 March 2022 was 134%.

The Company continues to be in compliance with the Master Direction for Non-BankingFinancial Company - Systemically Important Non-Deposit taking Company and Deposit takingCompany (Reserve Bank) Directions 2016.

Corporate Governance

In terms of the SEBI Listing Regulations a separate section titled Report on CorporateGovernance has been included in this Annual Report along with the Management Discussionand Analysis and report on General Shareholder Information.

The Managing Director and the Chief Financial Officer have certified to the Board inrelation to the financial statements and other matters as specified in the SEBI ListingRegulations.

A certificate from auditors of the Company regarding compliance of conditions ofcorporate governance is annexed to this Report.

Business Responsibility and Sustainability Report ('BRSR')

Pursuant to amendment in SEBI Listing Regulations top 1000 listed entities based onmarket capitalisation are required to submit a BRSR with effect from the FY2023. Howeverthese top 1000 listed entities may voluntarily adopt to submit the BRSR for FY2022 inplace of Business Responsibility Report.

Accordingly the Company has adopted a Policy on BRSR and other ESG initiatives. Adetailed BRSR in the format prescribed by SEBI describing various initiatives actions andprocess of the Company towards the ESG endeavor has been hosted on Company's website andcan be accessed at finance-investor-relation-annual-reports

Secretarial Standards of ICSI

The Company has complied with the requirements prescribed under the SecretarialStandards on meetings of the Board of Directors (SS-l) and General Meetings (SS-2] readwith the MCA circulars granting exemptions in view of the COVID-19 pandemic.

Internal Audit

The internal audit function provides an independent view to the Board of Directors theAudit Committee and the Senior Management on the quality and efficacy of the internalcontrols governance systems and processes. In line with the RBI's guidelines on RiskBased Internal Audit the Company has adopted a Risk Based Internal audit policy.

At the beginning of each financial year an audit plan is rolled out after approval ofthe Audit Committee. Pursuant to Risk Based Internal Audit Framework internal audit isaligned in such a manner that assurance is provided to the Audit Committee and Board ofDirectors on quality and effectiveness of the internal controls and governance relatedsystems and processes.

The Audit Committee regularly reviews the internal audit reports and the adequacy andeffectiveness of internal controls. Significant audit observations corrective andpreventive actions thereon are presented to the Audit Committee on a quarterly basis.

Statutory Auditors

Reserve Bank of India through its circular dated 27 April 2021 issued Guidelines forAppointment of Statutory Auditors (the 'Guidelines'/'circular') mandating NBFCs(including HFCs) with an asset size of Rs. 15000 crore and above to appoint minimum twoaudit firms as joint auditors for a continuous period of three years. Further theGuidelines also specifies that an auditor who has completed a period of three years(counted as one tenure) as on the date of the circular shall not be eligible forre-appointment in the same entity for six years (two tenures) after completion of onetenure of three years. Subsequently the RBI had also released Frequently Asked Questions(FAQs) dated 11 June 2021 inter alia clarifying that the existing statutoryauditors who have completed three years with an entity would not be able to continue asauditors with effect from second half of FY2022 even though they may not have completedtheir present tenure as approved by the Members of the said entity.

In terms of section 139 of the Act S R B C & CO LLP Chartered Accountants (FirmRegistration No. 324982E/ E300003) ('SRBC') were appointed as Statutory Auditors of theCompany for a period of five consecutive years to hold office from the conclusion of the30th AGM of the Company till the conclusion of the 35th AGM.

Given the RBI guidelines stated above SRBC being ineligible to continue as StatutoryAuditors of the Company for FY2022 and had therefore tendered their resignationeffective from 13 November 2021.

In line with the RBI requirements the Board of Directors based on the recommendationof the Audit Committee at their meeting held on 16 September 2021 have proposed theappointment of Deloitte Haskins & Sells Chartered Accountants (Firm Registration No.302009E] ('Deloitte') and G. M. Kapadia & Co. Chartered Accountants (FirmRegistration No.104767W) ('G. M. Kapadia') as Joint Statutory Auditors for a period of 3years to conduct audit of the financial statements of the Company for the financial years2022 2023 and 2024.

Pursuant to the provisions of section 139(8) of the Act members of the Company haveapproved appointment of Deloitte and G. M. Kapadia as Joint Statutory Auditors effective17 November 2021 till conclusion of 35th AGM. In the ensuing AGM approval of the membersis being sought for their appointment as Joint Statutory Auditor for remaining two termsfrom the conclusion of the 35th AGM till the conclusion of the 37th AGM for the financialyear ending 31 March 2023 and 31 March 2024 respectively.

The audit report given by Deloitte and G.M. Kapadia Joint Statutory Auditors forFY2022 is unmodified i.e. it does not contain any qualification reservation or adverseremark or disclaimer.

In terms of the RBI Master Directions - Non-Banking Financial Companies Auditors'Report (Reserve Bank) Directions 2016 the previous auditors have also submitted anadditional report dated 17 July 2021 for FY2021 which has been filed with RBI. There wereno comments or adverse remarks in the said report as well.

Secretarial Auditor

Pursuant to the provisions of section 204 of the Act and the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Board has appointed Shyamprasad D.Limaye Practicing Company Secretary (FCS No. 1587 CP No. 572) to undertake secretarialaudit of the Company.

A report from the secretarial auditor in the prescribed Form MR-3 is annexed to thisReport.

As per regulation 24A(1) of SEBI Listing Regulations a listed company is required toannex a secretarial audit report of its material unlisted subsidiary to its Annual Report.The secretarial audit report of BHFL a material subsidiary (a high value debt listedcompany) for FY2022 is annexed herewith.

In addition secretarial audit report pursuant to section 204 of the Act for BFinsec anon-material subsidiary is also annexed herewith.

Pursuant to regulation 24A(2) of SEBI Listing Regulations a report on secretarialcompliance for FY2022 has been issued by Shyamprasad D. Limaye and the same will besubmitted with the stock exchanges within the given timeframe. The report will be madeavailable on the website of the Company.

There are no observations reservations or qualifications or adverse remark in any ofthe aforesaid reports.

Other Statutory Disclosures

• The financial statements of the Company and its subsidiaries are placed on theCompany's website at

• Details required under the provisions of section 197(12) of the Act read withrule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 as amended containing inter alia the ratio of remuneration of directors tomedian remuneration of employees percentage increase in the median remuneration areannexed to this Report.

• Details of top ten employees in terms of the remuneration and employees inreceipt of remuneration as prescribed under rule 5(2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 as amended containing detailsprescribed under rule 5(3) of the said rules which form part of the Directors' Reportwill be made available to any member on request as per provisions of section 136(1) ofthe Act.

• The Company being an NBFC the provisions relating to Chapter V of the Acti.e. acceptance of deposit are not applicable. Disclosures as per NBFC regulations havebeen made in this Annual Report.

• The auditors i.e. statutory auditors and secretarial auditors have notreported any matter under section 143(12) of the Act and therefore no details arerequired to be disclosed under section 134(3)(ca) of the Act.

• The provision of section 148 of the Act relating to maintenance of cost recordsand cost audit are not applicable to the Company.

• The Company has a policy on prevention of sexual harassment at the workplace.The Company has complied with the provisions relating to the constitution of InternalComplaints Committee under Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013. The number of complaints received disposed off andpending during FY2022 is given in the Corporate Governance Report.

• There is no change in the nature of business of the Company during FY2022.

• The securities of the Company were not suspended from trading during the year onaccount of corporate actions or otherwise.

• The Company has not defaulted in repayment of loans from banks and financialinstitutions. There were no delays or defaults in payment of interest/principle of any ofits debt securities.

• During FY2022 the Company has issued non-convertible debenture to the tune ofRs. 16650 crore and redeemed non-convertible debentures and subordinate debt to the tuneof Rs. 2182 crore and

Rs. 50 crore respectively.

• The Managing Director as per the terms of his appointment does not draw anycommission or remuneration from subsidiary company. Hence no disclosure as required undersection 197(14) of the Act has been made.

• As on 31 March 2022 there is no amount remaining unclaimed in respect ofnon-convertible debentures.

• Neither any application was made nor any proceeding is pending under theInsolvency and Bankruptcy Code 2016 against the Company.

• During FY2022 there was no instance of one-time settlement with Banks orFinancial Institutions. Therefore as per rule 5(xii) of Companies (Accounts) Rules 2014reasons of difference in the valuation at the time of one-time settlement and valuationdone while taking loan from the Banks or Financial Institutions are not reported.

• Disclosures pursuant to RBI Master Directions unless provided in the Directors'Report form part of the notes to the standalone financial statements.


The Board of Directors places its gratitude and appreciation for the support andcooperation from its members the RBI and other regulators banks financial institutionstrustees for debenture holders and fixed deposit holders.

The Board of Directors also places on record its sincere appreciation for thecommitment and hard work put in by the Management and the employees of the Company and itssubsidiaries and thanks them for yet an excellent year of performance.

On behalf of the Board of Directors

Sanjiv Bajaj


Pune: 26 April 2022.