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CreditAccess Grameen Ltd.

BSE: 541770 Sector: Financials
BSE 00:00 | 13 Apr 580.85 18.65






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OPEN 552.00
VOLUME 21153
52-Week high 839.00
52-Week low 327.40
P/E 97.13
Mkt Cap.(Rs cr) 9,037
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 552.00
CLOSE 562.20
VOLUME 21153
52-Week high 839.00
52-Week low 327.40
P/E 97.13
Mkt Cap.(Rs cr) 9,037
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

CreditAccess Grameen Ltd. (CREDITACC) - Director Report

Company director report


The Members

CreditAccess Grameen Limited

The Directors have pleasure in presenting the 29th Board's Report of CreditAccessGrameen Limited (the "Company") together with the Audited Financial Statementsfor the year ended March 312020.

Unless otherwise specifically mentioned all the numbers provided herein are standalonefigures.


The financial statements of the Company for the year ended March 312020 have beenprepared in accordance with Ind AS and Schedule III to the Companies Act 2013 (the"Act").

The audited consolidated financial statements have been prepared in compliance with theAct Ind AS 110 'Consolidated financial statements' and the Securities and Exchange Boardof India (Listing Obligations and Disclosure Requirements) Regulations 2015 (the 'ListingRegulations').

A separate statement containing the salient features of its subsidiaries in theprescribed Form AOC-1 is attached to this report.

Financial Results - Standalone

Particulars FY2020 FY2019 % change over FY 2019
Total income 16843.64 12833.26 31.25%
Finance cost 5726.72 4167.54 37.41%
Net income 11116.92 8665.72 28.29%
Total operating expenses 4218.22 2939.73 43.49%
Pre-provisioning operating profit 6898.70 5725.98 20.48%
Impairment on financial instruments 2389.82 748.55 219.26%
Profit before tax 4508.88 4977.43 -9.41%
Profit after tax 3275.03 3217.56 1.78%
Other comprehensive income (273.23) (99.26) 175.37%
Total comprehensive income 3001.70 3118.35 -3.74%
Basic Earnings Per Share (EPS) (in rupees) 22.78 23.37 -2.52%
Diluted Earnings Per Share (DPS) (in rupees) 22.59 23.14 -2.38%

Financial Results - Consolidated

Particulars FY2020 FY2019 % change over FY 2019
Total income 17054.80 - -
Finance cost 5799.80 - -
Net income 11255.00 - -
Total operating expenses 4266.30 - -
Pre-provisioning operating profit 6988.70 - -
Impairment on financial instruments 2372.67 - -
Profit before tax 4616.03 - -
Profit after tax 3354.92 - -
Other comprehensive income (273.64) - -
Total comprehensive income 3081.28 - -
Basic Earnings Per Share (EPS) (in rupees) 23.20 - -
Diluted Earnings Per Share (DPS) (in rupees) 23.00 - -

Due to rounding off numbers presented in above table may not add up precisely to thetotals provided. Summary of financial performance of subsidiary viz; Madura Micro FinanceLimited is given below:


The Company acquired 75.64% of the shareholding of Madura Micro Finance Limited("MMFL) from its existing shareholders on March 18 2020 and additionally acquired0.44% of the share capital of MMFL on March 312020. Upon receipt of regulatory approvalsthe Scheme of Amalgamation shall be filed with the relevant National Company LawTribunals.

The Amalgamation would create value to various stakeholders including shareholderscreditors customers and employees as the combined business would benefit from increasedscale wider product diversification focused growth stronger balance sheet and theability to drive synergies across revenue opportunities operating efficiencies and costsavings through economies of scale amongst others

For the period from March 18 2020 up to March 312020 MMFL was a subsidiary of theCompany but not a Material Subsidiary.

The Company does not have any associate or joint venture companies.

Madura Micro Finance Limited's Financial Performance

Particulars FY2020 FY2019 % change over FY 2019
Total income 4759.04 3867.73 23.04%
Finance cost 1954.95 1499.15 30.40%
Total net income 2804.09 2368.57 18.39%
Total operating expenses 1168.57 797.36 46.55%
Impairment on financial instruments 571.42 350.42 63.07%
Profit before exceptional items 1064.10 1220.79 -12.84%
Exceptional items - - -
Profit before tax 1064.10 1220.79 -12.84%
Profit after tax 796.72 854.70 -6.78%
Other comprehensive income (2.16) (0.03) -
Total comprehensive income 794.55 854.67 -7.03%

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

B. Madura Micro Education Private Limited

Madura Micro Education Private Limited is a wholly owned subsidiary of Madura MicroFinance Limited.

Madura Micro Education Private Limited financial performance

Particulars FY2020 FY2019 % change over FY 2019
Total income 8.35 10.62 -21.37%
Finance cost 1.03 1.47 -29.93%
Total net income 7.32 9.15 -20.00%
Total operating expenses 5.14 7.52 -31.65%
Impairment on financial instruments 0.00 0.00 0.00%
Profit before exceptional items 2.18 1.63 33.74%
Exceptional items 0 0 -
Profit before tax 2.18 1.63 33.74%
Profit after tax 2.18 1.63 33.74%
Other comprehensive income -0.03 -0.10 -70.00%
Total comprehensive income 2.15 1.53 40.52%

a. Business Growth

The Company witnessed all-round growth during the year opened more branches acquiredsignificant numbers of customers and served them through 929 branches across 230 districtsin 14 States / Union Territories. The Company was able to raise the necessary resourcesall through the year to match the business and operational requirements leveraging itsrelationships with banks and financial institutions as well as forming new lenderrelationships.

The Company's overall performance during the year was robust resulting in improvementin all operational and financial parameters.

Your Company's organizational highlights for Financial Year ("FY") 2020 areas follows:

Year Ended 2020 2019
Branches 929 670
States/Union Territories 14 9
Districts 230 157
Kendras 196012 172173
Borrowers 2905036 2469837
Loans Disbursed (Rs in million) 103892.21 82211.60
Gross AUM (Rs in million) 98964.14 71593.30

b. Profitability

The total income of the Company increased from Rs 12833.26 million to Rs 16843.64million in FY2020. The total expenditure for the FY2020 increased from Rs 7855.82 millionto Rs 12332.36 million. The Company recorded profit after tax (PAT) of Rs 3275.03million for FY2020 compared to Rs 3217.61 million in FY2019. Considering that theunprecedented situation at the end of the year with COVOD 19 pandemic the company hasdecided to provide additional Rs 828.6 mn as provision against impairment as on March312020. Further the company also accounted the expenses of Rs 152.17 mn on account ofmerger of MMFL This proactive provisioning has resulted into lower profitability for theyear.


The Board of Directors aim to grow the business lines of the Company and enhance therate of return on investments of the shareholders. With a view to financing the long-termgrowth plans of the Company that requires substantial resources the Board of Directorsdid not recommend a dividend for the year under review.

In line with Clause 43A of the Listing Regulations the Board of Directors adopted aDividend distribution policy which sets out the parameters in determining the payment /distribution of dividend. The details of Dividend Distribution Policy is placed on theCompany's website at


The Company has transferred Rs 655.01 million to reserves out of the net profit ofFY2020 and an amount of Rs. 7795.20 million is the accumulated balance in RetainedEarnings Account (Profit and Loss account and comprehensive income).


The paid-up Equity Share Capital as at March 312020 stood at Rs 1439.85 million.During the year under review the Company has issued 433198 shares to the employees whoexercised their stock options granted under GKFSPL Employee Stock Option Plan - 2011. Ason March 312020 except as mentioned below none of the Directors of the Company holdinstruments convertible into equity shares of the Company.

As on March 312020 362500 stock options are held by Mr. Udaya Kumar Hebbar MD &CEO and 66000 stock options are held by Mr. B.R. Diwakar Director - Finance & CFOwhich are convertible into equity shares upon exercise of the same.


As on March 31 2020 the Board of your Company consists of Ten Directors. Theirdetails are as follows:

Category Name of Directors
Mr. Paolo Brichetti
Non-Executive Nominee Directors Mr. Massimo Vita
Mr. Sumit Kumar
Mr. Prabha Raveendranathan Mr. Anal Kumar Jain
Non-Executive Independent Directors Mr. George Joseph
Mr. Manoj Kumar
Ms. Sucharita Mukherjee
Executive Directors Mr. B. R. Diwakar Director - Finance & CFO
Mr. Udaya Kumar Hebbar Managing Director & CEO

The composition of the Board is in line with the requirements of the Companies Act2013 and the Securities Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 ("Listing Regulations"). All the Directors havevast knowledge and experience in their relevant fields and the Company had benefittedimmensely by their presence on the Board.

The skills/ expertise / competence of the Board of directors identified by the Board asrequired in the context of business of the Company is mentioned in the CorporateGovernance Report.

Changes in Directors and Key Managerial Personnel (KMP) during the FY 2020

During the year under review following were the changes in the Directors and KMPs ofthe Company.

Name Date of Appointment/ Resignation/ Re-designation Reason
Mr. Diwakar B. R. June 14 2019 Appointed as Director Finance & CFO
Mr. M.N. Gopinath October 29 2019 Resigned as Chairman and Independent Director
Mr. Manoj Kumar October 30 2019 Appointed as Additional and Independent Director
Mr. Syam Kumar R. January 22 2020 Resigned as Company Secretary and Compliance Officer
Mr. M.J. Mahadev Prakash January 22 2020 Appointed as Head - Compliance Legal & Company Secretary

Mr. Udaya Kumar Hebbar Managing Director & CEO Mr. B. R. Diwakar Director -Finance & CFO and Mr. M.J. Mahadev Prakash Head - Compliance Legal & CompanySecretary are the KMPs of the Company as on March 312020.

b. Woman Director

In terms of the provisions of Section 149 of the Companies Act 2013 and Regulation17(1)(a) of Listing Regulations the Company needs to have at least one woman director onthe Board. The Company has Ms. Sucharita Mukherjee as Independent Woman Director on theBoard.

c. Director retiring by Rotation

Mr. Massimo Vita Nominee Director (DIN: 07863194) is liable to retire by rotation interms of provisions of the Companies Act 2013 at the ensuing Annual General Meeting ofthe Company and being eligible offers himself for reappointment. The Board recommends hisreappointment.

As stipulated under Reg 36 (3) of the Listing Regulations a brief resume of Mr.Massimo Vita proposed to be reappointed is given in the notice of the 29th AGM of theCompany.

d. Declaration by Independent Director(s) and re-appointment if any

The Company has five Independent Directors on the Board. The Company has receiveddeclaration from each Independent Director of the Company under section 149(7) of theCompanies Act 2013 that they meet the criteria of independence as laid down in Section149(6) of the Companies Act 2013 and subsequently the same was placed at the BoardMeeting held on May 06 2020.

A declaration by Managing Director & CEO confirming the receipt of this declarationfrom Independent Directors is annexed to this report as Annexure I.

During the year under review Mr. M.N. Gopinath resigned as the Chairman andIndependent Director and Mr. Manoj Kumar was appointed as Additional and IndependentDirector. The Board is of the opinion that Mr. Manoj Kumar possesses relevant expertiseand experience to contribute for the growth and betterment of the Company.

e. Policy on Board Diversity

The Policy on Board Diversity approved and adopted by the Company is as follows:

1. Diversity is ensured through consideration of a number of factors including but notlimited to skills industry experience background and other qualities.

2. The Company takes into account factors based on its own business model and specificneeds from time to time.

3. The Nomination & Remuneration Committee leads the process of identifying andnominating candidates for appointment as Directors on the Board.

4. The benefits of diversity continue to influence succession planning and to be thekey criteria for the search and nomination of Directors to the Board.

5. Board appointments are based on merit and candidates are evaluated against objectivecriteria having due regard to the benefits of diversity on the Board including that ofgender.

f. Policy on Nomination & Remuneration of Directors KMPs and Senior Management

The Policy on Nomination and Remuneration sets out the criteria for determiningqualifications positive attributes and independence of Directors. It also lays downcriteria for determining qualifications positive attributes of KMPs and senior managementand other matters provided under Section 178(3) of the Companies Act 2013 and Regulation19 of Listing Regulations.

The Policy on Nomination and Remuneration of the Company as approved and adopted by theBoard is available on the website of the Company at

g. Evaluation of Board its Committees and Individual directors

The Board has carried out an annual evaluation of its own performance its CommitteesChairman and individual Directors.

A note on the annual Board evaluation process undertaken in compliance with theprovisions of the Companies Act 2013 and Listing Regulations is given in the Report onCorporate Governance which forms a part of this Report.

h. Meetings of the Board

The Board met 06 (Six) times during the financial year. Details of the meetings of theBoard during FY2020 is provided in the Report on Corporate Governance which forms a partof this Report.

i. Committees of the Board

The details of the Committees of the Board namely the Audit Committee CSR CommitteeRisk Management Committee Nomination and Remuneration Committee Stakeholders'Relationship Committee ALM Committee and IT Strategy Committee their composition termsof reference and the activities during the year under review are elaborated in the Reporton Corporate Governance which forms a part of this Report. Further there are no instanceswhere the Board has not accepted recommendations of Audit Committee.


a. Statutory Auditors

M/s S. R. Batliboi & Co LLP (FRN: 301003E/E300005) 12th Floor The Ruby 29Senapati Bapat Marg Dadar (West) Mumbai - 400 028 were appointed as the StatutoryAuditors of the Company at the AGM held on June 29 2016 for four financial yearscommencing from 2017 up to 2020.

The existing Statutory Auditors would complete their term of 10 consecutive years inthe Company as prescribed under the Companies Act 2013 and will hold their position up tothe ensuing AGM of the Company. In their place M/s. Deloitte Haskins & SellsChennai Chartered Accountants (Firm Reg. No. 008072S) having their office at ASV N RamanaTower 52 Venkatnarayana Road T. Nagar Chennai-600 017 have been recommended by theBoard of Directors as the Statutory Auditors of the Company whose appointment will besubject to the approval of shareholders at the ensuing AGM of the Company.

The Board has duly examined the Statutory Auditors' Report to the Annual AccountsFY2020 which is selfexplanatory. Clarifications wherever necessary have been includedin the Notes to Accounts. Further the Directors confirm that there are no qualificationsreservations adverse remarks or disclaimers in the Independent Auditor's Report providedby Statutory Auditors for the FY2020.

b. Secretarial Auditors

Pursuant to the provisions of section 204 of the Act the Board has re-appointed Mr. C.Dwarakanath Company Secretary in Practice (FCS 7723 and CP 4847) to undertakesecretarial audit of the Company.

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

The observations made in the Secretarial Audit Report pertains to delay in filingcertain charge documents with the Registrar of Companies which was caused mainly due todelay in signing the forms by the concerned lenders.

c. Cost Auditors

The provisions of Section 148 of the Companies Act 2013 read with the Companies (CostRecords and Audit) Rules 2014 relating to Cost Audit and maintaining cost audit recordsis not applicable to the Company.


During the year under review there was no change in the nature of business of theCompany.


The Credit Rating of different instruments of the Company as on March 312020 ismentioned under note 39 (m) of the Financial Statements under RBI disclosures.

Comprehensive Microfinance Grading by CRISIL as on March 312020 is 'M1C1'. CRISIL'sComprehensive Microfinance Capacity signifies highest capacity of the MFI to manage itsoperations in a sustainable manner and Excellent performance on Code of Conductdimensions. The grading is assigned on an eight-point scale with respect to MicrofinanceCapacity Assessment Grading with 'M1' being the highest grading and 'M8' the lowest andon a five-point scale with respect to Code of Conduct Assessment with 'C1' beingexcellent performance and 'C5' the weakest.


There were no significant and material orders passed by any regulators courts ortribunals that impacted the going concern status and the Company's operations in future.


At the beginning of each financial year an audit plan is rolled out after the same hasbeen approved by Audit Committee. The audit plan is aimed at evaluation of the efficacyand adequacy of internal control systems and compliance thereof robustness of internalprocesses policies and accounting procedures compliance with laws and regulations. Basedon the reports of internal audit function process owners undertake corrective action intheir respective areas. Significant audit observations and corrective actions if any arepresented to the Audit Committee of Board.


The internal financial controls of the Company are commensurate with its size scaleand complexity of operations. The Company has robust policies and procedures which interalia ensure integrity in conducting business timely preparation of reliable financialinformation accuracy and completeness in maintaining accounting records and preventionand detection of frauds and errors.

The internal financial controls with reference to the financial statements wereadequate and operating effectively.


The Board of Directors have adopted a risk management policy for the Company whichprovides for identification assessment and control of risks which in the opinion of theBoard may threaten the existence of the Company. The Management identifies and controlsrisks through a properly defined framework in terms of the aforesaid policy.


In pursuance of the provisions of Section 135 read with Schedule VII of the CompaniesAct 2013 the Company has a CSR Committee of the Board which reviews and recommends (a)the policy on Corporate Social Responsibility (CSR) including changes thereto and (b)Oversees implementation of the CSR Projects or Programmes to be undertaken by the Companyas per its CSR Policy. The CSR policy of the Company is available on the website of theCompany -

The Annual Report on CSR activities of the Company is enclosed herewith as Annexure- III.


The Company has established a whistle blower mechanism for the Directors and employeesto report any genuine concerns through Employees are encouraged toreport any unethical behaviour actual or suspected fraud or violation of the Codes ofConduct or policy including Insider Trading or any other illegal activity occurring in theorganisation. In exceptional cases directors or employees can raise their concernsdirectly to the Chairman of the Audit Committee by sending an e-mail to''. The cases reported will be investigated and resolved withinstrict timelines. The identity of the whistle-blower will be kept confidential andprotection from retaliatory actions is also provided for in the policy. Quarterly reportsin this regard are reviewed by the Audit Committee.


The Company being a non-banking financial company registered with the RBI and engagedin the business of giving loans is exempt from complying with the provisions of section186 of the Act in respect of loans and guarantees. Accordingly the disclosure of theloans given as required under the aforesaid section have not been made in this Report.


During FY2020 the transaction with related parties was entered with the approval ofthe Audit Committee in line with provisions of the Act and Listing Regulations. The AuditCommittee reviews the said transactions on a quarterly basis.

The related party transaction entered during the period under review was on arm'slength basis and in the ordinary course of business under the Act and not material underthe Listing Regulations. The transaction did not require members' prior approval under theAct or the Listing Regulations. During the FY 2019-20 there were no related partytransactions requiring disclosure under section 134 of the Act.

The Company has in place a Board approved Related Party Transaction Policy which isavailable on the website of the Company at


The role of human capital in any organization is of utmost importance. More so in anorganization like ours where a majority of employees are customer-facing to facilitate asmooth delivery of our financial services. There is a fine balance between customerservice and achievement of performance targets. The Company aims to provide a suitablework environment that encourages a positive attitude and superior performance.

Policies relating to Human Resources are employee friendly and support an environmentof accomplishment and satisfaction. The Company aims to provide the best of traininginputs and seamless growth opportunities ensuring that the culture of the organization istranslated into business performance.

The Company also facilitates performance-linked incentives that will help themotivational levels of the workforce thereby sustaining growth and achieve targets.


The ratio of the remuneration of the Executive Directors to the median employee'sremuneration and other details in terms of Section 197(12) of the Companies Act 2013 readwith Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 have been attached as Annexure - IV to the Directors' Report.

The details of employee remuneration as required under provisions of Section 197 (12)of the Companies Act 2013 read with Rule 5 (2) and 5 (3) of Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 and second proviso to Sec 136 of theCompanies Act 2013 are available for electronic inspection without any fee 21 days beforethe Annual General Meeting and shall be made available to any shareholder on request.Members seeking to inspect such documents can send an email None of these employees is a relative of any Directorof the Company.

Further the Independent Directors were eligible for commission aggregating to Rs.28.78 million for FY2020 based on the Shareholders' approval by way of a specialresolution dated November 212018. Apart from the above none of the directors includingthe Managing Director & CEO is in receipt of any commission from either the Company orits Holding Company during the year under review.


At the end of March 2020 the lockdown declared in the entire country due to COVID-19which continued beyond May 2020 had a significant impact on the business environment inthe country as well as for the Company. Collections and disbursements of loans were to behalted with immediate effect of lockdown. As per the RBI issued Policy guidelines on LoanMoratorium on March 27 2020 and the Company extended the option of loan Moratorium to allthe existing borrowers until May 312020. During this period the Company also requestedfor a similar moratorium benefit from the lenders and accordingly many banks havesupported by extending moratorium to the company. However the company has taken decisionto honour all the interest payment to

the lenders and requested moratorium only for principal repayments with the lenders.The Company also has taken sufficient steps to mitigate any liquidity risks by approachingfresh credit from lenders and is in a better position to manage its liquidity situation.Company was able to raise further funds during these periods and there are sufficientfunds in pipeline on account of various policy steps in terms of special window and TLTROby RBI.

Further on May 23 2020 RBI policy enabled to extend the moratorium by another 3months till August 312020. The Company reviewed its portfolio and based on positiveeconomic developments in the non-urban areas and particularly in its borrowers' segmentdecided to extend moratorium only on case to case basis on the request of the borrowers.Similarly the Company has decided to request the lenders to extend moratorium for itsborrowings. Company has reviewed various scenarios and made plans including raising freshfunds to mitigate any liquidity risks in this situation.


Pursuant to the Listing Regulations a separate section titled 'Corporate Governance'has been included in this Annual Report along with the Report on 'Management Discussionand Analysis'.

All Board members and Senior Management personnel have affirmed compliance with thecode of conduct for FY2019. A declaration to this effect signed by the Managing Directorof the Company is included in this Annual Report.

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

A certificate from the Secretarial Auditor of the Company regarding compliance ofconditions of corporate governance is attached as Annexure - V to the Directors'Report. There are no adverse comments / remarks in the Secretarial Audit Report for the FY2019-2020.


The Business Responsibility Report for the year under review has been annexed as Annexure- VI to the Directors' Report.


The Company has 858 women employees in various cadres as on March 312020. The Companyhas in place a Policy on Prevention Prohibition and Redressal of Sexual Harassment ofWomen at Workplace and an Internal Complaints Committee in line with the requirements ofthe Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act2013 and Rules made thereunder for reporting and conducting inquiry into the complaintsmade by the victim on the harassments at the workplace. The functioning of the Committeeswas carried out as per letter and spirit of the provisions of the Act.

During FY2020 the Company received one complaint of sexual harassment. The matter wasreferred to Prevention of Sexual Harassment Committee and based on the review and decisionof the Committee the case has been disposed of. There are no complaints pending forredressal as on March 312020.


The Company has in place a Fair Practice Code (FPC) approved by the Board in compliancewith the guidelines issued by RBI to ensure better service and provide necessaryinformation to customers to take informed decisions. The FPC is available on the websiteof the Company at

The Board also reviews the FPC every year to ensure levels of adequacy andappropriateness.


The Company has a dedicated Customer Grievance Cell for receiving and handling customercomplaints/grievances and ensuring that the customers are treated fairly and without anybias at all times. All issues raised by the customers are dealt with courtesy andredressed expeditiously.


Pursuant to sub-section (3)(a) of Section 134 and sub-section (3) of Section 92 of theCompanies Act 2013 read with Rule 12 of the Companies (Management and Administration)Rules 2014 the Annual Return as at March 312020 is available


a. Information Relating to Conservation of Energy Technology Absorption

Sl. No. Particulars Remarks
A Conservation of energy

The provisions of Section 134(3) (m) of the Companies Act 2013 relating to conservation of energy and technology absorption do not apply to the Company. The Company has however used information technology extensively in its operations and continuously invests in energy-efficient office equipment at all office locations.

(i) the steps taken or impact on conservation of energy;
(ii) the steps taken for utilising alternate sources of energy;
(iii) the capital investment on energy conservation equipment;
B Technology absorption
(i) the efforts made towards technology absorption;
(ii) the benefits derived like product improvement cost reduction product development or import substitution;
(iii) in case of imported technology (imported during the last three years reckoned from the beginning of the financial year)-
a. the details of technology imported;
b. the year of import;
c. whether the technology been fully absorbed;
d. if not fully absorbed areas where absorption has not taken place and the reasons thereof; and
(iv) the expenditure incurred on Research and Development.

b. Foreign Exchange Earnings and Outgo

During the year the foreign exchange outflow was equivalent to Rs 153.04 milliontowards term loan interest payments and procurement of a software license.


The Company is a non-deposit taking Non-Banking Financial Company - Micro FinanceInstitution (NBFC-MFI) and has not accepted any deposit as defined by the Companies Act2013.


During FY2020 the clause pertaining to treatment of options in case of cessation ofthe option holder was amended. Apart from the said modification there has been no otherchange in the GKFSPL Employee Stock Option Plan - 2011 (the 'ESOP scheme') ofthe Company.The ESOP Scheme is in compliance with the SEBI (Share Based Employee Benefits)Regulations 2014 as amended from time to time (the 'SBEB Regulations').

Disclosures pertaining to the ESOP scheme pursuant to the SBEB Regulations are placedon the Company's Grant wisedetails of options vested exercised and cancelled are provided in the notes to thestandalone financial statements.

The Company has not provided any financial assistance to i ts employees for purchase orsubscription of shares in the Company or in its holding company.

The Company has not issued any sweat equity shares or equity shares with differentialrights during the year.


a. During the year under review the Company has not allotted any equity shares withdifferential voting rights.

b. No frauds were reported by the auditors under sub-section 12 of section 143 of theCompanies Act 2013.

c. The Company has complied with applicable Secretarial Standards for Board and GeneralMeetings held during the year under review.

d. The Company has not revised Financial Statements as mentioned under section 131 ofthe Companies Act 2013.


In pursuance of Section 134 (5) of the Companies Act 2013 the Directors herebyconfirm that:

a. in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures if any;

b. the directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent to give a true and fairview of the state of affairs of the Company at the end of the financial year and of theprofit and loss of the Company for that year;

c. the directors have taken proper and sufficient care 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;

d. the directors have prepared the annual accounts on a going concern basis;

e. the directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and

f. the directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.


The Directors wish to place on record their appreciation and sincerely acknowledge thecontribution and support from shareholders customers debenture holders debenturetrustees Central and State Governments Bankers Reserve Bank of India Registrar ofCompanies Securities and Exchange Board of India Insurance Regulatory and DevelopmentAuthority of India BSE Limited National Stock Exchange of India Limited Registrar &Share Transfer Agents Credit Rating Agencies and other Statutory and RegulatoryAuthorities for the kind cooperation and assistance provided to the Company. The Directorsalso extend their special appreciation to the employees for their continuing support andunstinting efforts in ensuring an excellent all-round operational performance and also fortheir continued commitment dedication and cooperation.

For and on behalf of the Board of Directors
Place: Bengaluru Paolo Brichetti
Date: June 16 2020 Chairman