Dear Shareholders,
Your Directors are pleased to present their Thirty-third Report together with the
audited financial statements of your Company for the Financial Year ended 31st March 2023
("FY2023").
Financial Summary and Operational Highlights
Rs in crores
|
Consolidated |
% Change |
Standalone |
% Change |
Particulars |
FY2023 |
FY2022 |
|
FY2023 |
FY2022 |
|
Total Income |
12,832.4 |
11,400.5 |
12.6 |
11,056.1 |
9,718.8 |
13.8 |
Less : Finance Costs |
5,094.3 |
4,417.4 |
|
4,576.7 |
3,920.2 |
|
Expenditure |
4,695.6 |
5,347.3 |
|
3,539.6 |
4,314.9 |
|
Depreciation, Amortisation and Impairment |
226.0 |
152.0 |
|
187.2 |
126.8 |
|
Total Expenses |
10,015.9 |
9,916.7 |
1.0 |
8,303.5 |
8,361.9 |
(0.7) |
Profit before exceptional items and taxes |
2,816.5 |
1,483.8 |
|
2,752.6 |
1,356.9 |
|
Share of profit of Associates & Joint Ventures |
43.0 |
45.0 |
|
- |
- |
|
Exceptional items |
(56.1) |
20.6 |
|
(54.5) |
- |
|
Profit Before Tax |
2,803.8 |
1,549.4 |
81.0 |
2,698.1 |
1,356.9 |
98.8 |
Less : Provision For Tax |
- |
- |
|
- |
- |
|
Current Tax |
498.2 |
411.4 |
|
486.3 |
348.1 |
|
Deferred Tax |
234.4 |
(12.3) |
|
227.5 |
20.0 |
|
Profit After Tax for the Year |
2,071.2 |
1,150.3 |
80.1 |
1,984.3 |
988.8 |
100.7 |
Less : Profit for the year attributable to |
(1.2) |
13.4 |
|
- |
- |
|
Non-controlling interests |
|
|
|
|
|
|
Profit for the Year attributable to owners of the Company |
2,072.4 |
1,136.9 |
82.3 |
1,984.3 |
988.8 |
100.7 |
Balance of profit brought forward from earlier years |
6,147.0 |
5,285.0 |
|
5,248.0 |
4,558.4 |
|
Add: Other Comprehensive income /(Loss) |
(13.3) |
(3.2) |
|
(12.9) |
(2.4) |
|
Balance available for appropriation |
8,206.1 |
6,418.7 |
|
7,219.4 |
5,544.8 |
|
Less: Appropriations |
- |
- |
|
- |
- |
|
Dividend paid on Equity Shares |
443.9 |
98.6 |
|
444.8 |
98.8 |
|
Transfer to Statutory Reserves |
398.1 |
223.6 |
|
398.0 |
198.0 |
|
Add/Less: Other Adjustments: |
|
|
|
|
|
|
Gross obligation at fair value to acquire non-controlling interest |
59.4 |
54.4 |
|
- |
- |
|
Changes in Group's Interest |
(1.4) |
(3.9) |
|
- |
- |
|
Balance carried forward to balance sheet |
7,422.1 |
6,147.0 |
|
6,376.6 |
5,248.0 |
|
Net worth |
18,560.1 |
16,896.3 |
9.8 |
17,088.9 |
15,628.1 |
9.3 |
*Due to rounding off, numbers presented in above table may not add up precisely to the
totals provided
Consolidated Performance Highlights
Total Income for the year was Rs.12,832.4 crores as compared to Rs. 11,400.5 crores in
FY2022. Revenue from operations for the year was Rs.12,699.5 crores as compared to Rs.
11,317.6 crores in FY2022.
Profit Before Tax ("PBT") for the year was Rs. 2,803. crores as compared to
Rs. 1,549.4 crores in FY2022. Profit After Tax ("PAT") (Net of non-controlling
interest) for the year was Rs.2,072.4 crores as compared to Rs. 1,136.9 crores in FY2022.
Standalone Performance Highlights
During the year under review, the Company has disbursed 49,541.4 crores as against
27,581.5 crores during the previous year, an increase of 79.6% over the same period in
previous year. Total Income was 11,056.1 crores for the year ended 31st March 2023 as
compared to 9,718.8 crores for the previous year.
PBT grew by 98.8% at 2,698.1 crores as compared to Rs. 1,356.9 crores for the previous
year. PAT grew by 100.7% at 1,984.3 crores as compared to Rs.988.8 crores in the previous
year.
The Assets Under Management ("AUM") stood at Rs.99,565 crores as at 31st
March 2023 as against Rs. 79,797 crores as at 31st March 2022. Gross Stage 3 improved due
to focused collection initiatives and macro tailwinds. The Gross Stage 3 loan assets stood
at Rs. 3,717 crores, lower than that on 31st March 2022 (Rs. 4,976 crores). The Gross
Stage 3% to Business Assets declined from 7.7% as at 31st March 2022 to 4.5% as at 31st
March 2023.
Material changes from the end of the financial year till the date of this report
No material changes and commitments have occurred after the closure of the FY2023 till
the date of this Report, which would affect the financial position your Company.
ECL and other updates
The Company has updated the Expected Credit Loss ("ECL") model with the
latest set of data at periodic intervals for the year ended 31st March 2023, to capture
the significant changes in economic and market drivers, customer behaviours and government
actions to reduce the risk of uncertainty due to judgements and estimations considering
economic outlook data as per government agencies around the growth parameters. The Company
also continues to undertake risk assessment of its credit exposures in addition to the
model determined ECL provision, to reflect deterioration in the macroeconomic outlook and
uncertainty in credit evaluations. The Company held provisions (expected credit loss on
financial assets) aggregating to 3,294.7 crores as on 31st March 2023 ( 4,508.8 crores as
on 31st March 2022).
The Company's net Non-Performing Assets ("NPA"), net Stage-3 assets ratio
stood at 1.9% as at 31st March 2023 as against 3.4% as at 31st March 2022.
Transfer to Reserves
The Company proposes to transfer an amount of 398.1 crores to the Statutory Reserves,
in compliance with Section 45-IC of the Reserve Bank of India Act, 1934. Further, the
Board of your Company has decided not to transfer any amount to the General Reserve for
the year under review. An amount of 6,376.6 crores is proposed to be retained in the
Profit and Loss Account of the Company.
The Company maintains sufficient liquidity buffer fulfil its obligations arising out of
issue of debentures. The Company being an NBFC, is exempt from transferring any amount to
debenture redemption reserve in respect of privately placed or public issue of debentures,
as per the provisions of Section 71 of the Companies Act, 2013 read with Rule 18 of the
Companies (Share Capital and Debentures) Rules, 2014. The Company in respect of secured
listed non-convertible debt securities maintains 100% security cover or higher security
cover as per the terms of Information Memorandum and/or Debenture Trust Deed, sufficient
to discharge the principal amount and interest thereon. of Dividend
Considering stellar performance and strong cash flows, your Directors are pleased to
recommend a dividend of 6 per equity share (300%) on the face value of 2 each, for FY2023
vis- a- vis 180% dividend in FY2022. Dividend is subject to approval of the Members at the
ensuing Annual General Meeting and shall be subject to deduction of tax at source. The
dividend outgo for FY2023 will absorb a sum of 741.3 crores, which constitutes 37.35% pay
out of Company's Standalone Profits for FY2023 and the same is within the ceilings
specified in the Reserve Bank of India ("RBI") guidelines on Declaration of
Dividend by NBFCs dated 24th June 2021.
The Company has not paid any Interim Dividend during the financial year under review.
The dividend recommended is in accordance with the Company's Dividend Distribution
Policy and in compliance with the framework prescribed in RBI guidelines on Declaration of
Dividend by NBFCs.
Tax on Dividend
In terms of the provisions of the Income-tax Act, 1961, the Company will make payment
of dividend after deduction of tax at source ("TDS") as per the prescribed
rates, to those shareholders whose name appear as beneficial owner/ member in the list of
beneficial owners to be furnished by National Securities Depository Limited/ Central
Depository Services (India) Limited in case of shares held in dematerialised form, or in
the Register of Members in case of shares held in physical form, as at the close of
business hours on 21st July 2023 (Book Closure).
The Company has by email dated 17 th May 2023, informed the Members about the deduction
of tax at source on dividend. As it is imperative for the Company to receive the relevant
information and declarations from shareholders to determine the details of the TDS rates
applicable to different categories of shareholders, shareholders are requested to submit
the necessary documents as mentioned in the aforesaid communication, on or before 10th
July 2023. The said communication is also uploaded on the website of the Company at
https://www.mahindrafinance.com/ investors/disclosures-reg-46-62/investor-information.
Unclaimed dividend transferred to Investor
Education and Protection Fund
In terms of the provisions of Sections 124 and 125 of the Companies Act, 2013
("the Act") read with the Investor Education and Protection Fund Authority
(Accounting, Audit, Transfer and Refund) Rules, 2016, during the year under review, the
Company has transferred an amount of 7,19,604 being the unclaimed dividend of the Company
for FY2015 to the Investor Education and Protection Fund ("IEPF"). The details
of total amount(s) lying in unpaid dividend account of the Company for last seven years
and due to be transferred to IEPF, is mentioned in the Report on Corporate Governance,
forming part of this Annual Report.
Dividend Distribution Policy
In compliance with the provisions of Regulation 43A of the SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015, the Company has formulated Dividend
Distribution Policy, setting out criteria and circumstances to be considered by the Board
while recommending dividend to the shareholders. The Dividend Distribution Policy was
amended by the Board to inter-alia, incorporate the provisions pertaining to eligibility
criteria, aspects to be considered by the Board while recommending dividend, ceiling on
dividend payout ratio etc. in accordance with the Reserve Bank of India guidelines on
declaration of dividend dated 24th June 2021.
The revised Dividend Distribution Policy is appended as "Annexure I" and
forms part of this Annual Report. The Dividend Distribution Policy can also be accessed on
the Company's website at the web-link: https://
www.mahindrafinance.com//investors/disclosures-reg-46-62/corporate-governance#MMFSL-policies
Operations
Your Company's main line of business is financing of automobiles and tractors for
customers who use them mainly for earning their livelihood and for their personal
mobility. It also focusses on other businesses like pre-owned car loans, housing finance,
SME financing, insurance broking, mutual fund distribution, fixed deposits etc.
Additionally, your Company is also foraging into other areas like leasing, consumer
finance and loan against property. By offering a wide range of easy and affordable
products and services tailored to fit their cashflow cycles, your Company continues be a
vital financier to its customers in semi-urban and rural areas. Your Company has retained
its leadership position in financing the Mahindra range of vehicles and tractors.
Additionally, your Company is expanding its connect with other leading Car Original
Equipment Manufacturers (OEMs).
Building Blocks for Growth, Efficiency, Customer
Experience
A. Deeper Physical Reach
Your Company has an extensive PAN-India distribution network with 1,386 offices
spanning across 27 States and 7 Union Territories as on 31st March 2023. Due to its
extensive office network, your Company is less dependent on any one region in the Country.
Additionally, some regional, climatic, and cyclical dangers, such as heavy monsoons or
droughts, are lessened by geographic diversification. The vast office of the Company also
gains from a decentralised authorisation system, which enables each office to organically
build its business and use its client connections by providing financial products like
vehicle financing, pre-owned car loans, housing finance, SME financing, insurance broking,
mutual fund distribution, fixed deposits etc. There are a few guardrails defined centrally
to ensure asset quality standards. Your Company believes that its efficient office network
in rural and urban areas has afforded an opportunity to meet the financial needs of the
people of India by identifying and comprehending their needs and aspirations.
.
B. Enhancing Digital Reach
As mobile technology continues to evolve, your Company has placed emphasis on
implementation of mobile app ("MF Customer app") as a means of providing
customer support, fostering brand loyalty, raising customer retention rates, of inviting
new customers and earning income. The MF Customer app provides customers with a variety of
services right at their fingertips, saving time and money as compared to visiting a
physical branch. The app, which is available in 11 languages (including 9 Indian regional
languages), enables customers to apply for car loans, access and manage their loan
accounts and make EMI of payments using a variety of payment methods, including debit
cards, net banking, UPI, and wallets. to In FY2023, the app users have increased by 22%
from the previous year (8.8 lakh users in FY2023 as compared to 7.2 lakh users in FY2022).
Your Company has also offered mobile app to its dealer partners & dealer salesmen on
PAN India basis. Your Company also launched specialised end to end journey named
Used Car Digi Loans' in association with Car&Bike (by Mahindra First Choice
Wheels) and Rupyy (by CarDekho) to enable customers to get customised loan offers from
your Company enabling them to take faster buying decisions.
C. Leveraging Technology
As digitisation picks up pace, the Company's digital ambitions have grown multi-fold in
the areas of improving business performance, better credit underwriting, enhancing
customer experience, developing customised products, rethinking existing products.
The rollout of QuickCheck', an offer generation engine for premium target base of
customers booking Mahindra vehicles like Scorpio N, XUV
300/400/700 at dealership helps dealers and sales team of automotive vertical to pitch
right offers from your Company to the premium base of customers on the fly at showroom
itself. Also, assists dealers and sales teams in the automotive vertical in quickly and
effectively presenting the best offers from the Company to the premium client base
in-store.
OneApp', an application to boost experience of field employees, has changed the
digital posture of the way we did business earlier. Simultaneously, we continue to put a
lot of effort on real-time digital utilities for KYC, NPA Stamping, and e-NACH while also
strengthening our core through new partnerships for payment gateways, generating digital
leads, managing collections, cloud base omnichannel customer experience etc. As part of
our endeavour to communicate with our customers across a variety of digital platforms, we
have initiated set up of an end-to-end hyper personalised marketing tech platform. We have
started several digital interventions at MMFSL, spanning all employee categories (field
force, support staff, office, remote staff, work home employees), across all geographic
regions, as a part of our ongoing effort to improve our employee experience.
The Company also continues to expand the penetration of data sciences and artificial
intelligence. The implementation of strategic initiatives in business and collections has
benefited greatly from the use of business intelligence dashboards and insights. In terms
of business lines and volumes, the use of Machine Learning models in lending and retention
has increased. Additionally, we regularly monitor risk minimisation on the technology
security front by using continuous risk management procedures that are compliant with ISO
27001:2013 and the COSO
framework. Your Company regularly assesses risk, which involves implementing new
technology, keeping track of it and having external/internal specialists audit the same.
By implementing manual and automated technologies, the risks discovered during the
assessment are suitably managed by mitigating, minimising, or transferring the risks. In
accordance with the government's planned data privacy initiatives, we are adopting data
privacy practises.
D. Data as Competitive Advantage
Your Company has advantage when using analytics and artificial intelligence thanks to
its operations in the rural and semi-urban markets for more than 25 years and dealing with
a variety of profiles. Your Company has introduced its own algorithms to provide low-risk
customers with quicker loan approvals at variable interest rates, which will aid in
growing market share, enhancing portfolio quality and boosting profitability. The
integrated activation of Digital, Analytics and Technology will significantly improve
customer acquisition, retention, cross-selling and collections.
E. Growth Drivers for Future
The customer and competitive environment is ever changing. A need was felt to recraft
your Company's vision to help steer its growth over the next few years. Therefore, the
management with approval of the Board has redefined the Vision for your Company which aims
at positioning your Company as "A leading and responsible financial solutions
partner of choice for emerging India"
This new vision encompasses our commitment fromto service our customers in emerging
India in a responsible manner and simultaneously achieve profitable growth. It further
establishes our commitment to be a provider of comprehensive financial solutions, beyond
lending. The phrase "partner of choice" holds significance as it reflects our
dedication to prioritising digital initiatives, enhancing customer experience and
expanding our range of products.
The Mission is to deliver a sustainable profitable growth characterised by continued
growth including 2X Assets Under Management ("AUM"), stable asset quality (Gross
Stage-3 assets < 4%), increased Return on Assets ~ 2.5% and improved operating leverage
(Cost to Assets ~2.5%) by 2025.
Your Company is concentrating on developing its core products and expanding into new
growth areas. Financing of Pre-owned cars, used tractors and commercial vehicles have a
lot of head room to grow within the vehicle segments while increasing market share for its
existing range of products.
Your Company will keep on further refining its risk policy norms and underwriting to
ensure that asset quality continues to stay top-class.
Your Company plans to scale its non-vehicle lending portfolio which includes SME loans,
loan against property, personal loans, and other segments. These businesses have a
promising future and the Company believes that the group strength positions us to
participate in this growth journey.
The Company's Leasing and Subscription platform Quiklyz' which facilitates the
customers to access new cars without the hassle of car ownership is helping to scale both
the Corporate and Personal segments. It was launched initially in the metro cities and has
now scaled to 15 other locations.
To summarise, your Company will focus on continuing to strengthen its dominance as an
auto financier in emerging India, while also increasing the contribution of non-vehicle
business to grow its AUM from 65,000 crores in FY2022 to 2X by FY2025.
For more information on the performance of the Company, risk management framework and
initiatives please refer to Management Discussion and Analysis section forming part of
this Annual Report.
Other Developments
Amendment to Memorandum of Association
In order to ensure that the Company's ongoing activities and emerging opportunities in
the financial services space for furtherance of Company's main objects and activities
connected thereto in context of its present business are explicitly mentioned and are
within the sphere of Memorandum of Association ("MOA") and to ensure
cohesiveness and comprehensiveness of the MOA, the Board of Directors have subject to
approval of the shareholders of the Company, approved amendment to a sub-clause in the
"Matters which are necessary for furtherance of the objects specified in Clause (A)
of MOA".
Buy out of stake in Mahindra Insurance Brokers Ltd, subsidiary of the Company
Your Company currently holds 80% of the paid-up equity share capital of Mahindra
Insurance Brokers Ltd ("MIBL") and the remaining 20% is held by Inclusion
Resources Private Limited ("IRPL").
Pursuant to the approval of the Board and in accordance with the agreement between the
two shareholders (i.e., Company & IRPL), your Company has entered into agreement to
purchase 20% stake in MIBL, subsidiary of the Company, from IRPL at an aggregate
consideration of 206.39 crores, on 21st October 2022 subject to approval of Insurance
Regulatory and Development Authority of India ("IRDAI"). An application seeking
approval has been filed with IRDAI on 25th November 2022. Post receipt of approval from
IRDAI, transfer of shares and payment of consideration would be effectuated. Once the
acquisition is completed, MIBL will become a wholly owned subsidiary of your Company.
Change in Nature of Business
There has been no change in the nature of business and operations of the Company during
the year under review.
RBI Compliances
The Company has always endeavoured to maintain the highest standards of compliance and
culture within the organisation and shall continue to do so going ahead. The Company
continues to comply with all the applicable laws, regulations, guidelines etc. prescribed
by the Reserve Bank of India ("RBI"), from time to time. The Company continues
to be in compliance with the norms pertaining to capital adequacy, non- performing assets
etc. Your Company continues to invest in talent, systems and processes to further
strengthen the control, compliance, risk management and governance standards in the
organisation.
Scale Based Regulations
The Scale Based Regulations ("SBR") were notified by the Reserve Bank of
India ("RBI") vide its circular dated 22nd October 2021, effective
from1 st October 2022. Pursuant to the Scale Based Regulations, the RBI has classified
your Company as NBFC in Upper Layer ("UL"). Your Company has ensured full
compliance with various requirements prescribed under SBR for NBFC-UL within the specified
III timelines including adopting policy for enhanced regulatory framework, Internal
Capital Adequacy Assessment Process Policy (ICAAP), complying with large exposure norms,
setting limits for sensitive sector exposure etc.
Chief Compliance Officer
In compliance with SBR, the Board has appointed a Chief Compliance Officer to oversee
the compliances as applicable to the Company. The Board has also adopted Compliance Policy
in compliance with SBR effective 28 th March 2023.
Internal Ombudsman
Your Company has appointed an Internal Ombudsman ("IO") in compliance with
the RBI Circular dated 15th November 2021. A Report of number of complaints
escalated to IO and status of disposal of such complaints during the period under review
is being placed before the Board for its review in compliance with the aforesaid RBI
circular.
Finance
During the year under review, Reserve Bank of India ("RBI") focussed on
withdrawal of accommodation to ensure that inflation progressively aligns with the target,
while supporting growth. Accordingly, RBI raised the REPO Rate by 250 bps to take the REPO
rate from 4% in April 2022 to 6.50% by March 2023. Liquidity conditions remained tight
throughout the year with the banking sector liquidity falling from an estimated of over
7.50 lakh crore at the beginning of the financial year to around 1 lakh crore at the end
of the financial year.
Inflation in India also continued to be on a higher side throughout the year. After
touching a high of 7.79% April 2022, Consumer Price Index ("CPI") inflation has
moderated to 5.66% in March 2023 which is below the RBI's upper threshold of 6%. Globally,
inflation continued at elevated levels, with inflation in US, UK and Euro Zone
significantly higher than the target range for these economies. The rupee continued weaken
against the US Dollar throughout the year, in the wake of high probability of global
recession. The rupee fell from 75.72/$ to low of over 83/$ before closing back at around
the 82/$ mark.
In line with the domestic macro indicators i.e. high inflation, weakening rupee, higher
credit growth vis a-vis deposit growth and unfavourable global macro-indicators i.e.
higher interest rates, high inflation and a high probability of recession in the developed
economies like US, UK and Euro Zone, the interest rates in India also continued to rise
throughout the year. The 1 Year and 2 Year G Sec curve moved from 4.81% and 5.49% in April
2022, to 7.18% and 7.10% respectively in March 2023 along with the movement in REPO Rate.
During the year Interest cost on borrowed funds for the company increased from 6.68% as of
31st March 2022 to 7.53% as of 31st March 2023.
During the year under review, your Company continued with its diverse methods of
sourcing funds in addition to regular borrowings through Secured and Unsecured Debentures,
Term Loans, External Commercial Borrowings, Securitisation, Fixed Deposits, Commercial
Papers, Inter Corporate Deposit etc. and maintained prudential Asset Liability match
throughout the year. Your Company sourced long-term debentures and loans from banks and
other institutions at attractive rates. Your Company continues to expand its borrowing
profile by tapping new lenders and geographies.
Securitisation
During the year, your Company successfully completed four securitisation transactions
aggregating to 3954.85 crores.
Non-Convertible Debentures
During the year under review, your Company raised Secured/Unsecured Redeemable
Non-Convertible Debentures ("NCDs") of 7,508.61 crores ( 9,804.70 crores being
the face value of total amount raised) on a private placement basis, in various tranches,
including 380 crores ( 380 crores being the face value of total amount raised) through
Unsecured Redeemable Non-Convertible Subordinated Debentures eligible for Tier II Capital
and 2.25 crores through Partly paid-up NCDs. The NCDs are listed on the debt market
segment of BSE Limited.
As specified in the respective offer documents, the funds raised from NCDs were
utilised for various financing activities, onward lending, repaying the existing
indebtedness, working capital and for general corporate purposes of the Company. Details
of the end-use of funds were furnished to the Audit in Committee on a quarterly basis.
Your Company is in compliance with the applicable guidelines issued by the RBI and
Securities and Exchange Board of India in this regard.
There has been no default in making payments of principal and interest on all the NCDs
issued by the Company on a private placement basis and through public issue. As on 31st
March 2023, there is no unpaid/unclaimed interest on NCDs issued on a private placement
basis. With respect to the three public issuances of NCDs made by the Company, Principal
payment of 10,93,000/- and Interest of - 48,96,963/- is unclaimed by the investors as on
31st March 2023.
Commercial Paper
As at 31st March 2023, the Company had Commercial Paper ("CPs") with an
outstanding amount (face value) of 4,075 crores. CPs constituted approximately 5.4% of the
outstanding borrowings as at 31st March 2023. The CPs of the Company are listed
on the debt market segment of the National Stock Exchange of India Limited.
Borrowings
In order to expand the business of the Company and to cater the enhanced budgeted
disbursements, the Board of Directors of the Company, have subject to the approval of the
shareholders of the Company to be obtained at the ensuing 33rd Annual General
Meeting, increased the overall borrowing limit from 90,000 crores to 1,10,000 crores.
The Company had an aggregate outstanding borrowings of 74,945.86 crores as on 31 st
March 2023 as shown hereunder:
Particulars |
Deposits |
Bank Loans |
Non Convertible Securities |
Subordinate Debt |
Short Term Borrowing |
Others (Inter Corporate Deposit/ Commercial Papers etc.) |
External Commercial Borrowing |
Total |
Rs in crores |
5524.60 |
36920.73 |
20809.06 |
3442.13 |
675.00 |
5023.63 |
2550.71 |
74945.86 |
% to total |
7.4% |
49.2% |
27.8% |
4.6% |
0.9% |
6.7% |
3.4% |
100% |
Borrowing |
|
|
|
|
|
|
|
|
Credit Rating
CRISIL Limited upgraded your Company's long term credit rating to CRISIL AAA/Stable
w.e.f. 6th January 2023. With this upgrade, your Company enjoys highest rating for its
long term and short term borrowing programmes from all the credit rating agencies that it
works with. Your Company believes that its credit ratings and strong brand equity
enables it to borrow funds at competitive rates. The Company has been assigned highest
credit rating on all its instruments by leading rating agencies. The details of ratings
are given in the Corporate Governance Report, forming part of this Annual Report.
Capital Adequacy
As on 31st March 2023, the Capital to Risk Assets Ratio ("CRAR") of your
Company was 22.5% which is well above the minimum requirement of 15% CRAR prescribed by
the Reserve Bank of India.
Out of the above, Tier I capital adequacy ratio stood at 19.9% and Tier II capital
adequacy ratio stood at 2.6% respectively.
Share Capital
The issued, subscribed and paid-up Equity Share Capital as on 31st March 2023 was 247.1
crores, consisting of 123,55,29,920 Equity Shares of the face value of 2 each, fully
paid-up.
There was no change in the issued, subscribed and paid-up share capital during the year
under review. As on 31st March 2023, none of the Directors of the Company hold instruments
convertible into equity shares of the Company. ESOPs granted to the Vice Chairman and
Managing Director of the Company under the Company's Employee Stock Option Scheme would
vest as per the applicable vesting schedule.
Economy
Global Economy
Global Economy remains resilient and appears to be in a position wherein gradual
recovery with the blow of Russia Ukraine war is underway. Supply chain disruptions which
has led to shortage in availability of products are unwinding. Inflation which has been a
cause of continuous concern seems to now be retracing back. Growth looks to rebound in
2024 after the bottoming out in 2023. However, there seems to be turbulence beneath the
surface with inflation continuing to be stickier than anticipated, sharp effect of policy
tightening after a long cycle of benign interest rates resulting in sizable markdowns on
long term fixed rate investments. Further, turmoil in the banking system in some advanced
economies have triggered risk aversion, flight to safety and heightened volatility. The
state of financial health of the system shall depend on the ability of policy makers to
take swift actions by building greater oversight. In contrast, the pace of growth in
emerging markets and developing nations are even stronger with growth being visible at
4.5% (in the fourth quarter of the current year) compared to 2.8% (in the fourth quarter
of 2022).
Domestic Economy
Economic activity remained resilient in the last quarter of FY2023. A strong Rabi
production, expansion in industrial production and growth in core industries all indicates
positive growth in the agricultural and industrial activity. The inflation trajectory for
FY2024 would be shaped by both domestic and global factors. Global financial market
volatility has surged, with potential upsides for imported inflation risks. The
expectation of a good rabi crop should strengthen rural demand, while the sustained
buoyancy in contact-intensive services should support urban demand. Government's thrust on
capital expenditure continues and continuing strong capacity utilisation in manufacturing,
double digit credit growth and the moderation in commodity prices are expected to bolster
manufacturing and investment activity. The external demand drag could accentuate, given
slowing global trade and output. Protracted geopolitical tensions, tight global financial
conditions and global financial market volatility pose risks to the outlook. Taking all
these factors into consideration, real GDP growth for 2023-24 is projected at 6.5% with
Q1:2023-24 being the highest at 7.8%.
Management Discussion and Analysis
In accordance with the applicable provisions of the Master Direction issued by the
Reserve Bank of India and the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015, a detailed analysis of the Company's performance is discussed in the
Management Discussion and Analysis Report, which forms part of this Annual Report.
Corporate Governance
Your Company practices a culture that is built on core values and ethical governance
practices. Your
Company is committed to Integrity and transparency in all its dealings and places high
emphasis on business ethics. The Board of your Company exercises fiduciary
responsibilities in the widest sense of term endeavours to enhance long-term shareholder
value. The Governance framework is anchored by the clearly defined policies and procedures
covering areas such anti- bribery and anti-corruption, Prevention of Sexual Harassment at
Workplace and Whistle Blower Policy. A Report on Corporate Governance along with a
Certificate from M/s. Makarand M. Joshi & Co certifying compliance with the conditions
of Corporate Governance as stipulated in Regulations 17 to 27, clauses (b) to (i) and (t)
of sub-regulation (2) of Regulation 46 and Para C, D and E of Schedule V of the Securities
and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations,
2015 forms part of this Annual Report.
Investor Relations
During the current year, your Company has met multiple investors and analysts both
domestic and international. These sessions were undertaken through a mix of one-on-one or
group meetings. Your Company also participated in multiple domestic conferences organised
by reputed broking houses, in addition to accessing overseas investors through Non-Deal
Roadshows ("NDRs"). Having meetings in virtual format (through conference calls
and video-conferencing) enabled accessing a larger investor base. Your Company holds
quarterly and annual earnings calls through structured conference calls and/or weblinks,
details of which are made available to public through the Company's website and stock
exchange(s).
During these meetings/ earnings calls, the interactions are based on generally
available information accessible to the public in a non-discriminatory manner. No
unpublished price-sensitive information is shared during such meetings. Your Company
believes in transparent communication and have been voluntarily disclosing critical
information regarding Company's performance through monthly updates.
Silent period
As a good governance practice, your Company voluntarily observes a Silent / Quiet
period' starting from 1st day of the start of the month after the end of the quarter for
which the financial results are to be announced till the time of announcement of said
results. During this period, no interactions with investors/ analysts/funds are held to
discuss unpublished financial performance of the Company to ensure protection of the
Company's Unpublished Price Sensitive Information ("UPSI").
Consolidated Financial Statements
The Consolidated Financial Statements of your . Company, its subsidiaries,
associate/joint venture for FY2023, prepared in accordance with the relevant provisions of
the Companies Act, 2013 ("the Act") and applicable Indian Accounting Standards
along with all relevant documents and the Auditors' Report form part of this Annual
Report.
Pursuant to the provisions of Section 136 of the Act, the Standalone and Consolidated
Financial Statements of the Company, along with relevant documents and financial statement
of each of the subsidiaries of the Company are available on the website of the Company and
can be accessed at the web-link: https://www.mahindrafinance.com/investors/
disclosures-reg-46-62/financial-information
Subsidiaries, Joint Venture(s) and Associate(s)
A report on the performance and financial position of each of the Company's
subsidiaries, associate/ joint venture is included in the Consolidated Financial
Statements and the salient features of their financial statements and their contribution
to overall performance of the Company as required under Section 129(3) of the Companies
Act, 2013 ("the Act") read with Rule 8(1) of The Companies (Accounts) Rules,
2014, is provided in Form AOC-1, annexed as Annexure A' to the Consolidated
Financial Statements and forms part of this Annual Report.
Material Subsidiary
Regulation 16 of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 ("the Listing Regulations") defines a "material
subsidiary" to mean a subsidiary, whose income or net worth exceeds ten percent of
the consolidated income or net worth . respectively, of the listed entity and its
subsidiaries in the immediately preceding accounting year.
Accordingly, Mahindra Rural Housing Finance Limited is a material, debt listed
subsidiary, of your Company.
Operational and performance highlights of the Company's Subsidiary, Joint
venture/Associate Companies for FY2023 are given hereunder: Mahindra Rural Housing Finance
Limited
Mahindra Rural Housing Finance Limited ("MRHFL"), the Company's subsidiary,
engaged in the business of providing loans for purchase, renovation and construction of
houses to individuals in the rural and semi-urban areas of the country, registered a total
income of 1,349.8 crores as compared to 1,377.5 crores for the previous year, decline of
2% over previous financial year. Profit Before was 54.4% lower at 26.3 crores as compared
to 57.7 crores for the previous year. Profit After was 54.5% lower at 21.7 crores as
compared to 47.7 crores in the previous year.
During the year under review, MRHFL disbursed loans aggregating to 2,004 crores as
against 1,602 crores in the previous year.
MRHFL continued its focus on serving customers in rural India. Majority of the loans
disbursed were to the customers in villages with an average annual household income of
less than 3 lakhs. During the year under review, MRHFL disbursed home loans to more than
59,000 households. MRHFL is expanding its reach to provide affordable housing loans in
chosen geographies.
Mahindra Insurance Brokers Limited
During the year under review, Mahindra Insurance Brokers Limited ("MIBL"),
subsidiary of the Company engaged in the business of Direct and Re-insurance Broking,
serviced approximately 2.9 million insurance cases, for both Life and Non-Life Retail
business. The customised Group Credit Term Life increased from 5,02,508 lives covered with
a Sum Assured of 19,519 crores in FY2022 to 6,03,542 lives covered with a Sum Assured of
25, 577 crores in FY2023. A substantial portion of Group Credit Term Life continues to be
covered in the rural markets. There is growth of 46% in Gross Premium facilitated for the
Corporate and Retail business lines, increasing from 2,768.1 crores in FY2022 to 4,036.8
crores in FY2023. The Total Income increased by 23% from 348 crores in FY2022 to 426.5
crores in the FY2023. The Profit Before Tax decreased by from 70.4 crores to 46.1 crores
and the Profit After Tax decreased by 34% from 51.9 crores 34.4 crores during the same
period.
MIBL has been able to extend the benefit of insurance to over 4 lakh villages across
India.
Mahindra Manulife Investment Management Private Limited
Mahindra Manulife Investment Management Private Limited ("MMIMPL") acts as an
Investment Manager for the schemes of Mahindra Manulife Mutual Fund ("Mutual
Fund"). As on 31st March 2023, MMIMPL was acting as the investment manager to 20
schemes of the Mutual Fund. The Average Assets Under Management in these 20 schemes were
9,691 crores as on 31st March 2023 as compared to 8,839 crores as on 31st March 2022,
delivering a growth of 9.6% in assets. Of these assets, 8,294 crores were in equity and
hybrid schemes in March 2023, as compared to 5,911 crores in March 2022, a growth of 40%.
MMIMPL has empanelled 23,983 distributors and now has 5,77,009 investor accounts in these
20 schemes.
During the year under review, the total income Tax of MMIMPL was 44.1 crores as
compared to 35.3 crores for the previous year. The operations for Tax the year under
consideration have resulted in a loss of 30.9 crores as against a loss of 38.1 crores
during the previous year.
Mahindra Manulife Trustee Private Limited
Mahindra Manulife Trustee Private Limited ("MMTPL") acts as the Trustee to
Mahindra Manulife Mutual Fund ("Mutual Fund").
During the year, MMTPL earned trusteeship fees of 73.8 lakhs and other income of 7.3
lakhs as compared to 72.6 lakhs and 3.5 lakhs, respectively, for the previous year. MMTPL
recorded a profit of 16.1 lakhs for the year under review compared to a profit of 22.8
lakhs in the previous year.
Mahindra Ideal Finance Limited (Sri Lanka)
Your Company holds 58.2% stake in Mahindra Ideal Finance Ltd (Sri Lanka)
{"MIFL"} with a total investment of 77.97 crores. Leveraging on the Mahindra
Finance's expertise of over 26 years in the financial services sector and the local
management's expertise of the domestic market MIFL is poised to build a leading financial
services business in Sri Lanka. During the year under review, Sri Lanka went through
unprecedented political and economic crisis which triggered an acute shortage of foreign
exchange. Despite challenging circumstances, MIFL registered a growth in top line as well
as has remained profitable. During the year under review, MIFL registered a total income
of LKR 1,924 million as compared to LKR 1,322 million for the previous year, registering a
growth of 46%. Profit Before Tax was 51% lower at LKR 153 million as compared to LKR 310
million for the previous year. Profit After Tax was 64% lower at LKR 87 million as
compared to LKR 239 million in the previous year.
With 7 new branches opened during the year, the Company increased its footprint to 27
locations in the island nation.
Mahindra Finance CSR Foundation
Mahindra Finance CSR Foundation was incorporated on 2nd April 2019 as a
wholly-owned subsidiary of Mahindra Finance registered under Section 8 of the Act, to
promote and support CSR projects and activities of the Company and its group Companies.
The foundation has obtained Registration under Section 12AA and Section 80G of the
Income Tax Act, 1961 and CSR Registration Number.
Joint Venture/Associate
Mahindra Finance USA LLC ["MFUSA"]
MFUSA's retail and dealer disbursement registered a decrease of 3.9% to USD 877.2
million for the year ended 31st March 2023 as compared to USD 912.8 million for the
previous year.
Total Income increased by 13% to USD 62 million for the year ended 31st March 2023 as
compared to USD 54.9 million for the previous year. Profit before tax was 15% lower at USD
19.8 million as compared to USD 23.2 million for the previous year. Profit tax declined by
14% to USD 15 million as compared to USD 17.4 million in the previous year.
Changes in Subsidiaries, Joint Venture or Associate
Companies during the year
During the year under review, there were no changes in the Company's Subsidiaries,
Joint Venture/ Associate Companies.
Fixed Deposits and Loans/Advances
Your Company offers a wide range of Fixed Deposit schemes that cater to the investment
needs of various classes of investors. These Deposits carry attractive interest rates with
superior service enabled by robust processes and technology. In order to tap rural and
semi-urban savings, your Company continues to expand its network and make its presence
felt in the most remote areas of the country.
During the year, CRISIL has reaffirmed a of CRISIL AAA/Stable' for your Company's
Fixed Deposits. Additionally, Company's Fixed Deposit program also has AAA rating from
India Ratings. This rating indicates that the degree of safety regarding timely payment of
interest and principal is very strong. Your Company's Deposits continue to be a preferred
investment avenue amongst the investors.
As on 31st March 2023, your Company has mobilised funds from Fixed Deposits to the tune
of 5,541.8 crores, with an investor base of over 92,880 investors. Your Company continues
to serve the investors by introducing several customer centric measures on an ongoing
basis to further strengthen its processes in sync with the requirements of the Fixed
Deposit ("FD") holders. Your Company periodically sends various intimations via
SMS, e-mails, post, courier etc., to its investors as well as sends reminder emails to
clients whose TDS is likely to be deducted before any pay-out/accrual. Your Company also
provides a digital platform for online application/renewal of deposits, online generation
of TDS certificates from customer/ broker portal and seamless investment process for its
employees.
Your Company has rolled out several initiatives aimed at offering a superior experience
to fixed deposit holders. Some key ones include :
An integrated web portal has been developed to facilitate online application/
online renewal of Fixed Deposits, Loan against FDs, profile updates, etc.
Online submission of Forms 15G/15H by all eligible Depositors through the FD
Customer portal is made available on the Company's website.
TDS certificate(s) are made available on the Customer portal and Broker portal,
in addition to the same being sent to the concerned Depositors, from time to time.
In order to offer various payment options to Depositors, more payment gateways
have been added across various FD investment portals.
An advanced version of Customer Relationship Management ("CRM") has
been launched to record the queries, requests and complaints for future data analysis in
order to enhance customer service. An integrated service portal (E-Sarathi) has been
introduced to address the queries of Depositors routed through the Channel Partners on
real-time basis during working hours.
The process of recording of Central Know Your Customer ("CKYC")
details of the Depositors has been strengthened by introducing various control measures.
Separate categorisation of VIP customers to address the queries with a dedicated
Relationship Manager is introduced.
As at 31st March 2023, 4,883 Deposits amounting to 4.9 crores had matured for payment
and remained unclaimed. The unclaimed Deposits have since reduced to 4,678 Deposits
amounting to 4.5 crores. There has been no default in repayment of deposits or payment of
interest during the year.
Your Company being a Non-Banking Financial Company the disclosures required as per Rule
8(5)(v) and (vi) of the Companies (Accounts) Rules, 2014 read with Sections 73 and 74 of
the Companies Act, 2013, are not applicable to it.
The information pursuant to Clause 35(1) of Master Direction
DNBR.PD.002/03.10.119/2016-17 dated 25th August 2016 issued by the Reserve Bank of India
on Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank)
Directions, 2016 ("NBFC Regulations"), regarding unpaid/unclaimed public
deposits as on 31st March 2023, is furnished below: i. Total number of accounts of Public
Deposits of the Company which have not been claimed by the depositors after the date on
which the deposit became due for repayment: 4,883 ii. Total amounts due under such
accounts remaining unclaimed beyond the dates referred to in clause (i) as aforesaid: 4.9
crores
Initiatives taken to reduce the unclaimed amounts pertaining to Fixed Deposits :
1. Penny drop testing one month prior to maturity and interest pay out process is being
conducted to reduce rejection cases.
2. Deposit holders are being reached out via SMS/ Calls/ Email/Physical letters, as
applicable.
3. In case of death of depositors, claim settlement process is advised to joint
depositors/nominee/ legal heir, as the case may be;
4. Unclaimed FDs are being validated with the depositor's Loan account with the Company
, if any.
5. In case the cheque is undelivered, the Company deposits the amount in the bank
account of the customer, after necessary confirmations.
Transfer of Unpaid Amount(s) to IEPF:
Pursuant to Section 125 of the Companies Act, 2013 read with the Investor Education and
Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("the
IEPF Rules") as amended from time to time, matured Deposits remaining unclaimed for a
period of seven years from the date they became due for payment are required to be
transferred to the Investor Education and Protection Fund ("IEPF") established
by the Central Government. Further, interest accrued on the deposits which remain
unclaimed for a period of seven years from the date of payment are also required to be
transferred to the IEPF under Section 125(2)(k).
During the year, the Company has transferred to the IPEF an amount of 0.08 crores being
the unclaimed amount of matured fixed deposits and 0.05 crores towards unclaimed/unpaid
interest accrued on the Deposits. The concerned depositor can claim the Deposit and/or
interest from the IEPF by following the procedure laid down in the IEPF Rules.
Loans and Advances
During the year under review, the Company has not given any loans and advances in the
nature of loans to its subsidiaries or associate or loans and advances in the nature of
loans to firms/companies in which Directors are interested.
Accordingly, the disclosure of particulars of loans/ advances, etc., as required to be
furnished in the Annual Accounts of the Company pursuant to Regulation 34[3] and 53[f]
read with paragraph A of Schedule V of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 is not applicable to the Company.
Particulars of Loans, Guarantees or Investments in Securities
Your Company, being an NBFC registered with RBI and engaged in the business of giving
loans in ordinary course of its business, is exempt from complying with the provisions of
Section 186 of the Companies Act, 2013 ("the Act") with respect to loans.
Pursuant to the provisions of Section 186(4) of the Act, details with regard to the
investments made by the Company, as applicable, are given in Note no.51(iv) of the
Standalone financial statements, forming part of this Annual Report.
Achievements
Awards/Recognitions received by your Company during the year are enumerated hereunder:
CSR
Received a special commendation for CSR Program Swabhimaan' at the CSR
Journal Excellence Awards.
Recognised for persistent & innovative efforts in promoting CSR by The
Institute of Company Secretaries of India during the 7 th ICSI CSR Excellence Awards 2023.
Awarded CSR Times Awards 2022 Gold category for CSR Initiatives under Swabhimaan
in the area of skill development at the 9th National CSR Times Award 2022, New Delhi.
Sustainability
Became 1st NBFC in India to join the United Nations Global Compact Network for taking
steps towards responsible business actions to create a better world for our future
generation.
Featured under the Leadership Index for performance under ESG domain in the 2nd
Edition of CRISIL Sustainability Yearbook.
Improved CDP rating level to "B" and placed under leadership category
for taking steps towards managing its carbon emissions.
Included in the renowned FTSE4 Good Emerging Markets Index series for ESG
Performance for the 4th Consecutive time.
Marketing
Won Silver Award for Aapke Safar Ka Saathi testimonial video series at the RMAI
Flame Awards Asia 2022.
Human Resources
Great Place to work certified 2023 & Top 25 Great Place to Work in BFSI
2023.
Ranked 2nd in Financial Services Industry (Large Category) by AmbitionBox Best
Places to Work in India Employee Choice Award.
Recognised as Happiest Workplace for Women at India Today RPG Happiness at
Workplace Summit & Awards 2023.
Employee Stock Option Scheme and Restricted Stock Unit Plan - 2023
Employee Stock Options are recognised as an effective instrument to attract and retain
talent and align the interest of employees with that of the Company, thereby providing an
opportunity to the employees to participate in the growth of the Company and to create
long-term wealth in the hands of employees.
During the year under review, no options were granted to the eligible employees under
the Mahindra & Mahindra Financial Services Limited Employees' Stock Option Scheme 2010
("2010 Scheme"). The Company does not have any scheme to fund its employees to
purchase the shares of the Company.
The 2010 Scheme of the Company is in compliance with the Securities and Exchange Board
of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 ("SBEBSE
Regulations") and there were no amendments to the Scheme during FY2023. A Certificate
from M/s. Makarand M. Joshi Co., Secretarial Auditor of the Company for FY2023, certifying
that the Company's above-mentioned Scheme has been implemented in accordance with the
SBEBSE Regulations and the resolution passed by the Members, would be made available for
inspection by the Members through electronic mode at the Annual General Meeting
("AGM") scheduled to be held on 28th July 2023.
The applicable disclosures as stipulated under SBEBSE Regulations for the year ended
31st March 2023, with regards to the 2010 Scheme and Company's stock option trust is
uploaded on the Company's website and can be accessed at the web-link: https://
www.mahindrafinance.com/investors/disclosures-reg-46-62/financial-information Considering
limited number of options in the 2010 scheme and with a view to continue the practice of
rewarding performance of the employees, creating ownership culture and to retain, motivate
and attract talents in light of growing business and to align interests of shareholders
with that of employees, the Board of Directors of your Company, have subject to the
approval of the shareholders, approved a new Restricted Stock Unit Plan namely
Mahindra and Mahindra Financial Services Limited-Restricted Stock Unit Plan 2023'
("MMFSL RSU Plan-2023"), contemplating grant of 59,44,320 Restricted Stock Units
("RSUs") exercisable into equivalent equity shares, constituting 0.48% of the
paid-up share capital of the Company as on 31st March 2023.
Necessary resolutions seeking members approval for the MMFSL RSU Plan-2023 and related
matters are incorporated in the Notice convening 33rd Annual General Meeting of
the Company.
Sustainability Initiatives
In line with the Mahindra Group's motto: Rise for Good', your
Company is gearing up to be future ready by making "Sustainability" as an
integral part of the business strategy and risk framework. Sustainability has been a part
of organisation's philosophy since its establishment. Your Company's growth story mirrors
the story of India's transformation and its vision for financial inclusion. It is with
this purpose that the company works with and extends its services to the communities in
rural areas with the aim to change & their lives. At Mahindra Finance, Sustainability
is imbibed in its business philosophy and is seen as part of its intrinsic DNA. Your
Company's focus on rural customers and its constant endeavour is enabling them to Rise
by empowering people and creating shared value for all. Your Company's approach and
accomplishments on Sustainability echoes its mission of transforming rural lives and
contributing to people, planet and profit. Your Company is constantly making a positive
impact on the society in areas of health, education, environment, skill enhancement, rural
development and technology incubation.
Your Company and its subsidiaries have been enabling customers to meet their
aspirations through a diversified portfolio of financial product offerings Mahindra Rural
Housing Finance Limited helps people build their homes through affordable housing finance
solutions. Mahindra Insurance Brokers Limited secures their life and assets with insurance
solutions and Mahindra Manulife Investment Management Private Limited offers investment
options through its asset management solutions. Your Company lays strong emphasis on
customer centricity with a customer base spread across different villages in India, with
majority of them belonging to the Earn and Pay' segment.
Your Company commenced its journey towards reporting Sustainability performance in the
year 2008-09 through Mahindra Group's Sustainability Report. In FY2013 the Company
released its first Independent Sustainability Report with the theme "Forward focus to
transform lives". In FY2021, the
Company released its first Integrated Report with the theme "Care above Everything
else".
The Integrated Report represented facts during the pandemic, proactive steps taken to
support our stakeholders and navigate the challenging period together for a resilient
society. The Report adheres to the Global Reporting Initiative's ("GRI")
Standards, UN SDG's and is based on the Integrated Reporting framework ("IIRC").
Your Company continued to focus on integrating Sustainability into its business
practices across valued stakeholders through key initiatives.
Business Responsibility and Sustainability Report
In compliance with Regulation 34(2)(f) of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, as applicable, the Company's 1st Business
Responsibility and Sustainability Report for the year ended 31st March 2023, forms part of
this Annual Report.
The Board of Directors have adopted a new policy viz. Business Responsibility and
Sustainability Reporting Policy' ("BRSR Policy"), which inter-alia, incorporates
sustainability elements and aligns the Policy with National Guidelines on Responsible
Business Conduct ("NGRBC").
Business Responsibility and Sustainability Report -Training and Initiatives
Your Company outreached it's stewardship as a ESG leader and conducted its first ever
Business Responsibility and Sustainability Reporting training for value chain partners, by
emphasising on the best practices and case studies of its 9 principles based on NGRBC. The
integrated and empowering approach towards the stakeholders provides a visibility of ESG
practices across the value chain and enables the Company to form its sustainability
strategy. This future oriented outlook of aligning the stakeholders with our ESG goals
will play a considerable role in achieving the companies ESG targets.
Sensitising the employees to a novel concept such as Sustainability has been one of the
key initiatives of the Company during the year. Capacity building on Sustainability has
been driven through employee engagement Initiatives. During the year, your Company
launched a training module on Business Responsibility and Sustainability Report
("BRSR").
Initiatives like "Green Gifting", "I Am Responsible" activities
launched to promote ESG culture and sustainable consumption practices in employees will
enable sustainable behavioral changes & knowledge development as a core value of the
Company.
Your Company was recognised for its Sustainability initiatives with the accolades as
stated in Achievements section.
Your Company made proactive efforts to reduce CO2 emissions (carbon
footprint) through Project "Mahindra Hariyali" by planting 2,94,000+ saplings
throughout the country.
As a service sector, the major waste contributor is paper. Promoting a circular economy
strategy for its disposal, your Company launched a zero waste to landfill project thereby
ensuring to send paper waste to paper mills for recycling purpose only through authorised
organisations and in exchange receiving wheat straw based copier paper for further
consumption. This initiative ensures circular economy . and promotion of sustainable
consumption in business. Your Company's inclusive sustainable business model is future
ready and well equipped to enable its stakeholders progress.
Through the inclusive business model, your Company endeavours to cater to the bottom of
the pyramid in the rural and semi-urban areas, enabling them to earn their livelihood
through varied financial products and services. Through a wide network of branches, we are
promoting local employment and building strong lasting relationships with our
stakeholders. Your Company has always been conscious of its role as a responsible
corporate citizen and is building an inclusive organisation by empowering all the
stakeholders and facilitating their contribution towards growth that is both holistic and
long term. Through its wide network of branches with locally recruited employees, strong
and lasting relationships with its stakeholders, large customer base, vast experience and
market knowledge, your Company is providing financial resources to underserviced regions
of the Country.
Integrated Reporting
Your Company is pleased to present its holistic performance for FY2023, in the
Integrated Report of the Company. This report includes details such as the organisation's
strategy, governance framework, performance and prospects of value creation based on the
six capitals- Financial, Manufactured, Intellectual, Human, Social & Relationship and
Natural capital.
Corporate Social Responsibility (CSR)
With a vision to transform rural and semi-urban India into a self-reliant, flourishing
landscape, your Company started its journey in 1991 and has grown into a leading NBFC with
an employee base of around 26,058 employees all over India. By working with around 50 NGOs
and implementing partners in the areas of Education & Livelihood, Healthcare and
Environment, your Company strives to become an asset in the communities where it operates.
Your Company's Corporate Social Responsibility (CSR) initiatives are aligned with the
Company's purpose to drive positive change in the lives of our communities and aligned
with national priorities.
1. CSR Committee
The Company has duly constituted a CSR
Committee in accordance with Section 135 of the Companies Act, 2013 to assist the Board
and the Company in fulfilling the corporate social responsibility objectives of the
Company. The Committee presently comprises of the following Directors:
Name |
Category |
Mr. Dhananjay Mungale (Chairperson) |
Independent Director |
Ms. Rama Bijapurkar |
Independent Director |
Mr. Ramesh Iyer |
Executive Director |
During the year under review, 3 (three) CSR
Committee Meetings were held, details of which are provided in the Corporate Governance
Report. The CSR Committee inter-alia, reviews and monitors the CSR as well as BRSR
activities.
2. CSR Policy
The CSR Policy approved by the Board encompasses the approach and guidance given by the
Board taking into account the recommendations of the CSR Committee, including principles
for management of the CSR Project(s)/Program(s) and formulation of the Annual Action Plan.
The CSR Policy of the Company was amended to align the same with regulatory provisions
pertaining to CSR. The CSR Policy has been hosted on the website of the Company at:
https://www.mahindrafinance
com//investors/disclosures-reg-46-62/corporate-governance#MMFSL-policies
3. CSR Initiatives
Swabhimaan'- CSR Flagship program:
The Company had launched CSR flagship for Drivers Community in FY2021 (Project
"Swabhimaan" or "Self- Respect"), which is aimed at upliftment of
drivers and their family members In FY2023, to further solidify our commitment towards the
well-being of the driver communities, your Company successfully implemented its flagship
program Swabhimaan'. This multiprogram's focus has been to address the professional,
financial, and familial challenges faced by the drivers and their families and further
contribute to their overall well-being. In FY2023, we reached out to over 1,62,400+
beneficiaries across India. Through the Swabhimaan program, your Company provided 4
wheeler vehicle driving training to 3,100+ freshers, road safety training to 7,850+
existing drivers, auto mechanic training to 2,300+ youth, conducted financial &
digital literacy sessions for 1,42,000+ drivers and awarded scholarships to 7,000+
children of drivers. Through above interventions, your company impacted lives of
12,200+ women beneficiaries.
Your Company launched innovative Financial Literacy Campaign "Money Gyaan Se
Jeevan Aasaan" with the objective to create awareness about EMI Fraud Prevention,
Government SME and MSME schemes and Responsible borrowing under the theme "Money
Kathayein". This Public awareness campaign targeted to masses across rural and urban
communities educating on basic financial behaviours. Around 85 million views were garnered
through this digital campaign.
Women Empowerment Projects
Reaffirming its commitment to the cause of education, your Company continued its
support to the Nanhi Kali Program which has benefitted over 14,000+ underprivileged girl
children from socially and economically marginalised families living in urban, rural,
and tribal parts of India.
With the aim of helping girls complete schooling, Project Nanhi Kali provides girls
(from Class 1-10) with comprehensive support including two hours of daily after-school
remedial classes at Nanhi Kali Academic Support Centres. The girls also receive an annual
school supplies kit comprising a school bag, stationery and feminine hygiene material,
enabling them to attend school with dignity. To help improve learning outcomes, the
project provides every girl with access to personalised, adaptive learning software.
Further your Company continued Mahindra Pride Classroom program to reach out to
marginalised and socially excluded women to create job opportunities in various sectors
and enable women to become financially independent and participate actively in the
workforce. Under this program, we conducted 40 hours training for 62,900+ final year
female students in classrooms across government/government aided colleges, polytechnics,
industrial training institutions, employer premises etc. to enhance their employability
prospects in the emerging areas like Science, Technology, Engineering and Mathematics
("STEM"), digital marketing, coding, digital & financial literacy, new
educator and regenerative agriculture which are in high demand in today's job market.
Your Company launched pilot projects on Women Economic Empowerment Skill Development
with an aim to enable women to join the workforce and make them economically empowered.
Your Company trained 2,500+ women as Sewing Machine Operator, General Duty Assistant, Data
Entry Operators, Call centre/PO related skills training.
Environmental Sustainability Projects
To continue with its commitment to increase the green cover, as a part of the Mahindra
Hariyali project, your Company, planted more than 2,94,000+ saplings across India. As a
part of the Environmental Sustainability, your Company constructed 10 rainwater harvesting
structures (bore well recharge) in the schools to provide water and created 5 farm ponds
to provide water to the farmers throughout the year. Through this intervention, 3.50 lakhs
Litres of water potential is expected to get created. This project is expected to support
2,450 beneficiaries from the rural areas of Maharashtra.
Disaster Management (Relief and Rehabilitation)
Your Company being responsive to its approach towards natural calamities, supported
reconstruction and renovation of 6 flood affected government schools from Maharashtra and
Bihar through which 1,000+ students will be benefited.
Your Company also distributed Dry Ration and Personal Hygiene Kits to 1,200+ flood
affected families in Assam as humanitarian aid.
Health
In the area of healthcare, your Company organised nationwide blood donation drives in
which 6,240 Blood Units were collected, health check-up camps were conducted. Your Company
undertook Swachh Bharat initiatives and donated 12 ambulances that have enabled access to
primary healthcare centers, easy for several tribal and rural patients across the nation.
Skill development for Persons with Disabilities
Your Company continued its support to Persons with Disabilities by training 250+
beneficiaries under Hunnar' program in various skills in Banking and Financial
Services and Insurance ("BFSI"), hospitality and Information Technology Enabled
Services ("ITES") sectors to enhance their employability.
Your Company has always encouraged the employees to participate in various CSR Projects
to drive positive changes amongst the community. During the reporting period, around
18,200 employees (79% of total employees) contributed 97,400 volunteering hours in various
virtual and CSR
Calendar initiatives undertaken by the Company like blood donation, tree plantation,
Swachh Bharat, visit to municipal school, visit to Orphanages, Old age Homes & centres
for Differently Abled to re affirm its pledge to the society.
Apart from the key thrust areas, your Company contributed funds for other causes such
as preservation and promotion of the fine arts and culture, welfare of the armed forces
and supporting underprivileged community.
4. CSR Spend
As per the provisions of Section 135 of the Companies Act, 2013 ("the Act")
read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 ("CSR
Rules"), the mandatory CSR spend of the Company for FY2023 was
37.13 crores, against which the Company has spent 37.22 crores during FY2023. Your
Company is in compliance with the statutory requirements in this regard.
Further, in terms of the CSR Rules, Chief Financial Officer has certified that the
funds disbursed have been utilised for the purpose and in the manner approved by the Board
for FY2023.
5. Annual Report on CSR Activities
The Annual Report on the CSR activities undertaken by your Company during the year
under review, as prescribed in the Companies (Corporate Social Responsibility Policy)
Rules, 2014, as amended, is set out in "Annexure II" of this Report.
6. Impact Assessment of CSR Projects
The Company has been conducting internal impact assessments to monitor and evaluate its
strategic CSR programs. In compliance with the provisions of Section 135 of the Companies
Act 2013 read with sub-rule (3) of rule 8 of the Companies (Corporate Social
Responsibility Policy) Rules, 2014, impact assessment was required to be carried out for
the following projects
1. COVID 19 Relief Project
2. Swabhimaan
3. Mahindra Pride School
4. Nanhi Kali
5. Women Economic Empowerment
The Company has engaged independent agencies to carry out the impact assessment for the
aforesaid projects. Of the abovementioned projects, impact assessment has been completed
for COVID-19 relief project and Swabhimaan. The Executive Summary for Impact Assessment
Reports of COVID-19 relief project and Swabhimaan, is annexed with Annexure II'
of this Report and the complete Impact Assessment Reports of the applicable projects can
be accessed at the web-link: https://www.mahindrafinance. com/rise-for-good/csr-reports
Annual Return
Pursuant to Section 134(3)(a) and Section 92(3) of the Companies Act, 2013 read with
rule 12(1) of the Companies (Management and Administration) Rules, 2014, the Annual Return
in Form No. MGT-7, is available on the Company's website and can be accessed at the
web-link: https://www.mahindrafinance.com/investors/
disclosures-reg-46-62/financial-information/
Board & its Committees
Board
Your Company recognises and embraces the importance of a diverse Board in its success.
The confluence of Directors on the Board with knowledge and skills, perspective, regional
and industry experience, cultural and geographical background ensures that your Company
retains its competitive advantage. The Board Diversity Policy, as a part of Policy on
Appointment of Directors and Senior Management and succession planning for orderly
succession to the Board and the Senior Management w.e.f. 25th November 2022 sets out the
Board's approach to diversity.
As on 31st March 2023, the Board of your Company consisted of 10 Directors comprising
of a Non-Executive Chairman, 1 Executive Director,
2 Non-Executive Non-Independent Directors and 6 Independent Directors, of whom 2 are
Women Directors.
Committees constituted by the Board of Directors
Your Company has various Committees which have been constituted as a part of good
corporate governance practices and the same are in compliance with the requirements of the
relevant provisions of applicable laws and statutes.
The details of the Board Committees along with their composition, powers, terms of
reference, etc. are given in the Report on Corporate Governance, which forms part of this
Annual Report.
Audit Committee
As on 31st March 2023, the Audit Committee comprised of 5 Independent Directors and 1
Non-Executive Non-Independent Director:
Name |
Category |
Mr. C. B. Bhave |
Chairman of the Committee |
|
(Independent Director) |
Mr. Dhananjay Mungale |
Independent Director |
Ms. Rama Bijapurkar |
Independent Director |
Mr. Milind Sarwate |
Independent Director |
Mr. Amit Kumar Sinha |
Non-Executive Non- |
|
Independent Director |
Mr. Diwakar Gupta |
Independent Director |
Changes in Audit Committee Members:
Dr. Anish Shah ceased to be a Member of the Committee w.e.f. 2nd May 2022.
Mr. Amit Kumar Sinha was appointed as the Member of the Committee w.e.f. 2nd May
2022.
Mr. Diwakar Gupta was appointed as the Member of the Committee w.e.f. 3rd
February 2023.
During the year under review, 6 Audit Committee Meetings were held. Further, the terms
of reference of the Audit Committee were enhanced during the year under review, to align
it with statutory amendments notified under SEBI (Listing Obligations and Disclosure
Requirements) (Sixth Amendment) Regulations, 2022. All the recommendations of the Audit
Committee were duly approved and accepted by the Board during the year under review.
Meetings and Postal Ballot
The Board of Directors met 7 times during the year under review i.e. on 2nd May 2022,
28 th July 2022, 26th September 2022, 4 th October 2022, 2 nd November 2022, 3rd February
2023 and 16 th March 2023, as against the statutory requirement of at least four meetings.
The requisite quorum was present for all the Board Meetings. The maximum time gap between
any two Meetings was not more than one hundred and twenty days. These Meetings were well
attended. The 32 nd AGM of the Company was held on 28th July 2022 through Video
Conference.
During the year under review, no Extraordinary General Meeting ("EGM") of the
Members was held. During the year under review, basis recommendation of the Nomination and
Remuneration Committee and the Board of Directors, members by way of special resolution
passed through postal ballot on 30th December 2022, appointed Mr. Diwakar Gupta as an
Independent Director to hold office for 1st term of 5 consecutive years commencing from
1st January 2023 to 31 st December 2027 (both days inclusive).
Detailed information on the Meetings of the Board, its Committees, Postal Ballot and
the AGM is included in the Report on Corporate Governance, which forms part of this Annual
Report.
A calendar of all the meetings is prepared and circulated in advance to the Directors.
Meetings of Independent Directors
The Independent Directors met twice during the year under review, on 8th September 2022
and 16th March 2023. The Meetings were conducted in an informal manner without presence of
the Whole-time Director(s), the Non-Executive Non-Independent Directors, Chief Financial
Officer or any other Management Personnel to enable the Independent Directors to discuss
matters pertaining to, inter alia, review of performance of Non-Independent Directors and
the Board as a whole, review the performance of the Chairman of the Company (taking into
account the views of the Executive and Non-Executive Directors), assess the quality,
quantity and timeliness of flow of information between the Company Management and the
Board that is necessary for the Board to effectively and reasonably perform their duties.
Directors and Key Managerial Personnel
Appointment/Re-appointment of Directors during FY2023 and upto the date of this report
Appointment of Mr. Raul Rebello as the Executive
Director
Pursuant to succession planning approved by Nomination and Remuneration
Committee("NRC") and as recommended by NRC, Mr. Raul Rebello has been appointed
by the Board of Directors, subject to the approval of the shareholders, as the Whole-time
Director and KMP designated as Executive Director and MD & CEO-designate' w.e.f.
1 st May 2023 to 29th April 2024 (both days inclusive) and as the Managing
Director of the Company designated as Managing Director & CEO' w.e.f. 30th April
2024 to 30 th April 2028 (both days inclusive).
Mr. Raul Rebello will assume the office of Managing Director effective 30 th April
2024, after superannuation of Mr. Ramesh Iyer, Vice-Chairman and Managing Director of the
Company on 29th April 2024.
The approval of the shareholders for appointment of Mr. Raul Rebello as mentioned above
would be obtained at the ensuing 33rd AGM of the Company. Necessary resolutions(s) seeking
approval of the members are incorporated in the Notice of the 33rd Annual General Meeting
of the Company.
Appointment of Mr. Diwakar Gupta as an Independent Director of the Company
Pursuant to the recommendation of NRC and the Board of Directors of the Company, the
members of the Company have by means of a Special Resolution passed on 30th December 2022
vide Postal Ballot approved the appointment of Mr. Diwakar Gupta (DIN: 01274552) as an
Independent Director w.e.f. 1st January 2023 for a period of five consecutive years, not
liable retire by rotation. In the opinion of the Board, Mr. Diwakar Gupta holds high
standards of integrity, expertise and experience.
He is exempted from the requirement to undertake the online proficiency self-assessment
test.
Appointment of Mr. Siddhartha Mohanty as a Non-Executive Non-Independent Director
Pursuant to the recommendation of NRC and the Board of Directors of the Company, the
members of the Company have by means of an Ordinary Resolution passed on 15th
March 2022 vide Postal Ballot, approved the appointment of Mr. Siddhartha Mohanty (DIN:
08058830) as a Non-Executive Non-Independent Director of the Company w.e.f. 1st April
2022, liable to retire by rotation.
Cessation of Directors
Mr. Amit Raje (DIN: 06809197) Whole-time Director, designated as Chief Operating
Officer Digital Finance - Digital Business Unit was liable to retire at the 32 nd
AGM of the Company held on 28th July 2022 and was eligible for re-appointment. However,
Mr. Raje did not seek re-appointment due to pre-occupation and consequently ceased to be
Whole-time Director and Key Managerial Personnel of the Company w.e.f. 28th
July 2022.
During the year under review, no Independent Director of the Company resigned before
the expiry of his/ her tenure.
Retirement by Rotation
In terms of provisions of Section 152 of the Companies Act, 2013, Mr. Amit Kumar Sinha
Non-Executive and Non Independent Director, is liable to retire at the 33rd AGM
of the Company scheduled to be held on 28th the July 2023 and is eligible for
re-appointment.
However, he does not seek re-appointment as a Director due to his transition to a new
role in Mahindra Group i.e. he has been appointed as the Managing Director and CEO of
Mahindra Lifespace Developers Limited w.e.f. 23rd May 2023 and accordingly he would cease
to hold office as a Director of the Company at the close of the ensuing AGM, scheduled to
be held on 28th July 2023. The Board has taken note of the same and resolved not to fill
the vacancy so caused.
Re-appointment of Independent Director
The st 1 term of Mr. Milind Sarwate, Independent Director of the Company expires on
31st March 2024. Basis the performance evaluation report, business knowledge, skills sets,
experience and substantial contribution made by Mr. Sarwate during his 1st term and basis
recommendation of the Nomination and Remuneration Committee, the Board of Directors of the
Company have subject to the approval of the members of the Company, approved the
reappointment of Mr. Milind Sarwate (DIN: 00109854) as an Independent Director on the
Board of the Company, for a second term of 5 consecutive years w.e.f. 1st April 2024. The
necessary resolution seeking approval of the members of the Company has been incorporated
in the Notice of 33rd Annual General Meeting of the Company.
Fit and Proper and Non-Disqualification Declaration by Directors
All the Directors of the Company have confirmed that they satisfy the "fit and
proper" criteria as prescribed under Chapter XI of RBI Master Direction No. DNBR. PD.
008/ 03.10.119/2016-17 dated 1st September 2016, as amended, and that they are not
disqualified from being appointed/continuing as Director in terms of Section 164(1) and
(2) of the Companies Act, 2013.
Declaration by Independent Directors
All the Independent Directors of the Company have given their declarations and
confirmation that they fulfil the criteria of Independence as prescribed under Section
149(6) of the Companies Act, 2013 ("the Act") and Regulation 16(1)(b) of the
Listing Regulations and have also confirmed that they are not aware of any circumstance or
situation, which exist or may be reasonably anticipated, that could impair or impact their
ability to discharge their duties with an objective independent judgment and without any
external influence.
Further, the Board after taking these declarations/ disclosures on record and
acknowledging the veracity of the same, concluded that the Independent Directors holds
highest standards of integrity and possess the relevant proficiency, expertise and
experience qualify and continue as Independent Directors of the Company and are
Independent of the Management of the Company.
In terms of Section 150 of the Companies Act, 2013 read with Rule 6 of the Companies
(Appointment and Qualification of Directors) Rules, 2014, amended, Independent Directors
of the Company have confirmed that they have registered themselves with the databank
maintained by The Indian Institute of Corporate Affairs, Manesar (IICA') and the
said registration is renewed and active.
The Independent Directors of the Company except Dr. Rebecca Nugent, are exempt from the
requirement to undertake the online proficiency self-assessment test conducted by IICA.
Dr. Rebecca Nugent has cleared the online proficiency self- assessment test January 2023.
Key Managerial Personnel
The following persons were designated as the Key Managerial Personnel ("KMP")
of the Company pursuant to Sections 2(51) and 203 of the Companies Act, 2013 read with the
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as on 31st
March 2023:
1. Mr. Ramesh Iyer, Vice-Chairman & Managing Director
2. Mr. Vivek Karve, Chief Financial Officer of Company and Group Financial Services
Sector
3. Ms. Brijbala Batwal, Company Secretary
Changes in Key Managerial Personnel during FY2023
Mr. Amit Raje, ceased to be the Whole-time Director and KMP of the Company w.e.f. 28th
July 2022.
Directors' Responsibility Statement
Pursuant to the provisions of Section 134
(5) of the Companies Act, 2013, ("the Act") your Directors, based on the
representations received from the Operating Management and after due enquiry, confirm
that:
i. In the preparation of the annual accounts for financial year ended 31 st March 2023,
the applicable accounting standards have been followed and there are no material
departures in adoption of these standards. i
ii. They have in consultation with the Statutory Auditors selected such accounting
policies and applied them consistently and made judgments and estimates that are
reasonable and prudent so as to give a true and fair view of the state of affairs of the
Company as at 31 st March 2023 and of the profit of the Company for the year ended on that
date. ii
iii They have taken proper and sufficient care 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. They have prepared the annual accounts for financial year ended 31 st March 2023 on
a going concern basis.
v. They have laid down adequate internal financial controls to be followed by the
Company and that such internal financial controls were operating effectively during the
financial year ended 31st March 2023. v
vi. They have devised proper systems to ensure compliance with provisions of all
applicable laws and that such systems were adequate and operating effectively during the
financial year ended 31st March 2023.
Performance Evaluation of the Board
The Companies Act, 2013 ("the Act") and the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 ("the Listing Regulations") stipulate
the evaluation of the performance of the Board, its Committees, Individual Directors and
the Chairperson.
The Company has formulated a process for performance evaluation of the Independent
Directors, the Board, its Committees and other individual Directors which includes
criteria for performance evaluation of the Non-Executive Directors and Executive
Directors.
An annual performance evaluation exercise was carried in compliance with the applicable
provisions of the Act, Listing Regulations, the Company's Code of Independent Directors
and the criteria and methodology of performance evaluation approved by the NRC as under:
Evaluating body |
Evaluatee |
Broad criteria and parameters of evaluation |
Process of evaluation |
The Board, the NRC and the Independent Directors |
The Board as a whole |
Review of fulfilment of Board's responsibilities including Strategic
Direction, financial reporting, risk management framework, ESG, Grievance redressal,
succession planning, knowledge of industry trends, diversity of Board etc. and feedback to
improve Board's effectiveness |
Internal assessment through a structured and separate rating based
questionnaire for each of the evaluations. The evaluation is carried out on a secured
online portal |
The Board |
The Committees of the Board (separately for each Committee) |
Structure, composition, attendance and participation, meetings of
Committees, effectiveness of the functions able to submit their ratings and handled,
Independence of the Committee from the Board, contribution to decisions of the Board etc. |
whereby the evaluators are qualitative feedback, details of which are
accessible only to the |
The Board, the NRC, and the Independent Directors |
Independent Directors including those seeking re-appointment, Non -
Independent Directors, and the VC & MD (excluding the Director being evaluated) |
Qualifications, experience, skills, independence criteria, integrity of
the Directors, contribution and attendance at meetings, ability to function as a team and
devote time, fulfilment of functions, ability to challenge views of others in a
constructive manner, knowledge acquired with regard to the Company's business,
understanding of industry, fairness and transparency demonstrated, adequacy of resource
staffing. |
NRC Chairperson. The NRC also reviews the implementation and compliance
of the evaluation exercise done annually. The results and outcome are evaluated,
deliberated upon and noted by the Independent Directors, the NRC and the |
The Board, the NRC and the Independent Directors |
Chairperson |
Skills, expertise, effectiveness of leadership, effective engagement
with other Board members during and outside meetings, allocation of time to other Board
members at the meetings and ability to steer the meetings, commitment, impartiality,
ability to keep shareholders' interests in mind, effective engagement with shareholders
during general meetings etc. |
Board at their respective meetings. |
The questionnaires for performance evaluation are comprehensive and in alignment with
the guidance note on Board evaluation issued by the SEBI, vide its circular no.
SEBI/HO/CFD/CMD/CIR/P/2017/004 dated 5th January 2017 and are in line with the criteria
and methodology of performance evaluation approved by the NRC.
Outcome and results of the performance evaluation
All the Directors of the Company as on 31st March 2023 had participated in the
evaluation process. The Directors have expressed satisfaction with the criteria for
evaluation of performance of Board, its Committees and individual Directors, assessed via
online portal through series of questions. The results of evaluation were encouraging
showing high level of engagement of Board and its Committees performing its role with
effective oversight and providing guidance to Management. The results of the evaluation
were shared with the Board, Chairman of respective committees and individual Directors.
Based on the results of the evaluation, the Board has agreed on an action plan to
further improve the effectiveness and functioning of the Board. The suggestions from
previous evaluations were implemented by the Company during FY2023.
Familiarisation Programme for Directors
The Company has adopted a structured programme for orientation of all Directors
including the Independent Directors so as to familiarise them with the Company its
operations, business, industry, environment in which it functions, Indian and global
macro-economic front and the regulatory regime applicable to it. The Management updates
the Board Members on a continuing basis of any significant changes therein and provides
them an insight to their expected roles and responsibilities so as to be in a position to
take well-informed and timely decisions and contribute significantly to the Company.
The Independent Directors of the Company are made aware of their roles and
responsibilities at the time of their appointment through a formal letter of appointment,
which also stipulates various terms and conditions of their engagement. The terms of
reference of all the Committees with updations, if any, is shared with all the Board
Members on quarterly basis. Managing Director and Senior Management provide an overview of
the operations and familiarise the Directors on matters related to the Company's values
and commitments. They are also introduced to the organisation structure, constitution of
various committees, board procedures, risk management strategies etc.
Strategic Presentations are made to the Board where Directors get an opportunity to
interact with Senior Management. Directors are also informed of the various developments
in the Company through Press Releases, emails, etc. During the year under review, the
Company migrated to a new secure Board portal which inter-alia provides a one stop and
seamless solution for access to Board/Committee materials to all the Directors. The Board
portal also contains Annual Reports, Code of Conduct for Directors, terms of appointment,
committee charters and other policies for ease of access. This enables greater
transparency to the Board processes.
Pursuant to the provisions of the Companies Act, 2013 and Regulation 25(7) of the SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the Listing
Regulations"), the Company has during the year conducted familiarisation programmes
through briefings at Board/ Committee meetings for all Directors including Independent
Directors. Details of familiarisation programs imparted to the Independent Directors
during the financial year under review in accordance with the requirements of the Listing
Regulations are available on the Company's website and can be accessed at the weblink:
https://
www.mahindrafinance.com//investors/disclosures-reg-46-62/corporate-governance#familiarisation-programme
and is also provided in the Corporate Governance Report forming part of this Annual
Report.
Policies on Appointment of Directors and Senior Management and Remuneration of
Directors,
Key Managerial Personnel and Employees i) Policy on Appointment of Directors and Senior
Management and succession planning for orderly succession to the Board and the Senior
Management
In accordance with the provisions of Section 134(3)(e) of the Companies Act, 2013
("the Act") read with Section 178 of the Act and Regulation 17 of the SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the Listing
Regulations"), your Company has adopted a Policy on Appointment of Directors and
Senior Management and succession planning for orderly succession to the Board and the
Senior Management, which, inter-alia, includes the criteria for determining
qualifications, positive attributes and independence of Directors, identification of
persons who are qualified become Directors and who may be appointed in the Senior
Management team, succession planning for Directors and Senior Management, and the Talent
Management framework of the Company. Basis the recommendation of the Nomination and
Remuneration Committee, the Board of Directors had approved the revised policy, effective
25 th November 2022 for strengthening the disclosures on Corporate Governance, including
policies on Board membership criteria, Board Diversity Policy, Policy on criteria for
determining independence of Directors, updating statutory amendments and updation with
regards to Succession Planning.
The said policy is available on the website of the Company and can be accessed at
https://www.
mahindrafinance.com//investors/disclosures-reg-46-62/corporate-governance#MMFSL-policies ii)
Policy on Remuneration of Directors and the Policy on Remuneration of Key Managerial
Personnel, Senior Management and other
Employees of the Company
Your Company has also adopted the Policy on Remuneration of Directors and the Policy on
Remuneration of Key Managerial Personnel, Senior Management and other Employees of the
Company in accordance with the provisions of Sub-section (4) of Section 178 of the Act,
Scale Based Regulations notified by the Reserve Bank of India ("RBI") and
Listing Regulations. During the year, the said Policy was revamped to align with RBI
Guidelines dated 29th April 2022 including introducing clawback/malus clause in the
Policy. The said Policy is uploaded on the website of the Company and can be accessed at:
https://www.
mahindrafinance.com//investors/disclosures-reg-46-62/corporate-governance#MMFSL-policies
Adequacy of Internal Financial Controls with Reference to the Financial Statements
Your Company has in place adequate internal financial controls with reference to the
Financial Statements commensurate with the size, scale and complexity of its operations.
Your Company uses various industry standard systems to enable, empower and engender
businesses and also to to maintain its Books of Accounts. The transactional controls built
into these systems ensure appropriate segregation of duties, the appropriate level of
approval mechanisms and maintenance of supporting records.
The systems, Standard Operating Procedures and controls are reviewed by the Management.
Your Company's Internal Financial Controls are deployed through Internal
Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organisations of
the Treadway Commission ("COSO"), that addresses material risks in your
Company's operations and financial reporting objectives. Such controls have been assessed
during the year under review taking into consideration the essential components of
internal controls stated in the Guidance Note on Audit of Internal Financial Controls Over
Financial Reporting ("ICFR") issued by The Institute of Chartered Accountants of
India. risk control matrices are reviewed on a quarterly basis and control measures are
tested and documented on a quarterly basis.
The Company has IT systems in place making the ICFR process completely digital and
strengthening the review and monitoring mechanism. Based on the assessments carried out by
the Management during the year, no reportable material weakness or significant
deficiencies in the design operation of internal financial controls was observed. Your
Company recognises that Internal Financial Controls cannot provide absolute assurance of
achieving financial, operational and compliance reporting objectives because of its
inherent limitations. Also, projections of any evaluation of the Internal Financial
Controls to future periods are subject to the risk that the Internal Financial Control may
become inadequate because of changes in conditions or that the degree of compliance with
the policies or procedures may deteriorate. Accordingly, regular audits and review
processes ensure that such systems are reinforced on an ongoing basis.
Joint Statutory Auditor's certification on internal financial controls
The Joint Statutory Auditors of the Company viz M/s. Deloitte Haskins & Sells,
Chartered Accountants and M/s. Mukund M. Chitale & Co., Chartered Accountants have
examined the internal financial controls of the Company and have submitted an unmodified
opinion on the adequacy and operating effectiveness of the internal financial controls
financial reporting as at 31 st March 2023.
Internal Audit Framework
The Company has in place an adequate internal audit framework to monitor the efficacy
of internal controls with the objective of providing to the Audit Committee and the Board
of Directors, an independent, objective and reasonable assurance on the adequacy and
effectiveness of the Company's processes. The internal audit approach verifies compliance
with the operational and system related procedures and controls.
Separate meetings between the Chief Internal Auditor and the Audit Committee
Separate meetings between the Chief Internal Auditor and the Audit Committee, without
the presence of Management, were enabled to facilitate free and frank discussion amongst
them. The meetings were held on 2nd May 2022, 20 th September 2022, 2nd
November 2022 and 16th March 2023.
Risk Based Internal Audit ("RBIA") framework
In compliance with RBI circular dated 3rd February 2021, the Audit Committee has
approved a Risk Based Internal Audit ("RBIA") framework, along with or
appropriate processes and plans for internal audit for
FY2023 and FY2024. The Risk Based Internal Audit Plan is also being reviewed by the
Statutory Auditors and Chief Risk Officer before being approved by the Audit Committee.
The audit plan is aimed at evaluation of the efficacy and adequacy of internal control
systems and compliance thereof, robustness of internal processes, policies and accounting
procedures and compliance with laws and regulations. Based on the reports of internal
audit, function/process owners undertake corrective action in their respective areas.
Significant audit observations are tracked and presented to the Audit Committee, together
with the status of the management actions and the progress of the implementation of the
recommendations on a regular basis.
. Risk Management
Risk management forms an integral part of the Company's business. Your Company has a
comprehensive Risk Management Policy in place and has laid down a well-defined risk
management framework to identify, assess and monitor risks and strengthen controls to
mitigate risks. Your Company has established procedures to periodically place before the
Risk Management Committee and the Board of Directors, the risk assessment and minimisation
procedures being followed by the Company and steps taken by it to mitigate these risks.
The Risk Management Policy, inter-alia, includes identification of elements of risk,
including Cyber Security and related risks as well as those risks which in the opinion of
the Board may threaten the existence of the Company.
The Risk management process has been established across the Company and is designed to
identify, assess and frame a response to threats that affect the achievement of its
objectives. Further, it is embedded across all the major functions and revolves around the
goals and objectives of the Company. Your Company has a robust organisational structure
for managing and reporting on risks. This risk management mechanism works at all the
levels, which acts as the strategic defence cover of the Company's risk management and is
supported by regular review, control, self-assessments and monitoring of key risk
indicators. The Risk Management Committee ("RMC") constituted by the Board
manages the integrated risk and reviews periodically the Risk Management Policy and
strategy followed by the Company.
In compliance with Scale Based Regulations, the Board of Directors have basis
recommendation of RMC adopted ICAAP Policy and Framework with the objective of ensuring
availability of adequate capital to support all risks in business as also enable effective
risk management system in the Company.
The Chief Risk Officer ("CRO") oversees strengthens the risk management
function of the Company. The CRO is invited to the Board, Audit Committee, Asset Liability
Committee and Risk Management Committee Meetings. The CRO along with members of the Senior
Management apprises the Risk Management Committee and the Board on the risk assessment,
process of identifying and evaluating risks, major risks as well as the movement within
the risk grades, the root cause of risks and their impact, key performance indicators,
risk management measures and the steps being taken to mitigate these risks.
Auditors and Audit Reports
Statutory Auditors and their Reports
In terms of the provisions of Section 139 of the Companies Act, 2013 and RBI guidelines
for appointment of statutory auditors of NBFCs and basis the recommendation of the Audit
Committee and the Board of Directors of the Company, the members have at 32nd AGM held on
28 th July 2022 approved the appointment of M/s. Deloitte Haskins & Sells, Chartered
Accountants (ICAI Firm Registration No. 117365W) ["DHS"] and M/s. Mukund M.
Chitale & Co., Chartered Accountants (ICAI Firm Registration No. 106655W)
["MCC"], as the Joint Statutory Auditors of the Company to hold office for a
period of 2 consecutive years from the conclusion of the Thirty-second Annual General
Meeting till the conclusion of the Thirty-fourth Annual General Meeting of the Company to
be held in the year 2024. The Joint Statutory Auditors holds a valid peer review
certificate as prescribed under the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 ("the Listing Regulations").
The joint Statutory Auditors have issued unmodified Audit Reports on the Standalone and
Consolidated Financial Statements for the financial year ended 31st March 2023.
The Report does not contain any qualification, reservation or adverse remark or
disclaimer.
The joint Statutory Auditors have given a confirmation to the effect that they have not
been disqualified in any manner from continuing as the Statutory Auditors. Joint Statutory
Auditors of the Company were present at the last Annual General Meeting ("AGM")
held on and 28th July 2022.
Adoption of Policy for appointment of Statutory Auditors
In compliance with the Reserve Bank of India Guidelines dated 27th April
2021, the Company has in place a Policy for appointment of Statutory Auditors of the
Company.
Secretarial Auditor and Audit Report
M/s. Makarand M. Joshi & Co., Practicing Company Secretaries were appointed as the
Secretarial Auditor of the Company for conducting the Secretarial Audit of the Company for
FY2023 and FY2024 in accordance with the provisions of Section 204 of the Act read with
the Rules framed thereunder.
In accordance with the provisions of Sub-section (1) of Section 204 of the Companies
Act, 2013, the Secretarial Audit Report for FY2023 issued by M/s. Makarand M. Joshi &
Co., is appended to this Report as "Annexure III".
The former Secretarial Auditor viz. M/s KSR & Co., Company Secretaries LLP and the
current secretarial auditor M/s. Makarand M. Joshi & Co., were present at the last AGM
of the Company held on 28th July 2022.
The Secretarial Audit Report does not contain any qualification, reservation or adverse
remark or disclaimer.
Secretarial Audit of Material Subsidiary
The Secretarial Audit of Mahindra Rural Housing Finance Limited ("MRHFL"), a
material, debt listed subsidiary of the Company, for FY2023 was carried out pursuant to
Section 204 of the Companies Act, 2013. The Secretarial Audit Report of MRHFL submitted by
M/s. KSR & Co., Company Secretaries LLP, does not contain any qualification,
reservation or adverse remark or disclaimer.
Annual Secretarial Compliance Report with additional confirmations on compliances
In compliance with Regulation 24A of SEBI Listing Regulations, your Company has
undertaken an audit for FY2023 for all the applicable compliances as per SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015 and Circulars/ Guidelines
issued thereunder.
The Annual Secretarial Compliance Report ("ASCR") issued by M/s. Makarand M.
Joshi & Co., Company
Secretaries, Secretarial Auditor for FY2023 with additional confirmations on
compliances by the Company with respect to Insider Trading Regulations, Related party
Transactions, updation of Policies, disclosure of material events to Stock Exchanges etc.
as per revised ASCR format prescribed by BSE and NSE, has been filed with the Stock
Exchanges.
Cost Records and Cost Audit
Maintenance of cost records and requirement of cost audit as prescribed under the
provisions of Section 148 of the Companies Act, 2013 are not applicable in respect of the
business activities carried out by the Company and hence such accounts and records were
not required to be maintained by the Company.
Reporting of Frauds by Auditors
During the year under review, the Joint Statutory
Auditors and the Secretarial Auditor have not reported any instances of frauds
committed in the Company by its Officers or Employees, to the Audit Committee under
Section 143(12) of the Companies Act, 2013, details of which need to be mentioned in this
Report.
Particulars of Contracts or Arrangements with Related Parties
All contracts/arrangements/transactions entered into by the Company during the
Financial Year with related parties were in the ordinary course of business and on an
arm's length basis. Prior/omnibus approval is obtained for Related Party Transactions
which are of repetitive nature and/or entered in the Ordinary Course of Business and are
at Arm's Length. All Related Party Transactions and subsequent material modifications are
placed before the Audit Committee for review and approval.
All Related Party Transactions entered during the year were in the ordinary course of
business and on arm's length basis. During the year under review your Company had not
entered into any material related party transactions i.e. transactions exceeding 10% of
the annual consolidated turnover as per the last audited financial statements or exceeding
1,000 crores.
Disclosure as required in Form AOC-2
There were no contracts or arrangements transactions entered into during the year ended
31st March 2023 which were not at arm's length basis. Further, there were no material
contracts or arrangements or transactions for the year ended 31st March 2023. The
disclosure as required under Section 134(3)(h) of the Companies Act 2013, in form AOC-2,
is not applicable to the Company and hence, the prescribed Form AOC 2 does not form a part
of this report.
In accordance with the applicable provisions of the Master Direction issued by the
Reserve Bank of India and the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 ("the Listing Regulations"), the Policy on Materiality
of and Dealing with Related Party Transactions', is available on the Company's website:
https://www.mahindrafinance.
com//investors/disclosures-reg-46-62/corporate-governance#MMFSL-policies.
The transactions of the Company with the company belonging to the promoter/promoter
group which holds more than 10% shareholding in the Company as required pursuant to para A
of schedule V of the Listing Regulations is disclosed separately in the financial
statements of the Company. Further, details on the transactions with related parties are
provided in the accompanying financial statements.
Whistle Blower Policy/Vigil Mechanism
The Company promotes ethical behaviour in all its business activities and has
established a vigil mechanism for its Directors, Employees, and Stakeholders associated
with the Company to report their genuine concerns. The Vigil Mechanism as envisaged in the
Companies Act, 2013 and the Rules prescribed thereunder and the SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015 is implemented through the Whistle Blower
Policy, to provide for adequate safeguards against victimisation of persons who use such
mechanism and make provision for direct access to the Chairperson of the Audit Committee.
As per the Whistle Blower Policy implemented by the Company, the Employees, Directors
or any Stakeholders associated with the Company are free to report illegal or unethical
behaviour, actual or suspected fraud, or violation of the Company's Code(s) of Conduct or
Corporate Governance Policies or any improper activity, through the channels provided
below.
The Whistle Blower Policy provides for protected disclosure and protection to the
Whistle Blower. Under the Whistle Blower Policy, the confidentiality of those reporting
violation(s) is protected and they are not subject to any discriminatory practices. The
Whistle-blower can make a Protected Disclosure by using any of the following channels for
reporting:
1. Independent third party Ethics Helpline
Service Portal: https://ethics.mahindra.com
2. Toll free No: 000 800 100 4175
3. Chairperson of the Audit Committee
The Whistle Blower Policy has been widely disseminated within the Company. The Policy
is available on the website of the Company at the web link: https://
www.mahindrafinance.com//investors/disclosures-reg-46-62/corporate-governance#MMFSL-policies
The Audit Committee is apprised of the vigil mechanism on a periodic basis. During the
year, no person was denied access to the Chairperson of the Audit Committee. A quarterly
report on the whistle blower complaints is placed before the Audit Committee for its
review.
Particulars of Employees and Related Disclosures
Details of employees who were in receipt of remuneration of not less than 1,02,00,000
during the year ended 31st March 2023 or not less than 8,50,000 per month during any part
of the year, as required under provisions of Section 197(12) of the Companies Act, 2013
read with Rule 5(2) and 5(3) of Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 will be made available during 21 days before the Annual General
Meeting in electronic mode to any Shareholder upon request sent at the Email ID:
investorhelpline_mmfsl@mahindra.com. Such details are also available on Company's website
and can be accessed at the web-link: https://
www.mahindrafinance.com/investors/disclosures-reg-46-62/financial-information Disclosures
with respect to the remuneration of Directors, Key Managerial Personnel and Employees as
required under Section 197(12) of the Companies Act, 2013 and Rule 5(1) of Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, is given in Annexure
IV."
Disclosure in respect of remuneration/commission drawn by the Managing
Director/Whole-time Director from Holding or Subsidiary Company
During FY2023, Mr. Ramesh Iyer, Vice Chairman & Managing Director has received an
amount of 89.23 lakhs towards settlement of fourth vesting of Employees' Phantom Stock
Options granted by Mahindra Insurance Brokers Limited, subsidiary of the Company.
Mr. Amit Raje, was appointed as Whole time Director ("WTD") of the Company
w.e.f. 1 st April 2021 and ceased to hold the said position w.e.f. 28th July
2022. Mr. Raje was earlier associated with the Holding Company viz. Mahindra &
Mahindra ("M&M") as Executive Vice President Partnerships & Alliances,
wherein he was granted
97,783 ESOPs of M&M at an exercise price of 5/- per share. While he was paid
remuneration from the Company during his stint with the Company as WTD, out of 43,458
ESOPs of M&M vested and exercisable by him, he exercised 34,028 ESOPs during FY2023.
Except as mentioned herein, Mr. Ramesh Iyer and Mr. Amit Raje did not receive any other
remuneration or commission from Holding/Subsidiaries of the Company during FY2023.
Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition
and Redressal) Act, 2013 ("POSH Act")
Your Company is an equal opportunity employer and is committed to ensuring that the
work environment at all its locations is conducive to fair, safe and harmonious relations
between employees. It strongly believes in upholding the dignity of all its employees,
irrespective of their gender or seniority. Discrimination and harassment of any type are
strictly prohibited.
Your Company has in place a comprehensive Policy in accordance with the provisions of
POSH Act and Rules made thereunder.
All employees (permanent, contractual, temporary and trainees) are covered under this
Policy. The Policy has been widely communicated internally and is placed on the Company's
intranet portal. The Company ensures that no employee is disadvantaged by way of gender
discrimination.
The POSH Policy is available on the website of the Company and can be accessed at the
web-link: https://
www.mahindrafinance.com//investors/disclosures-reg-46-62/corporate-governance#MMFSL-policies.
Your Company has complied with the provisions relating to the constitution of the Internal
Complaints Committee ("ICC") under the POSH Act to redress complaints received
regarding sexual harassment. To ensure that all the employees are sensitised regarding
issues of sexual harassment, the Company conducts an online Induction Training through the
learning platform M-Drona (Internal Training App) covering topics including POSH
awareness, reconciliation before filing POSH complaint(s) and consequences of filing false
complaint(s). The following is a summary of Sexual Harassment complaint(s) received and
disposed off during the FY2023, pursuant to the POSH Act and Rules framed thereunder: a)
Number of complaint(s) of Sexual Harassment received during the year 1 b) Number of
complaint(s) disposed off during the year 1 c) Number of cases pending as at 31st
March 2023 0 d) Number of workshops/awareness programme on the subject carried out during
the year under review were as under:
Awareness program was conducted in which mailers & video on the Prevention of
Sexual Harassment at the workplace along with POSH policies was circulated to all
employees. POSH training was provided to all new joinees as a part of induction module.
An online e-learning module for employees on Prevention of Sexual Harassment covering
topics on Sexual Harassment, process of filing complaints, dealing with sexual harassment,
etc. is developed for training all the employees. 83% of the employees have completed this
training.
ICC training conducted for all ICC members. 1 session
POSH sensitisation training conducted for HR team. 5 sessions
Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo
The information in respect of conservation of energy, technology absorption and foreign
exchange earnings and outgo, as required under Section 134(3)(m) of the Companies Act,
2013 read with Rule (8)(3) of the Companies (Accounts) Rules, 2014 is attached as Annexure
V' to the Board's Report.
Policies
The details of the Key Policies adopted by the Company and changes made therein, if
any, during the year under review are mentioned at "Annexure VI" to the
Board's Report.
Compliance with the Provisions of Secretarial
Standard 1 and Secretarial Standard 2
The Directors have devised proper systems to ensure compliance with the provisions of
the Secretarial Standards, i.e. SS-1 and SS-2, relating to Meetings of the Board of
Directors' and General Meetings', respectively, issued by the Institute of Company
Secretaries of India ("ICSI") and such systems are adequate and operating
effectively.
Voluntary adherence of Secretarial Standards by all Board Committees
Although, SS-1 compliance is required only for Board and its Committees mandatorily
required to be constituted under the Companies Act, 2013 ("the Act"), the
Company adheres and complies with the good practices enunciated in the said Secretarial
Standards for all its mandatory and non-mandatory Committees.
Your Company has duly complied with applicable SS-1 and SS-2, during the year under
review.
Details of significant and material orders passed by the regulators or courts or
tribunals impacting the going concern status and the Company's operations in future
There were no significant and material orders passed by the regulators or courts or
tribunals during the year impacting the going concern status of the Company and its future
operations.
During the year under review and till the date of this report, Reserve Bank of India
("RBI") has passed the following orders against the Company:
1. Vide its press release dated 22nd September 2022, the RBI had directed the Company
to cease carrying out any recovery or repossession activity through outsourcing
arrangements. The said prohibition was lifted by RBI effective 4th January 2023 based on
the submissions made by the Company and its commitment to strengthen its recovery
practices and outsourcing arrangements, tighten the process of onboarding third party
agents and strengthen accountability framework as per its Board approved action plan.
2. Vide its order dated 5th April 2023, the RBI imposed a monetary penalty of 6.77
crores on the Company for deficiencies in regulatory compliance with the RBI directions on
fair practices relating to disclosure of annualised rate of interest charged on loans to
certain borrowers at the time of sanction and failure to give notice of change in terms
and conditions of loan to these borrowers. Your Company has already implemented remedial
actions to modify its processes and documentation to ensure disclosures, as per regulatory
requirements.
The above-mentioned orders do not impact either the going concern status or the
Company's operations in future.
Your Company will continue to invest in talent, systems and processes to further
strengthen the control, compliance, risk management and governance standards in the
organisation.
The Members may also refer note no. 53(VII)(b) of the standalone financial statements.
Disclosure Pertaining to Insolvency & Bankruptcy
Code
Your Company has not made any application under the Insolvency and Bankruptcy Code,
2016 ("IBC") during the year under review. The details of the pending
proceedings under IBC is mentioned hereunder: Your Company had filed 2 petitions with
National Company Law Tribunal ("NCLT") under IBC in FY2021, for recovery of
outstanding loans from its customers, being Corporate Debtors. The proceedings with
respect to said petitions were completed and order has been passed by the respective
jurisdictional NCLTs for initiating Corporate Insolvency Resolution Process against the
said companies.
Disclosure on one time Settlement
During the year, the Company has not made any one-time settlement for loans taken from
the Banks or Financial Institutions and hence the details of difference between amount of
the valuation done at the time of one time settlement and the valuation done while taking
loan from the Banks or Financial Institutions along with the reasons thereof is not
applicable.
General Disclosure
The Directors further state that no disclosure reporting is required in respect of the
following items, as there were no transactions/events related to these items during the
financial year under review:
There was no issue of equity shares with differential rights as to dividend, voting or
otherwise;
There was no issue of shares (including sweat equity shares) to the employees of the
Company under any scheme;
There was no raising of funds/Issue of shares through Preferential Allotment, Public
Issue, Rights Issue or Qualified Institutional Placement;
There was no buy back of the equity shares during the year under review;
There were no voting rights which are not directly exercised by the employees in
respect of equity shares for the subscription/purchase of which loan was given by the
Company (as there is no scheme pursuant to which such persons can beneficially hold shares
as envisaged under Section 67(3)(c) of the Companies Act, 2013 ("the ACT");
There was no suspension of trading of securities of the Company on account of corporate
action or otherwise;
There was no revision made in Financial Statements or the Board's Report of the
Company;
The Company being an NBFC, the provisions relating to Chapter V of the Act, i.e.,
acceptance of deposit, are not applicable. Disclosures as per NBFC regulations have been
made in this Annual Report.
Acknowledgments
The Board conveys its deep gratitude and appreciation to all the employees of the
Company for their tremendous efforts as well as their exemplary dedication and
contribution to the Company's performance.
The Directors would also like to thank its Shareholders, Customers, Vendors, Business
Partners, Bankers, Government and all other Business Associates for their continued
support to the Company and the Management.
For and on behalf of the Board
|
Dr. Anish Shah |
Place : Mumbai |
Chairman |
Date : 28th April 2023 |
DIN: 02719429 |
|