You are here » Home » Companies » Company Overview » SBI Cards & Payment Services Ltd

SBI Cards & Payment Services Ltd.

BSE: 543066 Sector: Financials
NSE: SBICARD ISIN Code: INE018E01016
BSE 00:00 | 26 Nov 956.00 -47.05
(-4.69%)
OPEN

998.00

HIGH

998.00

LOW

951.10

NSE 00:00 | 26 Nov 955.90 -47.35
(-4.72%)
OPEN

990.00

HIGH

995.00

LOW

951.00

OPEN 998.00
PREVIOUS CLOSE 1003.05
VOLUME 143774
52-Week high 1164.65
52-Week low 793.10
P/E 87.15
Mkt Cap.(Rs cr) 90,127
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 998.00
CLOSE 1003.05
VOLUME 143774
52-Week high 1164.65
52-Week low 793.10
P/E 87.15
Mkt Cap.(Rs cr) 90,127
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

SBI Cards & Payment Services Ltd. (SBICARD) - Director Report

Company director report

Dear Members

Your Directors are pleased to present the Twenty Third (23rd) Annual Report along withthe Audited Annual Accounts of your Company for the financial year ended March 31 2021.

FINANCIAL SUMMARY STATE OF COMPANY'S AFFAIRS AND BUSINESS PERFORMANCE

The financial performance of the company for the financial year ended March 31 2021and for the previous year is summarized below: –

(Rs In Crores)
S. No Particulars 2020-21 2019-20
1 Income 9713.58 9752.29
2 Finance Cost 1043.40 1300.93
3 Operating & Other Expenses 7223.19 6617.92
4 Depreciation and Amortization 123.26 103.80
5 Profit /(Loss) Before Tax 1323.73 1729.64
6 Tax 339.21 484.82
7 Profit /(Loss) After Tax 984.52 1244.82
8 Add: Opening surplus in statement of profit and loss 2719.51 1726.65
9 Add: Transfer from other comprehensive income 5.55 (3.00)
10 Less: Transfer to Statutory Reserve 196.90 248.96
11 Less: Interim equity dividend (amount Rs 1 per share) 93.90 -
12 Balance of P&L Account C/F to Balance Sheet 3418.78 2719.51

FY21 was predominated by COVID-19 pandemic and resulted in global economic downturn.The pandemic led to government mandated lockdowns which disrupted the growth momentum ofIndian economy. Subsequently as the lockdowns eased gradually the environment continuedto remain challenging and uncertain. SBI Card effectively navigated the challenges byfollowing the below aspects:

Ensuring business continuity: SBI Card assessed and focused onbusiness continuity from the very initial onset of Covid-19 and lockdown. Company'sinvestment in technology over the past few years enabled smooth transition to a remotework environment during lockdowns and disruptions.

Enhancing and utilizing digitization: Company focused on building acomplete Digital Journey for Customers across new acquisition onboarding servicing andcollections.

Building and enhancing product mix: SBI Card focused on augmentingits portfolio in the premium segment. During the year Company launched its first card inthe super-premium/ HNI segment AURUM and introduced premium variant of its popularfuel co brand BPCL SBI Card OCTANE. SBI Card entered into partnership with Paytmto launch an array of cards in both mass and affluent segments. SBI Card has been engagingcontinuously with leading digital/Payment platforms and entered into partnerships withGoogle Pay and Jio Pay during the year.

Managing Risks: SBI Card kept a sharp eye on potential risks andtaken measures in accordance. While Company continued to pursue sustainable growth it hascalibrated its risk strategies and strengthened its portfolio monitoring mechanisms andrecalibrated our underwriting models.

The nationwide lockdowns and subsequent restrictions led to disruptions and slowdown innew card acquisitions and also adversely impacted cardholder spends. Post easing of COVIDlock-down there has been a strong business recovery in terms of higher new accountsspends and receivables.

Company's market share on Cards in Force as on March 31 2021 improved to 19.1% asagainst 18.3% as on March 31 2020. Its Cards-in-force grew by 12% YOY toclose at 1.18 Cr as on March 31 2021 as against 1.05 Cr as on March 312020. The market share of cardholder spends improved to 19.4% for FY21 as against 17.9%in FY20 . Cardholder spends in FY21 stood at Rs 122416 Cr as against Rs 130915Cr in FY20 registering a decline of 6% YOY. Cardholder receivables grew by 4%YOY to close at Rs 25114 Cr as on March 31 2021 as against Rs 24141 Cr ason March 31 2020.

In FY21 while SBI Card's total income remained largely flat as compared to FY20 reductions in finance costs led to net revenues growth of 3% YOY. Focus on operatingefficiencies led to 3% decline YOY in operating costs. Earnings before credit costs stoodat Rs 4024 Cr at 10% growth YOY. The credit risk continued to be impacted by themacro-economic variables around us and led to higher credit costs. To cover the Companyfor future credit risks SBI Card created additional provisions of Rs 297 Cr by way ofmanagement overlay over and above the provisions required as per expected credit loss(ECL) model. This led to higher credit costs of 39% YOY and decline in profit after tax.The company achieved Profit after Tax (PAT) of Rs 985 Cr in FY21 as compared to Rs 1245Cr in FY20 .

With consistent efforts of the employees and business partners backed by SBI Card'srobust business model and ethics Company continued to effectively navigate its businessin turbulent times. SBI Card's business fundamentals are robust. Company follows healthyfinancial and corporate governance principles which form its core strength. While theexternal environment continues to be volatile Company is closely monitoring it to managechallenges and leverage opportunities.

The detailed business and financial performance is covered in the Management &Discussions Analysis section of the Annual Report.

REPORT ON PERFORMANCE OF SUBSIDIARIES ASSOCIATES AND JOINT VENTURE COMPANIES

During the year under review the Company did not have any subsidiary associate andjoint venture company.

MATERIAL CHANGES AND COMMITMENTS DURING THE YEAR UNDER REVIEW

Mr. Hardayal Prasad erstwhile Managing Director and Chief Executive Officer of theCompany resigned from the directorship and CEO Position with effect from close of businesshours of July 31 2020. Thereafter Mr. Ashwini Kumar Tewari was appointed as the ManagingDirector and Chief Executive Officer of the Company with effect from August 1 2020.

Further Mr. Ashwini Kumar Tewari erstwhile Managing Director and Chief ExecutiveOfficer of the Company resigned from the directorship and CEO Position with effect fromclose of business hours of January 27 2021. Thereafter Mr. Rama Mohan Rao Amara wasappointed as the Managing Director and Chief Executive Officer of the Company with effectfrom January 30 2021.

During the FY21 the Company had allotted 1568662 Equity Shares of Rs 10/- each tothe eligible employees of the Company pursuant to the exercise of options under the SBICard - Employee Stock Option Plan 2019 (ESOP Scheme 2019) at the exercise price of

H 152.10 per share. Accordingly the paid-up capital of the Company increased from Rs9389567940/-consisting of 938956794 equity shares of Rs 10/- each as on March 312020 to Rs 9405254560/-consisting of 940525456 equity shares of Rs 10/- eachas on March 31 2021. There has been no change in the nature of business during the yearunder review.

MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY BETWEEN THE END OF FINANCIAL YEAR UNDER REVIEW AND THE DATE OF THE REPORT

There were no material changes and commitments affecting the financial position of theCompany which occurred between the end of the financial year under review and the date ofthe report.

MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT

Management's Discussion and Analysis Report for the year under review as stipulatedunder the Master Direction - Non-Banking Financial Company - Systemically ImportantNon-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions 2016updated as on February 17 2020 and SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 is presented in a separate section forming part of the Annual Report.

DIVIDEND

Due to COVID 19 impact and the uncertainty caused by it your Company has considered itprudent to not propose dividend for the financial year ended March 31 2021.

DIVIDEND DISTRIBUTION POLICY

In terms of Regulation 43A of Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 ("ListingRegulations") the Dividend Distribution Policy of the Company is available onCompany's website at www.sbicard.com. The dividend distribution policy forms a part ofthis report.

RESERVES

During the year ended March 31 2021 the Company appropriated Rs 196.90 Crores towardsthe Statutory Reserves (H 248.96 Crores in FY20 ) in accordance with Section 45-IC of theReserve Bank of India Act 1934.

Status of other reserves and shares pending allotment (stated as other equity infinancial statements) as on March 31 2021 is as follows:

Other Equity (Rs in Crores)
Particulars 2020-21 2019-20
Capital Redemption Reserve 3.40 3.40
General Reserve 13.08 12.99
Statutory Reserves 1011.85 814.95
Capital Reserve (on account of amalgamation) (71.51) (71.51)
Securities Premium Reserve 935.19 904.74
Retained Earnings 3418.78 2719.51
Share application money pending allotment 2.92 -
Share Options outstanding account 40.50 18.18
Equity investment - OCI 7.29
Total 5361.50 4402.26

PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES

Particulars of contracts or arrangements with related parties referred to in Section188(1) of the Companies Act 2013 and in compliance with the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 in the prescribed Form AOC-2 is appended as Annexure1 to the Board's Report. The Related Party Transactions Policy of the Company isavailable on the website of the Company and can be accessed at www.sbicard.com.

Pursuant to the provisions of Regulation 23 (4) of Listing Regulations necessaryapproval of the Members was obtained for material related party transaction(s).

CAPITAL ADEQUACY

As per the Reserve Bank of India norms applicable for NBFC the company is required tokeep a Capital Adequacy Ratio (CAR) of 15%. Company's CAR is well above the regulatoryrequirement at 24.8% with 20.9% as Tier 1 Capital as of March 31 2021

DEBENTURES

ISSUE OF DEBENTURES

During the FY21 the Company has raised money by issue and allotment of followingdebentures:

• Raised Rs 400 Crores by issue and allotment of 4000 Fixed Rate UnsecuredRated Taxable Redeemable Senior Listed Non-Convertible Debentures of Rs 1000000/-each.

• Raised Rs 500 Crores by issue and allotment of 5000 Fixed Rate UnsecuredRated Taxable Redeemable Senior Listed Non-Convertible Debentures of Rs 1000000/-each.

• Raised Rs 450 Crores by issue and allotment of 4500 Fixed Rate UnsecuredRated Taxable Redeemable Senior Listed Non-Convertible Debentures of Rs 1000000/-each.

• Raised Rs 550 Crores by issue and allotment of 5500 Fixed Rate UnsecuredRated Taxable Redeemable Senior Listed Non-Convertible Debentures of Rs 1000000/-each.

REDEMPTION OF DEBENTURES

During the Financial Year 2020-21 following Non-Convertible Debentures were dulyredeemed on due date:

• Series 09 5000 Unsecured Non-Convertible Debentures of Rs 1000000/-each.

• Series 11 4000 Unsecured Non-Convertible Debentures of Rs 1000000/-each.

• Series 12 5000 Unsecured Non-Convertible Debentures of Rs 1000000/-each.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF COMPANIES ACT2013

The Company being a non-banking financial company registered with the RBI and engagedin the business of issuing credit cards is exempt from complying with certain provisionsof section 186 of the Companies Act 2013. Other necessary details as required under theSection 186 of the Companies Act 2013 are furnished in the financial statements of theCompany.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Composition of the Board of Directors ("Board") is in terms of the CompaniesAct 2013 the RBI Directions and SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015. Board consists of Nine Directors namely Mr. Dinesh Kumar KharaChairman Non-Executive Director (Nominee of SBI); Mr. Ashwini Kumar Tewari Non-ExecutiveDirector (Nominee of SBI); Mr. Rama Mohan Rao Amara Managing Director & CEO (Nomineeof SBI); Mr. Mihir Narayan Prasad Mishra Non-Executive Director (Nominee of SBI); Dr.Tejendra Mohan Bhasin Independent Director; Mr. Rajendra Kumar Saraf IndependentDirector; Mr. Dinesh Kumar Mehrotra Independent Director; Ms. Anuradha Shripad NadkarniIndependent Director and Mr. Shriniwas Yeshwant Joshi Independent Director as on the dateof the Report.

During the year under review Mr. Ashwini Kumar Tewari was appointed as ManagingDirector & CEO of the Company w.e.f. August 1 2020 and Mr. Devendra Kumar wasappointed as Non – Executive Director (Nominee of SBI) of the Company w.e.f. August21 2020.

Further during the year under review the Board of Directors of the Company alsoappointed Mr. Shriniwas Yeshwant Joshi as an Additional (Independent) Director of theCompany pursuant to Section 161 of the Companies Act 2013 effective December 4 2020.He has been appointed as an Independent Director for a term of three consecutive yearswith effect from the said date subject to the approval of members of the Company at theGeneral Meeting (GM). Also in terms of the referred Section Mr. Shriniwas Yeshwant Joshiwill hold office as a Director up to the date of the ensuing AGM. The Company has receiveda notice in writing proposing candidature of Mr. Joshi for appointment as a Director atthe ensuing AGM. Appointment of Mr. Joshi as an Independent Director on the Board isrecommended by the Nomination and Remuneration Committee. The Board recommends appointmentof Mr. Shriniwas Yeshwant Joshi as an Independent Director of the Company.

Further Mr. Rama Mohan Rao Amara was appointed as Managing Director & CEO (nomineeof SBI) (DIN: 08951394) of the Company with effect from January 30 2021 for a period oftwo years. Mr. Ashwini Kumar Tewari and Mr. Mihir Narayan Prasad Mishra were appointed asNon – Executive Director (Nominee of SBI) of the Company w.e.f. April 5 2021 andJune 18 2021 respectively.

During the year under review Mr. Hardayal Prasad the then Managing Director & CEOresigned from the directorship and CEO Position owing to his Voluntary retirement fromthe State Bank of India and

Mr. Shree Prakash Singh Non-Executive Non-Independent Director (Nominee of SBI)resigned from the directorship of the Company consequent upon his superannuation from theState Bank of India w.e.f. close of business hours on July 31 2020.

Further Mr. Rajnish Kumar the then Chairman of the Company also resigned from thedirectorship of the Company with effect from the close of business hours of October 62020 owing to completion of his term as the Chairman of the State Bank of India.

Mr. Ashwini Kumar Tewari the then Managing Director & CEO of the Company resignedfrom the directorship and CEO Position of the Company with effect from the close ofbusiness hours of January 27 2021 owing to his appointment as the Managing Director ofState Bank of India.

Mr. Nilesh Shivji Vikamsey Independent Director resigned from the directorship of theCompany with effect from November 5 2020 due to personal reasons.

Mr. Devendra Kumar Non–Executive Director (Nominee of SBI) resigned from thedirectorship of the Company with effect from close of business of June 8 2021 consequentupon change in his responsibilities in the State Bank of India.

Further CA Rover Holdings (CARH) vide its letter dated June 18 2021 had informed theBoard of Directors ("Board") of the Company that its shareholding in the Companyhad reduced to less than 10%. In terms of Article 33(ii)(b) of the Articles of Associationof the Company CARH's right to nominate a director on the Board of the Company being anInvestor Shareholder was subject to its shareholding amounting to at least 10%.Accordingly vide the said letter CARH had also offered to the Board to withdraw thenomination made by it for Mr. Sunil Kaul. The Board of the Company had accepted thewithdrawal of nomination by CARH.

Accordingly Mr. Sunil Kaul (nominated by CARH) (holding DIN: 05102910) resigned fromthe Directorship of the Company w.e.f. June 18 2021.

Your Directors place on record their sincere appreciation for the contribution made byMr. Rajnish Kumar Mr. Hardayal Prasad Mr. Shree Prakash Singh Mr. Nilesh ShivjiVikamsey Mr. Devendra Kumar and Mr. Sunil Kaul during their tenure on the Board of theCompany.

As on March 31 2021 the Company had three Key Managerial Personnel namely Mr. RamaMohan Rao Amara MD and CEO Mr. Nalin Negi CFO and Ms. Payal Mittal Chhabra CompanySecretary. Company Secretary also act as Compliance Officer of the Company for thepurposes of SEBI Stock Exchange and other listing compliances.

CORPORATE SOCIAL RESPONSIBILITY

As a responsible corporate citizen the Company has been undertaking and participatingin the socially important projects in the fields of health education Disaster Management(COVID relief) livelihood and skill enhancement old age home/orphanage and genderequality ensuring environmental sustainability and ecological balance etc. The Companyhas also framed a CSR policy in accordance with the provisions of the Companies Act 2013and rules made thereunder.

The contents of the CSR policy are disclosed on the website of the Company atwww.sbicard.com. The annual report on the CSR activities undertaken by the Company duringthe financial year under review in the prescribed format has been appended herewith as Annexure2.

POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS

Company follows the fit and proper criteria as laid down by RBI Directions and theNomination and Remuneration Policy of the Company framed under Section 178 of theCompanies Act 2013 SEBI Regulations and RBI Circular/Directions for appointment ofDirectors. Nomination and Remuneration Committee of the Board recommends for appointmentof a Director based on the fit and proper criteria Policy and Nomination and RemunerationPolicy of the Company. Further the Nomination and Remuneration Committee is responsibleto ensure ‘fit and proper' status of proposed/ existing directors. The Nomination andRemuneration Policy of the Company along with the changes made therein is available on thewebsite of the Company i.e. www.sbicard.com.

Apart from receiving sitting fees for attending Board and Committee meetings by theeligible Non-executive Directors of the Company and credit card transactions in theordinary course of business there are no pecuniary relationship of the Non-executiveDirectors with the Company.

Closing Balance as on March 31 2021 of the credit cards issued to Directors of theCompany was Rs 0.02 Crores.

DECLARATION OF INDEPENDENCE BY INDEPENDENT DIRECTORS

The Independent Directors on the Board of SBI Cards and Payment Services Limited havegiven declaration that they fulfill the criteria of independence specified in Section 149of the Companies Act 2013 and Regulation 25(8) of the SEBI (LODR) Regulations 2015 thesame has been relied upon by the Company.

AUDITORS AND COMMENTS ON AUDITORS REPORT

During the year under review the office of the Comptroller and Auditor General ofIndia (hereinafter referred to as "CAG") exercising the power conferred undersection 139 of the Companies Act 2013 appointed M/s. S. Ramanand Aiyar & Co.Chartered Accountants (Registration No. 000990N) as the Statutory Auditor of the Companyfor the financial year 2020-21. Statutory Audit was duly done by the referred firm. TheStatutory Auditors' report is self-explanatory in nature and does not require any commentsfrom Directors of the Company.

Also Supplementary Audit of the Company was conducted by Principal Director of AuditIndustry & Corporate Affairs New Delhi in accordance with Section 143 of theCompanies Act 2013. The observations made by the Principal Director of Audit Industry& Corporate Affairs New Delhi in his Audit Report for the Financial Year 2020-21 andBoard explanation to such observations are stated herein below:

A. Cash Flow Statement CAG observation:

Cash Flow from Investing Activities:

Capital expenditure on property plant and equipment- H56.95 crore

The above amount includes an amount of Rs 3.46 crore being amount due to capitalcreditors for purchase of capital goods. As it is a non-cash item it should not have beenconsidered while calculating net cash outflow from capital expenditure on property plantand equipment. Inclusion of non-cash item has resulted in overstatement of Net cash usedin investing activities by Rs 3.46 crore and understatement of net cash generated/ (used)in operating activities by same amount.

Company's Response:

Since capital creditors are part of trade payables Company has been capturing movementin trade payables under cash from operating activity through changes in working capital.However to comply with CAG's observation and for better presentation of financialstatements from the next financial year capital expenditure on Property Plant andequipment would be shown net off capital creditors under the head cash flow from Investingactivities.

B. Comments on disclosure:

CAG observation:

• Company has updated the estimation method of the credit risk classification/staging criteria between Stage

1 2 and 3 (e.g. all borrower's linked accounts are grouped under highest delinquencystage and an account remains in stage 3 till entire over dues are cleared) during 2020-21to recognize the potential risk if any in select segments. Impact due to change inestimation method has resulted in an increase in impairment loss by Rs 91 crore. Howeverthe Company has neither quantified the financial impact of Rs 91 crore nor stated thatestimating the impact is impracticable in future years which resulted in non-compliance toparas 39 and 40 of Ind AS 8 which stipulate that an entity shall disclose the nature andamount of a change in an accounting estimates that has an effect in the current period oris expected to have an effect in future periods. If the amount of the effect in the futureperiod is not disclosed because estimating it is impracticable an entity shall disclosethat fact.

Company's Response:

To comply with Ind AS requirement and CAG's observation necessary disclosure would beprovided with respect to such events in future.

CAG observation:

• The Company has provided Expected Credit Loss (ECL) amounting to Rs 331.71 crorefor the Stage 1 loan. ECL has been calculated by multiplying the Probability of Default(PD) Loss given Default (LGD) and Exposure at Default (EAD). The Company disclosed videnote 37.2.2 (B)(c) that Credit Conversion Factor (CCF) has been applied while calculatingEAD. As per the set formula EAD for Stage 1 loan worked out to Rs 22328 crore. PD andLGD in respect of Retail-unsecured loan was estimated at 2.28 percent and 65.90 percentrespectively. However the Company has adjusted the impact of CCF in the PD which led toincrease of PD to 2.47 percent. This fact has not been disclosed in the said Note.Further 1.52 percentage adopted as conversion factor has also not been disclosed. Hencethe note is deficient.

Company's Response:

To comply with CAG's observation going forward from the next financial year while wewill continue to consider Credit Conversion Factor (CCF) impact for Expected Credit Loss(ECL) calculations Probability of Default (PD) will be shown as per base calculations anddetails of CCF factor and its application shall be appropriately disclosed as footnotebelow ECL calculations in the financial statements.

Further Statutory Auditors of the Company single or joint for the Financial Year2021-22 will be appointed by the Comptroller and Auditor General of India.

SECRETARIAL AUDIT REPORT

Pursuant to the provisions of Section 204 of the Companies Act 2013 the Board ofDirectors appointed M/s. Chandrasekaran Associates Company Secretaries as theSecretarial Auditor of the Company to carry out secretarial audit for the financial year2020-21. The Secretarial Audit Report obtained from M/s. Chandrasekaran Associates;Company Secretaries is enclosed with this report as Annexure 3. The SecretarialAudit Report does not contain any qualification or reservations or adverse remarks.

INSTANCES OF FRAUD IF ANY REPORTED BY THE AUDITORS

During the year under review the Statutory Auditors have not reported any incident offraud to the Audit Committee.

FRAUD REPORTING

Certain instances of customer frauds on the Company primarily relating to fraudulentusage of credit cards issued by the Company have been reported during the FY 2020-21.

The total amount involved in these frauds was Rs 0.98 Crores and the recovery againstthis amount (pertaining to current year as well as the previous years) was Rs 1.11 Crores.

SECRETARIAL STANDARDS

The relevant Secretarial Standards issued by the Institute of Company Secretaries ofIndia (ICSI) related to the Board Meetings and General Meetings have been complied with bythe Company.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION

While the business activity of the Company does not result in any material consumptionof energy still the Company is committed to continue its efforts towards the conservationof energy. Energy conservation and technology updation are a part of the ongoing processesin the Company. Management's Discussion and Analysis Report section covers the Technologyaspect of the business in detail.

FOREIGN EXCHANGE EARNINGS AND OUTGO

During FY 2020-21 the Company incurred foreign currency expense of an amount of Rs313.54 Crores on network other service charges and other expenses (2019-20: Rs 483.24Crores)

The dividend remitted for the FY 2020-21 in foreign currency was Rs NIL (2019-20: RsNIL).

The foreign exchange earnings during the FY 2020-21 were Rs 292.72 Crores(2019-20: Rs 385.17 Crores) Income in foreign currency represents Incentive Income fromnetwork partners.

INTERNAL FINANCIAL CONTROLS

The Board has adopted the policies processes and structure for ensuring the orderlyand efficient conduct of its business with adequate and effective internal financialcontrol across the organization including adherence to the Company's policies thesafeguarding of assets the prevention and detection of frauds and errors the accuracyand completeness of the accounting records and the timely preparation of reliablefinancial disclosures.

Also the Company has an internal audit system commensurate with the size of theCompany and periodic audits of the internal functions and processes of the Company areensured. During the year under review no material or serious observation has beenreceived from the Internal Auditors of the Company for inefficiency or inadequacy of suchcontrols.

The Company is not required to maintain cost records as stated under section 148 of theCompanies Act 2013.

The Company is in compliance with necessary FEMA provisions on downstream investmentand has obtained certificate from Statutory Auditor in this regard.

DISCLOSURE OF ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNAL

No orders have been passed by any Regulator or Court or Tribunal which can have impacton the going concern status and the Company's operations in future.

RISK MANAGEMENT AT SBI CARD

Company has in place a robust and comprehensive Risk Management framework enumeratingrisk based decision making and risk management processes encompassing existing risks newrisks that may have arisen the likelihood and impact of risks and reporting significantchanges adjusting to the risk priorities. Management's Discussion and Analysis Reportsection covers this aspect of the business in detail.

PARTICULARS OF EMPLOYEES

The Directors would like to place on record their sincere appreciation for thecontributions made by employees of the Company at all levels. The ratio of theremuneration of each Director to the median employee's remuneration including otherdetails and the list of top 10 employees in terms of remuneration drawn in terms ofSection 197(12) of the Companies Act 2013 read with Rule 5 of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 are forming part of this report as Annexure4. Other details as required under Section 197(12) of the Companies Act 2013 readwith Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 is available on the website of the Company at www.sbicard. com.

The Annual Report including the financial statements are being sent to the shareholdersexcluding the aforesaid information. Shareholders interested in obtaining this informationmay access the same from the Company's website. In accordance with Section 136 of theCompanies Act 2013 this information is available for inspection by shareholders throughelectronic mode.

PUBLIC DEPOSITS

The Company has not accepted any deposits from the public as defined in the Non-BankingFinancial Companies (Reserve Bank of India) Directions as amended to date.

STATEMENT REGARDING OPINION OF THE BOARD WITH REGARD TO INTEGRITY EXPERTISE ANDEXPERIENCE (INCLUDING THE PROFICIENCY) OF THE INDEPENDENT DIRECTORS APPOINTED DURING THEYEAR

In the opinion of Board of Directors of the Company Independent Directors on the Boardof Company hold highest standards of integrity and are highly qualified recognized andrespected individuals in their respective fields. Its' an optimum mix of expertise(including financial expertise) leadership and professionalism.

EMPLOYEE STOCK OPTION SCHEME

Pursuant to the recommendation of the Board of Directors in their Meeting held onJanuary 16 2019 the Shareholders at the Extraordinary General Meeting held on February22 2019 had approved the SBI Card - Employees Stock Option Plan – 2019. Post- IPO ofthe Company SBI Card - Employees Stock Option Scheme – 2019 was ratified by theShareholders through postal Ballot on June 17 2020

The objective of employee stock option plan is to reward employees to align individualperformance with Company objectives and drive share-holders' value creation create aculture of ownership among the executives works towards successful Initial Publicoffering and employees to enhance their commitment to organization motivate management tocollaborate and attract and retain key talent critical to organizations' success. TheScheme is in compliance with the Securities and Exchange Board of India (Share BasedEmployee Benefits) Regulations 2014.

The brief details of the Employees Stock Option Scheme are detailed as below:

(a) Total Options granted during the year ended March 31 2021 131950
Total Options granted till the date of report 13475650
(b) Number of options vested:
During the year ended March 31 2021 2424170
As on the date of the Annual report 2437365
(c) Options exercised during the year; 1760432
(d) The total number of shares arising as a result of exercise of option; 1760432
(e) Options lapsed; 187515
(f) The exercise price; Rs 152.10 per equity share
(g) Variation of terms of options; NA
(h) Money realized by exercise of options; Rs 26.78 Crores
(i) Total number of options in force; 11527703 (including options vested but not exercised)
(j) Employee wise details of options granted to;-
(i) Key managerial personnel; No options were granted to the KMP during the FY20 -21
(ii) Any other employee who receives a grant of options in any one year of option amounting to five percent or more of options During the financial year ended March 31 2021 options were granted to following employees:
granted during that year. Sl. Name No. Options granted
1 Mr. Piyush Balasaria 2 Mr. Sajith Rajan 63700 68250
(iii) Identified employee who was granted option during any one year equal to or exceeding one percent of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant; NIL

Company is using fair value method to value its options. The detailed disclosurespursuant to the SEBI (Share Based Employee Benefits) Regulations 2014 have been placedon website of the Company i.e. www.sbicard.com.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134 (3) (c) of the Companies Act 2013 your Directors state that:

(a) in the preparation of the annual accounts for the year ended March 31 2021 theapplicable accounting standards had been followed along with proper explanation relatingto material departures;

(b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit and loss of the Company for that period;

(c) the directors had 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;

(d) the directors had prepared the annual accounts on a going concern basis; and

(e) the directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.

(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.

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 at www.sbicard.com.

BUSINESS RESPONSIBILITY REPORTING

The Business Responsibility Report as stipulated under Regulation 34 of SEBI (ListingObligations and Disclosure Requirement) Regulations 2015 describing the initiatives takenby Company from environmental social and governance perspective has been appendedherewith as Annexure 5 and is also displayed on the website of the Company i.e.www.sbicard.com.

CEO/CFO CERTIFICATION

As required under Regulation 17(8) of the SEBI (Listing Obligations and DisclosureRequirement) Regulations 2015 the CEO and CFO of the Company have certified the accuracyof the Financial Statements the Cash Flow Statement and adequacy of Internal ControlSystems for financial reporting for the year ended March 31 2021.

DECLARATION REGARDING COMPLIANCE BY BOARD MEMBERS AND SENIOR MANAGEMENT PERSONNEL WITHTHE COMPANY'S CODE OF CONDUCT

The Code of Conduct of the Company aims at ensuring consistent standards of conduct andethical business practices across the Company. This Code is reviewed on an annual basisand the latest Code is available on the website of the Company (www.sbicard. com).Pursuant to Listing Regulations a confirmation from the Managing Director & CEOregarding compliance with the Code by all the Directors and Senior Management of theCompany forms part of the Annual Report.

UPDATE ON CUSTOMER COMPLAINTS

The Company receives complaints both from Internal and External channels. Internalchannels include various touch points within the organization i.e. in person by visitingSBI Card office/ branch by telephone mail fax email website mobile app or on socialmedia channels. External Channels include any customer approaching external bodiesincluding Reserve Bank of India (RBI) Banking Ombudsman Office Consumer Education &Protection Department (CEPD) Corporate Center of State Bank of India including complaintsreceived from any external sources by them Directorate of Public Grievances / CentralizedPublic Grievance Redress and Monitoring System (DOPG / CPGRAMS) National ConsumerHelpline / Integrated Grievance Redressal Mechanism (NCH / INGRAM). Please note that thenumber of complaints reported by SBI Card in the Annual Reports for FY20 & FY21comprise only of Net Internal Complaints and Gross Banking Ombudsman Complaints.

CORPORATE GOVERNANCE INCLUDING DETAILS PERTAINING TO BOARD MEETINGS PERFORMANCEEVALUATION COMMITTEE DETAILS VIGIL MECHANISM CREDIT RATING ETC.

SBI Card has a strong and committed corporate governance framework which encompassespolicies processes and people by directing controlling and managing activities withobjectivity transparency and integrity.

SBI Card is committed to ensure fair and ethical business practices transparentdisclosures and reporting. The focus of the Company is on being compliant towardsstatutory requirements regulations and guidelines and ethical conduct of businessthroughout the organization with primary objective of enhancing stakeholder's value whilebeing a responsible corporate citizen. In Compliance with SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 a Report on Corporate Governance along withCertificate from Practising Company Secretary regarding compliance of conditions ofCorporate Governance has been appended herewith as Annexure 6 and forms part ofthis Annual Report.

Further the Corporate Governance Report which forms part of this Report also covers thefollowing:

(a) Particulars of the Board Meetings held during the financial year under review.

(b) The details with respect to composition of the Committees of the Board andestablishment of Vigil Mechanism.

(c) The manner in which formal annual evaluation of the performance of the Board itsCommittees and of individual directors has been made.

(d) Compliance with provisions under the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013.

(e) The credit ratings of the company as at the end of March 31 2021.

(f) Name of the debenture trustees with full contact details.

ACKNOWLEDGEMENT

The Board of Directors wish to thank the Reserve Bank of India Company's Bankerscustomers shareholders employees and collaborators for their valuable assistancesupport and cooperation.

For and on behalf of the Board
Dinesh Kumar Khara
Date: July 23 2021 CHAIRMAN
Place: Mumbai DIN: 06737041

.