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Poonawalla Fincorp Ltd.

BSE: 524000 Sector: Financials
BSE 00:00 | 22 Oct 148.05 -4.00






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OPEN 154.00
VOLUME 194077
52-Week high 199.65
52-Week low 33.10
Mkt Cap.(Rs cr) 11,319
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Sell Price 0.00
Sell Qty 0.00
OPEN 154.00
CLOSE 152.05
VOLUME 194077
52-Week high 199.65
52-Week low 33.10
Mkt Cap.(Rs cr) 11,319
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Poonawalla Fincorp Ltd. (POONAWALLA) - Director Report

Company director report

Your Directors have pleasure in presenting the 41st Annual Report along with theAudited Financial Statements of the Company for the financial year ended 31 March 2021.


( lakh)



Particulars FY2020-21 FY2019-20 FY2020-21 FY2019-20
Total income 187685.10 221903.40 235247.75 256287.78
Profit before interest and depreciation 15409.97 122979.54 40245.35 145139.63
Less: Interest and finance charges 87459.56 112397.10 110045.40 129382.18
Less: Depreciation 5215.44 7164.14 5625.29 7478.99
Profit before tax (77265.03) 3418.30 (75425.34) 8278.46
Share of profit of joint ventures - - 548.48 (100.72)
Tax Expense (19428.95) 4419.38 (18980.42) 5472.40
Profit after tax (57836.08) (1001.08) (55896.44) 2705.34
Add: Other Comprehensive Income/ (loss) 294.16 (617.26) 57.85 (82.99)
Total Comprehensive Income (57541.92) (1618.34) (55838.59) 2622.35
Profit available for appropriation
Profit after tax (57836.08) (1001.08) (55896.44) 2705.34
Balance of profit for earlier years 28653.27 32540.96 45911.39 46965.00
Profit available for appropriation (29182.81) 31539.88 (9985.05) 49670.34
Add: Other Comprehensive Income/ (loss) 197.88 (288.96) 208.25 (308.33)
Transfer to statutory reserve - - (608.67) (852.97)
Less: Dividend paid - (2597.65) - (2597.65)
Balance carried forward (28984.93) 28653.27 (10385.46) 45911.39


Global Economic Overview

The coronavirus pandemic or COVID-19 has had a significant impact on the globaleconomy. In Calendar Year (CY) 2020 the global economy contracted by 3.3% compared togrowth of 2.8% in CY2019 and 3.6% in CY2018 the decline being the biggest since the GreatDepression of the 1930s. The global trade contracted by 8.5% in CY2020 due to borderclosures as countries around the world imposed lockdowns. Supply disruptions interruptedthe international provision of goods and services. The impact of the pandemic onmerchandise trade volumes differed across regions in 2020 with most regions recordinglarge declines in both exports and imports. Merchandise trade volumes have now more orless returned to pre-pandemic levels. Cross-border trade in services remains subdued.

With COVID-19 pandemic still spreading across the world and caseloads reaching recordlevels in many economies the global outlook will remain heavily dependent on thepandemic's evolution. The widespread deployment of effective vaccines will play a key rolein halting the pandemic's progression and is also expected to strengthen economicactivity by raising confidence and improving financial market conditions.

The International Monetary Fund's (IMF) recent report on World Economic Outlookprojects 6% growth for the global economy in CY2021 reflecting additional fiscal supportin a few large economies and the anticipated vaccine-powered recovery in the second halfof the year.

Indian Economic Overview

The implementation of a national lockdown on March 24 2020 (i.e. on the eve of the newFY21 fiscal year) brought economic activity to a halt affecting both production andconsumption. India's GDP growth was negative in the first half of the fiscal year (Aprilto September 2020) and only modestly positive in the second half. Over the entire FY21India's economy is estimated to have contracted by ~8%.

The response of the Government to the COVID-19 outbreak has been swift andcomprehensive. A national lockdown to contain the health emergency was complemented by acomprehensive policy package to mitigate the impact on the poorest households (throughvarious social protection measures) as well as on small and medium enterprises (throughenhanced liquidity and financial support).

India seemed to have evolved through the pandemic on the back of strong policyinitiatives by the government along with an optimistic outlook for economic recovery.Structural reforms initiated by the government have helped restrict the fatality rate inIndia to 1.2%— one of the lowest in the world. After some success in curbing thevirus considerably India's economy had returned to functioning normally by the secondhalf of 2020. However over recent months the unexpected second wave of the virus hasstarted spreading rapidly which could impact recovery pace of the Economy. The RBI hasprojected FY22 GDP growth at 10.5% while IMF and World Bank put it at 12.5% and 10.1%respectively.

Industry Overview

NBFC Sector

Non-banking finance companies (NBFCs) play an important role in nation building andfinancial inclusion by complementing the banking sector in reaching out credit to theunbanked segments of society especially to the micro small and medium enterprises(MSMEs) which form the cradle of entrepreneurship and innovation.

India's non-bank lending sector was hit by a crisis in 2018 when a large financierunexpectedly defaulted. Further contraction of activity in 2020 on account of COVID-19Pandemic led to incremental slowdown. To mitigate the impact of COVID-19 on NBFC sectorthe government of India and Reserve Bank of India (RBI) came up with stimulus package andannounced various schemes such as Emergency Credit Line Guarantee Scheme (ECLGS) PartialCredit Guarantee Scheme (PCGS) Special Liquidity Scheme (SLS) extension of Credit LinkedSubsidy scheme for MIG under PMAY(U) Targeted Long-Term Repo Operations (TLTRO)Moratorium etc. clearly laying down the vision for NBFCs and thus facilitated a strongrecovery in second half of the year.

Adhoc Line of Credit and Guaranteed Emergency Credit Line scheme provided timely reliefto MSME sector/business community by providing them much needed liquidity during thecrisis period. Similarly for the NBFC sector the partial credit guarantee scheme helpedthem to tide over liquidity crisis. These measures helped in not only providing themuch-needed liquidity but also ensuring a path of stability for the NBFC sector.

The overall loans and advances contracted in H1FY21 due to weak demand on the back ofnationwide lockdown. However as the economic activities gradually resumed loandisbursements gained momentum in H2FY21. Collection efficiency also gradually improved tobe near normal in Q4FY21.

The growth in FY22 is envisaged to be driven by the improvement in demand from all keytarget segments vis-a-vis the current fiscal which was impacted by the Covid-19 relatedlockdown. Growth would be contingent upon the access to adequate funding lines i.e.incremental bank loans to non- banks which would in turn depend on overall bank creditgrowth. However all this is contingent on successful implementation of the vaccinationprogramme and the ability of government agencies to arrest the rising infections in thenear term.

Overview of underlying asset class

Automobile sector

• The Indian automobile industry made a stellar comeback in the second half ofFY21 despite the adverse impact of the Covid-19 induced economic downturn as sales surgeddue to better than expected economic recovery and shift in customer preference towardspersonal mobility. Overall decline in volumes have been substantially less than what wasexpected by analysts and industry experts at the start of the pandemic.

• The passenger vehicles domestic sales reached nearly same levels as last year inFY21 (-2.3% Y-o-Y) as per a CARE ratings report.

• Tractor sales remained unaffected through the year and in fact FY21 was one ofthe best years for this segment.

• The commercial vehicles segment which was the first to be affected by lockdownssaw Q1FY21 as a complete washout by witnessing just 30000 units of domestic sales.However as the economy opened up their sales grew and in the last quarter it clocked 2.1lakh units of sales the highest since Q4FY19. On a cumulative basis commercial vehiclessegment reached 80% of last year's volumes.

• Used vehicle is considered as one of the least impacted segment as consumersprefer more personal yet affordable mobility solutions during the pandemic. The onlineused car market is seeing an increased uptake online used car marketplaces and platformshave seen a growth of 17-18% in FY21 according to a Deloitte report.

SME Sector

• MSME sector was directly impacted due to lockdown and the uncertain economicsituation.

• Uncertainties in cash flows in MSME sector are likely to remain in the short tomedium term and recovery is expected to be slow owing to the second wave of pandemic anduncertainties around opening up of lockdown restrictions in major states. Howevermeasures from RBI and Government are likely to expedite the recovery process post openingup of the economy.

• Disruptions caused by the Covid-19 pandemic have impacted MSMEs' earnings by20-50%. MSMEs faced lots of difficulties due to interrupted supply chain systems andintrastate lockdown provisions. Consequently asset quality concerns for NBFCs having MSMEexposures have increased and are expected to pose challenge over the next few quarters.

• The Budget 2021-22 doubled the allocation to the MSME sector to INR 15700crores (vs. INR 7572 crores allocation in Budget 2020-21). In addition to the increasedallocation the Budget has also focused on promoting domestic manufacturing that benefitsthe MSME sector. Increased thrust on the Atmanirbhar Bharat program is also expected topromote the domestic manufacturing industry and ensure import substitution. The Budgetalso provides for the introduction of a special framework for debt resolution in respectof MSMEs. These measures should pave the way for higher role growth and employment ofMSMEs in India.

Mortgage Sector

• The significance of owning a home to avoid the uncertainties of living in arented accommodation was reinforced during the pandemic and work from home era. The desireto own a home is perhaps now stronger than ever.

• This pent-up demand combined with increased affordability due to extremely lowmortgage interest rates and stagnant property price since past few years has resulted inrevival of real estate sector during 2nd half of FY21. Furthermore the market is alsowitnessing renewed interest from Non-Resident Indians (NRIs) apart from end user demand.

• In FY22 a further improvement in sales across all housing segments is expected.However development focus on mid and affordable segments is expected to continue. Lastyear more than 80% of the new launches were in the sub H10 million category. Movingahead new launches are expected to remain concentrated in these price segments withdevelopers trying to reap the benefits of strong pent up demand in these segments.

• The government is also committed towards boosting affordable housing. The recentUnion Budget has extended the benefit of additional interest deduction on home loans forfirst time home buyers in the affordable segment. Further there is a time extension toclaim the tax holiday on profits from affordable housing projects until March 2022.

• As delivery timelines remain a key concern even now demand for ready to move inhomes is likely to be remain strong. However the effective and uniform implementation ofRERA across all States/UTs in India is expected to improve the confidence of homebuyersand ultimately lead to greater sales traction in under construction residential projects.


In volatile economic environment the Company focused on capital preservationcollections stringent operating expenses management and strengthening Balance Sheet.

The new initiatives undertaken by the Company continues to show positive impact in allareas during the current year.

Disbursements and Loan Assets

The standalone disbursements for the year declined from H511319 lakh in FY2019-20 toH242962 lakh in FY2020-21. Similarly the consolidated disbursements declined fromH642832 lakh in FY2019-20 to H368021 lakh in FY2020-21. The decline was mainly due todiscontinuation of Non Focus products (New Cars CV CE) and on account of COVID-19pandemic. The focus of the Company was on maintaining the portfolio quality in the lightof adverse economic trends and therefore be conservative in incremental lending andrestricting it to customers with existing track record and/or good security.

Total Loan Assets as on 31 March 2021 on standalone basis stood at H1056288 lakhagainst H1323368 lakh for the previous year and on consolidated basis at H1422546 lakhagainst H1613353 lakh for the previous year.

Asset Quality :

a. Stricter write off policy

During the year the Company moved to more stringent write off policy for itsportfolio. For Asset backed finance portfolio write-off has been advanced to 180+ dayspast due (dpd) against 730+ dpd earlier on Unsecured SME portfolio the write off has beenadvanced to 90+ dpd against 450+ dpd earlier and on mortgage portfolio the write off hasbeen introduced at 730+ dpd. This has resulted in additional charge of H28205.54 lacsduring the quarter and year ended 31 March 2021. The recovery efforts continue for thewritten off portfolio and recoveries made will be credited to profit and loss account inthe subsequent quarters in line with the applicable accounting policies.

b. COViD-19 impact on portfolio COViD-19 wave 1:

The Company implemented a moratorium policy in accordance with the Reserve Bank ofIndia (RBI) COVID-19 Regulatory Package announced on March 27 2020 April 17 2020 andMay 23 2020. For all loans where moratorium was availed by the borrowers the Company hadkept ageing of such loans and their asset classification at standstill during themoratorium period. The Company's business was adversely impacted during the period oflockdown in March-June 2020 period and the impact continued for some time evensubsequently.

There was an adverse impact of COVID on the credit loss incurred by the Company for theyear ended March 2021.

COVID-19 wave 2:

The COVID-19 wave 2 induced significant rise in infections and tragic loss of humanlives resulting in lockdowns that have caused disturbance in the overall operations atbeginning of the new financial year. The impact has spread in hinterland tier towns andimpacted the collections from the customers once again disturbing the operations of theCompany significantly.

The Company estimates that impact of COVID wave 2 and resultant lockdowns shall lead tohigher credit losses. The management expects muted response to the restructuringguidelines announced by the Reserve Bank of India on May 6 2021 as its implementationwould require physical connect with the customers which is not feasible until thelockdowns are lifted. This will result in forward flow of the loan book to higher bucketsin future and will thereafter take time to return to normalcy leading to significantincrease in credit risk.

The Company has estimated the impact of COVID-19 wave 2 on its portfolio and createdrequired additional provision of H62110.70 lacs as at 31 March 2021.

The Company holds cumulative provision against the potential impact of COVID-19 to thetune of H71433.07 lacs (H11660.45 lacs as on 31 March 2020) and basis managementestimate is adequate to cover the impact of second wave of COVID-19 on the entire loanportfolio.

The consolidated Gross Stage 3 Assets ratio on 3-month overdue basis on loans stood at3.7% in March 2021 compared to 6.4% in March 2020. Similarly the Net Stage 3 Assets ratioon loans stood at 1.2% in March 2021 compared to 4.2% in March 2020.


Magma maintained strong liquidity through the year. Our key strength is our longstanding in the industry and retail focused Business Model both in NBFC and HFC whichprovides comfort to our lending partners:

a. Average ticket size of H2 to 5 lakh for ABF H10 to 15 lakh for Mortgage and H10 to15 lakh for SME Business;

b. Pan India presence through its 254 branches spread across 21 States;

c. Diversified product mix with no single product comprising more than 20% of theportfolio;

d. Our robust track record of asset securitization having done securitization (onconsolidated basis) of over 263 pools for total asset value of over H46815 Crore overpast 14 years with diverse investors namely Public Sector Banks Private Sector BanksForeign Banks and Mutual Funds.

e. We exited March 2021 with liquidity of H2002 Crore comprising of available cash inhand of H414 Crore and unutilized credit limits of H 1588 Crore.

Business - Strategy and Outlook

Key initiatives FY2021:-

• Successfully pivoted Product and Geo strategy towards profitable products andmarkets

• Realignment of our Collections team with dedicated teams at middle and hardbucket level for effective NPA control

• Successful utilisation of Govt. schemes viz. EMI Moratorium ECLGS OTR Creditguarantee and Interest subventions to ease customer hardship

• Three rounds of Customer surveys ("India Bol Raha Hai") were conductedbasis which underwriting and collections norms were realigned with on ground marketsituation

• Introduction of large non-conventional channels to diversify our traditionalchannel base

• Journey towards automation of Lead2Disbursal workflow continued with successfuldevelopment of channel portal revenue approvals workflow and upload options for customerdocuments in our Sales app.

• Transformation of SME business in FY21 with key strategic themes: Go-DirectGo-Secured and Go-Digital.

Asset Backed Finance (ABF)

Disbursement declined by 55% from H405497 lakh in FY2019-20 to H181173 lakh inFY2020-21. The decline is mainly due to following reasons:

• Discontinuation of Non Focus products (Car CV and CE) in FY21.

• Low disbursement in Focus products during H1FY21 on account of lockdown imposeddue to COVID-19 pandemic.

• Deliberate slowdown in disbursals for certain products & customer segmentsdue to deployment issues.

Used Assets AUM contribution increased from 19% in FY2018-19 to 28% in FY2020-21.Direct channel contribution significantly grew from 31% in Q1FY2017-18 to 52% inQ4FY2020-21

ABF business continues to re-shape its portfolio by increasing contribution of focusproducts which is yielding positive results.

Mortgages Business

Disbursement under mortgage business ramped up significantly each quarter after asubdued Q1 to report 94% of FY20 numbers of H 126702 lakh in FY2020-21 as against H135508 lakh in FY2019- 20.

• The disbursement in home loans grew by 5% from H82671 lakh in FY2019-20 toH86702 lakh in FY2020-21 in line with "GO HOME LOAN" strategy implemented bythe Company.

• The contribution of home loan portfolio increased from 25% in FY2016-17 to 53%in FY2020- 21 in the overall housing AUM.

• Company's "GO DIRECT" strategy for transition from DSA model to directsales model improved direct sourcing from 28% in Q1FY18 to 75% in Q4FY21.

• Focused deep market penetration in 103 locations across 19 states using unitmodel implementation.

The push for affordable housing by the Government of India will further expand theCompany's current housing portfolio. The Company is poised towards being a uniqueaffordable finance Company having a national presence.

SME Business

Disbursement declined from H101827 lakh in FY2019-20 to H60146 lakh in FY2020-21 as aresult of tightening of SME lending on account of overall economic slowdown due toCOVID-19 pandemic and its impact on the SME segment. The asset under management decreasedby 23% i.e. from H185860 lakh as on 31 March 2020 to H142272 lakh as on 31 March 2021.

FY21 was a year of transformation for SME business with key strategic themes:Go-Direct Go-Secured & Go-Digital. Our Go-Direct initiative helped us to diversifythe sourcing mix from pure channel based to channel plus direct model and we could source11% of the total business under direct. In terms of Go-Secured strategy business sawsuccessful launch of the MSME Secured Loan product in the year and got some early wins atthree pilot regions. Under Go-Digital initiative we could offer end to end digital andpaperless experience to over 3500 of our SME customers availing ECLGS limit. Overall thebusiness expects to focus on improving asset quality through direct and secured strategyand contribute to bottom line of the Company.

Insurance business achieved H 134904 lakh Gross Written Premium for FY2020-21registering a growth of 4.3% YoY vs the industry GDP growth of 5.2%. The insurancebusiness reached a customer base of 2.1 million in FY2020-21 with 7600+ channel partnersas at March 2021. The business continues to witness productivity improvements in retailAgency OEM and Bancassurance channels. The Company is empaneled with fourteen OEMs as atMarch 2021 of which 8 were added in FY2020-21. The company has commenced business with 13OEMs till FY 21. Digital channel has grown by 185% in FY21. The Company continues toincrease its Non motor commercial portfolio backed by strong panel of reinsurers. Theservicing infrastructure

for retail and group health business has been put in place which has led to 54% growthin Health segment with 6% contribution in FY21 GWP. Motor Own Damage claims assessmentthrough video streaming remained stable at 45% during the year. Investment AUM has crossedH3000 Crs and investment leverage continuing to improve.

Branch network

Magma's branch network stood at 254 branches in FY2021. The Company has a pan Indiapresence with good geographical diversification. The Company continues to exploit theuntapped potential of existing branches and ensure that more products are available acrossour branch network.


Opportunities Challenges and Outlook


• Diversified asset financier both in term of products as well as geographieswhich helps mitigate risks.

• Pan-India presence with 254 branch offices primarily in Rural and Semi Urbanlocations.

• Sound business model presence in high yield high growth business segments andsuperior sustainable returns.

• Magma has invested heavily on technology as a strategic enabler which has helpedit to run operations even during COVID-19 pandemic times.

• Customer focus Product innovation and Superior delivery.

• Experienced senior management team.

• Strong relationships with public private as well as foreign banks institutionsand investors.

• Ability to meet the expectations of a diverse group of investors and excellentcredit ratings

• Innovative resource mobilisation techniques and prudent fund managementpractices


• Business and growth directly linked with the GDP growth of the country.

• Liability profile and dependence on banks for leverage and ALM matching.

• Company's Customers are more vulnerable to negative effects of economicdownturn.

• Uncertain economic environment on account of surge in COVID-19 cases and severalStates imposing restrictions such as night curfew and full lockdowns.


• Focus on MSME segments traditionally not serviced by banks (non-salariedprofessionals individuals traders and transporters).

• Large untapped rural and urban markets.

• Enhance digital solutions for business/collections.


• Slower economic activity and weak rural demand could lead to high credit costsdue to COVID-19 pandemic.

• Increased competition across the Company's product segments from captive financecompanies and small finance banks.

• External risks associated with liquidity stress political uncertainties fiscalslippage concerns etc.

• Growing number of Fintech companies.


(All figures are on consolidated basis unless specifically mentioned otherwise)

The Company's Profit after Tax (PAT) on consolidated basis decreased to H(55896) lakhin FY2020- 21 compared to H2705 lakh in FY2019-20.

The Company's net interest margin (NIM) increased to 8.2% in FY2020-21 as compared to7.6% in FY2019-20 on account of decreased finance cost.

Net Income from Operations (i.e. total income less finance cost) on a consolidatedbasis decreased by 1.3% from H126906 lakh in FY2019- 20 to H125202 lakhs in FY2020-21.

Total Income decreased by 8.2% from H256288 lakhs in FY2019- 2020 to H235248 lakhs inFY2020-21.

The write offs and provision increased from H48579 lakhs in FY2019- 20 to H144799lakhs in FY2020-21 as the Company has moved to stricter write off policy and madeadditional provision for likely adverse impact of COVID wave 2 as explained in moredetails in the para Asset Quality above.

On a Standalone basis the Capital Risk Adequacy Ratio (CRAR) for the year FY2020-21was 20.3% against the RBI stipulated norm of 15% for non-deposit taking Asset FinanceCompanies.

Details of significant changes (i.e. change of 25% or more as compared to theimmediately previous financial year) in key financial ratios:

1. Debt Equity ratio has increased from 3.98 as on 31st March 2020 to 4.08 as on 31stMarch 2021 at standalone level and increased from 4.36 as on 31st March 2020 to 4.75 as on31st March 2021 at consolidated level. This represents an increase of 2% and 9% atstandalone and consolidated level respectively.

2. Return on Assets (ROA) decreased from 0.2% in FY2019-20 to -17.7% in FY2020-21 andReturn on Equity (ROE) decreased from 1.0% in FY2019-20 to -102.9% in FY2020-21. This isprimarily on account of change in write-off policy and additional COVID provision providedduring the year as explained in more detail in the para Asset Quality above.


During the year there was no change in the nature of business of the Company or itssubsidiary.



Your Company has allotted 493714286 Equity shares of H2/- each at an issue price ofH70/- per equity share aggregating to H3456 crores by way of preferential allotment toRising Sun Holdings Private Limited (RSHPL) and to existing promoters of the Company on 6May 2021. Pursuant to the said allotment and on completion of the open offer RSHPL is thelargest shareholder of the Company and exercise control in the Company and is classifiedas a 'Promoter' of the Company w.e.f 21 May 2021. Consequently Magma Fincorp Limited hasbecome a subsidiary of RSHPL and Magma Housing Finance Limited has become a step downsubsidiary of RSHPL.


In accordance with the requirements in terms of Regulation 34 of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 (hereinafter referred to as'Listing Regulations') your Company prepared Consolidated Financial Statements inaccordance with Ind AS 110 - "Consolidated Financial Statements" and Ind AS 27 -"Separate Financial Statements". The Consolidated Financial Statements formspart of this Report.


Magma Housing Finance Limited (MHFL) is a wholly owned subsidiary of the Company. MHFLhas made disbursements of H125059 lakh in FY2020-21 against H131513 lakh in previousyear. MHFL has earned a PBT of H1436 lakh for the year ended 31 March 2021 against H5429lakh in previous year.

The Company's Joint Venture with HDI Global SE for General Insurance Business in Indianamed Magma HDI General Insurance Company Limited (Magma HDI) (the 'JV Company') has showna growth in the current year. Magma HDI has reported Gross Written Premium (GWP) ofH134904 lakh in FY2020-21 against H129392 lakh in FY2019-20. Magma HDI has earned PBT ofH1935 lakh for the year ended 31 March 2021 as against PBT of H568 lakh for the yearended 31 March 2020.

Jaguar Advisory Services Private Limited (JASPL) a Joint Venture with HDI Global SE isan advisory services Company domiciled in India. Presently JASPL provides manpowerservices. JASPL has earned a PBT of H0.41 lakh for the year ended 31 March 2021 againstH0.58 lakh in previous year.

None of the companies have ceased to be subsidiary/joint venture of your Company duringthe year under review

Pursuant to Section 129(3) of the Companies Act 2013 a statement in Form AOC-1containing the salient features of the Financial Statement of your Company's subsidiaryand joint ventures forms part of this Report and hence not repeated here for the sake ofbrevity.


In view of Net Loss during the year the Company is not proposing any Transfer toStatutory Reserve as required under Regulation 45-IC of Reserve Bank of India Act 1934issued by RBI.


As stipulated in Regulation 43A of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Company has in place the Dividend Distribution Policywhich is available on the Company's website at its weblink i.e. documents/. The samealso forms part of the Board's Report and is annexed as Annexure 5.

With a view to conserve capital given the challenging situation caused by the ongoingCOVID-19 pandemic and loss during the year the Board of Directors has not recommended anydividend on Equity Shares of the Company for the financial year ended 31 March 2021.


Being a non-deposit taking Company your Company has not accepted any deposits from thepublic within the meaning of the provisions of the Non-Banking Financial CompaniesAcceptance of Public Deposits (Reserve Bank) Directions 2016 and the provisions ofCompanies Act 2013.


Your Company had formulated and implemented Magma Employees Stock Option Plan 2007(MESOP 2007) and Magma Restricted Stock Option Plan 2014 (MRSOP 2014) in accordance withthe SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines1999 and SEBI (Share Based Employee Benefits) Regulations 2014 including any amendmentsthereto ('SEBI Guidelines/Regulations').

The Nomination and Remuneration Committee of the Board of Directors of the Companyinter alia administers and monitors the MESOP 2007 and MRSOP 2014 in accordance with theapplicable SEBI Guidelines/Regulations.

The details of the options granted and outstanding as on 31 March 2021 along with otherparticulars as required by Regulation 14 of the SEBI (Share Based Employee Benefits)Regulations 2014 is available on the website of the Company at and the Auditors' Certificate would be placed at theforthcoming Annual General Meeting pursuant to Regulation 13 of the said Regulations.


Equity Shares

During the year the following changes were effected in the Share Capital of theCompany: Issue of Equity Shares under the Magma Employees Stock Option Plan 2007:

During the year 101400 Equity Shares of the face value of H2/- each were allottedto the eligible employees at a price of H2/- per Equity Share upon the exercise of stockoptions by the employees:

After the close of financial year 1009649 Equity Shares of face value of H2/- eachwere allotted to the eligible employees upon the exercise of stock options by theemployees.

Preferential issue of Equity Shares

Pursuant to shareholders' approval by way of Special Resolution in the Extra OrdinaryGeneral Meeting and other necessary regulatory approvals and in compliance with provisionsof the Companies Act 2013 and Chapter V of the Securities and Exchange Board of India(Issue of Capital and Disclosure Requirements) Regulations 2018 (ICDR Regulations) andother applicable laws your Company has allotted 493714286 Equity shares of face valueH2/- each at an issue price of H70/- per equity share aggregating to H3456 crores by wayof preferential allotment to Rising Sun Holdings Private Limited (RSHPL) Mr. SanjayChamria and Mr. Mayank Poddar.

Pursuant to the said allotment RSHPL is the largest shareholder of the Company andhave a controlling stake in the Company and is classified as a 'Promoter' of the Companyalongwith the existing promoters in accordance with ICDR Regulations. Post issuance theNet worth of the Company has increased to over H5398 crores enhancing the capitaladequacy from 20.3% as of 31 March 2021 to 69.7%

The Proposed allotment triggered an obligation on RSHPL (together with Mr. Chamria andMr. Poddar in their capacity as persons acting in concert with RSHPL) to make an openoffer to the public shareholders of your Company under Regulations 3(1) and 4 of theSecurities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers)Regulations 2011 which has been duly complied with.

Consequent to the issue of the additional Equity Shares as above the issuedsubscribed and paid up Equity Share Capital of the Company as on the date of this Reportstands increased to 1528686094/- (Rupees One Hundred Fifty Two Crores Eighty Six LakhsEighty Six Thousand and Ninety Four only) consisting of 764343047 Nos. (Seventy SixCrores Forty Three Lakhs Forty Three Thousand Forty Seven only) of Equity Shares of H2/-each as on date.

The new Equity Shares issued shall rank pari passu with the existing Equity Shares ofthe Company in all respects.

The funds raised through the said Preferential Issue would be utilized to augment thegrowth of the Company and to further invest in the required growth capital in other groupentities.


Private Placement Issue of Debentures and Bank borrowings

During the year the Company has raised H175 crore through issuance of 1750 nos. ofprivately placed Listed Secured RedeemableNon- Convertible Debentures of face value H10lakh each. The proceeds of the issue have been utilized for the Company's generalcorporate purpose and to augment working capital needs.

During the year the Company has raised fresh Secured Loans of H575 crore from Banksand Financial Institutions. The Company has also raised funds of H576 crore from Banks andNBFCs through fresh issue of Pass Through Certificates (PTCs).

rbi guidelines

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


During FY2020-21 rating for Short-term debt instruments from CRISIL were re-affirmedat CRISIL A1+. CARE Ratings reaffirmed its ratings on the Company's Short term debtinstruments at CARE A1+ Bank Facilities long term Secured and Subordinated Debtinstruments at CARE AA- and Perpetual Debt instruments at CARE A+. The Bank Facilityratings of the Company have been reaffirmed by ICRA & India Ratings & ResearchPrivate Limited at ICRA AA - and IND AA- respectively. In line with the Ratings of theother agencies Brickwork Ratings have revised its rating for long term Secured Debt andSubordinated Debt instruments to BWR AA- and Perpetual Debt instruments to BWR A+.

AA- reflects that these instruments have high degree of safety regarding timely paymentof financial obligations and carry very low credit risk. ACUITE (erstwhile SMERA) havereaffirmed AA rating for Secured Redeemable Non-Convertible Debenture & UnsecuredSubordinated Debt Instrument rated by them.

Based on the recent preferential allotment announcement made by the Company CAREICRA India Ratings Brickwork Ratings have affirmed ratings at AA- with ratings keptunder watch with developing implication. Acuite affirmed the ratings at AA with ratingskept under watch with positive implication.

Credit Rating placed under 'Watch with Developing Implications' indicates that oncecredit uncertainty gets resolved the Credit Rating may either be upgraded/reaffirmed ordowngraded (only if approvals and other statutory requirements are not met &underlying event does not happen). Similarly Credit Rating placed under 'Watch withPositive Implications' indicates that once the credit uncertainty gets resolved theCredit Rating is more likely to be upgraded

Instrument Rating Rating Agency
Rating Under Basel Guidelines
Short Term Debt (Commercial Paper) A1 + CARE/CRISIL
Fund Based & Non-Fund AA- CARE
Based from Banks AA- ICRA
AA- India Ratings
Secured Redeemable Long- AA- CARE/Brickwork
Term Bond/Note AA ACUITE
Unsecured Subordinate Tier AA- CARE/Brickwork
Perpetual Debt Instruments A+ CARE/Brickwork

A status of ratings assigned by rating agencies and migration of ratings during theyear is provided in note no. 53 (i) to the standalone financial statements of the Company.


Particulars of loans guarantee and investments outstanding during the financial yearis furnished in note nos. 6 and 7 to the standalone financial statements of the Company.


The Risk Management Committee (RMC) functions in line with the Non-Banking FinancialCompanies - Corporate Governance (Reserve Bank) Directions 2015 and Listing Regulations.The Committee met six times during the year its terms of reference and functioning areset out in the Corporate Governance Report. The Company understands that risk evaluationand risk mitigation is a function of the Board of the Company and the Board of Directorsare fully committed to developing a sound system for identification and mitigation ofapplicable risks viz. systemic and non-systemic. The Company has also implemented/adoptedRisk Management Policy duly approved by the Board.

To make the current Risk Management practice more robust and aligned to the industrypractice the management has set up an internationally accepted forward looking IntegratedRisk Management (IRM) Framework. This covers all risk families including but not limitedto Credit Risk Market & Interest Risk Compliance Risk Operational RiskReputational Risk and Financial Risk. The said framework facilitates identificationmeasurement mitigation and reporting of risks through constant monitoring of Key RiskIndicators within the organisation. Involvement of the Senior Management team inimplementation of the IRM framework ensures achievement of overall organisationalobjectives across all business units.

The risk management infrastructure operates on five key principles:

1. An overarching Risk Appetite Statement that defines the shape of the portfoliodelivering predictable returns through economic cycles and optimizing enterprise-widerisk-return and capital deployment.

2. Independent governance and risk management oversight.

3. Establishment of forward-looking strategic risk assessment with pre-emptive creditand liquidity interventions to ensure proactive early action in the event of emergingmarket adversity.

4. Maintenance of well-documented risk policies with performance guardrails.

5. Extensive use of risk and business analytics and credit bureau as an integral partof decision- making process.

The Integrated Risk Management group is headed by the Chief Risk Officer who isresponsible for overseeing Magma's risk functions including credit risk market riskcompliance risk operational risk reputational risk and financial risk across allbusinesses products and processes.

Credit Risk

Magma adopts an independent approval process guided by product policies customerselection criteria credit acceptance criteria and other credit underwriting processes forsanctioning and booking each loan. This allows each customer to be independently assessedbased on both financial and non- financial measures.

All credit policies are clearly documented and approved by the Risk ManagementCommittee of the Board. Credit policies are reviewed on a periodic basis driven by changesin macro-economic indus- try/segment and credit bureau in addition to internal portfolioperformance.

Credit approval and administration is managed through a judicious use of Credit RuleEngine assessment by seasoned credit appraisal experts and an appropriate delegation ofcredit authority.

Portfolio quality improvement is a constant exercise. We use the statistical benchmarkof Early Warning Indicators and Continuous Portfolio Monitoring Indicators and basis theseindicators carry out Hind sighting exercise to make appropriate intervention in the CreditPolicy to further improve the portfolio quality and reduce the ultimate losses. Covid 19a health and economic crisis which started during the end of FY20 continued to impactmuch of the FY21. This led us to further enhance the credit processes due to uncertaineconomic conditions.

Operational Risk management

Operational risk framework is designed to cover all functions and verticals towardsidentifying the key risks in the underlying processes.

The framework at its core has the following elements:

1. Documented Operational Risk Management Policy.

2. Well defined Governance Structure.

3. Use of Identification & Monitoring tools such as OR Incident reporting Risk andControl Self- Assessment (RCSA) Key Risk Indicators (KRIs).

4. Standardized reporting templates reporting structure and frequency.

5. Regular workshops and training for enhancing awareness and risk culture.

Magma has adopted the internationally accepted 3-lines of defense approach tooperational risk management.

First line - Each function/vertical undergoes transaction testing to evaluate internalcompliance and thereby lay down processes for further improvement. Thus the approach is"bottom-up" ensuring acceptance of findings and faster adoption of correctiveactions if any to ensure mitigation of perceived risks.

Second line - Independent risk management vertical supports the first line indeveloping risk mitigation strategies and provides oversight through regular monitoring.All key risks are presented to the Risk Management Committee on a quarterly basis.

Third line - Internal Audit conducts periodic risk-based audits of all functions andprocess to provide an independent assurance to the Audit Committee.

In FY21 the Operational Risk (OR) team has helped identify assess monitor andmitigate risks across the organization. RCSA exercises and OR reviews have been conductedfor key business units / support functions and action plans have been developed to plugprocess gaps. An incident reporting process has been implemented during the year forreporting of OR incidents. The OR team helps senior management monitor risks throughquarterly reporting of OR information to the Operational Risk Management Committee (ORMC)and the RMC.

Fraud Risk Management


Fraud can undermine the effective functioning and divert scarce and valuable resourcesof the organization. Moreover fraudulent and corrupt behavior can seriously damagereputation and diminish trust to deliver results in an accountable and transparent manner.To combat the fraud the organization has effective corporate governance and framework forpreventing identifying reporting and effectively dealing with fraud and other forms ofcorruption. Magma is consistently putting effort to prevent detect and contain frauds.There is an independent Unit (Fraud Risk Management) to monitor investigative detect andprevent frauds.


Magma is committed to preventing identifying and addressing all acts of fraud againstthe organization whether committed by the staff members or other personnel or by thirdparties. Your Company has zero tolerance for fraud. To this effect your Company iscommitted to raising awareness of fraud risks implementing controls aimed at preventingfraud and establishing and maintaining procedures applicable to the detection of fraud.

Governance Structure

As a second line of defense Fraud Risk Management monitors & checks compliance andreport all fraud risks in the institution on ongoing basis. The independent functionreports into the Chief Risk Officer. All frauds as specified by the regulator are beingmonitored by the Audit Committee and Board of Directors.

Roles and Responsibility of Fraud Risk Management

Component Principle
Control Environment • Fraud Risk Operating manual is developed and reviewed periodically.
• All processes are being reviewed through ORM and Fraud risk to mitigate unforeseen gaps
• Cross functional training
Risk assessment • Comprehensive fraud risk assessments are done in support with ORM.
• Processes are being reviewed to plug the gaps.
• Learning through investigations is shared to mitigate the open risks for more effective policy.
Control activities Preventive and detective fraud control activities are deployed to mitigate the risk of fraud events occurring or not being detected in a timely manner.
• Customer Screening through documents review
• Fraud prevention tool for sophisticated deduplication
• Investigations & Mystery Shopping
• Post Disbursement Checks and enhanced surveillance
• Branch Assurance
• Negative Database Repository
• Regulatory reporting
Information & communication • Magma has established a communication process to obtain information about potential fraud through whistle blower policy and has deployed a coordinate approach to investigation and corrective action to address fraud appropriately and in a timely manner.
Monitoring • All frauds are reported to the regulator and are reviewed by the Audit Committee as well as Board of Directors.

Market Risk

Any mismatch in tenures of borrowed and disbursed funds may result in liquidity riskand thereby impact the Company's ability to service its loans. Thus it is imperative thatthere exists nil or minimal mismatch between the tenure of borrowed funds and assetsfunded. The Company has endeavored to maintain appropriate asset liability maturity withregard to its tenure and interest rates.

The pandemic risk was unprecedented and caused many disruptions and uncertaintiesglobally. Magma swiftly activated its Liquidity Continuity Plan encompassing measures toface challenges of pandemic through its well-defined treasury policies for managingliquidity investments interest rate and borrowings. The Company has taken the followingmeasures to rectify/bridge the cumulative negative mismatch and diversify the borrowingprofile in the FY2020-21:

1. Raised long term funds from banks and financial institutions.

2. Raised long term funds through Securitisation

3. Raising long term funds through private placement Secured NCDs.

Foreign exchange risk

The Company does not have any exposure to foreign exchange risk since itsdisbursements are in rupee terms and the nature of its borrowings are also in domesticrupee debt.

Liquidity risk management

Magma over a period of 3 decades has adopted prudent fund management practices and hasworked meticulously to diversify its borrowing profile thereby repeatedly enhancing theset of institutions it borrows from. Such diversified and stable funding sources emanatefrom several segments of lenders such as Banks Insurance Companies Mutual Funds Pensionfunds Financial and other institutions including Corporates and Foreign PortfolioInvestors due to Company's impeccable record in servicing its debt obligations on time. Inaddition to this the Company has established an excellent track record in its access tothe securitization / assignment market. As a matter of prudence and with a view to manageliquidity risk at optimum levels Magma keeps suitable levels of unutilized bank limits toeffectively mitigate possible contingencies arising out therefrom.

The Company has in place an Asset Liability Management Committee (ALCO) comprising ofBoard Members which periodically reviews the asset-liability positions cost of fundsand sensitivity of forecasted cash flows including Stress Testing over both short andlong-term time horizons. It accordingly recommends for corrective measures to bridge thegaps if any. The ALCO reviews the changes in the economic environment and financialmarkets and suggests suitable strategies for effective resource management. This resultsin proper planning on an on-going basis with respect to managing various financial risksviz. asset liability risk foreign currency risk and liquidity risk.

The Company has a comfortable liquidity position by way of unutilized Bank lines andinvestment in Fixed Deposits and further supported by funds raised through Term LoansSecured Debentures and Securitization.

People Risk

Magma provides a conducive work environment to its employees that enables them toperform well and hone their skills. Our policies are designed to ensure a healthy and safeworkplace free from discrimination or harassment. Our people are our most valuable assetand we are committed to attract engage and retain talent to create long-term value forour customers and stakeholders.

People risks that Magma focuses on includes following:

Inadequate availability of skilled manpower:

• Limited availability of candidates with appropriate skillset experience andculture fitment.

Productivity Risk:

• Longer learning curve leads to low output.

• Time taken to filling of required manpower hampers installed capacity.

Succession planning:

• Risk to business continuity due to lack of leadership succession.

Magma is proactive in identifying and addressing risk aspects around people and addressthem in a timely and comprehensive manner.

Further the Board is of the opinion that at present there are no material risks thatmay threaten the functioning of the Company.


Magma has an adequate system of internal controls in place. The Company has documentedits policies controls and procedures covering all financial and operating activities.Internal controls include IT general controls IT application controls controls designedto provide a reasonable assurance with regard to reliability on financial reportingmonitoring of operations for their efficiency and effectiveness protecting assets fromunauthorised use or losses compliances with regulations prevention and detection offraudulent activities etc. The Company continues its efforts to align all its processesand controls with leading practices.

A well-established independent Internal Audit function is responsible for providingindependent assurance on Company's system of internal controls risk management andgovernance processes including its subsidiaries. The scope and authority of the InternalAudit division is derived from the Audit Charter duly approved by the Audit Committee. Tomaintain independence of Internal Audit the Chief Internal Auditor (CIA) reportsfunctionally to the Audit Committee. Internal Audit prepares an annual audit planfollowing risk-based audit approach which is approved by the Audit Committee. The AuditCommittee reviews the annual audit plan the significant audit findings presented on aquarterly basis and the updated status of implementation of management action plan.

The company has a system of internal control over financial reporting that adequatelyaddresses the risk that a material misstatement in the company's financial statementswould not be prevented or detected on a timely basis and that these controls are operatingeffectively.


The Company has in place adequate internal financial controls with reference tofinancial statements commensurate with the size scale and complexity of its operations.Review of the internal financial controls environment of the Company was undertaken duringthe year which covered testing of Process IT and Entity level controls including reviewof key business processes for updating Risk Control Matrices etc. The risk and controlmatrices are annually reviewed and control measures are tested and documented. Moreoverthe Company continuously upgrades its systems and undertakes review of policiesguidelines manuals and authority matrix. The internal financial control is supplementedby extensive internal audits regular reviews by the Management and standard policies andguidelines to ensure reliability of financial and all other records to prepare financialstatements its reporting and other data. The Audit Committee of the Board reviewsinternal audit reports given along with management responses. The Audit Committee alsomonitors the implemented suggestions. The Company has in material respect an adequateinternal financial control over financial reporting and such controls are operatingeffectively. The statutory auditors of the Company have also certified on the existenceand operating effectiveness of the internal financial controls relating to financialreporting as of March 2021.


Pursuant to Section 177(9) of the Companies Act 2013 and Regulation 4(2)(d)(iv) of theListing Regulations the Company has in place a vigil mechanism named "Breach ofIntegrity and Whistle Blower (Vigil Mechanism) Policy" to provide a formal mechanismto the Directors and employees to report their concerns about unethical behaviour actualor suspected fraud or violation of the Company's Code of Conduct or ethics policy. ThePolicy provides for adequate safeguards against victimisation of employees who avail ofthe mechanism and also provides for direct access to the Chairman of the Audit Committee.

The details of the said Policy is explained in the Corporate Governance Report and isavailable on the website of the Company at


At Magma we believe that imperatives to business success are enhancements on peoplepractices processes product and technology. Our endeavour is to create an environmentwhere all four pillars work in harmony for the success of the organization.

• Dealing with the situation arising from COVID 19

o The COVID-19 outbreak has been unprecedented for our country and for the world. Theglobal coronavirus (Covid-19) pandemic has upturned life for all of mankind. Magmanavigated the crisis through the year we took several measures to place the safety ofour employees increasing sanitization/hygiene at our branch offices providing masks/gloves creating an Emergency Response team (comprising for HR and admin teams) whichcontinues to connect with and provide support to employees who were feeling unwell andlaunching a special Helpline for assistance. The entire leadership team nimbly worked toimplement our Business Continuity Plans (BCP) for various critical processes we hadimplemented Work-From-Home (WFH) for several job roles and enforcing social distancing wepromoted several digital collection modes.

o At top leadership level we were having huddles to review and ensure people safetyand collections to the extent possible with help of digital platforms.

o We set up 24*7 helpline and Emergency Response Team on Pan India basis to supportemployees working on any health- related issues for self and their families and created afund to support them financially.

• Learning and development

In continuation of our efforts to make Magma a self-developing Organization we havetaken various learning initiatives delivered through an e-Learning platform and web basedinstructor led programmes. This year special emphasis has been on developing 'digitallearning mediums' and Magma as a group had experienced the webinar culture way beforeCOVID. We have been doing these webinars from 2019 and in 2020 moving completely towebinar mode of learning. We have converted our Induction program to a digital medium tobring a wholistic and safe on-boarding experience for our employees. We also provide ajoining docket called "Aarambh" with the necessary details this document isprovided to employees in their regional language apart from English.

Few Key Learning Initiatives taken during the year across Magma:

o The Navoday Project has been introduced to do the reengineering in the businessprocesses of Magma and enable it to become digitally enabled Simulation based systemtraining done for all employees.

o Functional Learning Support through - Nuggets/video/ webinars

o We introduced several Web-based e-learning programs for branch safety Infosec andother employee safety related topics.

o We developed branch safety modules on COVID related protocols for re-opening of ouroffices each Magma employee was covered.

The key focus is to leverage L&D and business partnership to cocreate novellearning methods and embedding them to deliver business outcomes.

• Driven by technology

We have embedded technology to ease our people processes. Our onsite PeopleSoftplatform has all modules which are delivered on the internet including recruitmentemployee confirmation performance management separation for employees and real-timedashboard for leaders to take informed decision. We continue to ensure a great new joinerexperience through our online Onboarding program right from joining formalities to theinduction with the Organisation HR Policies and departments all of it happen online.

• Incentive schemes

Incentive is an important driver of business outperformance. We have schemes foremployees in Line (revenue generating customer facing) roles designed with clear keyperformance indicators (KPIs). The scheme design incorporates specific nuances to ensurethat each plan is aligned with the business objectives. At the frontline we have monthlyincentive schemes while at supervisory roles the frequency is quarterly and annually.These are dynamic schemes that reflect changes in the external macroeconomics environmentand revisited each year.

• Key HR Initiatives

Our retention strategy starts from the hiring stage and continues through the entireemployee life cycle management. We are having the following retention strategies:

o Hire people who meet the job role and Value system of Magma

o Be a partner to business and help business teams gets deeper insights from the groundthrough ideas and information bubble up mechanism.

o Help business teams connect with employees through online connect sessions to informnurture and guide teams.

o Promote people Internally as the first choice for a vacant position. Severalleadership positions were appointed internally.

o To strengthen our new joiners experience we launched "Aarambh" &"Maitree 3.0" our flagship Online Induction programs.

o Developed "Stay Healthy stay Positive" initiative for wholesome wellness ofemployees during the pandemic.

• Culture

Initiatives are being deployed to create stories and symbols that manifest the Valuesof integrity collaboration and respect. We are sensitive towards creating a Culture ofEmpathy Care and Gratitude towards the customer. CEO and Senior Leadership connects atregular interval have been instrumental in driving the right culture and messaging. Therehas been a profound impetus to create awareness around the use of ethical practices andprevent any fraud through risk awareness and mitigation.

• Retention

o Managerial capability enhancement through training and coaching.

o To drive succession planning and career progression.

o Leverage the Talent Council framework for internal promotions.

• Productivity

o Re-enforcement of Supervisor accountability and responsibility. o Deploy performancereview framework.

• Engagement

Keeping employees engaged and emotionally invested in the organisation is imperativefor the growth of the organisations. Magma and its leadership team is very conducive tonovel ideas of promoting employee engagement. During the tough times of physicaldistancing we have found different yet effective ways to engage our employees:

a. Inform Guide & Nurture the employees to sustain during these times

b. Create a platform for Idea Generation quizzes and contests

c. Co-opt employees to prepare for "bounce back" scenarios for businessresurrection.

d. Online wellness programs around keeping fit:

i. Yoga and cross fit training

ii. Nutrition and wellness education

f. Constant reskilling - Nuggets/video/webinars

g. Leadership interaction through webcast - "Connect" sessions withLeadership team and Platform to bubble up ideas from the field level resources.

• Prevention of Sexual Harassment at Workplace

The Company has zero tolerance towards sexual harassment at the workplace and hasadopted a 'Policy for Prevention of Sexual Harassment' to prohibit prevent or deter anyacts of sexual harassment at workplace and to provide the procedure for the redressal ofcomplaints pertaining to sexual harassment thereby providing a safe and healthy workenvironment in line with the provisions of Sexual Harassment of Women at Workplace(Prevention Prohibition & Redressal) Act 2013 and the rules thereunder. During theyear under review no case of sexual harassment was reported. To build awareness andappreciation of this area we have implemented an online knowledge module leveraging ourlearning management system.

We continue to strive harder with each passing year to ensure we succeed in bring thebest out of our people and enable the organization to create value for its shareholdersand employees.


Magma continues to leverage technology to drive efficiency and effectiveness ofcritical functions across the value chain of processes encompassing Customer servicesales operations and risk management. This year Information Technology focused onempowering the sales collections and customer service teams with tools for deepercustomer engagement and understanding; development of tools for enhancing the creditassessment for the business and development of a comprehensive 'systems of insight' werethe other focus areas. In this year Magma also strengthened and stabilized its digitalfootprint on the cloud.

Being committed to stand by its customers during the pandemic Magma provided 2 roundsof moratorium and a one-time loan restructuring (OTR) package to its customers; theseexercises were entirely driven by the robust technology platform that Magma uses formanaging customer loans.

Magma also introduced Agri term loan as a new product for its customers from thefarming community. Additionally the automated credit engine was further extended to coverconstruction equipment loan product to increase the process efficiency of credit riskassessment through straight- through processing.

This year Magma successfully introduced an indigenous digital survey application forenhanced customer understanding and engagement. Through a pioneering engagement with thefirst generation NBFC customers across the country Magma tried to assess the new realityfrom the pandemic. The digital app helped Magma to reach out to more than three lakhcustomers across the country to find out the impact of the pandemic on customers'business cash flows and outlook for the future.

Data Analytics continues to remain as a top enabler for Magma and as part of the finalleg of the Navodaya program Magma introduced systems of insight to provide 360 degreeinsight on sales crosssale financial data to various teams and empower them to takedecisions ahead of time and elevate Magma's maturity in business intelligence.

Magma implemented Scienaptic (a leading Al-powered credit decision platform company)enabled an artificial intelligence (AI) /machine learning (ML) model for underwritingcollections and customer analytics; the high accuracy predictive models will enable lowercredit losses higher approval rate and better life cycle management for the loans withinMagma's portfolio

The COVID 19 situation developed rapidly from the end of March 2020 and Magma couldsuccessfully use technology to empower its employees to work from home and remainproductive while not compromising on information and cyber security.

During FY2021-2022 the Information Technology will continue to deliver digitalcapabilities by driving productivity improvements technology partnerships and synergy ofoperations and opening up new avenues of business opportunities.


Some of the key initiatives undertaken by Magma during the year are:

> Internal activities

Going into the pandemic internal communications emerged as the focus area for theorganisation during the past financial year. The Internal Communication and Brand team wasresponsible for crafting and communicating regular Covid advisories Organisationalupdates Work-From-Home protocol e-handbook branch level advisories etc. aiming tocreate the necessary awareness. Employee engagements Reward & Recognition programmeslike Magma Tarang were conducted digitally to keep the Teams motivated where focusedcommunication was done to create excitement among employees. The management continued tohold virtual Town hall - Magma Vartalaap to communicate to the teams. The internalvertical wise contests and results were regularly highlighted as a part of businesssupport.

> Customer connect programmes

During FY 21 owing to the pandemic we could not connect actively with our customersfor large part of the year. We avoided physical on ground activities at catchments andconducted a few customer connect programs in-branch by conducting Red Carpet Day (GrahakDiwas) as branches started operations. We conducted 150 Red Carpet events in branchesconnecting with over 3000 customers for servicing their requirements.

> Public Relations

Magma maintained its corporate image with external stakeholders and the mediathroughout the year. Our views on the impact of Covid on the NBFC industry liquiditymanagement and business outlook have all been covered by the best in the financial mediaprint and electronic media channels. Stake sale and fund raising authored articles andviews on industry challenges were the highlights of the year. The leadership spoke atlarge BFSI and Technology events which were conducted online. We won NBFC Excellence -Technology Leader of the Year - in Asset Finance 2020 apart from being recognised at largeforum for our achievements in financing Information Technology Corporate SocialResponsibility. We have been able to enhance our corporate image with our Vice Chairmanand Managing Director being announced Co-Chairman of FIDC (Finance Industry DevelopmentCouncil). We have integrated regional communication into our strategy in 2021 which helpedus gain visibility in new geographies.

> Digital initiatives

We have further strengthened our presence not only on digital platforms but alsofocused on digital transformation projects to strengthen our connect with customers anddealers. The corporate website is now responsive to suit the mobile devices. Our socialmedia presence increased on platforms like Facebook LinkedIn Twitter and YouTube withregular business updates posts on the achievements of the Company articles TVinterviews of the management which helped in Thought leadership.

> Corporate Social Responsibility

Despite the outbreak of COVID pandemic Magma continued its social projects by strictlyadhering to Covid-19 norms. Some of the projects which had high degree on groundimplementation had to be paused for a while only to be renewed with greater intensitypost lockdown. During Lockdown when the migrant workers and street dwelling populationhad to face a lot of hardship Magma responded by offering Dry ration and cooked meals to28000 people many of whom had lost their jobs and were stranded on the road. Our campaignincluded building awareness on Social distancing and providing mask and sanitizer to themigrant workers and daily wagers across locations. Due to Lockdown we had to alter someof the existing projects like Magma Highway Heroes M-Care M-Scholar etc. For our Mid-Daymeal programme instead of meals we offered Happiness kit to the kids comprising of dryration school stationery hygiene kit etc. This was necessitated since the schoolsremained closed due to the virus outbreak. Further we conducted several projects acrossstates through our Employee Volunteering programme Swayam.

customer relationship management

Magma aims to be the most trusted and accessible financial services institutionpromoting financial inclusion and creating value for all its stakeholders. CustomerService is a key focus area for our Company. Our Company also believes in integrity goodgovernance professionalism transparency and client satisfaction.

Several key initiatives were undertaken to transform Customer Experience:

> Implementation of Net Promoter Score (NPS) which is a leading indicator ofCustomer Loyalty and Cross Sell. We have tied up with Litmus World a leading brand inCustomer Loyalty Assessment to conduct NPS survey through independent assessment. Customerexperience across key touch points - Sales Onboarding Service and Exit conducted basedon a detailed questionnaire.

> Asset finance business has an extremely healthy NPS score in the range of 40 -45which is one of the best in the industry.

> We believe that front line officers often create 'customer wow' moments and areambassadors of Customer Centricity Culture. We have enabled technology solutions whichenable customers to rate their experience with Field Officers. Average Field Officerrating is 3.7 on a scale of 5.

> Structured Customer Engagement program is implemented - Proactive connect toprevent complaints etc.

> Reaching out to customers at times of need through digital mode. WhatsApp Channelwas introduced as a mode of communication to share digital statements to customers.

Post implementation of Customer Relationship Management solution (Microsoft Dynamics)for Customer Service and Lead Management in FY 2019 Magma continues to track the benefitsrealized and work on the next level of customization needed.

Key initiatives in FY 21:

> Digital communication adopted for all communications associated with Moratoriumduring lockdown.

> Call Centre operated from WFH to ensure touchpoint availability for customersduring lockdown.

> Chatbot integrated on Website to handle Moratorium queries.

> Dedicated IVR for Moratorium queries.

> Digital statements were enabled via WhatsApp to ensure seamless service.

> Customer Centric culture was driven via online training to 1000+ frontline staff.

In order to ensure we treat customers fairly; we have implemented the following:


> Tariff sheet included in Welcome Letter to ensure complete transparency of allcharges.

> SLA for each request & complaint communicated to customer at the time ofregistration.

> Voice of customer recorded for every request & complaint that gets resolved totrack customer satisfaction.

Servicing customers in their preferred language

> Agreement copy in vernacular languages are displayed at branches and uploaded onwebsite.

> Sanction letter is also provided in vernacular language & acknowledgementtaken.

> Customer calls & SMS are handled in regional language to maintain &increase awareness.

Handling Grievances effectively:

> Mode of Welcome Letter & Agreement copy dispatch changed to registered post toavoid delay in document receipt.

> Complaints are resolved within 7 days on an average.

> Complaints RCA Forum conducted on a quarterly basis to address key process gaps.

directors and key managerial personnel


On the recommendation of the Nomination and Remuneration Committee and subject to theapproval of the members at the ensuing Annual General Meeting (AGM) of the Company theBoard of Directors at its meeting held on 5th May 2021 appointed Mr. Prabhakar Dalal(DIN: 00544948) and Mr. Sajid Fazalbhoy (DIN: 00022760) as Additional Directors in thecapacity of Non-Executive Independent Directors for a period of 3 years with effect from 5May 2021.

In accordance with the Terms of Agreement executed with Rising Sun Holdings PrivateLimited (RSHPL) and on the recommendation of the Nomination and Remuneration Committeethe Board of Directors at its meeting held on 31 May 2021 appointed:

(a) Mr. Adar Poonawalla (DIN: 00044815) as Additional Director in the capacity ofNon-Executive Director and designated as the Chairman of the Company with effect from 1June 2021

(b) Mr. Abhay Bhutada (DIN: 03330542) as Additional Director in the capacity ofManaging Director for a period of 5 years with effect from 1 June 2021

(c) Mr. Vijay Deshwal as Group Chief Executive Officer of the Company from first weekof July 2021 or such earlier date.

Appointment of Mr. Adar Poonawalla and Mr. Abhay Bhutada shall be subject to theapproval of members at the ensuing Annual General Meeting of the Company. Pursuant toprovisions of the Companies Act 2013 Mr. Abhay Bhutada and Mr. Vijay Deshwal will alsobe Key Managerial Personnel (KMP) of the Company.

Mr. Dalal Mr. Fazalbhoy Mr. Poonawalla and Mr. Bhutada are not disqualified frombeing appointed as a Director as specified in terms of Section 164 of the Companies Act2013.

Your Company has received notice from the members of the Company pursuant to Section160(1) of the Companies Act 2013 signifying their intention to propose the candidature ofMr. Dalal Mr. Fazalbhoy Mr. Poonawalla and Mr. Bhutada as the Directors of the Company.


Your Directors at its meeting held on 6 February 2021 based on the recommendation ofthe Nomination and Remuneration Committee has re-appointed Mr. Sanjay Chamria (DIN:00009894) as the Vice Chairman and Managing Director which is effective from 1 April 2021till 31 March 2026. Pursuant to change in control and in terms of the Agreement executedwith RSHPL Mr. Sanjay Chamria has been re-designated as Executive Vice Chairman w.e.f. 1June 2021. The re-appointment of Mr. Chamria is subject to the approval of theshareholders.

Mr. Chamria is not disqualified from being appointed as a Director as specified interms of Section 164 of the Companies Act 2013.

Your Company has received notice from a member pursuant to Section 160(1) of theCompanies Act 2013 signifying the intention to propose the candidature of Mr. Chamria asthe Director of the Company.

Retirement by Rotation

In accordance with the provisions of the Companies Act 2013 and Regulation 36 of theListing Regulations Mr. Sanjay Chamria (DIN: 00009894) retires at the ensuing AGM andbeing eligible offers himself for re-appointment.

The Board of Directors of your Company recommends the reappointment of the Directorliable to retire by rotation at the ensuing AGM.

Appropriate resolution seeking your approval to the aforesaidappointment/re-appointment along with brief profile of the Directors appear in the Noticeconvening the 41st AGM of your Company.


Mr. Narayan K Seshadri (DIN:00053563) Independent Non-Executive Chairman of theCompany resigned as a Director from the close of business hours of 31 August 2020.

Mr. V K Viswanathan (DIN: 01782934) Independent Non-Executive Director of the Companyresigned as a Director from the close of business hours of 8 February 2021.

The Board of Directors recognizes and places on record their valued contribution andunstinted support to the Company in the capacity of Independent Directors.

Change in designation

Mr. Mayank Poddar (DIN: 00009409) serving the Company as an Whole-time Director of theCompany for more than 30 years have decided to step down from the Executive role and nowcontinue as a Non-Executive Director of the Company with effect from 8 November 2020.Consequently the designation of Mr. Poddar has changed from Whole time Director toNon-Executive Director with effect from 8 November 2020.

independent Directors

The Company has received declarations pursuant to Section 149(7) of the Companies Act2013 from all the Independent Directors (IDs) of the Company confirming that they meetthe criteria of independence as prescribed both under Section 149(6) of the Companies Act2013 read with rules framed thereunder and in terms of Regulation 16(1)(b) of ListingRegulations. All the IDs of the Company have registered their names with the data bank ofIDs maintained by Indian Institute of Corporate Affairs (IICA).

In terms of Regulations 25(8) of the Listing Regulations the Independent Directorshave confirmed that they are not aware of

any circumstance or situation which exists or may be anticipated that could impair orimpact their ability to discharge their duties. The Board is of the opinion that theindependent directors appointed have requisite experience and expertise (includingproficiency).

Separate meeting of the Independent directors was held on 1 February 2021.

Fit and Proper Policy

All the Directors of the Company have confirmed that they satisfy the "fit andproper" criteria as prescribed in Chapter XI of RBI Master Direction No. DNBR. PD.008/ 03.10.119/2016-17 dated 1st September 2016 and that they are not disqualified frombeing appointed/continuing as Directors in terms of Section 164(2) of the Companies Act2013.

Familiarisation Programme for independent Directors

In compliance with the requirement of Regulation 25 of Listing Regulations the Companyhas put in place a Familiarisation Programme for the Independent Directors to familiarisethem about the Company and their roles rights responsibilities in the Company. Thedetails of the Familiarisation Programme along with the number of hours spent by each ofthe Independent Directors during the Financial Year 2020-21 is explained in the CorporateGovernance Report. The same is also available on the website of the at documents/.

Performance Evaluation

The Board of Directors has carried out an annual evaluation of its own performanceBoard Committees and individual Directors pursuant to the provisions of the CompaniesAct 2013 and Listing Regulations.

The Board evaluated the effectiveness of its functioning and that of the Committees andof individual directors by seeking their inputs on various aspects of Board/CommitteeGovernance through structured questionnaire.

The aspects covered in the evaluation included the contribution to and monitoring ofcorporate governance practices participation in the long-term strategic planning and thefulfilment of Directors' obligations and fiduciary responsibilities including but notlimited to active participation at the Board and Committee meetings.

The Chairman of the Nomination and Remuneration Committee had one-on-one meetings withthe Executive and Non-Executive Directors. Also the Nomination and Remuneration Committeehas carried out evaluation of every director's performance and reviewed theself-evaluation submitted by the respective directors. These meetings were intended toobtain Directors' inputs on effectiveness of Board/Committee processes.

The Board considered and discussed the inputs received from the Directors. Further theIndependent Directors at their meeting reviewed the performance and role ofnon-independent directors and the Board as a whole and Chairperson of Board Meeting of theCompany. Further the Independent Directors at their meeting had also assessed thequality quantity and timeliness of flow of information between the Company management andthe Board that was necessary for the Board to effectively and reasonably perform theirduties.

Outcome of evaluation process

Based on inputs received from the Board members it emerged that the overallperformance evaluation of the Board composition and quality understanding the businessincluding risks process and procedures oversight of financial reporting processincluding internal controls and audit functions ethics and compliances and monitoringactivities has been found to be Very Good. Similarly the effectiveness of BoardCommittees has been rated high and the performance of the erstwhile Chairman of theCompany and the present Chairperson of the Board Meeting have been found to be Very Good.Overall the Board was functioning very well in a cohesive and interactive manner.

Previous year's observations and actions taken

Based on the evaluation undertaken few observations and action taken for FY2019-20interalia include:

> In respect of Regulatory Changes it was suggested that a short smart note shouldbe circulated to the Board Members as soon as possible highlighting the changes andimplications on the Industry/ Company. The Company regularly updates the Board on theregulatory changes along with its impact on the Company. Further regulatory updates andits impact on the industry also forms part of the presentation placed at the Committee andBoard Meetings on a quarterly basis.

> Independent interactions with the internal auditors: The internal auditor and thestatutory auditor had a separate session with the independent directors of the Company atthe Audit Committee meeting.

Last year recommendations of IDs and Board on Performance Evaluation have been largelyimplemented.

Proposed actions based on current year observations

Based on the evaluation of FY2020-21 some areas of improvement were suggestedspecifically highlighting the following points:

> Presentation on regulatory updates and its impact to be made to the Board membersto facilitate their training and update their knowledge on a periodical basis and expertson the subject matter may be invited as and when required.

> Presentation by the Committees Chair's to the Board on the discussions and keydecisions taken at the respective Committees.

> The Committees have functioned well under the supervision of the Board. The Boardmay look at the composition of the committees in the coming year to engage moreeffectively with the new Board members.

Remuneration Policy

The Board has on the recommendation of the Nomination and Remuneration Committeeadopted the Remuneration Policy which inter alia includes policy for selection andappointment of Directors Key Managerial Personnel Senior Management Personnel and theirremuneration. The salient features of the Remuneration Policy is stated in the CorporateGovernance Report.

Key Managerial Personnel

In terms of Section 203 of the Companies Act 2013 the following are the KeyManagerial Personnel of the Company as on 31 March 2021:

1. Mr. Sanjay Chamria Vice Chairman and Managing Director

2. Mr. Kailash Baheti Chief Financial Officer

3. Mrs. Shabnum Zaman Company Secretary

Pursuant to change in Board composition on 31 May 2021 the Key Managerial Personnelshall also include Mr. Abhay Bhutada and Mr. Vijay Deshwal.

Code of Conduct for Directors and Employees

The Company has adopted a Code of Conduct for its Directors and employees including acode of conduct for Independent Directors which suitably incorporates the duties ofIndependent Directors as laid down in the Companies Act 2013. The said Codes can beaccessed on the Company's website at

In terms of the Listing Regulations all Directors and Senior Management Personnel haveaffirmed compliance with their respective codes. The Vice Chairman and Managing Directorhas also confirmed and certified the same which certification is provided at the end ofthe Report on Corporate Governance.


To the best of our knowledge and belief your Directors make the following statementsin terms of Section 134 (5) of the Companies Act 2013:

a. that in the preparation of the annual accounts for the year ended 31 March 2021 theapplicable Ind AS have been followed along with proper explanation relating to materialdepartures if any;

b. that such accounting policies as mentioned in Notes to the annual accounts have beenselected and applied consistently and judgement and estimates have been made that arereasonable and prudent so as to give a true and fair view of the state of affairs of theCompany as at 31 March 2021 and of the profit of the Company for the year ended on thatdate;

c. that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

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

e. that proper internal financial controls are in place and that the financial controlsare adequate and are operating effectively; and

f. that proper systems to ensure compliance with the provisions of all applicable lawsare in place and that such systems are adequate and operating effectively.


Minimum four pre-scheduled Board meetings are held annually. Additional Board meetingsare convened by giving appropriate notice to address the Company's specific needs. In caseof business exigencies or urgency of matters resolutions are passed by circulation.

During the year nine Board Meetings and nine Audit Committee Meetings were convenedand held the details of which are given in the Corporate Governance Report. Theintervening gap between the meetings was within the period prescribed under the CompaniesAct 2013 and Listing Regulations.


The Committees of the Board focus on certain specific areas and make informed decisionsin line with the delegated authority.

Pursuant to resignation of Mr. Narayan K Seshadri and Mr. V K Viswanathan AuditCommittee Nomination and Remuneration Committee and Stakeholders' Relationship Committeewere reconstituted.

Audit Committee

The Audit Committee presently comprises of Mr. Sunil Chandiramani who serves as theChairman of the Committee Mr. Mayank Poddar and Mrs. Vijayalakshmi R Iyer as othermembers. The terms of reference of the Audit Committee has been furnished in the CorporateGovernance Report. All the recommendations made by the Audit Committee during the yearwere accepted by the Board.

Nomination and Remuneration Committee

The Nomination and Remuneration Committee presently comprises of Mr. Bontha Prasada Raowho serves as the Chairman of the Committee Mr. Mayank Poddar and Mrs. Vijayalakshmi RIyer as other members. The charter of the Nomination and Remuneration Committee has beenfurnished in the Corporate Governance Report.

Stakeholders' Relationship Committee

The Stakeholders' Relationship Committee presently comprises of Mr. Bontha Prasada Raowho serves as the Chairman of the Committee Mr. Sunil Chandiramani and Mr. Sanjay Chamriaas other members. The terms of reference of the Stakeholders' Relationship Committee hasbeen furnished in the Corporate Governance Report.

Corporate Social Responsibility (CSR) Committee

The Corporate Social Responsibility Committee presently comprises of Mr. Mayank Poddarwho serves as the Chairman of the Committee and Mr. Bontha Prasada Rao and Mrs.Vijayalakshmi R Iyer as other members.

The Annual Report on CSR activities is annexed herewith and marked as Annexure 1. Theother Committees of the Board are Management Committee Asset Liability ManagementCommittee Risk Management Committee Review Committee and the IT Strategy Committee. Theterms of reference of these Committees have been furnished in the Corporate GovernanceReport.


In line with the requirements of the Companies Act 2013 and the Listing Regulationsthe Company has formulated a Policy on Related Party Transactions and the same can beaccessed on the Company's website at its weblink i.e. documents/. Alltransactions with Related Parties are placed before the Audit Committee for approval. Allrelated party transactions that were entered into during the financial year were on anarm's length basis and in the ordinary course of business the particulars of suchtransactions are disclosed in the notes to the financial statements. Disclosures ofrelated party transactions of the Company with the promoter/promoter group which holds 10%or more shareholding in the Company is given in note no. 44 to the standalone financialstatements. The nature of related party transactions does not require disclosure in AOC-2.

The Policy on Related Party Transactions is available on the Company's website at itsweblink i.e. documents/.


There were no significant material orders passed by the Regulators / Courts / Tribunalswhich would impact the going concern status of the Company and its future operations.


M/s. B S R & Co. LLP Chartered Accountants Bangalore bearing Registration No.101248W/W-100022 have been appointed as the Statutory Auditors of the Company for a periodof 5 years from the conclusion of the 36th AGM (for FY2015-16) till the conclusion of the41st AGM (for FY2020-21).

Considering the completion of tenure of the existing Statutory Auditors the Board ofthe Directors of the Company shall appoint Statutory Auditors based on the recommendationof the Audit Committee followed by the shareholders' approval.

The standalone and the consolidated financial statements of the Company have beenprepared in accordance with Indian Accounting Standards (Ind AS) notified under Section133 of the Companies Act 2013.

The notes on financial statements referred to in the Auditors' Report areself-explanatory and do not call for any further comments. The Auditors Report does notcontain any qualification reservation adverse remark or disclaimer. However theStatutory Auditor have drawn attention to the fact that pursuant to loss due to additionalprovision for Covid 19 the existing managerial remuneration paid by the Company to itsWhole Time Director (upto 7 November 2020) and the Vice Chairman and Managing Director isin excess of the limits laid down under Section 197 of the Companies Act 2013 ('Act')read with Schedule V to the Act and the Listing Regulations and is subject to approval ofthe shareholders. The Company is in the process of obtaining approval from itsshareholders vide special resolution at the forthcoming annual general meeting for suchexcess remuneration paid.


Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board of Directorsof the Company has appointed M/s. MKB & Associates Practicing Company Secretaries[Membership No-7596] to conduct the Secretarial Audit for the FY2020-21. The SecretarialAudit Report confirms that the Company has complied with the provisions of the CompaniesAct 2013 Rules Listing Regulations and Guidelines and that there were no deviations ornon-compliances.

The Secretarial Audit Report for the financial year ended 31 March 2021 is annexedherewith and marked as Annexure-2. The Secretarial Audit Report does not contain anyqualification reservation or adverse remark.


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.


The Company complies with all applicable secretarial standards.


As stipulated in Regulation 34(2)(f) of the Listing Regulations the BusinessResponsibility Report describing the initiatives taken by the Company from environmentalsocial and governance perspective forms part of this Report and is annexed as Annexure- 3.


Your Company complies with the provisions laid down in Corporate Governance laws. Itbelieves in and practices good corporate governance. The Company maintains transparencyand also enhances corporate accountability. In terms of Regulation 34 of ListingRegulations read with Schedule V the following forms part of this Report:

(i) Declaration regarding compliance to Code of Conduct by Board Members and SeniorManagement Personnel;

(ii) A certificate from a Practicing Company Secretary that none of the directors onthe Board of the Company have been debarred or disqualified from being appointed orcontinuing as directors of companies by the Board/Ministry of Corporate Affairs or anysuch statutory authority;

(iii) Report on the Corporate Governance and

(iv) Auditors' Certificate regarding compliance of conditions of Corporate Governance.


Your Company does not have any activity requiring conservation of energy or technologyabsorption and foreign exchange earnings and outgo.


Pursuant to Sections 92 and 134(3) of the Companies Act 2013 and Rule 12 of theCompanies (Management and Administration) Rules 2014 a copy of the Annual Return isavailable at the website of the Company at


In terms of the provisions of Section 197(12) of the Companies Act 2013 ('the Act')read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 and Companies (Appointment and Remuneration of ManagerialPersonnel) Amendment Rules 2016 a statement showing the names and other particulars ofthe employees drawing remuneration in excess of the limits set out in the said rules areprovided in this Report and marked as Annexure- 4.

Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 and Companies (Appointment and Remuneration ofManagerial Personnel) Amendment Rules 2016 are also provided in this Report and marked asAnnexure-4.


Pursuant to Section 124(5) of the Companies Act 2013 read with Investor Education andProtection Fund Authority (Accounting Audit Transfer and Refund) Rules 2016 (asamended from time to time) relevant amount which remained unpaid or unclaimed for a periodof seven years have been transferred by the Company from time to time on due dates tothe Investor Education and Protection Fund (IEPF). During the year under review yourCompany has transferred H464324/- (Rupees Four Lakhs Sixty Four Thousand Three Hundredand Twenty Four Only) to IEPF.

Pursuant to Section 124 (6) of the Companies Act 2013 and read with Rule 6 of theInvestor Education and Protection Fund Authority (Accounting Audit Transfer and Refund)Rules 2016 (as amended from time to time) all the underlying shares in respect of whichdividends are not claimed/paid for the last seven consecutive years or more are liable toget transferred to the IEPF DEMAT Account with a Depository Participant as identified bythe IEPF Authority. Accordingly during the year under review 15031 equity shares of facevalue of H2/- each were transferred to IEPF DEMAT Account.

The Company has uploaded the details of unpaid and unclaimed amounts lying with theCompany as on 31 August 2020 (date of last Annual General Meeting) and also the details ofequity shares transferred to IEPF DEMAT Account on the Company's website( and also on the Ministry of Corporate Affairs' website(


During the year under review neither the statutory auditors nor the secretarialauditor has reported to the Audit Committee under Section 143 (12) of Companies Act 2013any instances of fraud committed against the Company by its officers or employees thedetails of which needs to be mentioned in the Board's Report.


Your Directors would like to record their appreciation of the hard work and commitmentof the Company's employees and warmly acknowledge the unstinting support extended by itsbankers alliance partners and other stakeholders in contributing to the results.


Statements in the Board's Report and Management Discussion and Analysis describing theCompany's objectives outlook opportunities and expectations may constitute "ForwardLooking Statements" within the meaning of applicable laws and regulations. Actualresults may differ from those expressed or implied expectations or projections amongothers. Several factors make a significant difference to the Company's operationsincluding the government regulations taxation and economic scenario affecting demand andsupply natural calamity and other such factors over which the Company does not have anydirect control.

For and on behalf of the Board
Sunil Chandiramani Sanjay Chamria
Independent Non Executive Director Vice Chairman and Managing Director
DIN:00524035 DIN:00009894
Mumbai Kolkata
31 May 2021 31 May 2021