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Shriram City Union Finance Ltd.

BSE: 532498 Sector: Financials
NSE: SHRIRAMCIT ISIN Code: INE722A01011
BSE 00:00 | 29 Sep 1723.60 12.05
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NSE 00:00 | 29 Sep 1723.30 10.30
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OPEN 1744.35
PREVIOUS CLOSE 1711.55
VOLUME 1702
52-Week high 2471.35
52-Week low 1402.00
P/E 9.60
Mkt Cap.(Rs cr) 11,526
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 1744.35
CLOSE 1711.55
VOLUME 1702
52-Week high 2471.35
52-Week low 1402.00
P/E 9.60
Mkt Cap.(Rs cr) 11,526
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Shriram City Union Finance Ltd. (SHRIRAMCIT) - Director Report

Company director report

To

The Members of Shriram City Union Finance Limited Dear Members

The Board of Directors ("Board") is pleased to present thisReport with the audited standalone as well as consolidated financial statements of theCompany for the financial year ended March 31 2022 ("2021-22"). Theconsolidated financial statements presented pursuant to section 129 (3) of the CompaniesAct 2013 ("Act") and Regulation 34 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 ("LODR"). The report on corporategovernance management discussion and analysis and other annexures referred to form a partof this Report.

1. RESULTS OF OPERATION

The summary of standalone and consolidated financial performance of theCompany for 2021-22 is as under. The details of financials are provided in the annualfinancial statements.

'Rs in Lakhs

Particulars Standalone Consolidated
Year Ended March 31 2021 Year Ended March 31 2021
Total Income 653039.23 573843.47 707749.10 616188.06
Finance Charges 253252.52 213388.43 281312.56 234105.03
Depreciation 7835.49 7984.14 8622.51 8712.46
Total Other Expenses 245826.85 213532.15 260954.20 225569.39
Profit before tax ("PBT") 146124.37 138938.75 156859.83 147801.18
Total Tax expenses 37504.87 37844.33 40385.16 40029.64
Profit after Taxation ("PAT") 108619.50 101094.42 116474.67 107771.54
Paid up equity share capital (Face value of Rs 10/- per share) 6662.80 6600.50 6662.80 6600.50
Earning per equity share (Face value of Rs 10/- each)
(i) Basic 164.16 153.16 174.07 161.13
(ii) Diluted 163.17 152.81 173.02 160.76
Appropriations/Transfers:
Profit / Retained Earnings balance available for appropriation 466285.25 401606.68 486288.03 416019.16
General reserve (10880.00) (10250.00) (10880.00) (10250.00)
Statutory reserve (21760.00) (20490.00) (23132.01) (21458.72)

The above mentioned appropriations/transfers to different reserves in2021-22 were proposed and approved by the Board at the meeting held on April 29 2022 incompliance with the requirements of regulations of Reserve Bank of India ("RBI")and the Act. The Company being an NBFC registered with the RBI is exempted from providingdetails for loans made guarantee given or security provided in ordinary course ofbusiness as required under Section 186 of the Act. Thus such details are not mentionedhere. Loans guarantees and investments form a part of the Annual Financial Statementsprovided in this Annual Report.

2. DIVIDEND

The Company follows its Dividend Distribution Policy enclosed asAnnexure - 13 and displayed on the website of the Company (refer Table 1) forrecommendation declaration and payment of dividend. . The Board at its meeting held onApril 29 2022 had not considered recommendation of final dividend. The table below showsthe details of dividend for 2020-21 and 2021-22.

Dividend on equity shares of Rs 10 each No of Shares Per share (?) Dividend Payout Ratio Dividend Pay out (Rs in crores) Date of payment
Interim (2021-22) 66158139 10.00 66.15 November 24 2021
2nd Interim (2021-22) 66601785 27.00 179.82 March 25 2022
Total 37.00 22.65%
Interim (2020-21) 66004322 10.00 66.00 November 27 2020
2nd Interim (2020-21) 66005022 10.00 66.00 April 19 2021
Final (2020-21) 66005022 13.00 85.80 August 212021
Total 33.00 21.55%

Dividend payout is subject to applicable deduction of tax at source. Noof shares indicate the numbers of shares existed on respective record date for payment ofdividend. There were no delay in payment of dividend/interim dividend during 202122. Theinterim dividends declared shall be the dividend for the year.

3. CONTRACT OR ARRANGEMENT WITH RELATED PARTY AND ANNUAL RETURN

The Company has formulated an approved policy on Related PartyTransactions ("RPT") which is displayed on the web site of the Company (referTable-1) which complies with regulations of RBI the Act and LODR. There were RPTs during2021-22. All the transactions during 2021-22 with related parties referred to in Section188 of the Act were on arm's length basis in ordinary course of business withrequisite approval of the Audit and Risk Management Committee ("ARMC"). Thedetails of RPTs as required under Regulation 34(3) and 53(f) of the LODR appear in note no42 of the notes to financial statements. During 2021-22 the ARMC approved the RPTsrequiring it's approval. The details of RPTs were filed with both BSE Limited("BSE") and National Stock Exchange of India Limited ("NSE") on halfyearly basis during 2021-22. There were no material RPTs during 2021-22 with promotersdirectors key managerial personnel or other designated persons in potential conflict withthe interest of the Company at large and these information were filed with both BSE andNSE on quarterly basis on or before respective due dates during 2021-22. The details ofAnnual Return in prescribed form MGT - 7 as required under Section 92 (3) and 134 (3) ofthe Act is displayed on the web site of the Company (refer Table -1)

4. STATE OF AFFAIRS

The Company lends money to its customers through its different productofferings and accepts/renews deposits being a deposit taking Non-Banking Finance Company("NBFC") registered with the RBI. The Company has multiple product offering i.e.Enterprise Finance/MSME Finance Two wheeler loans Loan against Gold Auto FinancePersonal loans. The Company continued acceptance and renewal of deposits from public andlending to its customers as mentioned above with no change in business during 2021-22. Thebusiness of the Company includes sourcing borrowers understanding their loan requirementproviding them appropriate finance documentation of loans and receipt/recovery of loandues from borrowers. The Company is present all over India through its business outletsconcentrated in semi-urban and rural areas. Our customer centric approach continues tobring us more number of customers resulting in higher business. 19.23 Lakhs number ofcustomers were added during 2021-22. Total number of customers and total number ofbranches/ business outlets were 45.55 Lakhs and 986 respectively as on March 312022.

Total disbursements of loans under different products were Rs2614032.32 Lakhs during 2021-22 (2020-21 : Rs 1715392.97 Lakhs). Income fromoperations in 2021-22 grew up by 13.89% to Rs 652675.60 Lakhs (2020 -21 : Rs 573069.65Lakhs) and profit before tax was Rs 146124.37 Lakhs 2021-22 (2020 -21 : Rs 138938.75Lakhs). As at March 31 2022 the total assets under management stood at Rs 3318576.13Lakhs (March 312021: Rs 2957086.39 Lakhs).

During 2021-22 the total consolidated disbursements of loans underdifferent products were Rs 2887900.36 Lakhs (2020-21 : Rs 1934885.56 Lakhs).Consolidated Income from operations in 2021-22 grew by 14.99% to Rs 707297.38 Lakhs(2020 -21 : Rs 615097.69 Lakhs) and profit before tax was Rs 156859.83 Lakhs in2021-22 (2020 -21 : Rs 147801.18 Lakhs). As at March 31 2022 the consolidated assetsunder management was at Rs 3854077.38 Lakhs (March 31 2021 : Rs 3350031.08 Lakhs).

For lending and for other purposes the Company needs financialresources which are met by borrowing money from banks/institutions individuals andothers through public issue/private placement of non-convertible debentures("NCDs") acceptance/renewal of fixed deposits issue of commercial papers cashcredit/working capital loans and other loans. The summary of borrowings by the Company isas under.

Rs in Lakhs

Year ended March 31 Deposits Privately placed NCDs Public issue of NCDs Term loans Others Total
2022 682838.64 612611.69 38902.41 1260240.96 468587.86 3063181.56
2021 552888.78 339438.79 86924.21 1026457.11 550822.03 2556530.92

Balance outstanding on cash credit as on March 312022 was Rs 22992.47Lakhs (March 31 2021 : Rs 35847.57 Lakhs) Working capital demand loans as on March 312022 was Rs 235581.76 Lakhs (March 31 2021 : Rs 176515.34 Lakhs) and Securitisationlinked Term Loan as on March 31 2022 was Rs 210013.63 Lakhs (March 312021 : Rs338459.12 Lakhs)

The Company serviced all its financial obligations includingpayment/repayments/redemption of different loans /financial instruments (principal andinterest) on their respective due dates during 2021-22. The deposits and debenturesissued/allotted in non-dematerialised form were redeemed on submission of the claim withdocuments. 3893 number of deposits amounting to Rs 6616.72 Lakhs were outstanding to beclaimed or renewed on maturity as at March 312022. Subsequent follow-up by the Companyfor repayments/renewals brought it to 2228 number of deposits amounting to Rs 3232.60Lakhs on the date of this report. There were no deposits which had matured and claimedbut were not paid by the Company. The Company takes steps to arrange for repayment/renewalof these unclaimed deposits.

The Company is required to be rated by any of the rating agencies inIndia for its different kinds of borrowings. Such ratings were undertaken and the ratingsobtained are mentioned in notes to financial statements.

There are no significant and material orders passed by the regulatorsor courts or tribunals impacting going concern status and Company's operation infuture. For other orders please refer to the notes to accounts on contingent liabilitiesand report of the auditors. There were no material changes and commitments affecting thefinancial position of the Company which occurred between March 31 2022 being the end ofthe financial year of the Company and the date of this report The impact of pandemic hasbeen dealt with in the Management Discussion and Analysis annexed to this report asAnnexure - 3.

Frauds amounting to Rs 0.7 Lakhs detected during 202122 are reported innotes to financial statements and the same were reported to RBI as required. The status offrauds detected are reported in notes to financial statements. The ARMC and the Board haddiscussed about the status of the frauds committed and existing. The Company hasformulated whistle blower and vigil mechanism policy for in addition to other mattersbringing frauds to light by the whistle blowers.

The Company in the capacity of Financial Creditor has not filed anyapplications with National Company Law Tribunal under the Insolvency and Bankruptcy Code2016 during the financial year 2021-22 for recovery of outstanding loans against anycustomer being Corporate Debtor. Thus the difference between amount of the valuation doneat the time of one time settlement and the valuation done while taking loan from the Banksor Financial Institutions along with the reasons thereof is not applicable.

5. SCHEME OF AMALGAMATION

The Board and the required Committees of the Board approved in theirrespective meetings held on December 13 2021 the Composite Scheme of Amalgamation andArrangement under Sections 230 to 232 read with Regulation 52 and other applicableprovisions of the Act for : (i) the amalgamation of Shrilekha Business Consultancy PrivateLimited ("SBCPL") with Shriram Capital Limited ("SCL"); (ii) thedemerger of that undertaking from SCL which is carrying on the business of FinancialServices and the transfer and vesting thereof into Shriram Investment Holdings Limited("SIHL"); (iii) the demerger of those undertakings from SCL which are carryingon the businesses of a) Life Insurance and b) General Insurance and the transfer andvesting of the same into a) Shriram LI Holdings Private Limited ("SLIH") and b)Shriram GI Holdings Private Limited ("SGIH") respectively; (iv) the amalgamationof SCL (with its remaining undertaking and investments) with Shriram Transport FinanceCompany Limited ("STFC"); and (v) the amalgamation of Shriram City Union FinanceLimited ("SCUF") with STFC (referred to as "Scheme" ). The applicationfor approval of Scheme was made to both BSE and NSE and the No Objection letter to theScheme was received from BSE and NSE on March 15 2022 and March 16 2022 respectively.The Company filed application with Honourable National Company Law Tribunal Chennai Bench("NCLT") for the purpose. The updates on this subject will be posted on ourwebsite.

6. CAPITAL LISTING AND IEPF

As on March 312022 the paid up capital was Rs 6662.80 Lakhs with anincrease of Rs 62.30 Lakhs during 202122 due to allotment of 622994 (2020-21 : 2100)shares on exercise of options under Employees Stock Options Scheme ("ESOS") 2013by the eligible employees. The disclosures required under SEBI Regulations on ESOP as onMarch 312022 are set out in Annexure - 7 to this report. The Company has received thecertificate as attached in Annexure - 8 from the auditors of the Company certifying thatthe ESOP Scheme is implemented in accordance with the SEBI Guidelines and in accordancewith the resolution passed by the members. No equity shares other than equity shares underESOS were issued to employees of the Company and there was no buy back of its shares bythe Company during 2021-22 In compliance with Section 124 (5) of the Act the Companytransfers the dividend that has remained unclaimed for a period of seven years from thedate of its transfer to unpaid dividend account to Investor Education and Protection Fund("IEPF"). An amount of ' Lakhs (2020-21: Rs 86 Lakhs) is lying in unpaid equitydividend account of the Company. The unpaid dividends till March 312015 were transferredto IEPF. The Company as provided under Section 124(6) of the Act transferred all sharesin respect of which unclaimed dividends were transferred to IEPF during 2021-22. Incompliance with section 125 (2) of the Act matured deposits matured debentures andinterest accrued on these that had remained unclaimed/unpaid for a period of seven yearsfrom the date it became due for payment were transferred to IEPF during 2021-22 asmentioned below.

Rs in crores

Year Dividend Deposits Debentures Equity shares in nos.
2021-22 0.110 0.092 1.541 3802
2020-21 0.109 0.00 1.480 2427

The Company has displayed the details of unpaid dividend on its website (refer table no-1). The Company also posted individual letters to the last knownaddress of the shareholder on June 4 2021 and September 6 2021 and advertised innewspapers on June 5 2021 and September 8 2021 respectively. There will be no claim lieon the Company on account of dividend debentures and deposits which were transferred toIEPF. However the investors can claim it from IEPF Authority by following the requiredprocess.

The unclaimed equity shares existing in physical form available withthe Company/RTA are dematerialised at the time of transfer to IEPF Authorities asrequired under Regulation 34 of the LODR.

As required under Schedule V of LODR the Company has opened equityshare suspense Account with NSDL titled as "SCUF - Unclaimed Securities SuspenseAccount" for the purpose of transferring unclaimed equity shares held in physicalform. The Company will transfer after due verification the shares lying in the saidsuspense account to the eligible shareholders on request for such transfer is received. Ason March 31 2022 there were 475 (As on March 312021 : 475) number of unclaimed equityshares in the said SCUF - Unclaimed Securities Suspense Account. The voting rights onthese shares shall remain frozen till the rightful owner of such shares claims the shares.

S. No Particulars No of equity share holders No of unclaimed equity shares
1 Unclaimed equity shares as on April 12021 8 475
2 Shares claimed by shareholders during the Year
3 Transfer of unclaimed equity shares to IEPF during the Year as per IEPF Rules
4 Unclaimed equity shares as on March 312022 8 475

The voting rights for the above said unclaimed equity shares shallremain frozen till the shares are claimed by /transferred to the concerned share holders.No equity share was issued with differential rights to voting dividend or otherwise.

The listing fees to BSE and NSE for 2021-22 were paid on time. Theshares of the Company continue to be listed on BSE and NSE.

7. HUMAN RESOURCE

We highly appreciate the efforts of our employees at all levels fortheir stellar performance year after year. The Company provides necessary training forreskilling and for enhancing skills of our employees. In addition different motivationalmeasures are taken in order to keep our employees highly motivated. We emphasise onlocalisation of our workforce and encourage executive growth up the organisational ladderwithin respective geographies. The relation between the Company and its employees havealways been based on mutual respect openness honesty cooperation and trust. The Companyhas formulated a policy on Prevention of Sexual Harassment of women employees in the workplace. The Company has also constituted and Internal Complaints Committee as requiredunder the Sexual Harassment of Women at workplace (Prevention Prohibition and Redressal)Act 2013. There were no complaints received during 202122. The total employee strength ofthe Company as on March 31 2022 was 27997 with 1 1377 employees added during the Year. Asrequired under Section 197(12) of the Act read with Rule - 5 (1) and 5 (2) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rule 2014 theinformation on remuneration is given in table 2.1 of the Corporate Governance Report andother details are attached as Annexure - 1 to this Report.

8. SUBSIDIARY AND CONSOLIDATED FINANCIAL STATEMENTS

M/s Shriram Housing Finance Limited CIN - U65929TN2010PLC078004)("SHFL") is the only subsidiary of the Company. SHFL is an unlisted subsidiarywith 85.02% holding by the Company in the equity of SHFL. The Company subscribed to therights issue of SHFL with 111111112 number of equity shares of face value of Rs 10 eachpriced at Rs 45/- per share (including premium of Rs 35/- per share) aggregating to Rs5000000040/- during 2021-22. The Company does not have any other material listed/unlisted subsidiary Company as defined in Regulation 24 (1) of LODR. SHFL is a housingfinance company registered under National Housing Bank ("NHB") and regulated byReserve Bank of India (Registration Number- 08.0094.11) with registered office at Chennai.There was no entity which became or ceased to become subsidiary during 202122. Theentities shown in the Notes to Accounts under Related party disclosures as Associates aretreated as "associates" as per IND AS 24. The equity shares of SHFL are notlisted on any stock exchange but has debt securities listed on BSE. SHFL follows April toMarch as the financial year. SHFL mainly provides housing loans to self-employed andsalaried class in the lower and middle income category mostly in Tier 2 and Tier 3locations in India with 103 branches. SHFL has 22963 customers with loans in itsportfolio as on March 31 2022. The total employee strength of SHFL as on March 312022was 778. The Policy on Material Subsidiary(ies) of the Company is displayed on the website of the Company (Refer Table 1 for the link).

SHFL also provides loans against property and loans for housingprojects. The CAGR of loan disbursement of SHFL over last five years was around 23% withtotal disbursement during the year being Rs 273868.04 Lakhs. The total borrowings ofSHFL as on March 31 2022 was Rs 389667 Lakhs out of which Rs 53329 Lakhs was by wayof NCDs and the balance amount was borrowings from Banks National Housing Bank FinancialInstitutions and securitisation through banks & financial institutions.

As prescribed under section 129(3) of the Act the Consolidatedfinancial statements of the Company for 2021-22 were prepared in accordance withprovisions of the Act and LODR which were audited by the statutory auditors of theCompany. The consolidated financial statements along with the report of the auditors ofthe Company thereon are attached to this Report. Statement containing salient features ofthe financial statements for 2020-21 in form AOC- 1 is enclosed to the financialstatements of the Company.

The annual accounts annual reports and the related detailedinformation on SHFL shall be made available to the shareholders of the Company and to theshareholders of SHFL seeking such information at any point of time. In accordance withSection 136 of the Act audited annual financial statements consolidated financialstatements and related information of the Company and the audited financial statements ofSHFL are displayed on the Company's web site (Refer Table -1) and the same shall bekept at the respective Registered Office of the Company and SHFL for inspection by anyshareholder during business hours. Shriram Capital Limited and SHFL continued as promoterand subsidiary of the Company respectively.

9. RESERVE BANK OF INDIA DIRECTIONS/ GUIDELINES

Being a deposit accepting NBFC registered with the RBI the Company isregulated by the applicable regulations of the RBI. The Company continues to comply withall applicable regulations of RBI. The Company has formulated different policies andappointed different officials in the Company as required under the regulations of the RBI.The details of registration with RBI appear on note no - 1 to notes to the financialstatements. The Board confirms that the Company followed the corporate governancestandards prescribed by the RBI. The note nos 43 46 to 74 and 95 to 96 and other notes ofthe notes to financial statements contain the information required to be reported underthe regulations of the RBI. The Company accepts/ renews deposits as per regulations ofRBI. Being an NBFC regulated by the RBI the disclosure required under the Act with respectto deposits does not apply to the Company The followings are the indicators of acceptanceof deposits.

Description March 31
2022 2021
Capital Adequacy and Reserve Ratio ("CrAR")* 26.78% 28.64%
Net owned funds (? in Lakhs) 827252.84 730641.50
Statutory Liquidity Ratio in (? in Lakhs) 18.44% 19.35%
Deposits ( ' in Lakhs) including maturity payable 689455.36 559045.60

* The RBI prescribes the maintenance of CRAR 15 percent and above.

Our principal source of liquidity are cash cash equivalent balancesin accounts with banks current/liquid investments undrawn sanctioned limits frombanks/institutions and cash flow from operations. We maintain sufficient cash to meetstrategic and operational needs. We understand that the liquidity in the Balance sheetneed to balances between return and risk. We believe that our working capital is adequateto meet our current requirements.

10. CORPORATE GOVERNANCE

The Company follows the corporate governance practices and standardsprescribed under LODR regulations of RBI the Act and other regulations. Report oncorporate governance as required under Regulation 34(3) of LODR together with acertificate for the purpose from the auditors of the Company confirming the compliancewith the corporate governance is attached to this Report (Annexure - 2). As required underRegulation 34(2)(e) and 34(3) of LODR the Management Discussion and Analysis on thebusiness of the Company is enclosed as Annexure - 3. As required under Regulation 17 (8)of the LODR a compliance certificate duly signed by the Managing Director & ChiefExecutive Officer and Chief Financial Officer on the financial statements of the Companyfor 2021-22 was submitted to the Board at their meeting held on April 29 2022 (Annexure- 4). The relevant provisions of the voluntary guidelines are adopted in the areas deemedappropriate.

11. BUSINESS RESPONSIBILITY REPORT ("BRR")

Regulation 34(2)(f) of the LODR requires top 500 listed entities basedon market capitalisation as on March 31 2021 to include BRR as a part of the AnnualReport. The Company being one such entity has included BRR in this Annual Report(Annexure - 14).

12. CORPORATE SOCIAL RESPONSIBILITY ("CSR")

The Company constituted a CSR Committee consisting of three Directorsincluding two independent directors as required under Section 135 of the Act. The detailsof the CSR Committee appear on the Annual Report on CSR. Annual Report on CSR activitiesas required under Rule 9 of the Companies CSR Policy Rules 2014 of the Act is attached tothis report as Annexure - 10. The CSR policy of the Company as recommended by the CSRCommittee was reviewed and approved by the Board and is displayed on the website of theCompany (refer table 1). The CSR policy contains the areas of activities of CSR and otherdetail as required under Section 134 (3) (o) of the Act. During 2021-22 the Companyundertook CSR Projects on health education skill development through implementing Agent.The spend on CSR amounting to Rs 3167.57 Lakhs (2020-21: Rs 2195.23 Lakhs) during 2020-21 were approved by the Board of the Company as recommended by the CSR Committee The Boardaffirms that the CSR activities are implemented in accordance with CSR Policy of theCompany.

13. BOARD AND COMMITTEES

During 2021-22 the Company had optimum number of Directors with mix ofIndependent and Non Independent. Board met 6 times during 2021-22. During 2021-22 themeetings of the Board and Committees were held virtually through video conferencing atChennai to adhere to social distancing norms. The interval between two meetings did notexceed 120 days. Members of the Board possess requisite knowledge and experience to steerthe Company. The brief profile of each director appear on the website of the Company(Refer Table 1). The Company is immensely benefitted from the guidance support and adviceof the members of the Board. The Board consists of directors possessing diverse knowledgeskill and experience to enhance quality of its performance. The independent directors haverequisite qualification and experience to act as a Director on the Board. Details ofmeetings of the Board and committees held during 202122 and the details of appointmentinduction training retirement and resignation of Directors/KMPs during

2021- 22 are mentioned in the Corporate Governance report (Annexure -1). The Company complied with Secretarial Standards issued by the Institute of CompanySecretaries of India. The Board has Audit and Risk Management Committee ("ARMC")and Nomination and Remuneration Committee ("NRC") as specified under Section 177and 178 of the Act respectively. The Company received necessary declaration from eachindependent director about his/her meeting the criteria of independence as laid down underSection 149 (7) and 134(3) (d) of the Act and Regulation 16(b) of the LODR. A statement bythe Managing Director confirming receipt of this declaration from each independentdirector of the Company is attached as Annexure - 11. There is no change in thecircumstances affecting their status as Independent Directors of the Company. The Companyreceived required deed of covenant initially at the time of appointment and declarationduring 2021-22 from the Directors as required under regulations of RBI. The Board on therecommendation of NRC has formulated a policy for selection appointment and remunerationof directors senior management personnel as required under Section 178 (3) and 134 (3)(e) of the Act the details of which appear in the Annexure - 13 and the same is displayedon the web site of the Company (refer table 1). This Policy states the diversity of theBoard has laid down a framework for remuneration of Directors (Executive andNon-Executive) Key Managerial Personnel and Senior Management Personnel. As requiredunder section 134(3)(p) of the Act and the LODR annual performances evaluation of Boardthe Committees Chairman of the Board and individual directors were carried out during2021-22 based on the criteria and frame work adopted by the Board consisting ofparticipation attendance duties obligations contribution for effectiveness and relatedmatters of Board/Committee. The outcome of such evaluation done during 2021-22 wasdiscussed by the NRC/Board and both found it satisfactory. The Independent Directorsexpressed satisfaction over the performance and effectiveness of the Board individualNon-Independent Directors and the Chairman. The Independent Directors played active rolein the meetings of Committees including Audit and Risk Management Committee("ARMC").ARMC held separate meetings to discuss related party transactions andto review policies of the Company. The ARMC also had separate meetings with StatutoryAuditors Internal Auditors and participated in the meeting with Rating Agenciesseparately. Each Director has given his/her declaration to the Company for not holding anyshares in the Company and having no relation inter se with any Director. IndependentDirectors attend familiarisation programme on joining the Board and annually the detailsof which is displayed on the web site (refer table 1). Sri Umesh Govind Revankar (DIN -00141189) was appointed as the additional director with effect from December 14 2021holding office upto the conclusion of 36th AGM and he has expressed his intention andconfirmed his eligibility to act as a Director of the Company if appointed. As perprovisions of the Act and Articles of Association of the Company Sri Ignatius MichaelViljoen (DIN - 08452443) will retire by rotation and being eligible has sought forre-appointment at the ensuing AGM. He has expressed his intention and confirmed hiseligibility to continue as Director of the Company if appointed at the ensuing AGM. Incompliance with requirements under section 149(7) of the Act and Regulation 16(1) of theLODR the Board has received the declaration from all the Independent Directors about theirindependence and the Board is satisfied about it. During 2021-22 there was no change(appointment/resignation) in the Key Managerial Personnel namely Managing Director ChiefFinancial Officer and Company Secretary of the Company.

14. DIRECTORS' RESPONSIBILITY STATEMENT

The financial statements were prepared by following the provisionsprescribed under Section 133 (3) [Indian Accounting Standard ("Ind AS")] andother applicable sections of the Act and relevant rules and the guidelines issued by theSEBI and the RBI . Pursuant to Sections 134 (3) (c) and 134 (5) of the Act with respect toDirectors' responsibility statement the Directors of the Company hereby confirm inthe preparation of annual accounts for 2021-22 that :

(i) the applicable accounting standards have been followed and properexplanations have been made in notes to accounts for material departures if any;

(ii) the accounting policies have been selected and appliedconsistently and reasonable and prudent judgments and estimates have been made so as togive a true and fair view of the state of affairs of the Company as at March 31 2022 andstatement of the profit and loss of the Company for the year ended on that date;

(iii) proper and sufficient care have been taken for the maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) the annual accounts have been prepared on a going concern basis.

(v) internal financial controls to be followed were laid down whichwere adequate and were operating effectively and

(vi) proper systems had been devised to ensure compliance withprovisions of applicable laws which were adequate and were operating effectively

15. AUDIT AND AUDITORS

Internal audits were conducted periodically during 202122 and thereports thereon were presented to ARMC on quarterly basis. The Internal Auditor isappointed by and is reporting to ARMC. In addition to others matters internal auditconsisted of independent and objective assessment to monitor adequacy effectiveness andadherence to the internal controls internal financial control processes and procedures.Internal audit checked compliance with extant regulations. Internal audit conductedfollowed a Risk-based approach of Internal Audit (RBIA) by taking into account the RBIguidelines and established practices. The ARMC regularly reviewed the audit findings andthe adequacy and effectiveness of the internal control measures. The Company hasdocumented its internal financial controls considering the essential components of variousprocesses physical and operational. These include design implementation and maintenancealong with periodical internal review of effectiveness and sustenance commensuration withthe nature of business and the size of operations of the Company. This ensures conductingbusiness in orderly and efficiently by adhering to the Company's policiessafeguarding assets preventing errors with accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information. The internalfinancial controls with reference to the financial statements were adequate and operatingeffectively. The Company's organisation structure policy authority matrix andinternal financial controls ensure efficiency of operations protection of resources andcompliance with the applicable laws and regulations .The policies are reviewedperiodically and updated and systems are reviewed and upgraded. The internal financialcontrol is supplemented by internal audits regular reviews by management to ensurereliability of financial and other records to prepare financial statements and other data.The Joint Statutory auditors of the Company M/s R Subramanian & Company LLP CharteredAccountants Firm Registration Number 004137S/ S200041 ("RS") and M/s Abarna& Ananthan Chartered Accountants

Firm Registration Number 000003S ("A&A") have submittedto the members of the Company the attached Independent Auditors Reports for 2021-22 onstandalone financials and consolidated financials. Both the reports are unqualifiedwithout any reservation or adverse remark or disclaimer and thus the Board does not haveany explanation or comment. M/s SPNP & Associates Company Secretaries (Certificate ofPractice No : 3310 and Membership No : FCS F4862) in practice Chennai ("SPNP")appointed by the Company as the secretarial auditors pursuant to Section 204 of the Acthave conducted audit and have submitted their report as attached in Annexure - 15 to theMembers which is unqualified without any reservation or adverse remark or disclaimer.Therefore Board does not have any explanation or comment on such Secretarial AuditReport. Maintenance of Cost records and conducting of cost audits specified under section148(1) of the Act are not applicable for the business activities carried out by theCompany. During 2021-22 neither RS and A&A nor SPNP reported to ARM under Section143(12) of the Act any instances of fraud committed by officers or employees of theCompany. The Board appointed SPNP as secretarial auditor of the Company for 2022-23.

RS and A&A were appointed by the members as Joint Statutoryauditors of the Company from Extraordinary General Meeting held on September 8 2021 tillconclusion of 36th AGM of the Company. M/s G D Apte & Co. ("GDA") hadexpressed their intention not to continue as the Statutory Auditors of the Company witheffect from September 8 2021 due to applicability of RBI circular no .DoS.CO.ARG/SEC01/08.91.001/2021- 22 dated April 27 2021 which states that only joint audit by firms andauditors completed three years of tenor cannot continue as Auditors of the Company. GDAhad completed fours years and could not continue as Auditors and resigned from theiroffice vide letter dated July 29 2021. RS and A&A have confirmed their eligibilityand have communicated their willingness to continue as auditors. Necessary resolutionbased on the recommendation of the ARMC and approval of the Board to fix remuneration ofRS and A&A as Joint Statutory Auditors is proposed at the ensuing AGM. The details ofpayment of Statutory Auditors fees appear in financial statements.

16. MANAGEMENT OF RISK

The risk management function of the Company help in identifyinganalysing assessing mitigating monitoring and governing risks. The Company has a riskmanagement policy. A separate section in this report titled "Management Discussionand Analysis" discusses about risk and its mitigating factors and the mattersrequired under Section 134 (n) of the Act. In the opinion of the Board there is no riskexisting to threaten the existence of the Company. Report on risk assessment is presentedto ARM at its meeting by the Chief Risk Officer of the Company. The Board on therecommendation of the ARMC appointed Chief Risk Officer ("CRO") of the Companywith requisite qualification and experience as mention in the regulations of the RBI. TheCRO reports to ARMC.

17. ENERGY CONSERVATION TECHNOLOGY ABSORPTION FOREIGN EXCHANGEEARNING AND OUT GO

Section 134 (3) (m) of the Act read with Rule 8 of the Companies(Accounts) Rules 2014 specify the information to be furnished on conservation of energyabsorption of technology and foreign exchange earnings/outgo which for the Year arefurnished below. The operations of the Company are not energy intensive. However adequatemeasures for conservation of energy usage of alternate sources of energy and investmentsfor energy conservation wherever required were taken. The Company did not absorbed anytechnology. There was foreign exchange earnings of Rs 184.66 Lakhs (2020-21 : Rs 190.28Lakhs ). The outgo of foreign exchange was Nil (2020-21 : Rs 623.25 Lakhs)

18. ACKNOWLEDGEMENT

We thank our customers share holders investors bankers employeestrustees vendors auditors deposit holders and debenture holders. The Board expressesits appreciation and gratitude for the guidance and cooperation extended to the Company byRBI statutory authorities and regulators. The Board acknowledges the guidance of M/s RSand M/s A&A and M/s SPNP to the Company. The Board records the commitment anddedication of employees.

For and on behalf of the Board of Directors
Place : Chennai Debendranath Sarangi
Date : April 29 2022 Chairperson

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