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Satin Creditcare Network Ltd.

BSE: 539404 Sector: Financials
NSE: SATIN ISIN Code: INE836B01017
BSE 00:00 | 13 Jul 89.35 -1.75






NSE 00:00 | 13 Jul 89.15 -1.95






OPEN 92.50
52-Week high 317.65
52-Week low 46.00
P/E 2.98
Mkt Cap.(Rs cr) 465
Buy Price 87.00
Buy Qty 100.00
Sell Price 92.00
Sell Qty 14.00
OPEN 92.50
CLOSE 91.10
52-Week high 317.65
52-Week low 46.00
P/E 2.98
Mkt Cap.(Rs cr) 465
Buy Price 87.00
Buy Qty 100.00
Sell Price 92.00
Sell Qty 14.00

Satin Creditcare Network Ltd. (SATIN) - Director Report

Company director report


The Directors are pleased to present the Twenty Ninth Annual Report along with theAudited Financial Statement of your Company for Fiscal 2019.


(र in Lakhs)



Particulars Mar-19 Mar-18 Mar-19 Mar-18
Revenue 137304.32 97674.58 144803.66 103124.23
Total Expenses 105610.73 83606.74 111971.60 90063.84
Profit before Depreciation and tax 31693.59 14067.84 32832.06 13060.39
Depreciation and amortization expenses 1131.89 1406.00 1251.12 1474.27
Profit before Tax 30561.70 12661.84 31580.94 11586.12
Tax Expense 1 1067.42 4447.09 11431.30 4105.69
Profit After Tax 19494.28 8214.75 20149.64 7480.43
Other comprehensive income 2509.87 0.96 2516.19 10.67
Total comprehensive income for the year 22004.15 8215.71 22665.83 7491.10

OPERATIONS FUND RAISE PROSPECTS AND FUTURE PLANS Operational Highlights in brief(Standalone basis)

• The aggregate gross loan portfolio (GLP) of the Company stood at र637366.71Lakhs as on March 31 2019. This represents a year on year (YoY) growth of 25.35% ascompared to March 31 2018.

• Loan amount of र625192.24 Lakhs was disbursed in FY 18-19 representing anincrease of 12.21 % as compared to FY 17-18.

• The Company disbursed 23.39 Lakh loans during FY 1819 an increase of 28.80 %over FY 17-18.

• Average loan amount disbursed per account during FY 18-19 was '0.27 Lakhs andecrease of 12.88% from FY 17-18.

• The Company has operations spread across 22 states/ union territories

During the Financial Year under review Company saw 137.31% increase in itsprofitability with a net profit of र19494.28 Lakhs for the year ended March 31 2019 ascompared to र8214.75 Lakhs for the year ended March 31 2018. Profit before taxincreased by 141.37% to र30561.70 Lakhs. Total Income has increased from 97674.58Lakhs for the year ended March 31 2018 to 137304.32 Lakhs for the year ended March 312019 which is mainly due to increase in 25.35% of AUM in the Company.

Interest income of the Company increased to र11 7950.47 Lakhs from previous year'sinterest income of 95731.20 Lakhs. Loan Assets Portfolio of the Company increased byर128887.01 Lakhs during the year reaching 637366.71 Lakhs as on March 312019 asagainst '508479.70

Lakhs as on March 31 2018. The Return on Average Loan Assets increased to 3.40% in FY2018-19 as compared to 1.89% in FY 2017-18. The cost of funds declined to 12.53% in2018-19 compared to 12.56% in fiscal 2017- 18. On account of the above the Net InterestMargin improved to 9.45% as against 8.34% in FY 2017-18. Company's Strong liquidityposition provides significant headroom for growth. Company has Long term Credit RatingCARE A-(Upgraded from CARE BBB+); Short term rating CRISIL A1 (Assigned) & and CARE A1(upgraded from CARE A2); Grading MFI 1 (MFI One).

Operation's highlights are hereunder

Particulars March 2019 March 2018
Number of branches 977 809
Amount disbursed (र in Lakhs) 625192.24 5571 65.75
Number of active Clients 3149607 2401701
Total Assets under management (र In Lakhs) 637366.71 508479.70

Fund raise during FY 2018-19

During the year under review your Company has continued to diversify the sources offunds and raised a sum of र540873.98 Lakhs by way of short-term loans long-termloans issue of Non-Convertible Debentures Securitization & Assignments andCommercial Paper which has helped the Company to achieve higher Assets under management.Out of overall borrowings Company has raised funds through issuance of Non-ConvertibleDebentures amounting to र40370.00 Lakhs. Subordinated liabilities represents long termsource of funds for the Company and the amount outstanding as on March 31 2019 wasर53919.68 Lakhs. Further during the period under review your company has successfullyraised funds through Direct Assignment is र161458.78 Lakhs.

Please refer the Management Discussion and Analysis Report for more information.

Company's Prospects Future Plans and Business Overview:

The business of your Company scaled up through increase in number of branches and withnew initiatives taken by the Company. Your Company became the first Micro financeInstitutions (MFI) to foray into digital lending with no human intervention thus tappingthe millennials with the launch of "Loan Dost" in November 2018 a fintechventure that aims to provide short to medium term personal loans to salaried individuals.This is an app-based platform which provides instant loans from र1 0000 to र150000expand user base. The app is backed by strong evaluation processes including psychometrictest and fetching bank and tax details with borrower consent. Managed portfolio under thetie-up with IndusInd Bank stood at र63261 Lakhs as on March 31 2019. Your Companyintends to step up efforts to diversify revenue sources by increasing the share ofcross-sell income. Your Company will continue to expand its geographical footprint innewer regions and will also deepen its reach in the existing states. The Company hasenabled 100% branches for cashless disbursement through digital lending initiatives in FY2018-19 which is a big step towards ensuring client protection. Technology will continueto be at the helm of operations and will be leveraged to enhance business effectivenessand impact.

Please refer the Management Discussion and Analysis Report for more informationon your Company's Business Overview.


The Company has duly complied with the provision of Section 186 of the Companies Act2013 and Rules made thereunder. Details on loans or investment are mentioned in financialstatements of this Annual Report. The Company has not given any guarantees to any bodycorporate on behalf of a third party.

details of adequacy of internal financial controls

The policies and procedures adopted by your Company take into account the designimplementation and maintenance of adequate internal financial controls keeping in viewthe size and nature of the business. The internal financial controls ensure the orderlyand efficient conduct of its business. The controls encompass safeguarding of yourCompany's assets strict adherence to policies and prevention and detection of frauds anderrors against any unauthorized use or disposition of assets and misappropriation offunds. These controls help to keep a check on the accuracy and completeness of theaccounting records and timely preparation of reliable financial disclosures. The AuditCommittee ensures that all procedures are properly authorized documented described andmonitored. Job rotation is mandatory across departments to ensure high level ofcorrectness and accuracy. Your Company has in place technologically advancedinfrastructure with computerization in all its operations including accounts and MIS.

Your Company has in place strong internal audit processes and systems which design anannual audit plan to ensure optimum portfolio quality and keep risks at bay. There is afull-fledged in-house Internal Audit department.

The Regional Office Audit and Social Audit takes place on a quarterly basis whileCompliance Audit is done on the basis of feedback from other audits.

The Audit Committee of the Board of Directors comprising of independent directorsperiodically reviews the internal audit reports covering findings adequacy of internalcontrols and ensure compliances. The Audit Committee also meets the Company's StatutoryAuditors to ascertain their views on the financial statements including the financialreporting system compliance to accounting policies and procedures adequacy andeffectiveness of the internal controls and systems followed by the Company. InformationSystem Security controls enable the Company to keep a check on technology-related risksand also improve business efficiency and distribution capabilities. Your Company iscommitted to invest in IT systems including back-up systems to improve the operationalefficiency customer service and decision-making process.

High standards of your Company's internal control systems is adequately reflected in itreceiving ISO 27001:2013 Certification post qualifying two stages of audit by third partycertification body - Documentation audit and Control Testing audit. This indicates yourCompany has an integrated and robust Information Security Management System (ISMS) in itsbusiness processes & exemplifies that information security and client confidentialityare part of the cornerstones of your Company's strategic objectives. This approach alsoensures that employees supported by IT systems and processes throughout the organizationmaintain a high standard of security.

Your Company has also introduced "Centralized Shared Services Center" withinits subsidiary businesses to create a unified support model across the group. This hasalso enabled to provide more structured effective & efficient services acrossBusiness reporting end user application support and in Management of Infrastructuresupport security & new requirements centrally. This has enabled a professionalsupport model within the organization and has helped restructuring the teams at differentlevel and brought in significant cost optimization.


There are no material changes and commitments affecting the financial position of theCompany which has occurred between the end of the financial year of the Company i.e.March 31 2019 and the date of the Directors' Report.


During the year under review 2018-19 Company has acquired 1 105493 equity shares ofTaraashna Services Limited (TSL) from its existing shareholder MV Mauritius Limited. Byvirtue of this TSL has become Wholly owned subsidiary of your Company w.e.f . July 272018. Your Company has infused more equity fund of र2000 Lakhs in order to expand thebusiness operations of TSL.

In order to comply with the RBI guidelines to maintain qualifying asset and to havemore focus on MSME lending your Company has incorporated Satin Finserv limited (SFL) onAugust 10

2018 with an Authorized Share Capital of र300 Lakhs and Paid-up share capital ofर250 Lakhs. SFL is incorporated with the objective of providing Business loans to SME& MSME borrowers. SFL got the Certificate of Registration (COR) from Reserve Bank ofIndia (RBI) on January 09 2019 to commence business operations as Non- Banking FinanceCompany. Your Company has further infused र2000 Lakhs to enable it to expand itsbusiness and operations.

Business Highlights of Taraashna Services Limited

Taraashna Services Limited (TSL) wholly owned subsidiary's net worth stood at र5179.45 Lakhs as at March 312019. TSL is engaged in Business Correspondent activity and hasachieved a gross turnover of र6828.44 Lakhs during the year mainly from this activity(against gross turnover of र5385.79 Lakhs during previous year). TSL has a net profitafter tax of र841.88 Lakhs (previous year net loss after tax '684.06 Lakhs. TSL islooking for various business opportunities and is hopeful of getting some BusinessCorrespondent arrangements with new Principal partners to have a sustainable growth goingforward and achieving desired results.

The present AUM of TSL is spread across 8 states which includes Madhya Pradesh GujratRajasthan Punjab Maharashtra Bihar Uttar Pradesh and Chhattisgarh.

Business Highlights of satin Housing Finance Limited

Satin Housing Finance Limited (SHFL) wholly owned subsidiary's net worth stood atर4826.52 Lakhs as at March 31 2019. As on that date Capital to Risk Assets Ratio(CRAR) was 111.10% which is well above the regulatory requirement of 12%. SHFL's totalincome during the year ended March 31 2019 is र707.08 Lakhs as compared to previousperiod ended March 31 2018 of र63.85 Lakhs and net loss after tax during the year endedMarch 31 2019 is र123.36 Lakhs as compared to previous period ended March 31 2018 ofर50.25 Lakhs.

Business Highlights of satin Finserv Limited

Satin Finserv Limited (SFL) wholly owned subsidiary's net worth stood at र2186.83Lakhs as at March 31 2019. As on that date Capital to Risk Assets ratio in terms ofregulatory requirement is 187.37% which is well above the regulatory requirement of15.00%. SFL recently got the certificate of registration from and completed otherformalities and statutory registrations to be fully operational. SFLs Total Income duringthe period ended March 31 2019 is र10.38 Lakhs and net loss after tax of र63.17Lakhs.

Within a span of two months SFL has shown decent growth in terms of Sanctions &disbursements of loans. During the period under review SFL has sanctioned loans of र1150.00 Lakhs and has disbursed all the loans. First loan was disbursed on March 282019.

Consolidated Financial statements

In accordance with Section 129(3) of the Companies Act 2013 and Regulation 34(2) ofSEBI (Listing Obligations and Disclosure Requirement) Regulations 2015 the ConsolidatedFinancial Statements of the Company including the financial details of all the subsidiarycompanies forms part of this Annual Report. The Consolidated Financial Statements havebeen prepared in accordance with the Indian Accounting Standards issued by the Instituteof Chartered Accountants of India.

Further a statement containing salient features of the financial statements of theCompany's subsidiaries in Form AOC-1 also form part of the Annual Report. Further Companyhas neither any Associates nor any Joint Ventures as on March 31 2019.


As per the provisions of the Companies Act 2013 Mr Satvinder Singh (DIN: 00332521)retires by rotation at the ensuing 29th AGM and being eligible seeks hisappointment. The Board and Nomination & remuneration Committee of the Board recommendshis appointment.

Mr Sanjaya Gupta (DIN:02939128) Nominee director of "Asian Development Bank"and Mr Suramya Gupta (DIN- 06816354) Nominee Director of SBI FMO Emerging Asia FinancialSector Fund Pte. Ltd. have resigned from the position of director of the Company witheffect from October 15 2018 and January 07 2019 respectively. Further Mr Davis FrederickGolding (DIN: 00440024) Independent director of the Company has resigned from the Companyw.e.f. April 12 2019.

The Board wish to place on record its appreciation for the valuable contribution of MrSanjaya Gupta Mr Suramya Gupta and Mr Davis Frederick Golding in the sustained growth ofthe Company during their tenure as Directors of the Company.

Based on the recommendation of the Board of directors and Nomination and RemunerationCommittee of the Company a proposal for re-appointment of Mr Sundeep Kumar Mehta (DIN-00840544) Mr Rakesh Sachdeva (DIN- 0033371 5) Mr Sanjay Kumar Bhatia (DIN- 07033027)Mrs. Sangeeta Khorana (DIN: 06674198) and Mr Goh Colin (DIN: 069631 78) for second term of5 (five) years in the capacity of Independent Director of the Company is being included inthe Notice of the ensuing AGM to seek your approval.

There were no change in the Key Managerial Personnel during the year under review.

During the year 7 (Seven) Board Meetings were held. These Board Meetings were held onMay 30 2018 July 11 2018 August 13 2018 November 14 2018 February 04 2019.February 27 2019 and March 18 2019. Details on Board and its Committees are erstwhilementioned in Corporate Governance section of this Annual Report.

performance evaluation of board committees and directors

The Companies Act 2013 and SEBI (Listing Obligation and Disclosures Requirement)Regulations 2015 stipulates the performance evaluation of the Directors includingChairperson Board and its Committees. Further SEBI vide its circular dated

January 5 2017 issued a guidance note on Board Evaluation for listed companies. Inview of the same and in terms of Board approved Nomination and Remuneration policy theannual evaluation of Directors of their own performance Board Committees and individualdirectors (including Independent Directors) based on criteria for the Directors and theBoard are done through separate structured questionnaires. The performance of Board andits Committees individual Directors and Chairpersons were found satisfactory.


The Board has independent directors and there is appropriate balance of skillsexperience and knowledge in the Board to enable the Board to discharge its functions andduties effectively. The Independent Directors have submitted disclosure that they meet thecriteria of independence as provided under Section 149(6) of Companies Act 2013 and SEBIRegulations.


Pursuant to section 134 (5) of the Companies Act 2013 the Directors hereby confirm

1. That in the preparation of the annual accounts for the financial year ended March31 2019 the applicable accounting standards had been followed along with properexplanation relating to material departures;

2. That they have selected such accounting policies and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the financial year and of theprofit and loss of the Company for that period;

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

4. That they have prepared the annual accounts for financial year ended March 31 2019on a going concern basis;

5. That the directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively during the financial year ended March 31 2019; and

6. That the directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively during the financial year ended March 312019.


There is no material order passed by the regulators or courts or tribunals impactingthe going concern status and Company's operations in future.


During the financial year 2018-19 there is no materially significant related partytransaction with the Company's promoters directors the management or their relativeswhich may have potential conflict with the interest of the Company at large. The Companyhas also formulated a policy on dealing with the Related Party Transactions (including formaterial related party transactions) and necessary approval of the Audit Committee andBoard of Directors were taken wherever required in accordance with the Policy. Thedetails of such policies for dealing with all related party transactions are disseminatedon the website of the Company

In compliance with section 188(1) of the Companies Act 2013 AOC-2 enclosed as Annexure-I.Further details of Related Party Transactions as required to be disclosed as per IndianAccounting Standard 24 "Related Party Disclosures" specified under section 133of the Companies Act 2013 are given in the Notes to the Financial Statements.

Justification for entering into related party transactions

All Related Party Transactions were placed before the Audit Committee for review andapproval. Related Party Transactions were entered at Arm's Length basis. All Related PartyTransactions are subjected to independent review w.r.t compliance with the requirements ofRelated Party Transactions under the Companies Act 2013 and Listing Regulations.

Furtherance to this the remuneration paid to Mr H P Singh Chairman cum ManagingDirector and the sitting fee payment to non-executive directors (other than Investor'snominee) for each Board/Committee meeting(s) attended and professional fees was paid to MrDavis Frederick Golding Independent director in addition to sitting fee shown underRelated party disclosures segment under "Notes to the account" of Balance Sheetin terms of Indian Accounting Standard 24 issued by The Institute of Chartered Accountantsof India.

auditors & THEIR REPORTs statutory Auditors & their Report

M/s Walker Chandiok & Co LLP Chartered Accountants bearing Registration No.001076N/N500013 have been appointed on the recommendation of Audit Committee and Board ofDirector's (in conformity with the provisions of sections 139 and 141 of the CompaniesAct 2013 read with the Companies (Audit and Auditors) Rules 2014 (includes amendmentsthereto) as the Statutory Auditors of the Company for a period of 5 years from theconclusion of the twenty seventh AGM (for FY 2017-18) till the conclusion of the thirtysecond AGM (for FY 2021-22) subject to the provisions of Non-Banking Financial Company -Systemically Important Non-Deposit taking Company and Deposit taking Company (ReserveBank) Directions 2016 as amended from time to time. Your Company has also received theirwritten consent and a certificate that they satisfy the criteria provided under section141 of the Companies Act 2013 (includes amendments thereto) and the said appointment isin accordance with the applicable provisions of the Act and rules framed thereunder.

During the year under review the Auditors had not reported any matter under section143 (12) of the Act therefore no details are required to be disclosed under section 134(3)(ca) of the Act. The Auditors' Report is unmodified and does not contain anyqualification reservation adverse remark or disclaimer.

The Board has placed on record its sincere appreciation for the services rendered byM/s Walker Chandiok & Co LLP as Statutory Auditors of the Company.

Secretarial Auditors & their Report

In terms of section 204 of the Companies Act 2013 and Rules framed thereunder and onthe recommendation of the Audit Committee the Board of Directors of the Company hadappointed M/s S. Behera & Co. Company Secretaries (ICSI PCS Registration No. 5980) asthe Secretarial Auditor of the Company for the financial year 2018-19. Secretarial auditreport as provided by M/s S. Behera & Co. Company Secretaries is also annexed to thisReport in the prescribed Form MR-3 as Annexure-II. The Secretarial Audit Reportdoes not contain any qualification reservation adverse remark or disclaimer.

The report confirms that the Company has complied with the provisions of the actrules regulations and guidelines and there were no deviations/non-compliance.

Any member interested in hard copy of the Secretarial Audit Report may inspect the sameat the Corporate Office of the Company or write to the Company Secretary for a copy. TheBoard has placed on record its sincere appreciation for the services rendered by M/s S.Behera & Co. Company Secretaries as Secretarial Auditors of the Company.

Reporting of Frauds by Auditors

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

However few instances of misappropriation including embezzlement of cash by theemployees amounting to र290.44 Lakhs were reported. The Company has terminated theservices of such employees and also initiated legal action against such employees. TheCompany has recovered र32.45 Lakhs from some employees.


The Company has an Audit Committee in accordance with the provisions of section 177 ofthe Companies Act 2013 and in accordance with Regulation 18 of SEBI (LODR) Regulations2015 and as per other applicable laws. All members of the Committee are financiallyliterate. The Chairman of the Committee was present at the last Annual General Meeting toanswer the queries of the Members. The scope of the activities of the Audit Committee isas set out in Regulation 18 of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 and read with section 177 of the Companies Act 2013 and otherapplicable laws are approved by Board of Directors of the Company. The composition of theAudit committee and the details of meetings attended by the Directors are provided inCorporate Governance Report section of this Annual Report.


The Company confirms compliance with the applicable requirements of secretarialstandards 1 and 2.


Directors of your Company have recommended a final dividend (excluding dividenddistribution tax) on Preference shares as stated below:

S. No. Preference shares Period of dividend Recommended amount of Dividend per share
1. 12.10% Rated Cumulative Non-Convertible and Compulsorily Redeemable Preference Shares April 01 2018 to March 31 2019 र 1.2100
2. 0.01 % Optionally Convertible Cumulative Redeemable Preference Shares April 01 2018 to March 31 2019 र 0.0010

*Amount of dividend is excluding of dividend distribution tax

In order to undertake and carry on future plans it is necessary to conserve theresources. Your directors are of the opinion of retaining the profits for the year withinthe Company and thus have not recommended any dividend on equity shares for the yearended March 31 2019.


Your Company has a vision to drive ‘holistic empowerment' of the community andcarries CSR initiatives through a trust qualified to undertake CSR activities inaccordance with Schedule VII of the Companies Act 2013 (includes amendments thereto).Sustainability and social responsibility are an integral element of corporate strategy ofthe Company. In compliance with section 135 of the Companies Act 2013 read with theCompanies (Corporate Social Responsibility Policy) Rules 2014 the Company has establishedthe Corporate Social Responsibility Committee (CSR Committee) and the compositionfunction and details of meetings attended by the Committee Members are provided in theCorporate Governance Report.

The Board adopted the CSR Policy formulated and recommended by the CSR Committee andthe same is available on the Company's website i.e.

During the year under review your Company has spent approx. र85.75 Lakhs on CSRprojects/programs. Your Company is in compliance with the statutory requirements in thisregard. As per the requirement of Rule 8(1) of The Companies (Corporate SocialResponsibilities) Rules 2014 the Annual Report on CSR is annexed as Annexure III tothis report and the same is posted on the website of the Company i.e. The Company has carried out the CSR initiatives through Maharaja Agrasen CharitableHospital Trust (MAHCT) an eligible trust qualified to undertake CSR activities inaccordance with Schedule VII of the Companies Act 2013 MAHCT is in process ofestablishment of Maharaja Agrasen Medical College Maharaja Agrasen Nursing InstituteMaharaja Agrasen Paramedical Institute and Maharaja Agrasen Management Institute. Themedical college will have a separate section for economically weaker section categorypatients from across country wherein patients will be treated free of cost includingprovision of free medicines and diet. This section will run through CSR funds.


To widen the participation of shareholders in Company's decisions pursuant toprovisions of Section 108 of Companies Act 2013 read with Rule 20 of The Companies(Management and Administration) Rules 2014 as amended and in terms of Regulation 44 ofSEBI (Listing Obligations and Disclosures Requirements) Regulation 2015 the Company hasprovided e-voting facility to its members in respect of all member's resolutions to bepassed at General Meeting(s) of the Company. The Company is providing this facility toenable them to cast their votes electronically on all resolutions set forth in the Notice.The instruction(s) for e-voting for ensuing Annual General Meeting is provided with Noticeto members of this Annual Report. The Company has signed necessary agreements withNational Securities Depository Limited and Central Depository Services Limited tofacilitate e-voting for members approval in their general meetings or through postalballots.


To contribute towards greener environment the Company again proposes to send documentslike members meeting notice/other notices audited financial statements boards' reportauditors' report or any other document to members in electronic form at the e-mailaddress provided by them and/or available to the Company by the Depositories. Members whohave not yet registered their e-mail address (including those who wish to change theiralready registered e-mail address) may get the same registered/updated either with theirdepository participants or by writing to the Company/ RTA.


The shareholders of the Company at their Annual General Meeting held on July 6 2017the Nomination and Remuneration Committee of the Company approved a new scheme ‘SatinEmployee Stock Opti on Scheme 201 7' (ESOS 201 7) i n accordance with the Securities andExchange Board of India (Share Based Employee Benefits) Regulations 2014. ESOS isapplicable to all permanent and full-time employees (as defined in the Plan) excludingpromoters of the Company.

The eligibility of employees to receive grants under the Plan has to be decided by theNomination and Remuneration Committee from time to time at its sole discretion.

Vesting of the options shall take place in the manner determined by the Nomination andRemuneration Committee at the time of grant provided the vesting period. Vesting ofoptions shall be subject to the condition that the Grantee shall be in continuousemployment with the Company and such other conditions as provided under ESOS 2017. TheExercise Price of each grant is determined by the Nomination and Remuneration Committee atthe time of grant.

Presently stock options have been granted or shares have been issued under thefollowing scheme:

A. Satin Employee Stock Option Scheme 2009 (ESOS 2009)

B. Satin Employee Stock Option Scheme 2017 (ESOS 2017)

Details of Options Granted Vested and Exercise of Options

I. ESOS 2009

Date of Grant of Options No of Options Granted Vesting Date Vesting out of 150000 Options No of Options Exercised Vesting out of 98300 Options (11000 Lapsed) No of Options Exercised Vesting out of 87900 Options (9300 Lapsed) No of Options Exercised
January 12 2010 150000 January 12 2011 50000 50000 - - - -
- - January 12 2012 50000 50000 - - - -
- - January 12 2013 50000 50000 - - - -
December 2 2013 98300 December 2 2014 - - 29090 25824 - -
- - December 2 2015 - - 29100 22633 - -
- - December 2 2016 - - 29110 27243 - -
December 2 2016 87900 December 2 2017 - - - 22300 21100
- - December 2 2018 - - - - 19300 19300

II. ESOS 2017

Date of Grant of Options No of Options Granted Vesting Date Vesting out of 145200 Options (67800 Lapsed) No of Options exercised
August 14 2017 145200 August 14 2018* 21400 12200
May 30 2018 226600 NA NA NA

* These options are available for exercise till August 13 2019

A. Disclosures as per Indian Accounting Standard 102 Share Based Payment issued byICAI.

1. The Company had 'nil' share-based payment arrangements during the year ended March31 2019.

2. The estimated fair value of each stock option granted in the general employeestock option plan is र420.75 र166.98 and र414.54. This was calculated by applyingBlack Scholes pricing model. The model inputs were as follows

Esos 2009

esos 2017


Grant 3

Grant 1

Grant 2

Inputs 3rd Tranche of Vesting 1st Tranche of Vesting 2nd Tranche of Vesting 3rd Tranche of Vesting 1st Tranche of Vesting 2nd Tranche of Vesting
Date of Grant December 2 August 14 August 14 August 14 May 30 May 30
2016 2017 2017 2017 2018 2018
Share Price at grant Date (In ') 438.40 267.38 267.38 267.38 386.65 386.65
Exercise price (In ') 20.00 160.00 160.00 160.00 160.00 160.00
Expected Volatility (%) 60.39 55.86 62.90 62.90 45.31 53.94
Expected Dividends Yield - - - - - -
Contractual Life (in years) 3.08 1.50 2.50 3.50 1.50 2.50
Risk Free Interest Rate (%) 6.03 6.35 6.40 6.45 7.53 7.66

3. Other information regarding employee share-based payment plans is as below:

(र in Lakhs)
Particular Year ended March 312019 Year ended March 312018
Expense arising from employee share-based payment plans 317.86 ' 189.08

B. Diluted EPS on issue of shares pursuant to all the schemes covered under theregulations shall be disclosed in accordance with 'Indian Accounting Standard 33 -Earnings per Share issued by ICAI or any other relevant accounting standards as prescribedfrom time to time. Diluted EPS is र40.09.

Effects of Share Options on Diluted Earnings per Share (Accounting year April 012018to March 31 2019)

(र in Lakhs)
Net profit for the year ended 2019 ' 19494.28
Weighted average number of equity shares outstanding during the year ended 2019 48287570 Shares
Average fair value of one equity share during the year ended 2019 420.75 166.98 & 414.54
Weighted average number of shares under option during the year ended 2019 297369 Shares
Weighted average number of shares under Conversion during the year ended 2019 198838 Shares
Exercise price for shares under option during the year ended 2019 20.00 & 160.00

Computation of earnings per share

Particulars: Earnings Shares Earnings Per share
Net profit for the year ended 2019 19494.28 - -
Weighted average number of shares outstanding during year ended 2019 - 48287570 -
Basic earnings per share (?) - - 40.37
Dilutive impact of optionally convertible preference shares 64.47 -
Number of shares under option - 297369 -
Number of shares under conversion - 198838 -
Diluted earnings per share (?) 19558.75 48783777 40.09

C. Details related to ESOS

(i) A description of each ESOS that existed at any time during the year including the generalterms and conditions of each ESOS

S. No. Particular Satin ESOP 2009 Satin ESOP I 2010 Satin ESOP II 2010 Satin ESOS Scheme 2017
1. Date of shareholders' approval June 01 2009 March 26 2010 December 15 2010 July 6 2018
2. Total number of options approved under ESOS 425000 100000 150000 361400 and such other unvested options under existing ESOP Schemes
3. Vesting requirements/ Conditions The actual vesting of options will depend on continuation to hold the services being provided to the Company at the time of exercise of options and such other conditions as mentioned in the ESOP Scheme. The actual vesting of options will depend on continuation to hold the services being provided to the Company at the time of exercise of options and such other conditions as mentioned in the ESOP Scheme. The actual vesting of options will depend on continuation to hold the services being provided to the Company at the time of exercise of options and such other conditions as mentioned in the ESOP Scheme. The actual vesting of options will depend on continuation to hold the services being provided to the Company at the time of exercise of options and such other conditions as mentioned in the ESOS Scheme 2017.
4. Exercise price or pricing formula ' 20/- being the Fair Value of the shares of the Company (Computed on the basis of Audited result FY 2008-09). ' 22/- being the Fair Value of the shares of the Company. (Computed on the basis of Audited result FY 2009-10) ' 25/- being the Fair Value of the shares of the Company. (Computed on the basis of Audited result FY 2009-10) Nomination and Remuneration Committee is free to determine the exercise price based on Market Price
5. Maximum term of options granted 3 Years 3 Years 3 Years 3 years and 2 years or as the Committee may deem fit.
6. Source of shares (primary secondary or combination) Primary Primary Primary Primary
7. Variation in terms of options Not Applicable Not Applicable Not Applicable Variations in Terms of Grants can be done by the Nomination and Remuneration Committee

(ii) Method used to account for ESOS - Fair Value (Black Scholes Model).

(iii) Option movement during the year (For each ESOS):

Particulars Satin ESOP 2009 Satin ESOS Scheme 2017*
Number of options outstanding at the beginning of the period - 306200
Number of options granted during the year NA 226600
Number of options forfeited / lapsed during the year 6000 40100
Number of options vested during the year 19300 21400
Number of options exercised during the year 19300 12200
Exercise Price (' options) 20.00 160.00
Number of shares arising as a result of exercise of options 19300 12200
Money realized by exercise of options (र in Lakhs) if scheme is implemented directly by the company 6.20 19.42
Loan repaid (र in Lakhs) by the Trust during the year from exercise price received 6.20 19.42
Number of options Shifted to the New ESOS Scheme 2017 6000


Number of options outstanding at the end of the year - 125700
Number of options exercisable at the end of the year 19300 251700

* Figures of Outstanding Options under ESOS Scheme 2017 are reported consideringfigures of Existing ESOP Scheme and ESOS Scheme 2017

(iv) Weighted-average exercise prices:

• when the exercise price is equal/exceeds to market price.

• when the exercise price is less than market price ESOS 2009- र213.96

ESOS 2017- र283.78

Weighted-average fair values

• when the exercise price is equal/exceeds to market price.

• when the exercise price is less than market price- ESOS 2009- र420.75

ESOS 2017- र166.98 and र254.54

(v) Employee wise details (name of employee designation number of options grantedduring the year exercise price)

(a) Senior managerial personnel (of Company & its subsidiaries):

Details of Options Granted to Senior Managerial Personnel during financial year 2018-19

s. No. Name of Employee Designation No of Options Granted exercise Price (In ') Company
1 Mr Jugal Kataria Chief Financial Officer 24000 160.00 Satin Creditcare Network Limited
2 Mr Dev Verma Chief Operating Officer 24000 160.00 Satin Creditcare Network Limited
3 Mr Subir Roy Chowdhury Chief Human Resource Officer 24000 160.00 Satin Creditcare Network Limited
4 Mr Sanjay Mahajan Chief Information Officer 24000 160.00 Satin Creditcare Network Limited
5 Mr Amit Kumar Gupta Head-Accounts 2500 160.00 Satin Creditcare Network Limited
6 Choudhary Runveer Krishanan Company Secretary & Compliance Officer 2500 160.00 Satin Creditcare Network Limited
7 Mr Ashish Gupta Head-Finance 4000 160.00 Satin Creditcare Network Limited
8 Mr Indrajit Kumar Dy. Chief Operating Officer 3000 160.00 Satin Creditcare Network Limited
9 Mr Ajay Kumar Head-Business HR 1000 160.00 Satin Creditcare Network Limited
10 Mr Manoj Kumar Dy. Chief Operating Officer 3000 160.00 Satin Creditcare Network Limited
11 Mr Mukund Madhav Dy. Chief Operating Officer 4000 160.00 Satin Creditcare Network Limited
12 Mr Sushil Kumar Menon Vice President-IT 6000 160.00 Satin Creditcare Network Limited
13 Mr Lovneet Goyal Vice President-IT 6000 160.00 Satin Creditcare Network Limited
14 Mr Pranav Prakash Vice President-Operations 4500 160.00 Satin Creditcare Network Limited
15 Mr Amit Sharma Chief Executive Officer & Whole Time Director 24000 160.00 Satin Housing Finance Limited
16 Mr Sachin Sharma Chief Financial Officer 2000 160.00 Satin Housing Finance Limited
17 Mr Sanjeev Vij Chief Executive Officer & Whole Time Director 24000 160.00 Taraashna Service Limited
18 Mr Abhay Thakkar Chief Financial Officer 1500 160.00 Taraashna Service Limited
19 Mr Jitendra Kumar Pandey Chief Operating Officer 4000 160.00 Taraashna Service Limited
20 Mr Milind Govindrao Deshmukh Chief Operating Officer 4500 160.00 Taraashna Service Limited
21 Mr Punit Sharma Vice President-HR 3000 160.00 Taraashna Service Limited

(b) Following employees have received a grant in the reporting year of option amountingto 5% or more of option granted during that year;

S. No. Name of employee Designation No of Options granted
1. Mr Dev Verma Chief Operating Officer 24000
2. Mr Jugal Kataria Chief Financial Officer 24000
3. Mr Sanjay Mahajan Chief Information Officer 24000
4. Mr Subir Roy Chowdhury Chief Human Resource Officer 24000
5. Mr Amit Sharma Chief Executive Officer- Satin Housing Finance Limited 24000
6. Mr Sanjeev Vij Chief Executive Officer- Taraashna Services Limited 24000

(c) There is no Identified employees who were granted option during any one yearequal to or exceeding 1% of the issued capital (excluding outstanding warrants andconversions) of the company at the time of grant.

(vi) A description of the method and significant assumptions used during the year toestimate the fair value of options including the following information: Requisite detailsforms part of financial statements.

The details pursuant to SEBI (Share Based Employee Benefit) regulations 2014 has beenplaced on the website of the Company

ESOS Schemes Compliance Status

ESOS 2009 and ESOS 2017 is in compliance with Securities and Exchange Board of India(Share Based Employee Benefits) Regulations 2014 (SEBI ESOS Regulations) and theCompanies Act 2013. The company small place before upcoming AGM a certificate from theStatutory Auditors of the Company certifying that ESOS 2009 and ESOS 2017 Scheme of theCompany is being implemented in accordance with the Securities and Exchange Board of In di a (Sh are Based Employee Ben efi ts) Regulati ons 2014 and is in accordance with theresolutions passed by the Members of the Company at a general meeting.

The ESOS Schemes are implemented in accordance with Indian Accounting Standard issuedby ICAI and the relevant accounting pronouncements.

Administration of ESOS Schemes

The Nomination and Remuneration Committee of the Board administer the Employee StockOption Schemes formulated by the Company from time to time.


Vigil Mechanism/whistle Blower Policy

The Company has formulated a vigil mechanism through Whistle Blower Policy to deal withinstances of unethical behaviour actual or suspected fraud or violation of Company'scode of conduct or ethics policy and details of the same are explained in the CorporateGovernance Report. The Policy is also available on the Company's website (

Policy on Nomination & Remuneration for Directors Key Managerial Personnel (KMP)& Senior Management and Other Employees

In pursuance of the Company's policy to consider human resources as its invaluableassets to pay equitable remuneration to all Directors Key Managerial Personnel (KMP)Senior Management and other employees of the Company to have diversified Board toharmonize the aspirations of human resources consistent with the goals of the Company andin terms of section 178 of the Companies Act 2013 and Regulation 19 of Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 and as amended from time to time and Rules/Regulations/Guidelines/Notificationsissued by Securities and Exchange Board of India (SEBI) from time to time. The policy onnomination and remuneration was modified and approved by the Board of Directors vide itsmeeting dated February 04 2019. The Company periodically conduct familiarizationprogramme for the independent directors their roles rights responsibilities nature ofthe industry in which the Company operates and it's business model etc. The detail ofsuch familiarization programmes is disclosed on the Company's website i.e.

Risk Management Policy

The Board has adopted the Risk Management Policy based on the recommendation of theRisk Management Committee in order to assess monitor and manage risk throughout theCompany. Risk is an integral part of any business and sound risk management is criticalfor the success of any organization. The Audit Committee reviews adequacy andeffectiveness of the Company's internal control environment to monitor and mitigate therisk through internal audit recommendations including those relating to strengthening ofthe Company's risk management policies and systems.

Sexual harassment policy for women under The Sexual Harassment of women at workplace(prevention prohibition and redressal) act 2013

Your Company has in place a formal policy for prevention of sexual harassment of itsemployees at workplace. The Company is in compliance with the Sexual Harassment of Womenat workplace (Prevention Prohibition and Redressal) Act 2013 and has adopted a revisedpolicy on Sexual Harassment on August 14 2017 to prohibit prevent or deter any acts ofsexual harassment at workplace and to provide the procedure for the redressal ofcomplaints pertaining to sexual harassment thereby providing a safe and healthy workenvironment.

Further during the year under review there was no case filed pursuant to the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.



India continues to retain its position as the world's fastest growing major economy.Its GDP is seen growing by 7.3% in FY 2018-19 according to World Bank estimatessupported by continued recovery of investment and robust consumption amid a moreexpansionary stance of monetary policy and some expected impetus from the fiscal policy.Although structural economic reforms such as demonetization and GST led to short-term painin economic activity positive changes in the key metrics of the Indian economy are nowvisible. These reforms have integrated more people into the formal financial systemboosted cashless transactions and added more taxpayers. World Bank has projected India'sGDP to grow by an average 7.5% in FY 2019-20 and FY 2020-21 primarily with investmentpicking up and consumption remaining strong. Continued implementation of structural andfinancial sector reforms with efforts to reduce public debt remain essential to secure theIndian economy's growth prospects.


Micro-Finance Industry in India

The microfinance sector in India emerged in 1982 with the formation of National Bankfor Agriculture and Rural Development (NABARD) which operated through the Self Help Group(SHG) model. Currently three models are prevalent in the microfinance lending sector-SHGJLG (Joint Liability Group) and SHG Bank Linkage. Different industry players such asBanks SFBs (Small Finance Banks) NBFC-MFIs (NonBanking Finance Company-MicrofinanceInstitutions) other N BFCs (N on-Ba nki ng Fi na nce Companies) and N on-Profitorganization(s) operate through different models. NBFC-MFIs and non-profit MFIs are theonly two player groups with loan portfolios primarily focused towards microcredit.

As of December 31 2018 the microfinance industry was estimated to have a gross loanportfolio (GLP) of र166284 Crores up 43% over the previous year as per the MFINMicrometer. NBFC-MFIs hold the largest share of portfolio at 36.5% of the micro-credituniverse with an aggregate gross loan outstanding of र60631 Crores representing 43.8%growth over the previous year.

The branch network of NBFC-MFIs was 1 1747 up 34% over the previous year. Growth inthis segment can be attributed to the growing penetration by MFIs rise in income andaspiration levels and ease of lending rules by the Reserve Bank of India (RBI). Thesegment reported total of 2.94 Crore clients up 34% over the previous year while loanaccounts grew to 3.87 Crore registering 27.3% growth over the previous year (YoY).

NBFC- MFI Industry Overview

Particulars Q3 FY 18-19 Q3 FY 17-18 YoY change (%) (FY 18-19 over FY 17-18) Q2 FY 18-19
Dec-18 Dec-17 sep-18
Branches 11747 8792 34% 11201
Employees 100736 73064 38% 94599
Clients* (Crores) 2.94 2.2 34% 2.8
Loan accounts (Crores) 3.6 2.7 35% 3.4
Gross Loan Portfolio (Clients* (' Crores) 60549 39917 52% 56785
Loan disbursed (during the quarter Crores) 0.77 0.63 23% 0.79
Loan amount disbursed (during the quarter रCrores) 19919 14147 41% 20018

*The clients number here is the aggregate of clients of member MFIs. Given some degreeof overlaps it does not reflect the number of 'unique' clients

(Source: MFIN Micrometer - December 31 2018)

Understanding India's Microfinance Industry

1. Geographical Mix

While 72% of the NBFC-MFI portfolio is rural the remaining 28% is urban. In terms ofpurpose agricultural loans accounted for 57% of total GLP while non-agricultural(trade/services and manufacturing) loans accounted for 39%. The balance approx. 4% of GLPwas disbursed as household finance loans. The top 5 states in terms of loan amountoutstanding namely Karnataka Odisha Bihar

Tamil Nadu and Maharashtra accounted for 53% of the total GLP The top 10 statesaccounted for 84% of loan amount outstanding. The Company expanded its footprint inSouthern India and North East during the year with the addition of Meghalaya TripuraTamil Nadu Karnataka and Pondicherry to its presence map.

(Source: MFIN Micrometer - December 31 2018)

2. Market Share

Market share within NBFC-MFIs is clearly concentrated among large MFIs. Top 10 MFIsaccounted for 76% of the aggregate industry portfolio.

(Source: MFIN Micrometer - December 31 2018)

3. MFIs as Business Correspondents

In 2006 RBI initiated the Business Correspondent (BC) model to promote financialinclusion. Banks were allowed to use third-party agents as BCs to provide banking andfinancial services such as credit and savings on their behalf. Banks can benefit fromthe outreach and efficient distribution structures of MFIs. On the other hand MFIs canexploit the relationship to not only push credit but also to offer a much wider range ofproducts - savings credit insurance pension and remittances. A higher degree of clientsatisfaction is expected if MFIs offer a range of savings pension and remittanceservices. This will lead to improved customer loyalty and reduced default risks. Thesavings history of clients will also enable better credit appraisal and help MFIs addressthe problem of multiple borrowing. SCNL's Business Correspondent (BC) business withIndusInd Bank touched Assets Under Management of र633 Crores as part of the BCpartnership entered into during the previous year.

opportunities for microfinance sector

Microfinance has proved to be a powerful tool for initiating a cyclical process ofgrowth and development. MFIs undercut the local money-lenders by a huge margin. MFIs withtheir deep- rooted presence are in a sweet spot to leverage the growing capabilities ofrural India to avail financial loans and thereby embark on rising economic growth.

Outlook on NBFC-MFIs

Steady growth is projected for NBFC-MFIs led by NBFC-MFIs' ability to customiseproducts price the risk and manage ultimate credit costs especially related tosmall-ticket loans according to India Ratings and Research.

NBFC-MFIs' asset quality has been largely resilient to the twin disruption ofdemonetization and GST implementation. With tightening of interest rates and heightenedcompetition limiting maneuverability on the lending side margins are expected to comeunder pressure for NBFCs. Players that have maintained a matched asset-liability profilewill be better placed than those that have increased reliance on short-term fundingcreating an asset-liability tenor mismatch.

An increased focus on the rural economy could be a boost for NBFCs with a significantportion of the assets in rural areas. As per MFIN investors' confidence has been positivepost demonetization which is evident from a 40% YoY growth in equity investments duringFY 2017-18. This is largely due to robust and stable growth including consistentmaintenance of Non-Performing Assets (NPAs) at under 1% level. The industry has been ableto maintain the client repayment rate of 99% which allays the fear of risks involvedconsidering the unsecured nature of loans.

Source: India Ratings Press Release


As it taps further opportunities by entering into new geographical areas the Companyencounters with some fresh key challenges with respect to fulfilling its expansion plans.Considering changes in state laws the opening of new branches and splitting of existingbranches is a challenging task for the management. Training and development for employeesand security risks are other potential challenges faced by the management. The Company isalso moving towards digitization to achieve better operational efficiency. This may alsopose a challenge with regard to adoption of new technologies and for security prospects.However Company's senior management possesses the requisite expertise in their respectiveareas to face these challenges. It has a geographical advantage time- tested systems andprocesses effective internal audit and risk department association with large number oflenders and clean repayment track record and good credit rating in the sector. Toughcompetition with other financial institutions will continue to be a challenge but yourCompany's key strategies and business diversification will help to achieve better resultsand lead to a promising future.


Risk is an integral part of the Company's business and sound risk management iscritical to the success of the organization. As a financial institution the Company isexposed to risks that are particular to its lending and the environment within which itoperates. The Company has identified and implemented comprehensive policies and proceduresto assess monitor and manage these risks. Its risk management processes are constantlyimprovised and adapted to the changing risk scenario. The agility of its risk managementprocess is monitored and reviewed for its appropriateness in the changing landscape. Theprocess of continuous evaluation of risks includes taking stock of the risk landscape onan event-driven basis. The Company has an elaborate process for risk management whichrests on the three pillars of Business Risk Assessment Operational Controls Assessmentand Policy Compliance Processes. Major risks identified by the businesses and functionsare systematically addressed through mitigating actions on a continuing basis. These areperiodically discussed with both the Management and the Risk Management Committee. Some ofthe risks relate to competitive intensity and the changing legal and regulatoryenvironment. However to mitigate this risk the Company follows a conservative financialapproach through prudent business and risk management practices.


Brief Profile of the Company

Satin Creditcare Network Limited (hereafter referred to as ‘Your Company') beganoperations in 1990 as a provider of individual and small business loans and savingservices to urban lenders. With strong commitment and determination your Company hasemerged as one of the largest MFIs in terms of Gross Loan Portfolio in India with astrong presence in north east and central India. Your Company was been registered as anNBFC with RBI in 1998 and was converted into an NBFC-MFI in November 2013.

Your Company primarily operates on the Joint Liability Group model enabling it toprovide collateral-free micro-credit facilities to economically active women in bothrural and semiurban areas. These women otherwise find limited access to mainstreamfinancial service providers generally belonging to Economically weaker section of India.Your company also finances products purchase of solar lamps bicycles and loans fordevelopment of water connections and sanitation facilities. The Company focuses itsoperations in 22 states and union territories in India has 1163 branches and 11 831employees as on March 31 2019. (Consolidated basis)

In 2017 your Company incorporated Satin Housing Finance Limited as its wholly-ownedsubsidiary to finance the affordable housing segment. This was a part of the GroupCompany's strategy of product diversification and movement from unsecured to securedlending. It enabled your Company to leverage the rural outreach.

Your Company also provides Business Correspondent services under Taraashna Services Ltd(acquired in 2016). Further the Company has entered into a Business Correspondentpartnership with IndusInd Bank in FY 2017-18.

In addition your Company also offers loans to individual businesses Micro Small& Medium Enterprises (MSMEs) and other corporate loans under its wholly- ownedsubsidiary "Satin Finserv Limited". In the second half of FY2018-19 the Companyreceived a license for Satin Finserv Limited. The Company started lending to MFI companiesas well. It is targeting small business owners in manufacturing trading and serviceswhich are predominantly excluded from mainstream access to organized finance.

Your Company is strongly focused on rural and semi-urban areas catering to regionswhich typically unserved or underserved by MFIs. It plays an eminent role in rural growthclearly exhibited in 77% of its operations focused on rural India with presence in morethan 72000 villages.

These states include Uttar Pradesh Bihar Madhya Pradesh Punjab Assam RajasthanWest Bengal Orissa Haryana Gujarat Maharashtra Delhi & NCR UttarakhandJharkhand Chhattisgarh Tripura Tamil Nadu Jammu & Kashmir Himachal PradeshMeghalaya Pondicherry Karnataka.


With a vast experience of 29 years and a strong focus on providing microfinance to theunder-served communities in rural areas your Company has achieved a reputable position inthe microfinance space. Below are some of its key differentiators in the marketplace:

1. Process Excellence & Risk Mitigation

Cash circulation in the system is one of its prime risks that causes frauds fundinefficiencies and disputes with the customer. The step to cleanse cash from the systemcommenced a few months ago and it is now moving towards 100% cashless disbursement to allits customers. Your Company has started working towards cashless collections and projectedto reach 50% by FY 20. It has also initiated various pilots with digital payment vendors.

Your Company is also working towards capturing KYC with use of technology and sharedservices. This will ensure it delivers quality with better efficiency and reducedmanpower. It will result in better monitoring controls and data management with inputsand help improve qualities.

The geo-tagging of branches centres and customers is aimed at mitigating a huge riskof customer identification and reach without the need for recruiting a Community ServiceOfficer (CSO). This will automate the complete experience and eliminate dependency on CSOsfor customer identification and result in better Centre Management. The handover processwill also be streamlined and transparent.

Your Company has moved its customer compliant processes to outsourced inbound callingwith 9 language Interactive Voice Response (IVR) and interaction with customers in theirlanguage. This improves the understanding of issues faced by customers resulting intoenhanced customer experience and brand stickiness.

Psychometric implementation has enabled 6936000 Customer Tests and made customersfiltration process more scientific and transparent without any human intervention. Thisresults into reduced risk on customers with negative intentions.

2. Information Technology (IT) as an Enabler

Digital transformation technology (Loan Management System) has been our game changer.It has not only made operations quick and easy but also enabled your Company to turnaround its customer acquisition to disbursement journey by bringing it down from theearlier 18 days to a few minutes. This digital transformation has put the Company ahead ofthe curve to better respond to the ever-changing business scenarios. Its digital platformis completely online with realtime systems which provide support to the end-to-endlending process. It is equipped with comprehensive reporting capabilities audit trailsand logs detailed information about loan histories transaction reports requireddecisionmaking reports and numerous management analysis and real-time dashboards. Well-rundigital services can extend the geographical outreach of your Company.

Benefits of Technological Advancement

• Enabled instant bank account verifications. Today 100% of the branches can docashless disbursements.

• Advanced processes such as QR Code Scan and other technological advancementshave enhanced brand recall value. The last mile technology penetration launchedthrough TABS presents real-time visibility of loan status and instantly addresses anycustomer queries/touch points. Event-based capturing recording and tracking ofgeo-location based on business actions is undertaken by the workforce.

• The solution provides instant customer identification and bank accountverification real-time CB checks and SMS notifications with various real-timeintegration of APIs.

3. Centralized Shared Service Centers

Your Company has also extended its robust technology platform within the BC subsidiaryfor them to leverage the same benefits and help accelerate business growth. It introduced "Centralizedshared services Center" within Satin and Taraashna (BC Business) to create a unifiedsupport model across the Group. This will provide structured effective and efficientservices across business reporting / end-user application support and centrally manageinfrastructure support security and new requirements. This has not only enabled aprofessional support model within the organization but also helped restructuring of teamsat different levels and significant cost optimization. For newer subsidiaries {MSME andHousing} the Company has taken a strategic and tactical direction to move ahead with theindustry-established technology platform - OMNIFIN.

4. Loan Dost

Having taken a big leap your Company has launched a step changing digital lendingplatform "Loan Dost". The objective behind this is to become future readyand leverage rising growth opportunities. The future of lending entails no humanintervention and leverages innovative technologies fully integrated through APIs. LoanDost has the capability to make underwriting decisions in 25 minutes without any humanintervention. It is not only robust and secure it also makes several checks to protectagainst fraudsters and clients.

5. Information Security System

Your Company is the first MFI to be certified with ISO 27001:2013 affirming theprevalence of robust Information Security Management System (ISMS) specifying therequirements for establishing implementing maintaining and continually improvingmanagement systems. This certification indicates that SCNL has integrated a robust ISMS inits business processes and exemplifies that information security and clientconfidentiality are part of the cornerstones of its strategic objectives.


Your Company is back on the growth track. Its portfolio quality has improved and it isable to achieve a comfortable liquidity and ALM position. It has enabled 100% cashlessdisbursement in all its branches through digital lending initiatives in FY 2018-19. Itskey focus will continue to be on the quality of its portfolio. It will continue to step upits efforts to diversify revenue sources by increasing the share of cross-sell income. Itwill keep expanding its geographical footprint in newer regions besides deepening itsreach in the existing states. Its objective is to restrict "per state" exposureto less than 20% by FY 2019-20. Technology will continue to be at the helm of itsoperations and will be leveraged to enhance business effectiveness and impact.

Your Company is also looking to scale up its operations as a BC of IndusInd Bank. TheBC arrangement is likely to assist the Company in scaling up its operations and allowingit to broad base its offerings other than microfinance. On MSME and other corporate loansegments your Company will continue its strategic focus on enhancing its portfolioquality and expanding operations to newer geographies having received the NBFC licensefrom RBI for a separate wholly-owned subsidiary. Under housing finance your Companyaspires to become a niche housing finance player in Tier II III and IV cities and townsand enrich its portfolio quality. All the efforts taken by the Company have enabled it tosuccessfully overcome the hurdles posed by internal and external factors.


Particulars March 31 2019 March 31 2018
Gross yield1 23.97% 22.45%
Financial Cost Ratio2 11.15% 12.22%
Net Interest Margin3 12.81% 10.23%
Operating Expense ratio4 6.57% 6.30%
Interest Coverage Ratio5 1.40 1.26
RoA6 3.01% 1.49%
RoE8 19.08% 12.24%
Leverage (Total Debt7 / Total Net Worth) 4.55 5.78
Cost to Income Ratio 51.27% 61.56%
Net Profit Margin 14.20% 8.41%
PAT 194.94 82.15
Sales Revenue 1372.76 976.68

1. Gross Yield represents the ratio of total Income in the relevant period to theaverage AUM

2. Financial Cost Ratio represents the ratio of interest Expense in the relevant periodto the Average AUM

3. Net Interest Margin represents the difference between the Gross Yield and theFinancial Cost Ratio

4. Operating Expenses Ratio represents the ratio of the Operating Expenses (expensesincluding depreciation but excluding Credit Cost and interest Expense) to the Average AUM

5. Finance cost to the EBIT

6. RoA is annualized and represents ratio of PAT to the Average Total Assets

7. Total Debt includes Securitization and preference shares considered as debt inaccordance of IndAS

8. RoE is annualized and represents PAT(Post Preference Dividend) to the average equity(i.e net worth excluding preference share capital)


Your Company believes that human resources are the most critical element responsiblefor growth of a business. The Company continued to show signs of positivity and growthproviding the Management an appetite for enhancing its potential and driving growth anddevelopment of its people. Engaging with excellence was the key objective in FY 201819with focus on HR process automations with a vision to build an efficient and error-freefunction. Your Company's comprehensive and well-structured HR policies ensure employeegrowth at both personal and professional levels. The HR team ensures that employee goalsare aligned with that of your Company. To channelize employees' movements the Company hasadopted a geo-fencing technology-based attendance recording system across all its officesto track their attendance on a real-time basis. This has facilitated HR in effectivemanpower planning and initiate disciplinary actions on-time without human intervention.

Your Company provides regular skill and personnel development trainings to enhanceproductivity. This also includes creating the first line of leaders internal job postingand high level of promotions ensuring low attrition rates. Your Company emphasizes ongood governance and has in place the whistle blower and anti-sexual harassment policies.The arrangement creates an amicable growth scenario for both the employees andorganizational goals. The Company's number of employees as at March 31 2019 onconsolidated basis stood at 11831 (Previous Year 7653).


The Reserve Bank of India in exercise of its powers under The Reserve Bank of IndiaAct 1934 has granted NBFC-MFI (Serial No. B-1 4.01 394) status to the Company and theCompany is NBFC-NDSI. The Board of Directors of the Company has passed a resolution thatthe Company has neither accepted Public deposit nor will accept deposit during FY2019-20.


Your Company has been following all relevant guidelines issued by Reserve Bank of Indiafrom time to time. Further your Company has Capital Adequacy Ratio of 28.49% as on March31 2019. The NonBanking Financial Company - Micro Finance Institutions (Reserve Bank) -Directions 2011 ("NBFC-MFI Directions") were issued in December 2011 by theReserve Bank of India (RBI) pursuant to the Reserve Bank of India Act 1934 ("RBIAct"). The Company satisfies these conditions and was re-classified as a Non-BankingFinancial Company - Micro Finance Institution ("NBFCMFI") on November 6 2013.As a result the Company is required to comply with the NBFC-MFI Directions. TheseDirections include guidelines on qualifying assets criteria asset classification andprovisioning pricing of credit capital adequacy multiple lending over-borrowingcompliances and fair practices. The Company generally complies all conditions anddirections issued by RBI from time to time.


The Company has adopted best corporate practices and is committed to conducting itsbusiness in accordance with the applicable laws rules and regulations. The Companyfollows the highest standards of business ethics. A report on Corporate Governance formingpart of Directors' Report also enclosed herewith. During the year under review theCompany has obtained C1 as Code of Conduct Assessment Grade from ICRA which signifiesexcellent performance pertaining to Transparency Client Protection GovernanceRecruitment Client Education Feedback & Grievance Redressal and Data Sharing.

Satin is subject to the regulations of the RBI (‘Reserve Bank of India') and theSEBI(‘Securities and Exchange Board of India').The Corporate Governance structuresand practices at Satin are primarily shaped by the respective regulations. The ComplianceCertificate from S. Behra & Co. Company Secretary in Practice regarding compliance ofconditions of corporate governance and to certify that none of the director have beendebarred or disqualified from being appointed or continuing as directors of the Companiesby the Board /Ministry of Corporate affairs or any such authority under the SEBI LODRRegulations for FY19 is annexed to the Corporate Governance Report which is providedseparately in the Annual Report.


In terms of Section 197 (12) of the Companies Act 2013 read with Rule 5 Sub-Rule (1)(2) & (3) of Companies (Appointment & Remuneration) Rules 2014 the necessarydisclosures are annexed as Annexure IV with this report.


The equity shares of the Company are listed on BSE Limited (BSE) and National StockExchange Limited (NSE).


In terms of requirement made under Section 92 and Section 134(3)(a) of the CompaniesAct 2013 read with applicable rules of The Companies (Accounts) Rules 2014 extract ofannual return forms part of this Directors' Report and annexed as Annexure V.


Information pursuant to section 134 of the Companies Act 2013 read with Rule 8(3) (a)& (b) of the Companies (Accounts) Rules 2014 being not applicable and hence not beingdisclosed.

Further Information pursuant to Rule 8(3) (c) of the above said rule is mentionedbelow.

(र in Lakhs)
S. No. Particulars March 312019 March 31 2018
1. Travelling Expenses 26.85 28.99
2. Professional Fee 46.13 74.31
3. Interest Payment - External Commercial Borrowing 381.18 344.49
4. Sitting Fees 1.40 1.20
5. Investment 331.65 -
6. Processing fees 216.11 82.46
7. Investment 33164790 -
8. Processing fees 21611479 -


Your Directors would like to place on record their gratitude for the cooperationreceived from lenders our valued customers and shareholders. The Board in specificwishes to place on record its sincere appreciation of the contribution made by all theemployees towards growth of the Company.

For and on behalf of the Board of Directors
H P Singh
Place: Delhi Chairman cum Managing Director
Date : May 08 2019 DIN: 00333754