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Satin Creditcare Network Ltd.

BSE: 539404 Sector: Financials
NSE: SATIN ISIN Code: INE836B01017
BSE 00:00 | 03 Dec 79.90 5.55
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NSE 00:00 | 03 Dec 79.85 5.50
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OPEN 75.05
PREVIOUS CLOSE 74.35
VOLUME 115100
52-Week high 112.65
52-Week low 66.70
P/E
Mkt Cap.(Rs cr) 575
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Sell Price 0.00
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OPEN 75.05
CLOSE 74.35
VOLUME 115100
52-Week high 112.65
52-Week low 66.70
P/E
Mkt Cap.(Rs cr) 575
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Satin Creditcare Network Ltd. (SATIN) - Director Report

Company director report

Dear Members

It is our immense pleasure to present the 31st Annual Report along with theaudited financial statements of your Company for the financial year ended March 31 2021.The consolidated performance of the Company and its subsidiaries has been referred towherever required.

FINANCIAL SUMMARY/HIGHLIGHTS STATE OF AFFAIRS

Particulars Standalone Consolidated
March-21 March-20 March-21 March-20
Revenue 127307.52 140090.41 138017.68 150343.19
Total Expenses 126982.48 117253.81 137485.44 127426.83
Profit before Depreciation and Tax 325.04 22836.60 532.24 22916.36
Depreciation and Amortization Expenses 1301.32 1519.84 1507.63 1753.72
Profit Before Tax (976.28) 21316.76 (975.39) 21162.64
Tax Expense 379.21 5690.05 422.83 5665.38
Profit after (1355.49) 15626.71 (1398.22) 15497.26
Other Comprehensive Income (3473.87) 4454.43 (3492.17) 4482.47
Total Comprehensive Income for the Year (4829.36) 20081.14 (4890.39) 19979.73

OPERATIONS FUND RAISE PROSPECTS AND FUTURE PLANS

Operational Highlights in brief (Standalone basis)

The aggregate gross loan portfolio (GLP) of the Company stood at Rs.727459.78 lakhsas on March 31 2021. This represents a year on year (YoY) growth of 0.8% as compared toMarch 31 2020.

Loan amount of Rs.439445.68 lakhs was disbursed in 2020-21 representing adecrease of 45.38% as compared to 2019-20. The Company disbursed 1327121 lakhs loansduring 2020-21 decrease of 48.06% over 2019-20. Average loan amount disbursed peraccount during 2020-21 was Rs.0.33 lakhs which was similar to 2019-20. An additionalprovision to the tune of Rs.4360 lakhs has been recognized by the Company as at March 312021 risk (SICR) on account of significant on customers given additional support by theCompany which were impacted due to COVID-19. Further the Company has made additionalprovision of Rs.80 lakhs on the restructured SME loans.

Due to impact of Covid-19 on the operations and collection efficiencyof the Companythe Credit Cost of the Company has gone up substantially in line with the overallmicrofinance industry. Further higher overdue stands in the portfolio resulting in yieldloss during the year.

The Company has operations spread across 23 states / union territories.

Your Company has incurred loss of Rs.1355.49 lakhs for the year ended March 31 2021as compared to profit of Rs.15626.71 lakhs for the year ended March 31 2020. Loss beforetax of the Company is Rs.976.28 lakhs for the year ended March 31 2021 as compared toprofit before tax ofRs.21316.76 lakhs for the year ended March 31 2020. Total Income hasdecreased from Rs.140090.41 lakhs for the year ended March 31 2020 to Rs.127307.52lakhs for the year ended March 31 2021. Interest income of the Company increased to Rs.111686.08 lakhs from previous year's interest income of Rs.107844.38 lakhs. The Returnon Average Assets is (0.18%) in 2020-21 as compared to 2.25% in 2019-20. The cost of fundsdeclined to 11.49% in 2020-21 as compared to 11.68% in 2019-20. Company's Strong liquidityposition provides headroom for growth.

Credit Rating

Your Company believes that its credit rating and strong brand equity enables it toborrow funds at competitive rates. The credit rating details of the Company as on March31 2021 were as follows: Company has Long term Credit Rating CARE A-; Stable ICRA A-;Stable & BWR A- Stable Short term rating CARE A1 & ICRA A1 ; Grading MFI 1 (MFIOne).

Operation's highlights are hereunder:

Particulars March 31 2021 March 31 2020
Number of branches 1011 1140
Amount disbursed 439445.68 804514.18
(Rs.in lakhs)
Number of active Clients 2656200 3080274
Total Assets under 727459.78 721989.65
management (Rs.In lakhs)

Fund raised during 2020-2021:

(a) Resource Mobilization:

During the year under review your Company has continued to diversify thesources of funds and raised a total sum of Rs.440154.74 lakhs by way of EquityIssuances short-term loans long-term loans issue of Non-Convertible DebenturesExternal Commercial Borrowings and Securitization and Assignments which has helped theCompany to broadly achieve its' business target for 2020-21. Out of overall fund raisedRs.8915.32 lakhs were raised through equity issuances and Rs.431239.42 lakhs raisedthrough borrowings which includes Rs.117625.00 lakhs by issuance of Non-ConvertibleDebentures and Rs.220737.50 by way of term loan. The Company also raised one termloan through External Commercial Borrowing (ECB) route of Rs.7305 lakhs. SubordinatedDebts represented long term source of funds for the Company and the amount outstanding ason March 31 2021 was Rs.47309.77 lakhs.

(b) Bank Finance:

Bank Finance remains an important source of funding for your Company. Commercial Bankscontinued their support to your Company. As of March 31 2021 borrowings from banks wereRs.219427.06 lakhs as against Rs.233549.48 lakhs in the previous financial year.Please refer to the Management Discussion and Analysis Report for more information.

(c) Rights Issue

During the year under review your Company had come out with the Rights Issue ofRs.12000 lakhs (rounded off) and issued & allotted 19982283 partly paid equityshares of Rs.10 each at the issue price of Rs.60 per share (`15 was paid on subscriptionand balance Rs.45 to be payable on calls as and when decided by the Board) to the existingeligible shareholders of the Company in the ratio of 48 rights issue shares for every 125shares held on record date i.e. August 5 2020.

Thereafter Board of Directors in its meeting held on February 12 2021 made the FirstCall of Rs.30 per share (including premium of Rs.25) on above mentioned partly paid sharesand the First Call money period was opened from March 3 2021 to March 17 2021. Thedetails of the issue and first call money is provided in the below mentioned table:Details and Status of Rights issue as on March 31 2021

Sl. No. Particulars Details
1. Number of Partly Paid Shares allotted 19982283
2. Issue Price per Shares Rs.60 (Including Premium of Rs.50 per share)
3. Terms of Payment Rs.15 on subscription Balance of Rs.45 to be paid in calls
4. Amount raised on Subscription Rs.2997.34 lakhs
5. First Call Money per share Rs.30 (Including Premium of Rs.25 per share)
6. No. of Partly Paid Shares on which First Call Money has been received as on March 31 2021 19726605
7. Amount Received as first call till March 31 2021 Rs.5917.98 lakhs
8. Total Amount raised till March 31 2021 in Rights Issue Rs.8915.32 lakhs

Company's Prospects Future Plans and Business Overview:

The Company successfully navigated through challenging times impacted by theCOVID-induced lockdowns across the country. It undertook resilient and prudent decisionsto proceed with agility. Backed by digitized processes a sturdy balance sheet andsufficientliquidity the Company was able to withstand such tumultuous times. Thisresulted in a gradual improvement in collection efficiencies and disbursements. After anestimated 7.3% GDP contraction in 2020-21 a moderate growth prospect is expected in thecoming year. However the Company will continue being conservative and cautious in itslending approach. Also given the evolving nature of the pandemic with the second wave ofCOVID-19 infections and localized restrictions the Company will actively continuemonitoring changes in the economic conditions and their impact on its business operations.

The Company consistently aims to improve its portfolio quality while maintaining lowdelinquency and diversifying revenue sources. This is done through subsidiaries focus onsecured lending and cross-selling income. The Company uses analytics to understandcustomer preferences and their behavior patterns. This helps the Company devise itsunderwriting and collection strategy and mitigate losses allowing the business tomaximize recovery. Going ahead the asset quality is anticipated to get better with betterrepayments and collection efficiency getting closer to normalized levels. This improvementis firmly backed by the economy's V-shaped recovery. There have been noticeable signs ofrecovery across sectors after the upliftment of lockdown restrictions coupled with theGovernment's fiscal stimulus measures. This improvement strongly indicates towards theCompany's resilient customer base. Going further the Company's robust financial stabilityand firm liquidity position further added by its increasing disbursements is expected tobring it back to its pre-COVID growth levels.

Additionally the Company seeks to continue its efforts to diversify concentrationrisk. It aims at capping the per state exposure to 20% and per district exposure to <2%of AUM. The Company backed by its technology-led business processes cashless collectionsand digital repayment alternatives will continue delivering accessible and affordableproducts and services with enriched customer experience across the country. Our customerservice app facilitated customers by providing relevant information through user-friendlyinterface. The specially designed products of the Company are expected to aid itscustomers converge their business needs while also prudently using its cash resources.People training will remain a critical talent management tool in building and retainingthe talent pipeline. This is what gives a competitive advantage to the organization. TheCompany continuously endeavors to identify the current and future skills requirements ofthe organization. It helps the Company create flexible learning interventions meeting thediverse needs of its workforce. The Government and the RBI intervened to support NBFC-MFIsthrough loan moratorium on borrowing and liquidity support by financing the National Bankfor Agriculture & Rural Development (NABARD) and Small Industrial Development Bank ofIndia (SIDBI). Additionally it also announced Targeted Long-Term Repo Operations (TLTRO)to channelize liquidity towards small and mid-sized corporates including NBFCs and MFIsimpacted by COVID-19 disruptions. Recognizing the role of credit in recuperating thelow-income households' livelihoods NBFC-MFIs were appropriately enveloped under roletheessential services category. This played a significant in easing their operations.

The Union Budget 2021-22 brought relief to the capital starved MSMEs with theGovernment infusing Rs.15700 Crores for the andsector.Alsobyredefining Ministry of MSMEsbrought in a large number of micro and small units under the sector benefitingthem withtheir schemes and concessions. Under the Government's Aatmanirbhar Bharat Abhiyan MSMEsbenefited through various stimulus package and Emergency Credit Line Guarantee Scheme(ECLGS). The special liquidity scheme and partial credit guarantee scheme for NBFCs HFCsand MFIswillconsiderablybenefitthe end consumers many of who are in the rural andsemi-urban areas.

The Company will continue working towards achieving its strategic objective ofenhancing the portfolio quality and deepening footprints in newer geographies. Furtherthe primary focus will remain on strengthening secured retail MSME lending and wholesalelending to small NBFC MFI and others with better credit approval mechanism. Under theHousing Finance segment the Company is looking forward to becoming a niche housingfinance player in tier II III and IV cities and towns with excellent portfolio qualitywith NIL delinquency. The Company is gradually widening its footprints in themicro-housing space which indicates great potential for a secured high yield book.Moreover the Company will continue diversifying its portfolio through the subsidiaries byleveraging its branch network.

Moreover the majority of NBFC-MFI loans are given for agriculture and alliedactivities. Moving along this direction the recently announced Government schemes areexpected to benefit rural households. Additionally with RBI's liquidity measures andimproved liquidity in the financial ecosystem NBFC-MFIs are witnessing a rise inrepayments and disbursements. Looking at the past crisis the MFI industry has alwaysbounced back strongly in the face of adversity. Further streamlined processes with afocus on digitalization and trained field staff will help in managing any such turmoil inthe future. Normal monsoon expectations will further help rural economy.

Please refer to the Management Discussion and Analysis Report for moreinformation on your Company's Business Overview.

Impact of Covid-19

COVID-19 induced lockdown brought a complete halt to almost every business but worstaffected were those with small or no reserves operating in high liquid model. Most microand small businesses were impacted except the ones engaged in activities coming underessential goods and services as announced by the Government. The financial regulator inIndia announced various steps to limit macro effect of the pandemic on overall financialsystem. This included an increase of moratorium period for loans part rebate of interestrate and stimulus packages among others. These measures helped maintain adequateliquidity in the system facilitate seamless bank credit flow and ease financial strainamid the unprecedented times. Also the Government's announcement on various economicrelief measures for rural India is believed to support rural borrower's repaymentcapacity. Through decades MFIs have proven their resilience by dealing with variouschallenges. NBFC-MFIs responded to this crisis with agility and maturity with‘customer well-being' at the cornerstone of its response. All customers were given amoratorium option and were educated to help them take an informed decision. In additionNBFC-MFIs stayed empathetic to customers by remaining committed to the core values of fairinteraction and transparency. Till the time the pandemic continues there will be locallevel lockdowns that would create medium to minor level disruptions to livelihoods.However the industry has learned to live with it. The amount of money deployed in thisindustry reaches out huge number of customers with sustainable and traceable livelihoodoptions and making it more impactful. The Company's Board firmly believes in strategicplans for facing the second wave of pandemic. It believes in fighting with a positivemindset just the wayithasdemonstratedin call money period i.e. March the past.There is an optimism around and the Company feels that it will soon overcome theseadversities as it moves ahead into a promising future.

Share capital Authorized Capital

During the year under review Authorized Capital of your Company is increased fromRs.1400000000 divided into 65000000 Equity Shares of Rs.10 each and 75000000Preference Shares of Rs.10 each to Rs.1700000000 consisting of 95000000 EquityShares of Rs.10 each and 75000000 Preference Shares of Rs.10 each vide Shareholdersapproval through Postal Ballot dated June 17 2020.

Paid-up Share Capital a. Equity Share Capital

The Paid up Equity Share Capital of the Company on April 1 2020 stood atRs.520381940 divided into 52038194 Equity Shares of Rs.10 each.

During the year ended March 31 2021 the Company has come up with the Rights Issue ofequity shares amounting upto Rs.12000 lakhs and allotted 19982283 Partly Paid Equityshares of Rs.10 each at the price of Rs.60 per share (including premium of Rs.50) onSeptember 1 2020 to existing shareholders of the Company on rights basis. Company hasreceived Rs.15 per partly paid share (comprising paid up value of Rs.2.50 andpremium of Rs.12.50) on subscription of the aforesaid shares aggregating to amount ofRs.29.97 crores remaining balance of Rs.45 per share (including premium of Rs.37.50) wasto be received in one or more calls as may be decided by the Board from time to time. TheBoard of Directors of Company in their meeting held on February 12 2021 made first callof Rs.30 per share on the 19982283 partly paid equity shares of Rs.10 each (Rs.2.50paid up). 2021 to During the first March firstcall 17 2021 the Company has receivedmoney on 19726605 partly paid equity shares at Rs.30 per share (including premium ofRs.25) aggregating to amount of Rs.59.18 crores. For remaining 255678 partly paidsharesofdemand Rs.10 each (Rs.2.50 paid up) the final cum forfeiture notice has been issued. Ason date partly paid equity shares of Rs.10 each (Rs.7.50 Paid up) has been listed on BSELimited and National Stock Exchange of India Limited. Thus as on March 31 2021 thePaid-up Equity Share Capital of the Company stood increased to

Rs.668970672.50 divided into 52038194 fully paid Equity Shares of Rs.10 each and19726605 partly paid Equity Shares of Rs.10 each (Rs.7.50 paid-up) and 255678 partlypaid Equity Shares of Rs.10 each (Rs.2.50 paid-up).

b. Preference Share Capital

The paid-up Preference Share Capital of the Company as on March 31 2021 stood atRs.250000000 divided into 25000000 12.10% Rated Cumulative Non-Convertible andCompulsorily Redeemable Preference Shares. During the year under review there was nochange in the Preference Share Capital.

DIVIDEND

Directors of your Company have declared an interim dividend (plus applicable taxes) onPreference shares as stated below:

SI. No. Name of Preference Shareholders Preference Shares Period of dividend Amount of Dividend paid per preference share
1. The names will be as reckoned by Registrar and Transfer Agent (RTA) as on cut-off (record) date 25000000 12.10% Rated Cumulative Non-Convertible Compulsorily Redeemable Preference Shares April 1 2020 to April 22 2021 Rs.1.21*

 

*Amount of dividend is excluding applicable taxes further to note that Preferenceshares were redeemed on April 22 2021 as per agreed terms with Preference Shareholders.

Further in view of the losses incurred and future growth plans the Board has decidednot to recommend any dividend on Equity

Shares for the financial year 2020-21 .

AMOUNT TRANSFERRED TO RESERVES

Due to absence of profit during the year the Company hasn't transferred any amount tostatutory reserve of the Company pursuant to Section 45IC of the Reserve Bank of IndiaAct 1934. Further the closing balance of the retained earnings of the Company for2020-21 after all appropriation and adjustments were Rs.26632.46 lakhs.

DEPOSITS

The Company has not accepted/received any deposits during the year under report fallingwithin the ambit of Section 73 of the Companies Act 2013 and the Companies (Acceptance ofDeposits) Rules 2014.

Your Company is registered with the Reserve Bank of India (RBI) as a Non-Depositaccepting NBFC under Section 45-1A of the RBI Act 1934. Your Directors hereby report thatthe Company has not accepted any public deposits during the year under review and itcontinues to be a non-deposit taking non-banking financial company in conformity with theguidelines of the RBI. As such no amount of principal and interest was outstanding duringthe year.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

Pursuant to Section 186 of the Companies Act 2013 and Rules made thereunder requiringdisclosure in the Financial Statements of the full particulars of the loans made andguarantees given or securities provided by a Non- Banking Financial Company in theordinary course of its business and the purpose for which the loan or guarantee orsecurity is proposed to be utilized by the recipient of the loan or guarantee or securityare exempted from disclosure in the Annual Report. Further the details of investmentsmade by the Company are given in the Notes to the Financial Statements.

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 Audit C ommittee ensures that allprocedures are properly authorized documented described and monitored. Your Company hasin place technologically advanced infrastructure with computerization in all itsoperations 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 arisk based audit methodology for quarterly branch audits which are planned based onvarious risk based parameters. There is a full-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 Committeeof the Board of Directors comprising of Independent Directors periodically reviews theinternal audit reports covering findings adequacy of internal controls and ensurecompliances. The Audit Committee also meets the Company's Statutory Auditors to ascertaintheir views on the financial statements including the financial reporting systemcompliance to accounting policies and procedures adequacy and effectiveness of theinternal controls and systems followed by the Company. Information System Securitycontrols enable the Company to keep a check on technology-related risks and also improvebusiness efficiency and distribution capabilities. Your Company is committed to invest inIT systems including back-up systems to improve the operational efficiency customerservice and decision-making process. High standards of your Company's internal controlsystems is adequately reflected in it receiving ISO 27001:2013 Certification postqualifying two stages of audit by third party certification body - Documentation audit andControl Testing audit. There is also Surveillance Audit conducted by third party ISOAuditors to retain the certification. This indicates your Company has an integrated androbust Information Security Management System (ISMS) in its business processes &exemplifies that information security and client confidentiality are part of thecornerstones of your Company's strategic objectives. This approach also ensures thatemployees supported by IT systems and processes throughout the organization maintain ahigh standard of security. Your Company has also introduced "Centralized SharedServices Center" within its subsidiary businesses to create a unified support modelacross the group. This has also enabled to provide more structured effective &efficient services across business reporting end user application support and inManagement of infrastructure support security & new requirements centrally. This hasenabled a professional support model within the organization and has helped restructuringthe teams at different levels and brought in significant cost optimization.

MATERIAL EVENT RECORDED SUBSEQUENT TO THE DATE

OF FINANCIAL STATEMENTS

Except mentioned below there are no further material changes and commitments affectingthe financial position of the Company which has occurred between the end of the financialyear of the Company i.e. March 31 2021 and the date of the Directors' Report.

1. Your Company had redeemed 25000000 12.10% Rated Cumulative UnlistedNon-Convertible Compulsory Redeemable Preference Shares of Rs.10 each at par and paid theprincipal amount aggregating to Rs.2500 lakhs along with dividend accrued till date ofredemption (i.e. April 22 2021) amounting to Rs.319.90 lakhs plus applicable taxes to thePreference Shareholders in accordance with the terms and conditions of Agreement betweenthe Company and Preference Shareholders.

2. Your Company has received a senior loan facility of $ 5 million fromOesterreichische Entwicklungsbank OeEB Austria through External Commercial Borrowingchannel.

3. Your Company has converted 169460 Partly Paid Equity Shares of Rs.10 each (Rs.2.50paid up) into equivalent number of Partly Paid Shares of Rs.10 each (Rs.7.50 paid moneyup) on May 9 2021 upon receipt of first amounting to Rs.5083800 (Rs.30 per share whichincludes premium of Rs.25) during the extended period provided for payment of First CallMoney i.e. from April 1 2021 to April 30 2021. Further considering the pandemicsituation due to Covid-19 and prevailing Lockdown in various states of India themanagement (RIC) has further extended the payment period (from May 11 2021 to May 312021) by providing last opportunity for payment of First Call Money to the shareholdersholding partly paid shares (Rs.2.50 paid up).

Accordingly during the further extended period your call money on 31852 partlyCompanyhasreceived first paid equity shares of Rs.10 each (Rs.2.50 paid up) amounting toRs.9.55 lakhs (including premium of Rs.7.96 lakhs) and converted the same to the partlypaid equity shares of Rs.10 each (Rs.7.50 paid up) on June 9 2021. As on the date of thisreport your Company has received first call money on 19927917 Partly paid shares outof 19982283 (constitute 99.73% of the shares issued in rights issue) and decided toforfeit remaining 54366 partly paid equity shares of Rs.10 each (`2.50 paid up) alongwith amount paid thereon i.e. Rs.15 per share (including premium of `12.50) due tonon-payment of first call money in accordance with applicable provisions of Article ofAssociation of the Company.

DETAIlS OF SUBSIDIARY AND ASSOCIATE COMPANIES

AS REQUIRED UNDER RULE 8 OF THE COMPANIES (ACCOUNTS) RULES 2014

SUBSIDIARY AND ASSOCIATE COMPANIES

The Company has following 3 (Three) Wholly owned subsidiaries as on March 31 2021.There are no associate or Joint Venture Companies within the meaning of Section 2(6) ofthe Companies Act 2013. There has been no material change in the nature of the businessof the subsidiaries-

1. Taraashna Financial Services Limited (TFSL) – The Company wasincorporated on May 22 2012 originally as private limited company with the name TaraashnaServices Private Limited and became Wholly Owned Subsidiary of the Company w.e.f. July 272018. TFSL is engaged in Business Correspondent activity. As on March 31 2021 its paidup capital stood at Rs.1604 lakhs.

2. Satin Housing Finance Limited (SHFL) – The Company was incorporatedon April 17 2017 as Wholly Owned Subsidiary of the Company. It is registered withNational Housing Bank. SHFL is engaged in providing long-term finance for purchaseconstruction extension and repair of houses for the retail segment along with loansagainst residential property commercial property and plots. The Company has furtherinfused Rs.1500 lakhs by way of equity share capital during the period under review. Ason March 31 2021 its paid up capital stood at Rs.9500 lakhs.

3. Satin Finserv Limited (SFL) - The Company was incorporated on August 102018 as Wholly Owned Subsidiary. It is RBI registered Non-Deposit taking SystemicallyImportant Non- Banking Finance Company. SFL is engaged in providing business loans tomicro small and medium scale enterprises and to individuals. Further it is also engagedin providing corporate loans. As on March 31 2021 its paid up capital stood at Rs.10250lakhs.

Business Highlights of Taraashna Financial Services

Limited

Taraashna Financial Services Limited (TFSL) has achieved a gross turnover ofRs.5932.77 lakhs during the year mainly from business correspondent activity (againsttotal gross turnover of Rs.6977.29 lakhs during the previous year). Disbursement for2020-21 is Rs.43908 lakhs as against Rs.74090 lakhs in 2019-20 a decrease of 41%. ItsNet-worth stood at Rs.4584.69 lakhs as at March 31 2021. TFSL has 3.91 lakhs uniqueactive customers as at March 31 2021 and Cost of Funds for 2020-21 at 13.75% same as in2019-20. TFSL has partnered with seven (7) sectoral banks and three (3) NBFCs and hasreceived the income from all the ten Principal Partners during the 2020-21.

The Board of your Company can see bright future of TFSL in long run.

Business Highlights of Satin Housing Finance limited

Satin Housing Finance Limited (SHFL) wholly owned subsidiary's net worth stood atRs.9324.43 lakhs for the year ended March 31 2021. As on that date regulatory Capital toRisk Assets Ratio (CRAR) was 90.16% which is well above the regulatory requirement of 14%.Further during the year National Hosing Board sanctioned Rs.11 lakhs under refinancefacility to Housing Finance Company. SHFL's total income during the year ended March 312021 is Rs.2957.30 lakhs as compared to previous year ended March 31 2020 is Rs.2099.21lakhs a growth of 41% and earned net profit after tax during the year ended March 312021 of Rs.137.27 lakhs as compared to net loss during previous year ended March 31 2020of Rs.94.53 lakhs.

The Board of your Company is highly optimistic for bright future of SHFL in the yearsto come.

Business Highlights of Satin Finserv limited

Satin Finserv Limited ("SFL") wholly owned subsidiary's net worth stood atRs.10646.14 lakhs as on March 31 2021. The Capital to Risk Asset ratio in terms ofregulatory requirement is

80.23% which is well above the regulatory requirement of 15%. During the year underreview SFL has Disbursed Loans of Rs.6129 lakhs and thereby achieved AUM of Rs.13073lakhs. SFL reported Total Income during the year ended March 31 2021 is Rs.2480 lakhsand net profit after tax ofRs.470 lakhs. The Board of your Company can see a positiveoutlook of SFL in the years to come.

Consolidated Financial Statements

In accordance with Section 129(3) of the Companies Act 2013 and Regulation 34(2) ofSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the ConsolidatedFinancial Statements of the Companyincludingthefinancial details of all the subsidiarycompanies forms part of the Annual Report. The Consolidated Financial Statements havebeen prepared in accordance with the provisions of Indian Accounting Standards issued bythe Institute of 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 theCompany has neither any Associates nor any Joint Ventures as on March 31 2021.

DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

As on March 31 2021 the Board of Directors of your Company consist of 8 Directors.Their details are as follows:

SI. No. Name of Directors Category
1 Mr. Harvinder Pal Singh Executive Promoter Director
2 Mr. Satvinder Singh Non-Executive Promoter Director
3 Mr. Sundeep Kumar Mehta Non-Executive Independent Director
4 Mrs. Sangeeta Khorana Non-Executive Woman Independent Director
5 Mr. Goh Colin Non-Executive Independent Director
6 Mr. Sanjay Kumar Bhatia Non-Executive Independent Director
7 Mr. Christian Bernhard Ramm Non-Executive Nominee Director
8 Mr. Anil Kumar Kalra Non-Executive Independent Director

During the year under review the Non-Executive Directors of the Company had nopecuniary relationship or transactions with the Company other than sitting fees andreimbursement of expenses if any.

The Board was duly constituted in compliance with Regulation 17 of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 during the financial year endedMarch 31 2021 and the changes in the Board during the financial year upto the date ofreport are as follows:

A. Appointment

Mr. Christian Bernhard Ramm

Pursuant to the Agreements between the SCNL Promoters of SCNL & NordicMicrofinance Initiative Fund III KS ("NMI") and subsequent to resignation of Mr.Arthur Sletteberg who was Nominee Director of NMI on the Board of your Company NMI hadrecommended the name of Mr. Christian Bernhard Ramm (DIN: 08096655) as its NomineeDirector (representative of NMI) liable to retire by rotation on the Board of theCompany. The Board on recommendation of Nomination and Remuneration Committee of theCompany has approved his appointment by passing a resolution by circulation on May 302020.

B. Resignation/Cessation

Mr Rajeev Kakar

Mr Rajeev Kakar (DIN: 01888608) Nominee Director of Asian Development Bank on theBoard of the Company had resigned w.e.f. April 30 2020. The Board place on its recordits appreciation for the valuable contribution of Mr Rajeev Kakar in the sustained growthof the Company during his short tenure.

Mr Arthur Sletteberg

Mr Arthur Sletteberg (DIN: 07123647) Nominee Director of NMI on the Board of theCompany had resigned w.e.f May 30 2020. The Board place on its record its appreciationfor the valuable contribution of Mr Arthur Sletteberg in the sustained growth of theCompany during his tenure.

Mr Rakesh Sachdeva

Mr Rakesh Sachdeva (DIN: 00333715) Non-Executive Independent Director of the Companyresigned from the Company w.e.f. November 4 2020. The Board of Directors of the Companyhas appointed Mr Rakesh Sachdeva as Senior President of the Company to strengthen theSenior Management Team. Mr Rakesh Sachdeva has resigned from the position of Non-ExecutiveIndependent Director on the Board of Directors and its committees prior to assuming anexecutive role in the Company.

C. Retirement by rotation

Mr Christian Bernhard Ramm

In accordance with the provisions of Section 152 of the Companies Act 2013 and theArticles of Association of the Company Mr Christian Bernhard Ramm Director of theCompany is liable to retire by rotation this year and being eligible offer himself forre-appointment as Director. Brief resume and other details of Mr Christian Bernhard Rammwho is proposed to be re-appointed as a Director of the Company have been furnished withthe explanatory statement to the notice of the ensuing Annual General Meeting.

D. Key Managerial Personnel

As on March 31 2021 Mr Harvinder Pal Singh Chairman cum Managing Director Mr RakeshSachdeva Chief Financial Officer and Mr Adhish Swaroop Company Secretary &Compliance Officer Personnel of your Company in accordance with the provisions of Sections2(51) and 203 of the Companies Act 2013 read with Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014. The present term of Mr Harvinder Pal Singh asChairman cum Managing Director of the Company shall expire on September 30 2025.

During the year under review Mr Rakesh Sachdeva was appointed as Chief FinancialOfficer and Key Managerial Personnel of the Company w.e.f. December 13 2020 in place ofMr Krishan Gopal who had resigned w.e.f. December 12 2020 (close of business hours).Further Mr Vipul Sharma was appointed as Company Secretary & Compliance Officer andKey Managerial Personnel of the Company w.e.f. May 12 2021 in place of Mr Adhish Swaroopwho had resigned w.e.f. May 11 2021 (close of business hours).

Meetings of the Board

During the period under review 10 (Ten) Board Meetings were held the detail of thesame has been included in the Corporate Governance Report which forms part of the AnnualReport.

PERFORMANCE EVAlUATION OF BOARD COMMITTEES

AND DIRECTORS

Pursuant to the provisions of Section 178 of the Companies Act 2013 and Regulation17(10) read with Part D of Schedule II of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 ("Listing Regulations") the Nominationand Remuneration Committee and the Board of Directors have formulated a policy forperformance evaluation (same is covered under the Nomination and Remuneration Policy ofthe Company) of its own performance of various mandatory Committees of the Board and ofthe individual Directors. Further SEBI vide its circular (Ref. no. SEBI/HO/CFD/CMD/CIR/P/2017/004) dated January 5 2017 issued a guidance note on Board Evaluation forlisted companies. In view of the same and in terms of Board approved Nomination &Remuneration Policy the Independent Directors in their separate meeting held on February24 2021 under Regulation 25(4) of the Listing Regulations and Schedule IV of theCompanies Act 2013 had:

(i) reviewed the performance of Non-Independent Directors and the Board as a whole;

(ii) reviewed the performance of the Chairperson of the Company taking into accountthe views of executive and non-executive Directors; and

(iii) assessed the quality quantity and time-lines of flow of information between theCompany management and the Board that was necessary for the Board to effectively andreasonably performare their duties. KeyManagerial Further in terms of theprovisions of Regulation 19(4) read with Part D of Schedule II of the Listing Regulationsand Section 178 of the Companies Act 2013 the performance evaluation process of all theIndependent and Non-Independent Directors of the Company was carried out by the Nominationand Remuneration Committee in its meeting held on March 12 2021.

Further in terms of Regulations 17(10) of the Listing Regulations and Schedule IV ofthe Companies Act 2013 the Board of Directors also in their meeting held March 26 2021carried out the performance evaluation of the Independent Directors (excluding theDirector being evaluated) and that of its Committees.

The entire performance evaluation process was completed to the satisfaction of Board.

STATEMENT ON DECLARATION "CERTIFICATE OF INDEPENDENCE" U/S 149 (6) FROMINDEPENDENT DIRECTORS

The Board has Independent Directors and there is an 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 SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.

COMPLIANCE WITH SECRETARIAL STANDARDS

The Company has devised proper systems to ensure compliance with the provisions of allapplicable Secretarial Standards issued by the Institute of Company Secretaries of Indiaand that such systems are adequate and operating effectively.

DIRECTORS' RESPONSIBIlITY STATEMENT

Pursuant to Section 134 (5) of the Companies Act 2013 the Board of Directors of theCompany to the best of its knowledge and ability hereby confirm that: 1. in thepreparation of the annual accounts for the financial year ended March 31 2021 theapplicable accounting standards had been followed along with proper explanation relatingto material departures; 2. they have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as on March 31 2021 andof the profit and loss of the Company for the year ended March 31 2021; 3. they havetaken proper and sufficientcare for the maintenance of adequate accounting records inaccordance with the provisions of this Act for safeguarding the assets of the Company andfor preventing and detecting fraud and other irregularities; 4. they have prepared theannual accounts for financial year ended March 31 2021 on a going concern basis;

5. they have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and were operating effectively duringthe financial year ended March 31 2021; and 6. they have devised proper systems to ensurecompliance with the provisions of all applicable laws and that such systems were adequateand operating effectively during the financial year ended March 31 2021.

INFORMATION ON MATERIAl ORDERS PASSED BY THE REGUlATORS OR COURTS OR TRIBUNAl

During the period under review there were no significant and material orders passed bythe regulators or courts or tribunals impacting the going concern status of the Companyand its operations in future.

RELATED PARTY TRANSACTIONS

The Company has put in place a policy for Related Party Transactions ("RPTPolicy") which has been approved by the Board of Directors. The Policy provides foridentification necessary approvals by the Audit Committee / Board reporting anddisclosure requirements in compliance with the requirements of the Companies Act 2013 andthe SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. Alltransactions entered by the Company during the financial year with related parties were onarms' length basis and in the ordinary course of business or in absence of any criteriaapproval was obtained as per the applicable provisions and RPT Policy of the Company. Allsuch RPTs were placed before the Audit Committee / Board for approval wherever applicable.The Audit Committee reviews all RPTs periodically. During the year under review yourCompany has not entered into any contracts/ arrangement / transaction with related partieswhich could be considered material in accordance with Regulation 23 of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 and the policy of the Companyon materiality of RPTs. The policy for determining material subsidiary materiality ofRPTs and dealing with RPTs as approved by the Board may be accessed on the website of theCompany and the web-link of the same ishttps://satincreditcare.com/wp-content/uploads/2019/10/ Materiality-ploicy.pdf. All RPTsentered into during the Financial Year 2020-21 were in the ordinary course of business andon an arm's length basis. No material RPTs were entered into during the Financial Year2020-21 by the Company as defined in the Policy on Materiality of Related PartyTransactions and Dealing with Related Party Transactions. Accordingly the disclosure ofRPTs as required under Section 134(3)(h) of the Act in Form AOC-2 is not applicable.Further details of Related Party Transactions as required to be disclosed as per IndianAccounting Standard24 year "Related Party Disclosures" specified under Section133 of the Companies Act 2013 are given in the Notes to the Financial Statements.

Furtherance to this the remuneration paid to Mr Harvinder Pal Singh Chairman cumManaging Director and sitting fee paid to non-executive Directors (other than Investor'snominee) for each Board/Committee meeting(s) attended shown under Related partydisclosures segment under "Notes to the account" of Balance Sheet in terms ofIndian Accounting Standard - 24 issued by The Institute of Chartered Accountants of India.

AUDITORS & THEIR REPORTS Statutory Auditors & their Reports:

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 2017-18) till the conclusion of the thirtysecond AGM (for 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. The Auditors' Reports for thefinancial year 2020-21 does not contain any qualification reservation adverse remark ordisclaimer. Further there were no instances of any fraud reported by the StatutoryAuditor to the Board pursuant to Section 143(12) of the Companies Act 2013.

RBI has issued Guidelines for appointment of Statutory Central Auditor (SCA)/ StatutoryAuditor (SAs) of Commercial Banks (excluding RRBs) UCBs and NBFCs (including HFCs) videits circular No. RBI/2021-22/25 Ref. No DoS.CO.ARG/ SEC.01/08.91.001/2021-22 dated April27 2021. The Company will comply with the said guidelines in due course. The Board hasplaced on record its sincere appreciation for the services rendered by M/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 andbased on the recommendation of the Audit Committee the Board of Directors of the Companyhas appointed M/s S. Behera & Co. Company Secretaries (ICSI PCS Registration No. 5980)as the Secretarial Auditors of the -21 in its meeting dated Companyforthe financial

June 15 2020. The Company provided all the assistance and the facilities to theSecretarial Auditors for conducting the Secretarial Audit. Secretarial Audit Report asprovided by M/s S. Behera & Co. Company Secretaries is also annexed to this Reportin the prescribed Form MR-3 as Annexure - I. The Secretarial Audit Report does notcontain any qualification reservation adverse remark or disclaimer.

The Board has placed on record its sincere appreciation for the services rendered byM/s S. Behera & Co. Company Secretaries as Secretarial Auditors of the Company.

Reporting of Frauds by Auditors

During the period under review neither the Statutory Auditors nor the SecretarialAuditors have reported to the Audit Committee/ Board or Central Government any instancesof material fraud in the Companybyitsofficersor employees under Section 143(12) of theCompanies Act 2013. However few instances of misappropriation including embezzlement ofcash by the employees amounting to Rs.117.47 lakhs. The Company has terminated theservices of such employees and also initiated legal action against such employees. TheCompany has recovered Rs.12.67 lakhs from 20 employees.

AUDIT COMMITTEE

The Company has an Audit Committee constituted in accordance with the provisions ofSection 177 of the Companies Act 2013 RBI Guidelines and Regulation 18 of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015. All the members of theCommittee have expertise in finance and have knowledge of accounting and financialmanagement. The scope of the activities of the Audit Committee as set out in Regulation 18of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 and read withSection 177 of the Companies Act 2013 and other applicable laws are approved by Board ofDirectors of the Company. The composition of the Audit Committee and the details ofmeetings attended by the Committee members are provided in Corporate Governance Reportwhich forms part of the Annual Report.

CORPORATE SOCIAl RESPONSIBIlITY COMMITTEE

Your Company has a vision to drive ‘holistic empowerment' of the community andcarries CSR initiatives through partnering with a trust/ foundation qualified toundertake CSR activities in accordance with Schedule VII of the Companies Act 2013(includes amendments thereto). Sustainability and social responsibility are an integralelement of corporate strategy of the Company. In compliance with Section 135 of theCompanies Act 2013 read with Rules made thereunder and as amended from time to time theCompany has established the Corporate Social Responsibility Committee (CSR Committee) andthe composition function and details of meetings attended by the Committee Members areprovided in the Corporate Governance Report.

The Board adopted the CSR Policy formulated and recommended by the CSR Committee andthe same is available at https://satincreditcare.com/wp-content/uploads/2021/03/CSR-Policy-Version-3-01.03.2021.pdf During the period under review the Company had spentCSR expenditure of Rs.585.00 lakhs and based on the recommendation of CSR Committee theBoard of Directors vide Circular Resolutions dated January 8 2021 March 1 2021 andMarch 17 2021 approved the CSR expenditure for the financial year 2021-22. As per therequirement of Rules of the Companies (Corporate Social Responsibility Policy) AmendmentRules 2021 the Annual Report on CSR is annexed as Annexure - II to this report andthe same is posted on the website of the Company i.e. www.satincreditcare.com.

E-VOTING

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 ofthe SEBI (Listing Obligations and Disclosure Requirements) Regulation 2015 the Companyhas provided e-voting facility to its members in respect of all member's resolutions tobe passed 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. The Company has signed necessary agreements with National SecuritiesDepository Limited and Central Depository Services (India) Limited to facilitate e-votingfor member's approval in their general meetings or through postal ballots.

REGISTER E-MAIL ADDRESS

To contribute towards a greener environment the Company again proposes to senddocuments like general meeting notices/other notices annual report audited financialstatements boards' report auditors' report or any other document to members inelectronic form at the e-mail address provided by them and/or available to the Company bythe Depositories. Members who have not yet registered their e-mail address (includingthose who wishes to change their already registered e-mail address) may get the sameregistered/updated either with his / her depository participants or by writing to theCompany / RTA.

EMPLOYEES STOCK OPTION PLAN

Pursuant to the approval accorded by members at their Annual General Meeting held onJuly 6 2017 the Nomination and Remuneration Committee (NRC) of the Company formulated anew scheme ‘Satin Employee Stock Option Scheme 2017' (ESOS 2017) in accordance withthe Securities and Exchange Board of India (Share Based Employee Benefits) Regulations2014. ESOS is applicable to all permanent and full-time employees (as defined in thePlan) excluding promoters of the Company. The eligibility of employees to receive grantsunder the Plan has to be decided by NRC from time to time at its sole discretion. Vestingof the options shall take place in the manner determined by NRC at the time of grantprovided the vesting period. Vesting of options shall be subject to the condition that theGrantee shall be in continuous employment with the Company and such other conditions asprovided under ESOS 2017. The Exercise Price of each grant is determined by NRC at thetime of grant. Presently stock options have been granted or shares have been issued underthe Satin Employee Stock Option Scheme 2017 (ESOS 2017).

Details of Options Granted Vested and Exercise of Options

I. ESOS 2009: ESOS 2009 scheme was repealed in terms of Resolution passed by theShareholders at their meeting held on July 6 2017.

II. ESOS 2017:

Date of Grant of Options No of Options Granted Vesting Date Vested Option No of Options Exercised
145200 August 14 2018 21400 12200
August 14 2017 August 14 2019 15800 13500
August 14 2020 11400 -
May 30 2018 226600 May 30 2019 105050 20950
May 30 2020 96850 -

A. Relevant disclosures in terms of the ‘Guidance note on accounting for employeeshare-based payments' issued by ICAI or any other relevant accounting standards asprescribed from time to time.

The disclosures are provided in the notes to the Standalone financial statements of theCompany for the year ended March 31 2021.

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.

Rs.(2.19) per share.

C. Details related to ESOS 2017

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

SI. No. Particular Satin ESOP 2009* Satin ESOP I 2010* Satin ESOP II 2010* Satin ESOS Scheme 2017
a) Date of shareholders' approval June 1 2009 March 26 2010 December 15 2010 July 6 2017
b) Total number of options approved under ESOS 425000 100000 150000 361400 and such other invested options under existing ESOP Schemes
c) 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.
d) Exercise price or pricing formula Rs.20 being the Fair Value of the shares of the Company (Computed on the basis of Audited result 2008-09). Rs.22 being the Fair Value of the shares of the Company. (Computed on the basis of Audited result 2009-10) Rs.25 being the Fair Value of the shares of the Company. (Computed on the basis of Audited result 2009-10) Nomination and Remuneration Committee is free to determine the exercise price based on Market Price
e) Maximum term of options granted 3 Years 3 Years 3 Years 3 years and 2 years or as the Committee may deem fit.
f) Source of shares (primary secondary or combination) Primary Primary Primary Primary
g) 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

 

*The said Schemes had been repealed vide Shareholders resolution dated July 6 2017

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

(iii) As the Company has opted for expensing of the options using the fair value of theoptions

Difference between the employee compensation cost so computed and the employeecompensation cost that shall have been recognized if it had used the fair value:NotApplicable The impact of this difference on profits and on EPS of the Company:NotApplicable

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

Particulars Satin ESOS
Scheme 2017
Number of options outstanding at the beginning of the period 149150
Number of options granted during the year NA
Number of options forfeited / lapsed during the year 120500
Number of options vested during the year 108250
Number of options exercised during the year -
Exercise Price (In `) 160
Number of shares arising as a result of exercise of options -
Money realized by exercise of options (Rs.in lakhs) if scheme is implemented directly by the -
Company
Loan repaid (Rs.in lakhs)by the Trust during the year from exercise price received -
Number of options outstanding at the end of the year 269650
Number of options exercisable at the end of the year 79300

(v) Weighted-average exercise prices ("WAEP") and weighted-average fairvalues ("WAFV") of options:

a. Weighted-average exercise prices: when the exercise price is equal/exceeds tomarket price: Not Applicable when the exercise price is less than market price:ESOS2017- Rs.278.20

b. Weighted-average fair values: when the exercise price is equal/exceeds to marketprice: Not Applicable when the exercise price is less than market price: ESOS2017- Rs.166.98 and Rs.254.54

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

a. Senior Managerial Personnel: Nil

b. Any other employee who receives a grant in any one year of option amounting to 5% ormore of option granted during that year: Nil

c. Identified employees who were granted an option during any one year equal to orexceeding 1% of the issued capital (excluding outstanding warrants and conversions) of theCompany at the time of grant: Nil

(vii) A description of the method and significant assumptions used during the year toestimate the fair value of options and RSUs including the following information: Method:Black Scholes a. Significant Assumptions used to estimate the fair value are asfollows:

1. Expected volatility

2. Risk free interest rate

3. Returns are normally distributed

4. Markets are perfectly liquid

Particulars

Grant 1 ESOS 2017

Grant 2 ESOS 2017

1st tranche of vesting 2nd tranche of vesting 3rd tranche of vesting 1st tranche of vesting 2nd tranche of vesting
Fair market value of option on the date of grant 267.38 267.38 267.38 386.65 386.65
Exercise Price Rs.160.00 Rs.160.00 Rs.160.00 Rs.160.00 Rs.160.00
Expected Volatility 55.86% 62.90% 62.90% 45.31% 53.94%
Expected Life 3.08 1.50 2.50 3.50 1.50
Expected Dividend Nil
Risk Free Interest Rate 6.35% 6.40% 6.45% 7.53% 7.66%
Any other inputs to the model N.A.

b. The method used and assumptions made to incorporate the effects of expected earlyexercise. Not Applicable as the Scheme does not provide for early exercise.

c. How expected volatility was determined including an explanation of the extent towhich expected volatility was based on historical volatility; and The expected volatilityreflects the assumptions that the historical volatility over a period similar to the lifeoptions is indicative of future trends which may not necessarily be the actual outcome.

d. Whether and how any other features of the Options granted were incorporated into themeasurement of fair value such as a market condition: The closing price of the Company'sshare on NSE on the date previous to the grant date.

In view of accumulated losses of previous years the Company has not declared anydividend. Accordingly no adjustment is made to the aforesaid closing price for theexpected dividend yield over the expected life of the Options.

The expected life of the Options is based on historical data and current expectationsand is not necessarily indicative of exercise patterns that may occur.

The expected volatility reflects the assumptions that the historical volatility over aperiod similar to the life Options is indicative of future trends which may notnecessarily be the actual outcome.

D. Details of Employee Stock Purchase Scheme: Not applicable

E. Details Related to Stock Appreciation Rights (SAR): Not applicable

F. Details related to General Employee Benefit Scheme / Retirement Benefit Scheme:Notapplicable

G. Details related to trust:

SI. No. Particular Details
1. General information on all schemes
a) Name of the Trust SCNL Employee Welfare Trust
b) Details of Trustee Mr Subir Roy Chowdhury
Mr Amit Kumar Gupta
Mrs Urvashi Tyagi
Mrs Aditi Singh
c) Amount of loan disbursed by Company / any Company in the group during the year Nil
d) Amount of loan outstanding (repayable to Company / any Company in the group) as at the end of the year Rs.7969000
e) Any other contribution made to the Trust during the year Nil
2. Brief details of transactions in shares by the Trust
a) Number of shares held at the beginning of the year; 348950 fully paid equity shares of ` 10 each
b) Number of shares acquired during the year through Primary Issuance*:
(i) primary issuance (ii) secondary acquisition also as a percentage of paid up equity capital as at the end of the previous financial year along with information on weighted average cost of acquisition per share; 133996 partly paid equity shares of Rs.10 each (Rs.7.50 paid up) issued on Rights Basis at the issue price of Rs.60 per share (as on March 31 2021 Rs.45 per share has been paid which includes premium of Rs.37.50 per share)
c) Number of shares transferred to the employees / sold along with the purpose thereof; Secondary Acquisition: Nil
Nil
d) Number of shares held at the end of the year. 348950 fully paid equity shares of Rs.10 each 133996 partly paid equity shares of Rs.10 each (Rs.7.50 Paid up)
3. In case of secondary acquisition of shares by the
Trust
Held at the beginning of the year Nil
Acquired during the year Nil
Sold during the year Nil
Transferred to the employees during the year Nil
Held at the end of the year Nil

*During the year under review the Company has come out with the Rights Issue ofpartly paid up equity shares ("Rights Equity Share") for the existingshareholders of the Company as on record date i.e. August 5 2020. Further pursuant tothe ESOP Scheme 2017 the number of equity shares to be issued upon exercising of thevested options shall be adjusted/enhanced in accordance with the corporate action inbetween. Accordingly Employee who exercises the vested option (vested on or before recorddate of the rights issue) will also be entitled to apply for the Rights Equity Shares inthe ratio of 48 Rights Equity Share for every 125 Equity Shares issued on exercise ofvested options. Accordingly trust has applied in the rights issue to adjust the number ofshares to be issued on exercise of vested options. Thus employee can apply for RightsEquity Share only after exercising corresponding options and will be entitled on the basisof Rights Issue Ratio. Rights Equity Share will be issued to employee at par i.e. theprice at which the Rights Equity Share were acquired by the trust. As on March 31 2021Employee Welfare Trust has paid Rs.45 per Rights Equity Share.

ESOS Schemes Compliance Status

ESOS 2017 is in compliance with Securities and Exchange Board of India (Share BasedEmployee Benefits) Regulations 2014 (SEBI ESOS Regulations) and the Companies Act 2013.The Company has received a certificate from the Statutory Auditors of the Companycertifying that ESOS 2017 Scheme of the Company is being implemented in accordance withthe SEBI ESOS Regulations and is in accordance with the resolution passed by the Membersof the Company at a general meeting. The ESOS Schemes are implemented in accordance withIndian Accounting Standard issued by 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.

POLICIES

Vigil Mechanism/Whistle Blower Policy:

The Company in accordance with the provisions of Section 177(9) of Companies Act 2013read with Rule 7 of Companies (Meetings of Board and its Powers) Rules 2014 andRegulation 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015("Listing Regulations") has established a vigil mechanism through Whistle BlowerPolicy to deal with instances of unethical behavior actual or suspected fraud orviolation of Company's code of conduct or ethics policy and details of the same areexplained in the Corporate Governance Report. The Policy provides an adequate safeguardagainst victimization to the Whistle Blower and enables them to raise concerns and alsoprovides an option of direct access to the Chairman of Audit Committee. During the periodunder review none of the personnel have been denied access to the Chairman of the AuditCommittee. During the Financial Year 2020-21 no complaint was received.

The Whistle Blower Policy is also available at https://satincreditcare.com/wp-content/uploads/2019/05/Whistle-blower-Policy.pdf.

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 SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 and as amended fromtimetotimeandRules/Regulations/Guidelines/Notifications issued by Securities and ExchangeBoard of India (SEBI) from time to time. The policy on nomination and remuneration wasmodified and approved by the Board of Directors vide its meeting dated October 14 2019.The Nomination and Remuneration Policy is also available at https://satincreditcare.com/wp-content/uploads/2019/10/NRC-ver-2.2.pdf. Further the Company periodically conductsfamiliarization program for the independent Directors their roles rightsresponsibilities nature of the industry in which the Company operates and its businessmodel etc. The details of such familiarization programs are disclosed on the Company'swebsite and the web-link of the same ishttps://satincreditcare.com/policies-practices/#1611050197222-fdc295ab-84a2

Risk Management:

The Board of Directors of the Company has formed a Risk Management Committee to frameimplement and monitor the risk management plan for the Company. The Committee isresponsible for monitoring and reviewing the risk management plan and ensuring itseffectiveness. The Audit Committee has additional oversight in the area of financial risksand controls. The major risks identified by the businesses and functions aresystematically addressed through mitigating actions on a continuing basis. The developmentand implementation of risk management policy has been covered in the Management Discussionand Analysis which forms part of this report.

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 (forms part of HR Manual of the Company) on August 14 2017(while HR Manual has been last reviewed/ revised by the Board of Directors in theirmeeting held on November 6 2019) to prohibit prevent or deter any acts of sexualharassment at workplace and to provide the procedure for the redressal of complaintspertaining to sexual harassment thereby providing a safe and healthy work environment.Further during the calendar year 2020 following is the summary of complaints receivedand disposed off: No. of complaints received : 2 No. of complaints disposed off : 2

PARTICULARS OF EMPLOYEES

In terms of Section 197(12) of the Companies Act 2013 read with sub-rules (1) (2) and(3) of Rule 5 of the Companies (Appointment & Remuneration of Managerial Personnel)Rules 2014 the necessary disclosures are annexed as Annexure III with thisreport.

LISTING WITH STOCK EXCHANGES

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

Further the Company has also got its Non Convertable Debentures Listed on BSE.

ANNUAL RETURN

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act the Annual Return ason March 31 2021 is available on the Company's website on www.satincreditcare.com.

PARTICULARS ON CONSERVATION OF ENERGY

TECHNOlOGY ABSORPTION AND FOREIGN EXCHANGE

EARNINGS AND OUTGO

The information pertaining to conservation of energy technology absorption foreignexchange earnings and outgo as required under clause (m) of sub-section (3) of Section 134of the Companies Act 2013 read with sub-rule (3) of Rule 8 of the Companies (Accounts)Rules 2014 is annexed herewith as Annexure - IV and forms part of this Directors' Report.

DISCLOSURES UNDER THE INSOLVENCY AND

BANKRUPTCY CODE 2016

Your Company has neither filed any application nor any proceeding pending under theInsolvency and Bankruptcy Code 2016 during the reporting year hence no disclosure isrequired under this section. Further there are no details required to be reported withregards to difference between amount of the valuation done at the time of one timesettlement and the valuation done while taking loan from the Banks or FinancialInstitutions as your Company has not done any settlement with any Bank or FinancialInstitutions since its inception.

ACKNOWLEDGEMENTS

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

For and on behalf of the Board of Directors

Satin Creditcare Network limited

Harvinder Pal Singh
Place: Gurugram Chairman Cum Managing Director
Date: June 14 2021 DIN: 00333754

.