To the Members
Your Directors have pleasure in presenting their Forty-First Annual Report and theAudited Statements of Accounts for the financial year ended March 31 2020.
| || ||(Rs. in crores) |
|Particulars ||2019-20 ||2018-19 |
|Profit Before Depreciation And Taxation ||3579.72 ||3821.24 |
|Less: Depreciation amortization and impairment ||141.05 ||42.97 |
|Profit Before Tax ||3438.67 ||3778.27 |
|Less: Provision for taxation ||936.83 ||1214.28 |
|Profit After Tax ||2501.84 ||2563.99 |
|Add: Balance brought forward from previous year ||8070.47 ||6829.82 |
|Balance available for appropriation ||10572.31 ||9393.81 |
|Appropriations || || |
|General reserve ||250.19 ||257.00 |
|Statutory reserve ||500.38 ||514.00 |
|Debenture redemption reserve ||235.79 ||251.47 |
|Dividend on equity shares of Rs.10/- each ||272.26 ||249.57 |
|Tax on dividend ||55.96 ||51.30 |
|Balance carried to Balance Sheet ||9257.73 ||8070.47 |
NOVEL CORONA VIRUS PANDEMIC
On 11th March 2020 the World health Organization (WHO) declared the novel Coronavirus as pandemic. The Company swiflly activated the Business Continuity Plan (BCP) totake effective measures to face disruptions due to the outbreak of novel Corona viruspandemic in India. As per the assessment of a Credit Rating Agency the pandemic hascreated increasing macro-economic challenges and disruptions on the business activities ofNBFCs leading to operational constraints. In the last week of March2020 The Credit RatingAgency downgraded the ratings of some listed NBFCs and some instruments issued by theNBFCs including our Company. is was followed by other Rating Agencies revising the creditrating to negative outlook and rating watch negative. The credit rating position of theCompany as on date is as follows:
|Credit Rating Agency ||Instrument ||Ratings |
|CRISIL ||Bank Loan Long Term ||CRISIL AA+/Negative |
| ||Bank Loan Short Term ||CRISIL A1+ |
| ||Long Term Principal Protected Market Linked Debentures ||CRISIL PP-MLD AA+r/Negative |
| ||Non-Convertible Debentures ||CRISIL AA+/ Negative |
| ||Subordinated Debt ||CRISIL AA+/Negative |
| ||Short Term Debt ||CRISIL A1+ |
| ||Fixed Deposit ||CRISIL FAAA/Negative |
|India Ratings & Research Private Limited || ||IND AA+/ Rating Watch |
| ||Non-Convertible Debentures || |
| || ||Negative (RWN) |
| ||Subordinated Debt ||IND AA+/RWN |
| ||Commercial Paper ||IND A1+ |
|CARE ||Non-Convertible Debentures ||CARE AA+/Stable |
| ||Subordinated Debt ||CARE AA+/Stable |
| ||Commercial Paper ||CARE A1+ |
|ICRA ||Fixed Deposit ||MAA+ with Stable |
|Standard & Poor's Ratings ||Long-Term Issuer Credit Rating ||BB/ Negative Outlook |
| ||Short-Term Issuer Credit Rating ||B |
| ||Senior Secured Notes ||BB |
|Fitch Ratings ||Long-Term Issuer Default Rating ||BB Rating Watch Negative |
| ||Short-Term Issuer Default Rating ||B |
| ||Senior unsecured Long Term Rating ||BB Rating Watch Negative |
| ||Senior secured Long Term Rating ||BB Rating Watch Negative |
| ||Local Currency Long Term Issuer Default Rating ||BB Rating Watch Negative |
The detailed discussion in this regard is covered under the Management and DiscussionsReport forming part of this report.
Your Directors at their meeting held on October 24 2019 declared interim dividend ofRs. 5/- per equity share (i.e. 50%) for the financial year 2019-20. The interim dividendwas paid on November 19 2019 and involved a cash outflow of Rs. 136.76 crores includingtax on dividend. In order to conserve cash resources to face the challenges and thecontingencies created by Corona virus pandemic the Board of Directors have notrecommended the final dividend. As such the interim dividend shall be the final dividendfor the financial year 2019-20.
The Dividend Distribution Policy forms part of the Corporate Governance Report and isalso available on the website of the Company at https://bit.ly/2WzNefE
TRANSFER TO RESERVES
The amounts proposed to be transferred to General Reserve Statutory Reserve andDebenture Redemption Reserve are mentioned in the Financial Highlights under the headingAppropriations'.
CAPITAL ADEQUACY RATIO
Your Company's total Capital Adequacy Ratio (CAR) as of March 31 2020 stood at21.99% of the aggregate risk weighted assets on balance sheet and risk adjusted value ofthe off-balance sheet items which is above the regulatory minimum of 15%.
OPERATIONS AND COMPANY'S PERFORMANCE
For the financial year ended March 31 2020 your Company earned Profit Before Tax ofRs.3438.67 crores as against Rs.3778.27 crores in the previous financial year and theProfit After Tax of Rs.2501.84 crores as against Rs.2563.99 crores in the previousfinancial year. The total income for the year under consideration was Rs.16582.63 croresand total expenditure was Rs.13143.96 crores. Mobilization of funds from followingsources/instruments was as under:
| || || ||(Rs. in crores) |
|Sr. No. ||Particulars ||2019-20 ||2018-19 |
|1 ||Non-Convertible Debentures Institution ||2960.30 ||915.00 |
|2 ||Subordinated Debts Institutional ||- ||2360.00 |
|3 ||Term Loans from Banks Secured ||19121.64 ||13507.30 |
|4 ||Term Loans from Financial Institutions/ corporates Secured ||- ||1569.00 |
|5 ||Commercial Papers ||4130.00 ||24820.00 |
|6 ||Fixed Deposit ||4226.21 ||4956.10 |
|7 ||Inter Corporate Deposits ||207.40 ||50.00 |
|8 ||Non-Convertible Debentures Institution- Unsecured ||- ||500.00 |
|9 ||Non-Convertible Debentures Public Issue- Secured ||533.61 ||4792.63 |
|10 ||External Commercial Borrowings (Loan) ||1636.10 ||2402.33 |
|11 ||U.S. Dollar Senior Secured Notes ||5202.13 ||2849.90 |
|12 ||Social Bonds (U.S. Dollar Senior Secured Notes) ||3542.50 ||- |
|13 ||Cash Credit ||784.00 ||- |
The total Assets Under Management had increased to Rs.109749.24 crores fromRs.104482.29 crores. During 2019-20 the Company securitized its assets worth Rs.16581.13 crores (accounting for 15.11 % of the total assets under management as on March31 2020) as against Rs. 15123.06 crores during 2018-19. With securitisation the Companyensures better borrowing Profile leading to lower interest liability owing to its lendingto priority sector as per RBI. The outstanding direct assigned portfolio stood at Rs.1247.53 crores as on March 31 2020.
The Company continued its focus on financing of pre-owned commercial vehicles. Therelationship based business model enabled us to maintain the leadership position in thepre-owned commercial vehicles financing segment. For further market penetration theCompany opened 213 new Branches and other o_ces. With this the total number of Branch andother offices across India has now increased to 1758.
ISSUE OF SECURITIES Share Capital
The paid up Equity Share Capital of the Company stood at Rs.226.88 crores consisting of226882736 fully paid-up shares of face value of Rs.10/- each as on March 31 2020. It isrecalled that the shareholders in the 40th Annual General Meeting held on June 27 2019approved cancellation of the 48000 forfeited shares in respect of which the allotmentmoney was not paid by some of the shareholders. Accordingly the said 48000 shares stooddiminished from the issued and subscribed share capital of the Company and Rs.240000/-paid towards application money in respect of the forfeited shares was transferred from theforfeited shares account to capital reserve as per the applicable Indian accountingstandards and provisions of the Companies Act 2013.
Public Issue of Non-convertible Debentures
During the year under review the Company through Shelf Prospectus dated July 09 2019offered 100000000 Secured Redeemable Non-Convertible Debentures (NCDs) of face value ofRs. 1000 each to the Public for an amount aggregating up to Rs.10000 crores pursuant tothe Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations 2008 as amended.
The Company under the Shelf Prospectus and two Tranche Prospectuses issued and allotted5336070 NCDs aggregating to Rs.533.61 crores. The fund utilization was as per theobjects of the Public Issue of NCDs. The said NCDs are listed on the National StockExchange of India Limited and BSE Limited.
Issue of U.S. Dollar Senior Secured Notes/ Social Bonds
On April 24 2019 the Company issued 5.950 percent Senior Secured Notes due 2022aggregating to USD 500 Million to the Qualified Institutional Buyers (QIBs) under the Rule144A and to the eligible investors outside United States under Regulation S of the U.S.Securities Act 1933. Further on July 17 2019 the Company issued Senior Secured Notesaggregating to USD 250 Million to the eligible investors outside United States underRegulation S of the U.S. Securities Act 1933. ese notes were issued under the USD 2Billion Global Medium Term Note Programme (GMTN Programme). The proceeds of Senior SecuredNotes have been utilized for onward lending and other activities as permitted by the ECBDirections.
Having regard to the opportunities and appetite for the bonds of the reputed Indiancompanies in the international market the Company further updated and upsized from USD 2Billion Global Medium Term Note Programme to USD 3 Billion Global Medium Term NoteProgramme on December 27 2019.
Social Finance Framework for issuance of Social Bonds was set up by the Company. OnJanuary 16 2020 the Company issued 5.100 percent Senior Secured Notes (Social Bonds)aggregating to USD 500 Million under the USD 3 Billion Global Medium Term Note Programme(GMTN Programme) to the Qualified Institutional Buyers (QIBs) under the Rule 144A of theU.S. Securities Act 1933 and to the eligible investors outside United States underRegulation S of the U.S. Securities Act 1933. The Social Bonds got overwhelming responsefrom investors with the final order book in excess of USD 2.20 billion and oversubscription of >4x. The order book received interest and demand from marquee SocialBond Investors.
The net proceeds from the issue of Social Bonds have been utilized by the Company tofinance investments in Eligible Social Projects in accordance with International CapitalMarket Association Social Bond Principles 2018 as permitted by the ECB Guidelines.
The said Senior Secured Notes/Social Bonds are listed on the Singapore ExchangeSecurities Trading Limited. All Senior Secured Notes/Social Bonds issued under the U.S.$3000000000 GMTN Programme are fully hedged and would not involve any foreign exchangerisk to the Company.
As on March 31 2020 there were 12116 fixed deposits aggregating to Rs.150.02 croresthat have matured but remained unclaimed. ere were no deposits which were claimed but notpaid by the Company. The unclaimed deposits have since reduced to 5796 deposits amountingto Rs.56.40 crores. Appropriate steps are being taken continuously to obtain thedepositors' instructions so as to ensure renewal/ repayment of the matured deposits intime.
DIRECTORS AND KEY MANAGERIAL PERSONNEL Appointment of Directors
The Board of Directors in its meeting held on May 08 2019 appointed Mr. IgnatiusMichael Viljoen as a director of the Company in the category of non-executivenon-independent director in a casual vacancy caused by the resignation of Mr. GerritLodewyk Van Heerde (DIN 06870337) non-executive non-independent director of the Companywith effect from May 14 2019. The shareholders in its 40th Annual General Meeting held onJune 27 2019 passed necessary resolution for his appointment as a Director in thecategory of non-executive non-independent director.
Retirement of director by rotation
Mr. Puneet Bhatia (DIN 00143973) non-executive nonindependent director of theCompany will retire by rotation at the ensuing 41st Annual General Meeting (AGM) and beingeligible offers himself for re-appointment. His reappointment at the AGM will be in theinterest of the Company. The Nomination and Remuneration Committee and the Boardconsidered that the re-appointment of Mr. Puneet Bhatia is in the interest of the Companyand have recommended his re-appointment in view of financial acumen and expertise of Mr.Puneet Bhatia.
ere was no change (appointment/resignation) in the Key Managerial Personnel namelyManaging Director & CEO the Chief Financial Officer and the Company Secretary of theCompany during the financial year.
Declaration by Independent Directors
Pursuant to the provisions of Section 149 of the Companies Act 2013 the independentdirectors have submitted declarations that each of them meet the criteria of independenceas provided in Section 149(6) of the Act along with Rules framed thereunder and Regulation16(1)(b) of the SEBI Listing Regulations. ere has been no change in the circumstancesaffecting their status as independent directors of the Company.
Policies on appointment of Directors and Remuneration
Your Company recognizes the importance and benefits of having the diverse Board toenhance quality of its performance and has adopted a Policy on Board Diversity formulatedby the Nomination and Remuneration Committee. The Company's Remuneration Policy has laiddown a framework for remuneration of Directors (Executive and Non-Executive) KeyManagerial Personnel and Senior Management Personnel. ese Policies are available on theCompany's website at the weblink: https://bit.ly/32twQkM andhttps://bit.ly/2DQlAVb The Nomination and Remuneration Committee also takes intoaccount the fit and proper criteria for appointment of directors as stipulated by ReserveBank of India. The Company has also formulated policy on Succession Planning for Directorsand Key Managerial Personnel for continuity and smooth functioning of the Company.
Number of Meetings of the Board
Six Board Meetings were held during the financial year. The details of the Board andvarious Committee meetings are given in the Corporate Governance Report.
Performance evaluation at Board and independent directors meetings
The Board has carried out an annual performance evaluation of its own performance thedirectors individually as well as the evaluation of the working of its various Committeesfor the financial year 2019-20. The policy on performance evaluation of the Directors theBoard and its Committees is available on the Company's website at the weblink: https://cdn.stfc.in/common/Policy_On_Performance_Evaluation. pdf The evaluation was conducted onthe basis of a structured questionnaire which comprises performance criteria such asperformance of duties and obligations independence of judgement level of engagement andparticipation attendance of directors their contribution in enhancing the Board'soverall effectiveness etc. The Board has expressed their satisfaction with the evaluationprocess. The observations made during the evaluation process were noted and based on theoutcome of the evaluation and feedback of the Directors the Board and the managementagreed on various action points to be implemented in subsequent meetings.
The evaluation process endorsed cohesiveness amongst directors smooth communicationbetween the Board and the management and the openness of the management in sharing theinformation with the Board and placing various proposals for the Board's consideration andapproval. The independent directors met on February 03 2020 without the presence of otherdirectors or members of Management.
All the independent directors were present at the meeting. In the meeting theindependent directors reviewed performance of NonIndependent Directors the Board asa whole and Chairman. They assessed the quality quantity and timelines of flow ofinformation between the Company Management and the Board. The minutes of the independentdirectors was placed before the Board and the Board took note of the same.
The Independent Directors expressed satisfaction over the performance and effectivenessof the Board individual Non-Independent Directors and the Chairman. They also expressedsatisfaction with regard to the flow of information between the company management and theBoard.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134(3)(c) and Section 134(5) of the CompaniesAct 2013 the Directors confirm that to the best of their knowledge and belief:
a) In the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures;
b) that such accounting policies as mentioned in note 6 to the financial statementshave been selected and applied consistently and judgments and estimates have been madethat are reasonable and prudent so as to give a true and fair view of the state of affairsof the Company as at March 31 2020 and of the Profit of the Company for the year ended onthat date;
c) that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
d) the annual accounts have been prepared on a going concern basis.
e) the Company had followed the internal financial controls laid down by the directorsand that such internal financial controls are adequate and were operating effectively.
f) the directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
The Company continues to comply with all the requirements prescribed by the ReserveBank of India from time to time.
BUSINESS RESPONSIBILITY REPORT
Pursuant to Regulation 34(2)(f) of the Listing Regulations Business ResponsibilityReport is annexed and forms part of the Annual Report.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Our Company contributed Rs.5 crore to the Prime Minister's Citizen Assistance andRelief Emergency Situations Fund (PM CARES Fund). The CSR Report for the Financial Year2019-20 is annexed to this report as Annexure-I. The composition of CSR Committeeand the details of the ongoing CSR projects/ programs/activities are included in the CSRreport/section. The CSR Policy is uploaded on the Company's website at the web link:https://bit.ly/2CO7Qty
EXTRACT OF ANNUAL RETURN
Pursuant to the provisions of Section 92(3) of the Act the extract of the annualreturn in form MGT-9 is annexed as Annexure II. The same is also availableon the website of the company at the web link: https://www.stfc.in/investors/annual-reports/
DISCLOSURES AS PER THE SECTION 134 OF THE COMPANIES ACT 2013 READ WITH RULE 8 OF THECOMPANIES (ACCOUNTS) RULES 2014 Conservation of Energy Technical Absorption and ForeignExchange Earnings and Outgo
The information pursuant to Section 134(3)(m) of the Companies Act 2013 read withCompanies (Accounts) Rules 2014 is as follows:
a. The Company has no activity involving conservation of energy or technologyabsorption.
b. The Company does not have any Foreign Exchange Earnings.
c. Outgo under Foreign Exchange Rs. 148.09 crores.
Loans guarantee or investments in securities
The loan made guarantee given or security provided in the ordinary course of businessby a NBFC registered with Reserve Bank of India are exempt from the applicability ofprovisions of Section 186 of the Act. As such the particulars of loans and guarantee havenot been disclosed in this Report. During the year under review the Company has investedsurplus funds in various securities in the ordinary course of business. For details of theinvestments of the Company refer to Note 13 of the financial statements.
Contracts or Arrangements with Related Parties
All the related party transactions were entered in ordinary course of business on anarm's length basis. Hence no disclosure in Form AOC-2 are necessary and the same does notform part of this report. For details of the transactions with related party entered inordinary course of business on an arm's length basis refer to the Note 50 to the financialstatements.
As required under the Master Direction - Non-Banking Financial Company - SystemicallyImportant Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions2016 the policy on materiality of related party transactions and dealing with relatedparty transactions as approved by the Board is uploaded on the Company's website at theweb link: https://bit.ly/3jkFvMn
ere are no materially significant related party transactions made by the Company withPromoters Directors Key Managerial Personnel or other designated persons which may havea potential conflict with the interest of the Company at large. None of the Directors hasany pecuniary relationships or transactions vis--vis the Company save and except thepayment of sitting fees and commission to Independent Directors.
The Company's Risk Management Policy deals with identification mitigation andmanagement of risks across the organization. The same has been dealt with the ManagementDiscussion and Analysis annexed to the Annual Report.
Whistle Blower Policy/ Vigil Mechanism
The Company's Whistle Blower policy provides a mechanism under which anemployee/director of the Company may report unethical behaviour suspected or actualfraud violation of code of conduct and personnel policies of the Company. The VigilMechanism ensures standards of professionalism honesty integrity and ethical behavior.The Whistle Blower Policy/Vigil Mechanism is uploaded on the Company's website: https://bit.ly/3eH0jdeFinancial summary/highlights
The details are spread over in the Annual Report as well as are provided in thebeginning of this report.
Subsidiaries joint ventures or associate companies
ere were no entity(ies) which became or ceased to be subsidiaries joint ventures orassociate companies of the Company during the financial year ended March 31 2020. ShriramAutomall India Limited (SAMIL) Associate of the Company provides fee-based facilitationservices for the sale of pre-owned commercial and passenger vehicles agricultural andconstruction equipment dealer's stock of pre-owned two wheelers etc. repossessed bybanks and financing companies. SAMIL has 86 Automalls located across the Country. For theyear ended March 31 2020 SAMIL's total income from operations was Rs.187.99 crores asagainst Rs.164.12 crores in the previous year 2018-19 and the Net Profit of Rs.23.41crores as against net Profit of Rs.26.23 crores in the previous year 2018-19.
Internal Financial Control System
The Company's well-defined organizational structure documented policy guidelinesdefined authority matrix and internal financial controls ensure efficiency of operationsprotection of resources and compliance with the applicable laws and regulations. Moreoverthe Company continuously upgrades its systems and undertakes review of policies. Theinternal financial control is supplemented by extensive internal audits regular reviewsby management and standard policies and guidelines to ensure reliability of financial andall other records to prepare financial statements and other data. The Audit Committee ofthe Board reviews internal audit reports given along with management comments. The AuditCommittee also monitors the implemented suggestions.
Composition of Audit Committee
The Audit Committee comprised of following directors namely Mr. S. Sridhar Chairman Mrs. Kishori Udeshi Mr. Pradeep Kumar Panja and Mr. Puneet Bhatia.
The material changes and commitments affecting the financial position of the Companywhich has occurred between the end of the financial year of the Company and the date ofthe Directors' report The impact of pandemic has been dealt with in this reportunder separate head and also in the Management Discussion and Analysis annexed to theAnnual Report.
There are no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and company's operations in future. For otherorders please refer to Note 49 of the financial statement containing details of thecontingent liabilities.
No equity shares were issued with differential rights as to dividend voting orotherwise.
No equity shares (including sweat equity shares) were issued to employees of thecompany under any scheme.
The Company has not resorted to any buy back of its equity shares during the year underreview.
There was no change in the nature of business of the Company.
There was no fraud reported by the Auditors of the Company under the Section 143(12) ofthe Act to the Audit Committee.
Your Company has constituted IT Strategy committee and the committee has approved ITStrategy policy Cyber Security and Crisis Management Policy and documents to mitigate theCompany's exposure towards IT risks. The Company is prepared to face emerging cyberthreats such as Zero-day attacks remote access threats and targeted threats and contains(i) Detection (ii) Response (iii) Recovery and (iv) Containment plan. Your Company hasvarious security controls in place to mitigate risks and safeguard the Company againstsecurity breaches and technological lapses including established disaster recoverycentres located in different seismic zones periodic upgrading of servers and datastorage accreditation from the International Organisation for Standardisation for yourCompany's information security management system. External Auditors conducted datasecurity audits of ISO 27001 standard Cyber Security Vulnerability assessment andpenetration testing (VAPT) on annual basis. The detailed terms of reference of the ITStrategy committee are given in the Corporate Governance Report forming part of the AnnualReport.
The Company has a policy for prevention of Sexual Harassment for Women at Workplace. AnInternal Complaints Committee has been constituted in line with the Sexual Harassment ofWomen at Workplace (Prevention Prohibition and Redressal) Act 2013 (the saidAct'). During the year under review there was one case filed under the said Act.
Disclosure regarding details relating to deposits covered under Chapter V of the Act isnot applicable since our company is a Non-Banking Financial Company regulated by ReserveBank of India. The Company accepts deposits as per Master Direction - non-bankingfinancial companies acceptance of public deposits (Reserve Bank) Directions 2016.
The Company has obtained a certificate from the statutory auditor certifying that theCompany has complied with the requirements of the Regulation 9 of the Master Direction Foreign Investment in India with regard to downstream investments.
The Company has complied with Secretarial Standards issued by the Institute of CompanySecretaries of India on Board Meetings Annual General Meetings and Dividend.
The Company has complied with and obtained a certificate from the statutory auditorcertifying that the Company has complied with the requirements of the Regulation 9 of theMaster Direction Foreign Investment in India with regard to downstream investments.
CONSOLIDATED FINANCIAL STATEMENTS
Pursuant to Section 129 read with Rule 5 to the Companies (Accounts) Rules 2014Statement containing salient features of the financial statement of associate company(Form AOC 1) and a statement on consolidated financial position of the Company with thatof the SAMIL an associate of the Company is attached to the Annual Report. Theconsolidated financial statements attached to this Annual Report are prepared incompliance with the applicable Indian Accounting Standards and Listing Regulations. Theannual report and the annual accounts of SAMIL and the related detailed information shallbe made available to members of the Company seeking such information. The annual accountsof SAMIL are available on the website of the Company viz.https://www.stfc.in/annual-reports.aspx Further pursuant to the provisions of Section 136of the Act the financial statements of the Company consolidated financial statementsalong with relevant documents and separate audited financial statements in respect ofSAMIL are available on the website of the Company www.stfc.in.
PARTICULARS OF EMPLOYEES
The Company has not employed any individual except the Managing Director & CEOwhose remuneration falls within the purview of the limits prescribed under the provisionsof Section 197 of the Act read with Rule 5(2) of The Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014.
The Disclosure required as under Rule 5(1) and 5(2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is annexed to this report as Annexure-III.
Pursuant to the provisions of Section 139 of the Act and the Companies (Audit andAuditors) Rules 2014 M/s Haribhakti & Co. LLP Chartered Accountants Mumbai (FirmRegistration No. 103523W/W100048) and M/s Pijush Gupta & Co. Chartered AccountantsGurugram (Firm Registration No. 309015E) had been appointed as joint Auditors of theCompany at the 38th AGM held on June 29 2017 to hold office from the conclusion of the38th AGM until the conclusion of the 43rd AGM of the Company. The Companies (Amendment)Act 2017 has waived the requirement for ratification of the appointment of auditor by theshareholders at every Annual General Meeting with effect from May 07 2018. Hence theapproval of the members is not being sought for the reappointment of the joint Auditors inline with the resolution passed for their appointment at the 38th AGM held on June 292017. The joint Auditors have confirmed that they are not disqualified to act as Auditorsand are eligible to hold office as Auditors of the Company. They have also confirmed thatthey hold a valid peer review certificate as prescribed under Listing Regulations.Approval of the members is being sought for fixation of remuneration of joint Auditors ofthe Company for the financial year 2020-21.
The Auditors' Report to the members for the year under review does not contain anyqualification reservation or adverse remark.
Secretarial Audit Report pursuant to the provisions of Section 204 of the CompaniesAct 2013 for the financial year 2019-20 issued by Mr. P. Sriram Practicing CompanySecretary (Certificate of Practice No.3310) (Membership No. FCS 4862) is annexed to thisreport as Annexure-IV. The report does not contain any qualification reservationor adverse remark.
Pursuant to Schedule V of the SEBI Regulations the following Reports/Certificates formpart of the Annual Report:
the Report on Corporate Governance;
the Certificate duly signed by the Managing Director & CEO and ChiefFinancial Officer on the Financial Statements of the Company for the year ended March 312020 as submitted to the Board of Directors at their meeting held on June 10 2020 ;
the declaration by the Managing Director & CEO regarding compliance by theBoard members and senior management personnel with the Company's Code of Conduct ; and
the Management Discussion & Analysis Report
The Auditors' Certificate on Corporate Governance is annexed to this report as Annexure-V
Your Company has been awarded by BSE Limited as Outstanding Performer on BSEBONDPlatform under the Issuer category. Your Company has been actively participating in theCorporate Bond Market and has been mobilizing long term resources by issuing NCDs andgetting them listed on the esteemed stock exchange.
The Board of Directors would like to place on record their gratitude for the guidanceand cooperation extended by Reserve Bank of India and the other regulatory authorities.The Board takes this opportunity to express their sincere appreciation for the excellentpatronage received from the Banks and Financial Institutions and for the continuedenthusiasm total commitment dedicated efforts of the executives and employees of theCompany at all levels. We are also deeply grateful for the continued confidence and faithreposed on us by all the Stakeholders including Shareholders Depositors Debentureholders and Debt holders.
| ||For and on behalf of the Board of Directors |
| ||S. Lakshminarayanan |
|New Delhi ||Chairman |
|June 10 2020 ||(DIN: 02808698) |