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Equitas Holdings Ltd.

BSE: 539844 Sector: Financials
NSE: EQUITAS ISIN Code: INE988K01017
BSE 00:00 | 09 Dec 126.15 3.90
(3.19%)
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122.85

HIGH

126.40

LOW

122.20

NSE 00:00 | 09 Dec 126.10 3.70
(3.02%)
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124.00

HIGH

126.35

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OPEN 122.85
PREVIOUS CLOSE 122.25
VOLUME 30780
52-Week high 144.85
52-Week low 58.50
P/E 29.13
Mkt Cap.(Rs cr) 4,312
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 122.85
CLOSE 122.25
VOLUME 30780
52-Week high 144.85
52-Week low 58.50
P/E 29.13
Mkt Cap.(Rs cr) 4,312
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Equitas Holdings Ltd. (EQUITAS) - Director Report

Company director report

To

The Members

Equitas Holdings Limited

Your Directors have pleasure in presenting the Fourteenth Annual Report together withthe audited accounts of the Company both on a Consolidated and Standalone basis for theFinancial Year ended March 31 2021 (FY 2020-21).

1. Financial Results

( Rs. in lakhs)

Consolidated Standalone
Particulars 2020-21 2019-20 2020-21 2019-20
Total Revenue 382069 292336 17773 1907
Less: Total Expenditure 316460 260719 829 607
Profit before taxation 65609 31617 16944 1300
Provision for taxation 14230 11017 2249 530
Profit after taxation[A] 51379 20600 14695 770
Other Comprehensive Income [B] 400 119 1 (1)
Total comprehensive Income for the year net of tax [A+B] 51779 20719 14696 769
Transfer to Statutory Reserve 12545 6245 2939 154
Transfer to Special Reserve 742 483 - -
Transfer to Investment Fluctuation Reserve 198 276 - -
Transfer to capital Reserve 1761 - - -

2. Dividend

Your Directors approved and paid an interim dividend of Rs. 1/- per equity share of Rs.10/- each fully paid up of the Company to those equity shareholders whose names appearedin the register of members as on August 19 2020 being the record date fixed for thepurpose and second interim dividend of Rs. 2/- per equity share of Rs. 10/- each fullypaid up of the Company to those equity shareholders whose names appeared in the registerof members as on February 13 2021 being the record date fixed for the purpose.Your Board recommends adoption of interim dividend(s) paid during the year as finaldividend for FY 2020-21.

3. Transfer to Reserves

Your Company has transferred a sum of Rs. 2939 lakhs to Statutory Reserve as requiredunder the Reserve Bank of India Act 1934.

4. Capital Adequacy

The Capital Adequacy Ratio of the Company stands at 99.85% as of March 31 2021 asagainst the minimum capital adequacy requirements of 30% stipulated by RBI.

5. Material Changes and Commitments

There were no material changes and commitments between the end of FY 2020-21 and thedate of this report affecting the position of the Company except the impact of COVID-19pandemic and enforced lockdown on the business of the Group details of which are coveredunder Management Discussion & Analysis forming part of this Report.

6. Share Capital

The Company during the year has issued in aggregate 120 Equity Shares to itsemployees and the employees of its Subsidiaries under the Equitas Employees Stock OptionScheme 2015.

Pursuant to the aforesaid issue and allotment of Equity Shares the paid-up sharecapital of the Company stood at Rs. 3417901150 as at March 31 2021 as compared to Rs.3417899950 as at March 31 2020.

7. Investment in Subsidiaries

During the year under review the Company had infused a capital of Rs. 200 lakhs in itsSubsidiary Equitas Technologies Private Limited by subscribing to its equity shares on arights basis.

8. Core Investment Company

The Company continues to be categorised as a Non-Banking Financial Institution -Non-Deposit taking-Systemically Important Core Investment Company (CIC-ND-SI) under theRBI Regulations.

9. Statutory Disclaimer

The Company is having a valid Certificate of Registration dated September 1 2016issued by the RBI under Section 45-IA of the Reserve Bank of India Act 1934. However RBIdoes not accept any responsibility or guarantee about the present position as to thefinancial soundness of the Company or for the correctness of any of the statements orrepresentations made or opinions expressed by the Company and for discharge of anyliability by the Company.

Neither there is any provision in law to keep nor does the Company keep any part ofthe deposits with RBI and by issuing a Certificate of Registration to the Company RBIneither accepts any responsibility nor guarantees the payment of deposits to any depositoror any person who has lent any sum to the Company.

10. Fixed Deposits

The Company has not accepted any deposits from the public since inception.

11. Subsidiary Companies

The Company conducts its business through the following two subsidiaries:

Name of the Subsidiary Activities
1 Equitas Small Finance Bank Limited (ESFBL) ESFBL is engaged in Banking business. Its various activities are outlined in the Management Discussion and Analysis Report which forms part of this Report.
2 Equitas Technologies Private Limited (ETPL) ETPL is engaged in freight facilitation business under the brand name of ‘Wowtruck’. The Company provides a common platform for transporters and customers to connect online and carry out transactions on a real time basis.

As required under Regulations 16(1)(c) & 46 of Securities Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 [SEBI ListingRegulations] the Board of Directors had approved the Policy for determining MaterialSubsidiaries ("Policy"). The details of the Policy are available on the websiteof the Company https:// www.equitas.in/pdf/EHL_Policy_Materiality.pdf.

12. Corporate Social Responsibility

The Company has laid down a Corporate Social Responsibility Policy which is disclosedon our website https://www.equitas.in/pdf/EHL-CSR-Policy. pdf. In accordance with thePolicy the Company and its Subsidiary ESFBL contribute higher of 5% of its net profitsas against the prescribed 2% of average net profits made during the preceding threefinancial years to Equitas Development Initiatives Trust (EDIT) and Equitas HealthcareFoundation (EHF) registered public charitable trust(s) for carrying out CSR activities onits behalf. A report on CSR activities is enclosed as

Annexure – I.

13. Listing of shares of ESFBL

In compliance with the terms and conditions of the grant of Small Finance Bank (SFB)license ESFBL (Bank) got its shares listed on BSE Limited and National Stock Exchange ofIndia Limited on November 2 2020 through Initial Public Offer (IPO).

Also the Company had sold 72000000 of its shares held in the Bank under Offer forSale route in the IPO of the Bank in compliance with the dilution requirement stipulatedby RBI while granting SFB license.

14. Performance and Financial Position of Subsidiaries

As required under Section 129 of the Act read with Rule 5 of Companies (Accounts)Rules 2014 a statement containing salient features of financial statements of each ofthe Subsidiaries has been appended to the financial statements.

15. Consolidated Financial Statements

The Consolidated Financial Statements which have been prepared in accordance with theCompanies Act 2013 ("the Act") and the relevant Accounting Standards form partof this Annual Report.

16. Management Discussion and Analysis Report

In accordance with the SEBI Listing Regulations the Management Discussion and AnalysisReport highlighting the business-wise details forms part of this Report.

17. Corporate Governance Report

A report on Corporate Governance containing the details as required under the SEBIListing Regulations forms part of this Report.

The Executive Director & CEO and the Chief Financial Officer have submitted acertificate to the Board regarding the financial statements and other matters as requiredunder Regulation 17(8) of SEBI Listing Regulations.

18. Business Responsibility Report

Business Responsibility Report is attached and forms part of this Report.

19. Board Meetings

During FY 2020-21 the Board of Directors of the Company met four times. The details ofthe Meetings are given in the Report on Corporate Governance.

The maximum interval between any two Meetings did not exceed 120 days as prescribed inthe Act.

20. Composition of Audit Committee

The Company has constituted an Audit Committee in terms of the requirements of the Actand Regulation 18 of SEBI Listing Regulations. The composition of the same is disclosed inthe Corporate Governance Report.

21. Directors & Key Managerial Personnel

As on the date of this Report the Company has Eight Directors out of which five areIndependent Directors including a Women Independent Director. There were no changes in theBoard of Directors of the Company during the year.

21.1 The Company has familiarised the Independent Directors of the Company on theirroles and responsibilities nature of industry in which the Company operates businessmodel of the Company etc. The details of the familiarisation programme imparted toIndependent Directors are available on the website of the Company https://www.equitas.in/pdf/Familiarisation-Programme-for-Independent-Directors.pdf. The terms and conditionsof appointment of Independent Directors are also available on the website of the Companyhttps://www.equitas.in/pdf/ EHL-ID-Appt-TermsnConditions.pdf.

21.2 Section 152 of the Act provides that two-thirds of the total number ofDirectors are liable to retire by rotation out of which one-third shall retire from officeat every AGM. In terms of Section 149(13) the provisions of retirement of Directors byrotation shall not be applicable to Independent Directors and an Independent Directorshall not be included in the total number of Directors liable to retire by rotation. TheCompany has three Directors viz. Mr. Rangachary N Mr. Bhaskar S and Mr. John Alexliable to retire by rotation. As per the criteria stipulated under Section 152 of the Actfor retirement by rotation Mr. John Alex shall retire in the ensuing AGM of the Companyand being eligible for re-appointment offer himself for re-appointment. The Boardrecommends his re-appointment and the same is being placed for approval of theshareholders at the ensuing Annual General Meeting.

21.3 There were no changes in KMPs during the year. As at March 31 2021 theCompany had the following KMPs:

Name of the KMP Designation
1 Mr. John Alex Executive Director & Chief Executive Officer (ED & CEO)
2 Ms. Srimathy R Chief Financial Officer (CFO)
3 Ms. Deepti R Company Secretary (CS)

22. Declaration from Independent Directors

The Board has received declarations from the Independent Directors as required underSection 149(7) of the Act and Regulation 16(1)(b) of SEBI Listing Regulations and theBoard is satisfied that the Independent Directors meet the criteria of independence asmentioned therein.

23. Evaluation of Board Performance

The performance of the Chairman the Board Audit Committee (ACB) NominationRemuneration & Governance Committee (NRGC) Corporate Social Responsibility Committee(CSR) Stakeholders’ Relationship Committee (SRC) and that of individual Directorsfor the Year 2020-21 were evaluated on the basis of criteria approved by the Board. Someof the performance indicators based on which the independent directors are evaluatedinclude contribution to setting strategy and policy directions concern for stakeholdersapproach to issues placed before the Board exercising of own judgement and voicingopinion freely.

All Directors were provided the criteria for evaluation which were duly filled in andsent to the Secretary to NRGC. The feedback was then collated and shared in confidencewith the Chairman of NRGC.

The Chairman of NRGC discussed the same with the other Members of the Committee. Laterat the Board Meeting the Chairman of NRGC shared the feedback with the Chairman of theBoard and the other Directors.

24. Policy on Directors’ Appointment & Remuneration

Pursuant to the provisions of Section 178 of the Act the Company has formulated andadopted Policy on selection of Directors and Remuneration Policy which are disclosed onour website under Policies Section. https://www.equitas.in/pdf/EHLFit&ProperPolicy.pdf.https://www.equitas.in/pdf/EHLRemunerationPolicy.pdf

25. Directors’ Responsibility Statement

The Board of Directors of the Company to the best of their knowledge and beliefconfirm that:

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

2) 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 as at March 31 2021 and of the profit of theCompany for that period;

3) they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

4) they have prepared the annual accounts on a going concern basis;

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

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

26. Overall Remuneration

Details of all elements of remuneration paid to all the Directors are given in theCorporate Governance Report. The Independent Directors of the Company are not entitled tostock options.

Details of remuneration as required to be provided under Section 197 of the Act readwith Rule 5 of Companies (Appointment and Qualification of Managerial Personnel) Rules2014

(i) Ratio of Remuneration of Each Director with Median Employees Remuneration and the percentage increase in remuneration Name of the Director Ratio of remuneration$ to median remuneration of employees % increase in remuneration in the financial year#
Chairman 0.46:1 Please refer the note below
Chairman Audit Committee 0.34:1
Mr. Arun Ramanathan Nil
Mr. John Alex ED & CEO 7.34:1
Other Directors 0.23:1

 

#Remuneration increased by 16.57% during FY 2020-21. $ Does not include sitting fee paid to Directors for attending the Meetings of Board and Committees
(ii) the percentage increase in remuneration of Increase in remuneration of KMP is as follows:

 

Chief Financial Officer Chief Executive Officer CFO 6%
Company Secretary or Manager if any in the financial year; CS 6%
(iii) the percentage increase in the median remuneration of employees in the financial year; 6%
(iv) the number of permanent employees on the rolls of the Company as on March 31 2021 5 (five)

 

(v) 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 percentage increase in salaries of employees other than the managerial personnel in the last financial year was 5.44%.
Increase in remuneration of managerial personnel viz ED & CEO during FY 2020-21 is 10%.
(vi) affirmation that the remuneration is as per the remuneration policy of the Company. The remuneration is as per the Remuneration Policy of the Company.

None of the employees drew remuneration beyond the limits specified under Rule 5(2) ofCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014.

27. Whistle Blower Policy/Vigil Mechanism

The Company has devised a Vigil mechanism for Directors and employees through theadoption of Whistle Blower Policy details whereof is available on the Company’swebsite https://www.equitas.in/pdf/ EHL-Whistle-Blower-Policy.pdf.

28. Auditors

M/s T R Chadha & Co LLP Chartered Accountants having Registration Number (FirmRegistration No: 006711N/ N500028) were appointed as Statutory Auditors of the Company forfive years till the conclusion of the 18th Annual General Meeting (AGM) to beheld in the year 2025.

29. Details in respect of frauds if any reported by Auditors:

There have been no frauds reported during the Financial Year ended March 31 2021.

30. Secretarial Auditors

The Secretarial Audit Report of M/s B Ravi & Associates Practising CompanySecretaries for FY 2020-21 is enclosed as Annexure–III.

31. Explanations or comments by the Board on every qualification reservation oradverse remark or disclaimer made by Statutory Auditors or Secretarial Auditors

There are no qualifications reservations adverse remarks or disclaimers made by theStatutory Auditors or Secretarial Auditors.

32. Information as per Section 134 (3) (q) of the Act read with Rule 8 of the Companies(Accounts) Rules 2014

During the Financial Year the Company had no activity relating to conservation ofenergy or technology absorption. Also there were no foreign currency earnings or outgo.

33. Details of Employees Stock Option Scheme

Nomination Remuneration & Governance Committee constituted by the Board ofDirectors of the Company administers the Employee Stock Option Schemes formulated by theCompany from time to time.

Information as required under Section 62 of the Act and Rule 12 of the Companies (ShareCapital and Debentures) Rules 2014 and SEBI (Share Based Employee Benefits) Regulations2014 (SEBI Regulations):

Information required Particulars
1 Number of Options granted during the year Nil
2 Number of Options vested during the year 26011
3 Number of Options exercised during the year 120
4 Number of shares arising as a result of exercise of Options 120
5 Number of Options forfeited/ lapsed during the year 61768
6 Exercise Price (Rs.) 55
7 Money realized by exercise of Options (Rs. ) 6600
8 Total number of Options outstanding 110420
9 Option Granted but not vested 5617
10 Options Vested but not exercised 104803
11 Total number of Options available for grant 36830746
12 Variation of terms of options Nil

Note: Refer Note 43 to the Standalone Financial Statements and Note 57 to theConsolidated Financial Statements

Employee-wise details of options granted to

1. Key Managerial Personnel - Nil

2. Any other employee who receives a grant of options in any one year of optionsamounting to five percent or more of options granted during that year: - Nil

3. Identified employees who were granted options during any one year equal to orexceeding one percent of the issued capital (excluding outstanding warrants andconversions) of the Company at the time of grant - Nil

Other details relating to Stock Options as required under SEBI (Share Based EmployeeBenefits) Regulations 2014 are displayed on the Company’s websitehttps://www.equitas.in

34. Particulars of contracts or arrangements with related parties

All the Related Party Transactions that were entered into during the financial yearwere on an arm’s length basis and were in the ordinary course of business.

Pursuant to Section 134(3)(h) read with Rule 8(2) of the Companies (Accounts) Rules2014 there are no transactions to be reported under Section 188(1) of the Act in formAOC-2.

All Related Party Transactions as required under Indian Accounting Standard (Ind AS-24)are reported in Note 34 forming part of Financial Statements.

The Company’s Policy on dealing with Related Party Transactions is available onthe Company’s website https://www.equitas.in/pdf/EHLPolicyonRelatedPartyTransactions.pdf

35. Risk Management

The Company is a Core Investment Company (CIC) and its operations are limited to beinga CIC. The risks therefore primarily relate to investments made in its subsidiaries. Theoperations of each of the subsidiaries the risks faced by them and the risk mitigationtools followed by them to manage these risks are reviewed periodically by the RiskManagement Committees/Audit Committees and the Boards of the respective subsidiaries. Thesame are considered by the Risk Management Committee and Board of the Company as well.Details of the same are covered in the Management Discussion and Analysis Report.

36. Internal Financial controls

The Company has clear delegation of authority and standard operating procedures. Theseare reviewed periodically by the Audit Committee of the Company. These measures help inensuring adequacy of internal financial controls commensurate with the nature and scale ofoperations of the Company.

37. Loans/Guarantees /Investments

Details of loans guarantees and investments covered under Section 186 of the Act areprovided in Note 8 forming part of Financial Statements.

38. Disclosure under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013

The Company has in place a Policy on Prevention of Sexual Harassment in accordance withThe Sexual Harassment of Women at Workplace (Prevention Prohibition & Redressal) Act2013. Internal Complaints Committee has been set up to redress complaints received underthe Policy. No complaint has been received by the Company under this Policy so far.

39. Dividend Distribution Policy

The Dividend Distribution Policy of the Company is available on our websitehttps://www.equitas.in/ polices.php

40. Significant and Material Orders Passed by the Regulators or Courts

There have been no significant and material orders passed by Regulators or Courts orTribunals impacting the going concern status and the future operations of the Company.

41. Depository System

As the Members are aware the Company’s Equity Shares are tradable in electronicform. As on March 31 2021 out of the Company’s total equity paid-up share capitalcomprising of 341790115 Equity Shares only 99586 equity shares were in physical formand the remaining shares were in electronic form. In view of the numerous advantagesoffered by the Depository System the Members holding shares in physical form are advisedto avail themselves of the facility of dematerialization.

42. The Annual Return MGT-7 as required under the Act is available at the websiteof the Company www.equitas.in.

Acknowledgement

The Directors thank the investors and customers for reposing confidence in Equitas. TheDirectors gratefully acknowledge the guidance and support extended by RBI SEBI StockExchanges Depositories and other statutory authorities. Your Directors place on recordtheir sincere thanks to its valued constituents for their support and patronage. The Boardalso expresses its deep sense of appreciation to the employees at all levels for theirunstinted commitment to the growth of Equitas.

For and on behalf of the Board of Directors
John Alex Rangachary N
ED & CEO Chairman
May 13 2021 Chennai Bengaluru

.