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Life Insurance Corporation of India

Moneycontrol

Budget 2022

Associate Partners:

  • Kotak Mutual Fund
  • Pharmeasy
  • Indiabulls
  • SBI

Presenting Partner

Life Insurance Corporation of India

Moneycontrol

Budget 2022

Technology Partner

Dell Technologies

Associate Partners

Kotak Mutual Fund
Pharmeasy
Indiabulls
SBI
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Shriram City Union Finance Ltd.

BSE: 532498 | NSE: SHRIRAMCIT |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE722A01011 | SECTOR: Finance - Leasing & Hire Purchase

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Annual Report

For Year :
2019 2018 2017 2016 2015 2014 2013 2012 2011

Director’s Report

Dear Members,

The Board of Directors (“Board”) is pleased to present this Report with the audited standalone as well as consolidated financial statements of the Company for the financial year ended March 31, 2019 (“Year”). The consolidated financial statements presented pursuant to section 129 (3) of the Companies Act 2013 (“Act”) and Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“LODR”). The report on corporate governance, management discussion and analysis and other annexures referred to form a part of this Report.

1. RESULTS OF OPERATION

The summary of standalone and consolidated financial performance of the Company for the Year is as under. The details of financials are provided in the annual financial statements

Rs.in crores

Standalone

Consolidated

Particulars

Year Ended March 31

Year Ended March 31

2019

2018

2019

2018

Total Income

5,781.30

5,158.47

6,069.86

5,438.97

Finance Charges

1,979.91

1,664.13

2,105.83

1,779.62

Depreciation

31.20

33.26

33.53

35.19

Total expenses

4,260.98

4,070.00

4,524.47

4,292.49

Profit before tax (“PBT”)

1,520.32

1,088.47

1,545.39

1,146.48

Total Tax expenses

531.44

377.53

539.86

397.18

Profit after Taxation (“PAT”)

988.88

710.94

1,005.53

749.30

Paid up equity share capital (Face value of Rs. 10/- per share)

65.99

65.97

65.99

65.97

Earning per equity share (Face value of Rs. 10/- each)

(i) Basic

149.88

107.80

151.83

112.29

(ii) Diluted

149.83

107.72

151.78

112.21

Appropriation/Transfers:

Profit available for appropriation

2,955.77

2,313.93

3,034.96

2,384.72

General reserve

(99.90)

(66.48)

(99.90)

(66.48)

Statutory reserve

(199.80)

(132.96)

(202.41)

(137.43)

Debenture redemption reserve

(3.66)

(20.60)

(3.66)

(20.60)

Appropriation for the purpose of dividend is mentioned below. The Board in their meeting held on April 24, 2019 have proposed to transfer/carry amounts mentioned above to different reserves for the Year in compliance with the requirements of regulations of Reserve Bank of India (“RBI”) and the Act. Investment made during the Year are mentioned in the notes to financial statements. Loans, guarantees and investments covered under section 186 of the Act forms a part of the Annual Financial Statements provided in this Annual Report. There were no material changes and commitments affecting financial position of the Company occurring between March 31, 2019 and the date of this report.

2. DIVIDEND

The Board had formulated Dividend Distribution Policy as required under LODR. This policy is attached as Annexure -13 and is displayed on the website of the Company (Refer Table - 1). Dividends are recommended and paid in line with the Dividend Distribution Policy of the Company. The dividend declared/ recommended are as under. The Board in their meeting held on April 24, 2019 have proposed final dividend for the Year as mentioned below for the approval of share holders at the ensuing Annual General Meeting (“AGM”). The final dividend for the Year proposed, if approved would be paid to the members, whose names appear on the register of members as on the record date for payment of dividend for the Year.

Dividend on equity shares of Rs. 10 each

No of Shares

Per share (Rs. )

Dividend Payout Ratio

Dividend Payout (Rs. in crores)

Date of payment

Interim (FY19)

6,59,84,382

6.00

17.69%

47.73

November 20, 2018

Proposed Final (FY19)

6,59,92,317

16.00

127.29

Total

22.00

175.02

Interim (FY18)

6,59,58,377

6.00

21.53%

47.64

November 23, 2017

Final (FY18)

6,59,68,562

12.00

95.43

August 17, 2018

Total

18.00

143.07

FY- Financial year ending March 31

Dividend payout is inclusive of dividend distribution tax. No of shares indicate the numbers of shares existed on respective record date for payment of dividend except final dividend for FY19, which is number of shares existed on March 31, 2019. There were no delay in payment of dividend/interim dividend during the Year.

The Register of Members and Share Transfer Books will remain closed from July 23, 2019 to July 29, 2019 (both days inclusive) for the purpose of final dividend for the Year and for 33rd AGM scheduled to be held on July 29, 2019.

3. CONTRACT OR ARRANGEMENT WITH RELATED PARTY AND ANNUAL RETURN

All the transactions during the Year with related parties referred to in Section 188 of the Act, were on arm’s length basis in ordinary course of business with requisite approval of the Audit and Risk Management Committee. The Company has formulated an approved policy on related party transactions, which is displayed on the web site of the Company (Refer Table - 1) in compliance with regulations of RBI, the Act and LODR. The details of and transactions with the related parties as required under Regulation 34(3) and 53(f) of the LODR appear in note no.47 of the notes to financial statements. The Audit and Risk Management Committee, during the Year, approved the related party transactions requiring it’s approval. There were no material related party transactions during the Year with promoters, directors, key managerial personnel or other designated persons in potential conflict with the interest of the Company at large and this information were filed with both BSE Ltd (“BSE”) and National Stock Exchange of India Ltd (“NSE”) on quarterly basis on or before respective due dates during the Year. The extract of the Annual Return in the form MGT - 9 as required under Section 92 (3) and 134 (3) of the Act is attached to this Report as Annexure - 6 and is also displayed on the web site of the Company (Refer Table - 1)

4. STATE OF AFFAIRS

The Company is engaged in providing loans to customers and the loans are disbursed under it’s different products i.e. Enterprise Finance, Two wheeler loans, Loan against Gold, Auto Finance, Personal loans etc. There was no change in business of the Company during the Year. The business involves sourcing borrowers, understanding their requirement, provide them appropriate finance, recovery etc. The business outlets of the Company are concentrated in semi-urban and rural areas. Our customer centric approach continues to bring us more number of customers resulting in higher business. 11.50 lacs number of customers were added during the Year. Total number of customers and total number of branches/ business outlets were 38.32 lacs and 969 respectively as on March 31, 2019.

Total disbursements of loans under different products were Rs. 24,071.40 crores during the Year (2017-18 : Rs. 24,922.19 crores). Income from operations for the Year grew by 12.06% to Rs. 5,778 crores resulting in a profit before tax of Rs. 1,520 crores for the Year (2017 -18 : Rs. 1,088 crores). As at March 31, 2019 the total assets under management stood at Rs. 28,915.60 crores (March 31, 2018 : Rs. 27,579.11 crores).

During the Year, the total consolidated disbursements of loans under different products were Rs. 24,830.22 crores (2017-18 : Rs. 25,681.05 crores). Consolidated Income from operations for the Year grew by 11.59% to Rs. 6,067 crores (2017 -18 : Rs. 5,437 crores) and the same resulted in a profit before tax of Rs. 1,545 crores for the Year (2017 -18 : Rs. 1,146 crores). As at March 31, 2019 the consolidated assets under management stood at Rs. 30,763.26 crores (March 31, 2018 : Rs. 27,579.11 crores).

The Company borrows money in order to lend and to meet other requirements. Borrowing by the Company are made from banks/institutions, individuals and others through public issue/private placement of non convertible debentures (“NCDs”), acceptance/renewal of fixed deposits, issue of commercial papers, cash credit/working capital loans and other loans. The summary of borrowings by the Company is as under.

During the Year ended March 31,

Deposits

Privately placed NCDs

Public issue of NCDs

Term loans

Others

Total

2019

1,463.11

1,590.00

-

2,581.57

-

5,634.68

2018

1,295.03

1,585.00

-

4,445.00

-

7,325.03

Balance outstanding on cash credit as on March 31, 2019 was Rs. 1,581.87 crores (March 31, 2018: Rs. 1,464.19 crores), Working capital demand loans as on March 31, 2019 was Rs. 766.85 crores (March 31, 2018: Rs. 806.26 crores), Commercial Papers as on March 31, 2019 was Rs. 1,785.83 crores (March 31, 2018: Rs. 2,188.31 crores) and Securitisation linked Term Loan as on March 31, 2019 was Rs. 1,112.51 crores (March 31, 2018: Rs. 93.49 crores)

The Company serviced all its repayments and interests for different borrowings including due during the Year on respective due dates. The deposits and debentures issued/allotted in nondematerialised form were paid on submission of the claim with documents. 9,718 number of deposits amounting to Rs. 115.82 crores were outstanding to be claimed or renewed on maturity as an March 31, 2019. Subsequent follow-up by the Company for repayments/renewals brought it to 6,634 number of deposits amounting to Rs. 74.65 crores on the date of this report. There were no deposits which had matured and claimed, but were not paid by the Company. The Company takes steps to arrange for repayment/renewal of these unclaimed deposits.

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

There are no significant and material orders passed by the regulators or courts or tribunals impacting going concern status and company’s operation in future. There is no change in the nature of business of the Company.

During the Year, no frauds were detected. The status of frauds detected are reported in notes to financial statements. The Audit and Risk Management Committee (“ARM”) and the Board had discussed about the status of the frauds committed and existing. The Company has formulated whistle blower and vigil mechanism policy for, in addition to other matters, bringing frauds to light by the whistle blowers.

5. CAPITAL, LISTING AND IEPF

As on March 31, 2019 ,the paid up capital was Rs. 65.99 crores with an increase of Rs. 0.03 crores over the paid up capital on March 31, 2018 due to allotment of 26,555 no (2017 - 18 : 22,360) shares on exercise of options under Employees Stock Options Scheme 2006 by the eligible employees on exercise of their options under ESOP Scheme 2006. The ESOP Scheme titled SCUF ESOP Scheme 2013 as approved by the members in the Extraordinary General Meeting held on May 31, 2013 has not been implemented. The required disclosures on ESOP as on March 31, 2019 under SEBI Regulations are set out in Annexure -7 to this report. The Company has received the certificate as attached in Annexure - 8 from the auditors of the Company certifying that the ESOP Scheme is implemented in accordance with the SEBI Guidelines and in accordance with the resolution passed by the members. There was no buy back of its shares and no issue of sweat equity by the Company during the Year.

In compliance with Section 124 (5) of the Act, the Company transfers the dividend that has remained unclaimed for a period of seven years from the date of its transfer to unpaid dividend account to Investor Education and Protection Fund (“IEPF”). An amount of Rs. 0.92 crores (2017-18: Rs. 0.93 crores) is lying in unpaid equity dividend account of the Company. The unpaid dividends till March 31, 2012 were transferred to IEPF. The Company as provided under Section 124(6) of the Act, transferred all shares in respect of which unclaimed dividends were transferred to IEPF during the Year. In compliance with section 125 (2) of the Act, matured deposits, matured debentures and interest accrued on these that had remained unclaimed/unpaid for a period of seven years from the date it became due for payment were transferred to IEPF during the Year as mentioned below.

Rs. in crores

Year

Dividend

Deposits

Debentures

Equity shares in nos.

FY 19

0.090

0.000

0.664

52,794

FY 18

0.066

0.003

0.646

47,788

The Company has displayed the details of unpaid dividend on its web site (Refer Table - 1). The Company also posted individual letters to the last known address of the share holder on May 29, 2018 and September 15, 2018 and advertised at different points of time in news papers on May 30, 2018 and September 17, 2018. There will be no claim lie on the Company on account of dividend, debentures and deposits which were transferred to IEPF. However the investors can claim it from IEPF Authority by following the required process.

The unclaimed equity shares existing in physical form available with the Company/RTA, are dematerialised when required to be transferred to IEPF Authorities as required under Regulation 34 (3) read with para F Schedule V of the LODR. The status of the same is as under.

Rs. in crores

S. No

Particulars

No of equity shares holders

No of unclaimed equity shares

1

Unclaimed equity shares as on April 1, 2018

11

550

2

Shares claimed by shareholders during the Year

3

Transfer of unclaimed equity shares to IEPF during the Year as per IEPF Rules

2

50

4

Unclaimed equity shares as on March 31, 2019

9

500

The voting rights for the above said unclaimed equity shares shall remain frozen till the concerned shareholders claim the shares. No equity shares were issued with differential rights to voting, dividend or otherwise.

The listing fees to BSE and NSE for the Year were paid on time. The shares of the Company continue to be listed on BSE Ltd and National Stock Exchange of India Limited.

6. HUMAN RESOURCE

Our human resource is the best in class. In order to re-skill and enhance skill we constantly hold programmes in respective areas. This helps for growth in career of employees and achievement of Company’s goal. We focus on localisation of employees and have increased our emphasis on rewards and recognisition in order to keep our work force motivated. The relations among employees at all levels are guided by mutual respect, openness, honesty, co-operation and trust. The information is shared among employees on need to know basis. During the Year, the relation of the Company with employees was cordial with no unrest. The Company has formulated policy on prevention of sexual harassment of women employees in work place. The Company had constituted Internal Complaints Committee as required under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. There were no complaints received during the Year. The total employee strength of the Company as on March 31, 2019 was 27,267 with 8210 number of employees added during the Year. As required under Section 197(12) of the Act read with Rule - 5 (1) and 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rule, 2014, the information on remuneration is given in table 2.1 of the Corporate Governance Report and other details are attached as Annexure - 9 to this Report.

7. SUBSIDIARY AND CONSOLIDATED FINANCIAL STATEMENTS

M/s Shriram Housing Finance Ltd CIN - U65929TN2010PLC078004) (“SHFL”) is the unlisted subsidiary of the Company with 77.25% holding by the Company in the equity of SHFL. SHFL is a housing finance company registered with National Housing Bank (“NHB”) (Registration Number-08.0094.11) with registered office at Chennai. There was no entity which became or ceased to become subsidiary during the Year. The entities shown in the Notes to Accounts under Related party disclosures as Associates are “subsidiaries” of Shriram Capital Limited and hence such entities are treated as “associates” as per paragraph 9(b)(ii) of IndAS 24. The equities of SHFL are not listed on any stock exchange, but has debt securities listed on BSE. SHFL follows April to March as the financial year. SHFL provides housing loans to cross section of customer segments. SHFL has 10,378 customers with 11,896 loans in its portfolio as on March 31, 2019. The total employee strength of SHFL as on March 31, 2019 was 677.

SHFL provides home loans, loans against property and finances housing projects. The CAGR of loan disbursement of SHFL over last five years was 26.23% with total disbursement during the Year being Rs. 758.82 crores. The total borrowings of SHFL as on March 31, 2019 was Rs. 1,688.83 crores, out of which Rs. 580.14 crores was from allotment of NCDs and the balance amount was from borrowings from Bank and National Housing Bank (NHB).

Consolidated financial statements of the Company for the Year prepared as per Section 129(3) of the Act and in compliance with applicable accounting standards and LODR were audited by the statutory auditors of the Company. The consolidated financial statements along with the report of the auditors of the Company thereon are attached to this Report. Statement containing salient features of the financial statements for the Year in form AOC- 1 is attached to the financial statements of the Company.

The annual accounts, annual reports and the related detailed information on SHFL shall be made available to the shareholders of the Company and to the shareholders of SHFL seeking such information at any point of time. In accordance with Section 136 of the Act, audited annual financial statements, consolidated financial statements and related information of the Company and the audited financial statements of SHFL are displayed on the web site (Refer Table - 1) and the same shall be kept at the respective Registered Office of the Company and SHFL for inspection by any shareholder during business hours. Shriram Capital Limited and SHFL continued as promoter and subsidiary of the Company respectively.

8. RESERVE BANK OF INDIA (RBI) DIRECTIONS/ GUIDELINES

Being an NBFC registered with RBI, the Company is regulated by the applicable regulations of the RBI. The Company continues to comply with all applicable regulations of RBI. The details of registration with RBI appear on note no -1 to notes to the financial statements. The Board confirms that the Company followed the corporate governance standards prescribed by the RBI. The note nos 48, 52 to 78 and other notes of the notes to financial statements contain the information required to be reported under the regulations of the RBI. The disclosure with under the Act with respect to deposits is not applicable to our Company as our Company is a NBFC regulated by RBI. The Company accepts/ renews deposits as per Master Direction -Non Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 2016.

Description

March 31

2019

2018

Capital Adequacy and Reserve Ratio (“CRAR”)*

23.12%

21.37%

Net owned funds (Rs. in crores)

6,140.38

5,412.69

Statutory Liquidity Requirement in (Rs. in crores)

530.50

610.57

Deposits ( Rs. in crores)

3,254.04

3,227.23

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

Our principal source of liquidity are cash, cash equivalent, current investments and cash flow from operations. We maintain sufficient cash to meet strategic and operational needs. We understand that the liquidity in the Balance sheet need to balances between return and risk. We believe that our working capital is adequate to meet our current requirements.

9. CORPORATE GOVERNANCE

The Company follows the corporate governance practices and standards prescribed under LODR, regulations of RBI and other regulations. Report on corporate governance as required under Regulation 34(3) of LODR together with a certificate for the purpose from the auditors of the Company confirming the compliance with the corporate governance is attached to this Report (Annexure - 2). As required under Regulation 34(2)(e) and 34(3) of LODR, the Management Discussion and Analysis on the business of the Company is attached as Annexure - 3. As required under Regulation 17 (8) of the LODR, a compliance certificate, duly signed by the Managing Director & Chief Executive Officer and Chief Financial Officer on the financial statements of the Company for the Year, was submitted to the Board at their meeting held on April 24, 2019 (Annexure - 4). The relevant provisions of the voluntary guidelines are adopted in the areas deemed appropriate.

10. BUSINESS RESPONSIBILITY REPORT (“BRR”)

Regulation 34(2)(f) of the LODR requires top 500 listed entities based on market capitalisation as on March 31, 2016 to include BRR as a part of the Annual Report. The Company being one such entity, has included BRR in this Annual Report (Annexure -14).

11. CORPORATE SOCIAL RESPONSIBILITY (“CSR”)

The Company constituted a CSR Committee consisting of three Directors including two independent directors as required under Section 135 of the Act. The details of the CSR Committee appear on the Annual Report on CSR. Annual Report on CSR activities as required under Rule 9 of the Companies CSR Policy Rules, 2014 of the Act is attached to this report as Annexure - 10. The CSR policy of the Company as recommended by the CSR Committee, was reviewed and approved by the Board and is displayed on the website of the Company (Refer Table - 1). The CSR policy contains the details of CSR initiatives of the Company as required under Section 134 (3) (o) of the Act. During the Year, the Company undertook CSR Projects on health, education, skill development through implementing Agent. The spend on CSR amounting to Rs. 4.50 crores (2017-18 : Rs. 14.00 crores) during the Year was approved by the Board of the Company as recommended by the CSR Committee. The Board affirms that the CSR activities are implemented in accordance with CSR Policy.

12. BOARD AND COMMITTEES

The Company had optimum number of Directors and during the Year. Board met 4 times during the Year and interval between two meeting did not exceed 120 days. Members of the Board possess requisite knowledge and experience to steer the Company. The brief profile of each director appear on the website of the Company (Refer Table - 1). Details of meetings of the Board and committees held and the details about appointment, induction, training, retirement and resignation of Directors/KMPs during the Year are mentioned in the Corporate Governance report (Annexure - 1). The Company complied with Secretarial Standards issued by the Institute of Company Secretaries of India. The Board has Audit and Risk Management Committee (“ARMC”) and Nomination and Remuneration Committee (“NRC”) as specified under Section 177 and 178 of the Act respectively. As required under Section 149 (7) and 134(3) (d) of the Act, the Company received necessary declaration from each independent director about his/her meeting the criteria of independence as laid down under of the Act and LODR. A statement by the Managing Director confirming receipt of this declaration from each independent director of the Company is attached as Annexure - 11 . The Company received required deed of covenant at the time of appointment of directors and declaration during the Year from the Directors as required under regulations of RBI. The Board on the recommendation of NRC has formulated a policy for selection, appointment and remuneration of 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 displayed on the web site of the Company (Refer Table - 1). As required under section 134(3)(p) of the Act and LODR, annual performance evaluation of it’s own, the Committees, Chairman of the Board and individual directors based on the criteria and frame work adopted by the Board was carried out during the Year consisting of participation, attendance, duties, obligations, contribution for effectiveness of Board etc. The outcome of such evaluation done during the Year was discussed by the NRC/Board and both found it satisfactory. Each Director has given his/ her declaration to the Company for not holding any shares in the Company and having no relation inter se with any Director. Independent Directors attend familiarisation programme on joining the Board and annually the details of which is displayed on the web site (Refer Table - 1). Sri C R Muralidharan (DIN - 02443277), Sri Diwakar B Gandhi (DIN - 00298276), Sri Pranab Prakash Pattanayak (DIN - 00506007) and Sri Venkataraman Murali (DIN - 00730218) who were appointed as addition directors with effect from April 1, 2019. Sri C R Muralidharan, Sri Diwakar B Gandhi, Sri Pranab Prakash Pattanayak and Sri Ventakaraman Murali have expressed their intention and confirmed their eligibility to be appointed as Directors of the Company. The details on their appointment as directors forms a part of the Notice of the ensuing AGM. It would be the second term as independent directors, if Sri Pranab Prakash Pattanayak and Sri Venkataraman Murali are appointed in the ensuing AGM. There was no appointment/ resignation of Key Managerial Personnel (KMPs) during the Year. As per provisions of the Act and Articles of Association of the Company, Gerrit Lodewyk Van Heerde holding (DIN - 06870337) will retire by rotation and has expressed that he would not be available for directorship in the Company and has not sought for re-appointment at the ensuing AGM. In compliance with requirements under section 149(7) of the Act and Regulation 16(1) of the LODR the Board has received the declaration from all the Independent Directors about their independence and the Board is satisfied about it

13. DIRECTORS’ RESPONSIBILITY STATEMENT

The financial statements were prepared by following Indian Accounting Standard (“Ind AS”) prescribed under Section 133 (3) of the Act and relevant rules and guidelines issued by Securities and Exchange Board of India (“SEBI”). Pursuant to Sections 134 (3) (c) and 134 (5) of the Act with respect to Directors’ responsibility statement, the Directors of the Company hereby confirm, in the preparation of annual accounts for the Year that :

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

(ii) the accounting policies have been selected and applied consistently and reasonable and prudent judgments and estimates have been made so as to give a true and fair view of the state of affairs of the Company as at March 31, 2019 and statement 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 of adequate accounting records in accordance with the provisions of the Act for safeguarding the 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, which were adequate and were operating effectively and

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

14. AUDIT AND AUDITORS

Internal audits were conducted periodically during the Year by the internal auditor appointed by the ARM and the Board. In addition to others matters, internal audit did independent and objective assessment to monitor adequacy, effectiveness and adherence to the internal controls, processes and procedures instituted by the management and extant regulations and conducted a Risk-based approach of Internal Audit (RBIA) by taking into account the RBI guidelines and established practices. The internal audit reports were submitted by the internal auditor to the Audit and Risk Management Committee (“ARM”) and were circulated to the relevant management teams. The ARM regularly reviewed the audit findings and the adequacy and effectiveness of the internal control measures.

The Company has documented its internal financial controls considering the essential components of various processes, physical and operational. This includes its design, implementation and maintenance along with periodical internal review of operational effectiveness and sustenance which are commensurate with the nature of its business and the size of its operations. This ensures conducting business in orderly and efficiently by adhering to the Company’s policies, safeguarding of its assets, prevention of errors, accuracy and completeness of the accounting records and the timely preparation of reliable financial information. The internal financial controls with reference to the financial statements were adequate and operating effectively.

The auditors of the Company, M/s G.D. Apte & Co. Firm Registration No - 100515W Chartered Accountants (“GDA”) have submitted to the members of the Company the attached Independent Auditors Reports for the Year on standalone financials and consolidated financials. Both the reports are unqualified, without any reservation or adverse remark or disclaimer and thus the Board does not have any explanation or comment. M/s P. Sriram & Associates, Company Secretaries in practice, Chennai (“PSA”) appointed by the Company as the secretarial auditors pursuant to Section 204 of the Act have conducted audit and have submitted their report as attached in Annexure - 15 to the Members, which is unqualified, without any reservation or adverse remark or disclaimer. Therefore, Board does not have any explanation or comment on such Secretarial Audit Report. Maintenance of Cost records and conducting of cost audits specified under section 148(1) of the Act are not applicable for the business activities carried out by the Company. During the Year neither GDA nor PSA reported to ARM under Section 143(12) of the Act any instances of fraud committed by officers or employees of the Company. The Board appointed PSA as secretarial auditor of the Company for the financial year 2019-20.

GDA was appointed by the members as the auditors of the Company from 32nd AGM till conclusion of 36th AGM of the Company. GDA have confirmed their eligibility and have communicated their willingness to continue as auditors. Necessary resolution to fix remuneration of GDA as Auditors is proposed at the ensuing AGM.

15. MANAGEMENT OF RISK

The risk management function of the Company help in identifying, analysing, assessing, mitigating, monitoring and governing risks. The Company has a risk management policy. A separate section in this report titled “Management Discussion and Analysis” discusses about risk and its mitigating factors and the matters required under Section 134 (n) of the Act. In the opinion of the Board, there are no risk existing to threaten the existence of the Company. Report on risk assessment is presented to ARM at its meeting by the risk management team of the Company.

16. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING 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 energy, absorption of technology and foreign exchange earnings/outgo, which for the Year are furnished below.

The operations of the Company are not energy intensive. However, adequate measures for conservation of energy, usage of alternate sources of energy and investments for energy conservation, wherever required were taken. The Company did not absorbed any technology. There were foreign exchange earnings of Rs. 1.67 crores (FY2017 -18 : Rs. 1.45 crores ). The outgo of foreign exchange was Rs. 0.25 crores (FY2017 - 18 : Nil)

17. ACKNOWLEDGEMENT

We thank our customers, investors, bankers, employees, trustees, vendors, auditors, deposit holders and debentureholders. The Board expresses its appreciation and gratitude for the guidance and cooperation extended to the Company by RBI, statutory authorities and regulators. The Board acknowledges the guidance of M/s GDA and M/s PSA to the Company. The Board records the commitment and dedication of employees. The Board is grateful to the shareholders, depositors, debenture holders and debt holders of the Company for their patronage.

For and on behalf of the Board of Directors

Place : Chennai Debendranath Sarangi

Date : April 24, 2019 Chairperson

Director’s Report