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Mahindra & Mahindra Financial Services Ltd.

BSE: 532720 Sector: Financials
NSE: M&MFIN ISIN Code: INE774D01024
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OPEN 178.65
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VOLUME 537694
52-Week high 224.15
52-Week low 112.80
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Mkt Cap.(Rs cr) 21,709
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Mahindra & Mahindra Financial Services Ltd. (M&MFIN) - Director Report

Company director report

To

The Members of

Mahindra & Mahindra Financial Services Limited

Your Directors are pleased to present their Thirty-First Report together with theAudited Financial Statements of your Company for the Financial Year ended 31st March2021.

The performance highlights and summarised financial results of the Company are givenbelow:

PERFORMANCE HIGHLIGHTS

Consolidated income for the year increased by 1.5% to Rs. 12170.5 Crores as comparedto Rs. 11996.5 Crores in 2019-20;

Consolidated income from operations for the year was Rs. 12050.3 Crores as compared toRs. 11883.0 Crores in 2019-20 a growth of 1.4%;

Consolidated profit before tax for the year was Rs. 934.1 Crores as compared to Rs.1602.0 Crores in 2019-20;

Consolidated profit after tax and non-controlling interest for the year was Rs. 773.2Crores as compared to Rs. 1075.1 Crores in 2019-20.

FINANCIAL RESULTS

Rs. in Crores

CONSOLIDATED STANDALONE
March 2021 March 2020 March 2021 March 2020
Total Income 12170.5 11996.5 10516.8 10245.1
Less: Finance Costs 5307.6 5390.6 4733.2 4828.8
Expenditure 6046.4 4902.9 5241.4 3954.3
Depreciation Amortization and Impairment 150.5 146.9 125.9 118.3
Total Expenses 11504.4 10440.3 10100.5 8901.4
Profit before exceptional items and taxes 666.1 1556.1 416.3 1343.8
Share of Profit of Associates & Joint Ventures 39.5 45.9 - -
Exceptional items 228.5 - 6.1 -
Profit Before Tax 934.1 1602.0 422.4 1343.8
Less: Provision for Tax
Current Tax 512.3 647.3 450.3 556.9
Deferred Tax (340.9) (129.9) (347.5) (119.6)
(Excess) / Short provision for Income Tax - earlier years (17.6) (1.2) (15.5) -
Profit After Tax for the Year 780.3 1085.8 335.2 906.4
Less: Profit for the year attributable to Non-Controlling interests 7.1 10.7 - -
Profit for the year attributable to Owners of the Company 773.2 1075.2 335.2 906.4
Balance of profit brought forward from earlier years 4578.0 3957.3 4293.6 3834.0
Add: Other Comprehensive Income/(Loss) (1.8) (14.7) (2.4) (11.3)
Add: Transfer from Debenture Redemption Reserve - 223.7 - 223.7
Balance available for appropriation 5349.4 5241.4 4626.4 4952.8
Less: Appropriations
Dividend paid on Equity Shares (including tax thereon) - 484.2 - 477.9
Transfer to Statutory Reserves 98.8 222.8 68.0 181.3
Add/Less: Other Adjustments:
Gross obligation at fair value to acquire non-controlling interest 35.4 43.6 - -
Changes in Group's Interest (1.0) - - -
Balance profit carried forward to balance sheet 5285.0 4578.0 4558.4 4293.6

TRANSFER TO RESERVES

The Company proposes to transfer an amount of Rs. 68.0 Crores to the Statutory Reserve.Further the Board of your Company decided not to transfer any amount to the GeneralReserve for the year under review. An amount of Rs. 4558.4 Crores is proposed to beretained in the Statement of Profit and Loss.

DIVIDEND

Your Directors are pleased to recommend a dividend of Re. 0.80 per Equity Share of theface value of Rs. 2 each payable to those Members whose names appear in the Register ofMembers as on the Book Closure date. Dividend is subject to approval of Members at theensuing Annual General Meeting and shall be subject to deduction of tax at source.

The Equity dividend outgo for the Financial Year 2020-21 would absorb a sum of Rs. 98.8Crores.

The dividend pay-out is in accordance with the Company's Dividend Distribution Policy.

DIVIDEND DISTRIBUTION POLICY

The Dividend Distribution Policy containing the requirements prescribed in Regulation43A of the Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 is appended as "Annexure I" and formspart of this Annual Report.

The Dividend Distribution Policy can also be accessed on the Company's website at theweb-link: https:// mahindrafinance.com/discover-mahindra-finance/ policies.

During the year an amount of Rs. 713234 being the unclaimed/unpaid dividend of theCompany for the Financial Year ended 31st March 2013 was transferred in September 2020to the Investor Education and Protection Fund Authority.

OPERATIONS

The year under review has been one of the most challenging years both for your Companyand its customers. The COVID-19 pandemic outbreak which began in the middle of March 2020continued to impact the economy throughout the financial year 2020-21. The year was fullof uncertainties with slowdown in activities on the ground. The world was introduced tothe new normal of lockdowns containment zones work from home with restricted movementsof people and goods. The nationwide transport system came to a grinding halt as Air Trainand Road travel got severely impacted. This was a never seen before situation whichbrought the economic activities in the country to a virtual standstill. The impact of thepandemic led to closure of almost all the Company's offices business and recovery touchpoints and completely stalled the field operations from the last week of March 2020.Operations gradually resumed in mid-May in offices pan-India. Your Company has beenstrictly adhering to lockdown announcements in accordance with the directives issued bythe Central State Government and Local Administration.

Your Company is primarily in the financing of Automobiles and Tractors and addressescustomers who use these vehicles for earning their livelihood. Your Company remains asignificant financier to its customers in semi-urban and rural geographies by providing awide range of easy and affordable products and services designed to suit their cashflowcycles. Your Company expanded vide its channel connect with leading car dealers. YourCompany has retained its leadership position in financing the Mahindra range of vehiclesand tractors in addition to extending its lending to vehicles of other leading AutoOriginal Equipment Manufacturers (OEMs). Your Company has aggressively pursued financingof pre-owned vehicles and used tractors. The demand for both new and used automobiles forthe second consecutive year saw a substantial dip due to subdued load factors and supplyside constraints leading to poor sentiments and thus a much lower demand. The overallbusiness volumes continued to be low for the Company on the backdrop of certain segmentslike Taxi school bus/ van traders tourist operators contracting segments sand &stone mining applications etc. opting to refrain from purchasing new vehicles. Thisfurther led to overall lower disbursements by your Company. Simultaneously the earningsof the customers covered in the above mentioned segments were severely impacted due toslowdown of the economy. Hence the collections were also subdued during most parts of theyear. The Regulator did provide timely moratorium which gave support to our customers byallowing them to defer the EMI's by a period of 6 months. A significant majority of ourcustomers availed the benefit under this moratorium scheme. Your Company continued topartner with the customers during these difficult times and offered moratorium to alleligible customers. The agricultural sector was relatively less impacted as monsoonswater levels yields support prices were above average and hence resulted in decent farmbased cashflows. The second half of the year witnessed some amount of normalcy returningto the market with unlocking of the country. This led to better collection efficienciesstarting December 2020. The Government supported Emergency Credit Line Guarantee Scheme(ECLGS) was offered to all eligible customers in the second half of the fiscal to mitigatethe difficulties of vehicle users in commercial applications. A few of your Company'scustomers took benefit of this scheme to lubricate their working capital.

The Business model got stress-tested for an elongated period of extreme uncertainty onan all-India basis. The flexibility and the elasticity of the model is demonstrated by thereturn of near normal disbursements and high collection efficiencies in the fourthquarter as the pandemic started easing out.

Building Blocks for Growth Efficiency Customer Experience

A. Deeper Physical Reach

Your Company has an extensive pan-India distribution network with 1388 officesspanning across 27 States and 7 Union Territories as of 31st March 2021. During the yearunder review your Company enhanced its footprint into deeper rural pockets by addinganother 156 new branches in its network towards the year-end. Your Company's widespreadoffice network reduces its reliance on any one region in the country. The geographicdiversification also mitigates some of the regional climatic and cyclical risks such asheavy monsoons or droughts. In addition the Company's extensive office network benefitsfrom a decentralized approval system which allows each office to grow its businessorganically as well as leverage its customer relationships by offering multiple financialproducts including distribution of insurance products and mutual funds. Your Companyservices multiple products through each of its offices which reduces operating costs andimproves total sales. Your Company believes that the challenges inherent in developing aneffective office network in rural and semi-urban areas have also created opportunities ofcatering to the diverse financial requirements of its customers by identifying andunderstanding the needs and aspirations of the people.

B. Enhancing Digital Reach

Your Company has an enhanced on-line and in-mobile presence to provide a superiordigital experience to its customers. Employees customers and partners are being enableddigitally for all their needs and substantial progress has been made in this direction.Today the entire lending process is digitally enabled which has facilitated the EMIcollections being received through Digital and on-line means. This year also saw that thechallenge posed by the pandemic for collections was to an extent mitigated when customersextensively used our online and App based Digital Channels for making their monthlyrepayments. In the last quarter of the fiscal the total amount collected from thecustomers by digital means had gone up by 94% compared to the last quarter of the previousyear. Your Company and its subsidiaries have embraced digital in performing differentactivities like customer acquisition digitally enabled collections offering FixedDeposits Mutual Funds and Insurance products.

C. Leveraging Technology

Information Technology has enabled the automation and digitisation of processes acrossthe organisation empowering employees with the workflows and knowledge for efficiency andcontrols and engendering newer business products analytical models and decision-makingtools. The Company's digital channels of multi-lingual website mobile app and contactcentre too are increasingly popular with the customers. Your Company has successfullyleveraged enterprise technology platforms such as enterprise service bus customerrelationship management mobile application management data lake and businessintelligence. It is at an advanced stage in upgrading its Loan Origination System and LoanManagement System capabilities to meet the future growth requirements and to be able toseamlessly service its large customer base and partners in the rural and semi-urbangeographies.

D. Data as Competitive Advantage

Your Company's presence in the rural and semi-urban markets for more than 25 yearsworking with several profiles gives your Company a huge advantage in applying Analyticsand Artificial Intelligence (AI) on the data leading to customized personalized offeringsthat are designed and delivered with speed and lower risks. Your Company has launched itsproprietary algorithms to offer faster loan approvals at dynamic interest rates to lowrisk customers which would help in gaining market share improving portfolio quality andprofitability. Customer acquisition retention cross selling and collections will besubstantially enhanced with the combined Integrated activation of Digital Analytics andTechnology.

E. Growth Drivers for Future

Your Company is having several plans to expand its offerings to its customers forgrowth. Pre-owned Vehicles used tractors and commercial vehicles have a large opportunityfor growing within the vehicle segments while growing the market share for the Company'sexisting range of products.

Meeting the Non-vehicle Financial needs of customers in the rural and semi-urbanregions is another area of opportunity. Products like Personal Loans Consumer Loans FarmRelated Working Capital Loans etc. will have a growth focus targeting our large existingcustomer bases as well as new customers. For this purpose the Company has formed astrategic business unit (SBU) for its Fintech vertical which will focus on digitallending.

Leasing as a method of Specialized Financing of certain customer segments for bothvehicle and beyond is also being set up. Leasing offers an emerging opportunity and willaid in expanding the Financing portfolio in the medium and long term.

SME Lending

The SME lending faced significant head winds during the year due to weak economicenvironment and slowdown in the auto segment. The COVID-19 pandemic resulted indisruptions across businesses and SMEs also underwent significant stress. As a matter ofabundant caution your Company curtailed disbursements in significantly stressed sectorsand supported deserving clients with good track record. Consequently the Assets UnderManagement as of March 2021 has de-grown by 34% in comparison to March 2020. Further yourCompany focused on strengthening its systems to reduce risk and enhance customercentricity. Your Company also strengthened its product offerings and broadened its tie-upswith more OEMs. It is expected that with these measures your Company would be able to growits book significantly once the economic activity picks up.

The total value of assets financed stood at Rs. 25248.9 Crores as compared to Rs.42388.2 Crores in the previous year. Total Income grew by 2.7% at Rs. 10516.8 Crores forthe year ended 31st March 2021 as compared to Rs. 10245.1 Crores for the previousyear. Profit Before Tax (PBT) declined by 68.6% at Rs. 422.4 Crores as compared to Rs.1343.8 Crores for the previous year. Profit After Tax (PAT) declined by 63.0% at Rs.335.2 Crores as compared to Rs. 906.4 Crores in the previous year. During the year underreview the Assets Under Management stood at Rs. 81689 Crores as at 31st March2021 as against Rs. 77160 Crores as at 31st March 2020 a growth of 5.9%.

Despite the most difficult times the Gross Stage 3 loan assets stood at an absolutelevel of Rs. 5786 Crores almost the same as that on 31st March 2020 (Rs. 5747 Crores).This was a resilient performance given the backdrop of tough macro conditions and severelogistical issues. However as the disbursements slowed down in the aftermath of COVID-19outbreak the Gross Non-Performing Assets were at 9.0% of closing loan assets as on 31stMarch 2021 a tad higher against 8.4% as on 31st March 2020. The Company continued toreassess its credit exposures and made additional ECL overlay even during the year whichstood at Rs. 996 Crores as on 31st March 2021 as against Rs. 574 Crores as on 31stMarch 2020. Further in accordance with the regulatory expectation of the Reserve Bank ofIndia to bring down the Net Non-Performing Asset (NPA) ratio below 4% the Companyrecorded an additional provision of Rs. 1320 Crores during the fourth quarter on Stage 3loans. Resultantly the Net NPA ratio of the Company stood at 3.97% as at 31st March 2021as against 5.98% as on 31st March 2020. The Stage 3 provisioning coverage ratio stood at57.9% as compared to 31% in the previous year. There has been no change in the nature ofbusiness of the Company during the year under review.

FINANCIAL PRODUCTS DISTRIBUTION

During the year under review your Company has initiated activities to increase thesale of Third Party Products to its customers and increased the fee income of the Company.As a green initiative measure and for the convenience of its investors your Company hasrecently launched an Investment portal to enable them to transact in Mutual Funds as wellas Fixed Deposits of the Company. The portal is available on the website of the Companyunder the Investment tab. With the launch of this Investment Solutions portal yourCompany aims to increase the sales of third party investment products via the digitalroute along with other channels such as its branch network and a dedicated team to sellthese products to its clients.

The Company's Assets under Management for distribution of Mutual Fund Products (MFP) ason 31st March 2021 stood at Rs. 2900 Crores which grew 109% as compared to the AUM ason 31st March 2020. Further sales of other Third Party Products such as mutual fundsinsurance bonds & debentures etc. grew from Rs. 309 Crores in FY 2019-20 to Rs. 482Crores in FY 2020-21 recording a growth of 56% over the corresponding period in theprevious year. Your Company has also implemented a customer service process as well as aprocess for evaluation and recommendation of Mutual Fund schemes. All these initiativeswill lead to an increase in fee based income in the coming years.

MORATORIUM OF LOANS

As mentioned in the previous Annual Report and in accordance with the Board approvedMoratorium Policy read with the Reserve Bank of India (‘RBI') guidelines dated 27thMarch 2020 17th April 2020 and 23rd May 2020 relating to ‘COVID-19 - RegulatoryPackage' your Company has granted moratorium up to six months on the payment ofinstallments which became due between 1st March 2020 and 31st August 2020 to alleligible borrowers. This relaxation did not automatically trigger a significant increasein credit risk. During the year under review 81% of the customers have availed of themoratorium facility offered by the Company.

The Government of India Ministry of Finance vide its notification dated 23rd October2020 had announced COVID-19 Relief Scheme (‘the Scheme') for grant of ex-gratiapayment of difference between compound interest and simple interest for six months toborrowers in specified loan accounts as per the eligibility criteria and other aspectsspecified therein and irrespective of whether the RBI moratorium was availed or not.Accordingly your Company has credited an ex-gratia amount of Rs. 110.27 Crores in theaccounts of the eligible borrowers. The Company filed a claim with the State Bank of Indiafor reimbursement of the said ex-gratia amount as specified in the notification and hasreceived an amount of Rs. 109.28 Crores towards the same on 31st March 2021.

Further in connection with the judgment of the Hon'ble Supreme Court of India in thematter of Small Scale Industrial Manufacturers Association vs UOI & Ors. and otherconnected matters dated 23rd March 2021 and as advised by RBI vide its Circular No.RBI/2021-22/17 DOR. STR.REC.4/21.04.048/2021-22 dated 7th April 2021 and the IndianBanks' Association ('IBA') advisory letter dated 19th April 2021 your Company has put inplace a Board approved Policy to refund/ adjust the ‘interest on interest' charged tothe borrowers not covered under the Ex-gratia Scheme for the moratorium period i.e. 1stMarch 2020 to 31st August 2020. The Company has made an estimated provision of Rs. 31.75Crores as on 31st March 2021 towards this.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In accordance with the applicable provisions of the Master Direction issued by theReserve Bank of India and the Securities and Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015 a detailed analysis of the Company'sperformance is discussed in the Management Discussion and Analysis Report which formspart of this Annual Report.

CORPORATE GOVERNANCE

Your Company practices a culture that is built on core values and ethical governancepractices. Your Company is committed to transparency in all its dealings and places highemphasis on business ethics.

In accordance with the applicable provisions of the Master Direction issued by theReserve Bank of India and the Securities and Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015 a Report on Corporate Governance alongwith a Certificate from Messrs. KSR & Co. Company Secretaries LLP regardingcompliance with the conditions of Corporate Governance as stipulated in Regulations 17 to27 clauses (b) to (i) of sub-regulation (2) of Regulation 46 and paragraphs C D and E ofSchedule V of the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 forms part of the Annual Report.

SHARE CAPITAL

The Members at their Extraordinary General Meeting held on 30th June 2020 haveapproved the increase in the Authorised Share Capital of the Company from Rs.1900000000 (Rupees One Hundred Ninety Crores) divided into 700000000 (SeventyCrores) Equity Shares of Rs. 2 (Rupees Two) each of the Company and 5000000 (FiftyLakhs) Redeemable Preference Shares of Rs. 100 (Rupees Hundred) each of the Company to Rs.5500000000 (Rupees Five Hundred Fifty Crores) divided into 2500000000 (Two HundredFifty Crores) Equity Shares of Rs. 2 (Rupees Two) each of the Company and 5000000 (FiftyLakhs) Redeemable Preference Shares of Rs. 100 (Rupees Hundred) each of the Company bycreation of additional 1800000000 (One Hundred Eighty Crores) Equity Shares of Rs. 2(Rupees Two) each.

Rights Issue of Equity Shares

During the year under review your Company has allotted 617764960 Equity Shares ofthe face value of Rs. 2 each for cash at a price of Rs. 50 per Equity Share (includingpremium of Rs. 48 per Share) in the ratio of 1 (one) Rights Equity Share for every 1 (one)fully paid-up Equity Share of the Company held by the eligible Equity Shareholders on theRecord Date i.e. 23rd July 2020. The Issue opened on 28th July 2020 and closedon 11th August 2020. The Rights offering by your Company received a very satisfactoryresponse as seen by the high levels of subscription and strong participation fromShareholders and investors and was over-subscribed approximately by 1.3 times of theIssue Size. The Company received the approval from Stock Exchanges for listing on 19thAugust 2020 and trading of Rights Equity Shares on 20th August 2020.

The proceeds from the Rights Issue have been fully utilised for the objects of theRights Issue as mentioned in the Letter of Offer filed with the Securities and ExchangeBoard of India. Consequently pursuant to the allotment of Rights Shares on 17th August2020 the issued subscribed and paid-up Equity Share Capital of the Company standsincreased from 617764960 Equity Shares to 1235529920 Equity Shares of the face valueof Rs.2 each fully paid-up.

The issued subscribed and paid-up Equity Share Capital as on 31st March 2021 was Rs.247.11 Crores comprising 1235529920 Equity Shares of the face value of Rs. 2 eachfully paid-up.

During the year the Company has not issued any sweat equity shares or equity shareswith differential voting rights.

As on 31st March 2021 none of the Directors of the Company holds instrumentsconvertible into Equity Shares of the Company.

STOCK OPTIONS

During the year under review no Options were granted to Eligible Employees under theMahindra & Mahindra Financial Services Limited Employees' Stock OptionScheme–2010 ("2010 Scheme"). The Company does not have any scheme to fundits employees to purchase the shares of the Company. No employee has been issued stockoptions during the year equal to or exceeding 1% of the issued capital of the Company atthe time of grant.

The 2010 Scheme of the Company is in compliance with the Securities and Exchange Boardof India (Share Based Employee Benefits) Regulations 2014 ("SBEB Regulations")and there were no material changes made to the said Scheme. A Certificate from Messrs. B SR & Co. LLP Chartered Accountants Statutory Auditors of the Company pursuantto Regulation 13 of the SBEB Regulations would be available for inspection by the Membersthrough electronic mode.

Voting rights on the Shares issued to employees under the aforesaid Scheme are eitherexercised by them directly or through their appointed proxy.

The details of the Employees' Stock Options and the Company's Employees' Stock OptionTrust as required under the SBEB Regulations read with SEBI Circular CIR/CFD/ POLICYCELL/2/2015 dated 16th June 2015 have been uploaded on the Company's website and can beaccessed at the web-link: https://mahindrafinance.com/investor-zone/financial-information.

ECONOMY

Global and Domestic Growth

With completion of one year of the pandemic the work lying before administrations toprovide health care and vaccines continues to remain daunting. The human toll and loss ofeconomic activity caused by the pandemic is unprecedented which could have been muchworse but for the timely intervention and policy support provided across administrations.The global economic activity is estimated to have contracted by -3.3 percent in CalendarYear (CY) 2020 an improvement of 1.1 percent over the previous prediction in October2020. The silver lining remains the development and growing coverage of the vaccines whichis lifting the sentiment.

The progress of the virus has been slowed with the help of social distancing increasein availability of vaccines and treatment protocols. However the health infrastructure ofmany countries is reeling under the pressure of second and third wave. New restrictionsare introduced in countries facing such challenges indicating the recovery to be unevenand still in some distance.

Outlook

The global growth projected is at 6.0 percent in 2021 which thereafter moderates to4.4 percent in 2022. A lot of this shall depend upon the path of health crisis and thecoordinated policy actions taken to limit economic damage. The growth for advancedeconomies is projected at 5.1 percent in 2021 (vis--vis de-growth of -4.7% in 2020)compared to a growth of 6.7 percent in 2021 for emerging and developing economies(vis--vis de-growth of -2.2% in 2020).

With varied outlook for different countries the macro policy objectives still remainas the need to overcome the existing health crisis and returning employment to normallevels. The expectation based on availability of vaccines suggest local transmission toreduce everywhere by end of 2022.

Domestic Economy

The scenario in the Indian economy is much like many other countries where a gradualimprovement in macro indicators has been seen. The positives include the resiliencedemonstrated in rural demand which remained buoyant and had record agriculture productionin FY 2020-21. Urban demand has gained strength on the backdrop of normalization ofbusiness activity.

The anticipated improvement in economic activity is however held back with newmutations resulting in renewed jump in COVID-19 cases. Associated local lockdowns whichare now prevalent in many States shall dampen demand for contact intensive servicesrestrain growth and prolong the return to normalcy. The silver lining remains theexpectation of normal monsoon in the current year.

RBI projects the real GDP growth for FY 2021-22 to be at 10.5 percent. These growthexpectations may undergo a change as the decisions on lockdowns have increased acrossStates with the number of cases in the second wave now surpassing the numbers during thoseseen in the previous peak.

(Source: IMF RBI)

Finance

During the first eight months of the year under review (Apr-Nov 2020) Retail priceinflation continued to be higher than the RBI's upper margin of 6%. It fell sharply inNovember 2020 with food inflation coming down and has since moved up again but within theRBI's upper margin. Having reduced policy repo rate in the first quarter of FY 2021 from4.40% to 4.00% the RBI since then has maintained status quo in the key policy ratesalong with continuing an accommodative stance until necessary to sustain growth on adurable basis.

The Government of India and the Reserve Bank of India have taken a series of actionsduring the year which has assisted the financial sector including the NBFC industry towither the pandemic storm. These included amongst others reducing the benchmark ratesannouncing moratorium for six months restructuring scheme for a set of eligible borrowersand long-term repo operations to make easier access to liquidity. These actions led tostabilization of the financial sector with significant liquidity buffers being maintainedacross companies.

At the start of the fiscal year (April 2020) 10-year G-Sec benchmark yields (6.45% GS2029) was trading at 6.14% levels. The new benchmark (5.85% GS 2030) closed the year at6.18%. The yields during the year remained range bound as policy actions aimed at ensuringsteady supply of funds. During the year the INR appreciated by 2.5 percent from INR 75.39to INR 73.50 per USD after a sharp depreciation of 9.0 percent during the previous year.

Your Company has been identified as a "Large Corporate" under the frameworkprovided by the Securities and Exchange Board of India and accordingly has ensured thatmore than 25% of its incremental borrowings during the year was by way of issuance of Debtsecurities.

During the year under review your Company continued with its diverse methods ofsourcing funds in addition to regular borrowings like Secured and Unsecured DebenturesTerm Loans Fixed Deposits Commercial Papers etc. and maintained prudential AssetLiability match throughout the year. Your Company sourced long-term debentures and loansfrom banks and other institutions at attractive rates. Your Company continues to expandits borrowing profile by tapping into new lenders and geographies.

During the year your Company has successfully completed 3 securitisation transactionsaggregating to Rs.5120.30 Crores and raised JPY 15 billion (Rs. 1063.50 Crores) throughExternal Commercial Borrowings.

Private Placement Issues of Non-Convertible Debentures

During the year under review your Company issued Secured/Unsecured RedeemableNon-Convertible Debentures including Secured Redeemable Principal ProtectedNon-Convertible Market Linked Debentures ("NCDs") and raised an amountaggregating to Rs. 4815.90 Crores on a private placement basis in varioustranches. The NCDs are listed on the debt market segment of the BSE Limited.

Details of all the above-mentioned issues were provided to the Board on a periodicbasis.

As specified in the respective offer documents the funds raised from NCDs wereutilised for various financing activities onward lending to repay existing indebtednessworking capital and general corporate purposes of the Company. Details of the end-use offunds were furnished to the Audit Committee on a quarterly basis.

The Company is in compliance with the applicable guidelines issued by the Reserve Bankof India as amended from time to time.

The Company has been regular in making payments of principal and interest on all theNCDs issued by the Company on a private placement basis and through public issue. Thereare no NCDs which have not been claimed by investors or not paid by the Company after thedate on which the NCDs became due for redemption.

Commercial Paper

As at 31st March 2021 the Company had Commercial Paper (CPs) with an outstandingamount (face value) of Rs. 500 Crores. CPs constituted 0.8% of the outstanding borrowingsas at 31st March 2021. The CPs of the Company are listed on the debt market segment ofthe National Stock Exchange of India Limited.

Rupee Denominated Medium Term Note

Under the Company's Medium Term Note Programme the Company has not raised any fundsthrough Rupee denominated bonds during the year.

INVESTOR RELATIONS

Your Company has done multiple interactions with Domestic and Internationalinvestors/analysts during the current year. Given the ongoing pandemic all such meetingswere done through use of technology i.e. conference calls video-conferencing. YourCompany attended multiple investor meets organised by reputed Global and Domestic BrokingHouses during the year to communicate details of its performance important regulatoryand market developments and exchange of information. Roadshows were held during the yearwith Domestic and International investors on the backdrop of the Rights Issue undertakento strengthen the Capital Adequacy. Quarterly and annual earnings calls were scheduledthrough structured conference calls to keep various stakeholders informed about the pastperformance and future outlook of the industry especially those having a bearing on theCompany. These interactions with institutional shareholders fund managers and analystsare based on generally available information that is accessible to the public on anon-discriminatory basis. Your Company uploads the transcript of the quarterly earningscalls on its website which can be accessed by existing and potential investors andlenders. Your Company shall continue to make effective use of technology and limitin-person meetings.

Your Company believes in transparent communication and building a relationship ofmutual understanding and trust. Your Company further ensures that critical informationabout the Company is available to all the investors by hosting such information on theCompany's website.

CAPITAL ADEQUACY

As on 31st March 2021 the Capital to Risk Assets Ratio (CRAR) of your Company was26.0% which is well above the minimum requirement of 15% CRAR prescribed by the ReserveBank of India.

Out of the above Tier I capital adequacy ratio stood at 22.2% and Tier II capitaladequacy ratio stood at 3.8% respectively.

RBI GUIDELINES

The Company continues to comply with all the applicable regulations prescribed by theReserve Bank of India ("RBI") from time to time.

CREDIT RATING

Your Company believes that its credit rating and strong brand equity enables it toborrow funds at competitive rates. The credit rating details of the Company as on 31stMarch 2021 were as follows:

Rating Agency Type of Instrument Credit Rating* Remarks
India Ratings & Research Private Limited Commercial Paper Programme and Bank Facilities (Fund/Non-Fund Based Working Capital Limit) IND A1+ The ‘A1'+ rating indicates the Highest Level of Rating.
Instruments with this rating are considered to have very strong degree of safety regarding timely payment of financial obligations. Such instruments carry lowest credit risk.
Long-term (incl. MLD) Debt instruments Subordinated Debt Programme and Bank Facilities (Fund/Non-Fund Based Working Capital Limit) IND AAA/Stable The ‘AAA' ratings denote the highest degree of safety regarding timely servicing of financial obligations. Such instruments carry lowest credit risk.
IND PP-MLD AAA emr/Stable ‘PP-MLD' refers to Principal Protected Market Linked
Debentures. Suffix "emr" denotes the exclusion of the embedded market risk from the rating.
CARE Ratings Limited Long-term Debt Instruments and Subordinated Debt Programme CARE AAA/Stable The ‘AAA' ratings denote the highest degree of safety regarding timely servicing of financial obligations. Such instruments carry lowest credit risk.
Brickwork Ratings India Private Limited Long-term Subordinated BWR AAA/Stable
Debt Programme
CRISIL Ratings Limited Fixed Deposit Programme CRISIL FAAA/ Stable
Commercial Paper Programme and Bank Loan Facilities CRISIL A1+ The ‘A1'+ rating indicates the Highest Level of Rating.
Instruments with this rating are considered to have very strong degree of safety regarding timely payment of financial obligations. Such instruments carry lowest credit risk.
Long-term Debt Instruments CRISIL AA+/ Stable The ‘AA+' rating indicates a high degree of safety with regard to timely payment of financial obligations. Such instruments carry very low credit risk.
Subordinated Debt
Programme and Bank Loan
Facilities

* The ratings mentioned above were reaffirmed by the Rating Agencies during theFinancial Year 2020-21. With the above rating affirmations your Company continues toenjoy the highest level of rating from all major rating agencies at the same time.

ACHIEVEMENTS

Awards/Recognition received by your Company during the year are enumerated hereunder:

Marketing:

Won the Silver Award in the category of ‘New on ground property of the year' atthe Rural Marketing Association of India (Flame Awards) for the Gram Pravesh initiativesof the Company.

CSR & Sustainability:

Included in the renowned FTSE4Good Index Series for the second year.

Ranked 48th amongst Top 100 Indian companies for Sustainability & CSR underResponsible Business Rankings 2020 by Futurescape.

Attained performance band: B in the Carbon Disclosure Project Assessment 2019-20.

Included in ‘DJSI Sustainability Yearbook 2021'

Human Resources:

Recognized among "India's Best Workplaces in Career Management 2020" by GreatPlace to Work Institute.

FIXED DEPOSITS AND LOANS/ ADVANCES

Your Company offers a wide range of Fixed Deposit schemes that cater to the investmentneeds of various classes of investors. These Deposits carry attractive interest rates withsuperior service enabled by robust processes and technology. In order to tap rural andsemi-urban savings your Company continues to expand its network and make its presencefelt in the most remote areas of the country. During the year CRISIL has reaffirmed arating of ‘CRISIL FAAA/Stable' for your Company's Fixed Deposits. This ratingrepresents the highest degree of safety regarding timely servicing of financialobligations and carries the lowest credit risk. Your Company's Deposits continue to be apreferred investment amongst the investors.

As on 31st March 2021 your Company has mobilised funds from Fixed Deposits to thetune of Rs. 9481.16 Crores with an investor base of over 196278 investors.

Your Company continues to serve the investors by introducing several customer centricmeasures on an ongoing basis to further strengthen its processes in sync with therequirements of the Fixed Deposit holders. The Company periodically communicates variousintimations via SMS e-mails post courier etc. to its investors as well as sendsreminder emails to Depositors whose TDS is likely to be deducted before anypay-out/accrual. Your Company also provides a digital platform for onlineapplication/renewal of deposits online generation of TDS certificates fromcustomer/broker portal and seamless investment process for employees.

During the year under review your Company has rolled out several initiatives aimed atoffering a superior customer experience. Some key ones are: An integrated web portal hasbeen developed to facilitate online application/online renewal of Fixed Deposits Loanagainst FDs profile updates etc. Online submission of Forms 15 G/15H by all eligibleDepositors through the FD Customer portal is made available on the Company's website.

TDS certificate(s) are made available in the Customer portal and Broker portal inaddition to the same being sent to the concerned Depositors from time to time. In orderto offer various payment options to Depositors more payment gateways have been addedacross various FD investment portals.

An advanced version of Customer Relationship Management (CRM) has been launched torecord the queries requests and complaints for future data analysis in order to enhancecustomer service.

An integrated service portal (E-Sarathi) has been introduced to address the queries ofDepositors routed through the Channel Partners on real-time basis during working hours.

The process of recording Central Know Your Customer (CKYC) details of the Depositorshas been strengthened by introducing various control measures.

As at 31st March 2021 6052 Deposits amounting to Rs. 5.41 Crores had matured forpayment and remained unclaimed. The unclaimed Deposits have since reduced to 5882Deposits amounting to Rs. 5.17 Crores. There has been no default in repayment of Depositsor payment of interest during the year.

Your Company being a Non-Banking Financial Company the disclosures required as perRule 8 (5) (v) and (vi) of the Companies (Accounts) Rules 2014 read with Sections 73 and74 of the Companies Act 2013 are not applicable to it.

The information pursuant to Clause 35(1) of Master Direction DNBR.PD.002/03.10.119/2016-17 dated 25th August 2016 issued by the Reserve Bank of India onNon-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions2016 regarding unpaid/unclaimed public deposits as on 31st March 2021 is furnishedbelow:

i. total number of accounts of Public Deposits of the Company which have not beenclaimed by the depositors or not paid by the Company after the date on which the depositbecame due for repayment: 6052.

ii. total amounts due under such accounts remaining unclaimed or unpaid beyond thedates referred to in clause (i) as aforesaid: Rs. 54147729.

Depositors were intimated regarding the maturity of deposits with a request to eitherrenew or claim their Deposits. Your Company regularly sends letters/reminders via email toall those Fixed Deposit holders whose Deposits have matured as well as to those whoseDeposits remain unclaimed. Where the Deposit remains unclaimed follow-up action is alsoinitiated through the concerned agent or branch.

Pursuant to Section 125(2) (i) of the Companies Act 2013 read with the InvestorEducation and Protection Fund Authority (Accounting Audit Transfer and Refund) Rules2016 ('the IEPF Rules') as amended from time to time matured Deposits remaining unclaimedfor a period of seven years from the date they became due for payment are required to betransferred to the Investor Education and Protection Fund (IEPF) Authority established bythe Central Government. Further interest accrued on the matured deposits which remainunclaimed for a period of seven years from the date of payment will also be transferred tothe IEPF under Section 125(2) (k). The concerned depositor can claim the Deposit and/orinterest from the IEPF Authority by following the procedure laid down in the IEPF Rules.During the year an amount of Rs. 0.11 Crores has been transferred to the IEPF Authority.

During the year under review the Company has not given any loans and advances in thenature of loans to its subsidiaries or associate(s) or loans and advances in the nature ofloans to firms/companies in which Directors are interested.

Accordingly the disclosure of particulars of loans/advances etc. as required to befurnished in the Annual Accounts of the Company pursuant to Regulations 34 (3) and 53 (f)read with paragraph A of Schedule V of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 is not applicable to the Company.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS IN SECURITIES

Pursuant to Section 186(11) of the Companies Act 2013 ("the Act") theprovisions of Section 186(4) of the Act requiring disclosure in the Financial Statementsof the full particulars of the loans made and guarantees given or securities provided by aNon-Banking Financial Company in the ordinary course of its business and the purpose forwhich the loan or guarantee or security is proposed to be utilised by the recipient of theloan or guarantee or security are exempted from disclosure in the Annual Report.

Further pursuant to the provisions of Section 186(4) of the Act the details ofinvestments made by the Company are given in the Notes to the Financial Statements.

SUSTAINABILITY INITIATIVES

Sustainability has been deeply embedded in the Company's business model from the verybeginning. At the heart of our organizational strategy is an inclusive business modelwhich enables the residents of semi-urban and rural India to access formal channels ofcredit/finance helping them create long-term value. In line with the Mahindra Group'smotto: ‘Rise for Good' your Company is also gearing up to be future ready by makingsustainability and climate change an integral part of the business strategy and riskframework. Your Company has been enabling customers to meet their aspirations through adiversified portfolio of financial product offerings. It helps people build their homesthrough affordable housing finance solutions provided by Mahindra Rural Housing FinanceLimited secure their life and assets with insurance solutions facilitated by MahindraInsurance Brokers Limited and offers investment options through its asset managementsubsidiary Mahindra Manulife Investment Management Private Limited. By providing the rightset of opportunities and prospects in the remote areas your Company has helped customersto forge ahead. The Company lays strong emphasis on customer centricity. Its customer baseis spread across more than 3.80 lakh villages in India with majority of them belonging tothe ‘Earn and Pay' segment.

Your Company commenced its journey towards reporting sustainability performance in2008-09 through Mahindra Group's Sustainability Report and in the year 2012-13 the Companyreleased its first standalone Sustainability Report. In FY 2019-20 the Company releasedits Eighth Sustainability Report with the theme "Positive & Promising". TheReport adheres to the Global Reporting Initiative's (GRI) Standards and is based on theIntegrated Reporting framework. The Report is externally assured by KPMG.

The Content index has been checked by GRI and carries the GRI logo. FY 2019-20 wastruly a year of building sustainable resilience for the Group Financial Services Sector.The "Positive & Promising" theme of the Report shows that despite a varietyof challenges through the year the Company collectively stayed true to its core purposeand values helping its customers teams and communities realize their true potential.

This Report is hosted on the Company's website and can be accessed at: https://mahindrafinance.com/media/383687/mahindra-finance-sustainability-report-2019-20.pdf.

Your Company continued to focus on integrating Sustainability into the businesspractices and on building awareness for different stakeholders by taking variousinitiatives to engage them. In FY 2018-19 your Company became the 1st Financial Companyin India to be committed towards call to action for Science Based Targets.

The Science Based Targets initiative (SBTi) requires companies to publicly commit tosetting carbon emission reduction targets that are in line with climate science. YourCompany was recognized for its Sustainability initiatives during the year under reviewwith the following accolades:

Included in the renowned FTSE4Good Emerging Markets Index series for ESG Performancefor the 2nd time. FTSE4Good is an equity index series that is designed to facilitateinvestment in companies that meet globally recognised corporate responsibility standards.It is designed to measure the performance of companies demonstrating strong EnvironmentalSocial and Governance practices.

Ranked 48th amongst Top 100 Indian companies for Sustainability & CSR underResponsible Business Rankings 2020 by Futurescape.

Included in the ‘Dow Jones Sustainability Indices' Sustainability Yearbook 2021(the only Indian Company among the Diversified Financial Services Companies to feature inthe same).

Attained performance band "B" in the Carbon Disclosure Project (CDP)assessment 2020-21 greater than the Sector average and Asia Regional average.

Selected as the winner of the ‘The Mahindra Group Sustainability PerformanceAward 2020'.

Your Company's approach has been to make its environmental disclosure transparent andaccordingly it has been reporting disclosures and reports on its performance through theCarbon Disclosure Project (CDP) India since Financial Year 2011-12.

Sensitising the employees to a novel concept such as Sustainability has been one of thekey initiatives of the Company during the year. Capacity building on Sustainability hasbeen driven by Sustainability Courses on the learning platform. The Company launched amodule on Human Rights in the reporting year and made it mandatory for all the employees.The Mahindra Group and the United Nations have partnered to offer a Course on Climatechange for its employees.

During the year your Company made proactive efforts to reduce CO2 emissions (carbonfootprint) through Project "Mahindra Hariyali" by planting more than 30000saplings throughout the country.

Your Company is gearing up to be future ready by making sustainability and climatechange an integral part of its risk framework and taking measures to mitigate and managethem. In the reporting year the Company has enhanced its existing Risk Register byincluding applicable Climate change risks. Weather reports are assessed on a regular basisand aligned with business operations to protect the customers and minimize the riskimpact. The outlook for the future has been positive and your Company is well equipped toenable its customers and communities to progress through its inclusive and sustainablebusiness model.

BUSINESS RESPONSIBILITY REPORT

The Business Responsibility Report ("BRR") of your Company for the year2020-21 forms part of this Annual Report as required under Regulation 34(2)(f) of theSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 and is appended as "Annexure II".

Your Company is building an inclusive organisation by empowering all the stakeholdersand facilitating their contribution towards growth that is both holistic and long term.Through the inclusive business model your Company endeavours to cater to the bottom ofthe pyramid in the rural and semi-urban areas enabling them to earn their livelihoodthrough varied financial products and services. Your Company has always been conscious ofits role as a responsible corporate citizen. Through its wide network of branches withlocally-recruited employees strong and lasting relationships with its stakeholders largecustomer base vast experience and market knowledge your Company is providing financialresources to underserviced regions of the country.

The BRR can also be accessed on the Company's website at: https://mahindrafinance.com/discover-mahindra-finance/sustainability.

INTEGRATED REPORTING

Your Company is pleased to present its first Integrated Report which encompasses bothfinancial and non-financial information to enable Members to have a more holisticunderstanding of the Company's long-term perspective. This Integrated Report forms part ofthe Annual Report and is in consonance with the SEBI Circular dated 6th February 2017. AnIntegrated Report takes corporate reporting beyond just discussing the financialresources since any value creation activity requires other resources like people naturalresources and business relationships.

The Integrated Annual Report for the year 2020-21 includes details such as theorganisation's strategy governance framework performance and prospects of value creationbased on the six (6) forms of capital viz. financial capital manufactured capitalintellectual capital human capital social and relationship capital and natural capital.

The Integrated Annual Report for the year 2020-21 is hosted on the Company's websiteand can be accessed at the web-link: https://www.mahindrafinance.com/investor-zone/financial-information/.

Since 2012-13 the Company has been annually publishing a Sustainability Reportconforming to the guidelines of the Global Reporting Initiative ("GRI"). TheseReports adhere to the GRI standards and are based on the Integrated Reporting frameworkand have been externally assured. This year the Sustainability Report has been combinedwith the Integrated Report.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

With a vision to transform rural and semi-urban India into a self-reliant flourishinglandscape Mahindra Finance started its journey in 1991 and grew into a leading NBFC withan employee base of around 20000 employees all over India. By supporting about 23 NGOsand implementing partners in the areas of Education & Livelihood Healthcare andEnvironment the Company strives to become an asset in the communities where it operates.Your Company's Corporate Social Responsibility (‘CSR') initiatives are aligned withthe mission of transforming rural lives and hence focus on areas such as Education &Livelihood Healthcare and Environment.

In FY 2021 to consolidate and further strengthen its endeavor to support drivers yourCompany launched its flagship program- "SWABHIMAAN a holistic driver developmentprogram".

This program is initiated to address the professional financial and familialchallenges faced by the drivers and their families and further contribute to their overallwell-being. This multi-year program aims to benefit over 75000 beneficiaries through keyinterventions focusing on various aspects of a driver's life. Your Company will providedriver's training to freshers road safety training to existing drivers auto mechanictraining to women financial planning workshops accidental and health insurance policy todrivers and award scholarships to driver's children. Your Company continued its support toPeople with Disabilities (PwDs) by training them under ‘Hunnar' program in variousskills in BFSI hospitality and ITES sectors to enhance their employability. 365 peoplewith disabilities were trained and 274 were placed in jobs. The Company also conductedawareness campaigns about sanitation and hygiene under Healthcare and Swachh Bharatinitiatives. Reaffirming its commitment to the cause of education your Company continuedits support to the Nanhi Kali Program which has benefitted over 10800 underprivilegedgirl children from socially and economically marginalized families living in urban ruraland tribal parts of India. Your Company to promote inclusive socio-economic growth of themarginalized youth continued its support to Mahindra Pride School which skilled 1822youth and 100% have been placed. Further Mahindra Pride Classrooms supported anadditional 20 hours of online training to 30627 final year students covering EnglishSpeaking Life Skills Aptitude Interview Group Discussion and Digital Literacy throughPolytechnics and Arts & Science Colleges.

To continue with its commitment to increase the green cover your Company's employeesparticipated in the Mahindra Hariyali project. Employees from most of the branchesplanted more than 30000 saplings in selected locations.

Your Company provided ration kits to more than 5000 drivers and their familiesaffected by the COVID-19 pandemic across multiple States in India. Apart from the keythrust areas your Company contributed funds for other causes such as preservation andpromotion of the fine arts and culture and supporting orphanage homes differently abledhomes and homes for the elderly to re-affirm its pledge to strive for a better society.

During the year under review your Company has spent Rs. 32.54 Crores towardsCorporate Social Responsibility on various CSR projects and programs. This includes thecontribution of Rs. 5.17 Crores made to PM Cares Fund in the Financial Year 2019-20 whichhas been off-set against the CSR spend of the Financial Year 2020-21 as per theNotification D.O. No 05/1/2020-CSR-MCA dated 30th March 2020 issued by the Ministry ofCorporate Affairs. Your Company is in compliance with the statutory requirements in thisregard.

CSR COMMITTEE

The Company has duly constituted a CSR Committee in accordance with Section 135 of theCompanies Act 2013 to assist the Board and the Company in fulfilling the corporate socialresponsibility objectives of the Company.

Consequent upon the resignation of Dr. Anish Shah as a Member of the Committee witheffect from 16th May 2020 and cessation of Mr. V. Ravi Member as Executive Director& Chief Financial Officer of the Company with effect from 25th July 2020 theCommittee presently comprises of the following Directors:

Name Category
Mr. Dhananjay Mungale - Chairman of the Committee (Independent Director)
Ms. Rama Bijapurkar - Independent Director
Mr. Ramesh Iyer - Vice-Chairman & Managing Director

During the year under review 4 (four) CSR Committee Meetings were held details ofwhich are provided in the Corporate Governance Report.

CSR POLICY

During the year under review the Board based on the recommendation of the CSRCommittee amended the CSR Policy to align the same in accordance with the Companies(Corporate Social Responsibility Policy) Amendment Rules 2021 and Section 135 of theCompanies Act 2013 as amended effective from 22ndJanuary 2021.

The revised CSR Policy is hosted on the Company's website and can be accessed atthe web-link: https:// www.mahindrafinance.com/investor-zone/corporate-governance.The detailed Annual Report on the CSR activities undertaken by your Company during theyear as prescribed in the Companies (Corporate Social Responsibility Policy) Rules 2014as amended is set out in "Annexure III" of this Report.

ANNUAL RETURN

Pursuant to Section 134(3)(a) and Section 92(3) of the Companies Act 2013 read withRule 12(1) of the Companies (Management and Administration) Rules 2014 the Annual Returnas on 31st March 2021 in Form No. MGT-7 is available on the Company's website and can beaccessed at the web-link: https://www.mahindrafinance.com/investor-zone/financial-information.

BOARD MEETINGS EXTRAORDINARY GENERAL MEETING AND ANNUAL GENERAL MEETING

The calendar of the Board/Committee Meetings and the Annual General Meeting iscirculated to the Directors in advance to enable them to plan their schedule for effectiveparticipation at the respective meetings. Additional Board Meetings are convened by givingappropriate notice to address business exigencies. Apart from Meetings at times certaindecisions are taken by the Board/Committee(s) through Circular Resolutions after adiscussion over a conference call between Board/Committee Members.

All the decisions and urgent matters approved by way of Circular Resolutions/CircularNote are placed and noted at the subsequent Board/Committee Meeting(s).

The Board of Directors met seven times during the year under review on 15th May 20201st June 2020 18th July 2020 18th September 2020 26th October 2020 28th January2021 and 5th March 2021. The requisite quorum was present for all the Meetings. Themaximum time gap between any two Meetings was not more than one hundred and twenty days.These Meetings were well attended. The 30th Annual General Meeting ('AGM') of the Companywas held on 10th August 2020.

During the year under review an Extraordinary General Meeting ('EGM') of the Memberswas held on 30th June 2020 to approve the increase in the Authorised Share Capital of theCompany and consequential amendment(s) to the Capital Clause of the Memorandum ofAssociation of the Company.

Detailed information on the Meetings of the Board its Committees EGM and the AGM isincluded in the Report on Corporate Governance which forms part of this Annual Report.

MEETINGS OF INDEPENDENT DIRECTORS

The Independent Directors met twice during the year under review on 13th August 2020and 4th March 2021. The Meetings were conducted in an informal manner without thepresence of the Whole-time Director(s) the Non-Executive Non-Independent Directors orany other Management Personnel.

COMMITTEES OF THE BOARD OF DIRECTORS

The Company has various Committees which have been constituted as a part of goodcorporate governance practices and the same are in compliance with the requirements of therelevant provisions of applicable laws and statutes.

Audit Committee

As on 31st March 2021 the Audit Committee comprised of four Independent Directors andone Non-Executive Non-Independent Director:

Name Category
Mr. C. B. Bhave Chairman of the Committee
(Independent Director)
Mr. Dhananjay Mungale Independent Director
Ms. Rama Bijapurkar Independent Director
Mr. Milind Sarwate Independent Director
Dr. Anish Shah Non-Executive Non-Independent Director

Changes in Committee Members during the year:

• Mr. V. S. Parthasarathy ceased to be a Member of the Committee consequent uponhis resignation as a Non-Executive Non-Independent Director of the Company with effectfrom 18th September 2020.

• Mr. Amit Raje Non-Executive Non-Independent Director of the Company wasappointed as a Member of the Committee with effect from 28th January 2021.

Pursuant to his appointment as a Whole-time Director of the Company with effect from1st April 2021 and in order to be consistent with the principles of good governance Mr.Amit Raje resigned as a Member of the Audit Committee with effect from 5th March 2021.

• Mr. Arvind V. Sonde ceased to be a Member of the Committee consequent to hisresignation as an Independent Director of the Company with effect from 15th March 2021.

During the year 7 (seven) Audit Committee Meetings were held details of which areprovided in the Corporate Governance Report.

The recommendations of the Audit Committee were duly approved and accepted by the Boardduring the year under review.

Other Board Committees

The other Committees of the Board are:

i) Nomination and Remuneration Committee

ii) Stakeholders Relationship Committee

iii) Corporate Social Responsibility Committee

iv) Risk Management Committee

v) Asset Liability Committee

vi) IT Strategy Committee

vii) Committee for Strategic Investments

The details with respect to the composition powers roles terms of referenceMeetings held and attendance of the Directors at such Meetings of the relevant Committeesare given in detail in the Report on Corporate Governance of the Company which forms partof this Annual Report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Chairman of the Board of Directors

i) Resignation of Mr. Dhananjay Mungale as Chairman of the Board with effect from closeof business hours on 1st April 2021

Mr. Dhananjay Mungale (DIN: 00007563) stepped down as the Chairman of the Board ofDirectors with effect from the close of business hours on 1st April 2021. The Board hasplaced on record its deep appreciation of the contribution and valuable services renderedby Mr. Mungale during his association as Chairman of the Board since 2016.

Mr. Dhananjay Mungale continues to be an Independent Director of the Company.

ii) Appointment of Dr. Anish Shah as Chairman of the Board of Directors with effectfrom 2nd April 2021

In the light of Mr. Dhananjay Mungale relinquishing his office as Chairman of the Boardof Directors of the Company and on the recommendation of the Nomination and RemunerationCommittee the Board at its Meeting held on 28th January 2021 appointed Dr. Anish Shah(DIN: 02719429) as Non-Executive Chairman of the Board with effect from 2nd April 2021.

Dr. Anish Shah is currently the Managing Director and Chief Executive Officer ofMahindra & Mahindra Limited (‘M&M') the Holding Company with responsibilityfor the Group Corporate Office and full oversight of all businesses other than the Autoand Farm sectors of M&M.

Appointment/Re-Appointment of Directors Mr. Ramesh Iyer

Re-appointment of Mr. Ramesh Iyer Managing Director designated as Vice-Chairman &Managing Director

Mr. Ramesh Iyer has been the Managing Director of the Company since 30th April 2001and has played a key role in building Mahindra Finance into one of India's leading ruralfinance companies since 1995.

In March 2016 Mr. Iyer was elevated as the Vice-Chairman & Managing Director ofthe Company.

The term of office of Mr. Ramesh Iyer Vice-Chairman & Managing Director of theCompany expires on 29th April 2021.

On the recommendation of the Nomination and Remuneration Committee (‘NRC') theBoard of Directors at its Meeting held on 23rd April 2021 has re-appointed Mr. RameshIyer (DIN: 00220759) as the Managing Director liable to retire by rotation designated asVice-Chairman & Managing Director for a period of 3 (three) years with effect from30th April 2021 to 29th April 2024 (both days inclusive) subject to the approval ofMembers at the ensuing Annual General Meeting.

Mr. Amit Raje

Appointment of Mr. Amit Raje as a Non-Executive Non-Independent Director

Pursuant to the recommendation of the NRC the Board at its Meeting held on 18thSeptember 2020 appointed Mr. Amit Raje (DIN: 06809197) as an Additional Non-ExecutiveNon-Independent Director of the Company with effect from 18th September 2020 liable toretire by rotation.

The Members of the Company have by means of an Ordinary Resolution passed on 3rd March2021 vide Postal Ballot conducted through Remote E-voting mode approved the appointmentof Mr. Amit Raje as a Non-Executive Non-Independent Director of the Company.

Appointment of Mr. Amit Raje as Whole–time Director of the Company designated as"Chief Operating Officer Digital Finance – Digital Business Unit"

The Board of Directors of the Company at its Meeting held on 5th March 2021 has onthe recommendation of the NRC appointed Mr. Amit Raje as a Whole-time Director of theCompany liable to retire by rotation designated as "Chief Operating Officer DigitalFinance – Digital Business Unit" for a period of 5 (five) years witheffect from 1st April 2021 till 31st March 2026 (both days inclusive) subject toapproval of the Members at the ensuing Annual General Meeting.

Dr. Rebecca Nugent

Appointment of Dr. Rebecca Nugent as an Independent Director of the Company

Based on the recommendation of the NRC and on the proposal of the Board of DirectorsDr. Rebecca Nugent (DIN: 09033085) was appointed as an Independent Director of theCompany to hold office for a term of 5 (five) consecutive years commencing from 5thMarch 2021 to 4th March 2026 (both days inclusive) vide an Ordinary Resolution passedby the Members by means of a Postal Ballot through remote e-voting mode on 3rd March2021.

Mr. Amit Kumar Sinha

Appointment of Mr. Amit Kumar Sinha as a Non-Executive Non-Independent Director

Pursuant to the recommendation of the NRC the Board at its Meeting held on 23rd April2021 appointed Mr. Amit Kumar Sinha (DIN: 09127387) as an Additional Non-ExecutiveNon-Independent Director with effect from 23rd April 2021 to hold office up to the dateof the ensuing Annual General Meeting (‘AGM') of the Company and thereafter subjectto the approval of the Members at the said AGM as a Non-Executive Non-IndependentDirector liable to retire by rotation.

The Company has received the requisite Notice from a Member in writing proposing hisappointment as a Director of the Company.

Cessation of Directors Mr. V. Ravi

As mentioned in the previous Annual Report Mr. V. Ravi (DIN: 00307328) ceased to bethe Executive Director & Chief Financial Officer of the Company upon completion of histenure with effect from 25th July 2020. The Board has placed on record its deepappreciation of Mr. V. Ravi's immense contribution and valuable services during his longassociation with the Company and acknowledged Mr. Ravi's outstanding experience andexpertise in serving the Company including the Group's Financial Services Sectorcompanies.

Mr. V. S. Parthasarathy

Resignation of Mr. V. S. Parthasarathy as Non-Executive Non-Independent Director of theCompany

Mr. V. S. Parthasarathy (DIN: 00125299) resigned as Non-Executive Non-IndependentDirector with effect from 18th September 2020.

Consequently Mr. V. S. Parthasarathy also ceased to be a Member of the AuditCommittee Nomination and Remuneration Committee Risk Management Committee AssetLiability Committee and Committee for Strategic Investments of the Board effective 18thSeptember 2020.

Mr. Parthasarathy joined the Board of Directors of your Company in July 2014. The Boardacknowledged Mr. V. S. Parthasarathy's contribution to the Company and has placedon record its appreciation of the invaluable services rendered by Mr. Parthasarathy duringhis association with the Company.

Mr. Arvind V. Sonde

Resignation of Mr. Arvind V. Sonde as an Independent Director of the Company

Mr. Arvind V. Sonde (DIN: 00053834) was appointed as an Independent Director of theCompany by the Members through a Postal Ballot with effect from 9th December 2019 for aterm of five years.

Mr. Arvind V. Sonde resigned as a Member of the Board with effect from 15th March2021 due to other professional and family commitments. Mr. Sonde has confirmed that thereare no material reasons for his resignation other than those mentioned in his resignationletter.

Subsequently Mr. Arvind V. Sonde also ceased to be a Member of the Audit Committee andRisk Management Committee of the Board effective 15th March 2021. The Board has placed onrecord its sincere appreciation of the valuable services rendered by Mr. Sonde as anIndependent Director of the Company.

RETIREMENT BY ROTATION

Mr. Ramesh Iyer retires by rotation and being eligible offers himself forre-appointment at the 31st Annual General Meeting of the Company scheduled to be held on26th July 2021.

Re-appointment of Independent Directors

None of the Independent Directors of the Company is due for re-appointment.

Resignation of Independent Director(s)

During the year under review except for Mr. Arvind V. Sonde none of the IndependentDirectors of the Company had resigned before the expiry of his/her respective tenure(s).

Declaration by Directors

All the Directors of the Company have confirmed that they satisfy the "fit andproper" criteria as prescribed under Chapter XI of RBI Master Direction No. DNBR.PD.008/03.10.119/2016-17 dated 1st September 2016 as amended and that they are notdisqualified from being appointed/continuing as Directors in terms of Section 164(2) ofthe Companies Act 2013.

Declaration by Independent Directors

All the Independent Directors of the Company have given their respectivedeclarations/disclosures under Section 149(7) of the Companies Act 2013 ('Act') andRegulation 25(8) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 (‘Listing Regulations') and have confirmed that they fulfill thecriteria of Independence as prescribed under Section 149(6) of the Act and Regulation16(1)(b) of the Listing Regulations and have also confirmed that they are not aware ofany circumstance or situation which exist or may be reasonably anticipated that couldimpair or impact their ability to discharge their duties with an objective independentjudgment and without any external influence.

Further the Board after taking these declarations/ disclosures on record andacknowledging the veracity of the same concluded that the Independent Directors arepersons of integrity and possess the relevant proficiency expertise and experience toqualify as Independent Directors of the Company and are Independent of the Management ofthe Company.

In terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment andQualification of Directors) Rules 2014 as amended Independent Directors of the Companyhave confirmed that they have registered themselves with the databank maintained by theIndian Institute of Corporate Affairs Manesar (‘IICA'). The Independent Directorsare also required to undertake online proficiency self-assessment test conducted by theIICA within a period of 2 (two) years from the date of inclusion of their names in thedata bank unless they meet the criteria specified for exemption.

The Independent Directors of the Company except Dr. Rebecca Nugent are exempt from therequirement to undertake the online proficiency self-assessment test conducted by IICA.Dr. Rebecca Nugent will be undertaking the said test in due course.

Key Managerial Personnel

The following persons have been designated as the Key Managerial Personnel of theCompany pursuant to Sections 2(51) and 203 of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014:

Mr. Ramesh Iyer Vice-Chairman & Managing Director.

Mr. Amit Raje Whole-time Director of the Company designated as "Chief OperatingOfficer Digital Finance – Digital Business Unit".

Mr. Vivek Karve Chief Financial Officer of the Company and Group Financial ServicesSector.

Ms. Arnavaz M. Pardiwalla Company Secretary.

Changes in Key Managerial Personnel

Chief Financial Officer

Mr. V. Ravi ceased to be the Chief Financial Officer of the Company on completion ofhis tenure as Executive Director & Chief Financial Officer with effect from 25th July2020. Based on the recommendations of the Nomination and Remuneration Committee and theAudit Committee the Board of Directors of the Company at its Meeting held on 18th July2020 appointed Mr. Vivek Karve as the Chief Financial Officer designated as 'ChiefFinancial Officer of the Company and Group Financial Services Sector' with effect from14th September 2020.

Directors' Responsibility Statement

Pursuant to the provisions of Section 134(5) of the Companies Act 2013 ("theAct") your Directors based on the representations received from the OperatingManagement and after due enquiry confirm that:

i. in the preparation of the annual accounts for financial year ended 31st March 2021the applicable accounting standards have been followed and there are no materialdepartures in adoption of these standards.

ii. they have in consultation with the Statutory Auditors selected such accountingpolicies and applied them consistently and made judgments and estimates that arereasonable and prudent so as to give a true and fair view of the state of affairs of theCompany as at 31st March 2021 and of the profit of the Company for the year ended on thatdate.

iii. 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.

iv. they have prepared the annual accounts for financial year ended 31st March 2021 ona going concern basis.

v. they have laid down adequate internal financial controls to be followed by theCompany and that such internal financial controls were operating effectively during thefinancial year ended 31st March 2021.

vi. they have devised proper systems to ensure compliance with provisions of allapplicable laws and that such systems were adequate and operating effectively during thefinancial year ended 31st March 2021.

Performance Evaluation of the Board

The Companies Act 2013 and the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 ("the Listing Regulations") stipulate the evaluation of theperformance of the Board its Committees Individual Directors and the Chairperson.

The Company has formulated a Policy for performance evaluation of the IndependentDirectors the Board its Committees and other individual Directors which includescriteria for performance evaluation of the Non-Executive Directors and ExecutiveDirectors.

The evaluation framework for assessing the performance of Directors comprises variouskey areas such as attendance at Board and Committee Meetings quality of contribution toBoard discussions and decisions strategic insights or inputs regarding future growth ofthe Company and its performance ability to challenge views in a constructive mannerknowledge acquired with regard to the Company's business/activities understanding ofindustry and global trends etc.

The evaluation involves self-evaluation by the Board Member and subsequent assessmentby the Board of Directors. A member of the Board will not participate in the discussion ofhis/her evaluation.

Pursuant to the provisions of the Companies Act 2013 and Regulation 17 of the ListingRegulations the Board has carried out an annual evaluation of its own performance andthat of its Committees as well as performance of the Directors individually (includingIndependent Directors). The evaluation process was based on the affirmation received fromthe Independent Directors that they met the independence criteria as required under theCompanies Act 2013 and the Listing Regulations.

Feedback was sought by way of well-defined and structured questionnaires coveringvarious aspects of the Board's functioning such as adequacy of the composition of theBoard and its Committees Board culture areas of responsibility execution andperformance of specific duties obligations and governance compliance oversight ofCompany's subsidiaries etc. and the evaluation was carried out based on responsesreceived from the Directors. The aspects of succession planning were also considered.

A separate exercise was carried out by the Nomination and Remuneration Committee of theBoard to evaluate the performance of individual Directors who were evaluated on severalparameters such as level of engagement and contribution independence of judgmentsafeguarding the interest of the Company and its minority shareholders and knowledgeacquired with regard to the Company's business/activities.

The performance evaluation of the Non-Independent Directors and the Board as a wholewas carried out by the Independent Directors. The performance evaluation of the Chairmanof the Company was also carried out by the Independent Directors taking into account theviews of the Executive Directors and Non-Executive Directors.

The performance evaluation of the Independent Directors was carried out by the entireBoard excluding the Director being evaluated.

The outcome of the Board Evaluation for the Financial Year 2020-21 was discussed by theNomination and Remuneration Committee and the Board at their respective meetings held inApril 2021. Qualitative comments and suggestions of Directors were taken intoconsideration by Mr. Dhananjay Mungale former Chairman of the Board and Mr. C. B. Bhaveformer Chairman of the Nomination and Remuneration Committee. The Directors have expressedtheir satisfaction with the evaluation process.

Familiarisation Programme for Independent Directors

The details of programmes for familiarisation of Independent Directors with theCompany their roles rights responsibilities in the Company nature of the industry inwhich the Company operates business model of the

Company and related matters along with details of number of programmes and number ofhours spent by each of the Independent Directors during the Financial Year 2020-21 interms of the requirements of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 are available on the website of the Company and can be accessed at theweb-link: https://www.mahindrafinance.com/media/383820/familiarisation-programme-for-the-f-y-2020-21-website-uploading.pdf.

Policies on Appointment of Directors and Senior Management and Remuneration ofDirectors Key Managerial Personnel and Employees i) Policy on Appointment of Directorsand Senior Management and succession planning for orderly succession to the Board and theSenior Management

In accordance with the provisions of Section 134(3) (e) of the Companies Act2013 ("the Act") read with Section 178(2) of the Act and Regulation 17 of theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 your Company hasadopted a Policy on Appointment of Directors and Senior Management and succession planningfor orderly succession to the Board and the Senior Management which inter alia includesthe criteria for determining qualifications positive attributes and independence ofDirectors identification of persons who are qualified to become Directors and who may beappointed in the Senior Management team succession planning for Directors and SeniorManagement and the Talent Management framework of the Company.

This Policy is available at the Company's website at the web-link: https://mahindrafinance.com/investor-zone/corporate-governance.ii) Policy on Remuneration of Directors and the Remuneration Policy for Key ManagerialPersonnel and Employees of the Company

Your Company has also adopted the Policy on Remuneration of Directors and theRemuneration Policy for Key Managerial Personnel and Employees of the Company inaccordance with the provisions of sub-section (4) of Section 178 of the Act.

Dr. Anish Shah has been appointed as the Non-Executive Chairman of the Board ofDirectors with effect from 2nd April 2021. Dr. Shah is in the whole-timeemployment of Mahindra & Mahindra Limited (‘M&M') the Holding Company anddraws remuneration from it. Dr. Anish Shah is not paid any sitting fees or remuneration bythe Company.

In view of the above the Policy on Remuneration of Directors has been amendedeffective 2nd April 2021 in line with the aforesaid requirements and administrativechanges.

The Policy on Remuneration of Directors as amended and the Remuneration Policy forKey Managerial Personnel and Employees of the Company are appended as "AnnexureIV-A" and "Annexure IV-B" respectively and form part of thisReport. These Polices are also available at the Company's website at the web-link: https://mahindrafinance.com/investor-zone/corporate-governance.

The criteria for determining qualifications positive attributes and independence of aDirector and the Remuneration Policies for Directors Key Managerial Personnel and otheremployees have been discussed in detail in the Report on Corporate Governance.

AUDITORS

Statutory Auditors

Messrs. B S R & Co. LLP Chartered Accountants (ICAI Firm RegistrationNo.101248W/W-100022) were appointed as Statutory Auditors of the Company at theTwenty-seventh Annual General Meeting ('AGM') to hold office for a period of fiveconsecutive years commencing from the conclusion of the 27th AGM held on 24th July 2017till the conclusion of the 32nd AGM of the Company to be held in the year 2022. TheStatutory Auditors have given a confirmation to the effect that they are eligible tocontinue with their appointment and that they have not been disqualified in any mannerfrom continuing as Statutory Auditors. The remuneration payable to the Statutory Auditorsshall be determined by the Board of Directors based on the recommendation of the AuditCommittee.

The Report given by the Auditors on the Financial Statements of the Company for theFinancial Year 2020-21 is a part of the Annual Report. The Report is unmodified and doesnot contain any qualification reservation adverse remark or disclaimer.

The Statutory Auditors were present at the last AGM.

Secretarial Auditor

The Board of Directors of the Company has appointed Messrs. KSR & Co. CompanySecretaries LLP to conduct the Secretarial Audit of the Company pursuant to the provisionsof Section 204 of the Companies Act 2013 and the Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014. In accordance with the provisions of sub-section (1)of Section 204 the Secretarial Audit Report for the Financial Year 2020-21 is appended tothis Report as "Annexure V".

The Secretarial Audit Report does not contain any qualification reservation adverseremark or disclaimer.

The Secretarial Auditor was present at the last AGM.

Secretarial Audit of Material Unlisted Indian Subsidiary

Mahindra Rural Housing Finance Limited ('MRHFL') a material subsidiary of the Companyundertakes Secretarial Audit every year under Section 204 of the Companies Act 2013. TheSecretarial Audit of MRHFL for the Financial Year 2020-21 was carried out pursuant toSection 204 of the Companies Act 2013 and Regulation 24A of the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015. The Secretarial Audit Report of MRHFLsubmitted by Messrs. KSR & Co. Company Secretaries LLP does not contain anyqualification reservation or adverse remark or disclaimer. The Secretarial Audit Reportis appended as "Annexure VI" and forms part of this Report.

Cost Records and Cost Audit

Maintenance of cost records and requirement of cost audit as prescribed under theprovisions of Section 148(1) of the Companies Act 2013 are not applicable in respect ofthe business activities carried out by the Company.

Reporting of Frauds by Auditors

During the year under review the Statutory Auditors and the Secretarial Auditor havenot reported any instances of frauds committed in the Company by its Officers orEmployees to the Audit Committee under Section 143(12) of the Companies Act 2013details of which need to be mentioned in this Report.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All contracts/arrangements/transactions entered into by the Company during theFinancial Year with Related Parties were in the ordinary course of business and on anarm's length basis. During the year under review your Company had not entered into anycontract/arrangement/ transaction with Related Parties which could be considered materialin accordance with the Policy on Related Party Transactions. Pursuant to Section 134 (3)(h) read with Rule 8 (2) of the Companies (Accounts) Rules 2014 there are notransactions to be reported under Section 188 (1) of the Companies Act 2013. Accordinglythe disclosure of Related

Party Transactions as required under Section 134 (3) (h) of the Companies Act 2013 inForm AOC-2 is not applicable to the Company.

The Policy on Related Party Transactions as approved by the Board of Directors of theCompany is uploaded on the website of the Company and same can be accessed on theweb-link: https://www.mahindrafinance.com/investor-zone/corporate-governance/.

Further details on the transactions with Related Parties are provided in theaccompanying Financial Statements.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

The ongoing COVID-19 pandemic and its effect on the overall economy has impactedconsumer sentiments and collections thus affecting the Company's performance and thefuture effects of the outbreak remain uncertain. The outbreak has necessitated theGovernment to respond at unprecedented levels to protect public health local economiesand livelihoods. There remains a risk of subsequent waves of infection as evidenced bythe recently emerged variants of the virus. All these have substantially increased theestimation uncertainty in the preparation of the Financial Statements for the year ended31st March 2021.

Your Company has developed various accounting estimates in these Financial Statementsbased on forecasts of economic conditions which reflect expectations and assumptions as at31st March 2021 about future events that the management believe are reasonable underthese circumstances. There is a considerable degree of judgement involved in preparingforecasts. The underlying assumptions are also subject to uncertainties which are oftenoutside the control of the Company. Accordingly actual economic conditions are likely tobe different from those forecast since anticipated events frequently do not occur asexpected and the effect of those differences may significantly impact accountingestimates included in these Financial Statements.

The significant accounting estimates impacted by these forecasts and associateduncertainties are predominantly related to expected credit losses fair value measurementand recoverable amount assessments of non-financial assets.

Across the geographies and segments in which the Company operates the COVID-19outbreak has led to a worsening of economic conditions and increased uncertainty whichhas been reflected in higher Expected Credit Loss ('ECL') provisions. Furthermore creditlosses may increase due to exposure to vulnerable sectors of the economy such as retailhospitality and commercial real estate. The impact of the pandemic on the long-termprospects of businesses in these sectors is uncertain and may lead to significant creditlosses on specific exposures which may not be fully captured in ECL estimates.

Further in accordance with the regulatory expectation of the Reserve Bank of India tobring down the Net Non-Performing Asset (NPA) ratio below 4% which the Management hasagreed with the Company recorded an additional provision of Rs. 1300 Crores duringfourth quarter on Stage 3 loans.

The final impact of this pandemic and the Company's impairment loss allowance estimatesare inherently uncertain and hence the actual impact may be different than thatestimated based on the conditions prevailing as at the date of approval of these financialresults. The management will continue to closely monitor the material changes in themacro-economic factors impacting the operations of the Company.

The continuing rapid spread of COVID-19 pandemic emergence of new variants of thevirus and the subsequent restrictions/control measures announced by the respective StateGovernments are the events which have continued till the date of the announcement offinancial results of the Company. These uncertainties may adversely impact the Company'sbusiness operations in the future period. Other than the above mentioned situationaffecting the Company there is no material change and commitment that have occurred afterthe closure of the Financial Year 2020-21 till the date of this Report which would affectthe financial position of your Company.

RISK MANAGEMENT POLICY

Your Company has a comprehensive Risk Management Policy in place and has laid down awell-defined risk management framework to identify assess and monitor risks andstrengthen controls to mitigate risks. Your Company has established procedures toperiodically place before the Risk Management Committee and the Board of Directors therisk assessment and minimisation procedures being followed by the Company and steps takenby it to mitigate these risks.

The Risk Management Policy inter alia includes identification therein of elements ofrisk including Cyber Security and related risks as well as those risks which in theopinion of the Board may threaten the existence of the Company. The Risk managementprocess has been established across the Company and is designed to identify assess andframe a response to threats that affect the achievement of its objectives.

Further it is embedded across all the major functions and revolves around the goalsand objectives of the Company. Your Company has a robust organisational structure formanaging and reporting on risks.

The development and implementation of Risk Management Policy adopted by the Company isdiscussed in detail in the Management Discussion and Analysis chapter which forms part ofthis Annual Report.

WHISTLE BLOWER POLICY/VIGIL MECHANISM

The Company promotes ethical behaviour in all its business activities and hasestablished a vigil mechanism for its Directors Employees and Stakeholders associatedwith the Company to report their genuine concerns. The Vigil Mechanism as envisaged in theCompanies Act 2013 and the Rules prescribed thereunder and the Listing Regulations isimplemented through the Whistle Blower Policy to provide for adequate safeguards againstvictimisation of persons who use such mechanism and make provision for direct access tothe Chairperson of the Audit Committee. The Board at its Meeting held on 23rd April 2021has pursuant to the recommendations of the Audit Committee and in keeping with thechanging Corporate Governance landscape adopted a Revised Whistle Blower Policy of theCompany.

As per the Whistle Blower Policy implemented by the Company the Employees Directorscustomers dealers vendors suppliers or any Stakeholders associated with the Companyare free to report illegal or unethical behaviour actual or suspected fraud or violationof the Company's Codes of Conduct or Corporate Governance Policies or any improperactivity to the Ethics Helpline Provider or the Chairperson of the Audit Committee of theCompany or the Code of Conduct Committee. The Whistle Blower Policy also provides forreporting of insider trading violations as well as reporting of instances of leak ofUnpublished Price Sensitive Information by the employees.

The Whistle Blower Policy provides for protected disclosure and protection to theWhistle Blower. Under the Whistle Blower Policy the confidentiality of those reportingviolation(s) is protected and they are not subject to any discriminatory practices.Protected disclosures can also be made by sending an email at the designated email id:

MMFSL_COC@mahindra.com or any other mechanism as prescribed in the Whistle BlowerPolicy.

The Chairperson of the Audit Committee can be reached by sending a letter to the belowaddress:

Chairperson of the Audit Committee

Mahindra & Mahindra Financial Services Limited Mahindra Towers 4th Floor Dr. G.M. Bhosale Marg P. K. Kurne Chowk Worli Mumbai – 400 018.

The Whistle Blower Policy has been appropriately communicated within the Company and isavailable on the website of your Company at the web-link:https://mahindrafinance.com/media/384157/vigil-mechanism.pdf.

The Audit Committee is apprised on the vigil mechanism on a periodic basis. During theyear no personnel have been denied access to the Audit Committee.

SUBSIDIARIES JOINT VENTURE(S) AND ASSOCIATE(S)

The Company's Subsidiaries Joint Venture(s) and Associate(s) continue to contribute tothe overall growth in revenues and overall performance of your Company. A Report on theperformance and financial position of each of the subsidiaries joint venture(s) and theassociate companies included in the Consolidated Financial Statements and theircontribution to the overall performance of the Company is provided in Form AOC-1 as ‘AnnexureA' to the Consolidated Financial Statements and forms part of this Annual Report.

Your Company has formulated a Policy for determining ‘Material' Subsidiaries asdefined in Regulation 16 of the Listing Regulations. This Policy has been hosted on thewebsite of the Company and can be accessed at the web-link: https://mahindrafinance.com/investor-zone/corporate-governance.

SUBSIDIARIES

Mahindra Insurance Brokers Limited

During the year under review Mahindra Insurance Brokers Limited (‘MIBL') thesubsidiary in the business of Direct and Re-insurance Broking serviced approximately 1.43million insurance cases for both Life and Non-Life Retail business. There is de-growth of14% in Gross Premium facilitated for the Corporate and Retail business lines decreasingfrom Rs. 2431.89 Crores in the Financial Year 2019-20 to Rs. 2101.06 Crores in theFinancial Year 2020-21. The Total Income decreased by 20% from Rs. 336.89 Crores in theFinancial Year 2019-20 to Rs. 268.56 Crores in the Financial Year 2020-21. The Profitbefore Tax decreased by 40% from Rs. 73.90 Crores to Rs. 43.98 Crores and the Profit afterTax decreased by 40% from Rs. 53.36 Crores to Rs. 32.03 Crores during the same period.MIBL has been able to reach the benefit of insurance to over 3 lakh villages across India.

During the year MIBL focused on improving manpower productivity and efficiency throughautomation projects. There is also a sharper focus on diversifying the customer basethrough additional distribution channel including the Point of Sales Person channel andthe direct online sales through paybima.com. Though some of the planned investments insome of the business divisions were delayed there is no change in the long term strategyof MIBL.

Mahindra Rural Housing Finance Limited

Mahindra Rural Housing Finance Limited (‘MRHFL') the Company's subsidiary in thebusiness of providing loans for purchase renovation construction of houses toindividuals in the rural and semi-urban areas of the country registered a total income ofRs. 1454.7 Crores as compared to Rs. 1527.6 Crores for the previous yearregistering a decline of 4.8%. Profit before tax was 5% lower at Rs. 195.3 Crores ascompared to Rs. 205.6 Crores for the previous year. Profit after tax was 1.6% higher atRs. 151.0 Crores as compared to Rs. 148.6 Crores for the previous year. During the yearunder review MRHFL disbursed loans aggregating to Rs. 796.6 Crores as against Rs. 1876.4Crores in the previous year.

MRHFL continued its focus on serving customers in rural India. Majority of the loansdisbursed were to customers in villages with an average annual household income of lessthan Rs. 2.00 lakhs. During the year under consideration MRHFL disbursed home loans toaround 34559 households (in addition to around 1045898 existing households as on 31stMarch 2020). MRHFL has been expanding its geographical presence to provide affordableservices for rural households.

Mahindra Manulife Investment Management Private Limited and Mahindra Manulife TrusteePrivate Limited Equity Infusion by Manulife Investment Management (Singapore) Pte. Limited

As mentioned in the previous Annual Report Manulife Investment Management (Singapore)Pte. Limited has acquired 49% of the equity share capital of Mahindra Manulife InvestmentManagement Private Limited [formerly known as Mahindra Asset Management Company PrivateLimited (‘MAMCPL')] and Mahindra Manulife Trustee Private Limited [formerly known asMahindra Trustee Company Private Limited (‘MTCPL')] then wholly-owned subsidiariespursuant to the execution of the Share Subscription Agreement and Shareholders' Agreementby and amongst the Company MAMCPL MTCPL and Manulife on 21st June 2019.

Consequent to the above the shareholding of the Company in MAMCPL and MTCPL stoodreduced from 100% to 51% of the share capital respectively.

The erstwhile names of MAMCPL and MTCPL have been changed to Mahindra ManulifeInvestment Management Private Limited and Mahindra Manulife Trustee Private Limitedrespectively with effect from 19th May 2020.

Mahindra Manulife Investment Management Private Limited

Mahindra Manulife Investment Management Private Limited (‘MMIMPL') acts as anInvestment Manager for the schemes of Mahindra Manulife Mutual Fund. As on 31st March2021 MMIMPL was acting as the Investment Manager for sixteen schemes.

The Average Assets under Management in these sixteen schemes were Rs. 5249 Crores inMarch 2021 as compared to Rs. 4771 Crores in March 2020. Of these assets Rs.2591 Crores were in equity schemes in March 2021 as compared to Rs. 1616 Crores in March2020. MMIMPL has empanelled more than 15600 distributors and opened 213610 investoraccounts in these schemes recording a rise of more than 12%.

During the year under consideration the total income of MMIMPL was Rs. 30.5 Crores ascompared to Rs. 17 Crores for the previous year. The operations for the year underconsideration have resulted in a loss of Rs. 26.7 Crores as against a loss of Rs. 37.9Crores during the previous year.

Mahindra Manulife Trustee Private Limited

Mahindra Manulife Trustee Private Limited (‘MMTPL') acts as the Trustee toMahindra Manulife Mutual Fund.

During the year MMTPL earned trusteeship fees of Rs. 33 Lakhs and other income of Rs.2.7 Lakhs as compared to Rs. 20.9 Lakhs and Rs. 1 Lakh respectively for the previousyear. MMTPL recorded a loss of Rs. 0.97 Lakh for the year under review as against a lossof Rs. 1.8 Lakhs in the previous year.

Mahindra Finance CSR Foundation

Mahindra Finance CSR Foundation was incorporated on 2nd April 2019 as awholly-owned subsidiary of the Company registered under Section 8 of the Companies Act2013 to promote and support CSR projects and activities. The CSR Foundation is focused onidentifying need-based and long-term social impact interventions in cause areas such ashealth education employment & livelihood generation and environment.

In the current Financial Year the Foundation has launched a flagship CSR program forone of the important stakeholders of your Company i.e. the Driver Community. It is aimedat providing a safety net to drivers and their family members from a holistic perspectiveand various interventions would be implemented in collaboration with local NGO partners inselect States in India.

JOINT VENTURE/ASSOCIATE

Mahindra Finance USA LLC.

The joint venture company's disbursement registered a growth of 11.5% to USD 860.7Million for the year ended 31st March 2021 as compared to USD 772.2 Million for theprevious year.

Total Income declined by 10% to USD 61.9 Million for the year ended 31st March 2021 ascompared to USD 68.8 Million for the previous year. Profit before tax was 77% higher atUSD 23.4 Million as compared to USD 13.2 Million for the previous year. Profit after taxgrew at a healthy rate of 82% to USD 17.5 Million as compared to USD 9.6 Million in theprevious year.

Ideal Finance Limited (Sri Lanka)

In August 2019 your Company entered into a Share Subscription Share Purchase andShareholders' Agreement with Ideal Finance Limited (Sri Lanka) ['Ideal Finance'] and itsexisting Shareholders to form and operate a Joint Venture in the financial services sectorin Sri Lanka. The joint venture will capitalise on the Company's expertise of over 25years in the financial services domain and Ideal Finance's domestic market knowledge tobuild a leading financial services business in Sri Lanka.

Till date your Company has acquired 38.20% stake in Ideal Finance for an amountequivalent to LKR 110 Crores (approximately Rs. 44 Crores). Your Company is committed toenhancing its equity stake in Ideal Finance up to 58.2% aggregating to an amount notexceeding LKR 200.3 Crores.

This joint venture will further strengthen your Company's presence in the financialservices business. It will help your Company's growth in key emerging markets.

Names of Companies which have become or ceased to be Subsidiaries Joint Ventures orAssociate Companies during the year

During the year under review no company has become or ceased to be a subsidiary jointventure or associate of your Company.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company its subsidiaries associate(s)and joint ventures for the Financial Year 2020-21 prepared in accordance with therelevant provisions of the Companies Act 2013 and applicable Indian Accounting Standardsalong with all relevant documents and the Auditors' Report form part of this AnnualReport.

The Consolidated Financial Statements presented by the Company include the financialresults of its subsidiary companies associate(s) and joint ventures.

Pursuant to the provisions of Section 136 of the Companies Act 2013 the FinancialStatements of the Company Consolidated Financial Statements along with relevant documentsand separate annual accounts in respect of each of the subsidiaries are available on thewebsite of the Company and can be accessed at the web-link: https://www.mahindrafinance.com/investor-zone/financial-information.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND THE COMPANY'S OPERATIONS IN FUTURE

There are no significant and material orders passed by the regulators or courts ortribunals that would impact the going concern status of the Company and its futureoperations.

DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THEFINANCIAL STATEMENTS

Your Company has in place adequate internal financial controls with reference to theFinancial Statements commensurate with the size scale and complexity of its operations.

Your Company uses various industry standard systems to enable empower and engenderbusinesses and also to maintain its Books of Account. The transactional controls builtinto these systems ensure appropriate segregation of duties the appropriate level ofapproval mechanisms and maintenance of supporting records. The systems Standard OperatingProcedures and controls are reviewed by Management. These systems and controls are auditedby Internal Auditors and their findings and recommendations are reviewed by the AuditCommittee and the IT Strategy Committee of the Board of Directors which ensures theimplementation.

Your Company's Internal Financial Controls were deployed through Internal Control -Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of theTreadway Commission (COSO) that addresses material risks in your Company's operations andfinancial reporting objectives. Such controls have been assessed during the year underreview taking into consideration the essential components of internal controls stated inthe Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issuedby The Institute of Chartered Accountants of India. The risk control matrices are reviewedon a yearly basis and control measures are tested and documented on a quarterly basis. TheCompany has during the year enhanced its IT systems making the ICFR process completelydigital which has further enabled to strengthen its review and monitoring controls. Basedon the results of such assessments carried out by Management no reportable materialweakness or significant deficiencies in the design or operation of internal financialcontrols was observed.

Your Company recognises that Internal Financial Controls cannot provide absoluteassurance of achieving financial operational and compliance reporting objectives becauseof its inherent limitations. Also projections of any evaluation of the Internal FinancialControls to future periods are subject to the risk that the Internal Financial Control maybecome inadequate because of changes in conditions or that the degree of compliance withthe policies or procedures may deteriorate. Accordingly regular audits and reviewprocesses ensure that such systems are reinforced on an ongoing basis.

COMPLIANCE WITH THE PROVISIONS OF SECRETARIAL STANDARD – 1 AND SECRETARIALSTANDARD – 2

The Directors have devised proper systems to ensure compliance with the provisions ofall applicable Secretarial Standards issued by the Institute of Company Secretaries ofIndia and that such systems are adequate and operating effectively.

The applicable Secretarial Standards i.e. SS-1 and SS-2 relating to ‘Meetings ofthe Board of Directors' and ‘General Meetings' respectively have been duly compliedwith by your Company.

POLICIES

The details of the Key Policies adopted by the Company are mentioned at "AnnexureVII" to the Board's Report.

GENERAL DISCLOSURE

During the year the Company in the capacity of a Financial Creditor has filed twopetitions before the National Company Law Tribunal under the Insolvency and BankruptcyCode 2016 for recovery of outstanding loans against its customers being CorporateDebtors.

There was no instance of one-time settlement with any Bank or Financial Institutionduring the year under review.

PARTICULARS OF REMUNERATION AND RELATED DISCLOSURES

Disclosures with respect to the remuneration of Directors Key Managerial Personnel andEmployees as required under Section 197(12) of the Companies Act 2013 and Rule 5(1) ofCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are asunder:

Disclosure Requirement Disclosure Details
Name of Director/ KMP Designation Ratio of the remuneration of each Director to median remuneration of employees _%_ increase_ in_ Remuneration
1. Ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the Financial Year 2020-21 & Percentage increase in Remuneration of each Director Chief Financial Of_cer and Company Secretary during the Financial Year 2020-21 Dr. Anish Shah* Non-Executive Chairman (w.e.f. 2nd April 2021) N.A. N.A.
Mr. Dhananjay Mungale** (Former Chairman) Independent Director 15.96X 13.74
Mr. C. B. Bhave Independent Director 13.36X 21.04
Ms. Rama Bijapurkar Independent Director 12.39X 17.63
Mr. Milind Sarwate Independent Director 13.71X 25.08
Mr. Arvind V. Sonde^ Independent Director 11.25X 296.73
Dr. Rebecca Nugent# Independent Director 1.02X N.A.
Mr. V. S. Parthasarathy## Non-Executive Non-Independent Director N.A. N.A.
Mr. Ramesh Iyer Vice-Chairman & Managing Director 254.06X 8.45
Mr. Amit Raje$ Whole-time Director - Chief Operating Officer Digital Finance - Digital Business Unit N.A. N.A.
Mr. V. Ravi$$ Former Executive Director & Chief Financial Officer 129.29X 7.26
Mr. Vivek Karve@ Chief Financial Officer of the Company and Group Financial Services Sector - N.A.
Ms. Arnavaz M. Pardiwalla Company Secretary & Compliance Officer - -13.47

* Dr. Anish Shah Non-Executive Chairman being in the whole-time employment ofMahindra & Mahindra Limited (‘M&M') the Holding Company draws remunerationfrom it and does not receive any remuneration from the Company.

** Resigned as Chairman of the Board of Directors of the Company w.e.f. close ofbusiness hours on 1st April 2021. Mr. Mungale continues to be an Independent Director ofthe Company.

^ Resigned as an Independent Director of the Company with effect from 15th March2021.

# Appointed as an Independent Director of the Company with effect from 5th March2021.

## Resigned as Non-Executive Non-Independent Director of the Company with effectfrom 18th September 2020. Mr. V. S. Parthasarathy being in the whole-timeemployment of M&M did not receive any remuneration from the Company during the year.

$ Appointed as Non-Executive Non-Independent Director of the Company with effectfrom 18th September 2020. During F.Y. 2020-21 Mr. Amit Raje being in the whole-timeemployment of M&M did not receive any remuneration from the Company.

Mr. Amit Raje has been appointed as a Whole-time Director of the Company designated asChief Operating Of_cer Digital Finance - Digital Business Unit with effect from 1stApril 2021.

$$ Ceased to hold office as Executive Director & Chief Financial Officer of theCompany with effect from 25th July 2020.

@ Appointed as Chief Financial Officer of the Company and Group Financial ServicesSector with effect from 14th September 2020.

2. Percentage increase in the median Remuneration of employees in the Financial Year 2020-21: There is no increase in the median remuneration of employees.
There is a decrease of 16.09% in the median remuneration of employees taking into consideration employees who were in employment for the whole of the Financial Year 2020-21 and Financial Year 2019-20.
3. Number of Permanent employees on the rolls of the Company as on 31st March 2021: 19952
4. Average percentile increase already made in the salaries of employees other than the Managerial Personnel in the last Financial Year i.e. 2020-21 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: For employees other than Managerial Personnel who were in employment for the whole of the Financial Year 2019-20 and Financial Year 2020-21 there is no increase in the average percentile.
There is an average decrease of 15.86% for Financial Year 2020- 21 for employees other than Managerial Personnel whereas the increase in the managerial remuneration for Financial Year 2020-21 is 8.45%.
Justification:
In view of the outbreak of COVID-19 pandemic no increments were given to the employees and the Managerial Personnel during FY 2020-21.
There is an increase in the remuneration of Managerial Personnel mainly due to exercise of the ESOPs in FY 2020-21.
The remuneration of the Vice-Chairman & Managing Director is decided based on the individual performance inflation prevailing industry trends and benchmarks.
The remuneration of eligible Non-Executive Directors consists of commission and sitting fees. While deciding the remuneration various factors such as Director's participation in Board and Committee Meetings during the year other responsibilities undertaken such as Membership or Chairmanship/ Chairpersonship of Committees and such other factors as the Nomination and Remuneration Committee may deem fit etc. were taken into consideration.
5. Affirmation that the remuneration is as per the Remuneration Policy of the Company: The remuneration paid/payable is as per the Policy on Remuneration of Directors and Remuneration Policy for Key Managerial Personnel and Employees of the Company.

Notes:

1) The remuneration calculated is as per Section 2(78) of the Companies Act 2013 andincludes the perquisite value of Stock Options of the Company exercised during the year.

2) The calculations are based on Employees who were on the rolls of the Company for thewhole of the Financial Year 2019-20 and Financial Year 2020-21.

3) On the recommendation of the Nomination and Remuneration Committee the Board at itsMeeting held on 28th January 2021 has increased the commission and sitting fees payableto the Independent Directors for attending the Board/Committee Meetings. This iscommensurate with the increased responsibilities contribution and time devoted byIndependent Directors on various matters pertaining to the Company.

Mr. Ramesh Iyer Vice-Chairman & Managing Director of the Company does not receiveany remuneration or commission from its Holding Company.

Mr. Ramesh Iyer does not receive any commission from any of the subsidiaries of theCompany. During the year under review Mr. Ramesh Iyer has received remuneration fromMahindra Insurance Brokers Limited the Company's Subsidiary in the form of Employees'Phantom Stock Options amounting to Rs. 8851570.

Mr. Ramesh Iyer has not exercised ESOPs of Mahindra Rural Housing FinanceLimited a subsidiary company during the year which were granted in the earlier year(s).

The Company had 23 employees who were in receipt of remuneration of not less than Rs.10200000 during the year ended 31st March 2021 or not less than Rs. 850000 per monthduring any part of the year.

Details of employee remuneration as required under provisions of Section 197 (12) ofthe Companies Act 2013 read with Rule 5 (2) and 5 (3) of Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are available on your Company's websiteand can be accessed at the web-link: https://www.mahindrafinance.com/investor-zone/financial-information.

Any Member interested in obtaining a copy of the same may write to the CompanySecretary at the investor Email Id: investorhelpline_mmfsl@mahindra.com.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013

The Company is an equal opportunity employer and is committed to ensuring that the workenvironment at all its locations is conducive to fair safe and harmonious relationsbetween employees. It strongly believes in upholding the dignity of all its employeesirrespective of their gender or seniority. Discrimination and harassment of any type arestrictly prohibited.

The Company has in place a detailed Policy in accordance with the provisions of theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013('POSH Act') and Rules made thereunder to prevent sexual harassment of itsemployees.

All employees (permanent contractual temporary and trainees) are covered under thisPolicy. The Policy has been widely communicated internally and is placed on the Company'sintranet portal. The Company ensures that no employee is disadvantaged by way of genderdiscrimination.

The POSH Policy is also available on the website of the Company and can be accessed atthe web-link: https://www.mahindrafinance.com/investor-zone/ corporate-governance.

The Company has complied with the provisions relating to the constitution of theInternal Complaints Committee (ICC) under the POSH Act to redress complaints receivedregarding sexual harassment.

To ensure that all the employees are sensitised regarding issues of sexual harassmentthe Company conducts an online Induction Training through the learning platform M-Dronacovering topics on POSH awareness reconciliation before filing POSH complaint(s) andconsequences of filing false complaint(s).

The following is a summary of Sexual Harassment complaint(s) received and disposed offduring the year 2020-21 pursuant to the POSH Act and Rules framed thereunder:

a) Number of complaint(s) of Sexual Harassment received during the year: 2

b) Number of complaint(s) disposed off during the year: 2

c) Number of cases pending for more than 90 days: Nil

d) Number of workshops/awareness programme against sexual harassment carried out:

• Awareness program was conducted in which mailers and video on Prevention ofSexual Harassment at the work place along with the detailed POSH Policy was circulated tosensitise employees to uphold the dignity of their female colleagues at the workplace.

• Online training program on "Sexual Harassment while Working from Home"and best practices at work for handling sexual harassment cases was organised for Membersof the Internal Complaints Committee.

• A program was conducted online for all women employees to enhance awarenessregarding the Company's POSH Policy.

• Awareness program was conducted under the "Speak-up" campaign for theemployees in which awareness creating emails and wall papers on laptop/computer screensof all employees were circulated covering topics such as applicability of POSH Act tovirtual office raising a complaint under the POSH Act etc.

e) Nature of action taken by the employer or District Officer: Warning letter wasissued to both the respondents.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars in respect of conservation of energy technology absorption and foreignexchange earnings and outgo as required under sub-section (3) (m) of Section 134 of theCompanies Act 2013 read with Rule (8)(3) of the Companies (Accounts) Rules 2014 aregiven as under :

(A) Conservation of Energy

(i) The steps taken or impact on conservation of energy:

The operations of your Company are not energy intensive. However adequate measureshave been initiated to reduce energy consumption.

Select few steps are listed:

a) Replacement of conventional lighting with Light Emitting Diode (LED) lighting:

The Company has installed LED lighting in Regional Offices of the Company during theyear under review and the same has been monitored in terms of electrical consumption andexpenses. The Company extensively monitors its energy consumption and GHG emissions.Conservation of energy covers use of LED lights in new branches and retrofication to LEDlights in Regional Offices.

b) Replacement of old air-conditioning with updated version of machines with R-410Agas which helps in reducing Ozone depletion. Your Company has taken the initiative to useenvironment friendly gas in Air Conditioners during the year.

c) Reduction in water and energy consumption and recycling of waste paper generation atvarious locations.

During the year the Company has sent 2131 kgs. of waste generated at the Head Officefor responsible disposal and recycling. In return it has received 11195 Swachh BharatPoints which can be redeemed for environmentally friendly office stationary items from thevendor partner. Similarly waste generation and recycling has been done at the RecordManagement Company for 2896 boxes weighing total 16500 kgs.

(ii) The steps taken by the Company for utilising alternate sources of energy: Nil.

(iii) The capital investment on energy conservation equipment: Nil.

(B) Technology Absorption

(i) The efforts made towards technology absorption: Not Applicable.

(ii) The benefits derived like product improvement cost reduction product developmentor import substitution: Not Applicable.

(iii) In case of imported technology (imported during the last three years reckonedfrom the beginning of the Financial Year): Not Applicable.

(a) Details of Technology Imported;

(b) Year of Import;

(c) Whether the Technology has been fully absorbed;

(d) if not fully absorbed areas where absorption has not taken place and the reasonsthereof.

(iv) Your Company has not incurred any expenditure on Research and Developmentduring the year under review.

(C) Foreign Exchange Earnings and Outgo

Foreign Exchange earnings and outgo during the year under review are as follows:

Rs. in Crores
Total Foreign Exchange Earned and Outgo For the Financial Year ended 31st March 2021 For the Financial Year ended 31st March 2020
Foreign Exchange Earnings NIL NIL
Foreign Exchange Outgo 16.14 20.14
For and on behalf of the Board
Dr. Anish Shah
Chairman
Place : Mumbai
Date : 23rd April 2021

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