Sakthi Finance Since 19.

SFL:BSE:AGM2020:129:2020-21 25 November 2020

BSE Limited
(Stock Code : 511066)
P J Towers
25 Floor
Fort
Mumbai —400 012
Through : On-line submission

Dear Sir,

Annual Report for the financial year ended 31st March 2020 and Annual
General Meeting updates

We request you to refer our letter no. SFL:BSE:122:2020-21 dated 11 November

2020 regarding the convening of the 63rd Annual General Meeting ("AGM") of
the Company on Thursday, 17 December 2020 at 4.00 p.m ("1ST") through
Video Conferencing ("VC"), in compliance with the various General Circulars issued
by the Ministry of Corporate Affairs, the applicable provisions of the Companies
Act 2013 ("the Act") and the SEBI (Listing Obligations and Disclosure
Requirements) Regulations 2015 ("Listing Regulations").

We now submit an electronic copy of the Annual Report 2020 of the Company
comprising the Audited Financial Statements, Board's Report and Independent
Auditors' Report thereon for the financial year ended 31st March 2020 and the
Notice convening the 63rd AGM.

The electronic copies of the Annual Report 2020 and the AGM Notice were
circulated yesterday to all the members holding shares in dematerialized form
whose e-mail addresses are available with their Depository Participants ("DP") as
well as to the members holding shares in physical form whose e-mail addresses are
registered with the Company / Registrar Share Transfer Agent for communication
purposes. The documents are also being uploaded in the website of the Company
at www.sakthifinance.com and this submission will enable them to be available
on the website of the stock exchange for access by any member. In view of the
exemptions provided, no physical or hard copies of the AGM Notice and the
Annual Report 2020 are being sent to the shareholders.

Members of the Company who have not registered their e-mail addresses with the
Company were informed by a letter dated 16 September 2020 about the process
for registration of their e-mail addresses to receive the Annual Report 2020,
AGM Notice and the log-in credentials for participating in the AGM through

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Sakthi Finance Limited

62, Dr. N.tniappa Road. (oimbature • 641 018, Tamilnadu. Indla.
0422 22314'1 - 4216200 0422) 22.',1018 teww.sakthifinarwe.com : l.m5910.1710351'1.00i)(11-tS
 Sakthi Finance Since 1955

As per Section 108 of the Act and Rule 20 of the Companies (Management and
Administration) Rules 2014 as amended from time to time and the provisions of
Regulation 44 of Listing Regulations, members have been provided with the facility
to cast their votes electronically through the e-voting services provided by Central
Depository Services (India) Limited ("CDSL") on all Resolutions set out in the
Notice. The facility for voting will also be made available during the AGM and
members attending the Meeting who have not cast their vote(s) by remote
e-voting will be able to vote during the AGM through CDSL's remote e-voting.

The remote e-voting period commences on Monday, 14 December 2020 (9.00 a.m.
1ST) and concludes on Wednesday, 14 December 2020 (5.00 p.m. 1ST). During this
period, members of the Company, holding shares either in physical form or in
dematerialized form, as on the cut-off date i.e. 10 December 2020 may cast their
votes electronically. The voting rights of the Members shall be in proportion to
their shareholding in the Company as on the cut-off date10 December 2020.
The AGM Notice includes the detailed procedure for remote e-voting and voting
through CDSL.

Members are being provided with a facility to attend the AGM through
VC platform provided by the CDSL. Members who do not have the credentials for
e-voting or have forgotten the Password can retrieve it by following the remote
e-voting instructions contained in the AGM Notice.

For any further information or clarification, members can write to

investors@sakthifinance.com.

Yours faithfully
For Sakthi Finance Limited

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Company Secretary
FCS 7012

Sakthi Finance Limited

62, D. Nalijappa Road, Coimbatore - 641 018, Tamilnado, India.
l'h 0422 2231471 - 474, 4236200 Fax : 10422 2231915 www.sakthitinance.com 1 C1N: L65910T7,195501.0000145
board of directors bankers
Dr. M. Manickam Chairman State Bank of India
Sri. M. Balasubramaniam Central Bank of India
Vice Chairman and Managing Director The Lakshmi Vilas Bank Ltd
Sri. M. Srinivaasan Indian Overseas Bank
Dr. A. Selvakumar The Karnataka Bank Ltd
Sri. P.S. Gopalakrishnan Bank of India
Smt. Priya Bhansali Canara Bank
Sri. K.P. Ramakrishnan IndusInd Bank Ltd
Dr S Veluswamy Director (Finance & Operations) AU Small Finance Bank Ltd

Company Secretary Statutory auditors

Sri. S. Venkatesh M/s. P.K. Nagarajan & Co
Chartered Accountants
Coimbatore

Registered office Internal Auditor

Sakthi Finance Limited Sri B. Muralidharan FCA
CIN : L65910TZ1955PLC000145 Chartered Accountant
62, Dr. Nanjappa Road Coimbatore
Coimbatore - 641 018
Phone : (0422) 2231471 - 74, 4236200 Secretarial AuditorS
E-mail : sakthif_info@sakthifinance.com M/s. S. Krishnamurthy & Co
investors@sakthifinance.com Company Secretaries
Website : www.sakthifinance.com Chennai / Coimbatore

Registrars and share Transfer Agent

SKDC Consultants Limited
“Kanapathy Towers”, Third Floor
1391/A-1, Sathy Road
Ganapathy
Coimbatore - 641 006
Phone : (0422) 4958995, 2539835-836
Fax : (0422) 2539837
E-mail : info@skdc-consultants.com contents page

Notice 2
Debenture trustee Board’s Report 18
Catalyst Trusteeship Limited Corporate Governance Report 35
“GDA House” Independent Auditor’s Report 60
Plot No. 5, Bhusari Colony (Right) Balance Sheet 67
Paud Road Statement of Profit and Loss 69
Pune - 411 038 Statement of Changes in Equity 70
Phone : (020) 25280081 Cash Flow Statement 71
Fax : (020) 25280275
E-mail : dt@ctltrustee.com }
Notes forming an integral part
of the Financial Statements
73

63rd Annual Report 2020 | Financial Year 2019-20 Page | 1

NOTICE TO MEMBERS
NOTICE is hereby given that the Sixty Third (63rd) Annual if any, of the Companies Act 2013 (“the Act”),
General Meeting (“AGM”) of the members of the Company the Companies (Appointment and Qualifications of
will be held on Thursday, 17th December 2020 at 4.00 p.m Directors) Rules 2014 and the rules made thereunder,
(“IST”) through Video Conferencing (“VC”) / Other Audio read with Schedule IV to the Act and Regulation
Visual Means (“OAVM”) to transact the following businesses. 16(1)(b) and other applicable regulations of the Securities
You are requested to make it convenient to attend the meeting. and Exchange Board of India (Listing Obligations
and Disclosure Requirements) Regulations 2015
ORDINARY BUSINESS (“Listing Regulations”), as amended from time to time,
1. Adoption of Financial Statements Smt Priya Bhansali (DIN : 00195848), who was appointed as
To consider and if thought fit, to pass the following an Independent Director at the fifty eighth Annual General
resolution, as an Ordinary Resolution: Meeting of the Company and who holds office up to
27th September 2020 and who is eligible for re-
RESOLVED THAT the Audited Financial Statements for the
appointment as an Independent Director and who meets
financial year ended 31st March 2020 and the attached
the criteria of independence as provided in Section 149(6)
Reports of the Board of Directors and Auditors be and are
of the Act read with the rules framed thereunder and
hereby considered and adopted.
Regulation 16(1)(b) of the Listing Regulations and who
2. Confirmation of Interim Dividend on Preference Shares as has submitted a declaration to that effect and in respect
Final Dividend of whom the Company has received a Notice in writing
To consider and if thought fit, to pass the following from a Member under Section 160(1) of the Act proposing
resolution, as an Ordinary Resolution: her candidature for the office of Director, be and is hereby
RESOLVED THAT pursuant to Section 123(3) of the re-appointed as an Independent Director of the Company,
Companies Act 2013, an Interim Dividend of ` 9 per share not liable to retire by rotation, for a second consecutive
on 15,00,000 numbers of 9% Redeemable Cumulative term of five years with effect from 28th September 2020
Preference Shares of ` 100 each for the year ended to 27th September 2025.
31st March 2020 declared by the Board of Directors on 6. Reappointment of Sri K P Ramakrishnan (DIN : 07029959)
30th June 2020 out of the profits of the company for the as an Independent Director
said year be and is hereby confirmed as final dividend. To consider and if thought fit, to pass the following
3. Declaration of dividend on Equity Shares Resolution as a Special Resolution:
RESOLVED THAT pursuant to the provisions of Sections
To consider and if thought fit, to pass the following
149(10), 150(2), 152 and other applicable provisions,
resolution, as an Ordinary Resolution:
if any, of the Companies Act 2013 (“the Act”),
RESOLVED THAT a dividend of ` 0.60 (6%) per equity share, the Companies (Appointment and Qualifications of
as recommended by the Board of Directors, be declared for Directors) Rules 2014 and the rules made thereunder,
the financial year ended 31st March 2020 on 6,47,05,882 read with Schedule IV to the Act and Regulation 16(1)(b)
numbers of equity shares of ` 10 each out of profits of the and other applicable regulations of the Securities and
company for the said financial year and the said dividend Exchange Board of India (Listing Obligations and Disclosure
be paid to those equity shareholders whose names stand Requirements) Regulations 2015 (“Listing Regulations”),
on the Register of Members in case the equity shares are as amended from time to time, Sri K P Ramakrishnan
held in physical form and also to the beneficial holders of (DIN : 07029959), who was appointed as an Independent
the dematerialised shares as per the details provided by Director at the fifty eighth Annual General Meeting of
the Depositories in case the equity shares are held in the the Company and who holds office up to 27th September
electronic form, as on Saturday, 19th September 2020. 2020 and who is eligible for re-appointment and who
4. Reappointment of Dr M Manickam (DIN : 00102233), meets the criteria of independence as provided in Section
Director retiring by rotation, as a Director being eligible, 149(6) of the Act read with the rules framed thereunder
and Regulation 16(1)(b) of Listing Regulations and who
offer himself to be reappointed
has submitted a declaration to that effect and in respect
To consider and if thought fit, to pass the following of whom the Company has received a Notice in writing
resolution, as an Ordinary Resolution: from a Member under Section 160(1) of the Act proposing
RESOLVED THAT Dr M Manickam, holding his candidature for the office of Director, be and is hereby
DIN: 00102233, who retires by rotation and being eligible reappointed as an Independent Director of the Company,
for re-appointment, be and is hereby re-appointed as a not liable to retire by rotation, for a second consecutive
Director of the Company. term of five years with effect from 28th September 2020 to
27th September 2025.
SPECIAL BUSINESS
7. Reappointment of Sri M Balasubramaniam
5. Reappointment of Smt Priya Bhansali (DIN : 00195848) as (DIN : 00377053) as Managing Director and payment of
an Independent Director remuneration
To consider and if thought fit, to pass the following To consider and if thought fit, to pass the following
Resolution as a Special Resolution: resolutions as Special Resolutions:
RESOLVED THAT pursuant to the provisions of Sections RESOLVED THAT in accordance with the provisions of
149(10), 150(2), 152 and other applicable provisions, Sections 196, 197, 203 and other applicable provisions,
63rd Annual Report 2020 | Financial Year 2019-20 Page | 2
 if any, of the Companies Act 2013 (“the Act”) read 8. Issue of Redeemable, Cumulative Preference Shares on
with Schedule V to the Act and the Rules made under private placement basis for an amount not exceeding
the Act, approval of the company be and is hereby given ` 15 Crores
to the re-appointment of Sri M Balasubramaniam To consider and if thought fit, to pass the following
(DIN : 00377053), as Managing Director of the company Resolutions as Special Resolutions:
for a further period of five years with effect from RESOLVED THAT pursuant to the provisions of Sections 42,
29th September 2020 to 28th September 2025. 55 and any other applicable provisions of the Companies
RESOLVED FURTHER THAT in consideration of his Act 2013 (“the Act”), the Companies (Prospectus
qualification, experience and services rendered to the and Allotment of Securities) Rules 2014 and the
company as Managing Director and subject to the overall Companies (Share Capital and Debentures) Rules 2014
limits for payment of Managerial remuneration laid (including any amendment(s), statutory modification(s) or
down under Section 197 read with Schedule V to the Act, re-enactment(s) thereof), the Memorandum and Articles of
Sri M Balasubramaniam be paid the following remuneration Association of the Company, any other applicable laws for
and perquisites: the time being in force and subject to such other approvals
as may be required from regulatory authorities from time
Salary ` 3,00,000 per month to time, approval of the Company be and is hereby given
Perquisites Not exceeding the Annual Salary as may to the Board of Directors (“the Board”, which term shall
be decided by the Board of Directors from include any Committee thereof which the Board may have
time to time. constituted or may hereinafter constitute to exercise its
powers including the powers conferred by this resolution)
In addition to the salary,
to offer, issue and allot, in one or more tranches, 15,00,000
Sri M Balasubramaniam shall also be
(Fifteen lakhs only) Redeemable, Cumulative, Preference
entitled to the following perquisites:
Shares (“Preference Shares”) of the face value of ` 100
a. Contribution to Provident and each for cash at par for an amount not exceeding ` 1,500
Superannuation Funds to the extent not lakh (Rupees One Thousand Five Hundred lakh only) on
taxable under the Income Tax Act 1961; private placement basis to persons identified by the Board
b. Gratuity at the rate of half a month’s of Directors (hereinafter referred to as “the Board” which
salary for each completed year of term shall be deemed to include any duly constituted / to
service; and be constituted Committee of the Board thereof to exercise
c. Encashment of leave at the end of its powers including powers conferred by this resolution)
tenure as per the rules of the Company in their absolute discretion, whether or not such persons
Commission 3% on the Net Profits of the Company, are members of the Company, on such terms and
subject to a maximum ceiling specified conditions as may be decided by the Board and subject to
in Section I of Part II of Schedule V to the the following rights:
Act. a. The Preference Shares shall rank for dividend and in
repayment of capital in priority to the equity shares
RESOLVED FURTHER THAT where in any financial year, for the time being of the Company. The payment of
the Company has no profits or its profits are inadequate, dividend shall be on a non-cumulative basis.
the company shall pay to Sri M Balasubramaniam, b. The said shares shall carry a fixed cumulative preference
the remuneration by way of salary and perquisites not dividend to be determined by the Board of Directors at
exceeding the limits specified under Section II of Part II of the time of issue of preference shares on the capital for
Schedule V to the Act (including any statutory modification the time being paid-up thereon.
or re-enactment thereof for the time being in force) or
c. The said shares shall, in winding up, be entitled to
such other limit as may be prescribed by the government
rank as regards repayment of capital and arrears of
from time to time as minimum remuneration. dividend, whether declared or not, up to the date of
RESOLVED FURTHER THAT the approval for payment of commencement of the winding up in priority to the
remuneration in the event of loss or inadequacy of profit equity shares, but shall not be entitled to any further
shall be for a period not exceeding three years during the participation in the profits or surplus assets or surplus
said tenure of five years. funds.
RESOLVED FURTHER THAT the Board of Directors d. The said shares will not be converted into equity shares.
(the ‘Board’ which term includes a duly constituted e. The voting rights of the persons holding the said shares
Committee of the Board of Directors) have the liberty shall be in accordance with the provisions of Section
to grant increments and to alter and vary the terms and 47(2) of the Act.
conditions of the said appointment as it may deem fit and f. The said shares shall be redeemable not later than the
in such manner as may be agreed to between the Board and date determined by the Board of Directors at the time
Managing Director provided that the total remuneration of issue or such other date as may be determined by
does not exceed the statutory upper limit prescribed the Board of Directors provided that it does not exceed
under the Act. twenty years.
63rd Annual Report 2020 | Financial Year 2019-20 Page | 3
 RESOLVED FURTHER THAT the Board of Directors be and f. do all such acts, deeds and things and give such
is hereby authorized to delegate all or any of the powers directions and further to execute such documents,
conferred by this resolution to any Director(s) or Committee deeds, instruments and writings as may be deemed
of Directors or any Officer(s) of the Company, as it may necessary, proper and desirable or expedient to give
consider appropriate to give effect to the resolution. effect to the above Resolution.
RESOLVED FURTHER THAT the Board of Directors be and is
hereby authorized on behalf of the Company to do all such NOTES:
acts, deeds and matters and things as they may, at their 1. In view of the COVID-19 pandemic, the Ministry of
discretion, deem necessary or desirable for such purpose Corporate Affairs (“MCA”) has, by its General Circular No.
and with power on behalf of the Company to settle any 20/2020 dated 5th May 2020 in relation to ‘Clarification
questions, difficulties or doubts that may arise in this on holding of Annual General Meeting (“AGM”) through
regard as they may, in their absolute discretion, deem fit Video Conferencing (“VC”) or Other Audio Visual Means
and proper to give effect to the resolution. (“OAVM”) read with General Circular No. 14/2020 dated
9. Issue of Secured or Unsecured, Redeemable, 8th April 2020 and General Circular No. 17/2020 dated
Non-Convertible Debentures (“NCDs”) and / or other 13th April 2020 in relation to ‘Clarification on passing
Debt Securities on private placement basis of ordinary and special resolutions by companies under
To consider and if thought fit, to pass the following the Companies Act 2013 (“the Act”) and the rules made
resolutions, as Special Resolutions: thereunder on account of the threat posed by Covid-19
RESOLVED THAT pursuant to the provisions of Sections (collectively referred to as “MCA Circulars”) and the
42, 71 and other applicable provisions, if any, of the Securities and Exchange Board of India (“SEBI”) by
Companies Act 2013 (“the Act”) read with the Companies its Circular No. SEBI/HO/CFD/CMD1/CIR/P/2020/79
(Prospectus and Allotment of Securities) Rules 2014 and dated 12th May 2020 towards ‘Additional relaxation
the Companies (Share Capital and Debentures) Rules 2014 in relation to compliance with certain provisions of
(including any statutory modification(s) or re-enactment SEBI (Listing Obligations and Disclosure Requirements)
thereof, for the time being in force) and in accordance Regulations 2015 – Covid-19 pandemic’ (“SEBI Circular”)
with the provisions of the Securities and Exchange Board permitted the holding of the Annual General Meeting
of India (Issue and Listing of Debt Securities) Regulations (‘AGM’/‘the Meeting’) through VC/OAVM, without the
2008 (“SEBI Debt Regulations”), the rules, regulations, physical presence of the members at a common venue.
guidelines, circulars and RBI directions as amended from In compliance with the provisions of the Act, the SEBI (Listing
time to time, the Memorandum and Articles of Association Obligations and Disclosure Requirements) Regulations,
of the Company and subject to such other requirements as 2015 (“Listing Regulations”) and MCA Circulars,
may be prescribed by regulatory authorities from time to the 63rd AGM of the Company is being held through
time, the approval of the members of the Company be and
VC/OAVM on Thursday, 17th December 2020 at 4.00 p.m
is hereby given to the Board of Directors of the Company
(IST). The deemed venue for the AGM will be the Registered
(hereinafter referred to as “the Board” which term shall
be deemed to include the committee duly constituted/ Office of the company.
authorized committee of the Board) to offer, issue and 2. In terms of Clause 3.A.II. of the General Circular No
allot, listed / unlisted, Secured or Unsecured, Redeemable, 20/2020 dated 5th May 2020, issued by MCA, the matters
Non-Convertible Debentures (“NCDs”), and / or other Debt of Special Business as appearing at Item Nos. 5 to 9 of the
Securities on private placement basis, during the period accompanying Notice are considered to be unavoidable by
commencing from the conclusion of Sixty Third Annual the Board and hence, form part of this Notice.
General Meeting until the conclusion of Sixty Fourth Annual 3. The relevant Statement as required under Section 102 of
General Meeting up to an amount not exceeding ` 500 crores, the Act setting out the material facts in respect of Special
within the overall borrowing limits of the Company. Business under Item Nos 5 to 9 is annexed.
RESOLVED FURTHER THAT the Board be and is hereby
4. The relevant details of Directors seeking re-appointment
authorized to:
under Item Nos 5 to 7, pursuant to Regulation 36(3) of
a. decide whether to issue, in one or more series or tranches, the Listing Regulations and as required under Secretarial
as secured or unsecured; Standard - 2 on General Meetings issued by the Institute of
b. decide whether to list any of the tranches; Company Secretaries of India are also annexed.
c. finalize the other terms and conditions including 5. Pursuant to MCA Circular No. 14/2020 dated 8th April
the rate of interest, tenor and security cover thereof, 2020, the facility to appoint proxy to attend and cast vote
the consideration of the issue, utilization of the issue for the members is not available for this AGM and hence
proceeds and all matters connected to it; the Proxy Form and Attendance Slip are not annexed to
d. decide on the timing of each tranche; this Notice. However, the Body Corporates are entitled to
e. decide on the persons to whom it can be issued, appoint Authorised Representatives to attend the AGM
including companies, bodies corporate, statutory through VC / OAVM and participate thereat and cast their
corporations, commercial banks, lending agencies, votes through e-voting.
financial institutions, insurance companies, mutual 6. The attendance of the members attending the AGM
funds, pension / provident funds and individuals or through VC / OAVM will be counted for the purpose of
such other person / persons; and reckoning the quorum under Section 103 of the Act.
63rd Annual Report 2020 | Financial Year 2019-20 Page | 4
 Since the ensuing AGM is being held through VC / OAVM, 16. THE SECURITIES AND EXCHANGE BOARD OF INDIA (“SEBI”)
physical attendance of Members has been dispensed with. HAS MANDATED THE SUBMISSION OF PERMANENT
7. Members of the Company under the category of ACCOUNT NUMBER (“PAN”) BY EVERY PARTICIPANT IN
Institutional Investors, if any, are encouraged to SECURITIES MARKET. MEMBERS HOLDING SHARES IN
attend and vote at the AGM through VC / OAVM. ELECTRONIC FORM ARE, THEREFORE, REQUESTED TO
Corporate members intending to authorise their SUBMIT THE PAN TO THEIR DEPOSITORY PARTICIPANTS
representatives to participate and vote at the AGM are WITH WHOM THEY ARE MAINTAINING THEIR DEMAT
requested to send a duly certified copy of the board ACCOUNTS. MEMBERS HOLDING SHARES IN PHYSICAL
resolution authorizing their representatives to attend and FORM SHALL SUBMIT THEIR PAN DETAILS, PARTICULARLY
vote on their behalf at the AGM to murali@skmcoca.com WITH THE PHOTO COPY OF PAN CARD TO THE COMPANY /
or helpdesk.evoting@cdslindia.com. REGISTRAR.
8. Members can join the AGM in the VC/OAVM mode 15 17. SEBI HAD, BY ITS NOTIFICATION NOS. SEBI/LAD-NRO/
minutes before and after the scheduled time of the GN/2018/24 DATED 8TH JUNE 2018 AND SEBI/LAD-NRO/
commencement of the Meeting by following the procedure GN/2018/49 DATED 30TH NOVEMBER 2018, MANDATED
mentioned at Note No. 32 of this Notice and this mode THAT THE SECURITIES OF LISTED COMPANIES CAN BE
will be available throughout the proceedings of the AGM. TRANSFERRED IN DEMATERIALISED FORM ONLY (EXCEPT
The facility of participation at the AGM through VC/OAVM IN CASE OF TRANSMISSION OR TRANSPOSITION OF
will be made available to at least 1,000 Members on a first SHARES), WITH EFFECT FROM 1ST APRIL 2019. IN VIEW
come first served basis as per the MCA Circulars. OF THIS, MEMBERS HOLDING SHARES IN PHYSICAL FORM
9. Members may also note that the Notice of 63rd AGM along ARE REQUESTED TO CONSIDER CONVERTING THEIR
with the Annual Report for the year 2020 will also be made HOLDINGS TO DEMATERIALISED FORM TO ELIMINATE ALL
available on the Company’s website www.sakthifinance. RISKS ASSOCIATED WITH PHYSICAL SHARES AND FOR EASE
com for their download. For any communication, OF PORTFOLIO MANAGEMENT. MEMBERS CAN CONTACT
the shareholders may also send requests to the Company’s DEPOSITORY PARTICIPANTS FOR ASSISTANCE IN THIS
investors e-mail id: investors@sakthifinance.com. REGARD.
10. Notice of the 63rd AGM along with Annual Report for the 18. Mr. K. Murali Mohan, Chartered Accountant (Membership
year 2020 is being sent by electronic mode to the members No. 14328) has been appointed as the Scrutinizer to
whose e-mail addresses are registered with the Company / scrutinize the e-voting process in a fair and transparent
Depository Participants for communication purposes. manner.
11. The Register of Directors and Key Managerial Personnel 19. The Results declared along with Scrutinizer’s Report shall
and their shareholding, maintained under Section 170 be placed on the Company’s website www.sakthifinance.
of the Act and the Register of Contracts or Arrangements com, notice to confirm board of the Company and on
in which the directors are interested, maintained under the website of CDSL, www.evotingindia.com within two
Section 189 of the Act, will be available electronically days after the voting on the Resolutions at the Sixty
for inspection by the members during the AGM. Members Third AGM of the Company, viz. on or before Saturday,
seeking to inspect such documents can send e-mail to 19th December 2020 and communicated to BSE Limited,
svenkatesh@sakthifinance.com. where the equity shares of the Company are listed.
12. All documents referred to in the Notice are open for 20. To facilitate Members to receive this Notice electronically
inspection at the Registered Office of the Company on all and cast their vote electronically, the Company has made
working days between 11.00 a.m and 1.00 p.m. up to the special arrangement with SKDC Consultants Limited
date of the AGM. for registration of e-mail addresses in terms of the
13. In case of joint holders attending the AGM, only such joint MCA Circulars. Eligible Members who have not submitted
holder who is higher in order of name will only be entitled their e-mail address to SKDC Consultants Limited, are
to vote. required to provide their e-mail address to SKDC, on or
14. Members seeking any information or clarification on the before 5:00 p.m. (“IST”) on Thursday, 10th December
accounts or any other matter to be placed at AGM are 2020. This Notice and the procedure for remote e-Voting
requested to send written queries to the Company on along with the log-in ID and password for remote e-Voting
investors@sakthifinance.com, atleast 10 days before the will be sent to the e-mail address provided by the member.
date of the meeting to enable the management to respond The process for registration of e-mail address is as under:
quickly. a. Members holding shares in physical form
15. As per the provisions of Section 72 of the Act, the facility Members who have not registered their e-mail address
for making nomination is available for the members in with the company can obtain AGM Notice and Annual
respect of the shares held by them. Members who have not Report and/or log-in facility for remote e-voting,
yet registered their nomination are requested to register it by sending scanned copy of following documents by
by submitting Form No. SH-13. Members are requested to e-mail to investors@sakthifinance.com :
submit the said details to their Depository Participants in
i. a signed request letter mentioning your name, folio
case the shares are held by them in electronic form and to
number and complete address
the Company’s Registrar and Share Transfer Agent (“RTA”)
in case the shares are held by them in physical form, ii. self-attested scanned copy of the PAN card and
quoting your folio number. iii. self-attested scanned copy of any one of the

63rd Annual Report 2020 | Financial Year 2019-20 Page | 5

 documents (such as Aadhaar Card, Driving Licence, d. Non-resident shareholders can avail beneficial rates
Voter ID Card and Passport) towards proof of the under tax treaty between India and their country of
address of the member as registered with the residence, subject to providing necessary documents
Company. i.e. No Permanent Establishment and Beneficial
b. Members holding shares in electronic form Ownership Declaration, Tax Residency Certificate,
Members are requested to provide Demat account details any other document which may be required to
(CDSL-16 digit beneficiary ID or NSDL-16 digit DPID avail the tax treaty benefits by sending an e-mail to
+ CLID), Name, client master or copy of Consolidated green@skdc-consultants.com. The above declarations
Account statement, PAN (self attested scanned copy and documents need to be submitted by the
of PAN card), Aadhaar (self attested scanned copy of shareholders on or before the end of business hours of
Aadhaar Card) to investors@sakthifinance.com. Thursday, 10th December 2020.
The company shall co-ordinate with CDSL and arrange to 25. Payment of Dividend through electronic means
provide the log-in credentials to the above mentioned a. Shareholders are requested to provide Bank Account
shareholders. details such as Name of Account holder, Account
21. In case of any queries, Members may write to investors@ Number, IFS Code and name of bank and branch to
sakthifinance.com or helpdesk.evoting@cdslindia.com. facilitate electronic transfer of dividend amount.
22. Permanent registration of their e-mail address: The details may please be provided well in time in the
form given in the Annual Report which will be mailed to
Members are requested to register their e-mail address,
the members of the company.
in respect of electronic holdings with their Depository
Participants concerned and in respect of physical holdings b. Members holding shares in electronic form are
with the Company’s Registrar and Share Transfer Agent, informed that Bank particulars registered against their
SKDC Consultants Limited, Regd Office: “Kanapathy respective depository account will be used by the
Towers”, Third Floor, 1391/A-1, Sathy Road, Ganapathy, company for payment of dividend. The Company or its
Coimbatore - 641 006, Phone (0422) 4958995, 2539835- Registrar cannot act on any request received directly
836, E-mail : green@skdc-consultants.com, Website : from the members holding shares in electronic form
www.skdc-consultants.com. for any change of bank particulars or bank mandates.
23. Those Members who have already registered their e-mail The members have to advise such changes only to their
addresses are requested to keep their e-mail addresses depository participant.
validated with their Depository Participants / SKDC to 26. Transfer to Investor Education and Protection Fund
facilitate servicing of notices / documents / Annual (“IEPF”)
Reports and other communications electronically to their a. Transfer of unclaimed dividend
e-mail address in future.
In accordance with Sections 124, 125 of the Companies
24. Record Date and Dividend Act 2013, all unclaimed dividends up to the financial
a. Saturday, 19th September 2020 has been fixed as the year ended 31st March 1997 and for the years ended
Record Date for payment of dividend to the equity 31st March 2007, 2011 and 2012 which remained
shareholders. unclaimed for a period of seven years have been
b. Pursuant to the Finance Act 2020, dividend income transferred to the Investor Education and Protection
will be taxable in the hands of shareholders Fund (“IEPF”) of the Central Government. Members
w.e.f. 1st April 2020 and the Company is required to who have not encashed their dividend warrant(s) for
deduct tax at source from dividend paid to shareholders the said years are requested to forward their claims
at the prescribed rates. For the prescribed rates for by submitting Form IEPF - 5, which is available in the
various categories, the shareholders are requested to website : www.iepf.gov.in.
refer to the Finance Act 2020 and amendments thereof. The unclaimed dividends in respect of the following
The shareholders are requested to update their years will be transferred to IEPF on various dates as
PAN with Registrars & Share Transfer Agents, detailed below:
SKDC Consultants Limited (in case of shares held in
Financial Year Due date for transfer to IEPF
physical mode) and depositories (in case of shares
held in demat mode). 2012-13: Dividend on Equity Shares 2nd November 2020
c. A Resident individual shareholder with PAN and 2013-14: Dividend on Equity Shares 3rd November 2021
whose divided is likely to exceed ` 5,000 and who 2014-15: Dividend on Equity Shares 4th November 2022
is not liable to pay income tax can submit a yearly
2015-16: Dividend on Equity Shares 31st October 2023
declaration in Form No. 15G/15H, to avail the benefit of
non-deduction of tax at source by e-mail to 2016-17: Dividend on Equity Shares 1st November 2024
green@skdc-consultants.com on or before the end of 2017-18: Dividend on Equity Shares 31st October 2025
the business hours of Thursday, 10th December 2020.
2018-19: Dividend on Equity Shares 30th October 2026
Shareholders are requested to note that in case their
PAN is not registered, the tax will be deducted at a The Company urges all the Members to encash/claim
highest rate of 20%. their respective dividend during the prescribed period.
63rd Annual Report 2020 | Financial Year 2019-20 Page | 6
 Members who have not encashed the dividend warrants of the Company holding shares either in physical form or
so far in respect of the above periods, are requested to in dematerialized form, as on the cut-off date i.e.Thursday,
make their claim to SKDC Consultants Limited well in 10th December 2020 may cast their vote either by remote
advance of the above due dates. e-voting as well as e-voting system as on date of AGM,
b. Transfer of shares to IEPF if the member has not cast the vote using remote e-voting.
A person who is not a member as on the cut-off date should
The members may note that in case dividend is not
treat this Notice for information purpose only.
claimed for seven consecutive years, besides transfer
of the unclaimed dividend to IEPF, the Company shall The instructions for shareholders voting electronically are
transfer the shares in respect of which the dividend as under:
was so unclaimed to the dematerialized account of The e-voting period begins on Monday, 14th December
a.
IEPF under Section 124(5) of the Companies Act 2013 2020 (9.00 a.m) (“IST”) and ends on Wednesday,
and the IEPF Rules. Accordingly, the Company has 16th December 2020 (5.00 p.m) (“IST”). During this
transferred 4,18,393 equity shares of `10 each to the period shareholders of the Company, holding shares
dematerialized account of IEPF authority during the either in physical form or in dematerialized form, as
financial years 2019 and 2020. on the cut-off date, Thursday, 10th December 2020,
The Company had sent individual notices to all the may cast their votes electronically. The e-voting module
members whose shares were due to be transferred shall be disabled by CDSL for voting thereafter.
to IEPF Authority and had also published newspaper b. The shareholder should log on to the e-voting website
advertisement in this regard. www.evotingindia.com.
The details of such unclaimed dividends and shares c. Click on Shareholders
for the financial years are available on the company’s d. Now enter your User ID:
website at www.sakthifinance.com and on the website
of Ministry of Corporate Affairs at https://www.iepf. i. For CDSL : 16 digits beneficiary ID
gov.in. ii. For NSDL : 8 character DP ID followed by 8 Digits
27. Members are requested to support the Green Initiative Client ID
by registering/ updating their e-mail addresses, iii. Members holding shares in Physical Form should
with the Depository Participant (in case of Shares held in enter Folio Number registered with the Company.
dematerialised form) or with SKDC Consultants Limited e. Next enter the Image Verification as displayed and Click
(in case of Shares held in physical form). on Log-in.
28.
Since the AGM will be held through VC / OAVM in f. If you are holding shares in dematerialised form and
accordance with the MCA Circulars, the route map, proxy had logged on to www.evotingindia.com and voted
form and attendance slip are not attached to the Notice. on an earlier voting of any company, then your existing
29. UPDATION OF MEMBER’S DETAILS password is to be used.
Members are requested to quote their Folio Number/ g. If you are first time user, follow the steps given below:
Client ID/DP ID in all their correspondences.
For Shareholders holding shares in Demat Form or Physical
The format of the Register of Members prescribed by the Form
Ministry of Corporate Affairs under the Act requires the PAN Enter your 10 digit alpha-numeric PAN issued
Company / RTA to record additional details of Members, by Income Tax Department (applicable for
including their PAN details, e-mail address, bank details both demat shareholders as well as physical
for payment of dividend etc. A form for capturing the shareholders)
additional details is appended at the end of this Annual Members who have not updated their PAN
Report. with the Company/Depository Participant are
requested to use the sequence number which is
Members holding shares in physical form are requested to being provided.
submit the filled in form to the Company or RTA. Members Dividend Enter the Dividend Bank Details or date of Birth
holding shares in electronic form are requested to submit Bank (in dd/mm/yyyy format) as recorded in your
the details to their respective Depository Participants. Details or dematerialized account or in the Company
30. VOTING THROUGH ELECTRONIC MEANS Date of records in order to log in.
Birth If both the details are not recorded with the
In compliance with the provisions of Section 108 of the (DOB) depository or company, please enter the
Act read with Rule 20 of the Companies (Management and members ID/Folio Number in the dividend bank
Administration) Rules 2014, as amended and Regulation details field as mentioned in instruction (d).
44 of the Listing Regulations and the MCA Circulars,
the Company is providing facility of remote e-voting h. After entering these details appropriately, click on
to its Members through Central Depository Services “SUBMIT” tab.
(India) Limited (“CDSL”) in respect of the business to i. Members holding shares in physical form will then
be transacted at AGM. The facility of casting votes by a directly reach the Company selection screen. However,
member using remote e-voting as well as e-voting system members holding shares in dematerialised form will
on the date of the AGM will be provided by CDSL. Members now reach ‘Password Creation’ menu wherein they are
63rd Annual Report 2020 | Financial Year 2019-20 Page | 7
 required to mandatorily enter their log-in password in approval of the accounts, they would be able to cast
the new password field. Kindly note that this password is their vote.
also to be used by the dematerialised holders for voting l A scanned copy of the Board Resolution and Power
for resolutions of any other company on which they are of Attorney (POA) which they have issued in favour
eligible to vote, provided that company opts for e-voting of the Custodians, if any, should be uploaded in PDF
through CDSL platform. It is strongly recommended not format in the system for the scrutinizer to verify it.
to share your password with any other person and take t. In case you have any queries or issues regarding
utmost care to keep your password confidential. e-voting, you may refer the Frequently Asked
j. For Members holding shares in physical form, Questions (“FAQs”) and e-voting manual available at
the details can be used only for e-voting on the www.evotingindia.com under help section or write an
resolutions contained in this Notice. e-mail to helpdesk.evoting@cdslindia.com.
k. Click on the EVSN for “Sakthi Finance Limited” on which 31. Other instructions
you choose to vote. i. The voting period begins on Monday, 14th December
l. On the voting page, you will see “RESOLUTION 2020 (9.00 a.m) (“IST”) and ends on Wednesday,
DESCRIPTION” and against it, the option “YES/NO” 16th December 2020 (5.00 p.m) (“IST”). During this
for voting. Select the option YES or NO as desired. period, Members of the Company, holding shares
The option YES implies that you assent to the either in physical form or in dematerialized form, as on
Resolution and option NO implies that you dissent to the cut-off date i.e. Thursday, 10th December 2020,
the Resolution. may cast their vote electronically. The e-voting module
m. Click on the “RESOLUTIONS FILE LINK” if you wish to shall be disabled by CDSL for voting thereafter.
view the entire Resolution details. ii. Members holding multiple folios / demat accounts shall
n. After selecting the resolution you have decided to choose the voting process separately for each folio /
vote on, click on “SUBMIT”. A confirmation box will be demat account.
displayed. If you wish to confirm your vote, click on iii. In case you have any queries or issues regarding e-voting,
“OK”, else to change your vote, click on “CANCEL” and you may refer the Frequently Asked Questions (“FAQs”)
accordingly modify your vote. and e-voting manual available at www.evotingindia.
o. Once you “CONFIRM” your vote on the resolution, com under help section or contact Mr. Rakesh Dalvi,
you will not be allowed to modify your vote. Manager, CDSL, A Wing, 25th Floor, Marathon Futurex,
Mafatlal Mills Compounds, N. M. Joshi Marg, Lower
p. You can also take a print of the votes cast by clicking on
Parel (East), Mumbai - 400013 or write an e-mail
“Click here to print” option on the Voting page.
to helpdesk.evoting@cdslindia.com or calling on
q. If a dematerialised account holder has forgotten the 022-23058738 or 022-23058543 or 022-23058542
changed password, then Enter the User ID and the during working hours on all working days.
image verification code and click on Forgot Password
32. Instruction for members for attending the AGM through
and enter the details as prompted by the system.
VC / OAVM are as under:
r. Shareholders can also cast their vote using CDSL’s
a. Member will be provided with a facility to attend the
mobile app m-Voting available for android based
AGM through VC / OAVM through the CDSL e-voting
mobiles. The m-Voting app can be downloaded from
system. Members may access the same at https://www.
Google Play Store. Apple and Windows phone users can
evotingindia.com under shareholders / members log-in
download the app from the App Store and the Windows
by using the remote e-voting credentials. The link for
Phone Store respectively. Please follow the instructions
VC / OAVM will be available in shareholder / members
as prompted by the mobile app while voting on your
log-in where the EVSN of Company will be displayed.
mobile.
b. Members are encouraged to join the Meeting through
s. Note for Non-Individual Shareholders and Custodians
Laptops / IPads for better experience. Please note that
l Non-Individual shareholders (i.e. other than Participants connecting from Mobile Devices or Tablets
Individuals, HUF, NRI etc.) and Custodians are or through Laptop connecting via Mobile Hotspot may
required to log on to www.evotingindia.com and experience Audio/ Video loss due to fluctuation in their
register themselves as Corporates. respective network. It is therefore recommended to use
l A scanned copy of the Registration Form bearing the stable Wi-Fi or LAN connection to mitigate any kind of
stamp and sign of the entity should be e-mailed to above glitches.
helpdesk.evoting@cdslindia.com. c. For ease of conduct, Members who would like to
l After receiving the log-in details, a Compliance express their views / ask questions during the meeting
User should be created using the admin log-in and may register themselves as a speaker by sending their
password. The Compliance User would be able to link request in advance atleast 10 days prior to meeting
the account(s) for which they wish to vote on. mentioning their name, demat account number/
l The list of accounts linked in the log-in should be folio number, e-mail id, mobile number at
mailed to helpdesk.evoting@cdslindia.com and on investors@sakthifinance.com. The shareholders who
63rd Annual Report 2020 | Financial Year 2019-20 Page | 8
 do not wish to speak during the AGM but have queries c. Members who have voted through remote e-voting will
may send their queries in advance 10 days prior be eligible to attend the AGM. However, they will not be
to meeting mentioning their name, demat account eligible to vote at the AGM.
number/folio number, e-mail id, mobile number at By Order of the Board
investors@sakthifinance.com. These queries will be For Sakthi Finance Limited
replied to by the company suitably by e-mail. S Venkatesh
33. Voting process and instruction regarding e-voting at AGM 11th November 2020 Company Secretary
are as under: Coimbatore-18 FCS 7012
a. The procedure for e-voting on the day of the AGM is Registered Office:
same as the instructions mentioned above for remote 62, Dr Nanjappa Road
e-voting. Coimbatore – 641 018
b. Only those Members, who will be present in the AGM CIN : L65910TZ1955PLC000145
through VC / OAVM facility and have not cast their vote Phone : (0422) 2231471-74, 4236200
on the Resolutions through remote e-voting and are Fax : (0422) 2231915
otherwise not barred from doing so, shall be eligible to E-mail : investors@sakthifinance.com
vote through e-voting system available in the AGM. Website : www.sakthifinance.com

STATEMENT OF MATERIAL FACTS UNDER SECTION 102 OF THE COMPANIES ACT 2013

The following Statement sets out all material facts relating Director. Pursuant to Section 160 of the Act, the Company
to the business mentioned under Item Nos. 5 to 9 of the has received a notice in writing from a member proposing
accompanying Notice dated 11th November 2020. the re-appointment of Smt Priya Bhansali for the office of
Item No.5 Independent Director under Section 149 of the Act.
1. Smt Priya Bhansali (DIN : 00195848) has been a 5. Based on the performance evaluation of Smt Priya
Non-Executive, Independent Director of the Company since Bhansali and as per the recommendations of Nomination
September 2015. She is also a member of Nomination and and Remuneration Committee, given her professional
Remuneration Committee and Policy Review Committee qualification, rich experience and expertise in Finance and
of the Company. Smt Priya Bhansali was appointed as a Accounting, Direct Taxes, Audit, Joint Ventures, Foreign
Non-Executive, Independent Director by the members Investment and International Taxation etc for nearly
at the Fifty Eighth Annual General Meeting of the three decades and her contributions to the deliberations
Company held on 28th September 2015, for a term up and discussion at the meeting of the Board, the Board
to five consecutive years from 28th September 2015 to of Directors is of the opinion that Smt Priya Bhansali’s
27th September 2020, not liable to retire by rotation. continued association would be of immense benefit to
Smt Priya Bhansali is due for retirement from her first term the company and it is desirable to continue to avail the
as an Independent Director on 27th September 2020 as services of Smt Priya Bhansali as an Independent Director
per Section 149(6) of the Companies Act 2013 (“the Act”). for a second term of office.
2. As per Section 149(10) and (11) of the Act, an Independent 6. The Company has also received from Smt Priya Bhansali:
Director can hold office for a term up to five consecutive a. consent in writing to act as Director in Form DIR-2
years on the Board of a Company and can be re-appointed pursuant to Rule 8 of the Companies (Appointment and
on passing of a Special Resolution by the Company and
Qualification of Directors) Rules 2014
disclosure of such reappointment in the Board’s Report.
Smt Priya Bhansali fulfills the requirements of an b. intimation in Form DIR-8 in terms of Rule 14 of
Independent Director as laid down under Section 149(6) of the Companies (Appointment and Qualification of
the Act and Regulation 16 of the SEBI (Listing Obligations Directors) Rules 2014 to the effect that she is not
and Disclosure Requirements) Regulations 2015 (“Listing disqualified under sub-section (2) of Section 164 of the
Regulations”). Companies Act 2013, confirming her eligibility for such
re-appointment; and
3. Accordingly, Smt Priya Bhansali is eligible for
reappointment for a second term on the Board of the c. a declaration to the effect that she meets the criteria of
Company as an Independent Director, not liable to retire independence as provided in sub-section (6) of Section
by rotation, with effect from 28th September 2020 to 149 of the Companies Act 2013.
27th September 2025, subject to the approval of Members 7. Smt Priya Bhansali has also confirmed that she satisfies the
by a Special Resolution at this AGM. ‘Fit and Proper’ criteria as prescribed in Master Direction -
4. The Board of Directors, based on the recommendations of Non-Banking Financial Company - Systemically Important
Nomination and Remuneration Committee, propose the Non-Deposit Taking Company and Deposit Taking Company
re-appointment of Smt Priya Bhansali as an Independent (Reserve Bank) Directions 2016.
63rd Annual Report 2020 | Financial Year 2019-20 Page | 9
8. Further, as per Regulation 25(8) of the Listing Regulations, 16. Except Smt Priya Bhansali, none of the Directors or
Smt Priya Bhansali has confirmed that she is not aware Key Managerial Personnel (“KMP”) of the Company and
of any circumstance or situation which exists or may their relatives is concerned or interested, financially or
reasonably be anticipated that could impair or impact otherwise, in the Special Resolution set out above.
her ability to discharge her duties with an objective Item No.6
independent judgment and without any external 1. Sri K P Ramakrishnan (DIN : 07029959) has been a
influence. Smt Priya Bhansali has also confirmed that she Non-Executive, Independent Director of the Company
is not debarred from holding the office of a Director by since September 2015. He is also the member of
virtue of any SEBI Order or any such Authority pursuant Audit Committee and Policy Review Committee of
to SEBI Circular dated 20th June 2018 circulated by the Company. Sri K P Ramakrishnan was appointed
BSE Limited relating to enforcement of SEBI Orders as a Non-Executive, Independent Director by the
regarding appointment of Directors by listed companies. members at the Fifty Eighth Annual General Meeting
held on 28th September 2015, for a term up to five
9. Smt Priya Bhansali has further provided a declaration
consecutive years from 28th September 2015 to
pursuant to Rule 6(1) and (2) of the Companies
27th September 2020, not liable to retire by rotation.
(Appointment and Qualification of Directors) Rules 2014,
Sri K P Ramakrishnan is due for retirement from his first
as amended, affirming that she has registered her name term as an Independent Director on 27th September
with the Indian Institute of Corporate Affairs (“IICA”), 2020 as per Section 149(6) of the Companies Act 2013
Manesar for inclusion of her name in the Independent (“the Act”).
Directors’ Data Bank and that she will renew her
2. As per Section 149(10) and (11) of the Act, an Independent
application for it, from time to time, till she continues to
Director can hold office for a term up to five consecutive
hold as an Independent Director of the Company. She has years on the Board of a Company and can be re-appointed
also successfully passed the examination conducted by on passing of a special resolution by the Company and
the IICA to qualify for the Independent Directorship of the disclosure of such reappointment in the Board’s Report.
company. Sri K P Ramakrishnan fulfills the requirements of an
10. In the opinion of the Board and based on the Board’s Independent Director as laid down under Section 149(6) of
evaluation, Smt Priya Bhansali fulfills the conditions the Act and Regulation 16 of the SEBI (Listing Obligations
specified in the Act, Rules made thereunder and Listing and Disclosure Requirements) Regulations 2015
Regulations for her reappointment as an Independent (“Listing Regulations”).
Director of the Company and she is independent of the 3. Accordingly, Sri K P Ramakrishnan is eligible for
management of the Company. reappointment for a second term on the Board of the
Company as an Independent Director, not liable to retire
11. A copy of the draft letter for the re-appointment of
by rotation, with effect from 28th September 2020 to
Smt Priya Bhansali as an Independent Director setting out
27th September 2025, subject to the approval of Members
the terms and conditions would be available for inspection
by a Special Resolution at this AGM.
without any fee by the Members at the registered office
4. The Board of Directors, based on the recommendations of
of the Company during normal business hours on any
Nomination and Remuneration Committee, propose the
working day up to the date of AGM.
reappointment of Sri K P Ramakrishnan as an Independent
12. Smt Priya Bhansali holds a Graduate Degree in Commerce. Director. Pursuant to Section 160 of the Act, the Company
She is also a Fellow Member of the Institute of Chartered has received a notice in writing from a member proposing
Accountants of India and also holds a Diploma in the reappointment of Sri K P Ramakrishnan for the office of
Information System Audit (“DISA”). She is a partner in Independent Director under Section 149 of the Act.
M/s. Kumbhat & Co, Chartered Accountants. She has been a 5. Based on the performance evaluation of
practising Chartered Accountant for nearly three decades. Sri K P Ramakrishnan and as per the recommendations of
She has experience and expertise in Direct Taxes, Audit, Nomination and Remuneration Committee, given his rich
Joint Ventures, FDI and International Taxation, etc. and varied experience in banking and finance, gained over
13. Details of her Directorships and Committee Memberships a period of more than three decades in banking sector
held in other public companies are given in the Annexure and his contributions to the deliberations and discussion
to the notice. at the meeting of the Board, the Board of Directors is
of the opinion that Sri K P Ramakrishnan’s continued
14. In compliance with Section 149 read with Schedule IV to association would be of immense benefit to the company
the Act and Regulation 16 of the Listing Regulations and and it is desirable to continue to avail the services of
other applicable regulations, if any, the reappointment of Sri K P Ramakrishnan as an Independent Director for a
Smt Priya Bhansali as an Independent Director is placed second term of office.
for the approval of the members as a Special Resolution. 6. The Company has received from Sri K P Ramakrishnan:
15. Accordingly, the Board of Directors recommend the Special a. consent in writing to act as Director in Form DIR-2
Resolution set out in Item No 5 of the accompanying Notice pursuant to Rule 8 of the Companies (Appointment and
for the consideration and approval of the members. Qualification of Directors) Rules 2014
63rd Annual Report 2020 | Financial Year 2019-20 Page | 10
 b. intimation in Form DIR-8 in terms of Rule 14 of the 14. Details of his Directorships and Committee Memberships
Companies (Appointment and Qualification of Directors) held in other public companies are given in the Annexure
Rules 2014 to the effect that he is not disqualified under to the notice.
sub-section (2) of Section 164 of the Companies Act
15. In compliance with Section 149 read with Schedule IV to
2013, confirming his eligibility for such reappointment;
the Act and Regulation 16 of the Listing Regulations and
and
other applicable regulations, if any, the reappointment of
c. a declaration to the effect that he meets the criteria of
Sri K P Ramakrishnan as an Independent Director is placed
independence as provided in sub-section (6) of Section
for the approval of the members as a Special Resolution.
149 of the Companies Act 2013.
7. Sri K P Ramakrishnan has also confirmed that he satisfies 16. Accordingly, the Board of Directors recommend the Special
the ‘Fit and Proper’ criteria as prescribed in Master Resolution set out in Item No 6 of the accompanying Notice
Direction - Non-Banking Financial Company - Systemically for the consideration and approval of the members.
Important Non-Deposit Taking Company and Deposit 17. Except Sri K P Ramakrishnan, none of the Directors or
Taking Company (Reserve Bank) Directions 2016. Key Managerial Personnel (“KMP”) or their relatives,
8. Further, as per Regulation 25(8) of the Listing Regulations, is concerned or interested, financially or otherwise, in the
Sri K P Ramakrishnan has confirmed that he is not aware Special Resolution set out above.
of any circumstance or situation which exists or may
reasonably be anticipated that could impair or impact Item No.7
his ability to discharge his duties with an objective 1. At the 58th Annual General Meeting of the Company
independent judgment and without any external held on 28th September 2015 members had approved
influence. Sri K P Ramakrishnan has also confirmed that reappointment of Sri M Balasubramaniam as Managing
he is not debarred from holding the office of a Director by Director of the company for a period of five years with
virtue of any SEBI Order or any such Authority pursuant effect from 29th September 2015. His present term of
to SEBI Circular dated 20th June 2018 circulated by office as Managing Director is valid up to 28th September
BSE Limited relating to enforcement of SEBI Orders 2020.
regarding appointment of Directors by listed companies.
2. Considering his significant contributions made to the
9. Sri K P Ramakrishnan has further provided a declaration
company during his tenure of office, the Board of Directors
pursuant to Rule 6(1) and (2) of the Companies
(Appointment and Qualification of Directors) Rules have, at their meeting held on 24th August 2020, based
2014, as amended, affirming that he has successfully on the recommendation of Nomination and Remuneration
registered his name with the Indian Institute of Corporate Committee, reappointed him, subject to the approval of
Affairs (“IICA”), Manesar for inclusion of his name in the members, as Managing Director for a further period of five
Independent Directors’ Data Bank and that he will renew years with effect from 29th September 2020 on the terms
his application for it, from time to time, till he continues to and conditions set out in the resolutions which are placed
hold as an Independent Director of the Company. before the members for their approval. As per Section 203
10. Sri K P Ramakrishnan has confirmed that he had already of the Act, Managing Director is a Key Managerial Personnel
served as an Independent Director of listed and unlisted (“KMP”) of the Company.
public companies for more than ten years. As such, he has 3. Sri M Balasubramaniam holds a Master’s degree in
been exempted from the examination conducted by IICA to Commerce from Madras University and a Master’s
qualify for an Independent Directorship of the company. Degree in Business Administration from Notre Dame
11. In the opinion of the Board and based on the Board’s University, USA. He joined the company as a Director in
evaluation, Sri K P Ramakrishnan fulfills the conditions the year 1985 and has been the Managing Director of
specified in the Act, Rules made thereunder and Listing the company since 1990. He is also a Director of Sakthi
Regulations for his reappointment as an Independent Sugars Limited and other public limited companies.
Director of the Company and he is independent of the He is a member of Southern Regional Committee of
management of the Company. All India Council for Technical Education (“AICTE”).
12.
A copy of the draft letter for the reappointment of
4. During his long association with Company, the Company
Sri K P Ramakrishnan as an Independent Director setting
has gained from strength to strength under his outstanding
out the terms and conditions would be available for
inspection without any fee by the Members at the leadership. Further, considering the qualifications,
registered office of the Company during normal business experience and expertise, his continued association would
hours on any working day up to the date of AGM. be of immense benefit to the Company and hence it is
desirable to continue of avail of his services as Managing
13.
Sri K P Ramakrishnan holds a Graduate Degree in
Director of the company.
Engineering from Indian Institute of Technology, Chennai.
He was former Chief General Manager of IDBI Bank 5. The Company has received a notice in writing pursuant to
Limited. He has rich and varied experience in banking and Section 160 of the Companies Act 2013 from a member
finance, gained over a period of more than three decades proposing the reappointment of Sri M Balasubramaniam
in banking sector. for the office of Director of the Company.
63rd Annual Report 2020 | Financial Year 2019-20 Page | 11
6. Sri M Balasubramaniam has submitted the following iii. Recognition or awards: Not Applicable
documents: iv. Job Profile and Suitability :
a. consent in writing to be a Director in Form DIR-2 Sri M Balasubramaniam holds a Post graduate
b. intimation in Form DIR-8 to the effect that he is not degree in Commerce and a Masters Degree in
disqualified under Section 164(4) of the Companies Act Business Administration in Finance from Notre
2013. Dame University, USA.
7. Sri M Balasubramaniam has confirmed that he satisfies the Sri M Balasubramaniam joined the Company as
‘Fit and Proper’ criteria as prescribed in Master Direction - Director from 1985 and he has been the Managing
Non-Banking Financial Company - Systemically Important Director of the company since 29th September
Non-Deposit Taking Company and Deposit Taking Company 1990 and Vice Chairman and Managing Director of
(Reserve Bank) Directions 2016. the Company from 24th October 2007.
8. Sri M Balasubramaniam has also confirmed that he is During his long tenure, the company has achieved
not debarred from holding the office of a Director by all-round performance. During the financial
virtue of any SEBI Order or any such Authority pursuant year 2019-20, the Company has crossed `1,200
to SEBI Circular dated 20th June 2018 circulated by crore mark in total asset size under his very able
BSE Limited relating to enforcement of SEBI Orders stewardship.
regarding appointment of Directors by listed companies.
Considering the qualifications, experience, integrity
9. Details of his Directorships and Committee Memberships and expertise of Sri M Balasubramaniam in the
held in other public companies are given in the Annexure finance industry, he will be eminently qualified
to the notice. for being appointed as Managing Director of the
10.
The following additional information as required by company for a further period of 5 years with effect
Schedule V to the Companies Act 2013 is given below: from 29th September 2020.
I. General Information v. Remuneration proposed
i. Nature of Industry The present term of office of Managing
The Company has been in the business of financing Director is valid up to 28th September 2020.
for Commercial Vehicles, Infrastructure equipments Sri M Balasubramaniam is proposed to be reappointed
and Machineries, etc. as Managing Director for a further period of five (5)
ii. Date or expected date of commencement of years with effect from 29th September 2020 on the
commercial production following terms and conditions:
The Company was incorporated on 30th March Salary ` 3,00,000 per month
1955 and started Commencement of business
Perquisites Not exceeding the Annual Salary
immediately.
as may be decided by the Board of
iii. In case of new companies, expected date of Directors from time to time.
commencement of activities as per project In addition to the salary,
approved by financial institutions appearing in the Sri M Balasubramaniam shall
prospectus – Not applicable. also be entitled to the following
iv. Financial performance based on given indicators – perquisites:
as per audited financial results for the year ended a. Contribution to Provident and
31st March 2020. Superannuation Funds to the
Particulars (` lakhs) extent not taxable under Income
Tax Act 1961
Gross Turnover and Other Income 17,023.01
b.Gratuity at the rate of half
Net profit as per Statement of Profit 1,117.94 a month’s salary for each
and Loss (After Tax) completed year of service
Computation of Net Profit in 1,450.44 c. Encashment of leave at the end
accordance with Section 198 of the of tenure as per rules of the
Companies Act, 2013 Company
Net worth 15,357 Commission 3% on the Net Profits of the
v. Foreign investments or collaborators, if any: Company, subject to a maximum
ceiling specified in Section I of Part
Not applicable.
II of Schedule V to the Act
II. Information about the appointee:
vi. Comparative remuneration profile with respect
i. Background details: Information furnished in the to industry, size of the company, profile of the
Annexure to Notice. position and person (in case of expatriates the
ii. Past remuneration during the financial year ended relevant details would be with respect to the
31st March 2020: ` 114.19 lakhs country of his origin)

63rd Annual Report 2020 | Financial Year 2019-20 Page | 12

 The proposed remuneration to the Company and their relatives is, in any way, concerned
Sri M Balasubramaniam has been fixed after or interested, financially or otherwise, in the Resolution
considering the size of the business, his qualification set out at Item No. 7 of the Notice. None of the Directors
and the responsibilities shouldered for the effective and KMP of the Company are inter se related to each other.
management of the company. 12. Accordingly, the Board of Directors recommend the Special
The remuneration proposed to be paid to him, Resolution set out in Item No 7 of the accompanying Notice
is also commensurate with the remuneration given for the consideration and approval of the members.
to his position / level by the same industry or similar 13. The above terms and conditions may also be treated as an
companies. abstract under Section 190 of the Companies Act 2013.
Pecuniary relationship directly or indirectly with
vii. Item No.8
the Company, or relationship with the managerial To increase net worth, to strengthen the Capital Adequacy
personnel, if any: Ratio and to meet the Working Capital requirements of
Besides the remuneration proposed to be paid the Company, the company intends to issue, in one or more
to him, the Managing Director does not have any tranches, 15,00,000 Redeemable, Cumulative, Preference
other pecuniary relationship with the Company or Shares of ` 100 each for an amount not exceeding ` 15 crore
relationship with the managerial personnel. on private placement basis to such person(s) identified by the
III. Other Information Board of Directors of the Company (hereinafter referred to
as “the Board” which term shall be deemed to include any
i. Reasons of loss or inadequate profits : Not
duly constituted / to be constituted Committee of the Board
applicable, as the Company has posted a net profit
thereof to exercise its powers including powers conferred by
after tax of ` 1,117.94 lakhs during the year ended
this resolution) in their absolute discretion whether or not
31st March 2020.
such persons are members of the Company on such terms
ii. Steps taken or proposed to be taken for and conditions as may be decided by the Board of Directors
improvement - Not Applicable at their discretion.
Expected increase in productivity and profits in
iii. The Special Resolution authorizing the Board of Directors to
measurable terms: Not applicable as the Company offer, issue and allot preference shares at their discretion,
has adequate profits. as detailed in the resolution, is placed before the members for
11.
Except Sri M Balasubramaniam, Vice Chairman and their approval.
Managing Director, Dr M Manickam, Chairman and The terms and conditions of the preference shares shall be
Sri M Srinivaasan, Director and his relatives to the extent of subject to the provisions of the Companies Act 2013 and the
their shareholding interest, if any, in the Company, none of related rules under the Act and the Memorandum and Articles
the other Directors, Key Managerial Personnel (“KMP“) of of Association of the Company.
As required under Rule 9(3) of the Companies (Share Capital and Debentures) Rules 2014, the material facts in relation to the
above issue of Preference Shares, Rule 13(2) of the Companies (Share Capital and Debentures) Rules 2014 and Rule 14 of the
Companies (Prospectus and Allotment of Securities) Rules 2014, to the extent applicable are as follows:
a Particulars of the offer including date of passing of Board Preference Shares
resolution Date of Board Meeting : 30th July 2020
b Size of the issue and the number of preference shares to The Company proposes to issue and allot up to 15,00,000
be issued and the nominal value of each share (Fifteen Lakhs only) Redeemable, Cumulative, Preference
Shares of face value of ` 100 each for cash at par aggregating
a nominal value not exceeding ` 15 crore to various persons/
entities identified by the Board of Directors of the Company
(hereinafter referred to as "the Board” which term shall
be deemed to include duly constituted / to be constituted
Committee of the Board thereof to exercise its powers
including powers conferred by this resolution) and whether or
not they are members of the Company
c Nature of such shares. i.e cumulative or non-cumulative, Redeemable, Cumulative, Non-participating and
participating or non-participating, convertible or Non-Convertible Preference Shares
non-convertible
d Objectives of the issue To increase net worth, to strengthen the Capital Adequacy
Ratio and to meet the Working Capital requirements of the
Company
e Manner of issue of shares On private placement basis
f Price at which such shares are proposed to be issued At par
g Basis on which the price has been arrived at None

63rd Annual Report 2020 | Financial Year 2019-20 Page | 13

 h Name and address of valuer who performed valuation Not applicable
i Terms of issue, including terms and rate of dividend on As mentioned in the resolution in item No 8 and the rate of
each share etc dividend will be decided by Board of Directors
j Terms of redemption, including the tenure of redemption, The period of redemption would be based on the cash flows
redemption of shares at premium and if the preference of the Company for its business requirements and would be
shares are convertible, the terms of conversion decided by the Board of Directors but in no case shall exceed
a period of 20 years from the date of issue. Redemption of
preference shares at premium is not applicable and there is
no conversion of shares
k Manner and modes of redemption Out of profits and /or out of fresh issue of capital
l Current shareholding pattern of the Company Equity shareholding pattern as on 30th September 2020* :
Category No of Shares % of equity
capital
Promoter and Promoter 4,33,63,007 67.02
Group
Financial Institutions, 900 0.00
Mutual Funds and Banks
Bodies Corporate 1,57,14,554 24.29
including Overseas
Corporate Body
Non Resident Indians 47,186 0.07
Resident Individuals and 55,80,235 8.62
Others
Total 6,47,05,882 100.00
* Detailed shareholding pattern is available on the website of
the Company, i.e. www.sakthifinance.com and also available
on the website of the BSE Ltd i.e www.bseindia.com.
m Expected dilution in equity share capital upon conversion Not applicable
of preference shares
n Contribution being made by the promoters or directors None of the Promoters or Directors is interested in the offer.
either as part of the offer or separately in furtherance of
such objects
o Principal terms of assets charged as security, if applicable Not applicable
Accordingly, the Board of Directors recommend the Special for the Company. The borrowings of the Company presently
Resolution set out in Item No 8 of the accompanying Notice aggregate approximately to ` 983.74 crore, of which
for the consideration and approval of the members. Secured or Unsecured NCDs, Subordinated bonds and other
None of the Directors or Key Managerial Personnel or their debt securities, privately placed, aggregate approximately to
relatives, is concerned or interested, financially or otherwise, ` 364.06 crore.
in the passing of the Special Resolution. The Company expects to borrow an amount not exceeding
Item No.9 ` 500 crore by way of NCDs and other debt securities during
As per the provisions of Section 42 and 71 of the Companies the period commencing from the conclusion of the Sixty Third
Act 2013 (“the Act”) read with the Companies (Prospectus and Annual General Meeting until the conclusion of Sixty Fourth
Allotment of Securities) Rules 2014 and the Companies (Share Annual General Meeting. The issue proceeds are expected to
Capital and Debentures) Rules 2014, (including any statutory be used to fund the hire purchase finance operations of the
modification(s) or re-enactment thereof for the time being Company and for general working capital purposes.
in force), a company which offers or make an invitation to Hence, the approval of the Members is being sought by
subscribe to Non-Convertible Debentures (“NCDs”) on private way of a Special Resolution for the proposed issue of NCDs
placement basis, is required to obtain the prior approval of and other debt securities on private placement basis.
the members by way of a Special Resolution, which can be Further, Members are requested to authorize the Board
obtained once in a year for all the offers and invitations for (including any committee thereof) to offer and issue NCDs and
such NCDs during the year. other debt securities on private placement basis, in one or
Borrowings through NCDs and other debt securities, issued more series or tranches, within the overall borrowing limits of
on private placement basis form significant source of funds the Company, as approved by the members from time to time.

63rd Annual Report 2020 | Financial Year 2019-20 Page | 14

As required under Rule 14 of the Companies (Prospectus and Allotment of Securities) Rules 2014 and Rule 13(2) of the
Companies (Share Capital and Debentures) Rules 2014, to the extent applicable, the material facts in relation to the above
issue of NCDs and other debt securities are as follows:

Particulars of the offer including date of passing of Board Secured / Unsecured Redeemable, Non-Convertible
resolution Debentures (“NCDs”) and Other Debt Securities in one or
more series or tranches
Date of Board Meeting : 24th August 2020
Kinds of securities offered and the price at which security is NCDs and other Debt Securities
being offered Face Value of NCDs : ` 1,000 each
Other Debt Securities : At the discretion of the Board of
Directors at the time of Issue
Basis or justification for the price (including premium, if any) Not applicable
at which the offer or invitation is being made
Name and address of valuer who performed valuation Not applicable
Amount which the company intends to raise by way of such For an amount not exceeding ` 500 crores in aggregate
securities
Material Terms of raising of securities: Duration, if applicable, Terms :
Rate of dividend or rate of interest, mode of payment and NCDs : 15 to 36 months
repayment Other Debt Securities : At the discretion of the Board of
Directors at the time of Issue
Interest Rate : Not exceeding 12% p.a.
Mode of payment : NEFT / Cheque / DD
Repayment : NEFT / Cheque / DD on the date of maturity
Proposed time schedule for which the offer letter is valid Validity commencing from the conclusion of this AGM until
the conclusion of next AGM.
Purposes and objects of the offer To finance the business operations and increased working
capital requirements of the Company.
Contribution being made by the promoters or directors either None of the Promoters or Directors is interested in the offer.
as part of the offer or separately in furtherance of such objects
Principal terms of assets charged as security, if applicable Secured NCDs :
Security cover will be 1.10 times of the debenture value.
Accordingly, the Board of Directors recommend the Special Resolution as set out in Item No 9 of the accompanying Notice for the
consideration and approval of the members.
None of the Directors or Key Managerial Personnel or their relatives, is concerned or interested, financially or otherwise, except
to the extent of NCDs and other debt securities that may be subscribed to by their relatives or companies/firms in which they
are interested.
By Order of the Board
For Sakthi Finance Limited
S Venkatesh
11th November 2020 Company Secretary
Coimbatore FCS 7012

Registered Office:
62, Dr Nanjappa Road
Coimbatore – 641 018
CIN : L65910TZ1955PLC000145
Phone : (0422) 2231471-74, 4236200
Fax : (0422) 2231915
E-mail : investors@sakthifinance.com
Website : www.sakthifinance.com

63rd Annual Report 2020 | Financial Year 2019-20 Page | 15

 Annexure
DETAILS OF DIRECTORS SEEKING REAPPOINTMENT AT THE SIXTY THIRD ANNUAL GENERAL MEETING
(Pursuant to Regulation 36(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 and
Secretarial Standard 2 on General Meetings)
Name of the Director Dr M Manickam Smt Priya Bhansali
Item No 4 5
Director Identification Number 00102233 00195848
(“DIN”)
Date of birth and age 24th March 1956, 64 years 25th March 1966, 54 years
Date of appointment on the 11th December 1990 31st March 2015 (Addl Director - Independent)
Board 28th September 2015 (Independent Director)
Qualifications Master’s Degree in Statistics from Madras Graduate Degree in Commerce from Madras
University and a Master’s Degree in University. Fellow Member of the Institute of
Business Administration from University of Chartered Accountants of India (“ICAI”) and a
Michigan, USA Diploma Holder in Information System Audit
from ICAI
No of Board Meetings attended 6 out of 6 6 out of 6
during the year out of 6 meetings
Expertise in specific functional He has an experience of about 39 years She is a partner in M/s Kumbhat & Co,
areas in the field of Business and Industries. Chartered Accountants. She has been
He plays an advisory role in SFL. He is practicing as a Chartered Accountant for
the Chairman and Managing Director of nearly three decades. She has experience in
Sakthi Sugars Limited. He is also Chairman Direct Taxes, Audit, Joint Ventures, Foreign
and Managing Director of Sakthi Auto Direct Investment and International Taxation
Component Limited. In recognition of etc.
his contribution for Management of Agro
Processing Industries and Agricultural
Development, he was awarded the “Doctor
of Science” (Honoris Causa) by Tamilnadu
Agricultural University, Coimbatore in
July 2010. He was the President of Indian
Sugar Mills Association during 1996-97
Directorships held in other Listed Public Companies Listed Public Company
Companies 1. Kovai Medical Center and Hospitals Ltd 1. Sakthi Sugars Limited
2. Sakthi Sugars Limited Private Limited Company
Unlisted Public Companies 1. Ishita Advisory Services Private Limited
1. A B T Limited
2. ABT Foods Retailing (India) Limited
3. Sakthi Auto Component Limited
4. Sakthi Properties (Coimbatore) Limited
5. Sri Chamundeswari Sugars Limited
6. The Gounder and Company Auto Limited
Private Limited Companies
1. A B T Info Systems Private Limited
2. Anamallais Bus Transport Private Limited
3. Nachimuthu Industrial Association
Memberships / Chairmanships Stakeholders’ Relationship Committee: Nomination and Remuneration Committee:
of committee across public Chairman: Sakthi Finance Limited Member: Sakthi Finance Limited
companies Member: Sakthi Sugars Limited Policy Review Committee - Member:
Sakthi Finance Limited
Audit Committee - Member:
Sakthi Sugars Limited
No of equity shares held 92,813 Nil
Last drawn remuneration ` 1.20 lakhs (Sitting Fees) ` 2.00 lakhs (Sitting Fees)
Relationship with other directors Brother of Sri. M. Balasubramaniam None
Vice Chairman and Managing Director and
Sri. M. Srinivaasan, Director

63rd Annual Report 2020 | Financial Year 2019-20 Page | 16

Name of the Director Sri K P Ramakrishnan Sri M Balasubramaniam
Item No 6 7
Director Identification Number 07029959 00377053
(“DIN”)
Date of birth and age 16th October 1954, 66 years 20th September 1958, 62 years
Date of appointment on the 30th May 2015 (Additional Director - 21st August 1985
Board Independent)
28th September 2015 (Independent
Director)
Qualifications He holds a Bachelor’s degree in Engineering He holds Master’s Degree in Commerce from
from Indian Institute of Technology, Madras University and a Master’s Degree in
Chennai Business Administration from Notre Dame
University, USA.
No of Board Meetings attended 6 out of 6 5 out of 6
during the year out of 6 meetings
Expertise in specific functional He was Chief General Manager of He has experience of 34 years in the field
areas IDBI Bank Limited and has got more than of finance, auto and sugar industries.
three decades of experience in Banking He was Chairman of Coimbatore Zone of
and Finance Confederation of Indian Industry and also
a member of Management Committee
of Coimbatore Management Association.
He is a member of Southern Regional
Committee of All India Council for Technical
Education (“AICTE”)
Directorships held in other Unlisted Public Companies Listed Public Companies
companies 1 TDT Copper Limited Sakthi Sugars Limited
Private Limited Company Unlisted Public Companies
1. Think Capital Private Limited 1. A B T Limited
2. ABT Foods Retailing (India) Limited
3. ABT Properties Limited
4. Sakthi Auto Component Limited
5. Sakthifinance Financial Services Limited
6. Sri Chamundeswari Sugars Limited
7. The Gounder and Company Auto Limited
Private Limited Companies
1. Anamallais Bus Transport Private Limited
2. Coimbatore Innovation and Business
Incubator
3. Nachimuthu Industrial Association
Membership / Chairmanship Audit Committee Stakeholders’ Relationship Committee
of committees across public Member : Sakthi Finance Limited Member
companies Policy Review Committee 1. Sakthi Sugars Limited
Member : Sakthi Finance Limited 2. Sakthi Finance Limited
Policy Review Committee - Chairman:
Sakthi Finance Limited
CSR Committee - Member:
Sakthi Finance Limited
No of equity shares held Nil 1,92,000
Last drawn Remuneration ` 2.80 lakhs (Sitting Fees) ` 114.29 lakhs
Relationship with other directors None Brother of Dr M Manickam, Chairman and
Sri. M. Srinivaasan, Director

63rd Annual Report 2020 | Financial Year 2019-20 Page | 17

Board’s Report
To the Members have been prepared in accordance with the recognition
Your Directors are pleased to present their Sixty Third Annual and measurement principles stated therein, prescribed
Report together with the audited financial statements of the under Section 133 of the Companies Act 2013 (“the Act”)
company for the year ended 31st March 2020. read with relevant Rules issued thereunder and the other
accounting principles generally accepted in India.
1. FINANCIAL PERFORMANCE (` lakh)

The transition to Ind AS has been made from the
Particulars 2019 - 20 2018-19 previous Accounting Standards notified under the Act,
Total Income (A) 17,023.01 16,809.79 read with Rule 7 of the Companies (Accounts) Rules 2014
Less : Finance Costs 10,109.40 10,026.54 (as amended), guidelines issued by the Reserve Bank of
India (“RBI”) and other generally accepted accounting
Other Expenditure 5,046.97 4,965.22 principles in India (collectively referred to as “the previous

}
Depreciation, 465.61 438.72 GAAP”). Accordingly, the impact of transition has been
Amortization and recorded in the opening reserves as on 1st April 2018 and
Impairment the corresponding adjustments pertaining to comparative
Total Expenses (B) 15,621.98 15,430.48 previous year as presented in these Financial Statements
Profit before Exceptional have been restated/reclassified in order to conform to
Items and Taxes (A-B) 1,401.03 1,379.31 current year presentation.
Exceptional Items - - 3. BUSINESS
Profit before Tax 1,401.03 1,379.31 During the financial year, the company disbursed an
Less : Provision for Tax: - - amount of ` 67,132 lakh in hire purchase financing
operations as against ` 57,747 lakh during the previous
Current Tax 449.61 583.30 financial year. The collection efficiency has been good.
Deferred Tax (166.52) (161.48) Your directors hope to achieve better business
Profit after tax for the year 1,117.94 957.49 disbursements and profitability during the current
Balance of profit for earlier financial year.
years 2,803.87 2,719.51 4. CHANGE IN NATURE OF BUSINESS, IF ANY
Profit available for During the year, there was no change in the nature of
Appropriation 3,921.81 3,677.00 business of the company.
Add : Other Comprehensive 5. DIVIDEND
Income / (Loss) (5.54) (31.08) a. PREFERENCE SHARES
Less : Dividend paid on Your Directors have, at their meeting held on 30th June
Equity Shares (2019 & 2018) 500.00 500.00 2020, declared an interim dividend of ` 9 per share
Tax on Dividend - on 9% Redeemable Cumulative Preference Shares of
Equity Shares (2019 & 2018) 102.78 102.78 ` 100 each for the financial year ended 31st March
Statutory Reserve 223.59 239.27 2020 amounting to ` 129.65 lakh, after deduction of
Balance carried forward 3,089.90 2,803.87 TDS.
b. EQUITY SHARES
Note: The financial statements for the year ended
Your Directors are pleased to recommend a dividend
31st March 2020 have been prepared under Indian
Accounting Standards (“Ind AS”). The financial of ` 0.60 per equity share (6% on the face value
statements for the year ended 31st March 2019 of equity shares of ` 10 each) for the year ended
have been restated in accordance with Ind AS for 31st March 2020 amounting to ` 388.26 lakh.
comparative purposes. Equity Dividend recommended for the financial year
2019-20, if approved by the members, will be
2. IMPLEMENTATION OF INDIAN ACCOUNTING STANDARDS recognized as a liability during the financial year
(“Ind AS”) 2020-21.
Your Company has prepared the Financial Statements 6. TRANSFER TO RESERVES
in conformity with Indian Accounting Standards
(“Ind AS”) notified under the Companies (Indian No amount has been transferred to General Reserve from
Accounting Standards) Rules 2015, as amended by the current year profits.
Companies (Indian Accounting Standards) Rules 2016. 7. CHANGE IN THE CAPITAL
The Company has adopted Ind AS with effect from During the year, the Company has allotted 1,47,05,882
1st April 2019 with effective transition date of 1st April Equity Shares on preferential basis to Promoter Group
2018. Companies and Other Corporate Body on 13th March
Accordingly, these Financial Statements together with the 2020. Accordingly, the paid-up share capital stands
Financial Statements for the comparative reporting period increased to ` 7,970.59 lakh from ` 6,500.00 lakh.

63rd Annual Report 2020 | Financial Year 2019-20 Page | 18

8. MANAGEMENT DISCUSSION AND ANALYSIS REPORT 12. TRANSFER TO INVESTOR EDUCATION AND PROTECTION
As required under Regulation 34(2) of the SEBI (Listing FUND (“IEPF”)
Obligations and Disclosure Requirements) Regulations During the year 2019-20, your Company has transferred
2015 (“Listing Regulations”), a report on Management unclaimed dividend, unclaimed matured debentures and
Discussion and Analysis, which forms part of this report, deposits, including interest, amounting to ` 21.24 lakh to
is set out in Annexure 1. IEPF. Further, the Company has also transferred 39,715
9. PUBLIC ISSUE / REDEMPTION OF NON-CONVERTIBLE equity shares of ` 10 each in respect of which dividend
DEBENTURES has remained unclaimed for seven consecutive years to
IEPF.
a. Public Issue of Secured and Unsecured, Redeemable,
Non-Convertible Debentures for ` 20,000 lakh 13. DIRECTORS AND KEY MANAGERIAL PERSONNEL
During March – April 2020, the Company made a a. Retirement by rotation
Public Issue of Secured and Unsecured, Redeemable, In accordance with the provisions of Section 152(6)
Non-Convertible Debentures (“NCDs”) of ` 1,000 of the Companies Act 2013, Dr M Manickam, Director
each up to ` 10,000 lakhs, with an option to retain (DIN: 00102233) will retire by rotation at the ensuing
over-subscription up to ` 10,000 lakhs, aggregating AGM of the Company and being eligible, offers himself
` 20,000 lakhs. The NCD issue opened on 13th March for reappointment. The Board recommends his
2020 and closed on 30th April 2020 (extended due reappointment.
to Covid-19 pandemic with the approval of SEBI). b. Reappointment of Independent Directors
The Company received a subscription of ` 11,210.00
Pursuant to the provisions of Section 149(10) and
lakh. The Company made allotment of 10,28,631 NCDs
(11) of the Companies Act 2013, the Members of
aggregating ` 10,286.31 lakhs to the eligible allottees
the Company had appointed Smt Priya Bhansali and
on 8th May 2020. The NCDs have been listed and
Sri K P Ramakrishnan as Independent Directors at
admitted for trading with BSE Limited with effect from
the 58th Annual General Meeting (“AGM”) held on
12th May 2020. The entire proceeds of the NCD issue
28th September 2015 to hold office for five consecutive
were used towards the objects stated in the Prospectus.
years for a term up to 27th September 2020. They are
b. Redemption of Secured, Redeemable, eligible for reappointment as Independent Directors
Non-Convertible Debentures (“NCDs”) for the second term.
As per the terms and conditions of the Public Issue Based on the recommendation of the Nomination
Prospectus dated 30th March 2016, your company and Remuneration Committee and their experience
has fully redeemed the Secured, Redeemable, and expertise, performance evaluation exercise, skill
Non-Convertible Debentures issued under Options sets they possess and significant contributions made
VI, VII and VIII aggregating ` 11,040.05 lakhs. by Smt Priya Bhansali and Sri K P Ramakrishnan to
The repayment was made on 18th May 2020 to the the deliberations and discussion at the meeting of
respective Debenture holders and thus the entire NCDs the Board, the Board of Directors recommended their
under Options I to VIII were fully redeemed. reappointments, for the second term of five
10. PREFERENTIAL ISSUE OF EQUITY SHARES consecutive years from 28th September 2020 to
27th September 2025 for the approval of the Members
During the financial year, the Company has raised an
at the ensuing AGM by way of Special Resolutions and
amount of ` 2,500.00 lakhs by way of preferential issue
they are not liable to retire by rotation.
of 1,47,05,882 equity shares at ` 17 per share from
promoter group companies and other corporate body. c. Reappointment of Sri M Balasubramaniam as
The allotment was made on 13th March 2020. The listing Managing Director
and trading approval were received on 27th May 2020 The present term of office of Sri M Balasubramaniam,
and 3rd June 2020 respectively. The entire proceeds Managing Director is valid up to 28th September
of the issue were utilized for the purpose for which the 2020. Based on the recommendation of Nomination
amount had been raised. and Remuneration Committee, the Board of
11. DEPOSITS Directors at their meeting held on 24th August 2020,
approved his reappointment for a further period of
The total deposits with the company as at
five years with effect from 29th September 2020.
31st March 2020 stood at ` 18,482.25 lakhs as against
A resolution relating to his reappointment is placed
` 17,588.07 lakhs as at the end of the previous year.
before the members for their approval at the ensuing
As at the end of the financial year 2020, 494 public deposits Annual General Meeting.
aggregating ` 514.52 lakhs were due for repayment, but
d. Number of Meetings of the Board
remained unclaimed. The Company has been regularly
reminding the depositors about the maturity and out of Six (6) meetings of the Board of Directors of the
the said deposits, 216 deposits amounting to ` 267.17 Company were held during the year. For details of
lakhs have since been claimed and paid / renewed as per the meetings, please refer to Corporate Governance
their instructions. Report, which forms part of this Report.
63rd Annual Report 2020 | Financial Year 2019-20 Page | 19
 e. Key Managerial Personnel Smt Priya Bhansali, Independent Director has
In terms of Section 203 of the Act, successfully completed her on-line proficiency test
Sri M Balasubramaniam, Vice Chairman and Managing conducted by IICA, Manesar for being eligible to
Director, Dr S Veluswamy, Director (Finance and be reappointed as an Independent Director of the
Operations) and Sri S Venkatesh, Company Secretary Company.
are the Key Managerial Personnel (“KMPs”) of the h. Code of Conduct for Directors and Senior Management
Company. The Directors and members of the Senior Management
f. Remuneration Policy have confirmed compliance with the Code of Conduct.
A declaration to this effect has been signed by
Company’s policy on Director’s appointment and
Vice Chairman and Managing Director and forms part
remuneration including the criteria for determining
of the Annual Report.
qualifications, positive attributes, independence of
a director and other matters provided under Section i. Inter se relationship amongst Directors
178(3) of the Act are covered in the Corporate
Except Dr M Manickam, Chairman,
Governance Report which forms part of the Board’s Sri M Balasubramaniam, Vice Chairman and Managing
Report. The policy on remuneration is set out in Director and Sri M Srinivaasan, Director, who are related
Annexure 2. Further, information about the elements to each other as brothers, none of the other Directors
of remuneration package of individual directors is is related to each other within the meaning of the term
provided in the extract of Annual Return as required “relative” as per Section 2(77) of the Act read with the
under Section 92(3) of the Act and is enclosed as Listing Regulations.
Annexure 3 in the prescribed form MGT-9, which forms
part of this Report. j. Performance Evaluation
In terms of the requirements of the Act and Listing
g. Independent Directors’ Declaration
Regulations, the Board has carried out an annual
Dr A Selvakumar, Sri P S Gopalakrishnan, performance evaluation of the individual Directors,
Smt. Priya Bhansali and Sri K P Ramakrishnan, who are Committees of the Board and the Board as a whole.
Independent Directors, have submitted declarations
The evaluation was carried out based on a structured
that each of them meet the criteria of independence
questionnaire which includes performance criteria
as provided in sub-section (6) of Section 149 of the
such as performance of duties and obligations,
Act and Regulation 25 of the SEBI (Listing Obligations
independence of judgment, level of engagement
and Disclosure Requirements) Regulations 2015
and participation, contribution in increasing the
(“Listing Regulations”). Further, in terms of Regulation
Board’s over-all effectiveness etc. Your directors
25 of the Listing Regulations, they are not aware of
have expressed their satisfaction on functioning and
any circumstance or situation which exist or may
performance of Individual Directors, Board and its
reasonably be anticipated that could be impair or
Committees.
impact their ability to discharge the duties with an
objective independent judgement and without any 14. AUDIT COMMITTEE
external influence and they are independent of the The present Audit Committee has three non-executive
management. The Board is of the opinion that the directors as members of which two are Independent
independent Directors of the Company possess Directors. The composition of the Committee is given
requisite qualifications, expertise and experience in the below:
field of information technology, banking and finance, a. Dr A Selvakumar, Chairman
finance and accounting, FDI, international taxation etc.,
b. Sri M Srinivaasan, Member
and that they hold highest standards of integrity.
c. Sri K P Ramakrishnan, Member
The Independent Directors of the Company have
undertaken requisite steps towards inclusion of their 15. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
name in the data bank of independent Directors During the financial year 2019-20, the company has not
maintained with the Indian Institute of Corporate given / provided any loans, guarantee and securities to
Affairs (“IICA”) in terms of Section 150 of the Act parties mentioned in Section 185 of the Act. Hence the
read with Rule 6 of the Companies (Appointment provisions of Section 186 of the Act is not applicable to
and Qualifications of Directors) Rules 2014 and a the Company.
declaration to that effect has been obtained from them. 16. TRANSACTIONS WITH RELATED PARTIES
Majority of the Independent Directors of the Company The Company has entered into contracts or arrangements
have served as Directors in listed Companies having with the related parties in the ordinary course of business
paid-up share capital of ` 10 crore or more for a period and these are on an arm’s length basis only. There are
of not less than 10 years and hence they are exempt no contract or arrangement entered into with Related
from undertaking the proficiency test as per Rule 4 Party(ies) during the year which requires to be disclosed
of the Companies (Appointment and Qualification of in Form AOC-2 under Sections 188(1) and 134(h) of the
Directors) Rules 2014. Act.
63rd Annual Report 2020 | Financial Year 2019-20 Page | 20
17. INTERNAL CONTROL 24. DIRECTORS’ RESPONSIBILITY STATEMENT
The information about internal controls is set out in the As required under Section 134(5) of the Act, your directors
Management Discussion and Analysis Report which forms confirm, to the best of their knowledge and belief that:
part of this Report.
a.
in the preparation of the annual accounts,
18. RISK MANAGEMENT the applicable accounting standards have been
The Risk Management is overseen by the Risk Management followed and that there are no material departures;
Committee of the Company. The Committee oversees the b. they have selected such accounting policies and
Company’s processes and policies for determining risk applied them consistently and made judgments and
tolerance against established levels. Major risks identified estimates that are reasonable and prudent so as to
by the business and functions are systematically addressed give a true and fair view of the state of affairs of the
through mitigating actions on a continuous basis. For company at the end of the financial year and of the
details, please refer to the Management Discussion and profit of the company for the financial year;
Analysis Report which forms part of the Board’s Report.
c. they have taken proper and sufficient care for
19. WHISTLE BLOWER POLICY (VIGIL MECHANISM) the maintenance of adequate accounting records
The Company has formulated a Whistle Blower Policy in accordance with the provisions of the Act for
(Vigil Mechanism) for Directors and employees to report safeguarding the assets of the company and for
their genuine concerns. During the year, no complaint has preventing and detecting fraud and other irregularities;
been received in this regard. For details, please refer to
d. they have prepared the annual accounts on a going
Corporate Governance Report which forms part of this
concern basis;
Report.
e. they have laid down internal financial controls to
20. Subsidiaries, Associate and Joint Venture
be followed by the Company and that such internal
Companies
financial controls are adequate and operating
The Company does not have any subsidiary, associate or effectively; and
joint venture. There was no Company which has become
or ceased to be Company’s subsidiary, joint venture or f. they have devised proper systems to ensure compliance
associate company during the financial year 2019-20. with the provisions of all applicable laws and that such
systems were adequate and operating effectively.
21. CORPORATE GOVERNANCE REPORT
25. CORPORATE SOCIAL RESPONSIBILITY (“CSR”)
As required under Regulation 34(3) and Schedule V to the
Listing Regulations, a report on Corporate Governance The CSR Policy of the Company and the details about
and a certificate from the auditors of the company the initiatives taken by the Company on CSR during
regarding compliance of the conditions of Corporate the year as per the Companies (Corporate Social
Governance form part of the Annual Report and is set out Responsibility Policy) Rules 2014 have been disclosed in
in Annexure-4. Annexure - 5. Further, details regarding composition of
22. DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN Corporate Social Responsibility Committee and other
AT WORKPLACE (PREVENTION, PROHIBITION AND particulars are provided in the Corporate Governance
REDRESSAL) ACT 2013 Report which forms part of this report.
The Company has put in place a Sexual Harassment During the financial year, your company is required to
Prevention Policy in line with the requirements of the spend ` 38.53 lakhs towards CSR expenses. Your Company
Sexual Harassment of Women at Workplace (Prevention, has so far spent ` 12.19 lakhs as against the required to
Prohibition and Redressal) Act 2013. An Internal be spent during the financial year 2019-20.
Compliance Committee (“ICC”) has been formed to Due to COVID-19 pandemic lockdown during March–May
redress complaints received regarding sexual harassment. 2020, your company was unable to spend the balance
All employees are covered under this Policy. During the amount of ` 26.34 lakhs.
year 2019-20, there were no complaints received in this
regard by the ICC. 26. AUDITORS

23. ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH a. Statutory Auditors

REFERENCE TO THE FINANCIAL STATEMENTS M/s P K Nagarajan & Co., Chartered Accountants
The Company has put in place necessary internal financial (ICAI Firm Regn. No. : 016676S) were appointed as
controls which are adequate and are operating effectively. statutory auditors of the Company at the 60th Annual
The controls are adequate for ensuring the orderly General Meeting to hold office up to the conclusion
and efficient conduct of the business, completeness of of the 65th Annual General Meeting, subject to
accounting records and timely preparation of reliable ratification of appointment by the members, every
financial information, besides adherence to the Company’s year. The Ministry of Corporate Affairs has, by its
policies, safeguarding of assets, prevention and detection Notification dated 7th May 2018, dispensed with the
of frauds and errors, accuracy, etc. requirement of ratification of Auditor’s appointment by
63rd Annual Report 2020 | Financial Year 2019-20 Page | 21
 the members, every year. Hence, the resolution relating 29. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE
to ratification of Auditor’s appointment is not included REGULATORS OR COURT
in the Notice of the ensuing Annual General Meeting. There are no significant and material orders passed by
They have confirmed their independence and eligibility the regulators or courts or tribunals affecting the going
under Section 141 of the Act, the rules framed under concern status of your company and its operations in
the Act and listing regulations. future.

M/s. P K Nagarajan & Co, Chartered Accountants, 30. MATERIAL CHANGES AND COMMITMENTS
have audited the accounts of the company for the year There are no material changes and commitments which
2019-20 and submitted their report thereon. There has occurred between the end of the financial year of
been no qualification, reservation, adverse remarks or the company and the date of this report affecting the
disclaimer given by the Auditors in their report. Company’s financial position.
b. Secretarial Auditors 31. EXTRACT OF ANNUAL RETURN
Pursuant to Section 204 of the Act, your Directors The extract of Annual Return as provided under
appointed M/s. S Krishnamurthy & Co, Company sub-section (3) of Section 92 of the Act is enclosed as
Secretaries, to undertake the Secretarial Annexure - 3 in the prescribed Form MGT-9 and forms part
Audit of your company for the year 2019-20. of this Report.
The Secretarial Audit Report for the financial year 32. PECUNIARY RELATIONSHIP OR TRANSACTIONS OF
31st March 2020 is set out in Annexure-6. NON-EXECUTIVE DIRECTORS
There were no qualifications, reservations, observations During the year, the Non-Executive Directors of the
or adverse remarks made by the Auditors in their Company had no pecuniary relationship or transactions
report. with the Company.
c. Cost Records and Cost Audit 33. SECRETARIAL STANDARDS COMPLIANCE
Your Directors confirm that the Company has complied
Maintenance of cost records and requirements of cost
with the applicable Secretarial Standards issued by the
audit as prescribed under the provisions of Section
Institute of Company Secretaries of India in relation to
148(1) of the Act is not applicable for the business
Board and General Meetings.
activities carried out by the company.
34. ACKNOWLEDGEMENT
27. PARTICULARS REQUIRED UNDER SECTION 134 OF THE ACT
Your Directors wish to place on record the valuable
Particulars as required under Section 134(3)(m) of the guidance and excellent co-operation extended by the
Act read with Companies (Accounts) Rules 2014 are given members, banks, financial institutions, rating agencies,
below: Reserve Bank of India and other regulatory authorities.
a. The Company has no activity involving conservation of The Board of Directors wish to convey their sincere
energy or technology absorption; thanks to the depositors and debenture holders of the
company for their continued patronage. They also wish
b. The Company does not have any Foreign Exchange
to appreciate the excellent services rendered by the
Earnings; and
employees of the company.
c. Foreign Exchange Outgo : ` 83.43 lakhs
We pray the Goddess SAKTHI to continue to shower Her
28. PARTICULARS OF EMPLOYEES blessings and to guide us in all our endeavours.
The disclosures in terms of Section 197(12) of the Act read For and on behalf of the Board
with rules 5(1), (2) and (3) of the Companies (Appointment M Manickam
and Remuneration of Managerial Personnel) Rules 2014 24th August 2020 Chairman
relating to remuneration is enclosed as Annexure 7. Coimbatore DIN : 00102233

63rd Annual Report 2020 | Financial Year 2019-20 Page | 22

 Annexure - 1
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
INDIAN ECONOMY During the year 2019-20, the Commercial Vehicle Industry’s
The Indian Economy was showing signs of slow-down during sales came down by 28.75 per cent as against a growth of
the early part of the year, with Gross Domestic Product 5 per cent in 2018-19.
(“GDP”) declining to 4.8 per cent during the first half of Our Company is predominantly engaged in financing of
2019- 20 due to muted demand in core sectors. However, the pre-owned commercial vehicles and it is not expected to
hope of recovery during the later part of 2019-20 was strong. be impacted much during the financial year 2021. India is
But the global onset of COVID-19 pandemic from the last expected to have normal South West monsoon in the year
quarter of the financial year 2019-20 made the recovery 2020. With the Kharif sowing this year being substantially
difficult since March 2020. The GDP finally grew by 4.2 per higher over the last year’s planting, the performance of the
cent during the year 2019-20 as against the growth of agriculture sector and other allied activities is likely to increase
6.1 per cent during the year 2018-19. rural income, which will, in turn, increase the rural demand
Due to impact of COVID-19 pandemic, International Monetary for pre-owned vehicles. This may improve the prospects for
Fund (“IMF”) has pegged the India’s GDP growth at 1.9 per pre-owned Commercial Vehicles and consequently will
cent only. improve the business performance of your company.
IMPACT OF COVID-19 PANDEMIC THREATS
The outbreak of COVID-19 pandemic during the initial Due to COVID-19 pandemic, the company’s operations for the
months of 2020 affected the global and national economies last quarter of 2019-20, were slightly affected. During the
extensively. In India, the Government announced a lockdown of March – August 2020, the Company’s business
nationwide lockdown from the last week of March 2020 in an operations were impacted and as a result it has affected
effort to contain the spread of the pandemic. The lockdown the cash flows of the Company. During this time, the rating
has affected the liquidity of all Companies. RBI announced agencies downgraded many NBFCs. However, your company’s
three month’s moratorium on loans initially (up to May 2020) promoters supported the company by contributing to the
which was subsequently extended by another three months preferential equity share capital issue of the company and
(up to August 2020) to ease the burden of the borrowers. contributed ` 25 crores. This resulted in improvement of
The Indian Government, Reserve Bank of India and various various financial parameters. Consequently, rating agencies
other regulators have announced a variety of measures and reassigned a Stable outlook (rating BBB) for your company.
relaxations to ensure sufficient liquidity in the hands of the The interest rates, fuel prices, the Government’s move to
individuals, corporate / other market participants so that the BS VI transitioning will continue to be a threat to CV industry
impact caused by the pandemic is somehow mitigated to to which our company caters to.
some extent.
Unless there are signs of improvement in economic activities
The Honorable Prime Minister and the Finance Minister
post Covid-19, the prospects of increase in business of the
have announced to build “Atma Nirbhar Bharat”
company may not happen.
(“Self Reliant India”) to induce growth in these challenging
times. For the benefit of Non-Banking Finance Companies However, both support of the Government and RBI providing
(“NBFCs”), Housing Finance Companies (“HFC”) and Mutual various measures and relaxations to ease the liquidity of
Funds (“MF”), the Government of India launched ` 30,000 NBFCs during these extraordinary times may, to some extent,
crore special liquidity scheme where under the government mitigate the impact caused by the COVID-19 pandemic.
had agreed to buy investment grade debt papers of NBFCs, BALANCE OF PAYMENTS POSITION
HFC and MFI, which will be guaranteed by the Government.
Government also announced Targeted Long-term Refinancing The India’s Current Account Deficit for 2019-20, as a
Operations (“TLTRO”) aimed at specifically providing enough percentage of GDP, narrowed to 0.9 per cent of GDP as against
liquidity to NBFCs. 2.1 per cent in 2018-19. The marginal surplus in the current
account which was recorded in last quarter of 2020 was due to
Our company has also adopted the policy on moratorium and
the lower trade deficit on account of easing of crude oil prices.
extended the benefits to the borrowers who opted for it so as
The Foreign Exchange reserves stood at USD 505.60 billion in
to mitigate the burden on repayments.
June 2020 as compared to USD 412 billion at the end of the
OPPORTUNITIES financial year 2018-19.
For the financial year 2019-20, the automobile industry PROSPECTS
was severely hit as sales fell across all vehicle segments.
TThe prospects for growth will depend on various factors.
As per the data of Society of Indian Automobile Manufacturers
With the COVID-19 pandemic affecting the Indian economy
(“SIAM”), the Indian automobile industry declined by 20 per
under lockdown conditions, any improvement can take place
cent in domestic sales as compared to a 5.9 per cent growth in
only with the implementation of fiscal and regulatory support.
2018-19. The Commercial Vehicle Industry in India recorded a
decline of 30 per cent in 2019-20 as compared to a growth of As per the World Bank Report, the pandemic will greatly
17.1 per cent in 2018-19. This is due to the sharp slow-down affect the emerging and developing economies. In India,
in the economy, subdued demand and transition to BS VI. output is likely to decrease by 3.2 per cent in the financial
63rd Annual Report 2020 | Financial Year 2019-20 Page | 23
year 2020-21. However, rural India has not been affected Profit before Tax / Average 1.21 1.24
much by the pandemic. Bountiful harvest of crops followed by Tax Assets
procurement and the expectation of normal monsoon during
the year augurs well for the agricultural sector and will lead to Total Debt / Net worth 6.30 6.41
increased commercial activities in rural areas. Interest Coverage Ratio 1.14 1.14
Further, your company’s focus is on financing of pre-owned Gross NPA / Average Total 4.88 4.41
CVs only. Hence by increasing its presence in newer Assets
geographies with larger network of branches, your Company Net NPA / Average Total 2.60 2.12
will increase its business operations and profitability in the Assets
coming years.
RISKS AND CONCERNS
PERFORMANCE AND FINANCIAL REVIEW
Your Company, like any other NBFC, is also exposed to normal
During the financial year 2019-20, your company disbursed industry risks such as credit, market, interest and operational
Hire Purchase Advances to the extent of ` 67,132 lakhs risks. Your company has taken pro-active and prudent risk
as against ` 57,747 lakhs in the previous financial year management practices to mitigate these risks. The risk
2018-19. The total deposits held by the company as on management policies are periodically reviewed by the
31st March 2020 stood at ` 18,482 lakhs. Risk Management Committee and Audit Committee so that
The gross income for the financial year 2019-20 was recorded they are in line with your Company’s strategic needs.
at ` 17,023 lakhs and the net profit after tax for the year was INTERNAL CONTROL SYSTEM AND ITS ADEQUACY
at ` 1,117.94 lakhs, excluding the Comprehensive income.
Your company has sound and adequate system of internal
The company accounted towards depreciation, amortization
controls to monitor and regulate all the activities. Further, your
and impairment an amount of ` 465.61 lakhs in the statement
company adheres strictly with all internal control policies and
of profit and loss.
procedures and other regulatory requirements.
KEY FINANCIAL RATIOS
HUMAN RESOURCES DEVELOPMENT
The following are the Key Financial Ratios of the Company for
During the year 2019-20, your Company had a very
the financial year 2019-20 as compared to the financial year
harmonious and cordial relationship with all its employees.
2018-19.
There were 511 employees on the rolls of the company as on
31st March 2020. Your company’s human resources policy aims
March 2020 March 2019
Ratios to establish and build a strong performance and competency-
(%) (%)
driven culture with higher sense of accountability and
Return on Net Worth 7.24 7.12 responsibility among its employees. Your Company takes
Capital to Risk Adequacy concrete steps to strengthen the organizational competency
Ratio (“CRAR”) through various training programmes for various levels on a
regular basis for all its employees.
- Tier I Capital 12.88 13.22
For and on behalf of the Board
- Tier II Capital 9.03 9.13
M Manickam
Net Interest Income / Average 5.81 6.14 24th August 2020 Chairman
Total Assets Coimbatore DIN : 00102233

Cautionary Statement
Certain statements made in the Management Discussion and Analysis Report describing the Company’s objectives, predictions may
be “forward-looking statements” within the meaning of applicable laws and regulations. Actual results may vary significantly from
forward-looking statements contained in this report due to various risks and uncertainties. These risks and uncertainties include
the effect of economic and political conditions in India, change in interest rates, new regulations and Government policies that may
impact the Company’s business as well as its ability to implement the strategy.

63rd Annual Report 2020 | Financial Year 2019-20 Page | 24

 Annexure - 2
Policy on Remuneration
(Forming part of Nomination and Remuneration Committee Charter)
The Remuneration policy of the Company is in consonance connection with participation in the Board / Committee
with the industry practices and aims to attract, retain, develop Meetings.
and motivate a high performance workforce. The policy The Independent Directors of the Company are not
ensures equality, fairness and consistency in rewarding the entitled for Stock Option Scheme of the Company,
employees on the basis of performance. The details of Policy if any.
on remuneration for Directors, Key Managerial Personnel and
other employees of the Company are given below. B. Criteria for selection/appointment of and Remuneration
to Executive Directors
“In order to identify, attract, retain and motivate competent i. Criteria for selection/appointment
persons, a clear relationship of remuneration to performance
The NR Committee shall identify persons of integrity
and a balance between rewarding short and long-term
having relevant experience, expertise and leadership
performance of the Company, the Board of Directors of
quality for appointment for the position of Executive
the Company, as recommended by the Nomination and
Director viz. Managing Director etc. The NR Committee
Remuneration Committee (“NR Committee”), has adopted a
shall ensure that the identified persons also fulfil the
charter on appointment and remuneration as enumerated in
conditions like age limit under the Companies Act 2013
Section 178 of the Companies Act 2013 on 9th August 2014.
and other applicable laws, if any.
The policy provides a framework for remuneration to the
members of the Board of Directors, Key Managerial Personnel ii. Remuneration
(“KMP”) and other employees of the Company. The Managing Director will be paid such remuneration
A. Criteria for selection/appointment of and Remuneration and perquisites as may be mutually agreed upon at
to Non-Executive Directors the time of appointment or re-appointment between
the Company and the Managing Director, taking into
i. Criteria of selection consideration the profitability of the Company and
a. The Non-Executive Directors shall be persons of the overall limits prescribed under the Companies Act
integrity with relevant expertise and experience 2013.
so as to have a diverse Board with Directors having The remuneration of Managing Director of the Company
expertise in the fields of finance, banking, accounts, consists of fixed remuneration and variable portion by
taxation and general management. way of commission not exceeding 5% of the net profit
b. In the case of Independent Directors, that the calculated in accordance with the Companies Act 2013.
candidate, in addition to the requirements C. Criteria for selection/appointment of and Remuneration
under (a) above, should satisfy the criteria of to Senior Management Personnel
independence as stipulated in the Companies Act Based on the criticality of the role and responsibility of
2013 and the Listing Regulations. the Key Managerial Personnel (“KMP”), the NR Committee
c. The Nomination and Remuneration Committee decides on the required qualifications, experience and
while recommending a candidate for appointment attributes for the position and on the remuneration based
as a Director, shall consider and get itself satisfied on the industry benchmark and the current compensation
about: trend in the market. The remuneration consists of fixed
l The candidate is qualified for appointment under components like salaries, perquisites and a variable
Section 164 of the Companies Act 2013. component comprising annual bonus, if declared.
l Attributes / criteria regarding qualification and Based on the selection criteria laid as above and
experience in relevant field remuneration, the Committee identifies persons
and recommends to the Board for consideration and
l Personal, Professional or business standing
appointment.
l Requirement with respect to Board’s diversity
In respect of other Senior Management Employees,
d. In the case of re-appointment, the performance the NR Committee will recommend to the Board, all
evaluation of the Director and his level of remuneration, in whatever form, payable to them for its
participation will be considered. approval.
ii. Remuneration to Non-Executive Directors Senior Management means Officers/Personnel of the
The Non-Executive Directors are entitled to receive Company who are members of its Core Management
remuneration by way of sitting fees for each meeting Team excluding Board of Directors comprising members
of the Board or Committee of Board attended by them of Management, one level below the Chief Executive
of such sum as may be approved by the Board of Officer/ Managing Director, including Company Secretary,
Directors within the overall limits prescribed under the Chief Financial Officer and the functional heads.
Companies Act 2013 and the Companies (Appointment Annual increments are given on time scale basis and
and Remuneration of Managerial Personnel) Rules 2014. further increase to deserving employees based on the
They are also entitled for reimbursement of expenses in performance review.
63rd Annual Report 2020 | Financial Year 2019-20 Page | 25
 Annexure - 3
FORM NO. MGT 9
EXTRACT OF ANNUAL RETURN
as on the financial year ended 31st March 2020
(Pursuant to Section 92(3) of the Companies Act 2013 and Rule 12(1) of the
Companies (Management and Administration) Rules 2014)

I. REGISTRATION AND OTHER DETAILS

i CIN L65910TZ1955PLC000145
ii Registration Date 30th March 1955
iii Name of the Company Sakthi Finance Limited
iv Category/Sub-category of the Company Non-Banking Financial Company
v Address of the Registered Office and contact details:
Registered Office 62, Dr Nanjappa Road
Post Box No.3745, Coimbatore - 641 018
Tel : (0422) 2231471-74, 4236200
E-Mail : sakthif_info@sakthifinance.com
investors@sakthifinance.com
Head Office (Contact Details) As above
vi Whether listed company Yes
vii Name, Address and contact details of the Registrar SKDC Consultants Limited
and Share Transfer Agent, if any “Kanapathy Towers”
Third Floor, No.1391/A-1, Sathy Road
Ganapathy, Coimbatore - 641 006
Tel : (0422) 4958995, 2539835-836
Fax : (0422) 2539837
E-mail : info@skdc-consultants.com

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

All the business activities contributing 10% or more of the total turnover of the company shall be stated
Sl Name and Description of main products /services NIC Code of the Product / % to total turnover of the
No Service company
1 Finance for Commercial Vehicles and other loans 64920 - Other Credit Granting 98.65

III PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES

The Company has no holding, subsidiary and associate company.

63rd Annual Report 2020 | Financial Year 2019-20 Page | 26

IV. SHAREHOLDING PATTTERN (Equity Share capital Break up as % to total Equity)
(i) Category-wise Shareholding
No. of Shares held at the beginning of the year No. of Shares held at the end of the year %
Category of change
% of % of
Shareholders during
Demat Physical Total Total Demat Physical Total Total
the year
Shares Shares
A. Promoters (includes Promoters Group) (Promoter Group is as per the classification shown under Regulation 31 of SEBI (LODR) Regulations 2015 and
SEBI (SAST) Regulations 2011)
1) Indian
a) Individual/HUF 5,43,668 - 5,43,668 1.09 5,43,668 - 5,43,668 0.84 (0.25)
b) Central Govt.or - - - - - - - 0.00
State Govt.
c) Bodies Corporates 3,15,63,457 - 3,15,63,457 63.12 4,28,19,339 - 4,28,19,339 66.18 3.06
d) Bank/FI - - - - - - - 0.00
e) Any other - - - - - - - 0.00
SUB TOTAL : (A)(1) 3,21,07,125 - 3,21,07,125 64.21 4,33,63,007 - 4,33,63,007 67.02 2.81
2) Foreign
a) NRI- Individuals - - - - - - - - 0.00
b) Other Individuals - - - - - - - - 0.00
c) Bodies Corporates - - - - - - - - 0.00
d) Banks/FI - - - - - - - - 0.00
e) Any other - - - - - - - - 0.00
SUB TOTAL : (A)(2) - - - - - - - - 0.00
Total Shareholding 3,21,07,125 - 3,21,07,125 64.21 4,33,63,007 - 4,33,63,007 67.02 2.81
of Promoter and
Promoter Group
(A) = (A)(1)+(A)(2)
B. PUBLIC SHAREHOLDING
1) Institutions
a) Mutual Funds - - - - - - - - 0.00
b) Banks/Financial - 900 900 0.00 5 900 905 0.00 0.00
Institutions
c) Central Govt - - - - - - - - 0.00
d) State Govt. (Instn.) - - - - - - - - 0.00
e) Venture Capital Fund - - - - - - - - 0.00
f) Insurance - - - - - - - - 0.00
Companies
g) FIIs - - - - - - - - 0.00
h) Foreign Venture - - - - - - - - 0.00
Capital Funds
i) Others (specify) - - - - - - - - 0.00
SUB TOTAL : (B)(1) - 900 900 0.00 5 900 905 0.00 0.00
2) Non Institutions
a) Bodies corporates
i) Indian 69,52,900 9,41,102 78,94,002 15.79 1,03,54,409 9,40,262 1,12,94,671 17.46 1.67
ii) Overseas - - - - - - - - 0.00
b) Individuals
i) Individual
shareholders
holding nominal 25,20,764 9,92,284 35,13,048 7.03 24,87,195 9,20,516 3,407,711 5.27 (1.76)
share capital upto
` 1 lakh
ii) Individual
shareholders
holding nominal 11,72,492 2,43,150 14,15,642 2.83 12,99,801 2,43,150 1,542,951 2.38 (0.45)
share capital in
excess of ` 1 lakh
c) Others (specify)
Directors and their 300 - 300 0.00 300 - 300 0.00 0.00
relatives

63rd Annual Report 2020 | Financial Year 2019-20 Page | 27

 No. of Shares held at the beginning of the year No. of Shares held at the end of the year %
Category of change
% of % of
Shareholders during
Demat Physical Total Total Demat Physical Total Total
the year
Shares Shares
Non-resident 43,581 1,550 45,131 0.09 45,893 200 46,093 0.07 (0.02)
Indians
Overseas Corporate
Body } - 44,50,000 44,50,000 8.90 - 4,450,000 44,50,000 6.88 (2.02)

Clearing Members 53,681 - 53,681 0.11 32,611 - 32,611 0.05 (0.06)

Hindu Undivided Family 1,38,168 - 1,38,168 0.28 146,265 - 1,46,265 0.23 (0.05)
Unclaimed 2,975 - 2,975 0.01 2,975 - 2,975 0.00 (0.01)
Suspenses Account
Investor Education 3,79,028 - 3,79,028 0.76 418,393 - 4,18,393 0.65 (0.11)
and Protection Fund
SUB TOTAL : (B)(2) 1,12,63,889 66,28,086 1,78,91,975 35.79 1,47,89,842 65,54,128 2,13,41,970 32.98 (2.79)
Total Public Shareholding 1,12,63,889 66,28,986 1,78,92,875 35.79 1,47,87,847 65,55,028 2,13,42,875 32.98 (2.80)
(B)= (B)(1)+(B)(2)
C. Shares held by 0.00 0.00 0.00 - 0.00 0.00 0.00 0.00 0.00
Custodian for GDR
and ADRs
Grand Total (A+B+C) 4,33,71,014 66,28,986 5,00,00,000 100.00 5,81,50,854 65,55,028 6,47,05,882 100.00 0.00
(ii) Share Holding of Promoters and Promoter Group
Shareholding at the Shareholding at the
beginning of the year end of the year % change
% of shares % of shares in share-
Sl % to total % to total
Category of Shareholders pledged pledged/ holding
No shares shares
No of shares / encum- No of shares encum- during the
of the of the year
bered to bered to
company company
total shares total shares
1 Dr M Manickam 92,813 0.19 - 92,813 0.14 - (0.05)
2 Sri M Balasubramaniam 1,92,000 0.38 - 1,92,000 0.30 - (0.08)
3 Sri M Srinivaasan 2,51,355 0.50 - 2,51,355 0.39 - (0.11)
4 Smt.Karunambal Vanavarayar 7,500 0.02 - 7,500 0.01 - (0.01)
5 ABT Investment (India) 87,27,400 17.45 - 87,27,400 13.49 - (3.96)
Private Limited
6 ABT Finance Limited 1,31,162 0.26 - 33,31,162 5.15 - 4.89
7 ABT Industries Limited 9,19,926 1.84 - 9,19,926 1.42 - (0.42)
8 Sakthifinance Financial Services 81,10,000 16.22 - 1,24,20,000 19.19 - 2.97
Limited
9 Sakthi Financial Services (Cochin) 34,11,246 6.82 - 71,57,128 11.06 - 4.24
Private Limited
10 Sakthi Logistic Services Limited* 5,700 0.01 - 5,700 0.01 - (0.00)
11 Sakthi Sugars Limited 10,40,000 2.08 - 10,40,000 1.61 - (0.47)
12 Sri Chamundeswari Sugars Ltd 24,000 0.05 - 24,000 0.04 - (0.01)
13 Sri Sakthi Textiles Limited 7,000 0.01 - 7,000 0.01 - (0.00)
14 The Gounder and Company Auto 39,25,000 7.85 - 39,25,000 6.07 - (1.78)
Limited
15 Sakthi Realty Holdings Limited 24,75,000 4.95 - 24,75,000 3.83 - (1.12)
16 ABT Foundation Limited 24,75,000 4.95 - 24,75,000 3.83 - (1.12)
17 Dr.N Mahalingam (Deceased) 2,76,023 0.55 - 2,76,023 0.43 - (0.13)
18 Smt.M.Mariammal (Deceased) 36,000 0.07 - 36,000 0.06 - (0.02)
Total 3,21,07,125 64.21 - 4,33,63,007 67.02 - 2.81
* Name of this Company has since been changed to Sakthi Finance Holdings Limited

63rd Annual Report 2020 | Financial Year 2019-20 Page | 28

 (iii) Change in Promoters’ Shareholding*
Share holding at the Cumulative Share holding
Sl beginning of the Year during the year
Particulars
No % to total shares % to total shares
No. of shares No of shares
of the company of the company
1 At the beginning of the year 3,21,07,125 64.21 3,21,07,125 64.21
Increase due to preferential allotment of equity shares on
1,12,55,882 17.40 4,33,63,007 67.02
13th March 2020
At the end of the year 4,33,63,007 67.02 4,33,63,007 67.02
* includes promoter group

(iv) Shareholding Pattern of top ten Shareholders

(other than Directors, Promoters and Holders of GDRs and ADRs)
Share holding at the Cumulative Share holding
Sl beginning of the Year during the year
Shareholders Name
No % to total shares % to total shares
No. of shares No of shares
of the company of the company
1 Avdhoot Finance and Investment Private Limited
At the beginning of the year 56,24,208 11.25 56,24,208 11.25
Increase / Decrease in Shareholding during the year - - - -
At the end of the year 56,24,208 8.69 56,24,208 8.69
2 Sakthi Management Services (Coimbatore) Limited
At the beginning of the year 11,35,434 2.27 11,35,434 2.27
Increase / Decrease in Shareholding during the year 34,50,000 5.33 45,85,434 7.09
At the end of the year 45,85,434 7.09 45,85,434 7.09
3 Bridgewater Investment Corporation Limited
At the beginning of the year 44,50,000 8.90 44,50,000 8.90
Increase / Decrease in Shareholding during the year - - - -
At the end of the year 44,50,000 6.88 44,50,000 6.88
4 Grahasakthi Properties Private Limited
At the beginning of the year 9,27,237 1.85 9,27,237 1.85
Increase / Decrease in Shareholding during the year - - - -
At the end of the year 9,27,237 1.43 9,27,237 1.43
5 Deepinder Singh Poonian
At the beginning of the year 2,92,440 0.58 2,92,440 0.58
Datewise increase / (decrease) in shareholding during
the year :
Purchase of Shares on 10-05-2019 22,599 0.05 3,15,039 0.63
Purchase of Shares on 17-05-2019 53 0.00 3,15,092 0.63
Purchase of Shares on 31-05-2019 218 0.00 3,15,310 0.63
Sale of Shares on 14-06-2019 (37,931) (0.08) 2,77,379 0.55
Sale of Shares on 21-06-2019 (20,237) (0.04) 2,57,142 0.51
Sale of Shares on 28-06-2019 (32,056) (0.06) 2,25,086 0.45
Sale of Shares on 05-07-2019 (2,378) (0.00) 2,22,708 0.45
Sale of Shares on 12-07-2019 (6,962) (0.01) 2,15,746 0.43
Sale of Shares on 19-07-2019 (711) (0.00) 2,15,035 0.43
Sale of Shares on 26-07-2019 (12,134) (0.02) 2,02,901 0.41
Purchase of Shares on 21-02-2020 1 0.00 2,02,902 0.41

63rd Annual Report 2020 | Financial Year 2019-20 Page | 29

 Share holding at the Cumulative Share holding
Sl beginning of the Year during the year
Shareholders Name
No % to total shares % to total shares
No. of shares No of shares
of the company of the company
Purchase of Shares on 28-02-2020 318 0.00 2,03,220 0.41
Purchase of Shares on 06-03-2020 324 0.00 2,03,544 0.41
Purchase of Shares on 13-03-2020 6,082 0.01 2,09,626 0.32
Purchase of Shares on 20-03-2020 3,600 0.01 2,13,226 0.33
Purchase of Shares on 31-03-2020 1,040 0.00 2,14,266 0.33
At the end of the year 2,14,266 0.33 2,14,266 0.33
6 Balasubramaniam M
At the beginning of the year 1,67,150 0.33 1,67,150 0.33
Increase / Decrease in Shareholding during the year - - - -
At the end of the year 1,67,150 0.26 1,67,150 0.26
7 Kushagra Gupta
At the beginning of the year 1,40,285 0.28 1,40,285 0.28
Increase / Decrease in Shareholding during the year - - - -
At the end of the year 1,40,285 0.22 1,40,285 0.22
8 Amit Subhash Kulkarni
At the beginning of the year 54,538 0.11 54,538 0.11
Datewise increase / (decrease) in shareholding during
the year :
Purchase of Shares on 28-06-2019 10,000 0.02 64,538 0.13
Purchase of Shares on 05-07-2019 5,000 0.01 69,538 0.14
Purchase of Shares on 12-07-2019 5,462 0.01 75,000 0.15
Purchase of Shares on 22-11-2019 1,566 0.00 76,566 0.15
Purchase of Shares on 29-11-2019 4,327 0.01 80,893 0.16
Purchase of Shares on 06-12-2019 5,454 0.01 86,347 0.17
Purchase of Shares on 13-12-2019 2,500 0.01 88,847 0.18
Purchase of Shares on 20-12-2019 2,605 0.01 91,452 0.18
Purchase of Shares on 27-12-2019 2,994 0.01 94,446 0.19
Purchase of Shares on 03-01-2020 4,637 0.01 99,083 0.20
Purchase of Shares on 10-01-2020 916 0.00 99,999 0.20
Purchase of Shares on 06-03-2020 705 0.00 1,00,704 0.20
Purchase of Shares on 20-03-2020 17,471 0.03 1,18,175 0.18
Purchase of Shares on 27-03-2020 20,331 0.03 1,38,506 0.21
Purchase of Shares on 31-03-2020 113 0.00 1,38,619 0.21
At the end of the year 1,38,619 0.21 1,38,619 0.21
9 Bannari Amman Sugars Limited
At the beginning of the year 84,375 0.17 84,375 0.17
Increase / Decrease in Shareholding during the year - - - -
At the end of the year 84,375 0.13 84,375 0.13
10 Kalpathy Viswanath Narayanmurti
At the beginning of the year 75,748 0.15 75,748 0.15
Increase / Decrease in Shareholding during the year - - - -
At the end of the year 75,748 0.12 75,748 0.12

63rd Annual Report 2020 | Financial Year 2019-20 Page | 30

 (v) Shareholding of Directors and Key Management Personnel
Share holding at the Cumulative Share holding
Sl beginning of the Year during the year
Shareholders Name
No % to total shares % to total shares
No. of shares No of shares
of the company of the company
1 M Manickam, Chairman

At the beginnning of the year 92,813 0.19 92,813 0.19

Datewise increase / decrease in shareholding during
the year specifying the reason for increase / decrease - - - -
(e.g allotment/ transfer /bonus /sweat equity etc)
At the end of the year 92,813 0.14 92,813 0.14
2 M Balasubramaniam,
Vice Chairman and Managing Director
At the beginnning of the year 1,92,000 0.38 1,92,000 0.38
Datewise increase / decrease in shareholding
during the year specifying the reason for increase
- - - -
/ decrease (e.g allotment/ transfer /bonus /sweat
equity etc)
At the end of the year 1,92,000 0.30 1,92,000 0.30
3 M Srinivaasan, Director
At the beginnning of the year 2,51,355 0.50 2,51,355 0.50
Datewise increase / decrease in shareholding
during the year specifying the reason for increase
- - - -
/ decrease (e.g allotment/ transfer /bonus /sweat
equity etc)
At the end of the year 2,51,355 0.39 2,51,355 0.39
4 A Selvakumar, Director
At the beginnning of the year 300 0.00 300 0.00
Datewise increase / decrease in shareholding
during the year specifying the reason for increase
- - - -
/ decrease (e.g allotment/ transfer /bonus /sweat
equity etc)
At the end of the year 300 0.00 300 0.00
5 S Venkatesh, Company Secretary
At the beginnning of the year 1,075 0.00 1,075 0.00
Datewise increase / decrease in shareholding
during the year specifying the reason for increase
- - - -
/ decrease (e.g allotment/ transfer /bonus /sweat
equity etc)
At the end of the year 1,075 0.00 1,075 0.00

63rd Annual Report 2020 | Financial Year 2019-20 Page | 31

V INDEBTEDNESS
Indebtedness of the Company including interest outstanding / accrued but not due for payment (` lakhs)
Secured Loans Unsecured Total
Particulars Deposits
excluding deposits Loans Indebtedness
Indebtedness at the beginning of the financial year
i) Principal Amount 42,528.51 25,723.65 17,588.07 85,840.23
ii) Interest due but not paid 0.00 0.00 0.00 0.00
iii) Interest accrued but not due 2,188.91 3,165.61 1,122.70 6,477.22
Total (i+ii+iii) 44,717.42 28,889.26 18,710.77 92,317.45
Change in Indebtedness during the financial year
Additions 17,800.91 15,453.51 8,955.57 42,209.99
Reduction 9,746.06 14,873.84 8,021.30 32,641.20
Net Change 8,054.85 579.67 934.27 9,568.79
Indebtedness at the end of the financial year
i) Principal Amount 49,847.04 28,366.61 18,482.25 96,695.90
ii) Interest due but not paid 0.00 0.00 0.00 0.00
iii) Interest accrued but not due 2,925.23 1,102.32 1,162.79 5,190.34
Total (i+ii+iii) 52,772.27 29,468.93 19,645.04 101,886.24

VI REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

A Remuneration to Managing Director, Whole Time Director and/or Manager (` lakhs)
Mr M Balasubramaniam Dr S Veluswamy
Sl.
Particulars of Remuneration Vice Chairman and Director (Finance
No.
Managing Director and Operations)
1 Gross salary
(a) Salary as per provisions contained in section 17(1) of the Income Tax 1961 49.79 36.05
(b) Value of perquisites u/s 17(2) of the Income tax Act 1961 3.90 0.34
(c) Profits in lieu of salary under section 17(3) of the Income Tax Act 1961 -- --
2 Stock option -- --
3 Sweat Equity -- --
4 Commission -- --
- 3% of profit * 49.41 --
- others (specify) -- --
5 Others, please specify -- --
Total 103.10 36.39
Ceiling as per the Act 10% of the net profits of the Company
* subject to approval of members at the ensuing Annual General Meeting

63rd Annual Report 2020 | Financial Year 2019-20 Page | 32

 B Remuneration to other directors (` lakhs)
Sl
Particulars of Remuneration Name of the Director
No Total
1 Independent Directors Dr A Selvakumar P S Gopalakrishnan Priya Bhansali K P Ramakrishnan
(a) Fee for attending board / committee
3.20 1.60 2.00 2.80 9.60
meetings
(b) Commission -- -- -- -- --
(c ) Others, please specify -- -- -- -- --
Total (1) 3.20 1.60 2.00 2.80 9.60
2 Other Non Executive Directors M Manickam M Srinivaasan
(a) Fee for attending board 1.20 1.00 2.20
committee meetings
(b) Commission -- -- --
(c) Others, please specify. -- -- --
Total (2) 1.20 1.00 2.20
Total Managerial Remuneration (1+2) 11.80
Overall Ceiling as per the Act NA

C. Remuneration to Key Managerial Personnel other than MD/Manager/WTD (` lakhs)

Key Managerial Personnel
Sl Sri M K Vijayaraghavan,
Particulars of Remuneration Sri S Venkatesh
No Chief Financial Officer
Company Secretary
(CFO)*
1 Gross salary
(a) Salary as per provisions contained in section 17(1) of the Income Tax 1961 4.99 17.82
(b) Value of perquisites u/s 17(2) of the Income tax Act 1961 -- --
(c) Profits in lieu of salary under section 17(3) of the Income Tax Act 1961 -- --
2 Stock option -- --
3 Sweat Equity -- --
4 Commission -- --
- as % of profit * -- --
- others (specify) -- --
5 Others, please specify -- --
Total 4.99 17.82
* Sri M K Vijayaraghavan was CFO of the Company up to May 2019 only.

63rd Annual Report 2020 | Financial Year 2019-20 Page | 33

VII PENALTIES/PUNISHMENT/COMPOUNDING OF OFFENCES
Details of Penalty/
Section of the Punishment/ Authority (RD/NCLT/ Appeal made, if any
Type Brief Description
Companies Act 2013 Compounding fees Court) (give details)
imposed
A. COMPANY
Penalty
Punishment NIL
Compounding
B. DIRECTORS
Penalty
Punishment NIL
Compounding
C. OTHER OFFICERS IN DEFAULT
Penalty
Punishment NIL
Compounding

For and on behalf of the Board

M Manickam
24th August 2020 Chairman
Coimbatore DIN : 00102233

63rd Annual Report 2020 | Financial Year 2019-20 Page | 34

CORPORATE GOVERNANCE REPORT Annexure - 4
(Pursuant to Regulation 34(3) read with Schedule V to SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015)
(“Listing Regulations”)

1. Company’s Philosophy on Corporate Governance The Board of Directors and its Committees meet
Corporate Governance is a set of principles, processes and at periodic intervals. Policy formulation, setting
systems to be followed by Directors, Management and up of goals and evaluation of performance and
all the employees of the Company for enhancement of control function vest with the Board. The Board
shareholders value, keeping in view the interest of other has constituted Eleven (11) Committees, namely,
stakeholders. Integrity, transparency and compliance Audit Committee, Nomination and Remuneration
with regulations in dealing with members, employees, Committee, Stakeholders’ Relationship Committee,
customers, lenders, regulators and government agencies Corporate Social Responsibility Committee, Asset
are the objectives of good corporate governance. Liability Management Committee, Risk Management
The Company adopts and practices these principles of Committee, Information Technology (“IT”) Strategy
good Corporate Governance while ensuring integrity, Committee, Finance and Investment Committee,
transparency and accountability at all levels in the Allotment Committee, NCD Issuance Committee and
organisation. Policy Review Committee.
The necessary disclosures regarding the committee
2. Board of Directors
positions have been made by the Directors. None of
a. Composition and Category of Directors the Directors on the Company’s Board is a member of
As on 31st March 2020, the Board of Directors consists more than ten (10) Committees and Chairman of more
of eight (8) members. The Board has a Non-Executive than five (5) Committees (the committees being Audit
Chairman, a Vice Chairman and Managing Director, Committee and Stakeholders’ Relationship Committee)
a whole-time Director (Finance and Operations) and across all Companies in which they are Directors.
other five Non-Executive Directors, of which four are The Company has issued formal letters of appointment
Independent Directors (including a women director), to the Independent Directors and the terms of their
who bring in a wide range of skills, experience and appointment are disclosed on the Company’s website:
expertise to the Board. The number of Independent https://sakthifinance.com/board-of-directors.
Directors is 50% of the total number of Directors on the
It is confirmed that no Independent Director has
Board. The composition of the Board is in conformity
resigned from the Board before the expiry of his / her
with the provisions contained in Companies Act 2013
period during the financial year.
and Regulation 17 of the Listing Regulations.
Due to Covid-19 pandemic lockdown, the Independent
In accordance with Regulation 25(8) of the Listing
Director’s meeting could not be held on or before
Regulations, all Independent Directors (“IDs”) have
31st March 2020. However, the Independent Directors
confirmed that they meet the independence criteria
had a separate meeting on 30th July 2020 without
as mentioned under Section 149 of the Act, the rules
the participation of Non-Independent Directors and
framed thereunder and Regulation 16(1)(b) of the
Promoter Directors.
Listing Regulations. The IDs have further stated that
they are not aware of any circumstance or situation, Dr. M Manickam, Chairman, Sri M Balasubramaniam,
which exist or may reasonably be anticipated that Vice Chairman and Managing Director and
could impair or impact their ability to discharge Sri M Srinivaasan, Director are related to each other as
their objective, independent judgement and without brothers.
any external influence. The company has received b. Number of Board Meetings held during the year
confirmation from all existing IDs that they have
During the financial year 2019-20, six (6) Board
registered with Independent Director’s Database
Meetings were held on 29th May 2019, 5th August
maintained by the Indian Institute of Corporate Affairs
2019, 14th September 2019, 13th December 2019,
(“IICA”), Manesar, pursuant to Rule 6 of the Companies
13th January 2020, 14th February 2020. The gap
(Appointment and Qualification of Directors) Rules
between two meetings is within one hundred and
2014. Based on the disclosures received from all
twenty days only. The information as required under
the IDs and as determined at the meeting held on
Regulation 17(7) of the Listing Regulations is made
24th August 2020, the Board is of the opinion that the
available to the Board for discussion and consideration
IDs fulfill the conditions of independence as specified
at Board Meetings. The Board also reviews compliance
in the Act and are independent of management.
reports of all laws applicable to the company on
None of the Independent Directors on the Board serve quarterly basis.
as an Independent Director in more than seven listed
c. Familiarisation programme for Independent Directors
companies. All Independent Directors also comply with
the limit of Independent Directorship as prescribed in The familiarization process followed by the Company
the Listing Regulations. includes briefing about the Board’s composition and

63rd Annual Report 2020 | Financial Year 2019-20 Page | 35

 conduct, roles, rights, responsibilities of Directors, Independent Directors reviewed the performance of
nature of the industry, regulatory matters, the Chairman and of the Non-Independent Directors.
details about the Company, Group and its culture. e. Code of Conduct
The familiarization process is disclosed at the
Company’s web link https://sakthifinance.com/board- The Board of Directors have adopted a Code of Conduct
of-directors. and Ethics (“the Code”) to ensure compliance with the
legal requirements and standards of business conduct.
d. Performance Evaluation
The purpose of the Code is to promote ethical conduct.
In terms of the requirements of the Companies Act
2013 and Schedule II Part D of the Listing Regulations, All Board Members and Senior Management
the Board of Directors at their meeting held on Personnel of the company have affirmed compliance
30th July 2020 carried out an annual evaluation of its with the Code. A certificate to this effect, signed
own performance, its Committees and performance by Vice Chairman and Managing Director is
of individual directors, including the Chairman and of annexed. The Code has been hosted on the website
the Committees formed by the Board. The evaluation of the company https://sakthifinance.com/investor-
process is covered in the Board’s Report. Similarly, information.

f. Attendance and other Directorships

The composition of the Board of Directors, category, relationship with other Board Members, attendance at Board Meetings
held during the financial year and at the last Annual General Meeting, number of other Directorships and committee
Chairmanship / Membership held are given below:
Financial No. of other Committee
year director- position (b)
Category of Relationship with other 2019-20 ships
Name of the Director Attendance at (a) Chairman Member
Director Director(s)
Board Last
(excluding Sakthi Finance Ltd)
Meeting AGM
Dr M Manickam Non-executive Chairman, Brother of
Promoter Sri M Balasubramaniam and 6 Yes 8 - 1
DIN : 00102233 Sri M Srinivaasan
Sri M Balasubramaniam Vice Chairman and Brother of Dr M Manickam and
Managing Director, Sri M Srinivaasan 5 Yes 8 - 3
DIN : 00377053 Promoter
Sri M Srinivaasan Non-executive Director, Brother of Dr M Manickam
3 No 6 - 0
DIN : 00102387 Non-Independent and Sri M Balasubramaniam
Dr A Selvakumar Non-executive Director, None
6 Yes 2 - 1
DIN : 01099806 Independent
Sri P S Gopalakrishnan Non-executive Director, None
6 Yes 3 3 -
DIN : 00001446 Independent
Smt Priya Bhansali Non-executive Director, None
6 Yes 1 - 1
DIN : 00195848 Independent
Sri K P Ramakrishnan Non-executive Director, None
6 Yes 1 - -
DIN : 07029959 Independent
Dr S Veluswamy* Executive, Non- None
Independent Director 6 Yes 4 - 2
DIN : 05314999 (Finance and Operations)
* Appointed as an Additional Director (Finance and Operations) with effect from 29th May 2019
a. excludes directorships held in private limited companies, foreign companies and Section 8 company
b. only Audit Committee and Stakeholders’ Relationship Committee of public limited companies are considered

63rd Annual Report 2020 | Financial Year 2019-20 Page | 36

 g. The names of the listed entities (including this company), where the Directors hold Directorship in other companies as on
31st March 2020 and the category of Directorship is given below:

Name of the Director Name of the listed entity in which Category of Directorship
Directorship is held
Dr M Manickam 1. Sakthi Finance Limited Non-Executive, Non-independent
2. Sakthi Sugars Limited Executive, Non-independent
3. Kovai Medical Center and Hospitals Limited Independent
Sri M Balasubramaniam 1. Sakthi Finance Limited Executive, Non-independent
2. Sakthi Sugars Limited Non-Executive, Non-independent
Sri M Srinivaasan 1. Sakthi Finance Limited Non-Executive, Non-independent
2. Sakthi Sugars Limited Non-Executive, Non-independent
Dr A Selvakumar 1. Sakthi Finance Limited Independent
Sri P S Gopalakrishnan 1. Sakthi Finance Limited Independent
2. Dharani Sugars and Chemicals Limited Independent
3. Kothari Sugars and Chemicals Limited Independent
Smt Priya Bhansali 1. Sakthi Finance Limited Independent
2. Sakthi Sugars Limited Independent
Sri K P Ramakrishnan 1. Sakthi Finance Limited Independent
Dr S Veluswamy 1. Sakthi Finance Limited Executive, Non-independent

h. The Board has identified the following skills/expertise/ 6.

Understanding the applicable laws, rules,
competencies for the effective functioning of the regulations and policy
Company. 7. Integrity and ethical standards
1. Industry knowledge i. Board Skills / Expertise / Competencies
2. Leadership qualities In terms of Regulation 34(3) read with Schedule V
3. Strategic thinking to the Listing Regulations, the Board of Directors
have identified the following core skills/ expertise/
4. Financial Expertise (Banking, Finance and competencies as required in the context of its business
Accounting) and the sector for it to function effectively and those
5. Information Technology are available with the Board. These are given below:

Understanding
Lead- Integrity
Industry Strategic Financial Information applicable laws,
Name of the Director ership and ethical
Knowledge Thinking Expertise Technology rules, regulation
Qualities standards
and policy
Dr M Manickam 3 3 3 3 3 3 3
Sri M Balasubramaniam 3 3 3 3 3 3 3
Sri M Srinivaasan 3 3 3 3 3 3 3
Dr A Selvakumar 3 3 3 3 3 3 3
Sri P S Gopalakrishnan 3 3 3 3 3 3 3
Smt Priya Bhansali 3 3 3 3 3 3 3
Sri K P Ramakrishnan 3 3 3 3 -- 3 3
Dr S Veluswamy 3 3 3 3 3 3 3

63rd Annual Report 2020 | Financial Year 2019-20 Page | 37

3. COMMITTEES OF THE BOARD
6. Review the financial statements, in particular,
A. Audit Committee the investments made in the unlisted subsidiary
company, if any.
Terms of reference
7. Review the utilization of the Loans / Investments
The Company has adopted an amended Audit by the holding company exceeding ` 100 crores or
Committee Charter on 29th May 2019 which will be 10% of the asset size of the company, whichever is
in line with enhanced scope for the Committee as laid lower, if applicable.
down under Section 177 of the Companies Act 2013
8. Review the compliance with the requirements of
and Regulation 18(3) read with Part C of Schedule II to
SEBI (Prevention of Insider Trading) Regulations
the Listing Regulations.
2015, as amended, at least once in a year.
The terms of reference of this Committee are wide
The committee consists of three non-executive
enough to cover the matters specified for Audit
directors of which two are independent directors.
Committee under Regulation 18(3) read with Part C of
Schedule II to the Listing Regulations as well as those The present composition of the Audit Committee,
number of meetings held and the attendance of its
in Section 177 of the Companies Act 2013 and are as
members are given below:
follows:
Composition
1. Examination of the financial statement and draft
auditors’ report. Chairman
2. Oversight of the Company’s financial reporting 1. Dr A Selvakumar, Independent Director
process and disclosure of its financial information Members
to ensure that the financial statements are correct, 2. Sri M Srinivaasan, Director
sufficient and credible. 3. Sri K P Ramakrishnan, Independent Director
3. Recommendation for appointment, remuneration Number of Meetings held and Attendance
and terms of appointment of statutory auditors of The Committee held six meetings during the
the Company. financial year on 29th May 2019, 5th August 2019,
4. Approval of payment to statutory auditors for any 14th September 2019, 5th December 2019,
other services rendered by the statutory auditors. 13th December 2019 and 14th February 2020.
5. Discuss and review, with the management and The gap between two meetings is within one hundred
auditors, the annual/quarterly financial statements and twenty days only.
before submission to the Board, with particular
Name No. of No. of
reference to:
meetings meetings
a. Matters required to be included in the Directors’ held attended
Responsibility Statement in the Board’s Report in
Dr A Selvakumar 6 6
terms of sub-section (3)(c) of Section 134 of the
Sri M Srinivaasan 6 2
Companies Act 2013
Sri K P Ramakrishnan 6 6
b. Disclosure under Management Discussion and
Analysis of Financial Condition and Results of All the members of Audit Committee are financially
Operations literate. The minutes of Audit Committee are being
placed before the Board of Directors at their meetings.
c. Any changes in accounting policies and practices
The Chairman of the Audit Committee was present at
and reasons for them
the last Annual General Meeting.
d. Major accounting entries involving estimates
B. Nomination and Remuneration Committee
based on exercise of judgment by management
The Company has adopted a revised Nomination and
e. Significant adjustments made in the financial
Remuneration Committee Charter on 29th May 2019.
statements arising out of audit findings The role of Nomination and Remuneration Committee
f. Modified Opinions in the draft audit report is as required under Section 178 of the Companies Act
g. Disclosure of any related party transactions 2013 and Regulation 19 read with Part D of Schedule II
h.
Compliance with listing and other legal to the Listing Regulations.
requirements relating to financial statements and Terms of reference
i. Review the statement for uses/applications of The terms of reference of the Committee includes the
funds under major categories on a quarterly following:
basis, with the financial results and annually 1. Formulate the criteria for determining qualifications,
the statement of funds utilized for purposes positive attributes and independence of a Director
other than as mentioned in the offer document/ and recommend to the Board a policy relating to
prospectus/notice. Such review shall be the remuneration for the Directors, Key Managerial
conducted till the full money raised through any Personnel (“KMPs”) and other employees and to
issue has been fully spent ensure the following:
63rd Annual Report 2020 | Financial Year 2019-20 Page | 38
 a. the level and composition of remuneration is Composition
reasonable and sufficient to attract, retain and Chairman
motivate Directors as well as KMPs of the quality 1. Sri P S Gopalakrishnan, Independent Director
required to run the company successfully;
Members
b. relationship of remuneration to performance is
2. Dr A Selvakumar, Independent Director
clear and meets the appropriate benchmarks;
and 3. Smt Priya Bhansali, Independent Director
c. remuneration to Directors, Key Managerial Number of Meetings held and Attendance
Personnel and senior management involves The Committee held two meetings during the
a balance between fixed and incentive pay financial year on 29th May 2019 and 5th August 2019.
reflecting the short and long-term performance, The Chairman of the Nomination and Remuneration
objectives appropriate to the working of the Committee was present at the last Annual General
Company and its goals. Meeting.
2. The Nomination and Remuneration Committee Name No. of No. of
determines and recommends remuneration meetings meetings
including commission, perquisites and allowances held attended
payable to Vice Chairman and Managing Director; Sri P S Gopalakrishnan 2 2
3. Identifying persons who are qualified to become Dr A Selvakumar 2 2
directors as well as those who may be appointed in Smt Priya Bhansali 2 2
senior management in accordance with the criteria Remuneration to Directors
laid down;
For Vice Chairman and Managing Director
4. Recommend on Board diversification;
The total remuneration, as approved by the members,
5. Formulate criteria and carry out evaluation of every consists of a fixed component viz. salary, perquisites
Director’s performance; and allowances as per Company’s Rules and a variable
6. Review and recommend the compensation and component, linked to the performance of the company,
variable pay for Executive Directors and KMPs to the consisting of commission within the limits approved by
Board, remuneration payable to Senior Management; the members.
and For Director (Finance and Operations)
7. Recommend to the Board about appointment and The total remuneration, as approved by the members,
removal of Directors and senior management consists of a fixed component viz. salary, perquisites
personnel. and allowances as per Company’s Rules.
The company has complied with the mandatory For Non-Executive Directors
requirement of Regulation 19 of the Listing Regulations
Sitting fee as permitted under the Companies Act
regarding Nomination and Remuneration Committee.
2013 plus reimbursement of actual travelling and
The composition of the Nomination and Remuneration out-of-pocket expenses incurred for attending such
Committee, the number of meetings held and the meetings. Non-executive directors are not being paid
attendance of its members are given below: any commission.

The details of remuneration/sitting fee paid to the executive/non-executive directors for the financial year 2019-20 and
the shares held by them are given below.

Name of the Director Salary Commission Perquisites Sitting Fee Total No. of equity
shares held
(` lakh)
Dr M Manickam - - - 1.20 1.20 92,813
Sri M Balasubramaniam 49.79 60.50 3.90 - 114.19 1,92,000
Sri M Srinivaasan - - - 1.00 1.00 2,51,355
Dr A Selvakumar - - - 3.20 3.20 300
Sri P S Gopalakrishnan - - - 1.60 1.60 Nil
Smt Priya Bhansali - - - 2.00 2.00 Nil
Sri K P Ramakrishnan - - - 2.80 2.80 Nil
Dr S Veluswamy 36.05 - 0.34 - 36.39 Nil

63rd Annual Report 2020 | Financial Year 2019-20 Page | 39

 Notes: The Committee meets periodically to attend grievances
1. The present tenure of appointment of Managing of shareholders in connection with transfer of shares,
Director and Director (Finance and Operations) transposition of shares and other investors’ grievances.
are governed by the Articles of Association of the Number of Meetings held and Attendance
company and the resolutions passed by the Board of The Committee held a meeting during the financial
Directors and members of the company. These cover year on 15th February 2020 and the attendance of its
the terms and conditions of such appointments. members are given below:
2. The Company has entered into agreements with
Managing Director for a period of 5 years with Name No. of No. of
effect from 29th September 2015 and for Director meetings meetings
(Finance and Operations) for a period of 5 years with held attended
effect from 29th May 2019. Dr. M Manickam 1 1
3. The resignation of a director becomes effective Sri M Balasubramaniam 1 1
upon its acceptance by the Board. Dr A Selvakumar 1 1
4. No severance fee is payable to the Directors on
During the year, the Company received a complaint
termination of office.
from a shareholder regarding non-receipt of dividend
5. The company has no stock option scheme either to for the financial year 2017-18 and 2018-19 through
its directors or to its employees.
SEBI SCORES. It was expeditiously attended to the
6. None of the non-executive directors have any satisfaction of the complainant. No complaint was
pecuniary relationship or transactions with the
pending as at the close of the financial year.
company.
The Chairman of Stakeholders’ Relationship Committee
7. No remuneration (sitting fees) payable to a single
non-executive director exceeds fifty per cent was present at the last Annual General Meeting.
of the total annual remuneration payable to all Name, Designation and Address of Compliance Officer
non-executive directors. S. Venkatesh, Company Secretary
C. Stakeholders’ Relationship Committee Sakthi Finance Limited
Terms of reference (CIN:L65910TZ1955PLC000145)
The terms of reference of this Committee are as per 62, Dr. Nanjappa Road
Part D of Schedule II B to the Listing Regulations and Post Box No.3745, Coimbatore - 641 018
are given below. Tel : (0422) 2231471-474, 4236200
a. Resolving the grievances of the security holders E-mail : investors@sakthifinance.com
of the listed entity including complaints related to Website : www.sakthifinance.com
Transfer / Transmission of shares, non-receipt of
D. Corporate Social Responsibility (“CSR”) Committee
annual report, non-receipt of declared dividends,
Issue of new / duplicate certificates, general meeting Terms of reference
etc. The role of CSR Committee is to formulate and
b. Review of measures taken for effective exercise of recommend to the Board, a CSR Policy which shall:
voting rights by shareholders.
1. indicate the activities to be undertaken as specified
c. Review of adherence to the service standards in Schedule VII to the Companies Act 2013;
adopted by the listed entity in respect of various
services being rendered by its Registrar and Share 2. recommend the amount of expenditure to be
Transfer Agent and incurred on the CSR activities;
d. Review of the various measures and initiatives taken 3. to monitor the CSR Policy of the Company from time
by the listed entity for reducing the quantum of to time;
unclaimed dividends and ensuring timely receipt of 4.
prepare a transparent monitoring mechanism
dividend warrants /annual reports/statutory notices for ensuring implementation of the projects/
by the shareholders of the company.
programmes/activities proposed to be undertaken
Composition by the Company; and
The composition of the Stakeholders’ Relationship
5. to do all such acts, deeds and things as may be
Committee is given below:
required in connection with the CSR activities.
Chairman The CSR Committee formulated and recommended
1. Dr M Manickam the CSR Policy to the Board during the financial year
Members 2019-20. The CSR Policy has been hosted on the
2. Sri M Balasubramaniam, Vice Chairman and website of the Company.
Managing Director Composition
3. Dr A Selvakumar, Independent Director The composition of CSR Committee is given below:
63rd Annual Report 2020 | Financial Year 2019-20 Page | 40
 Chairman F. Risk Management Committee
1. Sri P S Gopalakrishnan, Independent Director Terms of reference
Members The Risk Management Committee has been formed for
the purpose of managing the inherent risks faced by
2. Dr A Selvakumar, Independent Director
the Company.
3. Sri M Balasubramaniam, Vice Chairman and
Composition
Managing Director
Number of Meetings held and Attendance The Risk Management Committee was reconstituted
at the board meeting held on 13th December 2019.
Due to Covid-19 pandemic lockdown, no meeting was
The composition of the Risk Management Committee
held on or before 31st March 2020. However a meeting
is given below:
was held on 30th July 2020.
Chairman
Name No. of No. of 1. Sri M Balasubramaniam, Vice Chairman and
meetings meetings Managing Director
held attended
Members
Sri P S Gopalakrishnan 1 1
2. Dr A Selvakumar, Independent Director
Sri M Balasubramaniam 1 1
3. Dr S Veluswamy, Director (Finance & Operations)
Dr A Selvakumar 1 1
Number of Meetings held and Attendance
E. Asset Liability Management Committee
The committee held two meetings during the financial
Terms of reference year on 16th September 2019 and 12th Februrary
The Asset Liability Management (“ALM”) Committee 2020 and the attendance of its members are given
reviews the company’s fiscal and risk management below.
policies and practices adopted by the company. Name No. of No. of
Composition meetings meetings
The ALM Committee was reconstituted at the Board held attended
meetings held on 5th August 2019 and 13th December Sri M Balasubramaniam 2 2
2019. Accordingly, the composition of the ALM Dr A Selvakumar 2 2
Committee is given below: Dr S Veluswamy* 2 1
Chairman * inducted as a member from 13th December 2019
1. Sri M Balasubramaniam, Vice Chairman and G. Information Technology (“IT”) Strategy Committee
Managing Director Terms of reference
Members 1. Providing input to other Board Committees and
2. Dr A Selvakumar, Independent Director Senior Management.
3. Dr S Veluswamy, Director (Finance & Operations) 2. Carrying out review and amending the IT strategies
in line with the corporate strategies, Board Policy
4. Sri S Senthilkumar, Deputy General Manager (F&A) reviews, cyber security arrangements and any other
Number of Meetings held and Attendance matter related to IT Governance.
The committee held three meetings during the 3. Approving IT strategy and policy documents and
financial year on 25th April 2019, 23rd October ensuring that the management has put an effective
2019 and 18th March 2020 and the attendance of its strategic planning process in place.
members are given below: 4. Ascertaining that management has implemented
processes and practices that ensure that the
Name No. of No. of
IT delivers value to the business.
meetings meetings
held attended 5. Ensuring IT investments represent a balance of risks
and benefits and that budgets are acceptable.
Sri M Balasubramaniam 3 3
6. Monitoring the method that management uses
Sri M K Vijayaraghavan, 3 1
to determine the IT resources needed to achieve
Advisor*
strategic goals and provide high-level direction for
Dr S Veluswamy** 3 2 sourcing and use of IT resources.
Dr A Selvakumar*** 3 1
7. Ensuring proper balance of IT investments for
Sri S Senthilkumar 3 3 sustaining Company’s growth and becoming aware
* Relinquished from the committee from 5th August about exposure towards IT risks and controls.
2019 Composition
** Inducted as a member from 5th August 2019 The composition of Information Technology Strategy
*** Inducted as a member from 13th December 2019 Committee is given below:
63rd Annual Report 2020 | Financial Year 2019-20 Page | 41
 Chairman I. Allotment Committee
1. Dr A Selvakumar, Independent Director Terms of reference
Members The Committee is authorized to allot Equity Shares
2. Dr S Veluswamy, Director (Finance & Operations) and other securities and to do such acts, deeds and
things as may be deemed necessary or desirable in
3. Sri M K Vijayaraghavan, Advisor
connection with such allotment of Equity Shares and
4. Dr S Krishnaswamy, Chief Technology Officer other Securities.
5. Sri M Purushothaman, Associate Vice President (HR)
Composition
6. Sri N Raveendran, Sr. General Manager (EWS)
The composition of the Allotment Committee and the
Number of Meetings held and Attendance number of meetings held are given below:
The committee held two meetings during the financial Chairman
year on 29th June 2019 and 10th January 2020 and the 1. Sri M Balasubramaniam, Vice Chairman and
attendance of its members are given below: Managing Director
No. of No. of Members
Name meetings meetings 2. Dr A Selvakumar, Independent Director
held attended 3. Sri K P Ramakrishnan, Independent Director
Dr A Selvakumar 2 2 Number of Meetings held and Attendance
Dr S Veluswamy 2 2 During the financial year, thirty three Meetings
Sri M K Vijayaraghavan 2 - were held on 17th April 2019, 1st June 2019,
Dr S Krishnaswamy 2 2 17th June 2019, 28th June 2019, 29th June 2019,
Sri M Purushothaman 2 2 19th July 2019, 20th July 2019, 8th August 2019,
Sri N Raveendran 2 2 9th August 2019, 29th August 2019, 5th September
2019, 16th September 2019, 17th September
H. Finance and Investment Committee 2019, 30th September 2019, 1st October 2019,
Terms of reference 19th October 2019, 4th November 2019, 5th November
The Board of Directors at their meeting held on 2019, 19th November 2019, 22nd November
12th March 2016, had authorised the committee to 2019, 6th December 2019, 16th December 2019,
borrow, accept and approve sanctions/modifications 21st December 2019, 30th December 2019,
of credit facilities with the bankers and other financial 31st December 2019, 20th January 2020,
institutions up to an amount not exceeding `50,000 24th January 2020, 30th January 2020, 8th February
lakh and to make necessary investments in compliance 2020, 28th February 2020, 13th March 2020,
with RBI Directions. 24th March 2020 and 30th March 2020 for allotting
equity shares through preferential allotment,
Composition debentures and other debt securities on private
The composition of the Committee is given below: placement basis and the attendance of its members are
Chairman given below:
1. Dr M Manickam No. of No. of
Members Name meetings meetings
held attended
2. Sri M Balasubramaniam, Vice Chairman and
Managing Director Sri M Balasubramaniam 33 33
3. Dr A Selvakumar, Independent Director Dr A Selvakumar 33 33
Sri K P Ramakrishnan 33 25
Number of Meetings held and Attendance
During the financial year, nine meetings were held on J. NCD Issuance Committee
3rd July 2019, 17th July 2019, 20th December 2019, Terms of reference
23rd December 2019, 6th January 2020, 25th January This Committee is formed for the purpose of:
2020, 14th February 2020, 3rd March 2020 and a. authorization of any director or directors of the
7th March 2020 for approving the borrowings / Company or other officer or officers of the Company,
Investments of the company and the attendance of its including by the grant of power of attorneys,
members are given below: to do such acts, deeds and things as such authorized
person in his/her/its absolute discretion may deem
No. of No. of
necessary or desirable in connection with the issue,
Name meetings meetings
offer and allotment of the NCDs;
held attended
b. giving or authorizing the giving by persons
Dr. M Manickam 9 8
concerned of such declarations, affidavits,
Sri M Balasubramaniam 9 9 certificates, consents and authorities as may be
Dr A Selvakumar 9 9 required from time to time;
63rd Annual Report 2020 | Financial Year 2019-20 Page | 42
 c. appointing the lead manager(s) to the issue Composition
in accordance with the provisions of the Debt The composition of NCD Issuance Committee is given
Regulations; below:
d. seeking, if required, any approval, consent or waiver Chairman
from the Company’s lenders, and/or parties with
1. Sri M Balasubramaniam, Vice Chairman and
whom the Company has entered into with various
Managing Director
commercial and other agreements, and/or any/all
government and regulatory authorities concerned Members
in India, and/ or any other approvals, consents or 2. Dr A Selvakumar, Independent Director
waivers that may be required in connection with the 3. Sri M Srinivaasan, Director
issue, offer and allotment of the NCDs;
Number of Meetings held and Attendance
e. deciding, approving, modifying or altering the
pricing and terms of the NCDs and all other related During the financial year, three Meetings were held on
matters, including the determination of the size of 15th May 2019, 19th February 2020 and 7th March
the NCD issue up to the maximum limit prescribed 2020 and the attendance of its members are given
by the Board; below:

f. approval of the draft and final prospectus or No. of No. of

Name meetings meetings
disclosure document as the case may be (including
held attended
amending, varying or modifying it, as may be
considered desirable or expedient) as finalized in Sri M Balasubramaniam 3 3
consultation with the Lead Managers, in accordance Dr A Selvakumar 3 3
with all applicable laws, rules, regulations and Sri M Srinivaasan 3 -
guidelines;
K.
Policy Review Committee
g. seeking the listing of the NCDs on any Indian stock
exchange, submitting the listing application to such Terms of reference
stock exchange and taking all actions that may be The Committee is formed for the purpose of reviewing
necessary in connection therewith; all regulatory policies of the company from time to
time.
h. appointing the Registrars and other intermediaries
to the NCD Issue, in accordance with the provisions Composition
of the Debt Regulations; The composition of the Policy Review Committee is
i. finalization of and arrangement for the submission given below:
of the draft prospectus to be submitted to the Chairman
Stock Exchange(s) for receiving comments from the 1. Sri M Balasubramaniam, Vice Chairman and
public and the prospectus to be filed with the Stock Managing Director
Exchange(s) and any corrigendum, amendments,
Members
supplements thereto;
2. Dr A Selvakumar, Independent Director
j. appointing the Debenture Trustees and execution
of the Trust Deed in connection with the NCD Issue, 3. Smt Priya Bhansali, Independent Director
in accordance with the provisions of the Debt 4. Sri K P Ramakrishnan, Independent Director
Regulations; The Committee held two meetings during the financial
k. authorization of the RTA for maintenance of register year on 29th May 2019 and 13th December 2019 and
of NCD holders; the attendance of its members are given below:
l. finalization of the basis of allotment of the NCDs
No. of No. of
including in the event of over-subscription;
Name meetings meetings
m. finalization of the allotment of the NCDs on the held attended
basis of the applications received; acceptance and Sri M Balasubramaniam 2 1
appropriation of the proceeds of the NCD Issue; and
Dr A Selvakumar 2 2
n. to generally do any other act and/or deed,
Smt. Priya Bhansali 2 2
to negotiate and execute any document/s,
application/s, agreement/s, undertaking/s, deed/s, Sri. K P Ramakrishnan 2 2
affidavits, declarations and issue certificates and/or
to give such direction as it deems fit or as may be 4. SUBSIDIARY COMPANY
necessary or desirable with regard to the NCD Issue. The company does not have any subsidiary company.

63rd Annual Report 2020 | Financial Year 2019-20 Page | 43

5. GENERAL BODY MEETINGS
a. Details of date, time and venue where the last three Annual General Meetings held are given below:

Year AGM Date Time Venue

2019 62nd 23rd September 2019 12.15 p.m Smt. Padmavathi Ammal Cultural Centre
2018 61st 24th September 2018 12.00 Noon 1548, Avinashi Road, Peelamedu
Coimbatore - 641 004
2017 60th 25th September 2017 12.05 p.m
b. Details of Special Resolutions passed in the previous three Annual General Meetings are given below:
Date of AGM Particulars of Special Resolutions passed
23rd September 2019 1. Re-appointment of Dr A Selvakumar (DIN : 01099806) as an Independent Director
(62nd AGM) 2. Re-appointment of Sri P S Gopalakrishnan (DIN : 00001446) as an Independent Director
3. Issue of Secured or Unsecured, Redeemable, Non-Convertible Debentures (“NCDs”) and
/ or other Debt Securities on private placement basis for an amount not exceeding ` 750
crore.
24th September 2018 1. Continuation of Directorship of Sri P S Gopalakrishnan (DIN 00001446), Non-Executive
(61st AGM) Independent Director for the remaining period of his present tenure, from 1st April 2019
till 26th September 2019.
2. Issue of Secured or Unsecured, Redeemable, Non-Convertible Debentures (“NCDs”) and
/ or other Debt Securities on private placement basis for an amount not exceeding ` 750
crore
25th September 2017 1. Private Placement of Secured or Unsecured, Redeemable, Non-Convertible Debentures
(60th AGM) (“NCDs”) and/or other Debt Securities for an amount not exceeding ` 750 crore
c. Details of Postal Ballot
During the year, a Postal Ballot was conducted by the Company for seeking the approval of the Members.
Sri K Murali Mohan, Chartered Accountant, was appointed as the Scrutinizer to conduct the postal ballot and remote
e-voting in a fair and transparent manner. The Company had engaged the services of Central Depository Services (India)
Limited as the agency for the purpose of providing the e-voting facility.
The details of postal ballot are as follows:
Date of Postal Ballot Notice : 24th January 2020
Voting Period : 30th January 2020 to 29th February 2020
Date of approval : 29th February 2020
Date of Declaration of result : 2nd March 2020
Scrutinizer : Sri K Murali Mohan FCA
Details of Resolution passed:
% of votes Votes cast in favour Votes cast against
No of votes polled on
Name of the resolution
polled outstanding No of
shares No of votes % %
votes
Issuance of Equity Shares to Promoter 3,95,43,202 79.09 3,95,41,801 99.996 1,401 0.004
Group Companies and Other Corporate
Body of the Company on preferential basis
d. None of the resolutions proposed for the ensuing Annual General meeting need to be passed by Postal Ballot.
e. No Special Resolution is proposed to be conducted through Postal Ballot as on the date of this Report.
6. MEANS OF COMMUNICATION
a. The quarterly results are published in national/regional daily (“Business Line” in English and “The Hindu” in Tamil).
The half-yearly results are not individually sent to the shareholders.
b. The following are also promptly displayed on the Company’s Website www.sakthifinance.com and also filed with
BSE Limited’s on-line filing portal.
- Financial Results, Shareholding Pattern, Corporate Governance Report, Annual Reports under “Investors Section”
- Letters/intimation to Stock Exchanges in the “Investor Announcements” under “Investors Section”.

63rd Annual Report 2020 | Financial Year 2019-20 Page | 44

7. MANAGEMENT
A detailed Management Discussion and Analysis Report forms part of the Board’s Report and is given in Annexure 1.
8. DIRECTORS’ APPOINTMENT / REAPPOINTMENT / CONTINUATION
Details of disclosure regarding reappointment of Independent Directors and Managing Director are given in the Annexure
to the Notice.
9. GENERAL SHAREHOLDER INFORMATION
63rd Annual General Meeting
Day, Date and Time : Thursday, 17th December 2020 at 4.00 p.m
Mode : Through Video Conferencing (“VC”) / Other Audio Visual Means (“OAVM”)
10. FINANCIAL CALENDAR FOR 2020-21
Unaudited financial results for the quarter ended June 2020 On or before 15th September 2020 (extended by
SEBI due to Covid-19 pandemic)
Unaudited financial results for the quarter ending September 2020 On or before 14th November 2020
Unaudited financial results for the quarter ending December 2020 On or before 14th February 2021
Audited financial results for the year ending March 2021 On or before 30th May 2021
Annual General Meeting for the year ending March 2021 On or before 30th September 2021.
11. DIVIDEND PAYMENT
On or after 17th December 2020 but within the stipulated time.
12. LISTING ON STOCK EXCHANGES AND STOCK CODE
a. Listing
The equity shares are presently listed on BSE Limited, Floor 25, P J Towers, Dalal Street, Fort, Mumbai - 400 001.
The listing fee has been paid to the exchange. The company has paid the annual custodial fee for the year 2020-21 to
National Securities Depository Limited and Central Depository Services (India) Limited on the basis of beneficial accounts
maintained by them as on 31st March 2020.
b. NCD Public Issue 2016
As per the terms and conditions of the Public Issue Prospectus dated 30th March 2016, your company redeemed
Non-Convertible Debentures issued under Options VI, VII and VIII aggregating ` 11,040.05 lakh (Principal amount).
The redemption was made on 18th May 2020 to the respective Debenture holders.
c. Details of NCDs listed with BSE Limited - NCD Public Issue 2019

Option ISIN Scrip Code Coupon Rate Frequency of Interest Amount Date of Matu-
(%) Payment (` lakhs) rity
I. Secured
I INE302E07177 936674 9.50 Monthly 646.99 15 May 2021
II INE302E07185 936676 NA Cumulative 1,344.40 15 May 2021
III INE302E07193 936678 9.75 Monthly 592.26 15 May 2022
IV INE302E07201 936680 9.75* Annual 268.93 15 May 2022
V INE302E07219 936682 NA Cumulative 800.13 15 May 2022
VI INE302E07227 936684 10.00 Monthly 1,909.01 15 May 2023
VII INE302E07235 936686 10.00* Annual 292.14 15 May 2023
VIII INE302E07243 936688 NA Cumulative 1,541.34 15 May 2023
II. Unsecured
IX INE302E08027 936690 10.25 Monthly 2,084.53 15 June 2024
X INE302E08035 936692 10.25* Annual 106.70 15 June 2024
XI INE302E08043 936694 NA Cumlative 2,183.57 15 June 2024
Total 11,770.00

63rd Annual Report 2020 | Financial Year 2019-20 Page | 45

 d. Details of NCDs listed with BSE Limited - NCD Public Issue 2020

Option ISIN Scrip Code Coupon Rate Frequency of Interest Amount Date of Maturity
(%) Payment (` lakhs)
I. Secured
I INE302E07250 937171 9.50 Monthly 1,691.11 8th May 2022
II INE302E07268 937173 NA Cumulative 1972.55 8th May 2022
III INE302E07276 937175 9.75 Monthly 811.80 8th August 2023
IV INE302E07284 937177 9.75* Annual 141.50 8th August 2023
V INE302E07292 937179 NA Cumulative 793.53 8th August 2023
VI INE302E07300 937181 10.00 Monthly 1,894.23 8th June 2024
VII INE302E07318 937183 10.00* Annual 248.73 8th June 2024
VIII INE302E07326 937185 NA Cumulative 1,129.16 8th June 2024
II. Unsecured
IX INE302E08050 937187 10.25 Monthly 738.88 8th July 2025
X INE302E08068 937189 10.25* Annual 66.60 8th July 2025
XI INE302E08076 937191 NA Cumulative 798.22 8th July 2025
Total 10,286.31

* The interest will be calculated on quarterly compounding basis and will be paid at the end of the year.
e. The Company’s Stock Code for equity shares is as follows:
Stock Exchange Stock Code
BSE Limited, Mumbai 511066

f. International Securities Identification Number (ISIN) INE302E01014

g. Corporate Identification Number (CIN) L65910TZ1955PLC000145

h. Market Price Data
The monthly high and low market prices of the company’s equity shares traded on BSE Limited, Mumbai for the financial
year 2019-20 are given below:
BSE Price BSE Sensex
Month
High (`) Low (`) High Low
April 2019 19.00 16.40 39,487 38,460
May 2019 19.95 16.20 40,125 36,956
June 2019 19.00 12.00 40,312 38,871
July 2019 15.75 12.55 40,032 37,128
August 2019 16.00 11.95 37,808 36,102
September 2019 17.99 13.75 39,441 35,988
October 2019 16.89 13.00 40,392 37,416
November 2019 16.20 14.15 41,164 40,014
December 2019 15.50 12.60 41,810 40,135
January 2020 17.15 14.55 42,274 40,477
February 2020 16.00 14.20 41,709 38,220
March 2020 15.95 10.02 39,083 25,639

63rd Annual Report 2020 | Financial Year 2019-20 Page | 46

 REGISTRARS AND SHARE TRANSFER AGENT DEBENTURE TRUSTEE
SKDC Consultants Limited Catalyst Trusteeship Limited
(Unit: Sakthi Finance Limited) “GDA House”
Regd Office: ‘Kanapathy Towers’ Plot No. 5
Third Floor, 1391/A-1, Sathy Road Bhusari Colony (Right)
Ganapathy, Coimbatore - 641 006 Paud Road, Pune - 411 038
Phone : (0422) 4958995, 2539835 - 836 Phone : (020) 25280081
Fax : (0422) 2539837 Fax : (020) 25280275
E-Mail : info@skdc-consultants.com E-mail : dt@ctltrustee.com
Website : www.skdc-consultants.com Website : www.catalysttrustee.com

i. Share Transfer System

All transfers/transmissions/Issue of Duplicate Share certificates received are processed by the Registrar and Share Transfer
Agent and are approved by the Share Transfer Committee. Share transfers are registered and returned to the shareholders
within the stipulated time, if the documents are in order.
Pursuant to Regulation 40(9) of the Listing Regulations, certificates, on half yearly basis, have been issued by a
Company Secretary in practice with regard to due compliance of share transfer formalities by the Company. Pursuant to
SEBI (Depositories and Participant’s) Regulations 2018, certificates have also been received from a Company Secretary in
Practice for:
a. timely dematerialization of shares of the company; and
b. reconciliation of the share capital of the company by conducting a share capital audit on a quarterly basis.
13. DISTRIBUTION OF SHAREHOLDING AS AT 31ST MARCH 2020
The distribution of shareholding as at 31st March 2020 is as under:

Share holding No. of share holders % of share holders No. of shares % of share holding
1 - 500 9,016 86.23 13,36,046 2.06
501 - 1,000 747 7.14 5,86,049 0.91
1,001 - 2,000 320 3.06 4,68,467 0.72
2,001 - 3,000 125 1.19 3,19,334 0.49
3,001 - 4,000 52 0.50 1,88,613 0.29
4,001 - 5,000 52 0.50 2,37,389 0.37
5,001 - 10,000 72 0.69 5,09,893 0.79
10,001 and above 72 0.69 6,10,60,091 94.37
Total 10,456 100.00 6,47,05,882 100.00
14. SHAREHOLDING PATTERN AS AT 31ST MARCH 2020
The shareholding pattern as at 31st March 2020 is as under:

Category No. of Shares Percentage

Promoters / Promoter Group 4,33,63,007 67.02
Other bodies corporate 1,12,94,671 17.46
Banks, Financial Institutions and Mutual Funds 905 0.00
Non-resident Incorporated Entity 44,50,000 6.88
Non-Resident Indians 46,093 0.07
Resident public 51,29,838 7.92
Unclaimed Shares Suspense Account 2,975 0.00
Investor Education and Protection Fund 4,18,393 0.65
Total 6,47,05,882 100.00

63rd Annual Report 2020 | Financial Year 2019-20 Page | 47

15. DEMATERIALISATION OF SHARES
The Company’s shares are compulsorily traded in dematerialized form and are admitted for trading under both the
depositories of India viz. National Securities Depository Ltd (“NSDL”) and Central Depository Services (India) Ltd (“CDSL”).
5,81,50,854 Equity Shares of the Company constituting 89.87% (based on the expanded capital) of the paid-up capital were
dematerialized as on 31st March 2020.
16. NOMINATION FACILITY
The company is accepting nomination forms from members in the prescribed Form SH-13. Any member, who is desirous
of making a nomination, is requested to contact the Secretarial department at the Registered Office of the company or
the Registrar and Share Transfer Agent. Members holding shares in dematerialized form are requested to forward their
nomination instructions to the depository participant concerned. Nomination is only optional and can be cancelled or varied
by the member at any time.
17. OUTSTANDING GDRs OR ADRs OR WARRANTS OR ANY CONVERTIBLE INSTRUMENT’S CONVERSION DATE AND LIKELY IMPACT
ON EQUITY
The company has not issued GDRs or ADRs or Warrants or any convertible instruments.
18. ADDRESS FOR CORRESPONDENCE
Sakthi Finance Limited
(CIN:L65910TZ1955PLC000145)
Regd. office : 62, Dr. Nanjappa Road, Post Box No.3745
Coimbatore – 641 018
Tel : (0422) 2231471-474, 4236200
E-mail : sakthif_info@sakthifinance.com
Website : www.sakthifinance.com
19. INVESTORS’ CORRESPONDENCE
All investors correspondence should be addressed to the company’s Registrars and Transfer Agent at the address mentioned
above.
Contact Person : Sri K Marimuthu
Investors may also contact Sri S Venkatesh, Company Secretary and Compliance Officer at the Registered Office of the
company for any investor grievance related matters.
Tel. Nos : (0422) 2231471-474, 4236207 E-mail : svenkatesh@sakthifinance.com
The company has designated the following exclusive E-mail Id for the convenience of investors:
investors@sakthifinance.com
20. CREDIT RATING
Rating Agency Term Type Rating
Short/Long Term Fixed Deposit Programme [ICRA] MA- (Stable)
Long Term Cash Credit Limits [ICRA] BBB (Stable)
ICRA Limited
Short Term Working Capital Demand Loans [ICRA] A2
Long Term Non-Convertible Debentures [ICRA] BBB (Stable)

21. MANDATORY REQUIREMENT OF PERMANENT ACCOUNT NUMBER (PAN):

SEBI has, by its Circular dated 7th January 2010, made it mandatory to furnish PAN copy in the following cases:
a. Deletion of name of deceased shareholder(s), where shares are held in the name of two or more shareholders;
b. Transmission of shares to the legal heir(s), where the deceased shareholder was sole holder;
c. Transposition of shares: In case of change in order of names in which physical shares are held jointly in the name of two
or more shareholders.
22. CODE OF CONDUCT FOR PREVENTION OF INSIDER TRADING
Pursuant to the requirements of Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations 2015,
as amended, the company has adopted a revised Code of Conduct to Regulate, Monitor and Report Trading by Insiders.
Sri S Venkatesh, Company Secretary is the Compliance Officer. The Code of Conduct is applicable to all Directors and such
designated employees of the Company and other connected persons who have access to unpublished price sensitive
information relating to the company.

63rd Annual Report 2020 | Financial Year 2019-20 Page | 48

23. DISCLOSURES RELATING TO UNCLAIMED SHARES DEMAT SUSPENSE ACCOUNT
Pursuant to Regulation 39(4) of the Listing Regulations, the company opened a dematerialized account viz. Unclaimed
Shares Dematerialized Suspense Account with Stock Holding Corporation of India Limited, Coimbatore in the name and style
of “Sakthi Finance Limited-Unclaimed Shares Demat Suspense Account”. The details of Unclaimed Shares Demat Suspense
Account as on 31st March 2020 are as follows:
Sl No Particulars No. of Share holders No. of Shares
1 Aggregate number of shareholders and outstanding shares lying 34 2,975
in Unclaimed Shares Demat Suspense Account at the beginning
of the year
2 Number of shareholders who approached for transfer of shares – –
from Unclaimed Shares Demat Suspense Account during the
year
3 Number of shareholders to whom Shares were transferred from – –
Unclaimed Shares Demat Suspense Account during the year
4 Aggregate number of shareholders and outstanding shares lying 34 2,975
in Unclaimed Shares Demat Suspense Account at the end of the
year
The voting rights in the shares outstanding in the suspense account as on 31st March 2020 shall remain frozen till the
rightful owners of such shares claim the shares.
24. OTHER DISCLOSURES No personnel of the Company have been denied access
a. Related Party Disclosures to the Chairman of the Audit Committee. During the
year, no complaint was received in this regard.
The details of transactions with related parties are
disclosed in Note 42 of Notes forming an integral part of d. Commodity Price Risk or Foreign Exchange Risk and
the financial statements. The Company has not entered Hedging Activities
into any other transactions of material nature with its Our Company’s operations do not give rise to any of
promoters, directors or management, their relatives these risks or activities.
etc. that may have a potential conflict with the interest
of the company at large. The policy on Related Party e. Plant Locations
Transactions has been hosted on the website of the As the company is engaged in the business of
Company, www.sakthifinance.com. The register of Non-banking Financial services, this is not applicable.
contracts or arrangements containing the transactions
f. Details of utilization of funds raised through
in which the directors are interested or concerned is
Preferential Allotment or Qualified Institutional
placed before the Board for its information. The related
Placement
party transactions entered into by the company in the
ordinary course of business are periodically placed During the year ended 31st March 2020, the Company
before the Audit Committee for its approval. had raised an amount not exceeding ` 2500.00 lakhs
through preferential issue of 1,47,05,882 equity shares
b. Details of Non-Compliance, Penalties and Strictures
at ` 17 per share from promoter group companies and
There are no instances of non-compliance by the other corporate body. The allotment was made on
company on any matters relating to capital markets, 13th March 2020. The listing and trading approval
nor have any penalty/strictures been imposed on the were received on 27th May 2020 and 3rd June 2020
company by Stock Exchanges or SEBI or any other respectively. The entire proceeds of the issue were
statutory authority on any matter relating to capital utilized for the purpose for which the amount was
markets during the last three years. raised.
c. Whistle Blower Policy/Vigil Mechanism
g. Certificate from Company Secretaries regarding
The Company has adopted a Whistle Blower Policy/ debarment or disqualification of Directors
Vigil Mechanism to provide a formal mechanism
to the Directors, employees and other external M/s. S Krishnamurthy & Co, Company Secretaries,
shareholders to report their concerns about unethical have certified that none of the Directors of the
behaviour, actual or suspected fraud or violation of Company have been debarred or disqualified from
the Company’s Code of Conduct. The policy provides being appointed or continuing as a Director of the
not only for adequate safeguards against victimization Company by SEBI or Ministry of Corporate Affairs or
of employees who avail of this mechanism but also any other statutory authority. The said certificate forms
direct access to the Chairman of Audit Committee. part of this report and is given in Annexure A.

63rd Annual Report 2020 | Financial Year 2019-20 Page | 49

 h. Disclosure in relation to recommendation made by The Board The Company does not maintain a
Committees of the Board
separate office for Non-executive
During the year under review, all recommendations Chairman.
of the Board Committees have been accepted by the
Sharehold- The half-yearly financial results are
Board.
er Rights published in leading newspapers and
i. Total fee paid to the Statutory Auditors and all entities are also displayed on the Company's
in the network firm/ entities website www.sakthifinance.com.
The details of total fee for all the services paid by the Therefore, the results are not being sent
Company to M/s. P K Nagarajan & Co (FRN: 016676S), separately to the shareholders.
Chartered Accountants, Statutory Auditors for the Modified During the year under review, there was
financial year are given below: opinion in no Audit qualifications in the Auditor's
Particulars (` Lakh) Auditor’s Report on the Company's financial
Statutory Audit 16.00 Report statements.
Other Services including 14.80 S e p a r a t e The post of Non-executive Chairman
reimbursement of expenses posts of of the Board is separate from that of
Chairman Managing Director.
Total 30.80
and CEO
j. Disclosures in relation to the Sexual Harassment of Reporting The Company has appointed a Practicing
Women at Workplace (Prevention, Prohibition and of Internal Chartered Accountant as an internal
Redressal) Act 2013 Auditor auditor and he reports directly to the
Status of complaints for the Financial Year 2019-20 is Audit Committee of the Company.
as follows:
n. The Company is in compliance with the disclosures
Number of complaints filed during the Nil required to be made under this report in accordance
financial year with Regulation 34(3) read with Schedule V(C) to the
Number of complaints disposed of during Nil Listing Regulations.
the financial year
o. Disclosures on compliance with Corporate governance
Number of complaints pending as at the Nil requirements specified in Regulations 17 to 27
end of the financial year have been included in the relevant Section of the
k. Accounting treatment in preparation of Financial report. Appropriate information has been placed on the
Statements Company’s website pursuant to Clauses (b) to (i)
of sub-regulation (2) of Regulation 46 of Listing
The Company has prepared the financial statements
Regulations.
in accordance with the Indian Accounting Standards
(“Ind AS”) notified under Section 133 of the Companies p. CEO/CFO Certification
Act 2013 (“the Act”) read with the Companies (Indian
In accordance with Regulation 17(8) read with Part B of
Accounting Standards) Rules 2015.
Schedule II to the Listing Regulations relating to CEO/
l. Mandatory requirements CFO certification, Vice Chairman and Managing Director
The Company has complied with all the mandatory and Director (Finance and Operations) have given
requirements of the Listing Regulations relating to necessary certificate to the Board for the financial year
Corporate Governance. ended 31st March 2020.

m. Discretionary requirements q. Auditor’s certificate on Corporate Governance

The company’s status of compliance with the following As stipulated in Regulation 34(3) of Schedule V to
discretionary requirements as specified in Regulation the Listing Regulations, the Auditor’s certificate on
27(1) read with Part E of Schedule II to the Listing compliance of conditions of Corporate Governance is
Regulations are given below: annexed to this Report.

63rd Annual Report 2020 | Financial Year 2019-20 Page | 50

 r. Information on the Company’s website including composition of Committees, key policies, codes and charters, adopted
by the Company are given below:

Name of the Policy, Code or Charter Brief description Web Link

Terms of Appointment of The appointment letter issued to https://sakthifinance.com/
Independent Directors Independent Directors detailing the board-of-directors/
broad terms and conditions of their
appointment
Board Committees The composition of various https://sakthifinance.com/
committees of the Board board-of-directors/
Code of Conduct The Code lays down the ethical https://sakthifinance.com/wp-
standards that Directors and Senior content/themes/sakthifinance/
Management Personnel have to pdf/policies/Code-of-conduct-for-
observe in their professional conduct. Directors-and-Senior- Management.
pdf
Whistleblower Policy Whistleblower Policy has been for- https://sakthifinance.com/ wp-
(Vigil Mechanism) mulated for Directors and employees content / uploads / 2019/05/SFL_
of the Company to report concerns Whistle_Blower_Policy_May2019.pdf
about unethical behaviour, actual or
suspected fraud or violation of the
Company's Code of Conduct.
Policy on Related Party Transactions This policy deals with related party https://sakthifinance.com/wp-
transactions and regulation of all content/uploads/ 2019/05/SFL_RPT_
transactions between the Company Policy_ May 2019.pdf
and its related parties.
Familiarisation Programme For Independent Directors through https://sakthifinance.com/wp-
various programmes /presentations content/themes/ sakthifinance/pdf/
fpd/ Familiarisation-Programme-
2020.pdf
Policy on determination of Materiality The policy applies to disclosures https://sakthifinance.com/wp-
for Disclosure of Event / Information of material events affecting the content/uploads/ 2019/05/SFL_
Company. Policy_on_ Material_ Event.pdf
Policy on Preservation of documents The policy provides guidelines for https://sakthifinance.com/wp-
archiving of corporate records and content/themes/ sakthifinance/pdf/
documents as required by various policies/ Preservation-of-Documents-
statutes. and-its-Archival.pdf
Corporate Social Responsibility Policy The policy outlines the Company's https://sakthifinance.com/ wp-
strategic policy on society through content/themes/ sakthifinance/pdf/
programmes focussing on Health, policies/ CSR-Policy.pdf
Education etc.
Policy on Disclosure of material This policy provides timely, https://sakthifinance.com/wp-
events adequate and uniform dissemination content/uploads/ 2019/05/SFL_
of information and disclosure Policy_on_ Material_Event.pdf
of Unpublished Price Sensitive
information to provide accurate
and timely communication to our
shareholders and the financial
markets.
Investor Education and Protection Statement of unclaimed and unpaid https://sakthifinance.com/ investor-
Fund (“IEPF”) amounts of Dividend, Shares, information/
Debentures and Deposits
For and on behalf of the Board
M Manickam
24th August 2020 Chairman
Coimbatore DIN : 00102233

63rd Annual Report 2020 | Financial Year 2019-20 Page | 51

 ANNUAL DECLARATION BY VICE CHAIRMAN AND MANAGING DIRECTOR PURSUANT TO REGULATION
34(3) READ WITH SCHEDULE V TO THE LISTING REGULATIONS

I, M Balasubramaniam, Vice Chairman and Managing Director, hereby declare that all the Board Members and Senior
Management Personnel of the Company have affirmed compliance with the Company’s Code of Conduct and Ethics
for the year ended 31st March 2020.
For Sakthi Finance Limited

M BALASUBRAMANIAM
24th August 2020 Vice Chairman and Managing Director
Coimbatore-18 DIN : 00377053

Independent Auditor’s Certificate on Compliance with the Corporate Governance requirements under SEBI (Listing
Obligations and Disclosure Requirements) Regulations 2015
To
The Members of Sakthi Finance Limited
Certificate on Corporate Governance
1. We have examined the compliance of conditions of Corporate Governance by Sakthi Finance Limited (‘the Company’) for the
year ended March 31, 2020 as stipulated in Regulations 17 to 27, Clause (b) to (i) of Regulation 46 (2) and paragraphs C, D and
E of Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations,
2015 (‘Listing Regulations’) pursuant to the Listing Agreement of the Company with Stock exchange.
Management’s Responsibility
2. The compliance with the terms and conditions contained in the Corporate Governance is the responsibility of the
Management of the Company including the preparation and maintenance of all relevant supporting records and documents.
This responsibility includes the design, implementation and maintenance of internal control and procedures to ensure the
compliance with the conditions of the Corporate Governance stipulated in the Listing Regulations.
Auditor’s Responsibility
3. Pursuant to the requirements of the Listing Regulations, it is our responsibility to provide a reasonable assurance whether the
Company has complied with the conditions of Corporate Governance as stipulated in Listing Regulations for the year ended
March 31, 2020.
4. Our examination was limited to procedures and implementation thereof adopted by the Company for ensuring the compliance
of the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of
the Company.
5. We have carried out an examination of the relevant records of the Company in accordance with the Guidance Note on
Certification of Corporate Governance issued by the Institute of Chartered Accountants of India (‘the ICAI’)and as per the
Guidance Note on Reports or Certificates for special purposes issued by the ICAI which requires that we comply with the
ethical requirements of the Code of Ethics issued by ICAI.
Opinion
6. Based on our examination of the relevant records and according to the information and explanations given to us and the
representations provided by the Management, we certify that the Company has complied with the conditions of Corporate
Governance as stipulated in the SEBI Listing regulations.
7. We state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or
effectiveness with which the management has conducted the affairs of the Company.

For P K NAGARAJAN & CO.,

Chartered Accountants
Firm Registration Number: 016676S
P K Nagarajan
Partner
24th August 2020 Membership Number: 025679
Coimbatore UDIN:20025679AAAABN8970

63rd Annual Report 2020 | Financial Year 2019-20 Page | 52

 Annexure A
CERTIFICATE OF NON-DISQUALIFICATION OF DIRECTORS
(In terms of Regulation 34(3) read with Schedule V Para C Clause(10)(i) to the Securities and Exchange Board of India
(Listing Obligations and Disclosure Requirements) Regulations 2015]

To Exchange Board of India (Listing Obligations and Disclosure

The Members of Requirements) Regulations 2015.
Sakthi Finance Limited In our opinion and to the best of our information and according
62, Dr.Nanjappa Road to the verification at MCA Portal as considered necessary and
Coimbatore - 641018 explanations furnished to us by the Company and its Officers,
We have examined the relevant registers, records, forms, we hereby certify that none of the directors on the Board of
returns and disclosures received from the Directors of Sakthi Sakthi Finance Limited (“the Company”) as stated below for
Finance Limited [CIN: L65910TZ1955PLC000145] having the financial year ended as on the 31st March 2020 have been
registered office at 62, Dr.Nanjappa Road, Coimbatore 641 018 debarred or disqualified from being appointed or continuing as
produced before us by the Company for the purpose of issuing directors of companies by the Securities and Exchange Board
this Certificate, in accordance with Regulation 34 (3) read with of India (SEBI), the Ministry of Corporate Affairs, Government
Schedule V Para C, Sub Clause 10 (i) of the Securities and of India (MCA) or such other Statutory Authority.

Sl Name of the Director Nature of Directorship Director’s

No Identification Number
1 Mahalingam Manickam Chairman 00102233
2 Balasubramaniam Mahalingam Vice Chairman and Managing Director 00377053
3 Srinivaasan Mahalingam Non Executive Non Independent Director 00102387
4 Arumugam Selvakumar Independent Director 01099806
5 Gopalakrishnan Subramaniam Puthucode Independent Director 00001446
6 Priya Bhansali Independent Director 00195848
7 Kollengode Padmanabhan Ramakrishnan Independent Director 07029959
8 Sundaraswamy Veluswamy Director (Finance and Operations) 05314999

We wish to state that the management of the Company is responsible to ensure the eligibility of a person for appointment /
continuation as a Director on the Board of the Company. Our responsibility is to express an opinion on these based on our
verification. This certificate is neither an assurance as to the future viability of the Company nor of the efficiency or effectiveness
with which the management has conducted the affairs of the Company.
For S. Krishnamurthy & Co.,
Company Secretaries
R.Sivasubramanian
Partner
Membership No. A22289
24th August 2020 Certificate of Practice No.12052
Coimbatore UDIN : A022289B000608921

63rd Annual Report 2020 | Financial Year 2019-20 Page | 53

 Annexure - 5
ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBILITY (“CSR”) ACTIVITIES FOR THE FINANCIAL YEAR 2019-20
1. A brief outline of the Company’s CSR Policy, including 2. The composition of CSR Committee is given below:
overview of the projects or programs proposed to be a. Sri P S Gopalakrishnan, Chairman
undertaken and a reference to the web-link to the b. Dr A Selvakumar, Member
CSR Policy and project and Programs c. Sri M Balasubramaniam, Member
The Company has adopted a CSR policy within the broad 3. Average net profits of the Company for the last three
scope laid down in Schedule VII to the Companies Act financial years: ` 1,926.42 lakh
2013 as projects/programs/activities, excluding activities
in its normal course of business. The CSR Policy of the 4. Prescribed CSR Expenditure (two percent of the amount as
Company is available on the website of the company mentioned in item 3 above) : ` 38.53 lakh
under the following link: https://sakthifinance.com/ 5. Details of CSR spent during the financial year 2019-20
wp-content/themes/sakthifinance/pdf/policies/
CSR-Policy.pdf (` lakhs)
Particulars Amount
Total amount spent for the financial year 12.19
Amount unspent, if any 26.34
6. Manner in which the amount spent during the financial year is detailed below:
Sl CSR project or ac- Sector in Projects or Amount out- Amount spent Cumulative Amount
No tivity identified which the programmes: lay (budget) on the projects Expenditure spent :
Project is (1) Local area or project or or programs up to the Direct or
covered other program wise Subheads: reporting through
(2) Specify the (1) Direct period imple-
State and district expenditure menting
where Projects on projects or agency
or programs
programs were (2) Overheads
undertaken (` lakhs) (` lakhs) (` lakhs)
1 Appropriate Promoting Local areas and 9.73 9.73 Direct
sponsorship to education, others
community / enhancing
social / charitable vocational
institutions of skills
repute engaged in 38.53
activities in line
with our CSR Policy
2 Rural Development, Healthcare Local areas and 2.46 12.19 Direct
Healthcare and others
Sanitation
Total 38.53 12.19
7. In case the Company has failed to spend the two per cent of the average net profits for the last three financial years or any
part thereof, the Company shall provide the reasons for not spending the amount in Board’s Report.
Your Company has so far spent ` 12.19 lakhs as against ` 38.53 lakhs required to be spent during the financial year 2019-20.
Refer Board’s report for the reasons for unspent amount.
8. A responsibility statement of the CSR Committee that the implementation and monitoring of CSR Policy, is in compliance with
CSR objective and policy of the Company.
Pursuant to the provisions of Section 135 of the Companies Act 2013 read with the Companies (Corporate Social Responsibility
Policy) Rules 2014, the CSR Committee states that the implementation and monitoring of CSR Policy is in compliance with the
CSR objectives and policy of the Company.
M. Balasubramaniam P.S. Gopalakrishnan
Vice Chairman and Managing Director Chairman
24th August 2020 (Member) (CSR Committee)
Coimbatore DIN : 00377053 DIN : 00001446

63rd Annual Report 2020 | Financial Year 2019-20 Page | 54

 Form No. MR-3 Annexure - 6
Secretarial Audit Report for the financial year ended 31st March 2020
[Pursuant to Section 204(1) of the Companies Act, 2013 and Rule No. 9 of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules 2014]
To iii. The Depositories Act, 1996 and the regulations and
The Members bye-laws framed thereunder.
SAKTHI FINANCE LIMITED [CIN:L65910TZ1955PLC000145] iv. The following Regulations prescribed under the
62, Dr.Nanjappa Road, Coimbatore – 641018 Securities and Exchange Board of India Act, 1992
We have conducted a Secretarial Audit of the compliance (“SEBI Regulations”):-
of applicable statutory provisions and adherence to good a. Securities and Exchange Board of India (Issue and
corporate practices by SAKTHI FINANCE LIMITED (hereinafter Listing of Debt Securities) Regulations, 2008;
called “the Company”) during the financial year from (“ILDS”)
1st April 2019 to 31st March 2020 (“the year”/ “audit period”/ b. Securities and Exchange Board of India
“period under review”). (Substantial Acquisition of Shares and Takeovers)
We conducted the Secretarial Audit in a manner that provided Regulations, 2011; (“SAST”)
us a reasonable basis for evaluating the Company’s corporate c. Securities and Exchange Board of India
conducts/statutory compliances and expressing our opinion (Prohibition of Insider Trading) Regulations,
thereon. 2015;
We issue this report based on: d. Securities and Exchange Board of India (Listing
i. Our examination /verification of the physical / electronic Obligations and Disclosure Requirements)
books, papers, minute books and other records maintained Regulations, 2015. (“LODR”); and
by the Company and furnished to us in physical / electronic e. Securities and Exchange Board of India (Issue
form through e-mail, forms / returns filed and compliance of Capital and Disclosure Requirements)
related action taken by the Company during the year as
Regulations, 2018(“ICDR”).
well as after 31st March 2020 but before the issue of this
v. The following law is specifically applicable to the
audit report;
Company (Specific laws):
ii. Our observations during our visits to the Registered office
a. Chapter III B of the Reserve Bank of India Act,
of the Company;
1934 and the directions/guidelines/circulars/
iii. Compliance certificates confirming compliance with notifications issued thereunder by the Reserve
all laws applicable to the Company given by the key Bank of India (“RBI”) to the extent applicable to a
managerial personnel / senior managerial personnel of deposit taking non-banking finance company.
the Company and taken on record by the Audit Committee/
vi. The listing agreement entered into by the Company
Board of Directors; and
with BSE Limited (BSE) (Agreement).
iv. Representations made, physical/electronic documents
vii. Foreign Exchange Management Act, 1999 and the
shown and information provided by the Company, its
rules and regulations made thereunder to the extent
officers, agents and authorised representatives during our
of Foreign Direct Investment (“FEMA”).
conduct of the Secretarial Audit.
viii. Secretarial Standards issued by The Institute of
We hereby report that, in our opinion, during the audit
Company Secretaries of India (Secretarial Standards).
period covering the financial year ended on 31st March 2020
the Company has complied with the statutory provisions 1.2. During the period under review and also considering the
listed hereunder and has Board processes and compliance compliance related action taken by the Company after
mechanism in place to the extent, in the manner and subject 31st March 2020 but before the issue of this report,
to the reporting made hereinafter. the Company has, to the best of our knowledge and belief
The members are requested to read this report along with our and based on the records, information, explanations and
letter of even date annexed to this report as Annexure – A. representations furnished to us:
i. Complied with the applicable provisions/ clauses of
1. Compliance with specific statutory provisions
the Acts, Rules, SEBI Regulations and Specific laws
We further report that: mentioned under sub-paragraphs (i), (ii), (iii), (iv)(a)
1.1. We have examined the books, papers, minute books and to (iv)(e) , (v) to (vii) of paragraph 1.1 above; and
other records maintained by the Company and the forms, ii. Generally complied with the applicable provisions
returns, reports, disclosures and information filed or of Secretarial Standards on Meetings of the Board
disseminated during the year, according to the applicable of Directors (“SS-1”) and General Meetings (“SS-2”)
provisions/ clauses of: mentioned under paragraph 1.1.(viii) above to the
i. The Companies Act, 2013 and the rules made extent applicable to Board meetings and General
thereunder (“the Act”). meetings. Secretarial Standards on ‘Dividend’
ii. The Securities Contracts (Regulation) Act, 1956 and (“SS-3”), being non-mandatory, has not been
the rules made thereunder. adopted by the Company.

63rd Annual Report 2020 | Financial Year 2019-20 Page | 55

1.3. We are informed that, during/ in respect of the year, 2.6 Agenda and detailed notes on agenda were sent to the
due to non-occurrence of certain events, the Company directors at least seven days before the Board meetings.
was not required to comply with the following laws/ 2.7 Agenda and detailed notes on agenda for the following
rules/ regulations and consequently was not required items were either circulated separately less than seven
to maintain any books, papers, minute books or other days before or at the Board meetings and consent of
records or file any forms/ returns under: the Board for so circulating them was duly obtained as
i. Foreign Exchange Management Act, 1999 and required under SS-1:
the rules and regulations made thereunder to the i. Supplementary agenda notes and annexures in
extent of Overseas Direct Investment and External respect of unpublished price sensitive information
Commercial Borrowings (“FEMA”); such as audited financial statement / results,
ii. Securities and Exchange Board of India (Registrars unaudited financial results and connected papers;
to an Issue and Share Transfer Agents) Regulations and
1993 regarding the Companies Act, 2013 and dealing ii. Additional subjects / information / presentations and
with client; supplementary notes.
iii. Securities and Exchange Board of India (Buy Back of 2.8 A system exists for directors to seek and obtain further
Securities) Regulations, 1998; information and clarifications on the agenda items before
iv. Securities and Exchange Board of India (Delisting of the meetings and for their meaningful participation at
Equity Shares) Regulations, 2009; and the meetings.
v. Securities and Exchange Board of India (Share Based 2.9 We are informed that, at the Board meetings held during
Employee Benefits) Regulations, 2014. the year:
2. Board processes: i. Majority decisions were carried through; and
We further report that: ii. No dissenting views were expressed by any Board
2.1 The constitution of the Board of Directors of the Company member on any of the subject matters discussed, that
during the year was in compliance with the applicable were required to be captured and recorded as part of
provisions of the Companies Act, 2013 (‘the Act’) and the minutes.
SEBI LODR. 3. Compliance mechanism
2.2 As on 31st March 2020, the Board has: We further report that:
i. 2 [Two] Executive Directors 3.1 There are reasonably adequate systems and processes
ii. 2 [Two] Non-Executive Non Independent Directors in the Company, commensurate with the Company’s size
and operations, to monitor and ensure compliance with
iii. 4 [Four] Non-Executive Independent Directors, applicable laws, rules, regulations and guidelines.
including a Woman Independent director.
4 Specific events/ actions
2.3 The processes relating to the following changes in the
composition of the Board of Directors during the year 4.1 During the year, the following specific events/ actions
were carried out in compliance with the provisions of the having a major bearing on the Company’s affairs took
Act and LODR: place, in pursuance of the above referred laws, rules,
regulations and standards :
i. Re-appointment of Sri.M.Srinivaasan (DIN 00102387)
as a Director, upon retirement by rotation at the 62nd i. The Company allotted 11,77,000 Secured
Annual General Meeting held on 23rd September and Unsecured Redeemable, Non-Convertible
Debentures (“NCDs”) of ` 1,000 each aggregating
2019.
` 117.70 Crores to the eligible allottees on
ii. Re-appointment of Dr.A.Selvakumar (DIN 01099806) 15th May 2019 by Public Issue of Prospectus dated
and Sri.P.S.Gopalakrishnan (DIN 00001446) as 28th March 2019. The NCDs have been listed and
Non-Executive Independent Directors for the second admitted for trading with BSE Limited with effect
term of five consecutive years from 27th September from 17th May 2019.
2019 to 26th September 2024 at the 62nd Annual
ii. Members have accorded their approval at the
General Meeting held on 23rd September 2019.
62nd Annual General Meeting held on
iii. Appointment of Dr.S.Veluswamy (DIN 05314999) as 23rd September 2019 by way of Special
Wholetime Director designated as Director (Finance Resolution, to offer, issue and allot, in one or more
and Operations) for a period of five years from tranches, secured or unsecured, listed or unlisted,
29th May 2019 to 28th May 2024 at the Non-Convertible Debentures (“NCDs”), subordinated
62nd Annual General Meeting held on bonds and /or other debt securities for an amount not
23rd September 2019 liable to retire by rotation. exceeding ` 750 Crores on private placement basis,
2.4 Adequate notice was given to all the directors to enable during the period of one year commencing from the
them to plan their schedule for the Board meetings. 62nd Annual General Meeting.
2.5 Notice of Board meetings were sent to the directors at iii. Members have accorded their approval through
least seven days in advance. Postal Ballot on 2nd March 2020, by way of Special

63rd Annual Report 2020 | Financial Year 2019-20 Page | 56

 Resolution to offer, issue and allot upto 1,47,06,000 7th March 2020. Based on this, 10,28,631 numbers
Equity Shares at such price, inclusive of premium, of Non–Convertible Debentures of ` 1,000 each
aggregating for an amount not exceeding ` 25 amounting ` 102.86 crores were issued, allotted
crores to Promoter Group Companies and other on to eligible allottees on 8th May 2020 and it
Body Corporate on preferential basis. Based on this, has been listed and admitted for trading with
1,47,05,882 equity shares were issued and allotted BSE Limited with effect from 12th May 2020.
at ` 17 per share to Promoter Group Companies
v. Secured Redeemable Non-Convertible Debentures
and other Body Corporate on 13th March 2020.
(OptionVI, VII and VIII) allotted under Public Issue
The listing and trading approval were received on
Prospectus on 30th March 2016 amounting to
27th May 2020 and 3rd June 2020 respectively from
` 110.40 crores were redeemed on 18th May 2020.
BSE Limited. Consequent to the issue of 1,47,05,882
equity shares, the paid up capital of the Company For S Krishnamurthy & Co
stands increased to ` 79.70 crores from ` 65 crores. Company Secretaries
iv. The prospectus for public issue of Secured and
Unsecured, Redeemable Non-Convertible Debentures R.Sivasubramanian
(“NCDs”) upto ` 100 crores with an option to retain Partner
over subscription upto ` 100 crores aggregating Membership No : A22289
` 200 crores has been filed and registered with Date : 24th August 2020 Certificate of Practice No : 12052
Registrar of Companies, Tamilnadu, Coimbatore on Place : Coimbatore UDIN : A022289B000608919

Annexure – A to Secretarial Audit Report of even date

To 5. We have verified the secretarial records furnished to

The Members us on a test basis to see whether the correct facts are
SAKTHI FINANCE LIMITED [CIN:L65910TZ1955PLC000145] reflected therein. We have also examined the compliance
62, Dr.Nanjappa Road procedures followed by the Company on a test basis.
Coimbatore –641 018 We believe that the processes and practices we followed
Our Secretarial Audit Report (Form MR-3) of even date for the provide a reasonable basis for our opinion.
financial year ended 31st March 2020 is to be read along with 6. We have not verified the correctness and appropriateness
this letter. of financial records and books of accounts of the Company
1. The Company’s management is responsible for as the same are being verified by and reported on by the
maintenance of secretarial records and compliance with Statutory Auditors.
the provisions of corporate and other applicable laws, 7. We have obtained the Management’s representation about
rules, regulations and standards. Our responsibility is to compliance of laws, rules and regulations and happening
express an opinion on the secretarial records produced for of events, wherever required.
our audit.
8. Our Secretarial Audit report is neither an assurance as to
2. We have followed such audit practices and processes as the future viability of the Company nor of the efficiency or
we considered appropriate to obtain reasonable assurance effectiveness with which the management has conducted
about the correctness of the contents of the secretarial the affairs of the Company.
records.
3. While forming an opinion on compliance and issuing this
report, we have also considered compliance related action For S Krishnamurthy & Co
taken by the Company after 31st March 2020 but before Company Secretaries
the issue of this report. R.Sivasubramanian
4. We have considered compliance related actions taken by Partner
the Company based on independent legal/ professional Membership No : A22289
opinion / certification obtained as being in compliance Date : 24th August 2020 Certificate of Practice No : 12052
with law. Place : Coimbatore UDIN : A022289B000608919

63rd Annual Report 2020 | Financial Year 2019-20 Page | 57

 Annexure - 7
PARTICULARS OF EMPLOYEES
1. Details of remuneration as required under Section 197(12) of the Companies Act 2013 read with Rule 5(1) of
the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014
A. Ratio of remuneration of each director to the median remuneration of the Company for the financial year
2019-20.
Sl Remuneration for Ratio to median
Name and Designation of the Director
No FY 2019-20 (` lakh) remuneration
1 Dr M Manickam, Chairman 1.20 0.39 : 1
2 Mr M Balasubramaniam, 114.19 36.84: 1
Vice Chairman and Managing Director
3 Sri M Srinivaasan, Director 1.00 0.32:1
4 Dr A Selvakumar, Director 3.20 1.03:1
5 Sri P S Gopalakrishnan, Director 1.60 0.51:1
6 Smt Priya Bhansali, Director 2.00 0.64:1
7 Sri K P Ramakrishnan 2.80 0.90:1
8 Dr S Veluswamy, Director (Finance and Operations) 36.39 11.73:1
B. Percentage increase in remuneration of each Director, Chief Executive Officer, Chief Financial Officer and Company
Secretary for the financial year
Sl Name and Designation of the Director / Remuneration for % increase in remu-
No Key Managerial Personnel (KMP) FY 2019-20 (` lakh) neration in FY 2019-20
1 Dr M Manickam, Chairman 1.20 50
2 Mr M Balasubramaniam, 114.19 (0.38)
Vice Chairman and Managing Director
3 Sri M Srinivaasan, Director 1.00 (28.57)
4 Dr A Selvakumar, Director 3.20 (15.79)
5 Sri P S Gopalakrishnan, Director 1.60 (20)
6 Smt Priya Bhansali, Director 2.00 25
7 Sri K P Ramakrishnan 2.80 (6.67)
8 Dr S Veluswamy, Director (Finance and Operations) 36.39 13.01
9 Mr S Venkatesh, Company Secretary 17.83 5.19
Note: 1. Sri M K Vijayaraghavan, former Chief Financial Officer (“CFO”), was employed as CFO for only a part of the year
and hence not included above.
2. Non-executive Directors were paid only sitting fees during the year
C. Other Information
a The percentage increase in the median remuneration of all
(6.44)%
employees during the financial year 2019-2020.
b The number of permanent employees on the rolls of the 511
company as on 31st March 2020.
c Average percentile increase already made in the salaries of The average increase in salaries of employees
employee other than the managerial personnel in the last other than managerial personnel for 2019-20 was
financial year and its comparison with the percentile increase (6.01)%. Percentage increase in the managerial
in the managerial remuneration and justification thereof remuneration for the year was 2.01%.
and point out if there are any exceptional circumstances for
increase in the managerial remuneration.
d Affirmation that the remuneration is as per the remuneration The Company affirms that remuneration to the
policy of the company. employees during the financial year is as per the
remuneration policy of the Company.

63rd Annual Report 2020 | Financial Year 2019-20 Page | 58

 2. Statement of particulars of employees pursuant to the provisions of Section 197(12) of the Companies Act 2013 read with Rules 5(2) and 5(3) of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014
Particulars of Top 10 Employees in terms of remuneration drawn during the year 2019-20
Remu- Total
Date of Age Last employment held
Sl Name of the Designation of neration Qualifi- Experi-
commencement (in before joining the
No Employee the employee received cations ence
of employment years) company
(` lakh) (Years)
1 Sri M Balasubramaniam Vice Chairman and 114.19 M.Com, 35 21/08/1985 61 Director, ABT Industries
Managing Director MBA (USA) Limited
2 Dr S Veluswamy Director (Finance and 36.39 MCom, ACS, 39 01/04/1994 61 Asst Company Secretary,
Operations) Ph.D Sakthi Sugars Limited
3 Dr K Natesan President (Operations) 27.59 MA, LLB, MBA, 39 03/04/1992 61 Asst Manager (Personnel),
Ph.D Tamilnadu
Telecommunications
Limited
4 Sri K Guruprasad Senior Vice President 24.94 BCom, MBA, 47 03/05/1996 70 Regional In-charge,
Grad ICMA State Bank of India
(Inter), CAIIB

63rd Annual Report 2020 | Financial Year 2019-20

5 Dr G Sundar Vice President 23.55 MA, MBA, 40 20/01/1997 64 Manager, Union Bank of
Ph.D India
6 Sri M Purushothaman Associate Vice 22.17 BSc, MBA 37 02/06/2010 61 Head - Strategic Planning,
President BK Group, Kolkata
7 Dr N Raveendran Senior General 21.87 BCom, MBA, 39 11/06/2009 60 Senior Manager
Manager Ph.D (IT Services), Pricol Limited
8 Sri S Saravanakumar General Manager 21.16 BBM, MCA 17 05/01/2015 43 Zonal Manager,
(Business HDB Financial Services Ltd
Development)
9 Sri S Senthil Kumar Deputy General 20.66 MCom, MBA, 36 11/06/2011 61 General Manager (Finance
Manager (Finance and Diploma in and Admin / Operations)
Accounts) Law Tarantella Fashions,
a unit of TRADITION
INTERNATIONAL, UAE
10 Smt R Geetha Vice President 19.13 MBA 29 01/06/2019 52 Sakthifinance Financial
(Strategic Initiatives) Services Limited

Notes:
a. the above table is based on payouts made during the year.
b. Remuneration includes salary, bonus, various allowances, contribution to Provident Fund, Superannuation Fund, Gratuity Fund and taxable value of
perquisites calculated in accordance with the Income Tax Act / Rules.
c. None of the employees mentioned above is related to any director of the Company except Vice Chairman and Managing Director.
d. During the Financial year 2019-20, no employee was in receipt of remuneration in excess of the Managing Director of the Company and held himself or
along with his spouse and dependent children two percent or more of the equity shares of the company.
e. The appointment of Managing Director is contractual in nature.

Page | 59
Independent Auditors’ Report
To the Audit of the Ind AS Financial Statements section
The Members of Sakthi Finance Limited of our report. We are independent of the Company in
Report on the Audit of the Ind AS financial statements accordance with the Code of Ethics issued by the Institute
Opinion of Chartered Accountants of India together with the
ethical requirements that are relevant to our audit of the
1. We have audited the accompanying Ind AS financial
Ind AS financial statements under the provisions of the
statements of Sakthi Finance Limited (“the Company”),
Act and the Rules made thereunder, and we have fulfilled
which comprise the Balance Sheet as at 31st March
our other ethical responsibilities in accordance with
2020, the Statement of Profit and Loss (including Other
these requirements and the Code of Ethics. We believe
Comprehensive Income), the statement of Changes in
that the audit evidence we have obtained is sufficient and
Equity and the Statement of Cash Flows for the year
appropriate to provide a basis for our opinion.
then ended and notes to the Ind AS financial statements,
including a summary of the significant accounting policies Emphasis of Matter
and other explanatory information. 4. We draw attention to Note 2(d) to the accompanying Ind
2. In our opinion and to the best of our information and AS Financial statements, which explains the impact of the
according to the explanations given to us, the aforesaid COVID 19 pandemic and management assessment of the
Ind AS financial statements give the information required probable material impact on Company’s operations and
by the Companies Act, 2013 in the manner so required financial metrics, including the non-fulfillment of the
and give a true and fair view in conformity with the obligations by the customers due to lock-down, extended
Indian Accounting Standards prescribed under section moratorium allowed by Government and other restrictions
133 of the Act, read with Companies (Indian Accounting related to Covid-19 situation.Our opinion is not modified
Standards) Rules, 2015 as amended and other accounting in respect of this matter.
principles generally accepted in India, of the state of Key Audit Matters
affairs of the Company as at 31st March, 2020, and total 5. Key audit matters are those matters that, in our
comprehensive income, changes in equity and its cash professional judgment, were of most significance in our
flows for the year ended on that date. audit of the Ind AS financial statements of the current
Basis for Opinion period. These matters were addressed in the context of
3. We conducted our audit in accordance with the Standards our audit of the Ind AS financial statements as a whole,
on Auditing (SAs) specified under section 143(10) of and in forming our opinion thereon, and we do not provide
the Act. Our responsibilities under those Standards are a separate opinion on these matters.
further described in the Auditor’s Responsibilities for

Key Audit Matter How the matter was addressed in Audit

5.1 Asset Classification We have assessed the systems and processes laid down by the
Accuracy in identification and categorization of company to appropriately identify and classify the receivables
receivables from financing activities as performing and from financing activities including those in place to ensure
non-performing assets and in ensuring appropriate asset correct classification, income recognition and provisioning /
classification, existence of security, income recognition, write-off including Non-performing assets as per applicable RBI
provisioning / write off thereof and completeness guidelines. The audit approach includes testing the existence
of disclosure including compliance with applicable and effectiveness of the control environment laid down by the
guidelines issued by Reserve Bank of India (RBI). management and conducting detailed substantive verification
on selected samples of continuing and new transactions in
accordance with the principles laid down in the Standards on
Auditing and other guidance issued by Institute of Chartered
Accountants of India. Agreements entered into regarding
significant transactions including related to Hire Purchase and
Pronote Loans have been examined to ensure compliance. We
have also reviewed the reports generated from management
information systems, audit / inspection reports issued by
the internal / secretarial auditors and RBI. The impact of all
significant external and internal events including those if
any, subsequent to Balance Sheet date have been taken
into consideration for the above purposes. Compliance with
material disclosure requirements prescribed by RBI guidelines
and other statutory requirements have been verified.

63rd Annual Report 2020 | Financial Year 2019-20 Page | 60

 5.2 Information Technology System Our audit procedures focused on the IT infrastructure and
The dependence of Information technology (IT) system is applications relevant to the financial reporting:
run throughout the operating cycle of the company. Hence Evaluating the IT policy and procedures of the Company in
the reliability on Company’s key financial accounting and accordance with accepted standards, guidelines and practices.
reporting processes are tied with the effectiveness and Reviewing the organizational structure with job description,
efficiency of IT systems, IT controls over the voluminous managerial policy and deployment of IT resources with respect
transactions, process around such information systems to segregation of duties in IT environment to ensure that
and the usage of information from such systems. We unauthorized data entry cannot take place and unauthorized
observed that any probability of deficiencies in control programs are not allowed to run.
over IT systems such as validation failures, incorrect input The aspects covered in the IT systems General Control audit
data, improper segregation of duties, unauthorized access were (i) User Access Management (ii) System maintenance
to IT system, lack of monitoring may result in the financial control have been ensured by understanding the design and
accounts and report being misstated. In view of the same, the operating effectiveness of such controls in the system;
we have considered this as Key Audit Matter and had focus Understanding updation that were made to the IT landscape
on IT systems and controls, user access management, during the audit period and assessing the relevant information
segregation of duties, system reconciliation controls and for financial reporting.
system application controls due to the complexity of the Application level embedded controls have been reviewed by
IT environment, huge daily operational volume across performing validation checks, test check on logical access
numerous locations and the reliance on automated and IT controls, a run through test to ensure non-manipulation of
dependent manual controls. transaction entered into the system and other compensatory
controls, wherever applicable.
5.3 Adoption of New Accounting Framework (Ind AS)
Effective 1st April 2019, the Company adopted the Indian We performed the following key audit procedures:
Accounting Standards notified by the Ministry of Corporate • Assessed the design, implementation and operating
Affairs with the transition date of 1st April 2018. effectiveness of key internal controls over management’s
The following are the major impact areas for the Company evaluation of electives and exemptions availed in line with
upon transition: the principles under Ind-AS 101 on transition to Ind AS.
• Classification and measurement of financial assets and • Confirmed the approvals of Audit Committee for the choices
financial liabilities and exemptions made by the Company for compliance/
• Measurement of impairment loss allowance acceptability under Ind-AS 101.
• Accounting for loan fees and costs • Evaluated management’s transition date choices and
• Fair Valuation of Property, Plant and Equipment exemptions for compliance under Ind-AS 101.
The migration to the new accounting framework Ind AS • Assessed the methodology implemented by management
is a process involving multiple decision points upon to give impact on the transition.
transition. Ind AS 101, First Time Adoption prescribes • Assessed the accuracy of the computations
electives and exemptions for first time application of • Assessed areas of significant estimates and management
Ind AS principles at the transition date. We identified judgment in line with principles under Ind-AS.
transition date accounting as a key audit matter because
of significant degree of management judgment and
application on the areas noted above.
5.4 Impairment Loss Allowance
Management’s judgements in the calculation of • We obtained understanding of management’s assessment
impairment allowances have significant impact on the of impairment of loans including the Ind AS 109
financial statements. The estimates regarding impairment implementation process, internal rating model, impairment
allowances are complex and require a significant degree allowance policy and ECL modelling methodology.
of judgement, which increased with implementation of • We assessed the design and implementation and tested
Expected Credit Loss (“ECL”) model starting from 1st April the operating effectiveness of controls over the modelling
2018 as required by Ind AS 109 relating to “Financial process including governance over monitoring of the model
Instruments.” Management is required to determine the and approval of key assumptions.
expected credit loss that may occur over either a 12-month • We also assessed the approach of the Company for
period or the remaining life of an asset, depending on the categorisation of the loans in various stages reflecting the
categorisation of the individual asset. inherent risk in the respective loans.
• For a sample of financial assets, we tested the correctness of
stage-wise categorisation, reasonableness of PD, accuracy
of LGD and ECL computation.

63rd Annual Report 2020 | Financial Year 2019-20 Page | 61

 The key areas of judgement include: Based on the above work performed, management’s
1. Categorisation of loans in Stage 1, 2 and 3 based on assessment of impairment loss allowance and related
identification of: disclosure are considered to be reasonable.
a. exposures with significant increase in credit risk
since their origination and
b. Individually impaired / default exposures.
2. Techniques used to determine Loss Given Default
(‘LGD’) and Probability of Default (‘PD’) to calculate
ECL.
3. The impact of different forward looking information
including future macroeconomic conditions in the
determination of ECL.
These judgements require new models to be built and
implemented to measure the expected credit losses on
certain financial assets measured at amortised cost.
Management has made a number of interpretations and
assumptions when designing and implementing models
that are compliant with the new standard.
The accuracy of data flows and the implementation
of related controls are critical for the integrity of
the estimated impairment provisions. Given the
significance of judgements and the high complexity
particularly to the calculation of ECL, we considered this
area as a Key Audit Matter.

Information Other than the Ind AS financial statements and 2015. This responsibility also includes maintenance of
Auditor’s Report thereon adequate accounting records in accordance with the
6. The Company’s Board of Directors is responsible for the provisions of the Act for safeguarding of the assets of
other information. The other information comprises the the Company and for preventing and detecting frauds
information included in the Annual Report but does not and other irregularities; selection and application of
include the Ind AS financial statements and our auditor’s appropriate accounting policies; making judgments and
report thereon. estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal
7. The Annual report is expected to be made available to
financial controls, that were operating effectively for
us after the date of this Auditor’s report. Our opinion on
ensuring the accuracy and completeness of the accounting
the Ind AS financial statements does not cover the other
records, relevant to the preparation and presentation of
information and we will not express any form of assurance
the Ind AS financial statements that give a true and fair
conclusion thereon.
view and are free from material misstatement, whether
8. In connection with our audit of the Ind AS financial due to fraud or error.
statements, our responsibility is to read the other
10. In preparing the Ind AS financial statements, the Board
information identified above when it becomes available
of Directors is responsible for assessing the Company’s
and in doing so, consider whether the other information
ability to continue as a going concern, disclosing,
is materially inconsistent with the Ind AS financial
as applicable, matters related to going concern and using
statements or our knowledge obtained in the audit,
or otherwise appears to be materially misstated. the going concern basis of accounting unless the Board
of Directors either intends to liquidate the Company or
Responsibilities of Management and Those Charged with to cease operations, or has no realistic alternative but to
Governance for the Ind AS financial statements do so. Those Board of Directors are also responsible for
9. The Company’s Board of Directors is responsible for the overseeing the Company’s financial reporting process.
matters stated in Section 134(5) of the Act with respect to
Auditor’s Responsibilities for the Audit of the Ind AS financial
the preparation of these Ind AS financial statements that
statements
give a true and fair view of the financial position, financial
performance (including other comprehensive income), 11. Our objectives are to obtain reasonable assurance about
changes in equity and cash flows of the Company in whether the Ind AS financial statements as a whole are
accordance with the accounting principles generally free from material misstatement, whether due to fraud
accepted in India, including the Indian Accounting or error and to issue an auditor’s report that includes
Standards specified under Section 133 of the Act, our opinion. Reasonable assurance is a high level of
read with Companies (Indian Accountant Standards) Rules, assurance but is not a guarantee that an audit conducted

63rd Annual Report 2020 | Financial Year 2019-20 Page | 62

 in accordance with SAs will always detect a material matters that may reasonably be thought to bear on our
misstatement when it exists. Misstatements can arise from independence, and where applicable, related safeguards.
fraud or error and are considered material if, individually 15. From the matters communicated with those charged with
or in the aggregate, they could reasonably be expected to governance, we determine those matters that were of most
influence the economic decisions of users taken on the significance in the audit of the Ind AS financial statements
basis of these Ind AS financial statements. of the current period and are therefore the key audit
12. As part of an audit in accordance with SAs, we exercise matters. We describe these matters in our auditor’s report
professional judgment and maintain professional unless law or regulation precludes public disclosure about
skepticism throughout the audit. We also: the matter or when, in extremely rare circumstances,
we determine that a matter should not be communicated
a) Identify and assess the risks of material misstatement in our report because the adverse consequences of doing
of the Ind AS financial statements, whether due to so would reasonably be expected to outweigh the public
fraud or error, design and perform audit procedures interest benefits of such communication.
responsive to those risks and obtain audit evidence
Other Matter
that is sufficient and appropriate to provide a basis
for our opinion. The risk of not detecting a material 16. The comparative financial information of the Company
misstatement resulting from fraud is higher than for for the year ended 31st March 2019 and the transition
date opening balance sheet as at 1st April 2018, included
one resulting from error, as fraud may involve collusion,
in these Ind AS Financial Statements, are based on the
forgery, intentional omissions, misrepresentations,
previously issued statutory financial statements prepared
or override of internal control.
in accordance with the Companies (Accounting Standards)
b) Obtain an understanding of internal control relevant Rules 2006 audited by us, vide our report for the year
to the audit in order to design audit procedures that ended 31st March 2019 and 31st March 2018 dated
are appropriate in the circumstances. Under section 29th May 2019 and 30th May 2018 respectively expressed
143(3)(i) of the Act, we are also responsible for an unmodified opinion on those financial statements,
expressing our opinion on whether the company has as adjusted for the differences in the accounting principles
adequate internal financial controls system in place adopted by the company on transition to the Ind AS,
and the operating effectiveness of such controls. which have been audited by us. Our opinion is not
c) Evaluate the appropriateness of accounting policies modified in respect of this matter.
used and the reasonableness of accounting estimates Report on Other Legal and Regulatory Requirements
and related disclosures made by management. 17. As required by the Companies (Auditor’s Report) Order,
d) Conclude on the appropriateness of management’s 2016 (“the Order”), issued by the Central Government of
use of the going concern basis of accounting and based India in exercise of the powers conferred by sub-section
on the audit evidence obtained, whether a material (11) of Section 143 of the Act, we give in the “Annexure-A”
uncertainty exists related to events or conditions a statement on the matters specified in paragraphs 3 and
that may cast significant doubt on the Company’s 4 of the Order, to the extent applicable.
ability to continue as a going concern. If we conclude 18. As required by Section 143 (3) of the Act, we report that:
that a material uncertainty exists, we are required to a)
We have sought and obtained all the information and
draw attention in our auditor’s report to the related explanations which to the best of our knowledge and
disclosures in the Ind AS financial statements or, if such belief were necessary for the purposes of our audit.
disclosures are inadequate, to modify our opinion. Our
b) In our opinion, proper books of account as required
conclusions are based on the audit evidence obtained by law have been kept by the Company so far as it
up to the date of our auditor’s report. However, future appears from our examination of those books.
events or conditions may cause the Company to cease
to continue as a going concern. c) The Balance Sheet, the Statement of Profit and
Loss (including other comprehensive income), the
e) Evaluate the overall presentation, structure and statement of changes in equity and the Statement of
content of the Ind AS financial statements, including Cash Flow dealt with by this Report are in agreement
the disclosures and whether the Ind AS financial with the books of account.
statements represent the underlying transactions and
d) In our opinion, the aforesaid Ind AS financial
events in a manner that achieves fair presentation.
statements comply with the Indian Accounting
13. We communicate with those charged with governance Standards specified under Section 133 of the Act, read
regarding, among other matters, the planned scope with Companies (Indian Accounting Standards) Rules,
and timing of the audit and significant audit findings, 2015.
including any significant deficiencies in internal control e) On the basis of the written representations received
that we identify during our audit. from the Directors as on 31st March,2020 taken on
14. We also provide those charged with governance with record by the Board of Directors, none of the directors
a statement that we have complied with relevant is disqualified as on 31st March, 2020, from being
ethical requirements regarding independence and to appointed as a director in terms of Section 164(2) of
communicate with them all relationships and other the Act.
63rd Annual Report 2020 | Financial Year 2019-20 Page | 63
 f) With respect to the adequacy of internal financial financial statements as referred to Notes to the Ind
controls over financial reporting of the company and AS financial statements.
the operating effectiveness of such controls, refer to ii) The Company did not have any long-term contracts
our separate report in“Annexure B”; including derivative contracts for which there were
g) According to the information and explanations given any material foreseeable losses;
to us and based on the examination of the records, iii) There has been no delay in transferring the
the Company has paid/provided for managerial amounts required to be transferred to the Investor
remuneration in accordance with the requisite Education and Protection Fund (“IEPF”) except for
approvals mandated by the provisions of Section 197 ` 500 that has not been transferred to IEPF for the
read with Schedule V to the Act; and reason described in notes to the Ind AS financial
statements.
h) With respect to other matters to be included in
For P K Nagarajan & Co.,
the Auditor’s Report in accordance with Rule 11 of
Chartered Accountants
the Companies (Audit and Auditors) Rules 2014, in
Firm Registration Number : 016676S
our opinion and to the best of our information and
P K Nagarajan
according to the explanations given to us;
Partner
i) The Company has disclosed the impact of pending Coimbatore Membership No.025679
litigations on its financial position in its Ind AS 30.07.2020 UDIN: 20025679AAAABG1707

The Annexure- ‘A’ referred to in our Independent Auditors’ c) There are no amounts of such loans overdue for more
report to the members of the company on the Ind AS financial than ninety days.
statements for the year ended 31st March 2020, we report iv. In our opinion and according to the information and the
that: explanations given to us, the company has not given/
i. a) The Company has maintained proper records showing provided any loans, guarantee and securities to parties
full particulars, including quantitative details and covered in section 185 of the Act. The Company has
situation of fixed assets. complied with provisions of section 186 of the Act to the
b) These fixed assets have been physically verified by extent applicable.
the management at reasonable intervals. No material v. The company has accepted deposits from the public.
discrepancies were noticed on such verification. The directives issued by the Reserve Bank of India (RBI)
c)
According to the information and explanations and provisions of Section 73 to 76 or any other relevant
given to us, the title deeds of immovable properties, provisions of the Act and the rules framed thereunder,
as disclosed in Notes to the Ind AS financial statements, wherever applicable, have been complied with. No order
are held in the name of the company. In respect of has been passed by National Company Law Tribunal or
immovable properties taken on lease and disclosed Reserve Bank of India or any Court or any other Tribunal.
as right-of-use-assets in the financial statements, vi. The Central Government has not specified the maintenance
the lease agreements are in the name of the company. of Cost Records under sub-section (1) of Section 148 of
ii. The company does not hold any inventory. Therefore, the the Act for the activities of the company.
provisions of Clause 3(ii) of the Order are not applicable vii. a) The company is regular in depositing undisputed
to the company. statutory dues, including provident fund, employees’
iii. The Company has granted unsecured loans to a party state insurance, income-tax, goods and service tax,
covered in the register maintained under section 189 of cess and any other applicable material statutory dues
the Act. In our opinion and according to the information with the appropriate authorities. There are no such
and explanations given to us, statutory dues as at the last day of the financial year,
remaining in arrears for a period of more than six
a) The terms and conditions of the grant of such loans are
months from the date they became payable.
not prejudicial to the Company’s interest.
b) According to the information and explanations given to
b) The schedule of repayment of principal and payment
us, the following disputed statutory dues aggregating
of interest has been stipulated for the loans granted
to ` 1338.12 Lakhs that have not been deposited
and the repayment/receipts are regular.
on account of matters pending before appropriate
authorities:

Name of the Statute Nature of Dues Amount Period to which the Forum where the
(` in Lakhs) amount relates dispute is pending
Income Tax Act, 1961 Income Tax 9.83 AY 2012-13 Assessing Officer
Finance Act, 1994 Service Tax 1,328.29 Oct 2009 to Sept High Court of Madras
2014
Total 1,338.12

63rd Annual Report 2020 | Financial Year 2019-20 Page | 64

viii. According to the information and explanations given to us, The details of such related party transactions have been
the Company has not defaulted in repayment of dues to disclosed in the notes to the Ind AS financial statements
financial institutions, banks, Government and debenture as required under the Indian Accounting Standard (Ind AS)
holders during the year. 24.
ix. In our opinion and according to the information and the xiv.
During the year under review, the company has
explanations given to us, the Company has utilized the made preferential allotment of equity shares and the
money raised by way of public issue of non-convertible requirements of Section 42 of the Act have been complied
debentures and term loans during the year for the purpose with. The amounts raised have been used for the purpose
for which those were raised. for which they were raised. Further, the company has not
x. According to the information and explanations given to issued any fully or partly convertible debentures during
us, no material fraud by the Company or on the Company the year.
by its officers or employees has been noticed or reported xv. According to the information and explanations given
during the year. to us and based on our examination of the records,
xi. According to the information and explanations given the Company has not entered into non-cash transactions
to us and based on the examination of the records, with the Directors or persons connected with them.
the Company has paid/provided for managerial Accordingly, para 3(xv) of the Order is not applicable.
remuneration in accordance with the requisite approvals xvi. According to the information and explanations given to
mandated by the provisions of Section 197 read with us, we report that the company has registered as required,
Schedule V to the Act. under Section 45-IA of the Reserve Bank of India Act,
xii. In our opinion and according to the information and 1934.
explanations given to us, the Company is not a Nidhi For P K Nagarajan & Co.,
Company. Accordingly, para 3(xii) of the Order is not Chartered Accountants
applicable. Firm Registration Number : 016676S
xiii. According to the information and explanations given P K Nagarajan
to us and based on our examination of the records of Partner
the Company, transactions with the related parties are Coimbatore Membership No.025679
in compliance with sections 177 and 188 of the Act. 30.07.2020 UDIN: 20025679AAAABG1707

Annexure – ‘B’ to the Independent Auditors’ report of even Auditor’s responsibility

date on the Ind AS Financial Statements of Sakthi Finance 3. Our responsibility is to express an opinion on the
Limited Company’s internal financial controls over financial
Report on the Internal Financial Controls under Clause (i) of reporting based on our audit. We conducted our audit
sub-section 3 of section 143 of the Act in accordance with Guidance Note on Audit of Internal
1. We have audited the internal financial controls over Financial Controls over Financial Reporting (the “Guidance
financial reporting of Sakthi Finance Limited (“the Note”) and the Standards on Auditing issued by ICAI and
Company”) as at 31st March 2020 in conjunction with our deemed to be prescribed under section 143(10) of the Act
audit of the Ind AS financial statements of the Company for to the extent applicable to an audit of Internal Financial
the year ended on that date. Controls, both applicable to an audit of Internal Financial
Controls and both issued by the ICAI. Those standards and
Management’s responsibility for Internal Financial Controls:
the Guidance Note require that we comply with ethical
2. The Company’s management is responsible for requirements and plan and perform the audit to obtain
establishing and maintaining internal financial controls reasonable assurance about whether adequate internal
based on the internal controls over financial reporting financial controls over financial reporting was established
criteria established by the Company considering the and maintained and if such controls operated effectively
essential components of the internal controls stated in the in all material respects.
Guidance Note on Audit of Internal Financial Controls over
4. Our audit involves performing procedures to obtain audit
Financial Reporting issued by The Institute of Chartered
evidence about the adequacy of internal financial controls
Accountants of India (ICAI). These responsibilities
system over financial reporting and their operating
include the design, implementation and maintenance of
effectiveness.
adequate internal financial controls that were operating
effectively for ensuring the orderly and efficient conduct Our audit of internal financial controls over financial
of its business, including adherence to Company’s policies, reporting included obtaining an understanding of internal
the safeguarding of its assets, the prevention and detection financial controls over financial reporting, assessing the risk
of frauds and errors, the accuracy and completeness of the that a material weakness exists and testing and evaluating
accounting records, and the timely preparation of reliable the design and operating effectiveness of internal
financial information, as required under the Companies controls based on the assessed risks. The procedures
Act, 2013. selected depend on the auditor’s judgment, including the

63rd Annual Report 2020 | Financial Year 2019-20 Page | 65

 assessment of the risk of material misstatements of the Inherent Limitations of Internal Financial Controls over
Ind AS financial statements, whether due to fraud or error. Financial Reporting
5. We believe that the audit evidence, we have obtained is 7. Because of the inherent limitation of internal financial
sufficient and appropriate to provide a basis for our audit controls over financial reporting, including the possibility
opinion on the Company’s internal financial control system of collusion or improper management override of controls,
over financial reporting. material misstatements due to error or fraud may occur
Meaning of Internal Financial Control Over Financial and not be detected. Also, projections of any evaluation
Reporting of internal financial controls over financial reporting to
6. A Company’s internal financial control over financial future periods are subject to the risk that the internal
reporting is a process designed to provide reasonable financial controls over financial reporting may become
assurance regarding the reliability of financial reporting inadequate because of changes in condition, or that the
and the preparation of Ind AS financial statements for degree of compliance with the policies or procedures may
external purposes in accordance with generally accepted deteriorate.
accounting principles. A Company’s internal financial Opinion
controls over financial reporting includes those policies 8. In our opinion, the Company has, in all material respects,
and procedures that an adequate internal financial control system over
1)
pertains to the maintenance of records that, financial reporting and such internal financial controls
in reasonable detail, accurately and fairly reflect the over financial reporting were operating effectively as at
transactions and dispositions of the assets of the 31st March 2020, based on the internal controls over
company; financial reporting criteria established by the Company
2) provide reasonable assurance that transactions are considering the essential components of internal controls
recorded as necessary to permit preparation of Ind stated in the Guidance Note on Audit of Internal Financial
AS financial statements in accordance with generally Controls Over Financial Reporting issued by ICAI.
accepted accounting principles, and that receipts and
expenditure of the company are being made only in For P K Nagarajan & Co.,
accordance with authorizations of management and Chartered Accountants
directors of the company; and Firm Registration Number : 016676S

3) provide reasonable assurance regarding prevention or P K Nagarajan

timely detection of unauthorized acquisition, use, or Partner
disposition of the company’s assets that could have a Coimbatore Membership No.025679
material effect on the Ind AS financial statements. 30.07.2020 UDIN: 20025679AAAABG1707

63rd Annual Report 2020 | Financial Year 2019-20 Page | 66

Sakthi Finance Limited
balance sheet as at 31st March 2020
(` Lakhs)
As at As at As at
Particulars Note 31st March 31st March 1st April
2020 2019 2018

ASSETS
Financial Assets
Cash and cash equivalents 3 1,112.79 3,359.77 3,764.70
Bank Balances other than cash and cash equivalents 4 469.39 695.04 1,386.66
Receivables
(i) Trade Receivables 5 237.36 114.81 96.25
(ii) Other Receivables 8.69 6.72 8.54
1,07,046.18
Loans 6 92,654.12 89,471.14
2,659.80
Investments 7 2,783.09 2,558.42
Other Financial assets 8 2,044.27 1,743.13 1,767.27

Non-Financial Assets
Current tax assets (net) 36.80 50.06 –
Investment Property 9 284.41 289.01 293.61
Property, Plant and Equipment 10 (a) 6,316.65 6,474.52 6,527.16
Right of use assets 1,331.08 1,430.93 1,519.28
Intangible assets under development 10 (b) 15.07 – 68.20
Other Intangible assets 10 (c) 114.95 190.33 157.51
Other non-financial assets 11 323.78 270.45 157.45
Total Assets
1,22,001.22 1,10,061.98 1,07,776.19

LIABILITIES AND EQUITY

LIABILITIES
Financial Liabilities
Payables 12
(I) Trade Payables
(i) Total outstanding dues of
micro enterprises and small enterprises 6.87 0.33 –
(ii) Total outstanding dues of creditors other than
micro enterprises and small enterprises 160.76 185.23 117.89
(II) Other Payables
(i) Total outstanding dues of
micro enterprises and small enterprises – – –
(ii) Total outstanding dues of creditors other than
micro enterprises and small enterprises 101.99 251.05 140.08
Debt Securities 13 31,453.32 26,308.25 30,952.98
Borrowings (Other than debt securities) 14 21,218.20 20,793.20 19,481.34
19,046.38
Deposits 15 18,348.07 17,029.53
Sub-Ordinated Liabilities 16 29,216.13 25,825.96 21,884.12
Other financial liabilities 17 1,720.71 1,726.69 1,595.87

63rd Annual Report 2020 | Financial Year 2019-20 Page | 67

balance sheet as at 31st March 2020 (ContD...) (` Lakhs)
As at As at As at
Particulars Note 31st March 31st March 1st April
2020 2019 2018

Non-Financial Liabilities
Current tax liabilities (net) – – 56.95
121.73
Provisions 18 104.19 174.04
Deferred tax liabilities (net) 19 215.71 376.25 539.26
Other non-financial liabilities 20 91.89 105.29 90.29
EQUITY
Equity Share Capital 21 6,470.59 5,000.00 5,000.00
Other Equity* 22 12,176.94 11,037.47 10,713.84
Total Liabilities and Equity
1,22,001.22 1,10,061.98 1,07,776.19
The accompanying Notes form an integral 1-53
part of the financial statements
*Refer Statement of Changes in Other Equity for details
As per our report attached
For P.K.Nagarajan & Co For and on behalf of the Board
Chartered Accountants
Firm Regn. No.: 016676S
M. BALASUBRAMANIAM M. Manickam
P.K.Nagarajan Vice Chairman and Managing Director Chairman
Partner DIN : 00377053 DIN : 00102233
Membership No.025679
UDIN : 20025679AAAABG1707
S. Venkatesh S. Veluswamy
Place : Coimbatore Company Secretary Director (Finance & Operations)
Date : 30th July 2020 Membership No. FCS 7012 DIN : 05314999

63rd Annual Report 2020 | Financial Year 2019-20 Page | 68

Sakthi Finance Limited
Statement of Profit and Loss for the year ended 31st March 2020 (` Lakhs)
For the For the
Particulars Note year ended year ended
31st March 2020 31st March 2019

Revenue from Operations

Interest Income 23 16,158.72 15,614.06
Rental Income 21.13 24.99
Fees and Commission Income 24 483.89 732.64
Sale of power from Wind Mills 25 208.43 217.66
Recovery of Bad Debts 150.44 215.64
Total Revenue from operations 17,022.61 16,804.99
Other Income 26 0.40 4.80
Total Income 17,023.01 16,809.79
Expenses
Finance Costs 27 10,109.40 10,026.54
Fees and commission expense 174.25 93.81
Impairment on financial instruments 28 729.44 638.72
Employee Benefits Expense 29 2,633.57 2,466.47
Depreciation and Amortization 30 465.61 438.72
Other expenses 31 1,509.71 1,766.22
Total Expenses 15,621.98 15,430.48
Profit before exceptional items and tax 1,401.03 1,379.31
Exceptional Items - -
Profit before tax 1,401.03 1,379.31
Tax Expense: 283.09 421.82
- Current Tax 449.61 583.30
- Deferred Tax (166.52) (161.48)
Profit for the year 1,117.94 957.49
Other Comprehensive Income
(A) Items that will not be reclassified to profit or loss
- Fair value changes in Equity Instruments (22.38) (26.54)
- Actuarial Changes in Defined benefit obligation 22.82 (6.07)
- Income Tax relating to items that will not be reclassified to profit or loss (5.98) 1.53
Sub Total (A) (5.54) (31.08)
(B) Items that will be reclassified to profit or loss - -
Other Comprehensive Income (A+B) (5.54) (31.08)
Total Comprehensive Income 1,112.40 926.41
Earnings per Equity Share
Par Value per Equity Share (`) 10.00 10.00
- Basic (`) 2.19 1.85
- Diluted (`) 2.19 1.85
The accompanying Notes form an integral 1-53
part of the financial statements
As per our report attached
For P.K.Nagarajan & Co For and on behalf of the Board
Chartered Accountants
Firm Regn. No.:016676S
M. BALASUBRAMANIAM M. Manickam
P.K.Nagarajan Vice Chairman and Managing Director Chairman
Partner DIN : 00377053 DIN : 00102233
Membership No.025679
UDIN : 20025679AAAABG1707
S. Venkatesh S. Veluswamy
Place : Coimbatore Company Secretary Director (Finance & Operations)
Date : 30th July 2020 Membership No. FCS 7012 DIN : 05314999

63rd Annual Report 2020 | Financial Year 2019-20 Page | 69

 Sakthi Finance Limited
STATEMENT OF CHANGES IN EQUITY for the year ended 31st March 2020
A. EQUITY SHARE CAPITAL - (Issued, Subscribed and fully paid-up) (Refer Note No. 21) (` Lakhs)
Changes in equity share capital
Balance as at Changes in equity share Balance as at Balance as at
during the year- Allotment of
1st April 2018 capital during the year 31st March 2019 31st March 2020
equity shares on preferential basis
5,000.00 - 5,000.00 1,470.59 6,470.59
B. OTHER EQUITY (Refer Note No. 22) (` Lakhs)
Reserves and Surplus Items of Other Comprehensive Income
Statutory
Debenture
Particulars Reserve as Actuarial Changes
Capital Securities General Redemption Retained Equity
per section in Defined benefit Total
Reserve Premium Reserve Reserve Earnings Instruments
45-IC of RBI obligation
(“DRR”)
Act 1934
Balance as at 1st April 2018 2,704.65 52.61 801.07 500.00 3,936.00 2,719.51 - - 10,713.84
Profit / (Loss) for the year - - - - - 957.49 - - 957.49
Dividends - - - - - (602.78) - - (602.78)
Other Comprehensive Income for the year - - - - - - (26.54) (4.54) (31.08)

63rd Annual Report 2020 | Financial Year 2019-20

Transfer from Debenture Redemption - - - 672.25 (672.25) - - - -
Reserve to General Reserve
Transfer to Statutory Reserve 239.27 - - - - (239.27) - - -
Balance as at 31st March 2019 2,943.92 52.61 801.07 1,172.25 3,263.75 2,834.95 (26.54) (4.54) 11,037.47
Profit / (Loss) for the year - - - - - 1,117.94 - - 1,117.94
Dividends - - - - - (602.78) - - (602.78)
Other Comprehensive Income for the year - - - - - - (22.38) 16.84 (5.54)
Transfer from Debenture Redemption - - - 3,263.75 (3,263.75) - - - -
Reserve to General Reserve
Securities Premium on Preferential Issue - - 1,029.41 - - - - - 1,029.41
of Equity Shares
NCD Public Issue Expenses - - (399.56) - - - - - (399.56)
Transfer to Statutory Reserve 223.59 - - - - (223.59) - - -
Balance as at 31st March 2020 3,167.51 52.61 1,430.92 4,436.00 - 3,126.52 (48.92) 12.30 12,176.94
As per our report attached
For P.K.Nagarajan & Co For and on behalf of the Board
Chartered Accountants
Firm Regn. No.:016676S M. BALASUBRAMANIAM M. Manickam
Vice Chairman and Managing Director Chairman
P.K.Nagarajan
DIN : 00377053 DIN : 00102233
Partner
Membership No.025679
UDIN : 20025679AAAABG1707 S. Venkatesh S. Veluswamy
Place : Coimbatore Company Secretary Director (Finance & Operations)
Membership No. FCS 7012 DIN : 05314999

Page | 70
Date : 30th July 2020
Sakthi Finance Limited
CASH FLOW STATEMENT for the year ended 31st March 2020 (` Lakhs)
Particulars For the year For the year
ended 31st March 2020 ended 31st March 2019
A. Cash flow from Operating activitIes
Profit before tax 1,401.03 1,379.31
Adjustment to reconcile profit before tax to net cash flows
Non-cash expenses
Depreciation and amortisation 465.61 438.72
Impairment on Loan Assets 545.14 337.13
Bad debts and write-offs 170.29 264.64
Remeasurement gain/(loss) on defined benefit plans 22.82 (6.07)
Impairment on investments 2.80 2.70
Impairment on Trade receivables 11.21 34.25
Amortization of fees and Commission on financial liability 174.10 143.60
Income/expenses considered separately
Income from investing activities (253.59) (300.27)
Net gain/loss on derecognition of property, plant and equipment 1.50 (1.47)
Finance costs 10,109.40 10,026.54
Operating profit before working capital changes 12,650.31 12,319.08
Movements in Working Capital:
Decrease / (increase) in loans (15,107.49) (3,784.75)
Decrease / (increase) in Trade receivables (135.73) (50.99)
Decrease / (increase) in other financial assets (301.14) 24.14
Decrease / (increase) in other non-financial assets (94.37) (14.34)
Increase / (decrease) in Trade Payables (17.93) 67.67
Increase / (decrease) in Other Payables (149.06) 110.97
Increase / (decrease) in other financial liabilities 39.06 135.80
Increase / (decrease) in Lease liabilities 18.31 43.76
Increase / (decrease) in other non-financial liabilities (13.40) 15.00
Increase / (decrease) in Provisions 17.55 (69.85)
Cash used in operations (15,744.20) (3,522.59)
Income taxes paid (net of refunds) (436.35) (690.31)
Interest received on Bank deposits 21.19 81.22
Finance costs paid (10,070.99) (9,986.93)
Net Cash flows from / (used in) Operating Activities (A) (13,580.04) (1,799.53)
B. Cash flow from investing activities
Purchase of property, plant and equipment and intangible assets (100.39) (211.45)
Purchase of investments at amortised cost (51.88) (389.91)
Proceeds from sale of investments at amortised cost 150.00 136.00
Proceeds from sale of property, plant and equipment and intangible assets 0.90 2.55
Interest income received from investment at amortised cost 232.40 219.05
Increase in earmarked balances with banks 225.65 691.62
Net cash flows from / (used in) Investing Activities (B) 456.68 447.86

63rd Annual Report 2020 | Financial Year 2019-20 Page | 71

CASH FLOW STATEMENT for the year ended 31st March 2020 (ContD...)
(` Lakhs)
Particulars For the year For the year
ended 31st March 2020 ended 31st March 2019
C. Cash flow from Financing activitIes
Proceeds from issue of equity shares 2,500.00 -
Issue expense of Debt Securities (358.51) (98.65)
Proceeds from borrowings through Debt Securities 11,681.70 4,528.00
Repayment of borrowings through Debt Securities (6,580.16) (9,194.98)
Proceeds from borrowings through Deposits 4,461.38 3,528.57
Repayment of borrowings through Deposits (3,846.90) (2,292.39)
Proceeds from borrowings other than Debt Securities 5,500.00 1,221.91
Repayment of borrowings other than Debt Securities (4,580.66) (4,375.94)
Proceeds from borrowings through Sub-Ordinated Liabilities 14,496.80 12,858.60
Repayment of borrowings through Sub-Ordinated Liabilities (11,153.37) (8,955.74)
(Increase) / decrease in loan repayable on demand (494.37) 4,465.89
Lease liability paid (146.75) (135.75)
Dividend paid (including tax) (602.78) (602.78)
Net cash flows from Financing Activities (C) 10,876.38 946.74
Net increase/(decrease) in cash and cash equivalents (A+B+C) (2,246.98) (404.93)
Cash and cash equivalents at the beginning of the year 3,359.77 3,764.70
Cash and cash equivalents at the end of the year 1,112.79 3,359.77
Net cash provided by / (used in) Operating Activities includes:
Interest received 15,905.13 11,623.90
Interest paid (10,070.99) (9,986.93)
Net cash provided by / (used in) operating activities 5,834.14 1,636.97
Cash and cash equivalents at the end of the years:
i) Cash in hand 38.58 1,004.97
ii) Cheques on hand 977.21 2,050.30
iii) Balances with banks (of the nature of cash and cash equivalents) 97.00 304.50
Total 1,112.79 3,359.77

As per our report attached

For P.K.Nagarajan & Co For and on behalf of the Board
Chartered Accountants
Firm Regn. No.:016676S
M. BALASUBRAMANIAM M. Manickam
P.K.Nagarajan Vice Chairman and Managing Director Chairman
Partner DIN : 00377053 DIN : 00102233
Membership No.025679
UDIN : 20025679AAAABG1707
S. Venkatesh S. Veluswamy
Place : Coimbatore Company Secretary Director (Finance & Operations)
Date : 30th July 2020 Membership No. FCS 7012 DIN : 05314999

63rd Annual Report 2020 | Financial Year 2019-20 Page | 72

Notes forming an integral part of the financial statements for the YEAR ended
31st March 2020
1. Company Overview Accounting policies have been consistently applied to
Sakthi Finance Limited (“SFL” or “the Company”) is a all periods presented, unless otherwise stated.
public limited Company having its Registered Office at The regulatory disclosures as required by NBFC Master
62, Dr. Nanjappa Road, Coimbatore, Tamilnadu - 641018. Directions to be included in the Notes forming an
The Equity Shares and Non-Convertible Debentures of the integral part of the financial statements are prepared
Company are listed on BSE Limited. as per RBI Notification for Implementation of Ind AS.
The Company is a deposit-taking Non-Banking Financial b. Presentation of Financial Statements
Company (“NBFC”) registered with Reserve Bank of India
The company presents its balance sheet in the order
(“RBI”) vide certificate No. 07-00252 dated 8th May
of liquidity. Financial statements of the Company are
1998. By virtue of RBI Circular dated 22nd February 2019,
prepared and presented in the format prescribed in
the Company has been classified as an NBFC Investment
the Division III to Schedule III to the Act applicable to
and Credit Company (NBFC-ICC). The Company is engaged
NBFCs, as notified by the Ministry of Corporate Affairs
in the business of Hire Purchase Financing for Commercial
(“MCA”). Financial assets and financial liabilities are
Vehicles, Infrastructure Equipment, Machineries, etc.
generally reported gross in the balance sheet. They are
The Board of Directors at their meeting held on 30th July, only offset and reported net when, in addition to having
2020 authorised the issue of Financial statements of the an unconditional legally enforceable right to offset the
Company for the year ended 31st March, 2020. recognised amounts without being contingent on a
2. Significant Accounting Policies future event, the parties also intend to settle on a net
a. Basis of preparation basis in all of the following circumstances.
The financial statements of the Company have been l The normal course of business
prepared for the first time in accordance with the l The event of default
Indian Accounting Standards (“Ind AS”) notified under l The event of insolvency or bankruptcy of the
Section 133 of the Companies Act, 2013 (“the Act”) Company and/or its counterparties.
read together with Rule 3 of the Companies (Indian
The Financial Statements are presented in Indian
Accounting Standards) Rules 2015 (as amended from
Rupees (`) which is the functional currency of the
time to time) and the relevant provisions of the Act as
company and all values are rounded off to the nearest
applicable, Master Direction - Non-Banking Financial
lakhs with two decimals except where otherwise
Company - Systematically Important Non-Deposit
indicated.
taking Company and Deposit taking company (Reserve
Bank) Directions 2016 (“the NBFC Master Directions”) The aggregation and classification of amounts in the
and the notification for implementation of Indian financial statements are based on materiality and
Accounting Standard vide circular RBI/2019-20/170D similarity between the items. Items of dissimilar nature
OR(NBFC).CC.PD.No.109/22.10.106/2019-20 dated or function are separately presented unless they are
13th March 2020 (‘RBI Notification for Implementation immaterial except when required by law.
for Ind AS’) issued by RBI. c. Use of Estimates, Judgements and Estimation of
The financial statements for the previous year ended uncertainty
31st March 2019 which was previously prepared in The preparation of financial statements of the company
accordance with the accounting standards notified involves use of estimates in computation of expected
under Section 133 of the Companies Act 2013, read credit loss, making judgments in determination of
together with para 7 of the Companies (Accounts) fair value of financial assets and financial liabilities,
Rules 2014 (herein after referred to as “Previous assumptions for actuarial changes in defined benefit
GAAP”) have been restated as per Ind AS to provide obligations. The Company based its assumptions and
comparability. The date of transition to Ind AS being 1st estimates on factors available when the financial
April 2018, the financial statements for the year ended statements were prepared.
31st March 2018 prepared under Previous GAAP has The use of estimates and assumptions, which might
now been restated as per Ind AS as on 1st April 2018. have an effect on these financial statements. The
The financial statements have been prepared on a estimates are based on historical experience and other
going concern basis and on historical cost convention, factors that are considered to be relevant. The actual
except for certain financial instruments that are results may differ from these estimates. The company
measured at Fair Values Through Other Comprehensive believes that the estimates used in preparation of
Income (“FVTOCI ”) at the end of each reporting period. financial statements are prudant and reasonable.

63rd Annual Report 2020 | Financial Year 2019-20 Page | 73

Notes forming an integral part of the financial statements for the YEAR ended
31st March 2020
Existing circumstances and assumptions about future Financial Assets at Amortised Cost
development however may change due to market The classification of financial assets such as cash
changes or circumstances arising that are beyond the and cash equivalents, Loans, trade receivables
control of the company. and investments (other than classified at FVTOCI)
d. Impact of Covid 19 are measured at amortized cost based on the
assessment of business model as follows:
Corona Virus spread has lead to lock down at national
level in the month of March to May 2020. This affected Business model Assessment
the loan disbursal and collections during that period. An assessment of business model for managing
The full impact of Covid 19 on the performance will financial assets is fundamental to the classification
be known after few more months only. To help the of a financial asset.
borrowers during lock down RBI announced moratorium The Company determines its business model at the
benefits to the borrowers for installments falling due level that best reflects how it manages groups of
in between March 2020 to August 2020. The details financial assets to achieve its business objective.
of moratorium benefits extended by the company is The Company’s business model is not assessed on
furnished in Note 49.4 of this report. an instrument-by-instrument basis, but at a higher
e. Financial Instruments level of aggregated portfolios and is based on
observable factors such as:
i. Initial Recognition
l How the performance of the business model and
Financial assets and Financial Liabilities are initially
the financial assets held within that business
recognised on the date the company becomes model are evaluated and reported to the
a party to the contractual provisions of the company’s key management personnel;
instrument.
l The risks that affect the performance of the
Financial assets and financial liabilities are initially
business model (and the financial assets held
measured at fair value. Transaction costs directly
within that business model) and, in particular, the
attributable to the acquisition of financial assets or
way those risks are managed;
financial liabilities measured at fair value through
profit or loss are recognised immediately in the l How managers of the business are compensated
Statement of Profit and Loss. (for example, whether the compensation is based
on the fair value of the assets managed or on the
Transaction costs directly attributable to the
contractual cash flows collected); and
acquisition or issue of financial assets and financial
liabilities that are measured at amortised cost are l The expected frequency, value and timing of
added to or deducted from the fair value of the loan disbursements based on the analysis of
financial assets or financial liabilities, as appropriate, disbursements made and realisation of cash
on initial recognition. flows in previous periods.
Unlike the other financial assets, Trade receivables The financial assets of the Company are held within a
are measured at transaction price at which the business model, whose objective is to hold assets in
transaction had taken place. order to collect contractual cash flows, are managed
to realise cash flows by collecting contractual
ii. Classification and Measurement payments over the life of the instrument and within
The financial assets are classified based on the the business model whose objective is achieved
Company’s business model for managing the by both collecting the contractual cash flows and
financial assets and their contractual cash flow selling the financial asset.
characteristics as subsequently measured: The Solely Payments of Principal and Interest
a) At amortised cost (“SPPI”) test on the principal amount outstanding:

b) At Fair Value Through Other Comprehensive For an asset to be classified and measured at
Income (“FVTOCI”) amortised cost, its contractual terms should give rise
to cash flows that meet SPPI test. For that purpose:
c) At Fair Value Through Profit and Loss (“FVTPL”)
‘Principal’ for the purpose of this test is defined
The Company classifies financial liabilities at as the fair value of the financial asset at initial
amortised cost unless it has designated liabilities at recognition and may change over the life of the
fair value through profit and loss. financial asset.

63rd Annual Report 2020 | Financial Year 2019-20 Page | 74

Notes forming an integral part of the financial statements for the YEAR ended
31st March 2020
The interest income represents the consideration l The contractual rights to receive the cash flows
for time value of money, credit risk, other basic from the financial asset have expired, or
lending risks and a profit margin that is consistent l The Company has transferred its right to receive
with a basic lending arrangement. cash flows from the asset or has assumed an
The SPPI assessment is made in the currency in obligation to pay the received cash flows in full
which the financial asset is denominated. without material delay to a third party under a
The contractual terms of the financial asset give ‘pass-through’ arrangement; and either:
rise on specified dates to cash flows that are Solely a. the Company has transferred substantially
Payments of Principal and Interest (“SPPI”) on the all the risks and rewards of the asset, or
principal amount outstanding.
b. the Company has neither transferred nor
Financial Assets at FVTOCI retained substantially all the risks and
Equity instruments rewards of the asset, but has transferred
The Company has made an irrevocable election to control of the asset.
classify and measure the listed equity instruments On derecognition of a financial asset, the difference
FVTOCI to present the subsequent changes in between: (a) the carrying amount (measured at the
fair value under Other Comprehensive Income date of derecognition) and (b) the consideration
(“OCI”) and the classification is determined on an received shall be recognised in the Statement of
instrument-by-instrument basis. Profit and Loss.
Gains and losses on these equity instruments are Financial Liability
never recycled to profit or loss. Dividends are The Company derecognises the financial liability
recognised in profit or loss as dividend income when, and only when it is extinguished i.e. when the
when the right to receive the payment has been
contractual obligation is discharged or cancelled or
established, except when the company benefits
expired.
from such proceeds as a recovery of part of the cost
of the instrument, in which case, such gains are A financial liability shall be considered as
recorded in OCI. extinguished when there is an exchange between
the Company and the lender with substantially
Financial liabilities at Amortised cost
different terms of the original financial liability
The company has classified the debt instruments, or when there is a substantial modification of the
redeemable non-convertible preference shares and terms of existing financial liability or part thereof.
other borrowed funds at amortised cost. Amortised
On derecognition of a financial liability, the
cost is calculated by taking into account any discount
difference between: (a) the carrying amount and (b)
or premium on issue of funds, and transaction costs
that are an integral part of the Effective Interest Rate the consideration paid shall be recognised in the
(“EIR”). Statement of Profit and Loss.

Any fees,paid or received, transaction costs and v. Impairment of Financial Assets

other premiums or discounts that are included in The impairment loss allowance is provided based on
the calculation of the effective interest rate are the Expected Credit Loss (“ECL”) model.
amortised over the expected life of the financial The ECL is based on the credit losses expected to
instrument. arise over the life of the financial asset (the lifetime
iii. Reclassification of Financial Instrument expected credit loss), unless there has been no
The Company does not reclassify its financial assets significant increase in credit risk since origination,
subsequent to their initial recognition, apart from in which case, the allowance is based on the 12
the exceptional circumstances in which the Company months’ expected credit loss.
acquires, disposes of, or terminates a business Lifetime ECL are the expected credit losses resulting
line. Financial liabilities are never reclassified. from all possible default events over the expected
The Company did not reclassify any of its financial life of a financial instrument.The 12-month ECL
assets or liabilities for the financial years 2019-20 is the portion of Lifetime ECL that represent the
and 2018-19. ECLs that result from default events on a financial
iv. Derecognition of Financial Instrument instrument that are possible within the 12 months
Financial Asset after the reporting date.
The Company derecognises the financial asset when, The Company has categorized its loans into Stage 1,
and only when: Stage 2 and Stage 3, as detailed below:
63rd Annual Report 2020 | Financial Year 2019-20 Page | 75
Notes forming an integral part of the financial statements for the YEAR ended
31st March 2020
Stage 1: Level 1 Those where the inputs used in the
Financial assets, where there has not been a valuation are unadjusted quoted prices
significant increase in credit risk since initial from active markets for identical assets or
recognition and that are not credit impaired upon liabilities that the Company has access to,
origination, are classified under this stage. Stage 1 at the measurement date. The Company
loans also include facilities where the credit risk has considers markets as active only if there
improved and the loan has been reclassified from are sufficient trading activities with regard
to the volume and liquidity of the identical
Stage 2 & 3. The Company provides 12-month ECL
assets or liabilities and when there are
for Stage 1 assets.
binding and exercisable price quotes
Stage 2: available on the balance sheet date.
Financial assets, where there has been a significant Level 2 Those where the inputs that are used for
increase in credit risk since initial recognition but valuation and are significant, are derived
do not have a objective evidence of impairment, are from directly or indirectly observable
market data available over the entire
classified under this stage. The Company provides
period of the instrument’s life. Such inputs
Lifetime ECL for Stage 2 assets. include quoted prices for similar assets
Stage 3: or liabilities in active markets, quoted
prices for identical instruments in inactive
90 Days Past Due is considered as default for markets and observable inputs other than
classifying a financial instrument as credit impaired. quoted prices such as interest rates and
For exposures that have become credit impaired, a yield curves, implied volatilities, and credit
lifetime ECL is recognised and interest revenue is spreads. In addition, adjustments may be
required for the condition or location of
calculated by applying the effective interest rate to
the asset or the extent to which it relates
the amortised cost (net of provision) rather than the to items that are comparable to the valued
gross carrying amount. instrument. However, if such adjustments
f. Fair Value Measurement are based on unobservable inputs which
are significant to the entire measurement,
Fair value is the price that would be received to sell the Company will classify the instruments
an asset or paid to transfer a liability in an orderly as Level 3.
transaction between market participants at the
Level 3 Those that include one or more
measurement date. unobservable input that is significant to the
A fair value measurement assumes that the transaction measurement as a whole.
to sell the asset or transfer the liability takes place
The Company determines appropriate classes of assets
either: and liabilities on the basis of the following:
1. in the principal market for the asset or liability; or a. the nature, characteristics and risks of the asset or
2. in the absence of a principal market, in the most liability; and
advantageous market for the asset or liability. b. the level of the fair value hierarchy within which the
The principal or the most advantageous market is fair value measurement is categorized.
accessible by the company at the measurement date. The company evaluates the levelling at each reporting
The Company measures the fair value of an asset or period on an instrument-by-instrument basis and
liability using the assumption that market participants reclassifies instruments when necessary based on the
would use when pricing the asset or liability. facts at the end of the period.
g. Property, Plant and Equipment (“PPE”)
The price is either directly observable or estimated
using another valuation technique. The Company had The Company recognises an item of property, plant and
equipment when:
adopted valuation techniques that are appropriate in
the circumstances and for which sufficient data are a. it is probable that future economic benefits
available to measure fair value by maximizing the use associated with the item will flow to the entity; and
of relevant observable inputs and minimizing the use b. the cost of the item can be measured reliably.
of unobservable inputs. The cost of assets comprises its purchase price, freight,
duties, taxes and any other incidental expenses directly
The company applied the fair value hierarchy for the
attributable to bringing the asset to the location and
inputs to valuation techniques used to measure fair condition necessary for it to be capable of operating in
value. The three levels of hierarchy are: the manner intended by the management.
63rd Annual Report 2020 | Financial Year 2019-20 Page | 76
Notes forming an integral part of the financial statements for the YEAR ended
31st March 2020
Subsequent expenditure related to an item of tangible on disposal in the Statement of profit and loss in the
asset are added to its gross value only if it increases year in which the asset is derecognized.
the future benefits of the existing asset, beyond its
h. Intangible Assets
previously assessed standards of performance and
cost can be measured reliably. Other repairs and Intangible assets are carried at its cost less any
maintenance costs are expensed off as and when accumulated amortisation and accumulated
incurred. impairment losses, if any.
Property, Plant and Equipment is carried at cost less The intangible assets comprise computer software
accumulated depreciation and any accumulated which is amortized over the estimated useful life, in
impairment losses. a straight line method. The amortisation charge is
calculated by using the straight line method to write
Capital work in progress comprises the cost of PPE that
down the cost of intangible assets over their estimated
are not ready for its intended use at the reporting date.
useful life of 6 years as per Management’s estimate.
Depreciation
Amortization is recognised as an expense in the
Depreciation is calculated using the straight-line Statement of Profit and Loss for the period. The
method to write down the cost of property and Company has practice of reviewing the method and
equipment to their residual values over their estimated period of amortisation at the end of each financial year.
useful lives which is in line with the estimated useful
An intangible asset is derecognised on disposal or
life as specified in Schedule II to the Act except
when no future economic benefits are expected from
for leasehold improvements which are amortised
its use or disposal.
on a straight-line basis over the period of lease or
estimated period of useful life of such improvement, Any gain or loss arising on derecognition of the
subject to a maximum period of 60 months. Leasehold intangible assets (calculated as the difference between
improvements include all expenditure incurred on the net disposal proceeds and the carrying amount of
the leasehold premises that have future economic the asset) is recognised in other income / netted off
benefits. The depreciation charge for each period will from any loss on disposal in the statement of profit and
be recognised in the Statement of Profit and Loss for loss in the year in which the asset is derecognised.
the period. i. Investment Property
Investment properties are properties held to earn
Useful life as
rentals and/or for capital appreciation or both.
prescribed Useful life
Investment properties are measured initially at cost,
by Schedule estimated
Particulars including transaction costs. Subsequent to initial
II to the by the
Companies Company recognition, investment properties are stated at
Act 2013 cost less accumulated depreciation and impairment
losses, if any. When significant parts of the investment
Buildings 60 years 60 years property are required to be replaced at intervals, the
Plant and Machinery 15 years 15 years company depreciates them separately based on their
specific useful lives. All other repair and maintenance
Plant - Windmills 22 years 22 years costs are recognised in the Statement of Profit and Loss
Furniture and Fixtures 10 years 10 years as incurred.
The company, based on technical assessment made
Vehicles 8 years 8 years
by management, depreciates the building over its
Office Equipments 5 years 10 years estimated useful life of 60 years. The management
believes that these estimated useful life is realistic and
Computers 3 years 6 years
reflect fair approximation of the period over which the
The Management has considered the useful life of assets are likely to be used.
office equipments and computers as 10 years and 6 Though the Company measures investment property
years respectively. using cost based measurement, the fair value of
Property, Plant and Equipment is derecognised on investment property is disclosed in Note No. 9 Fair
disposal or when no future economic benefits are value are determined based on an annual evaluation
expected from its use. performed by an accredited external independent
Any gain or loss arising on derecognition of the asset valuer.
(calculated as the difference between the net disposal j. Impairment of Non-Financial Assets
proceeds and the net carrying amount of the asset) is The Company reviews the carrying amounts of
recognised in other income / netted off from any loss PPE, Investment Property and Intangible assets to
63rd Annual Report 2020 | Financial Year 2019-20 Page | 77
Notes forming an integral part of the financial statements for the YEAR ended
31st March 2020
determine, if there is an indication that those assets defined benefit liability), are recognised immediately
have suffered any impairment loss . In case of any such in the balance sheet with a corresponding debit or
indication those non financial assets are tested for credit to Other Comprehensive Income (“OCI”) in the
impairment so as to determine the impairment loss, if period in which they occur. Re-measurements are not
any, at the end of each reporting period. reclassified to profit or loss in subsequent periods.
k. Employee Benefits The retirement benefit obligation recognised in the
Short Term Employee Benefits Balance Sheet represents the actual deficit or surplus
Short-term employee benefits are recognised as in the Company’s defined benefit plans. Any surplus
expense when the related service is provided. A liability resulting from this calculation is limited to the present
for salaries and wages, Bonus, leave encashment is value of any economic benefits available in the form
recognised for the amount expected to be paid if the of refunds from the plans or reductions in the future
Company has a present legal or constructive obligation contribution to the plans.
to pay this amount as a result of past service provided
Other Long-Term Benefits
by the employee and the obligation can be estimated
reliably. Leave Encashment,Compensated Absences and Sick
Leave
Defined Contribution Plan
The Company provides for the encashment / availment
Employees Provident Fund (“EPF”) and Employees
of leave with pay subject to certain rules. The
State Insurance (“ESI”)
employees are entitled to accumulate leave subject
Retirement benefits such as employee provident to certain limits for future encashment / availment.
fund and employee state insurance comes under the The liability is provided based on the number of days
defined contribution plan for which the Company of unutilized leave at each balance sheet date on the
make contributions to such schemes administered by basis of an independent actuarial valuation.
government organisations set up under the applicable
The service cost, interest on defined benefit liability
statute and are recognised as expense when an and remeasurements of defined benefit liability is
employee renders related service. recognised in the statement of Profit and loss.
Defined Benefit Plan l. Income
Gratuity i. Interest Income
The obligation in respect of defined benefit plans, The Company recognises interest income using EIR
which covers Gratuity is provided for on the basis of an on all financial assets subsequently measured at
actuarial valuation at the end of each financial year by amortised cost.
an Independent Actuarial using Projected Unit Credit
EIR is the rate that exactly discounts estimated future
method. The Company makes contribution to a Gratuity
cash flows of the financial instruments through the
Fund administered and managed by Life Insurance
expected life of the financial instrument or, where
Corporation of India (“LIC”).
appropriate, a shorter period, to the net carrying
The present value of the defined benefit obligation is amount. The future cash flows are estimated using
determined by discounting the estimated future cash the contractual terms of the instrument.
outflows by reference to market yields at the end of the
The Company calculates interest income by
reporting period on government bonds that have terms applying the EIR to the gross carrying amount
approximating to the terms of the related obligation. of financial assets other than credit-impaired
Past services are recognised at the earlier of the plan assets. In case of credit-impaired financial assets
amendment / curtailment and recognition of related (‘Stage 3’), the Company recognises interest income
restructuring costs/termination benefits. on the amortised cost net of impairment loss of
The Company recognises the changes in the net defined the financial asset at EIR. If the financial asset is
benefit obligation such as service cost (including no longer credit-impaired, the Company reverts to
current service cost, past service cost, as well as gains calculating interest income on a gross basis.
and losses on curtailments and settlements) under Interest levied on customers for delay in
employee benefit expenses and net interest expense repayments/non-payment of contractual cash flows
or income in the Statement of Profit and Loss in the line is recognised on realisation.
item, Employee Benefits Expenses. Interest Income from Government securities is
Re-measurements of defined benefit plan, comprising recognized on time proportion basis taking into
actuarial gains and losses, the return on plan assets account the amount outstanding and the rate
(excluding amounts included in net interest on the net applicable.

63rd Annual Report 2020 | Financial Year 2019-20 Page | 78

Notes forming an integral part of the financial statements for the YEAR ended
31st March 2020
ii. Dividend Income are reported at the prevailing closing spot rate. Non-
Dividend income on equity shares is recognised monetary items are measured in terms of historical
when the right to receive the payment is established cost in foreign currency and are not retranslated.
by the reporting date. Exchange differences, if any that arise on settlement
iii. Other Operating Income of monetary items or on reporting of monetary items
at each Balance Sheet date at the closing spot rate are
The Company recognises revenue from contracts
recognised in the Statement of Profit and Loss in the
with customers (other than financial assets to which
period in which they arise.
Ind AS 109 ‘Financial instruments’ is applicable)
based on a comprehensive assessment model as n. Borrowing Costs
set out in Ind AS 115 ‘Revenue from contracts with Borrowing costs include interest expense calculated
customers. The Company identifies contract(s) with using the effective interest method as per Ind As 109
a customer and its performance obligations under on Financial instrument and interest in respect of lease
the contract, determines the transaction price and liability recognised in accordance with Ind AS 116.
its allocation to the performance obligations in the Borrowing costs that are directly attributable to the
contract and recognises revenue only on satisfactory acquisition, construction or production of a qualifying
completion of performance obligations. Revenue asset are capitalised as part of cost of such asset till
is measured at the fair value of the consideration such time the asset is ready for its intended use or sale.
received or to be received. A qualifying asset is an asset that necessarily requires a
The Company recognises income on recoveries of substantial period of time to get ready for its intended
financial assets written off on realisation basis. use or sale. All other borrowing costs are recognised in
the Statement of Profit and Loss in the period in which
iv. Fees and Commission Income
they are incurred.
The Company recognises service and administration
o. Income Taxes
charges towards rendering financial services
to its customers on satisfactory completion of Tax expense (tax income) comprises current tax
service delivery. Cheque Bounce charges levied expense (current tax income) and deferred tax expense
on customers for non payment of instalment on (deferred tax income)
the contractual date is recognised on realisation. i. Current tax
Foreclosure charges are collected from loan Current tax is the amount of tax payable to (recovered
customers for early payment/closure of loan and are from) the taxation authorities on the taxable income
recognised on realisation. for the year determined in accordance with the
v. Sale of Power from Windmills provisions of the Income Tax Act, 1961 and Income
Computation and Disclosure Standards prescribed
Income from power generation is recognized as
therein. The tax rates and tax laws used to compute
per the Power Purchase Agreements with State
the amount are those that are enacted by the end
Electricity Board and on supply of power to the
of reporting date. Current tax relating to items
grid.
recognised outside the Statement of Profit and
vi. Net gain/loss on fair value changes Loss is recognised in correlation to the underlying
The Company designates certain financial assets for transaction either in OCI or directly in other equity.
subsequent measurement at FVTOCI. The Company ii. Deferred Tax
recognises gains/loss on fair value change of
Deferred tax is the tax effect on temporary
financial assets measured at FVTOCI.
differences between tax bases of assets and
m. Foreign Currency Transaction liabilities and their carrying amounts in the Financial
The functional currency and presentation currency Statements as at the reporting date.
of the Company is Indian Rupee. Functional currency Deferred tax liability is recognised for all taxable
of the Company has been determined based on the temporary differences and deferred tax asset is
primary economic environment in which the Company recognised for all deductible temporary differences
operate considering the currency in which funds are to the extent that it is probable that taxable profit
generated, spent and retained. will be available against which the deductible
Transactions in currencies other than the Company’s temporary difference can be utilised.
functional currency are recorded on initial recognition Deferred tax assets and liabilities are measured at
using the exchange rate at the transaction date. At each the tax rates that are expected to apply to the period
Balance Sheet date, foreign currency monetary items when the asset is realised or the liability is settled,
63rd Annual Report 2020 | Financial Year 2019-20 Page | 79
Notes forming an integral part of the financial statements for the YEAR ended
31st March 2020
based on tax rates (and tax laws) that have been If the effect of the time value of money is material,
enacted or substantively enacted by the end of the provisions are determined by discounting the expected
reporting period. future cash flows to net present value using an
The Company reviews the carrying amount of a appropriate pre-tax discount rate that reflects current
deferred tax asset as at the end of each reporting market assessments of the time value of money and,
period and reduce the carrying amount of a deferred where appropriate, the risks specific to the liability.
tax asset to the extent that it is no longer probable When there is a possible obligation or a present
that sufficient taxable profit will be available to obligation in respect of which the likelihood of outflow
allow the benefit of part or all of that deferred tax of resources is remote, no provision or disclosure is
asset to be utilised. made.
Deferred tax relating to items recognised A present obligation that arises from past events, where
outside profit or loss is recognised either in other it is either not probable that an outflow of resources
comprehensive income or in other equity. will be required to settle or a reliable estimate of the
p. Goods and Services Input Tax Credit amount cannot be made, is disclosed as a contingent
Input Tax credit is accounted for in the books in the liability. Contingent liabilities are also disclosed when
period when the underlying service/supply received is there is a possible obligation arising from past events,
accounted to the extent permitted as per the applicable the existence of which will be confirmed only by the
regulatory laws and when there is no uncertainty in occurrence or non-occurrence of one or more uncertain
availing/utilising the same. The ineligible input credit future events not wholly within the control of the
is charged off to the respective expense or capitalised Company.
as part of asset cost as applicable.
Contingent assets are not recognised in the financial
q. Leases statements. However, when the realisation of income
As a Lessee is virtually certain, then the related asset is not a
The Company has applied Ind AS 116 ‘Leases’ for all contingent asset and is recognised.
lease contracts except for short term leases and leases s. Cash and Cash Equivalents
for which underlying asset is of low value on modified
Cash and cash equivalents in the balance sheet
retrospective approach.
comprise cash on hand, cheques and drafts on hand,
Right of Use Asset is initially measured as at the
balance with banks in current accounts and short-term
sum of initial measurement of the lease liability
deposits with an original maturity of three months or
and any lease payments made at or before the date
less, which are subject to an insignificant risk of change
of commencement of lease, adjusted by any lease
in value.
incentives received. On subsequent period, the Right
of Use Asset is measured at cost less accumulated t. Statement of Cash Flow
depreciation and any accumulated impairment losses Statement of Cash flows are reported using the indirect
with adjustment for remeasurement of lease liability. method, whereby the net profit before tax is adjusted
Lease Liability is initially measured at the present value for the effects of transactions of a non-cash nature, any
of the lease payments that are not paid as at that date of deferrals or accruals of past or future operating cash
recognition discounted at the Company’s incremental receipts or payments and items of income or expenses
borrowing rate. If lease liability subsequently under- associated with investing or financing cash flows. The
goes changes on account of interest on the lease statement of cash flows from operating, investing and
liability, lease payments and remeasurement of financing activities of the Company are segregated.
the carrying amount on any reassessment or lease u. Earnings Per Share (“EPS”)
modifications.
Basic earnings per share is calculated by dividing the
As a Lessor
net profit or loss for the period attributable to equity
The Company recognises the lease payments from shareholders by the weighted average number of
operating lease as income on the basis of contractual equity shares outstanding during the period.
terms between the Lessee and the Company.
The weighted average number of equity shares
r. Provisions and Contingent Liabilities
outstanding during the period and for all periods
Provisions are recognised when the Company has a presented is adjusted for shares issued during the year.
present obligation (legal or constructive) as a result
of a past event, it is probable that the Company will For the purpose of calculating diluted EPS, profit after
be required to settle the obligation, and a reliable tax for the year attributable to the equity shareholders
estimate can be made on the amount of the obligation. and the weighted average number of equity shares
Provisions are reviewed at each balance sheet date and outstanding during the year are adjusted for the effects
adjusted to reflect the current best estimate. of all dilutive potential equity shares.
63rd Annual Report 2020 | Financial Year 2019-20 Page | 80
Notes forming an integral part of the financial statements for the YEAR ended
31st March 2020
v. First time Adoption of Ind AS (Ind AS 101) as permitted by Ind As 101, it has used reasonable
These financial statements, for the year ended and supportable information that is available without
31st March 2020 are the first financial statements the undue cost or effort to determine the credit risk at
Company has prepared in accordance with Ind AS. For the date that financial instruments were initially
periods up to and including the year ended 31st March, recognised in order to compare it with the credit risk
2019, the Company prepared its financial statements at the transition date.
in accordance with the previous GAAP. Accordingly, Exemption availed
the Company has prepared financial statements which Deemed cost for Property, Plant and Equipment and
comply with Ind AS applicable for periods ending Intangible Assets
on 31st March 2020, together with the comparative The Company has elected to use fair value for Land,
period information as at and for the year ended Building and Plant and Machinery and carrying value
31st March 2019. for all other property, plant and equipment, Intangible
In preparing these financial statements, the Company’s assets as the deemed cost at the date of transition to
opening balance sheet was prepared as at 1st April Ind AS.
2018, the Company’s date of transition to Ind AS. Leases
This note explains the principal adjustments made by
The Company had assessed whether the contracts
the Company in restating its Previous GAAP financial existing as on the date of transition contains a lease
statements, including the balance sheet as at 1st April and has classified those leases as operating lease on
2018 and the financial statements as at and for the year the basis of facts and circumstances existing at that
ended 31st March 2019. Ind AS 101 allows first-time date.
adopters certain exemptions from the retrospective
The Company measured the lease liability at the
application of certain requirements under Ind AS.
present value of remaining lease payments discounted
The Company has applied the following exemptions/
using Company’s incremental borrowing rate at the
exceptions.
date of transition. Right of Use Asset at an amount
Exception to retrospective application applied by the equal to lease liability adjusted by the amount of any
Company prepaid or accrued lease payments relating to the
Estimates lease recognised in the Balance Sheet immediately
The estimates made in accordance with Ind AS as at before 1st April 2018.
1st April 2018 and 31st March 2019 is consistent with The Company had applied Ind AS 116 in modified
those made for the same dates as per Indian GAAP retrospective approach subject to the following
apart from the items where application of Indian GAAP practical expedients:
did not require estimation which includes: l Applied a single discount rate to a portfolio of leases
i. Classification of financial assets based on the with reasonably similar characteristics
business model and SPPI Test l The lease rental with lease term ends within 12
ii. Classification of preference shares as financial months of the date of transition to Ind AS are
liability at Amortised cost accounted on straight line basis.
iii. Impairment of financial assets based on expected l Leases for which the underlying asset is of low value
credit loss model. are recognised as expense as and when incurred.

De-recognition of Financial Assets and Financial l The Company has used hindsight in determining the
lease term if the contract contains options to extend
Liabilities
or terminate the lease.
The Company has applied the requirements of
Designation of Previously Recognised Financial
de-recognition of financial assets and financial
Instruments
liabilities as per Ind AS 109 prospectively from the
date of transition to Ind AS. The Company had designated the investment in equity
instruments at FVTOCI in accordance with requirements
Classification and measurement of Financial Assets of Ind AS 109 on the basis of facts and circumstances
The Company has classified the financial assets in that exists at the date of transition to Ind AS.
accordance with Ind AS 109 on the basis of facts and Uncertainty over income tax treatments
circumstances exist at the date of transition to Ind AS.
The Company has elected not to reflect the application
Impairment of Financial Asset of requirements of Uncertainty over Income Tax
The Company has applied the impairment Treatments to Ind AS 12 in comparative information in
requirements of Ind As 109 retrospectively, however, the Ind AS Financial Statements.

63rd Annual Report 2020 | Financial Year 2019-20 Page | 81

Notes forming an integral part of the financial statements for the Year ended
31st March 2020 (` Lakhs)
As at As at As at
Particulars 31st March 31st March 1st April
2020 2019 2018
3. CASH AND CASH EQUIVALENTS
Cash on hand 38.58 1,004.97 839.68
Balance with Banks in Current Accounts 97.00 304.50 854.42
Cheques, drafts on hand 977.21 2,050.30 2,070.60
Total 1,112.79 3,359.77 3,764.70
4. BANK BALANCES OTHER THAN CASH AND CASH EQUIVALENTS
Earmarked Balances with Banks :
- Unpaid Dividend Accounts 56.39 57.04 165.71
Term Deposits with Banks :
- Free - 375.00 959.95
- Under Lien # 413.00 263.00 261.00
Total 469.39 695.04 1,386.66
# Details of Term deposits under lien
As at 31st March 2020 As at 31st March 2019 As at 1st April 2018
Bank Balances Other Bank Balances Other Bank Balances Other
Particulars other than Financial other than Financial other than Financial
Cash and Cash assets Cash and Cash assets Cash and Cash assets
equivalents (Note 8) equivalents (Note 8) equivalents (Note 8)
(Note 4) (Note 4) (Note 4)
For Statutory Liquidity Ratio 413.00 11.88 263.00 11.33 261.00 11.39
Total 413.00 11.88 263.00 11.33 261.00 11.39
5. RECEIVABLES
(i) Trade Receivables
Considered good - Unsecured
Dues from sale of Wind Power 310.22 176.46 123.65
Less: Impairment Loss Allowance (72.86) (61.65) (27.40)
Total 237.36 114.81 96.25
(ii) Other Receivables
Considered good - Unsecured
Rent Receivables 8.69 6.72 8.54
Total 8.69 6.72 8.54
There is no due from any directors or other officers of the Company or any firm or
Private Limited Company in which any Director is a partner, a Director or a member.
6. LOANS
(A) Loans (at amortised cost) *
Hire Purchase Loans# 1,08,363.51 93,596.61 90,264.69
Loans repayable on Demand 1,315.22 1,210.52 987.45
Other Loans ## 358.98 342.30 358.70
Total (Gross) 1,10,037.71 95,149.43 91,610.84
Less: Impairment Loss Allowance (2,991.53) (2,495.31) (2,139.70)
Total (Net) 1,07,046.18 92,654.12 89,471.14
(B) (i) Secured by Tangible Assets 1,08,363.51 93,596.61 90,265.21
(ii) Secured by Intangible Assets – – –
(iii) Covered by Bank / Govt. Guarantee – – –
(iv) Unsecured 1,674.20 1,552.82 1,345.63
Total (Gross) 1,10,037.71 95,149.43 91,610.84
Less: Impairment Loss Allowance (2,991.53) (2,495.31) (2,139.70)
Total (Net) 1,07,046.18 92,654.12 89,471.14

63rd Annual Report 2020 | Financial Year 2019-20 Page | 82

Notes forming an integral part of the financial statements for the Year ended
31st March 2020 (` Lakhs)
As at As at As at
Particulars 31st March 31st March 1st April
2020 2019 2018
(C) (i) Loans in India
(a) Public Sector – – –
(b) Others 1,10,037.71 95,149.43 91,610.84
Total (Gross) 1,10,037.71 95,149.43 91,610.84
Less: Impairment Loss Allowance (2,991.53) (2,495.31) (2,139.70)
Total (Net) - C (i) 1,07,046.18 92,654.12 89,471.14
(ii) Loans Outside India – – –
Less: Impairment Loss Allowance – – –
Total (Net) - C (ii) – – –
Total (Net) - C (i+ ii) 1,07,046.18 92,654.12 89,471.14
* There is no loan assets measured at FVTOCI or FVTPL or designated at FVTPL
# Includes Repossessed Assets ## Includes Staff Loans and Loans against deposits
7. INVESTMENTS
At Amortised Cost
Investments in Government Securities Number Face
Value per
unit (`)
Quoted
Bonds of Central and State Governments # 25,68,000 100 2,581.07 2,681.99 2,430.77
Total (A) 2,581.07 2,681.99 2,430.77
At Fair value through Other Comprehensive Income
Investments in Equity Instruments
Quoted - Associates
Sakthi Sugars Limited 5,52,833 10 40.36 62.73 89.28
Quoted - Others
Stiles India Limited 100 10 – – –
Total (B) 40.36 62.73 89.28
At Cost
Investments in Equity Instruments
Unquoted - Associates
ABT Industries Limited 1,50,000 10 15.00 15.00 15.00
ABT Foods Agrovet Limited
(Formerly Sakthi Beverages Ltd) 1,25,000 10 12.50 12.50 12.50
Sakthi Soft Drinks Pvt Limited 30,000 10 3.00 3.00 3.00
Sri Bhagavathi Textiles Limited 5 100 0.04 0.04 0.04
Sri Chamundeswari Sugars Limited 1,86,666 10 7.82 7.82 7.82
Unquoted - Others
ABT Co-operative Stores Limited 500 10 0.05 0.05 0.05
Chokhani International Limited 100 10 0.02 0.02 0.02
Total (C) 38.43 38.43 38.43
Total (Gross) - (A+B+C) 2,659.86 2,783.15 2,558.48
(i) Investments Outside India – – –
(ii) Investments In India 2,659.86 2,783.15 2,558.48
Total 2,659.86 2,783.15 2,558.48
Less: Impairment Loss Allowance 0.06 0.06 0.06
Total (Net) 2,659.80 2,783.09 2,558.42
# In accordance with the Master Direction - Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions 2016 dated 25th
August 2016, the Company has created a floating charge on the statutory liquid assets comprising investment in Government Securities on the above
investments in favour of IDBI Trusteeship Services Ltd, trustee representing the public deposit holders of the company.
63rd Annual Report 2020 | Financial Year 2019-20 Page | 83
Notes forming an integral part of the financial statements for the Year ended
31st March 2020 (` Lakhs)
As at As at As at
Particulars 31st March 31st March 1st April
2020 2019 2018
8. OTHER FINANCIAL ASSETS
- Interest accrued on Government Securities 56.69 55.71 44.66
- Interest accrued on Term Deposits
  - Free – 24.41 40.13
  - Under Lien (Refer Note 4) 11.88 11.33 11.39
- Security Deposits 65.32 63.62 40.59
- Other Loans and Advances 1,896.74 1,573.92 1,599.70
- Advance to Employees 13.64 14.14 30.80
Total 2,044.27 1,743.13 1,767.27
9. a) Investment Property
Particulars Land Building Total
Deemed Cost as at 1st April 2018 66.87 226.74 293.61
Additions – – –
Deductions – – –
Carrying amount as at 31st March 2019 66.87 226.74 293.61
Additions – – –
Deductions – – –
Carrying amount as at 31st March 2020 66.87 226.74 293.61
Accumulated depreciation / amortisation and impairment
Balance as at 1st April 2018 – – –
Depreciation for the year – 4.60 4.60
Depreciation on deductions – – –
Balance as at 31st March 2019 – 4.60 4.60
Depreciation for the year – 4.60 4.60
Depreciation on deductions – – –
Balance as at 31st March 2020 – 9.20 9.20
Net Carrying amount
As at 1st April 2018 66.87 226.74 293.61
As at 31st March 2019 66.87 222.14 289.01
As at 31st March 2020 66.87 217.54 284.41
Useful Life of the Asset (in years) - 60 -
9. b) Rental Income with respective expenses
Particulars Year ended Year ended
31st March 2020 31st March 2019
Rental Income - Building 21.13 24.99
Direct operating expenses on properties generating rental income 2.13 1.17
9. c) Fair Value of Investment Property with assumptions applied in determining the fair value of investment property
Significant Sensitivity
Valuation Range Fair value Sensitivity
Particulars unobservable of the input to
technique (Weighted avg) Rs in lakhs Rs in lakhs
inputs fair value
Sensitivity analysis
Investment Property Professional Price per Rs.2,500 - 5,000 5% 370 19
As at March 31, 2020 valuer Sq.feet per Sq.feet
Investment Property Professional Price per Rs.2,500 - 5,000 5% 359 18
As at March 31,2019 valuer Sq.feet per Sq.feet
Investment Property Professional Price per Rs.2,500 - 5,000 5% 349 17
As at April 01, 2018 valuer Sq.feet per Sq.feet

63rd Annual Report 2020 | Financial Year 2019-20 Page | 84

 Notes forming an integral part of the financial statements for the Year ended 31st March 2020
10 (a) Property, Plant and Equipment - Tangible Assets (` Lakhs)
Total
Land - Plant and Plant - Wind Furniture Office
Particulars Buildings Vehicles Tangible
Freehold Machinery Mills and Fixtures Equipments
Assets
Deemed Cost as at 1st April 2018 2,764.91 1,697.37 73.46 1,615.39 221.89 77.89 76.25 6,527.16
Additions – 15.27 12.45 – 86.44 20.98 40.29 175.43
Deductions – – – – – 1.08 – 1.08
Carrying Amount as at 31st March 2019 2,764.91 1,712.64 85.91 1,615.39 308.33 97.79 116.54 6,701.51
Additions – 0.25 8.80 – 25.94 – 48.44 83.43
Deductions – – 1.49 – 0.93 0.63 – 3.05
Carrying Amount as at 31st March 2020 2,764.91 1,712.89 93.22 1,615.39 333.34 97.16 164.98 6,781.89
Accumulated depreciation /
amortisation and impairment
Balance as at 1st April 2018 – – – – – – – –
Depreciation for the year – 52.88 6.93 104.57 28.94 12.98 20.69 226.99

63rd Annual Report 2020 | Financial Year 2019-20

Depreciation on deductions – – – – – – – –
Balance as at 31st March 2019 – 52.88 6.93 104.57 28.94 12.98 20.69 226.99
Depreciation for the year – 55.10 7.78 104.57 34.78 13.50 23.17 238.90
Depreciation on deductions – – 0.23 – – 0.42 – 0.65
Balance as at 31st March 2020 – 107.98 14.48 209.14 63.72 26.06 43.86 465.24
Net Carrying amount
As at 1st April 2018 2,764.91 1,697.37 73.46 1,615.39 221.89 77.89 76.25 6,527.16
As at 31st March 2019 2,764.91 1,659.76 78.98 1,510.82 279.39 84.81 95.85 6,474.52
As at 31st March 2020 2,764.91 1,604.91 78.74 1,406.25 269.62 71.10 121.12 6,316.65
Useful Life of the Asset - 60 15 22 10 8 10
(In Years)

Carrying Value of Assets Pledged Against borrowings / Debt Securities as at 31st March 2020 (Refer Note 13 & 14)
As at 1st April 2018 427.29 1,515.86 - 1,615.39 - - - 3,558.54
As at 31st March 2019 427.29 1,478.19 - 1,510.82 - - - 3,416.30
As at 31st March 2020 427.29 1,428.80 - 1,406.25 - - - 3,262.34

Page | 85
Notes forming an integral part of the financial statements for the Year ended
31st March 2020
10 (b) Intangible Assets under development (` Lakhs)
Particulars Amount
Deemed Cost as at 1st April 2018 68.20
Additions –
Deductions 68.20
Carrying Amount as at 31st March 2019 –
Additions 15.07
Deductions –
Carrying Amount as at 31st March 2020 15.07

10 (c) Other Intangible Assets - Computer Software

Particulars Amount
Deemed Cost as at 1st April 2018 157.51
Additions 104.22
Deductions –
Carrying Amount as at 31st March 2019 261.73
Additions 1.88
Deductions –
Carrying Amount as at 31st March 2020 263.61
Accumulated amortisation and impairment
Balance as at 1st April 2018 –
Depreciation for the year 71.40
Depreciation on deductions –
Balance as at 31st March 2019 71.40
Depreciation for the year 77.26
Depreciation on deductions –
Balance as at 31st March 2020 148.66
Net Carrying amount
As at 1st April 2018 157.51
As at 31st March 2019 190.33
As at 31st March 2020 114.95
Useful Life of the Asset (in years) 6

63rd Annual Report 2020 | Financial Year 2019-20 Page | 86

Notes forming an integral part of the financial statements for the Year ended
31st March 2020 (` Lakhs)
As at As at As at
Particulars 31st March 31st March 1st April
2020 2019 2018
11. OTHER NON-FINANCIAL ASSETS
Considered good - Unsecured :
- Prepaid Expenses 112.64 100.68 46.63
- GST Input Tax Credit (Refer Note 2 (p)) 143.34 62.64 100.51
- Debenture Issue Expenses 57.60 98.65 -
- Others 10.20 8.48 10.31
Total 323.78 270.45 157.45
LIABILITIES AND EQUITY
12. PAYABLES
(I) Trade Payables
(i) Total outstanding dues of micro enterprises and small enterprises 6.87 0.33 -
(ii) Total outstanding dues of creditors other than micro enterprises and 160.76 185.23 117.89
small enterprises
(II) Other Payables
(i) Total outstanding dues of micro enterprises and small enterprises - - -
(ii) Total outstanding dues of creditors other than micro enterprises and 101.99 251.05 140.08
small enterprises
Total 269.62 436.61 257.97
Micro, Small and Medium Enterprises:
Based on and to the extent of the information received by the Company from the suppliers during the year regarding their
status under the Micro, Small and Medium Enterprises Development Act 2006 (“MSMED Act”) the total outstanding dues of
Micro and Small enterprises, which are outstanding for morethan the stipulated period and other disclosures as per MSMED
Act are given below
a) Dues remaining unpaid to any supplier at the year end
- Principal 6.87 0.33 –
- Interest on the above – – –
b) Interest paid in terms of Section 16 of the MSMED Act along with the amount
of payment made to the supplier beyond the appointed day during the year
- Principal paid beyond the appointed date – – –
- Interest paid in terms of Section 16 of the MSMED Act – – –
c) Amount of interest due and payable for the period of delay on payments made – – –
beyond the appointed day during the year
d) Amount of interest accrued and remaining unpaid – – –
e) Further interest due and payable even in the succeeding years, until such date – – –
when the interest due as above are actually paid to the small enterprises
6.87 0.33 –
13. DEBT SECURITIES
At Amortised Cost
Non-Convertible Debentures - Secured 31,453.32 23,807.33 28,452.05
Non-Convertible Debentures - Unsecured - 2,500.92 2,500.93
Total 31,453.32 26,308.25 30,952.98
Debt Securities in India 31,453.32 26,308.25 30,952.98
Debt Securities outside India – – –
Total 31,453.32 26,308.25 30,952.98
Note: i. There are no debt securities measured at FVTPL or designated at FVTPL
ii. The Non-Convertible Debentures are secured by immovable properties and Loan receivables of the Company having carrying value
of 31st March 2020 ` 30,772.56 lakhs, 31st March 2019 ` 24,582.59 lakhs, 1st April 2018 ` 29,456.12 lakhs.
iii. For Debt securities subscribed by the related parties Refer Note 42.
63rd Annual Report 2020 | Financial Year 2019-20 Page | 87
Notes forming an integral part of the financial statements for the Year ended
31st March 2020
Details of Non-Convertible Debentures - Secured : (` Lakhs)
As at As at As at
Particulars
31st March 2020 31st March 2019 1st April 2018
A) (i) Issued on private placement basis - Face Value of ` 1
- Repayable on maturity:
Interest Range 9% to 10%
Maturing within 1 year 1,310.00 716.00 377.00
Maturing between 1 to 2 years – 1,310.00 716.00
Maturing between 2 to 3 years – – 1,310.00
Interest Range 10% to 11%
Maturing within 1 year – 928.23 804.30
Maturing between 1 to 2 years – – 928.23
Interest Range 11% to 12%
Maturing within 1 year – – 515.97
Sub-Total A (i) 1,310.00 2,954.23 4,651.50
(ii) Issued on private placement basis - Face Value of ` 1000
- Repayable on maturity:
Interest Range 9% to 10%
Maturing within 1 year 2,443.50 1,029.00 45.00
Maturing between 1 to 2 years 3,659.00 1,455.00 190.00
Maturing between 2 to 3 years 2,804.50 3,165.50 932.50
Sub-Total A (ii) 8,907.00 5,649.50 1,167.50
TOTAL A (i+ii) 10,217.00 8,603.73 5,819.00
Add : Interest accrued but not due 364.37 324.58 232.19
Less: unamortized charges 54.82 54.81 30.38
Total Amortized Cost (A) 10,526.55 8,873.50 6,020.81
B) Public Issue - Face Value of ` 1000
Repayable on maturity:
Interest Range 9% to 10%
Maturing within 1 year
Maturing between 1 year to 2 years 1,991.39 – –
Maturing between 2 years to 3 years 1,661.32 – –
Maturing between 3 years to 4 years 3,742.49 – –
Interest Range 10% to 11%
Maturing within 1 year 11,040.05 2,014.94 3,432.09
Maturing between 1 year to 2 years – 11,040.05 2,014.94
Maturing between 2 years to 3 years – – 11,040.05
Interest Range 11% to 12%
Maturing between 1 year to 2 years – – 3,647.90
Sub-Total (B) 18,435.25 13,054.99 20,134.98
Add : Interest accrued but not due 2,491.52 1,878.84 2,296.26
Less: unamortized charges – – –
Total Amortized Cost (B) 20,926.77 14,933.83 22,431.24
Total Amortized Cost (A+B) 31,453.32 23,807.33 28,452.05
C) Non-Convertible Debentures - Unsecured :
Senior Unsecured NCD
Repayable on maturity:
Interest Range 13% to 14%
Maturing between 3 years to 4 years – 2,500.00 –
Maturing between 4 years to 5 years – – 2,500.00
Sub-Total (C) – 2,500.00 2,500.00
Add : Interest accrued but not due – 0.92 0.93
Total Amortized Cost (C) – 2,500.92 2,500.93
Total Amortized Cost (A+B+C) 31,453.32 26,308.25 30,952.98

63rd Annual Report 2020 | Financial Year 2019-20 Page | 88

Notes forming an integral part of the financial statements for the Year ended
31st March 2020 (` Lakhs)
As at As at As at
Particulars 31st March 31st March 1st April
2020 2019 2018
14. BORROWINGS (OTHER THAN DEBT SECURITIES)
At amortized cost
Term Loan - Secured
- From Banks 1,601.00 1,948.49 3,735.91
- From Other Lenders 5,077.19 3,810.36 5,176.99
Loan Repayable on Demand
- Cash Credit Facilities from Banks 14,540.01 15,034.35 10,568.44
Total 21,218.20 20,793.20 19,481.34
Borrowings in India 21,218.20 20,793.20 19,481.34
Borrowings outside India – – –
Total 21,218.20 20,793.20 19,481.34
There is no borrowings measured at FVTPL or designated at FVTPL.
a) Term loans from Banks are secured as under :
i) The Lakshmi Vilas Bank Ltd
Sl Amount of Rate of Repayment Mora- Security details Amount Amount Amount
No Term Loan Interest torium outstanding outstanding outstanding
sanctioned per Commence- End date period as on as on as on
annum ment date 31.03.2020 31.03.2019 1.04.2018
1 3,000.00 11.55% 31.10.2016 30.09.2019 - Hypothecation - 507.14 1,521.43
of specified
Hire Purchase
receivables and
personal guarantee
by a director
Add : Interest accrued but not due - 5.98 -
Less: unamortized charges - 6.00 18.00
Total Amortized Cost - 507.12 1,503.43
ii) AU Small Finance Bank Ltd
Sl Amount of Rate of Repayment Mora- Security details Amount Amount Amount
No Term Loan Interest torium outstanding outstanding outstanding
sanctioned per Commence- End date period as on as on as on
annum ment date 31.03.2020 31.03.2019 01.04.2018
1 2,500.00 10.65% 15.12.2017 15.12.2020 - Hypothecation 608.11 1,418.92 2,229.73
of specified
Hire Purchase
receivables
and personal
guarantee by a
director
Add : Interest accrued but not due 2.88 6.73 10.55
Less: unamortized charges 2.13 4.97 7.80
Total Amortized Cost 608.86 1,420.68 2,232.48

63rd Annual Report 2020 | Financial Year 2019-20 Page | 89

Notes forming an integral part of the financial statements for the Year ended
31st March 2020
iii) IndusInd Bank Ltd (` Lakhs)
Sl Amount of Rate of Repayment Morato- Security details Amount Amount Amount
No. Term Loan Interest rium outstanding outstanding outstanding
sanctioned per Commence- End date period as on as on as on
annum ment date 31.03.2020 31.03.2019 1.04.2018
1 6,50.00 12.00% 04.03.2020 04.06.2023 3 Mths Hypothecation 634.61 - -
of specified
2 3,50.00 12.00% 04.03.2020 04.06.2023 3 Mths Hire Purchase 340.22 - -
receivables
Add : Interest accrued but not due 8.65 - -
Less: unamortized charges 4.73 - -
Total Amortized Cost 978.75 - -
iv) HDFC Bank Ltd
Sl Amount of Rate of Repayment Morato- Security details Amount Amount Amount
No Term Loan Interest rium outstanding outstanding outstanding
sanctioned per Commence- End date period as on as on as on
annum ment date 31.03.2020 31.03.2019 1.04.2018
1 19.00 9.50% 05.02.2019 05.01.2022 - Hypothecation 13.39 20.69 -
of New Innova
Crysta GX Car
Add : Interest accrued but not due - - -
Less: unamortized charges - - -
Total Amortized Cost 13.39 20.69 -
b) Term loans from other Lenders are secured as under:
i) Sundaram Finance Ltd
Sl Amount of Rate of Repayment Morato- Security details Amount Amount Amount
N. Term Loan Interest rium outstanding outstanding outstanding
sanctioned per Commence- End date period as on as on as on
annum ment date 31.03.2020 31.03.2019 1.04.2018
1 1,000.00 10.25% 10.10.2017 10.02.2021 5 Mths Exclusive charge 188.51 537.76 853.18
on 17 Wind
Mills situated
at Tirunelveli/
Tirupur Dist
in Tamilnadu
and also at
Motugunda
Village, Bhavnad
Taluk, Jam Nagar
Dist, Gujarat and
guarantee by a
director
Add : Interest accrued but not due 1.11 3.17 5.03
Less: unamortized charges - - -
Total Amortized Cost 189.62 540.93 858.21

63rd Annual Report 2020 | Financial Year 2019-20 Page | 90

Notes forming an integral part of the financial statements for the Year ended
31st March 2020
ii) Northern Arc Capital Ltd (formerly IFMR Capital Finance Pvt Ltd) (` Lakhs)

Sl Amount of Rate of Repayment Morato- Security details Amount Amount Amount

No. Term Loan Interest rium outstanding outstanding outstanding
sanctioned per Commence- End date period as on as on as on
annum ment date 31.03.2020 31.03.2019 1.04.2018
1 1,000.00 13.50% 14.04.2016 14.09.2018 6 Mths Hypothecation - - 228.25
2 395.00 13.50% 12.05.2016 12.10.2018 6 Mths of specified - - 104.36
Hire Purchase
3 730.00 13.50% 19.09.2016 19.02.2019 6 Mths receivables - - 296.42
4 330.00 12.90% 24.10.2016 25.03.2019 6 Mths and personal - - 144.69
guarantee by a
5 170.00 12.90% 22.11.2016 22.04.2019 6 Mths - 6.44 80.23
director
6 1,500.00 14.00% 06.04.2020 07.03.2022 - 1,500.00 - -
Add : Interest accrued but not due 14.38 0.02 4.46
Less: unamortized charges 19.84 - -
Total Amortized Cost 1,494.54 6.46 858.41
iii) Hinduja Leyland Finance Ltd
Sl Amount of Rate of Repayment Morato- Security details Amount Amount Amount
No Term Loan Interest rium outstanding outstanding outstanding
sanctioned per Commence- End date period as on as on as on
annum ment date 31.03.2020 31.03.2019 1.04.2018
1 1,500.00 12.50% 07.02.2015 07.04.2018 - Hypothecation - - 46.44
2 250.00 12.50% 07.04.2015 07.06.2018 - of specified - - 23.08
Hire Purchase
3 2,600.00 10.71% 07.05.2017 07.04.2020 - receivables 84.28 1,039.08 1,897.17
4 1,500.00 10.25% 07.03.2018 07.04.2021 2 Mths and personal 509.79 1,013.98 1,469.35
guarantee by a
director
Add : Interest accrued but not due 4.22 14.49 24.33
Less: unamortized charges - - -
Total Amortized Cost 598.29 2,067.55 3,460.37
iv) Shriram Transport Finance Company Ltd
Sl Amount of Rate of Repayment Morato- Security details Amount Amount Amount
No Term Loan Interest rium outstanding outstanding outstanding
sanctioned per Commence- End date period as on as on as on
annum ment date 31.03.2020 31.03.2019 1.04.2018
1 1,000.00 * 12.50% 27.03.2019 26.03.2020 - Hypothecation - 1,000.00 -
2 2,000.00 13.00% 05.09.2019 05.08.2023 - of specified 1,773.86 - -
Hire Purchase
3 1,000.00 13.00% 05.05.2020 05.04.2023 - receivables 1,000.00 - -
Add : Interest accrued but not due 16.43 2.05 -
Less: unamortized charges 13.33 4.93 -
Total Amortized Cost 2,776.96 997.12 -
* Floating balance working capital loan closed on 26.03.2020

63rd Annual Report 2020 | Financial Year 2019-20 Page | 91

Notes forming an integral part of the financial statements for the Year ended
31st March 2020
v) Profectus Capital (P) Ltd (` Lakhs)
Sl Amount of Rate of Repayment Morato- Security details Amount Amount Amount
No Term Loan Interest rium outstanding outstanding outstanding
sanctioned per Commence- End date period as on as on as on
annum ment date 31.03.2020 31.03.2019 1.04.2018
1 200.00 13.00% 15.04.2019 15.04.2020 - Hypothecation 17.67 200.00 -
of specified
Hire Purchase
receivables
Add : Interest accrued but not due 0.11 0.28 -
Less: unamortized charges - 1.98 -
Total Amortized Cost 17.78 198.30 -

c) loans repayable on demand - Cash credit facilities with banks (secured)

From the Balance Sheet date As at 31st March 2020 As at 31st March 2019 As at 1st April 2018

Interest Amount Interest Amount Interest Amount

Rate Range outstanding Rate Range outstanding Rate Range outstanding
Maturing wih in 1 Year 10.55% to 14,432.38 11.00% to 15,028.40 10.50% to 10,591.42
12.80% 12.50% 12.00%
Add : Interest accrued but not due 125.96 40.40 41.31
Less: unamortized charges 18.33 34.45 64.29
Total Amortized Cost 14,540.01 15,034.35 10,568.44
The Cash Credit facilities from Banks are secured by hypothecation of specified hirepurchase receivables and a personal
guarantee by Director(s). The Company has also extended collateral security of Company’s Building and land belonging
to a Director.
d) There is no default in repayment of loans and interest thereon.
(` Lakhs)
As at As at As at
Particulars 31st March 31st March 1st April
2020 2019 2018
15. DEPOSITS (Unsecured)
At amortized cost
Public Deposits 19,046.38 18,348.07 17,029.53
Total 19,046.38 18,348.07 17,029.53
There is no Deposits measured at FVTPL or designated at FVTPL.

63rd Annual Report 2020 | Financial Year 2019-20 Page | 92

Notes forming an integral part of the financial statements for the Year ended
31st March 2020
Details of Deposits - Unsecured : (` Lakhs)
As at As at As at
Particulars
31st March2020 31st March 2019 1st April 2018
Repayable on maturity:
Interest Range 8% to 9%
Maturing within 1 year 8,322.06 6,058.49 3,388.33
Maturing between 1 to 2 years 7,064.93 6,304.29 3,961.27
Maturing between 2 to 3 years 2,580.74 3,019.28 3,178.34
Interest Range 9% to 10%
Maturing within 1 year – 1,890.32 1,670.50
Maturing between 1 to 2 years – – 1,923.58
Interest Range 10% to 11%
Maturing within 1 year – – 1,900.43
Sub Total 17,967.73 17,272.38 16,022.45
Add : Interest accrued but not due 1,171.20 1,162.57 1,091.06
Less: unamortized charges 92.55 86.88 83.98
Total Amortized Cost 19,046.38 18,348.07 17,029.53

As at As at As at
Particulars 31st March 31st March 1st April
2020 2019 2018
16. SUB-ORDINATED LIABILITIES (Unsecured)
At amortized cost
Non-Convertible Debentures - Unsecured 4,577.35 - -
Redeemable Cumulative Preference Shares (RCPS) 1,630.10 1,656.11 1,129.12
Sub-Ordinated Debts 23,008.68 24,169.85 20,755.00
Total 29,216.13 25,825.96 21,884.12
Sub-Ordinated Liabilities in India 29,216.13 25,825.96 21,884.12
Sub-Ordinated Liabilities outside India - - -
Total 29,216.13 25,825.96 21,884.12
Note: There is no Sub-Ordinated liabilities measured at FVTPL or designated at FVTPL
Terms/rights attached to RCPS
The RCPS do not have voting rights other than matters which directly affect them. In the event of any due and payable
dividends remain unpaid for aggregate period of at least two years prior to the start of any general meeting of the equity
shareholders, RCPS holders shall have voting rights in line with their voting rights of the equity shareholders. The RCPS will
be redeemed at the end of three years from the date of allotment and the payment of dividend would be in accordance with
the terms agreed at the time of issuance of RCPS.
On winding up or repayment of capital, RCPS holders enjoy preferential rights vis a vis equity shareholders, for repayment of
capital paid-up and shall include any unpaid dividends.
For the year ended 31 March 2020, the Company declared and paid an interim dividend of ` 129.65 lakhs after deduction
of TDS of ` 5.35 lakhs) on RCPS of ` 100 each fully paid (31 March 2019 : ` 166.02 lakh).

63rd Annual Report 2020 | Financial Year 2019-20 Page | 93

Notes forming an integral part of the financial statements for the Year ended
31st March 2020
Details of Sub-Ordinated Liabilities - Unsecured :
(` Lakhs)
As at As at As at
From the Balance sheet date
31st March 2020 31st March 2019 1st April 2018
A) Non-Convertible Debentures - Unsecured :
Issued on Public Issue
Repayable on maturity:
Interest Range 10% to 11%
Maturing between 4 years to 5 years 4,374.80 – –
Sub-Total (A) 4,374.80 – –
B) Preference Shares
Repayable on maturity:
10% Redeemable Cumulative Preference Shares
Maturing within 1 year – – 302.45
9% Redeemable Cumulative Preference Shares
Maturing within 1 year 835.00 – –
Maturing between 1 years to 2 years 665.00 835.00 –
Maturing between 2 years to 3 years – 665.00 835.00
Sub Total (B) 1,500.00 1,500.00 1,137.45
C) Sub-Ordinated Debts
- Repayable on maturity:
Interest Range 10% to 11%
Maturing between 3 to 4 years 9,914.40 – –
Maturing between 4 to 5 years 12,221.80 9,914.40 –
Maturing after 5 years 179.40 2,279.20 –
Interest Range 11% to 12%
Maturing within 1 year – 9,094.39 7,485.88
Maturing between 1 years to 2 years – – 9,092.39
Sub Total (C) 22,315.60 21,287.99 16,578.27
Sub-Total (A+B+C) 28,190.40 22,787.99 17,715.72
Add : Interest accrued but not due
A) Non-Convertible Debentures - Unsecured 202.55 - -
B) Preference Shares 135.00 166.01 -
C) Sub-Ordinated Debts 876.67 3,005.97 4,212.80
Less: Unamortized charges
A) Non-Convertible Debentures - Unsecured - - -
A) Preference Shares 4.89 9.90 8.33
B) Sub-Ordinated Debts 183.60 124.11 36.07
Total amortized cost 29,216.13 25,825.96 21,884.12
Sub-Ordinated Liabilities subscribed by related parties refer Note 42

63rd Annual Report 2020 | Financial Year 2019-20 Page | 94

Notes forming an integral part of the financial statements for the Year ended
31st March 2020 (` Lakhs)
As at As at As at
Particulars 31st March 31st March 1st April
2020 2019 2018
17. OTHER FINANCIAL LIABILITIES
Unclaimed dividends (Refer Note below) 56.31 56.94 165.71
Unclaimed matured deposits and Interest accrued theron 598.66 362.71 318.93
Unclaimed matured Sub-Ordinated Debts and Interest accrued theron 252.79 562.38 -
Unclaimed matured debentures and Interest accrued theron 100.73 116.89 285.26
Unclaimed Redeemable Cumulative Preference Shares 3.00 12.00 213.75
Advances from Customers 254.64 103.69 75.27
Security Deposits 11.41 11.41 11.41
Lease Liabilities (Refer Note 49) 443.17 488.21 493.19
Other Payables - 12.46 32.35
Total 1,720.71 1,726.69 1,595.87
Note : Equity Dividend pertaining to the financial year 2011 and 2012 for an amount of ` 500 have not been remitted into Investor Education
and Protection Fund, awaiting clearance from Income Tax authorities.
18. PROVISIONS
Provision for Employee Benefits
Provision for bonus 44.00 20.46 56.58
Provision for gratuity (net) 28.71 38.28 75.27
Provision for leave encashment 49.02 45.45 42.19
Total 121.73 104.19 174.04
19. DEFERRED TAX LIABILITIES (net)
a. Application of Expected Credit Loss on Financial Assets (663.41) (559.36) (565.26)
b. Employee benefit expenses (30.64) (5.15) (16.48)
c. Right of Use Assets and Lease Liabilities (6.27) (2.05) 10.00
d. Application of EIR on Financial Liabilities 99.22 82.56 72.46
e. Differences in Carrying amount of Property, Plant and Equipment 816.81 860.25 1,038.54
Total 215.71 376.25 539.26
20. OTHER NON-FINANCIAL LIABILITIES
Tax Deducted at source 91.89 105.29 90.29
Total 91.89 105.29 90.29
21. SHARE CAPITAL
Authorised Share Capital
10,00,00,000 Equity shares of Rs.10 each 10,000.00 10,000.00 7,000.00
(FY 2019 : 10,00,00,000, FY 2018 : 7,00,00,000 : Equity Shares of ` 10 each)
30,00,000 Redeemable Cumulative Preference Shares of ` 100 each 3,000.00 3,000.00 3,000.00
13,000.00 13,000.00 10,000.00
Issued, Subscribed and Paid up Share capital
6,47,05,882 Equity shares of Rs.10 each fully paid up 6,470.59 5,000.00 5,000.00
(FY 2019 : 5,00,00,000, FY 2018 : 5,00,00,000 : Equity Shares of ` 10 each)
6,470.59 5,000.00 5,000.00

63rd Annual Report 2020 | Financial Year 2019-20 Page | 95

Notes forming an integral part of the financial statements for the Year ended
31st March 2020
a) Reconciliation of shares outstanding at the beginning and end of the year (` Lakhs)
As at 31st March 2020 As at 31st March 2019 As at 1st April 2018
Particulars
No. of Shares Amount No. of Shares Amount No. of Shares Amount
Equity Shares with Voting Rights
Number of Shares at the 5,00,00,000 5,000.00 5,00,00,000 5,000.00 5,00,00,000 5,000.00
beginning of the year
Add : Allotment of Equity Shares 1,47,05,882 1,470.59 - - - -
on preferential basis made
during the year
Number of Shares at the end of 6,47,05,882 6,470.59 5,00,00,000 5,000.00 5,00,00,000 5,000.00
the year
b) Details of shareholders holding more than 5% shares in the sharecapital of the company
As at 31st March 2020 As at 31st March 2019 As at 1st April 2018
Particulars % of No. of % of No. of % of No. of
Holding Shares Holding Shares Holding Shares
Equity Shares with Voting Rights
1. Sakthifinance Financial 19.19 1,24,20,000 16.22 81,10,000 16.22 81,10,000
Services Limited
2. ABT Investments (India) 13.49 87,27,400 17.45 87,27,400 17.45 87,27,400
Private Limited
3. Sakthi Financial Services 11.06 71,57,128 6.82 34,11,246 6.82 34,11,246
(Cochin) Private Limited
4. Avdhoot Finance and 8.69 56,24,208 11.25 56,24,208 11.25 56,24,208
Investment Private Limited
5. Sakthi Management Services 7.09 45,85,434 2.27 11,35,434 2.27 11,35,434
(Coimbatore) Limited
6. Bridgewater Investment 6.88 44,50,000 8.90 44,50,000 8.90 44,50,000
Corporation Limited
7. The Gounder and Company 6.07 39,25,000 7.85 39,25,000 7.85 39,25,000
Auto Limited
8. ABT Finance Limited 5.15 33,31,162 0.26 1,31,162 0.26 1,31,162
c) Terms/ rights attached to equity shares
The Company has only one class of equity shares having a par value of ` 10 per share. Each holder of equity shares is
entitled to one vote per share. The dividend is subject to the approval of the shareholders at the ensuing annual general
meeting. The Board of Directors have, at their meeting held on 30 July 2020, recommended a dividend of 6 per cent,
` 0.60 per share (Dividend for 31st March 2019 : ` 1) on equity shares. The Company declares and pays dividend in Indian
rupees.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of
the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity
shares held by the shareholders.
Details of Dividends proposed (` Lakhs)
Particulars 31 March 2020 31st March 2019
Face Value per share (Rs.) 10.00 10.00
Dividend Percentage 6% 10%
Dividend per Share (Rs.) 0.60 1.00
Dividend on equity shares 388.24 500.00
Dividend distribution tax – 102.78
Total Dividend including dividend distribution tax 388.24 602.78
Note : The dividends proposed for the financial year 31st March 2019 have been paid to share holders in the subsequent
financial year and accounted on payment basis on approval of the members of the company at relevant Annual General
Meeting. The dividends proposed for the financial year 31st March 2020 shall be paid to share holders on approval of
the members of the company at the ensuing Annual General Meeting.

63rd Annual Report 2020 | Financial Year 2019-20 Page | 96

Notes forming an integral part of the financial statements for the Year ended
31st March 2020
(` Lakhs)
As at As at As at
Particulars 31st March 31st March 1st April
2020 2019 2018
22. OTHER EQUITY
Reserves and Surplus
Statutory Reserve as per Section 45IC of the RBI Act 1934
Opening Balance 2,943.92 2,704.65 2,466.12
Add : Transfer from Retained Earnings 223.59 239.27 238.53
Closing balance 3,167.51 2,943.92 2,704.65
Capital Reserve
Balance as at the Opening and Closing of the year 52.61 52.61 52.61
Securities Premium
Opening Balance 801.07 801.07 801.07
Add : Securities Premium on Preferential Issue of Equity Shares 1,029.41 –
Less : NCD Public issue expenses 399.56 – –
Closing Balance 1,430.92 801.07 801.07
General Reserve
Opening Balance 1,172.25 500.00 1,500.00
Add : Transfer from Debebture Redemption Reserve 3,263.75 672.25
Less : Transfer to Retained Earnings – – 1,000.00
Closing Balance 4,436.00 1,172.25 500.00
Debenture Redemption Reserve
Opening Balance 3,263.75 3,936.00 2,603.00
Add : Transfer from Retained Earnings – – 1,333.00
Less : Transfer to General Reserve 3,263.75 672.25 –
Closing Balance – 3,263.75 3,936.00
Retained Earnings
Opening Balance 2,834.95 2,719.51 2,790.10
Add : Profit after tax for the year 1,117.94 957.49 1,102.74
Transfer from General Reserve – – 1,000.00
3,952.89 3,677.00 4,892.84
Less: Appropriations
Equity Dividend (` 1 per share) paid 500.00 500.00 500.00
Tax on Dividend-Equity Shares 102.78 102.78 101.80
Transfer to Statutory Reserve 223.59 239.27 238.53
Transfer to Debenture Redemption Reserve – – 1,333.00
Closing Surplus 3,126.52 2,834.95 2,719.51
Item of Other Comprehensive Income (“OCI”)
(i) Fair value changes in Equity Instruments
Opening Balance (26.54) – –
Add : Income/(Expenses) for the year (22.38) (26.54) –
Closing Balance (48.92) (26.54) -
(ii) Actuarial changes in Defined benefit obligation
Opening Balance (4.54) – –
Add : Income/(Expenses) for the year 16.84 (4.54) –
Closing Balance 12.30 (4.54) -
Closing Balance (i) + (ii) (36.62) (31.08) -
Total 12,176.94 11,037.47 10,713.84

63rd Annual Report 2020 | Financial Year 2019-20 Page | 97

Notes forming an integral part of the financial statements for the Year ended
31st March 2020
Nature and purpose of reserves
Capital reserve: Capital reserve is the excess amount received on re-issue of forfeited equity shares in an earlier year.
Securities Premium : The amount received in excess of face value of the equity shares is recognised in Securities premium.
The reserve can be utilised only for limited purposes such as issuance of bonus shares in accordance with the provisions of
the Companies Act 2013. Debenture issue expenses have been written off against Securities Premium.
General reserve: General reserve was created through an annual transfer of net profit at a specified percentage in accordance
with applicable regulations. General reserve can be utilised only in accordance with the specific requirements of Companies
Act 2013.
Debenture redemption reserve:
a. The Company is required to transfer 25% of the value of the outstanding debentures issued through public issue to
Debenture Redemption Reserve (“DRR”).
b. As per the Notification No.G.S.R. 574(E) dated 16 August 2019 issued by the Ministry of Corporate Affairs which has
amended the Companies (Share Capital and Debentures) Rules 2014, no DRR is required to be created for debentures
issued by a Non-BankingFinance Company (“NBFC”) subsequent to the notification date. Accordingly, the Company has
not created DRR on public issue of non-convertible debentures issued after the date of said notification.
c. In respect of the debentures issued through public issue, the Company has created DRR of ` Nil (March 31, 2019:
` 3263.75 Lakhs ).
d. On redemption of the debentures for which the DRR, is created, the amounts no longer necessary to be retained in this
account need to be transferred to the retained earnings.
e. During the year, the balance amount standing to the DRR which is no longer required to be created, has been transferred
to retained earnings.
Statutory reserve: Every year the Company transfers a sum of not less than twenty per cent of net profit of that year as
disclosed in the statement of profit and loss to its Statutory Reserve as per Section 45-IC of the RBI Act 1934.
Retained earnings: Retained earnings are the profits that the Company has earned till date less any transfers to statutory
reserve, debenture redemption reserve, general reserve, dividends distributions paid to shareholders and transfer from
debenture redemption reserve.

63rd Annual Report 2020 | Financial Year 2019-20 Page | 98

Notes forming an integral part of the financial statements for the Year ended
31st March 2020
(` Lakhs)
For the For the
Particulars Year ended Year ended
31st March 2020 31st March 2019
23. Interest Income
(On Financial instruments measured at amortised cost)
Income from Hire purchase operations 15,521.70 14,874.64
Interest from:
- Loans 383.43 439.15
- Bank deposits 21.19 81.22
- Investments 232.40 219.05
Total 16,158.72 15,614.06
There is no income on Financial Instruments measured at FVTOCI
24. Fees and Commission
- Service Charges 381.66 576.21
- Stamp and documentation charges 102.23 156.43
483.89 732.64
25. Sale of power from Wind Mills
Income from Wind mill -Sale of Electricity 208.43 217.66
208.43 217.66
26. Other Income
- Profit on sale of Property, Plant and Equipment 0.00 1.47
- Miscellaneous income 0.40 3.33
Total 0.40 4.80
27. Finance Costs
(On Financial Liabilities measured at amortised cost)
Interest Expense on:
- Deposits 1,640.61 1,582.63
- Borrowings 2,304.29 2,497.01
- Debt Securities 3,140.72 3,202.12
- Sub-Ordinated Liabilities 2,863.75 2,548.27
- Lease Liability 38.41 39.61
Bank Charges 121.62 156.90
Total 10,109.40 10,026.54
Note : Other than financial liabilities measured at amortised cost, there are
no other financial liabilities measured at FVTPL
28. Impairment on financial instruments
(On Financial instruments measured at amortised cost)
Investments 2.80 2.70
Hire Purchase Receivables 545.14 337.13
Trade Receivables 11.21 34.25
Bad Debts 170.29 264.64
Total 729.44 638.72
There is no impairment on Financial Instruments measured at FVTOCI

63rd Annual Report 2020 | Financial Year 2019-20 Page | 99

Notes forming an integral part of the financial statements for the Year ended
31st March 2020 (` Lakhs)
For the For the
Particulars Year ended Year ended
31st March 2020 31st March 2019
29. Employee Benefits ExpenseS
Salaries and wages 2,315.35 2,160.70
Contributions to Provident and Other Funds 98.62 94.09
Staff Welfare Expenses 137.59 117.88
Gratuity 45.09 29.90
Leave Encashment 36.92 63.90
Total 2,633.57 2,466.47
30. Depreciation and Amortization
Depreciation on Property, Plant and Equipment 238.91 226.98
Amortization - Intangibles 77.26 71.41
Depreciation on Investment property 4.60 4.60
Amortization - Right of use assets 144.84 135.73
Total 465.61 438.72
31. Other Expenses
Rent 59.89 66.23
Rates, Taxes and Licences 179.28 175.74
Stamping on documents 27.96 31.63
Communication 73.94 91.27
Insurance 14.04 15.42
Travelling and Conveyance 395.12 502.60
Printing and Stationery 48.96 56.68
Power and Fuel 40.02 35.63
Advertisements 15.92 25.05
Auditor’s Remuneration :
As Auditor:
- Audit Fee 16.00 14.00
- Limited Review Fee 7.10 4.85
- Certification Fee 5.25 4.87
- Reimbursement of Expenses 2.45 1.65
Legal and Professional Charges 203.91 237.45
Repairs and Maintenance on:
- Buildings 78.52 90.21
- Machinery 52.19 50.98
- Information Technology 146.93 76.37
- Other Assets 34.70 40.74
Filing Fees 9.28 31.28
Directors’ Sitting Fees 11.80 12.60
Corporate Social Responsibility Expenses (Refer Note 35) 12.19 40.79
Loss on Sale of Property, Plant and Equipment 1.50 –
Miscellaneous Expenses 72.76 160.18
Total 1,509.71 1,766.22
32. Contingent Liabilities
Claims against the Company not acknowledged as debt;
a) Income Tax issues 9.83 9.83
b) Service Tax Issues 1328.29 1328.29
The company has deposited with Service Tax department an amount of ` 98.63 lakhs against the demand relating to
payment of Cenvat credit under Protest. The company’s writ petition before the Honourable High Court of Madras against
the levy has been admitted and stay has been granted.
c) The pending litigations as at 31.3.2020 has been compiled and reviewed. The current position of litigations has been
evaluated and effect thereof have been appropriately disclosed in the financial statements.

63rd Annual Report 2020 | Financial Year 2019-20 Page | 100

Notes forming an integral part of the financial statements for the Year ended
31st March 2020 (` Lakhs)
For the For the
Particulars Year ended Year ended
31st March 2020 31st March 2019
33. Expenditure in foreign currency on account of :
Intangible Assets - 13.02
Travelling and Conveyance - 5.97
Annual Maintenance Charges - Information Technology 83.43 83.43
34. Remittance of Dividend in foreign currency
Year to which the dividend relates 2018-19 2017-18
No. of non-resident share holders 1 1
No. of shares on which dividend remittance was made 44,50,000 44,50,000
Amount remitted (` Lakhs) 44.50 44.50
35. Note on Expenditure on Corporate Social Responsibility
The following is the information regarding projects/programmes undertaken and expenses incurred on CSR activities
during the year ended 31st March 2020:
I. Gross amount required to be spent by the company during the year: ` 38.53 Lakhs
II. Amount spent during the year on: (by way of contribution to the trusts and the projects undertaken)
Particulars Amount Spent
a. Construction / acquisition of any asset
b. On purposes other than (a) above:
Promoting Education 6.71
Promoting Healthcare 2.46
Promoting Healthcare including preventive health care and others
Swachh Bharath Project
Promoting Sports 3.02
Others
Total 12.19
The Company has so far spent ` 12.19 lakhs as against the required amount to be spent during the financial year 2019-20.
Due to Covid-19 pandemic lockdown during March - May 2020, the company was unable to spend the balance amount of
` 26.34 lakhs.

36. Capital management

The company determines the amount of capital required on the basis of factors like funding structure, capital adequacy ratio
and leveraging ratios. The capital adequacy ratio working are given below. The capital structure is also monitored on the
basis of Capital adequacy ratio.
The Company has complied with all regulatory requirements related to capital and capital adequacy ratios as prescribed by
RBI.
As at As at As at
Particulars
31.03.2020 31.03.2019 01.04.2018
Tier - I Capital 15,357.08 13,887.80 13,515.18
Tier - II Capital 10,768.57 9,596.46 4,115.95
Total Capital 26,125.65 23,484.26 17,631.13
Aggregate of Risk Weighted Assets 1,19,197.86 1,05,057.62 1,02,376.60
Tier-I Capital adequacy ratio 12.88 13.22 13.20
Total Capital adequacy ratio 21.91 22.35 17.22

63rd Annual Report 2020 | Financial Year 2019-20 Page | 101

Notes forming an integral part of the financial statements for the Year ended
31st March 2020
“Tier I Capital” means owned fund as reduced by investment in shares of other non-banking financial companies and in
shares, debentures, bonds, outstanding loans and advances including hire purchase and lease finance made to and deposits
with subsidiaries and companies in the same group exceeding, in aggregate, ten per cent of the owned fund.
“Owned fund” means paid up equity capital, preference shares which are compulsorily convertible into equity, free reserves,
balance in share premium account and capital reserves representing surplus arising out of sale proceeds of asset, excluding
reserves created by revaluation of asset, as reduced by accumulated loss balance, book value of intangible assets and
deferred revenue expenditure, if any.
“Tier II Capital” includes the following -
a. preference shares other than those which are compulsorily convertible into equity;
b. revaluation reserves at discounted rate of fifty five percent;
c. General provisions (including that for Standard Assets) and loss reserves to the extent these are not attributable to actual
diminution in value or identifiable potential loss in any specific asset and are available to meet unexpected losses, to the
extent of one and one fourth percent of risk weighted assets
d. hybrid debt capital instruments; and
e. Sub-Ordinated debt to the extent the aggregate does not exceed Tier I capital.
Aggregate Risk Weighted Assets:
Under RBI Guidelines, degrees of credit risk expressed as percentage weightages have been assigned to eachof the on-
balance sheet assets and off- balance sheet assets. Hence, the value of each of the on-balance sheetassets and off- balance
sheet assets requires to be multiplied by the relevant risk weights to arrive at risk adjustedvalue of assets. The aggregate
shall be taken into account for reckoning the minimum capital ratio.
37. FUNDS RAISED BY ISSUE OF EQUITY SHARES ON PREFERENTIAL BASIS TO PROMOTER GROUP COMPANIES AND OTHER
CORPORATE BODY
During the financial year, the Company made an issue of 1,47,05,882 Equity Shares on preferential basis to Promoter Group
Companies and Other Corporate Body at ` 17 per share for an amount not exceeding ` 25 crores. The equity shares were
allotted on 13th March 2020 and were listed in BSE Limited on 27th May 2020 and admitted for trading on 4th June 2020.
The details of utilization of preferential issue proceeds are given below:
(` Lakhs)
Particulars Amount
Issue proceeds raised 2,500.00
Utilised for :
a. Working Capital requirements 2,487.07
b. Issue Expenses 12.93
Balance to be utilized –

63rd Annual Report 2020 | Financial Year 2019-20 Page | 102

 38. Maturity Analysis of Assets and Liabilities
The table below show the maturity analysis of assets and liabilities according to when they are expected to be recoverd or settled. (` Lakhs)
As at As at
Less than 12 More than Less than 12 More than Less than 12 More than As at
PARTICULARS 31st March 31st March
momths 12 months momths 12 months momths 12 months 1st April 2018
2020 2019
ASSETS
Financial Assets
Cash and cash Equivalents 1,112.79 - 1,112.79 3,359.77 - 3,359.77 3,764.70 - 3,764.70
Bank Balances other than Cash and cash 469.39 - 469.39 695.04 - 695.04 1,386.66 - 1,386.66
Equivalents
Receivables

(i) Trade Receivables 237.36 - 237.36 114.81 - 114.81 96.25 - 96.25

(ii) Other Receivables 8.69 - 8.69 6.72 - 6.72 8.54 - 8.54
Other Long Term Liabilities

Long-Term Provisions
Loans 52,429.41 54,616.77 1,07,046.18 48,762.22 43,891.90 92,654.12 43,621.69 45,849.45 89,471.14

63rd Annual Report 2020 | Financial Year 2019-20

Investments - 2,659.80 2,659.80 149.60 2,633.49 2,783.09 136.02 2,422.40 2,558.42
Other Financial Assets 2,044.27 - 2,044.27 1,743.13 - 1,743.13 1,767.27 - 1,767.27
Non-Financial Assets
Current tax Assets (net) 36.80 - 36.80 50.06 - 50.06 - - -
Deferred tax Assets (net) - - -

Investment Property - 284.41 284.41 - 289.01 289.01 - 293.61 293.61

Property Plant and Equipment - 6,316.65 6,316.65 - 6,474.52 6,474.52 - 6,527.16 6,527.16
Right of use assets 156.86 1,174.22 1,331.08 99.85 1,331.08 1,430.93 88.35 1,430.93 1,519.28
Intangible Assets under development - 15.07 15.07 - - - - 68.20 68.20
Other Intangible Assets - 114.95 114.95 190.33 - 190.33 - 157.51 157.51
Other Non-Financial Assets 323.78 - 323.78 270.45 - 270.45 - 157.45 157.45
Total Assets 56,819.35 65,181.87 1,22,001.22 55,441.98 54,620.00 1,10,061.98 50,869.48 56,906.71 1,07,776.19

Page | 103
 (` Lakhs)
As at As at
Less than 12 More than Less than 12 More than Less than 12 More than As at
PARTICULARS 31st March 31st March
momths 12 months momths 12 months momths 12 months 1st April 2018
2020 2019
LIABILITIES AND EQUITY
Liabilities
Financial Liabilities
Payables
(I) Trade Payable
(i) Total outstanding dues of micro 6.87 - 6.87 0.33 - 0.33 - - -
enterprises and small enterprises
(ii) Total outstanding dues of creditors 160.76 - 160.76 185.23 - 185.23 117.89 - 117.89
other than micro enterprises and small
enterprises
(II) Other Payables
(i) Total outstanding dues of micro - - - - - - - - -
enterprises and small enterprises
(ii) Total outstanding dues of creditors 101.99 - 101.99 251.05 - 251.05 140.08 - 140.08

63rd Annual Report 2020 | Financial Year 2019-20

other than micro enterprises and small
enterprises
Debt Securities 17,119.99 14,333.33 31,453.32 5,203.87 21,104.38 26,308.25 6,109.41 24,843.57 30,952.98
Borrowings (Other than debt securities) 17,688.72 3,529.48 21,218.20 19,373.58 1,419.62 20,793.20 14,968.99 4,512.35 19,481.34
Deposits 9,055.02 9,991.36 19,046.38 8,636.24 9,711.83 18,348.07 7,606.21 9,423.32 17,029.53
Sub-Ordinated Liabilities 967.45 28,248.68 29,216.13 12,136.34 13,689.62 25,825.96 9,881.75 12,002.37 21,884.12
Other Financial Liabilities 1,388.74 331.97 1,720.71 1,283.52 443.17 1,726.69 1,107.66 488.21 1,595.87
Non-Financial Liabilities
Current tax Liabilities (net) - - - - - - 56.95 - 56.95
Provisions 72.71 49.02 121.73 58.74 45.45 104.19 131.85 42.19 174.04
Deferred tax Liabilities (net) - 215.71 215.71 - 376.25 376.25 - 539.26 539.26
Other Non-Financial Liabilities 91.89 - 91.89 105.29 - 105.29 90.29 - 90.29
Equity
Equity Share Capital - 6,470.59 6,470.59 - 5,000.00 5,000.00 - 5,000.00 5,000.00
Other Equity - 12,176.94 12,176.94 - 11,037.47 11,037.47 - 10,713.84 10,713.84
Total Liabilities and Equity 46,654.14 75,347.08 122,001.22 47,234.19 62,827.79 110,061.98 40,211.08 67,565.11 107,776.19

Page | 104
Notes forming an integral part of the financial statements for the Year ended
31st March 2020
39. DISCLOSURE PURSUANT TO IND AS “7” - Change in Liabilities arising from Financing Activities (` Lakhs)
Particulars 1st April 2018 Cash Flows Others 31st March 2019
Debt Securities 30,952.98 (4,666.98) 22.25 26,308.25
Deposits 17,029.53 1,236.18 82.36 18,348.07
Borrowings Other than Debt securities 19,481.34 1,311.86 - 20,793.20
Sub-Ordinated Liabilities 21,884.12 3,902.86 38.98 25,825.96
Lease Liability 493.19 (135.73) 130.75 488.21
Total 89,841.16 1,648.19 274.34 91,763.69

Particulars 31st March 2019 Cash Flows Others 31st March 2020
Debt Securities 26,308.25 5,101.54 43.53 31,453.32
Deposits 18,348.07 614.48 83.83 19,046.38
Borrowings Other than Debt securities 20,793.20 425.00 - 21,218.20
Sub-Ordinated Liabilities 25,825.96 3,343.43 46.74 29,216.13
Lease Liability 488.21 (146.75) 101.71 443.17
Total 91,763.69 9,337.70 275.81 1,01,377.20

40. DISCLOSURE PURSUANT TO IND AS “12” INCOME TAX

a. Explanation of Relationship between tax Expense and Accounting Profit
Sl No Particulars FY 2019-20 FY 2018-19
1 Profit before Tax 1,401 .03 1,379 .31
2 Applicable Income Tax Rate 25.17% 29.12%
3 Expected Income Tax Expense 352.61 401.66
4 Tax effect of adjustments to reconcile expected Income tax expense at tax
rate to reported income tax expense:
Effect of expenses / provisions not deductible in determining taxable profit 380.17 387.69
Effect of expenses / provisions deductible in determining taxable profit (449.69) (377.26)
Effect of tax incentives and concessions - (16.97)
Effect of differential tax rate - (59.32)
Adjustment related to tax of prior years - 86.02
Tax Effect of Adjustments (69.52) 20.16
5 Tax Expense/(Income) 283.09 421.82
b. Deferred Tax Asset/(Liabilities) - Major Components
Tax Expense/ Tax Expense/
Balance as at Balance as at
Sl No Particulars (Income) (Income)
1.4.2018 31.03.2019
charged in P&L charged in OCI
(A) (B) (C) D = (A) - (B+C)
1 Application of Expected Credit Loss on 565.26 5.90 - 559.36
Financial Assets
2 Employee benefit expenses 16.48 12.86 (1.53) 5.15
3 Right of Use Assets & Lease Liabilities (10.00) (12.05) - 2.05
4 Application of EIR on Financial Liabilities (72.46) 10.10 - (82.56)
5 Differences in Carrying amount of (1,038.54) (178.29) - (860.25)
Property, Plant and Equipment
Deferred Tax Asset / (Liabilities) (539.26) (161.48) (1.53) (376.25)

63rd Annual Report 2020 | Financial Year 2019-20 Page | 105

Notes forming an integral part of the financial statements for the Year ended
31st March 2020
(` Lakhs)
Tax Expense/ Tax Expense/
Balance as at Balance as at
Sl No Particulars (Income) (Income)
31.03.2019 31.03.2020
charged in P&L charged in OCI
(A) (B) (C) D = (A) - (B+C)
1 Application of Expected Credit Loss on 559.36 (104.05) - 663.41
Financial Assets
2 Employee benefit expenses 5.15 (31.47) 5.98 30.64
3 Right of Use Assets & Lease Liabilities 2.05 (4.22) - 6.27
4 Application Of EIR On Financial (82.56) 16.66 - (99.22)
Liabilities
5 Differences in Carrying amount of (860.25) (43.44) - (816.81)
Property,Plant and Equipment
Deferred Tax Asset / (Liabilities) (376.25) (166.52) 5.98 (215.71)
c. Tax Items in Statement of Profit and Loss
31st March 31st March
Sl No Particulars
2020 2019
1 Current Tax Expense/(Income) 449.61 583.30
2 Deferred Tax Expense/(Income)
Amount of deferred tax expense/(income) relating to originating and reversal (166.52) (102.17)
of temporary difference
Amount of deferred tax expense/(income) relating to change in tax rates or - (59.31)
the imposition of new taxes
Income Tax Expense / (Income) recognised in statement of profit and loss 283.09 421.82
d. Tax Items recognised in Other Comprehensive Income
31st March 31st March
S.No Particulars
2020 2019
1 Tax Expense
- Current Tax Expense - -
- Deferred Tax Expense 5.98 (1.53)
Income Tax Expense/(Income) recognised in Other Comprehensive Income 5.98 (1.53 )

e. There is no tax expense charged directly to other equity

f. Tax U/s 115 BAA of Income Tax Act
Pursuant to the Taxation Laws (Amendment) Ordinance 2019, Finance (No. 2) Act, 2019, the Company had exercised
the option permitted Under Section 115BAA of the Income Tax Act, 1961 to compute Income Tax at an effective rate
(ie., 25.17 %) from the financial year 2019 - 20 and accordingly, the company had re-measured the deferred tax as at
31st March 2019.

63rd Annual Report 2020 | Financial Year 2019-20 Page | 106

Notes forming an integral part of the financial statements for the Year ended
31st March 2020
41. Disclosure requirements Under Ind AS 19 (“Employee Benefits”)
a. Defined benefit obligation - Gratuity
The Gratuity scheme is a defined benefit plan, that provides for a lumpsum payment upon death while in employment
or at the time of separation. Based on rules of the scheme, the benefits are calculated on basis of last drawn salary and
the period of service rendered and paid as lumpsum. There is a vesting period of 5 years. The plan invloves the following
risks that affect the liabilities and cash flows
1. Interest rates risk:
The defined benefit obligation calculated using a discount rate based on government bonds. If bond yields fall,
the defined benefit obligation will tend to increase.
2. Salary inflation risk:
Higher than expected increases in salary will increase the defined benefit obligation.
3. Demographic risks:
This is the risk of volatility of results due to unexpected nature of decrements that include mortality attrition, disability
and retirement. The effects of this decrement on the DBO depend upon the combination of salary increase, discount
rate, and vesting criteria and therefore not very straight forward. It is important not to overstate withdrawal rate
because the cost of retirement benefit of a short service employees will be less compared to long service employees.
5. Actuarial Risk:
It is the risk that benefits will cost more than expected. This can arise due to one of the following reasons
Adverse Salary Growth Experience: Salary hikes that are higher than the assumed salary escalation will result into an
increase in Obligation at a rate that is higher than expected.
Variability in mortality rates: If actual mortality rates are higher than assumed mortality rate assumption than the
Gratuity benefits will be paid earlier than expected. Since there is no condition of vesting on the death benefit, the
acceleration of cash flow will lead to an actuarial loss or gain depending on the relative values of the assumed salary
growth and discount rate.
Variability in withdrawal rates: If actual withdrawal rates are higher than assumed withdrawal rate assumption than
the Gratuity benefits will be paid earlier than expected. The impact of this will depend on whether the benefits are
vested as at the resignation date
6. Investment Risk:
For funded plans that rely on insurers for managing the assets, the value of assets certified by the insurer may not be
the fair value of instruments backing the liability. In such cases, the present value of the assets is independent of the
future discount rate. This can result in wide fluctuations in the net liability or the funded status if there are significant
changes in the discount rate during the inter-valuation period.
(` Lakhs)
Sl As at As at As at
Particulars
No 31.03.2020 31.03.2019 01.04.2018
I Present Value of Defined Benefit Obligation
Defined benefit obligation at the beginning of the period 257.25 263.39 266.61
(i) Current service cost 20.79 22.98 23.27
(ii) Past Service Cost - - 20.00
(iii) Interest cost 12.19 18.51 18.92
(iv) Re-measurement Loss/(gain) due to : - - -
(a) Changes in financial assumptions 10.56 - (2.89)
(b) Changes in demographic assumptions (0.40) (3.84) -
(c ) Experience on defined benefit obligation (1.33) (23.49) (46.84)
(v) Benefits paid (101.19) (20.30) (15.68)
Defined benefit obligation as at the end of the period 197.87 257.25 263.39

63rd Annual Report 2020 | Financial Year 2019-20 Page | 107

Notes forming an integral part of the financial statements for the Year ended
31st March 2020 (` Lakhs)
Sl Particulars As at As at As at
No 31.03.2020 31.03.2019 01.04.2018
II Fair Value of Plan Assets
Fair Value of Plan Assets at the beginning of the period 218.97 188.12 174.69
(i) Benefits Paid (101.19) (20.30) (15.68)
(ii) Employer Contribution 9.52 69.02 17.23
(iii) Expected Interest Income on Plan Assets 10.21 15.53 12.83
(iv) Actuarial (Loss)/Gain from Return on plan Assets 31.65 (33.40) (0.95)
Fair Value of Plan Assets as at the end of the period 169.16 218.97 188.12
Net (Asset)/Liability Recognised in Balance Sheet ( I-II) 28.71 38.28 75.27
III Cost of Defined Benefit Plan for the Year
(i) Current service cost 20.79 22.98 23.27
(ii) Past Service Cost - - 20.00
(iii) Interest Cost 12.19 18.51 18.93
(iv) Expected Interest Income on Plan assets (10.21) (15.53) (12.83)
Net Cost recognized in the Statement of Profit and Loss 22.77 25.96 49.37
IV Re-measurement (loss)/gain due to :
(a) Changes in financial assumptions (10.56) - 2.89
(b) Changes in demographic assumptions 0.40 3.84 -
(c ) Experience on defined benefit obligation 1.33 23.49 46.84
Actuarial (Loss)/Gain from Return on plan assets 31.65 (33.40) (0.95)
Net cost recognised in Other Comprehensive Income 22.82 (6.07) 48.78
V Significant Actuarial Assumptions
(i) Discount Rate 6% 7% 7%
(ii) Expected Return on Plan Assets 6% 7% 7%
(iii) Salary Escalation Rate 4% 4% 4%
(iv) Attrition Rate 22% 15% 19%
VI Sensitivity Analysis for significant actuarial assumption
(i) Discount Rate
+ 100 Basis Rate (6.39%) (7.44%) (5.62%)
- 100 Basis Rate 6.91% 8.11% 5.98%
(ii) Salary Growth
+ 100 Basis Rate 6.67 % 8.11% 5.27 %
- 100 Basis Rate (6.27%) (7.56%) (5.02%)
(iii) Attrition Rate
+ 100 Basis Rate (0.11%) 0.54% 0.23%
- 100 Basis Rate 0.09% (0.62%) (0.26%)
Other Long Term Benefits - Leave Encashment
b.
The leave encashment is long term benefit plan, that provides for a lumpsum payment upon death of employee or at
the time of separation. Based on scheme rules the benefits are calculated on the basis of last drawn salary and the leave
count and paid as lumpsum.
The benefit involves the following risks that affect the liabilities and cash flows.

63rd Annual Report 2020 | Financial Year 2019-20 Page | 108

Notes forming an integral part of the financial statements for the Year ended
31st March 2020
1. Interest rates risk :
The defined benefit obligation calculated using a discount rate based on government bonds. If bond yields fall, the
defined benefit obligation will tend to increase.
2. Salary inflation risk:
Higher than expected increases in salary will increase the defined benefit obligation.
3. Demographic risks:
This is the risk of volatility of results due to unexpected nature of decrements that include mortality attrition, disability
and retirement. The effects of this decrement on the DBO depend upon the combination salary increase, discount rate,
and vesting criteria and therefore not very straight forward. It is important not to overstate withdrawal rate because
the cost of retirement benefit of a short service employees will be less compared to long service employees.
(` Lakhs)
Sl As at As at As at
Particulars
No 31.03.2020 31.03.2019 01.04.2018
I Present Value of Defined Benefit Obligation
Defined benefit obligation at the beginning of the period 45.45 42.19 -
(i) Current service cost 8.35 7.27 42.19
(ii) Interest cost 1.94 2.18 -
(iii) Re-measurement Loss/(gain) due to : - - -
(a) Changes in financial assumptions 2.75 - -
(b) Changes in demographic assumptions - - -
(c ) Experience on defined benefit obligation 23.88 54.44 -
(v) Benefits paid (33.35) (60.63) -
Closing defined benefit obligation 49.02 45.45 42.19
II Cost of Defined Benefit Plan for the Year
(i) Current service cost 8.35 7.27 42.19
(ii) Interest cost 1.94 2.19 -
Net Cost recognized in the statement of Profit and Loss 10.29 9.46 42.19
III Significant Actuarial Assumptions
(i) Discount Rate 7% 7% 7%
(ii) Expected Return on Plan Assets - - -
(iii) Salary Escalation Rate 4% 4% 4%
(iv) Attrition Rate 19% 19% 19%
IV Sensitivity Analysis for significant actuarial assumption
(i) Discount Rate
+ 100 Basis Rate (1.95%) (2.49%) (2.57%)
- 100 Basis Rate 2.14% 2.86% 2.97%
(ii) Salary Growth
+ 100 Basis Rate 1.91% 2.75% 2.87%
- 100 Basis Rate (1.77%) (2.43%) 1.37%
(i) Discount Rate
+ 100 Basis Rate 0.05% 0.47% 0.51 %
- 100 Basis Rate (0.07%) (0.54%) (0.59%)

63rd Annual Report 2020 | Financial Year 2019-20 Page | 109

Notes forming an integral part of the financial statements for the Year ended
31st March 2020
42. Disclosure pursuant to Ind AS “24” - Related Party Disclosure
Relationships
A Enterprises in which the Key Management Personnel ABT Ltd.
and their relatives can exercise significant influence ABT Finance Ltd.
ABT Foundation Ltd.
ABT Industries Ltd.
ARC Retreading Co. Pvt. Ltd.
N Mahalingam & Co
Nachimuthu Industrial Association
Ramanandha Adigalar Foundation
Sakthifinance Financial Services Ltd.
Sakthifinance Holdings Ltd.
Sakthi Realty Holdings Ltd.
Sakthi Sugars Ltd.
Sakthi Auto Components Ltd
Sakthi Properties (Coimbatore) Ltd
Sri Chamundeswari Sugars Ltd.
Sri Sakthi Textiles Ltd.
The Gounder and Company Auto Ltd.
B Key Management Personnel Dr M Manickam, Chairman
Sri M Balasubramaniam, Vice Chairman and Managing Director
Sri M Srinivaasan, Director
Dr A Selvakumar Independent Director
Sri P S Gopalakrishnan, Independent Director
Smt Priya Bhansali, Independent Director
Sri K P Ramakrishnan, Independent Director
Dr S Veluswamy, Director (Finance & Operations)
Sri S Venkatesh, Company Secretary
c Relatives of Key Management Personnel Smt Vinodhini Balasubramaniam, Wife
Smt Samyuktha Vanavarayar
Mrs Shruthi Balasubramaniam
Mr Amrith Vishnu Balasubramaniam
Sri M Harihara Sudhan
Smt Bhavani Gopal
Smt Lalitha Ramakrishnan

63rd Annual Report 2020 | Financial Year 2019-20 Page | 110

Notes forming an integral part of the financial statements for the Year ended
31st March 2020
Transactions / Material Transactions with Related Parties made during the year (` Lakhs)
Related parties Relatives of
For the year For the year
where significant Key Key
Sl ended ended
Nature of Transactions influence is Managment Manage-
No. 31st March 31st March
exercised where Personnel ment Per-
2020 2019
controls exist sonnel
1 Income
Rent received
Sakthifinance Financial Services Ltd 3.52 - - 3.52 3.82
Interest Income
ABT Industries Ltd. 9.72 - - 9.72 28.80
2 Expenses
Purchase of fuel
N.Mahalingam & Co 11.56 - - 11.56 19.64
Rent paid
M.Balasubramaniam - 1.20 - 1.20 2.40
Smt.Vinodhini Balasubramaniam - - 1.20 1.20 -
M. Srinivaasan 56.64 - 56.64 30.00
Resource Mobilisation Charges
Sakthifinance Financial Services Ltd. 225.70 - - 225.70 56.71
Printing charges
Nachimuthu Industrial Association 22.19 - - 22.19 19.64
Sakthi Sugars Ltd.(Om Sakthi) 2.42 2.42 2.73
CSR Expenses
Ramanandha Adigalar Foundation - - - - 23.53
Deputation Charges
Sakthifinance Financial Services Ltd. 50.43 - - 50.43 74.69
Remuneration
M.Balasubramaniam - 49.79 - 49.79 47.69
S.Veluswamy - 33.66 - 33.66 31.87
M.K.Vijayaraghavan - 4.99 - 4.99 35.87
S.Venkatesh - 16.94 - 16.94 16.49
Perquisites
M.Balasubramaniam - 3.90 - 3.90 3.90
S.Veluswamy - 0.34 - 0.34 0.34
S.Venkatesh - 0.00 - 0.00 0.46
Employee Benefits
M.Balasubramaniam - 6.05 - 6.05 6.05
S.Veluswamy - 2.35 - 2.35 2.35
S.Venkatesh - 1.18 - 1.18 1.18
Commission**
M.Balasubramaniam - 49.41 - 49.41 60.50
Sitting Fees
Non-Executive Directors
M.Manickam - 1.20 - 1.20 0.80
M.Srinivaasan - 1.00 - 1.00 1.40

63rd Annual Report 2020 | Financial Year 2019-20 Page | 111

Notes forming an integral part of the financial statements for the Year ended
31st March 2020
(` Lakhs)
Related parties Relatives of
For the year For the year
where significant Key Key
Sl ended ended
Nature of Transactions influence is Managment Manage-
No. 31st March 31st March
exercised where Personnel ment Per-
2020 2019
controls exist sonnel
Independent-Directors
A Selvakumar - 3.20 - 3.20 3.80
P S Gopalakrishnan - 1.60 - 1.60 2.00
Priya Bhansali - 2.00 - 2.00 1.60
K P Ramakrishnan - 2.80 - 2.80 3.00
** subject to approval of share holders at the ensuing Annual General Meeting

Relatives
Related parties Key
of Key As at As at
where significant Manag- As at
Sl Manage- 31st 31st
Nature of Transactions influence is ment 1st April
No. ment March March
exercised where Person- 2018
Person- 2020 2019
controls exist nel
nel
3 Assets
Loans and advances given
ABT Industries Ltd. 899.00 - - 899.00 - -
Loans and advances repaid
ABT Industries Ltd. (400.00) - - (400.00) - -
4 Liabilities:
Subscription in NCDs:
Sri Chamundeswari Sugars Limited - - - - - 221.94
Smt.Vinodhini Balasubramaniam - - 70.00 70.00 - 40.00
Smt.Samyuktha Vanavarayar - - 75.00 75.00 50.00 50.00
Ms.Shruthi Balasubramaniam - - 63.00 63.00 20.23 20.23
Bhavani Gopal - - 50.00 50.00 56.00 6.00
Lalitha Ramakrishnan - - 24.00 24.00 21.00 21.00
M. Harihara Sudhan - - 2.00 2.00 2.00 -
Investments in Deposits
Bhavani Gopal - - 20.00 20.00 20.00 20.00
Amrith Vishnu Balasubramaniam - - 8.83 8.83 8.83 8.83
M. Harihara Sudhan - - 6.64 6.64 1.10 -
Subscription in SD Bonds:
Smt.Vinodhini Balasubramaniam - - 10.00 10.00 10.00 -
Ms.Shruthi Balasubramaniam - - 10.00 10.00 10.00 -
Liabilities for Expenses Payable:
Sakthi Sugars Ltd. 0.21 - - 0.21 0.10 0.10
N. Mahalingam And Co. 0.00 - - 0.00 2.07 0.19
Nachimuthu Industrial Association 6.87 - - 6.87 0.33 -

63rd Annual Report 2020 | Financial Year 2019-20 Page | 112

Notes forming an integral part of the financial statements for the Year ended
31st March 2020
43. Disclosure pursuant to Ind AS “33” - Earnings Per Share
Basic EPS is calculated by dividing the profit for the year attributable to equity holders of the Company by the weighted
average number of equity shares outstanding during the year.

Particulars For the year ended For the year ended

31.03.2020 31.03.2019
a) Weighted average number of equity shares of ` 10 Each
(i) Number of shares at the beginning of the year 5,00,00,000 5,00,00,000
(ii) Number of shares at the end of the year 6,47,05,882 5,00,00,000
(b) Weighted average number of shares outstanding during the year (nos) 5,07,63,420 5,00,00,000
(c) Net Profit after tax available for equity shareholders ( ` lakhs) 1,112.40 926.41
Basic and diluted earnings per share (`) 2.19 1.85

44. Financial Risk Management framework

The company is engaged in finance business and like any other NBFC is exposed to risks such as credit risk, liquidity risk,
market risk, operational risks etc. The company follows pro-active risk management practices to mitigate these risks. The risk
management policies are periodically reviewed by the Risk Management Committee and Audit Committee.
Credit Risk
Credit risk is the risk that arises when the borrowers of the company are unable to meet the financial obligations.
The Company has a comprehensive and well - defined credit policy, which encompasses a credit approval process for all
businesses along with guidelines for mitigating the risks associated with them. The appraisal process includes a detailed
risk assessment of the borrowers, physical verifications and field visits. The company has a robust post sanction monitoring
process supervision and follow-up to identify portfolio trends and early warning signals. This enables the company to
implement necessary changes to the credit policy, whenever the need arises. Also being in asset finance, the company’s
lending is secured by adequate collaterals from the borrowers.
Repayment by individual customers and portfolio is tracked regularly and required steps for recovery are taken through
follow ups and legal recourse.

63rd Annual Report 2020 | Financial Year 2019-20 Page | 113

Notes forming an integral part of the financial statements for the Year ended
31st March 2020
In assessing the impairment of financial loans under Expected credit Loss (ECL) Model, the assets have been
segmented into three stages. The three stages reflect the general pattern of credit deterioration of a financial
instrument. The difference in accounting between stages, relate to the recognition of expected credit losses and
the measurement of interest income
The Company categorises loan assets into stages primarily based on the Days of Past Due Status.
Stage 1 : 0-30 days past due
Stage 2 : 31-90 days past due
Stage 3 : More than 90 days past due
Expected Credit Loss (ECL)
As a result of adoption of IndAs , the company has followed Ind As 109 for the calculation of expected credit
loss. The measurement of ECL involves three main components Viz,
Exposure at default (EAD), Probability of Default (PD) and Loss Given Default (LGD).
Definition of Default
If the borrower is past due for more than 90 days on any material credit obligation to the Company; or the
borrower is unlikely to pay his credit obligations to the Company in full, it is considered as default.
Probability of Default (PD)
The Probability of Default is an estimate of the likelihood of an account getting into default over a given time
horizon. The PD model reflects the probability of default, taking into consideration the residual tenor of each
contract and it relies not only on historical information and the current economic environment, but also considers
forward-looking information such as the forecasts on the macroeconomic factors like GDP , Inflation rate etc.
Loss Given Default
The Loss Given Default is an estimate of the loss arising in the case where a default occurs at a given time. It is
based on the difference between the contractual cash flows due and those that the Company would expect to
receive, including from the realisation of any collateral. It is usually expressed as a percentage of the EAD
Exposure at Default
Exposure at Default (EAD) is defined as the sum of Principal outstanding and interest accrued at the reporting
date
Collateral Valuation
To mitigate its credit risks on financial assets, the Company seeks to use collateral, where possible. The collateral
comes in various forms, such as movable and immovable assets, guarantees, etc.
Write offs
Financial assets are written off either partially or in their entirety only when the Company has no reasonable
expectation of recovery. If the amount to be written off is greater than the accumulated loss allowance, the
difference recorded as an expense in the period of write off. Any subsequent recoveries against such loans are
credited to the statement of profit and loss

63rd Annual Report 2020 | Financial Year 2019-20 Page | 114

 Notes forming an integral part of the financial statements for the Year ended 31st March 2020
The following table provides an overview of the gross carrying amount of loan assets stagewise : (` Lakhs)
Particulars 31.03.2020 31.03.2019
Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total
Balance at the beginning of the year 78,498.26 11,999.70 4,651.47 95,149.43 74,853.69 12,388.67 4,368.48 91,610.84
New business- net of recovery 55,339.50 7,571.34 122.41 63,033.25 49,687.00 4,359.43 1,86.11 54,232.54
Transfer due to change in credit worthiness
Stage 1 30,89.84 (2,988.08) (101.76) – 1,209.09 (1,130.30) (78.79) –
Stage 2 (7,093.80) 7,128.68 (34.88) – (6,070.87) 6,112.76 (41.89) –
Stage 3 (848.48) (930.33) 1778.81 – (1,014.11) (920.78) 1,934.89 –
Financial Assets that have been derecognised (40,190.95) (6,449.54) (1,334.20) (4,7974.69) (40,062.18) (8,791.06) (1,576.06) (50,429.30)
Write off during the year (59.28) (12.18) (98.82) (170.28) (104.37) (19.02) (141.26) (264.65)
Balance at the end of the year 88,735.09 16,319.59 4,983.03 1,10,037.71 78,498.25 11,999.70 4,651.48 95,149.43

The following table provides an overview of the Expected Credit Loss, stagewise :
Particulars 31.03.2020 31.03.2019

63rd Annual Report 2020 | Financial Year 2019-20

Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total
Balance at the beginning of the year 139.53 269.59 2,086.19 2,495.31 120.05 259.67 1,759.98 2,139.70
New business- net of recovery 52.69 184.75 29.40 266.84 45.08 136.83 43.40 225.31
Transfer due to change in credit worthiness
Stage 1 2.80 (2.62) (0.18) – 3.14 (3.02) (0.12) –
Stage 2 (109.64) 110.36 (0.72) – (104.32) 105.22 (0.90) –
Stage 3 (275.80) (330.81) 606.61 – (346.67) (348.46) 695.13 –
Financial Assets that have been derecognised 287.70 94.87 (67.29) 315.28 422.55 121.62 (297.97) 246.20
Write off during the year (0.16) (3.41) (82.33) (85.90) (0.30) (2.27) (113.33) (115.90)
Balance at the end of the year 97.12 322.73 2,571.68 2,991.53 139.53 269.59 2,086.19 2,495.31

Page | 115
Notes forming an integral part of the financial statements for the Year ended
31st March 2020
Geographical break-up of portfolio ( Net SOH ) (` Lakhs)
Particulars FY2020 FY2019 FY2018
Tamil Nadu & Puducherry 85,435 72,605 66,035
Kerala 18,176 16,560 19,463
Karnataka 3,084 2,764 2,956
Andhra 1,669 1,668 1,811
Total 1,08,364 93,597 90,265

Portfolio composition - Net Stock on Hire

Particulars FY2020 FY2019 FY2018
Commercial Vehicles 97,047 83,690 80,700
Cars & Jeeps 8,603 7,682 7,060
Construction Equipment 2,000 1,510 1,981
Machinery 649 690 486
Consumer Durable 65 25 38
Total 1,08,364 93,597 90,265
Liquidity Risk
Liquidity risk is the risk related to cash flows and the inability to meet the company’s liabilities as and when they become due. It
arises from the mismatches in the maturity pattern to cope with a decline in liabilities or increase in assets
The Company monitors these risks through appropriate risk limits. Asset Liability Management Committee (“ALCO”) reviews
these risks and related trends and helps adopt various strategies related to assets and liabilities, in line with company’s risk
management framework
The contracted cashflow arising out of the financial liabilities and financial assets as at 31.03.2020 is furnished hereunder :
Over 3 Over 6 Over 1 year Over 3 years
Up to 3
Particulars months & up months & up & up to 3 & up to 5 Over 5 years Total
months
to 6 months to 1 year years years
Financial Liabilities
Deposits 1,920.49 2,964.92 4,769.13 9,990.50 – – 19,645.04
Borrowings 15,403.29 17,44.47 19,008.22 14,368.29 31,538.80 178.11 82,241.18
Foreign Currency Assets – – – – – – –
Foreign Currency Liabilities – – – – – – –
Total 17,323.78 4,709.39 23,777.35 24,358.79 31,538.80 178.11 1,01,886.22
Financial Assets
Cash and cash equivlants 38.58 – – – – – 38.58
Bank balances 1,303.42 – 240.18 – – – 1,543.60
Loans 14,140.05 14,421.83 23,867.52 48,870.07 5,681.93 64.78 1,07,046.18
Investments – – – 522.82 2,058.25 78.73 2,659.80
Other financial assets 1,002.32 291.54 380.72 976.40 – – 2,650.98
Total 16,484.37 14,713.37 24,488.42 50,369.29 7,740.18 143.51 1,13,939.14

63rd Annual Report 2020 | Financial Year 2019-20 Page | 116

Notes forming an integral part of the financial statements for the Year ended
31st March 2020
The contracted cashflow arising out of the financial liabilities and financial assets as at 31.03.2019 is furnished hereunder :
(` Lakhs)
Over 3 Over 6 Over 1 year Over 3 years
Up to 3
Particulars months & up months & up & up to 3 & up to 5 Over 5 years Total
months
to 6 months to 1 year years years
Financial Liabilities
Deposits 1,295.29 2,871.13 4,832.53 9,711.83 – – 18,710.78
Borrowings 13,038.20 4,917.50 21,666.87 21,784.62 9,937.57 2,261.92 73,606.68
Foreign Currency Assets – – – – – – –
Foreign Currency Liabilities – – – – – – –
Total 14,333.49 7,788.63 26,499.40 31,496.45 9,937.57 2,261.92 92,317.46
Financial Assets
Cash and cash equivlants 1,004.97 – – – – – 1,004.97
Bank balances 2,871.47 112.36 66.01 – – – 3,049.84
Loans 11,689.89 11,135.27 25,937.06 38,919.85 4,568.36 403.69 92,654.12
Investments – – – 351.89 873.71 1,557.49 2,783.09
Other financial assets 1,230.1 322.07 180.84 186.66 265.5 – 2,185.17
Total 16,796.43 11,569.70 26,183.91 39,458.40 5,707.57 1,961.18 1,01,677.19

The contracted cashflow arising out of the financial liabilities and financial assets as at 01.04.2018 is furnished hereunder :
Over 3 Over 6 Over 1 year Over 3 years
Up to 3
Particulars months & up months & up & up to 3 & up to 5 Over 5 years Total
months
to 6 months to 1 year years years
Financial Liabilities
Deposits 1,946.87 3,511.13 2,440.32 9,450.15 – – 17,348.46
Borrowings 6,765.54 2,577.22 19,987.58 30,915.01 12,358.34 – 72,603.69
Foreign Currency Assets – – – – – – –
Foreign Currency Liabilities – – – – – – –
Total 8,712.41 6,088.35 22,427.90 40,365.16 12,358.34 – 89,952.16
Financial Assets
Cash and cash equivlants 839.68 – – – – – 839.68
Bank balances 3,869.92 210.09 231.67 – – – 4,311.68
Loans 11,748.88 11,022.99 20,849.82 40,095.93 5,025.37 728.15 89,471.14
Investments – – 136.31 147.45 522.82 1,751.84 2,558.42
Other financial assets 666.61 234.78 376.62 369.00 – 382.50 2,029.51
Total 17,125.09 11,467.86 21,594.43 40,612.38 5,548.19 2,862.49 99,210.43

63rd Annual Report 2020 | Financial Year 2019-20 Page | 117

Notes forming an integral part of the financial statements for the Year ended
31st March 2020
Market Risk
Market Risk is the risk arising in financial instruments due to changes in market variables such as interest rates, liquidity etc.
The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while
maximising the return.
Interest Rate Risk
Interest Rate Risk is the possibility of loss arising from changes in the value of financial instruments as result of changes in market
variables such as interest rates and other asset prices. The company’s exposure to market risk is a function of asset liability
management activities. Except the borrowings from banks, the interest rates of which are linked to MCLR, other borrowings are
fixed rate instruments. The Company has not availed any foreign currency borrowings. The major portion of lending is at fixed
rates.
The interest rate profile of the interest bearing financial instruments is as follows (` Lakhs)
As at As at As at
31.03.2020 31.03.2019 01.04.2018
Financial assets
Fixed rate instruments
Loans 1,10,037.71 95,149.43 91,610.84
Investments 2,581.07 2,681.99 2,430.77
Bank Balances 413.00 638.00 1,220.95
Variable rate Instruments – – –
Total 1,13,031.78 98,469.42 95,262.56
Financial Liabilities
Fixed rate instruments
Debt securities 31,554.05 26,425.14 31,238.24
Borrowings (other than debt securities) 6,678.19 5,758.85 8,912.90
Deposits 19,645.04 18,710.78 17,348.46
Sub-Ordinated liabilites 27,838.82 24,732.23 20,755.00
Preference Shares 1,630.10 1,656.11 1,129.12
Variable rate instruments
Bank Borrowings 14,540.01 15,034.35 10,568.44
Total 1,01,886.21 92,317.46 89,952.16
As the fixed rate instruments are carried at amortised cost, their carrying amount will not vary because of changes in market
interest rate.
A cash flow sensitivity analysis for variable rate instruments, indicating the possible change in Profit and Loss / equity for 1%
change in interest rate is furnished hereunder:
Particulars 31.03.2020 31.03.2019
1 % increase 1 % decrease 1 % increase 1 % decrease
in interest in interest in interest in interest
rate rate rate rate
Variable rate instruments- carrying amount +82 (82) +69 (69)
Operational Risk
Operational risk is the risk of loss resulting from inadequate or failed internal processes, people or systems or from external
events.
The operational risks of the company are managed through comprehensive internal control systems and procedures and key
back up processes.
Further submission of exceptional reports for procedural lapses at the branches level, risk-based audits on a regular basis across
all business units/functions and IT disaster recovery plans are put in place for evaluating key operational risks the processes of
which are meant to adequately mitigate them on an on-going basis.
63rd Annual Report 2020 | Financial Year 2019-20 Page | 118
Notes forming an integral part of the financial statements for the Year ended
31st March 2020
45. Disclosure pursuant to Ind AS “108” - Operating Segments
The Company is primarily engaged in the business of asset financing. This, in the context of Ind AS 108 on “Operating
Segments” notified by the Companies (Indian Accounting Standards) Rules 2016, is considered to constitute a single primary
segment.
The Company operates in single segments only. There are no operations outside india and hence there is no external revenue
or assets which require disclosure.

46. Disclosure pursuant to Ind AS “113”

1. Financial Assets designated at Fair value through Other Comprehensive Income (` Lakhs)
Fair Value As at As at As at
Particulars
hierarchy 31st March 2020 31st March 2019 1st April,2018
Investment in Equity Instruments Level 1 40.36 62.73 89.28
2. Financial assets and financial liabilities measured at amortised cost as at 31.03.2020

Carrying Fair Value

Particulars
Amount Level 1 Level 2 Level 3
Financial Assets
Cash and cash Equivalents 1,112.79 1,112.79 – –
Bank Balances other than Cash and cash Equivalents 469.39 469.39 – –
Trade Receivables 246.05 – 318.91 –
Loans 1,07,046.18 – – 1,07,046.18
Investments 2,619.44 2741.96 38.37 –
Other Financial Assets 2,044.27 – – 2,044.27
Financial Liabilities
Payables
(I) Trade Payable 167.63 – 167.63 –
(II) Other Payables 101.99 – 101.99 –
Debt Securities 31,453.32 20,926.77 10,526.55 –
Borrowings (Other than debt securities) 21,218.20 21,218.20 – –
Deposits 19,046.38 – – 19,046.38
Sub-Ordinated Liabilities 29,216.13 – 29,216.13 –
Other Financial Liabilities 1,720.71 – 1,720.71 –

3. Financial assets and financial liabilities measured at amortised cost as at 31.03.2019

Carrying Fair Value

Particulars
Amount Level 1 Level 2 Level 3
Financial Assets
Cash and cash Equivalents 3,359.77 3,359.77 – –
Bank Balances other than Cash and cash Equivalents 695.04 695.04 – –
Trade Receivables 121.53 – 183.18 –
Loans 92,654.12 – – 92,654.12
Investments 2,720.36 2804.85 38.37 –
Other Financial Assets 1,743.13 – – 1,743.13

63rd Annual Report 2020 | Financial Year 2019-20 Page | 119

Notes forming an integral part of the financial statements for the Year ended
31st March 2020
(` Lakhs)

Carrying Fair Value

Particulars
Amount Level 1 Level 2 Level 3
Payables
(I) Trade Payable 185.56 – 185.56 –
(II) Other Payables 251.05 – 251.05 –
Debt Securities 26,308.25 14,933.83 11,374.42 –
Borrowings (Other than debt securities) 20,793.20 20,793.20 – –
Deposits 18,348.07 – – 18,348.07
Sub-Ordinated Liabilities 25,825.96 – 25,825.96 –
Other Financial Liabilities 1,726.69 – 1,726.69 –

4. Financial assets and financial liabilities measured at amortised cost as at 01.04.2018

Carrying Fair Value

Particulars
Amount Level 1 Level 2 Level 3
Financial Assets
Cash and cash Equivalents 3,764.70 3,764.70 – –
Bank Balances other than Cash and cash Equivalents 1,386.66 1,386.66 – –
Trade Receivables 104.79 – 183.18 –
Loans 89,471.14 – – 89,471.14
Investments 2,469.14 2545.21 38.37 –
Other Financial Assets 1,767.27 – – 1,767.27
Financial Liabilities
Payables
(I) Trade Payable 117.89 – 117.89 –
(II) Other Payables 140.08 – 140.08 –
Debt Securities 30,952.98 22,431.24 8,521.74 –
Borrowings (Other than debt securities) 19,481.34 19,481.34 – –
Deposits 17,029.53 – – 17,029.53
Sub-Ordinated Liabilities 21,884.12 – 21,884.12 –
Other Financial Liabilities 1,595.87 – 1,595.87 –
Note:
The Management assessed that cash and cash equivalents, bank balances other than cash and cash equivalents, receivables,
other financial assets, payables, and other financial liabilities approximates their carrying amount largely due to short term
maturities of these instruments.
There were no transfers between level 1 and level 2 for any asset or liabilities during the year.

63rd Annual Report 2020 | Financial Year 2019-20 Page | 120

Notes forming an integral part of the financial statements for the Year ended
31st March 2020
47. DISCLOSURE PURSUANT TO IND AS ‘101’ First time adoption of Ind AS
Equity Reconciliation (` Lakhs)
Sl No Particulars As at 31st March 2019 As at 1st April 2018
Other Equity reported as per previous GAAP 11,217.69 10,790.14
1 Adoption of Effective Interest Rate (EIR) for amortization of (490.60) (480.80)
Income and Expected credit loss for impairment of Financial
Assets at amortized cost
2 Adoption of EIR for amortization of expenses – Financial Liabilities 98.35 120.01
at amortised cost
3 Re-measurement gain / loss on defined benefit obligation plan as (42.55) (26.36)
per Ind AS 19
4 Impact of Application of Ind AS 116 for lease payments from the (64.96) -
date of transition
5 Adoption of fair value as deemed cost for Property, Plant and 903.28 903.28
Equipment
6 Adjustments on account of de-recognition of Intangible assets (347.12) (297.73)
7 Tax adjustments on above (236.62) (294.70)
Other Equity as per Ind AS 11,037.47 10,713.84

Profit Reconciliation For The Year Ended 31.3.2019

Particulars For the year ended
31.3.2019
Net Profit after tax as per Previous GAAP 1196.35
Adjustments resulting in increase / (decrease) in net profit after tax reported under Previous GAAP:
a.   Adoption of Effective Interest Rate (EIR) for amortization of Income and Expenditure – Financial (2.39)
Assets at amortised cost
b.   Adoption of EIR for amortization of expenses – Financial Liabilities at amortised cost (187.68)
c.   Expected Credit Loss (ECL) and related adjustments under Ind AS 109 (7.42)
d.   Re-measurement gain / loss on defined benefit obligation plan as per Ind AS 19 (10.10)
e.   Adoption of Ind AS 116 for lease payments. (64.96)
f.   Fair value of equity instrument at fair value through Other Comprehensive Income 26.54
g.   Adjustments on account of de-recognition of Intangible assets. (49.40)
h.   Tax adjustments on the above items 56.55
Net Profit after tax as per Ind AS 957.49
Other Comprehensive Income, net of tax (31.08)
Total Comprehensive Income as per Ind AS 926.41
Material Adjustments to the statement of cash flows for the year ended 31.03.2019
Particulars Previous GAAP Adjustments Ind AS
Net cash generated from/(used in) operating activities 1,506.89 (3,306.42) (1,799.53)
Net cash generated from/(used in) investing activities 110.65 337.21 447.86
Net cash generated from/(used in) financing activities (2,022.47) 2,969.21 946.74
Net increase/(decrease) in cash and cash equivalents (404.93) - (404.93)
Cash and cash equivalents at the beginning of the year 3,764.70 - 3,764.70
Cash and cash equivalents at the end of the year 3,359.77 - 3,359.77

63rd Annual Report 2020 | Financial Year 2019-20 Page | 121

Notes forming an integral part of the financial statements for the Year ended
31st March 2020
1 Financial Asset at amortised cost
The Company has applied effective interest rate for recognition of income from financial assets classified and
subsequently measured at amortised cost. The provision for loss of loan assets (i.e., Impairment) has been made as per
expected credit loss method on financial assets as per Ind AS 109 while it has been provided on a percentage basis as
per RBI provisioning norms/ directions under previous GAAP. The adoption of this treatment had resulted in a decrease
in other equity of ` 480.80 lakhs as at 01.04.2018 and ` 490.60 lakhs as at 31.03.2019. The profit for the year ended
31.03.2019 is reduced by ` 9.81 lakhs
2.a Financial liabilities at amortised cost
As required under the Ind AS 109, transactions costs incurred towards origination of Financial liabilities have been
deducted from the carrying amount of financial liability on initial recognition. These costs are recognised in the statement
of profit and loss over the tenor of the financial liability as interest expense, computed using the effective interest rate
method.Under the previous GAAP, these transaction costs were charged to the statement of profit and loss as and when
incurred. Consequently, on the date of transition (01.04.2018) retained earnings have been increased by ` 120.01 Lakhs
and ` 98.35 as at 31st March, 2019. The profit for the year ended 31.03.2019 is reduced by ` 21.66 lakhs.
2.b Preference shares classified as financial liability
Under previous GAAP, Non-convertible Preference shares are considered as part of share capital and dividend declared and
paid on those preference shares have been apportioned directly from other equity. Ind AS 32 requires the classification
of non-convertible financial instruments as financial liability and not as equity. Consequently, the preference shares are
classified as financial liability and dividend payable (including dividend distribution tax) on the same are charged into
the statement of profit or loss during the period. This has resulted in decrease in profit for the year ended 31.03.2019
by ` 166.02 lakhs.
3 Defined benefit Obligation
Under previous GAAP, remeasurement gain/loss on defined benefit obligation (gratuity), and other long term employee
benefits (Leave salary) arising primarily due to change in actuarial assumptions was recognised as employee benefits
expense in the Statement of Profit and Loss. Under Ind AS 19, such remeasurement gain/loss relating to defined
benefit plans is recognised in Other Comprehensive Income as per the requirements of Ind AS 19- Employee benefits.
Consequently, the related tax effect of the same has also been recognised in Other Comprehensive Income.
Remeasurement of gratuity and leave encashment resulted in decrease in retained earnings by ` 26.36 lakhs as at
01.04.2018 and by ` 42.55 lakhs as at 31.03.2019. During the year 2018-19 a loss of ` 4.54 lakhs is recognised in Other
Comprehensive income and ` 10.10 lakhs in the Statement of Profit and Loss.
4 Lease under Ind AS 116
Under previous GAAP, operating lease payments are recognised as expense in the statement of profit and loss on straight
line basis over the lease term. Ind AS 116 requires the Company to recognise a lease liability and Right of use asset
with respect to the operating leases. The Company applies the standard from 01.04.2019 in modified retrospective
approach by restating the comparative figures for the year ended 31.03.2019 by recognising the right of use asset and
lease liability for the remianing lease payments as at the date of transition (i.e., 01.04.2018). Consequently, the retained
earnings and profit for the period ended 31.03.2019 is reduced by ` 64.96 lakhs
5 Fair Valuation of Property, Plant and Equipment (“PPE”)
The Company has elected to measure items of Land, Buildings and Plant and Machinery at fair value as at the date of
transition to Ind AS and considered it as deemed cost. Hence, at the date of transition to Ind AS (i.e., 01.04.2018), an
increase of ` 903.28 Lakhs was recognised in Property, Plant and Equipment with corresponding increase in Retained
Earnings.
Since the Company has elected for fair valuation of PPE as at the date of transition to Ind AS, the Revaluation Reserve
existing on the date of transition under Previous GAAP amounting to ` 1,735.96 Lakhs has been transferred to the
Retained Earnings.
6 De-recognition of Intangible assets and Intangible assets under development
The carrying amount of Intangible asset under GAAP of ` 297.73 Lakhs has been derecognized on transition to Ind AS
since no future economic benefits are expected from its use or disposal. The loss arising from such de-recognition has
been transferred to the retained earnings on the date of transition.
The carrying amount of intangible asset under GAAP as at 31.03.2019 of ` 347.12 Lakhs has been derecognised.
Accordingly ` 49.52 Lakhs charged as depreciation and amortisation under previous GAAP reversed in the Statement of
Profit or Loss and ` 98.91 lakhs has been recognised as expenses in the Statement of Profit and Loss.

63rd Annual Report 2020 | Financial Year 2019-20 Page | 122

Notes forming an integral part of the financial statements for the Year ended
31st March 2020
48. First Time Adoption of Ind AS
The following note explains the principle adjustments made by the company in restating its Previous GAAP financial
statements, including balance sheet as at 1 April 2018 and the financial statements as at and for the year ended 31st March
2019 to comply with Ind AS 101.
Balance Sheet as at 1st April 2018 (` Lakhs)
Previous
PARTICULARS Adjustments Ind AS
GAAP
ASSETS
Financial Assets
Cash and cash Equivalents 3,764.70 (0.00) 3,764.70
Bank Balances other than Cash and cash Equivalents 1,386.66 0.00 1,386.66
Receivables -
(i) Trade Receivables 132.19 (27.40) 104.79
(ii) Other Receivables - - -
Loans 89,557.49 (86.35) 89,471.14
Investments 2,565.85 (7.43) 2,558.42
Other Financial Assets 3,253.57 (1,486.30) 1,767.27
Non-Financial Assets
Current tax Assets (net) - - -
Deferred tax Assets (net)
Investment Property 293.61 - 293.61
Property Plant and Equipment 5,623.87 903.29 6,527.16
Capital Work in Progress 5.44 (5.44) -
Right of use assets - 1,519.28 1,519.28
Intangible Assets under development 68.20 (0.00) 68.20
Other Intangible Assets 359.00 (201.49) 157.51
Other Non-Financial Assets 247.55 (90.10) 157.45
Total Assets 1,07,258.13 518.06 1,07,776.19
LIABILITIES AND EQUITY
Liabilities
Financial Liabilities
Payables
(I) Trade Payable
(i) Total outstanding dues of micro enterprises and small enterprises - - –
(ii) Total outstanding dues of creditors other than micro enterprises and small enterprises 117.89 - 117.89
(II) Other Payables
(i) Total outstanding dues of micro enterprises and small enterprises - - -
(ii) Total outstanding dues of creditors other than micro enterprises and small enterprises 140.08 0.00 140.08
Debt Securities 30,983.37 (30.39) 30,952.98
Borrowings (Other than debt securities) 19,571.42 (90.08) 19,481.34
Deposits 17,113.50 (83.97) 17,029.53
Sub-Ordinated Liabilities 21,928.52 (44.40) 21,884.12
Other Financial Liabilities 1,102.68 493.19 1,595.87
Non-Financial Liabilities
Current tax Liabilities (net) 56.95 0.00 56.95
Provisions 118.74 55.30 174.04
Deferred tax Liabilities (net) 244.56 294.70 539.26
Other Non-Financial Liabilities 90.29 0.00 90.29
Equity
Equity Share Capital 5,000.00 - 5,000.00
Other Equity 10,790.13 (76.29) 10,713.84
Total Liabilities and Equity 1,07,258.13 518.06 1,07,776.19

63rd Annual Report 2020 | Financial Year 2019-20 Page | 123

Notes forming an integral part of the financial statements for the Year ended
31st March 2020
Balance Sheet as at 31st March 2019 (` Lakhs)
Previous
PARTICULARS Adjustments Ind AS
GAAP
ASSETS
Financial Assets
Cash and cash Equivalents 3,359.77 - 3,359.77
Bank Balances 695.04 - 695.04
Receivables -
(i) Trade Receivables 183.18 (61.65) 121.53
(ii) Other Receivables - - –
Loans 92,713.65 (59.53) 92,654.12
Investments 2,792.92 (9.83) 2,783.09
Other Financial Assets 3,287.68 (1,544.55) 1,743.13
Non-Financial Assets
Current tax Asset (net) 50.06 - 50.06
Deferred tax Assets (net) - - -
Investment Property 289.01 - 289.01
Property Plant and Equipment 5,571.21 903.30 6,474.51
Right of use of Premises - 1,430.93 1,430.93
Capital work in Progress 5.51 (5.51) -
Intangible Assets under development 152.89 (152.89) -
Other Intangible Assets 342.30 (151.97) 190.33
Other Non-Financial Assets 322.79 (52.33) 270.46
Total Assets 1,09,766.01 295.97 1,10,061.98
LIABILITIES AND EQUITY
Liabilities
Financial Liabilities
Payables
(I) Trade Payable
(i) Total outstanding dues of micro enterprises and small enterprises 0.33 0.00 0.33
(ii) Total outstanding dues of creditors other than micro enterprises and small enterprises 185.23 0.00 185.23
(II) Other Payables
(i) Total outstanding dues of micro enterprises and small enterprises -
(ii) Total outstanding dues of creditors other than micro enterprises and small enterprises 238.95 12.10 251.05
Debt Securities 26,363.06 (54.81) 26,308.25
Borrowings (Other than debt securities) 20,845.52 (52.32) 20,793.20
Deposits 18,434.95 (86.88) 18,348.07
Sub-Ordinated Liabilities 25,793.96 32.00 25,825.96
Other Financial Liabilities 1,404.50 322.19 1,726.69
Non-Financial Liabilities
Current tax Liability (net) 0.00 0.00 0.00
Provisions 36.91 67.28 104.19
Deferred tax Liability (net) 139.62 236.63 376.25
Other Non-Financial Liabilities 105.29 0.00 105.29
Equity
Equity Share Capital 5,000.00 0.00 5,000.00
Other Equity 11,217.69 (180.22) 11,037.47
Total Liabilities and Equity 1,09,766.01 295.97 1,10,061.98

63rd Annual Report 2020 | Financial Year 2019-20 Page | 124

Notes forming an integral part of the financial statements for the Year ended
31st March 2020
49. Disclosure Pursuant to Ind AS “116” Leases
In cases of leases where the Company is a leasee (Operating Lease)
The Company’s lease asset class primarily consist of land and buildings taken on lease for Corporate office and Branch office
premises used for operating activities (` Lakhs)
Particulars 31-Mar-20 31-Mar-19
(a) Depreciation charge for Right-of-Use Assets 144.84 135.73
(b) Interest expense on Lease Liabilities 38.41 39.61
(c) The expense relating to short-term leases - -
(d) The expense relating to leases of low-value assets 59.89 66.23
(e) Total cash outflow for leases 206.64 176.62
(f) Additions to right-of-use assets 53.19 55.14
(g) The carrying amount of right-of-use assets at the end of the reporting period 1,331.08 1,430.93

Maturity Analysis 31-Mar-20
Less than 1 year 151.88
1-3 years 219.74
3-5 years 120.23
More than 5 years 82.26
Total future undiscounted cash outflow on lease liability 574.12
In cases of leases where the Company is a lessor (Operating Lease)
The Company has given four buildings on operating lease for commercial purposes and recognises the income as per the
contractual terms of lease.

63rd Annual Report 2020 | Financial Year 2019-20 Page | 125

Notes forming an integral part of the financial statements for the Year ended
31st March 2020
50. Disclosures under RBI Directions
50.1 Schedule to the Balancesheet of an Non-Banking financial company as required under Master Direction- Non-Banking Financial Company /
Systemically important Non-Deposit taking Company and Deposit-taking company (Reserve Bank) Directions 2016 (` Lakhs)
Sl. Particulars As at 31.03.2020
No.
Amount Amount
outstanding Overdue #
(1) Liabilities Side:
Loans and advances availed by the Non Banking Financial Company
inclusive of interest accrued thereon but not paid:
(a) Debentures : Secured 31,554.05 100.73
: Unsecured - -
(Other than falling within the meaning of Public deposit)
(b) Deferred Credits - -
(c) Term Loans 1,601.00
(d) Inter-Corporate loans and borrowing 5,077.19
(e) Commercial paper - -
(f) Public Deposits 19,645.04 598.66
(g) Sub-Ordinated Debts 23,261.47 252.79
: Debentures - Unsecured 4,577.35 -
(h) Other Loans - Cash Credit 14,540.01 -
(2) Break-up of (1) (f) and (g) above (Outstanding Public deposits inclusive of interest accrued thereon
but not paid):
(a) In the form of Unsecured Debentures - -
(b) In the form of Partly secured Debentures - -
i.e. debentures where there is a shortfall in the value of security
(c) Other Public Deposits 19,645.04 598.66
(d) Sub-Ordinated Debts 23,261.47 252.79
: Debentures - Unsecured 4,577.35 -
# Represents unclaimed deposits and interest accrued thereon
(3) Assets side:
Break-up of Loans and Advances including bills receivables Amount
(Other than those included in (4) below): outstanding
(a) Secured 358.98
(b) Unsecured 1,315.22
(4) Break-up of Leased Assets and Stock on Hire and Other assets counting towards AFC activities:
(1) Lease Assets including lease rentals under Sundry Debtors
(a) Financial Lease -
(b) Operational Lease -
(2) Assets on Hire including Hire charges under Sundry Debtors
(a) Stock on Hire 10,8151.45
(b) Repossessed Assets 212.06
(3) Other Loans counting towards AFC activities
(a) Loans where assets have been repossessed -
(b) Loans other than (a) above -

63rd Annual Report 2020 | Financial Year 2019-20 Page | 126

Notes forming an integral part of the financial statements for the Year ended
31st March 2020
(` Lakhs)
(5) Break-up of Investments: As at 31.03.2020
Current Investments :
1. Quoted
(i) Shares : (a) Equity -
(b) Preference -
(ii) Debentures and Bonds -
(iii) Units of Mutual Funds -
(iv) Government Securities -
(v) Others -
2. Unquoted
(i) Shares : (a) Equity -
(b) Preference -
(ii) Debentures and Bonds -
(iii) Units of Mutual Funds -
(iv) Government Securities -
(v) Others -
Long Term Investments :
1. Quoted
(i) Shares : (a) Equity 40.36
(b) Preference -
(ii) Debentures and Bonds -
(iii) Units of Mutual Funds -
(iv) Government Securities 2,581.07
(v) Others
2. Unquoted :
(i) Shares : (a) Equity 38.37
(b) Preference -
(ii) Debentures and Bonds -
(iii) Units of Mutual Funds -
(iv) Government Securities -
(v) Others -
(6) Borrower group-wise classification of assets financed as in 3 and 4 above
31.03.2020 (Amount net of provisions)
Category Secured Unsecured Total
1. Related parties
(a) Subsidiaries - - -
(b) Companies in the same group - - -
(c) Other related parties - 503.13 503.13
2. Other than related parties 1,05,730.96 812.09 1,06,543.05
Total 1,05,730.96 1,315.22 1,07,046.18

63rd Annual Report 2020 | Financial Year 2019-20 Page | 127

Notes forming an integral part of the financial statements for the Year ended
31st March 2020 (` Lakhs)
(7) Investor group-wise classification of all Investments (Current and non-Current Long term) in shares and securities (both quoted and unquoted)
Category Market value / Book value
Break up or (Net of provisions)
fair value or NAV
31.03.2020 31.03.2020
1.Related parties
(a) Subsidiaries - -
(b) Companies in the same group - -
(c) Other related parties 78.72 78.68
2. Other than related parties 2,568.07 2,581.12
Total 2,646.79 2,659.80
(8) Other information
Particulars Amount
(i) Gross Non Performing Assets 5,662.99
(a) Related parties -
(b) Other than Related parties 5,662.99
(ii) Net Non Performing Assets -
(a) Related parties -
(b) Other than Related parties 3,022.60
(iii) Assets acquired in satisfaction of debt -
50.2 Balance Sheet disclosures as required under Master Direction - Non-Banking Financial Company - Systemically Important
Non-Deposit taking Company and Deposit - Taking Company (Reserve Bank) Directions 2016
Sl.
Particulars 31.03.2020 31.03.2019
No.
1 Capital to Risk (Weighted) Assets Ratio
CRAR (%) 21.91 22.35
CRAR - Tier I Capital (%) 12.88 13.22
CRAR - Tier II Capital (%) 9.03 9.13
Amount of Sub-Ordinated debt considered as Tier-II capital 14,496.80 12,858.60
Amount raised by issue of Perpetual Debt Instruments - -
2 Investments
Value of Investments
Gross Value of Investments
In India 2,659.86 2,783.15
Outside India - -
Provisions for Diminution in value of investments
In India 0.06 0.06
Outside India - -
Net Value of Investments
In India 2,659.80 2,783.09
Outside India - -
Movement of provisions held towards diminution in value of investments
Opening balance 0.06 0.06
Add : Provisions made during the year
Less: Write-off / write-back of excess provisions during the year - -
Closing balance 0.06 0.06

63rd Annual Report 2020 | Financial Year 2019-20 Page | 128

Notes forming an integral part of the financial statements for the Year ended
31st March 2020 (` Lakhs)
3 Derivatives
Forward Rate Agreement / Interest Rate Swap - -
Exchange Traded Interest Rate (IR) Derivatives - -
Disclosures on Risk Exposure in Derivatives Qualitative Disclosure:- - -
The Company has no derivaties transactions - -
4 Disclosures relating to Securitisation
SPV and Minimum Retention Requirements - -
Details of Financial Assets sold to Securitisation / Reconstruction - -
Company for Asset Reconstruction - -
Details of Assignment transactions undertaken by NBFCs - -
Details of non-performing financial assets purchased / sold - -
Details of non-performing financial assets purchased - -
Details of Non-performing Financial Assets sold - -
5 Asset Liability Management Maturity pattern of certain items of Assets and Liabilities as on 31.03.2020
Over 3 Over 6 Over 3
Upto Over 1 Over 1 year
Over 2 Months Months Months years & Over 5
Sl No Particulars 30/31 Month upto & upto 3 Total
upto 3 Months & upto 6 & upto 1 upto 5 years
days 2 Month years
Months year years
(i) Deposits 926.78 561.87 431.84 2,964.92 4,769.13 9,990.50 - - 19,645.04
(ii) Advances 4,596.17 4,844.33 4,699.55 14,421.83 23,867.52 48,870.07 5,681.93 64.78 1,07,046.18
(iii) Investments - - - - - 522.82 2,058.25 78.73 2,659.80
(iv) Borrowings 1,307.32 13,571.99 523.98 17,44.47 19,008.22 14,368.29 31,538.80 178.11 82,241.18
(v) Foreign Currency Assets - - - - - - - - -
(vi) Foreign Currency Liabilities - - - - - - - - -
Asset Liability Management Maturity pattern of certain items of Assets and Liabilities as on 31.03.2019
Over 3 Over 6 Over 3
Upto Over 1 Over 1 year
Over 2 Months Months Months years & Over 5
Sl No Particulars 30/31 Month upto & upto 3 Total
upto 3 Months & upto 6 & upto 1 upto 5 years
days 2 Month years
Months year years
(i) Deposits 518.78 372.09 404.42 2,871.13 4,832.53 9,711.83 - - 18,710.78
(ii) Advances 3,480.82 3,645.57 4,563.50 11,135.27 25,937.06 38,919.85 4,568.36 403.69 92,654.12
(iii) Investments - - - - - 351.89 873.71 1,557.49 2,783.09
(iv) Borrowings 4,749.70 3,972.31 4,316.19 4,917.50 21,666.87 21,784.62 9,937.57 2,261.92 73,606.68
(v) Foreign Currency Assets - - - - - - - - -
(vi) Foreign Currency Liabilities - - - - - - - - -

63rd Annual Report 2020 | Financial Year 2019-20 Page | 129

Notes forming an integral part of the financial statements for the Year ended
31st March 2020 (` Lakhs)
Sl Particulars 31.03.2020 31.03.2019
No
6 Exposures
(i) Exposure to Real Estate Sector - -
(ii) Exposure to Capital Market - -
a Direct investment in equity shares, convertible bonds, convertible debentures 78.79 101.16
and units of equity-oriented mutual funds the corpus of which is not exclusively
invested in corporate debt
b Advances against shares / bonds / debentures or other securities or on clean basis - -
to individuals for investment in shares (including IPOs / ESOPs), convertible bonds,
convertible debentures, and units of equity-oriented mutual funds
c Advances for any other purposes where shares or convertible bonds or convertible - -
debentures or units of equity oriented mutual funds are taken as primary security;
d advances for any other purposes to the extent secured by the collateral security of - -
shares or convertible bonds or convertible debentures or units of equity oriented
mutual funds i.e. where the primary security other than shares / convertible bonds /
convertible debentures / units of equity oriented mutual funds 'does not fully cover
the advances;
e secured and unsecured advances to stockbrokers and guarantees issued on behalf - -
of stockbrokers and market makers.
f Loans sanctioned to corporates against the security of shares / bonds / debentures - -
or other securities or on clean basis for meeting promoter's contribution to the
equity of new companies in anticipation of raising resources.
g Bridge loans to companies against expected equity flows / issues - -
h All exposures to Venture Capital Funds (both registered and unregistered) - -
Total Exposure to Capital Market 78.79 101.16
(iii) Details of financing of parent company products Nil Nil
(iv) Details of Single Borrower Limit (SBL) / Group Borrower Limit (GBL) exceeded by the Nil Nil
NBFC
(v) Unsecured Advances 1,315.22 1,210.52
7 Miscellaneous
(i) Registration obtained from other financial sector regulators NA NA
(ii) Disclosure of Penalties imposed by RBI and other regulators - -
(iii) Related Party Transactions - Ref. Note No 42
(iv) Ratings assigned by credit rating agencies and migration of ratings during the year

Sl Particulars ICRA Ltd

No.
(i) Deposits (ICRA) MA-Stable
(ii) Debentures (ICRA) BBB Stable
(iii) Long-Term Borrowings (ICRA) BBB Stable
(iv) Short-Term Borrowings (ICRA) A2

Migration of ratings during the year : NIL

(v) Remuneration of Directors
Ref. Page No. 35 of Corporate Governence Report 2020

63rd Annual Report 2020 | Financial Year 2019-20 Page | 130

Notes forming an integral part of the financial statements for the Year ended
31st March 2020 (` Lakhs)
Sl Particulars 31.03.2020 31.03.2019
No
(vi) Management
Ref. Management and Discussion and Analysis report on Page No.
(vii) Net Profit or Loss for the period, prior period items and changes in accounting Nil Nil
policies
8 Other Disclosures
(i) Provisions and Contingencies
Break up of 'Provisions and Contingencies' shown under the head Expenditure in
statement of Profit and Loss Account
a Provisions for diminution in value of Investment 2.80 2.70
b Provision towards NPA 556.35 371.38
c Provision for Standard Assets - -
d Provision made towards Income Tax 283.09 421.82
d Other Provision and Contingencies (with details)
(ii) Draw Down from Reserves
(iii) Concentration of Deposits, Advances, Exposures and NPAs
a Concentration of Deposits:-
Total Deposits of twenty largest depositors 586.56 537.40
Percentage of Deposits of twenty largest depositors to Total Deposits 3.17% 3.06%
b Concentration of Advances:-
Total Advances to twenty largest borrowers 1,849.78 1,909.49
Percentage of Advances to twenty largest borrowers to Total Advances 1.71% 2.04%
c Concentration of Exposures
Total Exposure to twenty largest borrowers / customers 1,147.62 1,111.52
Percentage of Exposures to twenty largest borrowers / customers to Total 1.06% 1.19%
Exposure of the NBFC on borrowers / customers
d Concentration of NPAs
Total Exposure to top four NPA accounts 56.94 132.84
e Sector-wise NPAs % NPAs to Total Advances in that
sector
(i) Sector
(ii) Agriculture & allied activities 0.00% 0.08%
(iii) MSME – Engineering
(iv) Corporate borrowers - Textiles 0.07% 0.05%
(v) Services - Others
(vi) Unsecured personal loans 4.97% 4.92%
(vii) Auto loans - Transport -

63rd Annual Report 2020 | Financial Year 2019-20 Page | 131

Notes forming an integral part of the financial statements for the Year ended
31st March 2020 (` Lakhs)
Sl
Particulars 31.03.2020 31.03.2019
No
f Movement of NPAs
(i) Net NPAs to Net Advances (%) 2.82% 3.02%
(ii) Movement of NPAs (Gross)
Opening balance 4979.55 4812.67
Additions during the year 2798.65 3575.23
Reductions during the year 2115.21 3408.35
Closing balance 5662.99 4979.55
(iii) Movement of Net NPAs
Opening balance 2793.97 3004.95
Additions during the year 1792.46 2144.37
Reductions during the year 1563.83 2355.35
Closing balance 3022.60 2793.97
(iv) Movement of provisions for NPAs (excluding provisions on standard assets)
Opening balance 2185.58 1807.72
Provisions made during the year 1006.19 1430.86
Write-off / write-back of excess provisions 551.38 1053.00
Closing balance 2640.39 2185.58
(v) Overseas Assets (for those with Joint Ventures and Subsidiaries abroad) Nil Nil
(vi) Off-balance Sheet SPVs sponsored (which are required to be consolidated as per Nil Nil
accounting norms)
9 Disclosure of Complaints
a No. of complaints pending at the beginning of the year 0 0
b No. of complaints received during the year 1 2
c No. of complaints redressed during the year 0 2
d No. of complaints pending at the end of the year 1 0

50.3 Disclosures as required under guidelines on liquidity risk management frame work for NBFCs issued by RBI by notification
no. RBI/2019-20/88 DOR.NBFC (PD) CC.No.102/03.10.001/2019-20 dated 4th November 2019.
Public disclosure on Liqidity Risk:
i. Funding concentration based on significant counterparty (both deposits and Borrowings):
Sl No. Type of Instruments No. of Significant Amount % of total % of total
counter parties ` lakhs deposits liabilities
1 Borrowings 6 16,749 90.62 16.21
ii.Top 20 Large Deposits ( amount ` in Lakhs) and % of Total Deposits
Sl No. Descriptions Amount % of total
` lakhs deposits
1 Total for Top 20 Large Deposits 586.56 3.17%
iii.Top 10 Borrowings ( amount ` in Lakhs) and % of Total Borrowings
Sl No. Descriptions Amount % of total
` lakhs Borrowings
1 Total for Top 10 Borrowings 19,985 20.67%

63rd Annual Report 2020 | Financial Year 2019-20 Page | 132

Notes forming an integral part of the financial statements for the Year ended
31st March 2020
iv. Funding concentration based on significant instrument / products (` Lakhs)
Sl No Name of the Instrument / Products Amount % of total
` lakhs Liabilities
1 Sub-Ordinate Debts 23,261.47 22.83%
2 Fixed Deposits 19,645.04 19.28%
3 Non Convertible Debentures - Public Issue 2019 20,926.77 20.54%
4 Non Convertible Debentures - Private placement 10,627.29 10.43%
5 Non Convertible Debentures - Public Issue-Unsecured 4,577.35 4.49%
(considered as Sub-Ordinated debt)
6 Preference Shares 1,630.11 1.60%
Total 80,668.03 79.17%
v. Stock Ratios:
a. Commercial Papers as a % of Total Public Funds , Total Liabilities and Total Assets
Sl No Amount % of total
Name of the Instrument / Products
` lakhs deposits
1 Commercial Paper Outstanding – –
2 % to Total Public Funds – –
3 % to Total Liabilities – –
4 % to Total Public Assets – –
b. Non-Convertible Debentures (on maturities of less than 1 year) as a % of Total Public Funds, total Liabilities and
Total Assets
Sl No Name of the Instrument / Products Amount
1 Non-Convertible Debentures (on maturities of less than 1 year ) 148.86
2 % to Total Public Funds 19.69%
3 % to Total Liabilities 14.40%
4 % to Total Assets 12.20%
c. Other Short term Liabilities, if any as a % of Total Public Funds, Total Liabilities and Total Assets
Sl No Name of the Instrument / Products Amount
1 Other Short term Liabilities 27425
2 % to Total Public Funds 36.28%
3 % to Total Liabilities 26.54%
4 % to Total Assets 22.48%
vi. Institutional set-up of liquidity risk management
The Board of Directors of the Company have an overall responsibility for the management of all types of risks,
including liquidity risk, to which the Company is exposed in the normal course of its business. Further, the Board of
Directors have constituted a Risk Management Committee (“RMC”), as mandated by RBI, for the effective supervision,
evaluation, monitoring and review of various aspects and types of risks, including liquidity risk, faced by the Company.
The meetings of RMC are presently held as may be necessary, Moreover, the Board of Directors have also constituted
an Asset Liability Committee (“ALCO”), for the management of the Company’s short and long-term funding and meeting
liquidity requirements. The Company manages liquidity risk by maintaining adequate reserves and surplus, accessing
undrawn bank facilities and obtaining funding from various other sources, as may be feasible. ALCO provides guidance
and direction in terms of interest rate, liquidity, funding sources etc. ALCO meetings are held as may be required,
The minutes of ALCO meetings are placed before the Board of Directors at their next meeting for their perusal / approval
/ ratification.

63rd Annual Report 2020 | Financial Year 2019-20 Page | 133

Notes forming an integral part of the financial statements for the Year ended
31st March 2020
Definition of terms as used in the table above:
a) Significant counter party:
A “Significant counterparty” is defined as a single counterparty or group of connected or affiliated counterparties
accounting in aggregate for more than 1% of the NBFC’s total liabilities.
b) Significant instrument/product:
A “Significant instrument/product” is defined as a single instrument/product of group of similar instruments/products
which in aggregate amount to more than 1% of the NBFC’s total liabilities.
c) Total liabilities:
Total liabilities include all external liabilities (other than equity).
d) Public funds:
“Public funds” includes funds raised either directly or indirectly through public deposits, inter-corporate deposits, bank
finance and all funds received from outside sources such as funds raised by issue of commercial papers, debentures
etc. but excludes funds raised by issue of instruments compulsorily convertible into equity shares within a period
not exceeding 5 years from the date of issue. It includes total borrowings outstanding under all types of instruments/
products.
e) Other short-term liabilities:
All short-term borrowings other than CPs and NCDs with original maturity less than 12 months.
50.4 Disclosure as required under RBI notification no. RBI/2019-20/220 DOR.No .BP.BC.63/21.04.048/2019-20 dated 17 April
2020 on COVID -19 Regulatory Package - Asset Classification and Provisioning
(` Lakhs)
Particulars Amount
i. Respective amounts in SMA/overdue categories, where the moratorium/deferment was extended 4109
ii. Respective amount where asset classification benefits is extended 478
iii. Provisions made during the Q4 - FY2020 # 23.92
In respect of accounts in default but standard where moratorium up to 3 months is granted, and asset classification
benefit is extended, the Company has made general provisions of not less than 5 per cent of the total outstanding of
such accounts as applicable for the quarter ended 31 March 2020 within the overall provision requirement of 10% of
the total outstanding to be spread equally over two quarters. Balance general provision of not less than 5% of the total
outstanding of such accounts is to be made for the quarter ending 30 June 2020
iv. Provisions adjusted during the respective accounting periods against slippages and the residual NA
provisions
# The Company has made an additional provision of ` 23.92 lakhs at 5% of the total outstanding for the quarter and year ended
31st March 2020 as per IRAC Norms and the same is included in relevant disclosures as applicable to the Company.

63rd Annual Report 2020 | Financial Year 2019-20 Page | 134

Notes forming an integral part of the financial statements for the Year ended
31st March 2020
50.5 Disclosure as required under RBI notification no. RBI/2019-20/170 DOR (NBFC).CC.PD.No .109/22.10.106/2019-20 dated
13 March 2020 on Implementation of Indian Accounting Standards
A comparison between provisions required under extant prudential norms on Income Recognition, Asset Classification
and Provisioning (IRACP) and impairment allowances made under Ind AS 109 for the year ended 31 March 2020
(` Lakhs)
Asset Classification as Asset Gross Carrying Loss Allowances Net Carrying Provisons Difference
per RBI Norms classification Amount as per (Provisions) as Amount required as between Ind AS
as per Ind AS Ind AS required under per IRACP 109 provisions
109 Ind AS 109 norms and IRACP
norms
(1) (2) (3) (4) (5) = (3)-(4) (6) (7) = (4)-(6)
Performing Assets
Standard Stage 1 88,735.09 97.12 88,637.97 354.94 (257.82)
Stage 2 16,319.59 322.73 15,996.86 87.28 235.45
Sub-Total 1,05,054.68 419.85 1,04,634.83 442.22 (22.37)
Non-Performing Assets
(NPA)
Substandard Stage 3 2,083.43 700.05 1,383.38 132.79 567.26
Doubtful - up to 1 year Stage 3 644.95 308.23 336.72 254.74 53.49
1 to 3 years Stage 3 380.02 273.18 106.84 301.78 (28.60)
More than 3 years Stage 3 311.12 218.87 92.25 290.79 (71.92)
Sub-Total for doubtful 1,336.09 800.28 535.81 847.31 (47.03)
assets
Loss Stage 3 1,563.51 1,071.35 492.16 1,563.52 (492.17)
Sub-Total for NPA 4,983.03 2,571.68 2,411.35 2,543.62 28.06
Other items such
as guarantees, loan
commitments, etc.
which are in the scope
of Ind AS 109 but not
– – – – – –
covered under current
Income Recognition,
Asset Classificaion and
Provisioning (IRACP)
norms
Sub-Total – – – – – –
Total Stage 1 88,735.09 97.12 88,637.97 354.94 (257.82)
Stage 2 16,319.59 322.73 15,996.86 87.28 235.45
Stage 3 4,983.03 2,571.68 2,411.35 2,543.62 28.06
Total 1,10,037.71 2,991.53 1,07,046.18 2,985.84 5.69

63rd Annual Report 2020 | Financial Year 2019-20 Page | 135

Notes forming an integral part of the financial statements for the Year ended
31st March 2020
51. There have been no events after the reporting date that require disclosure in these financial statements.
52. During the financial year 2019-20, no fraud was detected.
53. Previous year figures have been regrouped, reclassified and rearranged, wherever necessary, to conform to current year
presentation.

As per our report attached

For P.K.Nagarajan & Co For and on behalf of the Board
Chartered Accountants
Firm Regn. No.: 016676S
M. BALASUBRAMANIAM M. Manickam
P.K.Nagarajan Vice Chairman and Managing Director Chairman
Partner DIN : 00377053 DIN : 00102233
Membership No.025679
UDIN : 20025679AAAABG1707
S. Venkatesh S. Veluswamy
Place : Coimbatore Company Secretary Director (Finance & Operations)
Date : 30th July 2020 Membership No. FCS 7012 DIN : 05314999

63rd Annual Report 2020 | Financial Year 2019-20 Page | 136

 Branch Network
Branch Offices Address Fax Phones
TAMILNADU
Coimbatore Main 641 018 62, Dr.Nanjappa Road 0422 2231915 0422 2231471
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Chennai 600 004 Raja Rajeswari Towers, No.29 & 30, Dr Radhakrishnan Salai, Mylapore 044 28114286
Dharmapuri 636 701 No.117/11 Q, First Floor, Nethaji Bye-pass Road, Opp. Govt. Medical College Hospital 04342 270888
Dindigul 624 002 No.67/3, Nehruji Nagar, 80 Feet Road, Opp:SBI ATM 0451 2441121
Erode 638 003 Sakthi Sugars Building, 122, Veerabadra Road 0424 2222209
Hosur 635 109 92/3 First Floor, K.K.Complex, Bagalur Road 04344 241142
Kallakurichi 606 202 Gopuram Towers, Second Floor, 59/5, Durgam Road 04151 223567
Kanchipuram 631 501 14/69, Opp. Santhana Krishna Silk Street, Ground Floor, Mettu Street 044 27231677
Karaikudi 630 002 45, First Floor, Subramaniapuram, 4th Street South 04565 227204
Kumbakonam 612 001 Anna Ice Cream Building, No.1-E, Second Floor, Dr. Besant Road 0435 2430096
Madurai 625 020 757, West Main Road, Anna Nagar 0452 2535585
Mettupalayam 641 301 Sundaram Type Office Complex, 41/1-A Annur Main Road 04254 224686
Nagercoil 629 001 No. 93/1A, Sarguna Veethi, Chettikulam Junction 04652 222008
Namakkal 637 001 First Floor, Annai Palaniammal Plaza, 3A, Salem Road, Opp. Old RTO Office 04286 275125
Perambalur 621 212 140/2A3, 3B7A Second Floor, Ruckmani Srinivasan Complex 04328 225570
Pollachi 642 001 No.33, First Floor, Coimbatore Main Road, Near Ramanathan Medicals 04259 225004
Sakthi Nagar 638 315 Sakthi Nagar, Bhavani Taluk 04256 246238
Salem 636 004 215/4, Abiroopa Towers, Second Floor, Kuruvangu Chavadi, Omalaur Main Road 0427 2448840
Sankagiri 637 301 No.1/14/18. D6, Settia Gounder Complex-C, Bhavani Main Road 0428 3240270
Sivakasi 626 123 100/A4, First Floor, Marutham Hotel Upstairs, Opp. Bell Hotel, Thiruthangal Road 04562 227226
Theni 625 531 No.15-1-60, Devi Towers, Cumbam Road, Union Bank Upstairs, P.C. Patti 04546 264955
Tirunelveli 627 002 10-A/1, Trivandrum Road 0462 2502989
Tirupur 641 602 No.15, First Floor, Ganga Nagar, First Street, Avinashi Road, Bangla Stop 0421 2242511
Trichy 620 018 174, 10th Cross West, Thillai Nagar 0431 2741959
Tuticorin 628 003 Ground Floor, 138, Palayamkottai Road, Near AVM Hospital 0461 2323977
Vellore 632 006 No. 97, Second Floor, First West Main Road, Gandhi Nagar 0416 2243653
Puducherry 605 011 No. 94, Kamaraj Salai, Near Jeeva Rukmani Theatre 0413 2213786
KERALA
Alapuzha 686 561 No. AMCW 20/115, Second Floor, Ambalapuzha 0477 2260111
Ernakulam 682 016 New No.: 61/3537 (Old No: 61/3633-C), Second Floor, S.A. Road, Valanjambalam 0484 2357359
Kanhangad 671 315 Door No.KM/1353/Ward I/B5/B6, Brother's Buildings, Second Floor Main Road, Near 0467 2201102
LIC Office
Kannur 670 002 SB – 5/1102/E, Ennes Enclave, (Near Ashoka Hospital), South Bazaar 0497 2703223
Kottayam 686 601 No.1x572/E, Madappallil Building, Room No. : 572E, Sastri Road 0481 2564167
Kozhikode 673 004 5/2248-D, Mavoor Road, Opp:Civil Supplies Corporation 0495 2720414 0495 2723699
Manjeri 676 121 Kurikkal Plaza, Opp. Court Complex, Kacheripadi 0483 2767468
Muvattupuzha 686 673 Door No.XXIII / 392, 392(A), NH 49, Kottayil Buildings, Velloorkunnam, Market PO 0485 2812465
Pala 686 575 Vettipuzhichalil House, Century VEE TEE Arcade, Ward No.18, Building No.303(4), 04822 210930
Kottaramattam
Palakkad 678 007 12/872, First Floor, KAV Central, Chandranagar P O 0491 2573232
Pathanamthitta 689 645 PMC IX /1128(1)10(E), Second Floor, Aban Arcade, Ring Road, Near Bus Stand 0468 2224300
Thrissur 680 001 DAZE Towers, Second Floor, Marar Road 0487 2440294
Vadakara 673 101 No.25/125-A, Elite Building, Second Floor, Opp. Keerthi Mudra Theatre, Edodi 0496 2515632
KARNATAKA
Bengaluru 560 001 No.206, Second Floor, Blue Cross Chamber, No. 11, Infantry Road Cross 080 25583365
JP Nagar, Bengaluru 560 078 No.57-132-4, First Floor, 2nd Cross, Seventh Main, KSRTC Layout, JP Nagar 080 26583364
Mangaluru 575 002 Door No.213, Second Floor, Mangalore Shalimar Gate, Byepass Road, Near Kankanady 0824 2434811
Bus Stand
MAHARASHTRA
Mumbai 400 021 1012, Dalamal Towers, 211, Nariman Point 022 22830942
ANDHRA PRADESH
Rajahmundry 533 103 79-16-12/2, Third Floor, E & S Reddy Complex Tilak Road Behind Aryapuram Coop 0883 2433934
Urban Bank, Opp: Saibaba Temple
Vijayawada 520 008 No.59–14–5, 5th Floor, BSR Plaza, NH – 5 Opp. Stella College, Ring Road 0866 2476333
Visakhapatnam 560 016 No.49-24-51, A, 6, First Floor, Flat No. 101-A, Pavan Estate Shankaramadam Road 0891 2550060 0891 2550060
NEW DELHI 110 057 No.149, Vasant Enclave 011 26141165

63rd Annual Report 2020 | Financial Year 2019-20 Page | 137

 FOR HOLDERS OF SHARES IN PHYSICAL FORM
$

SKDC Consultants Limited

(Unit: Sakthi Finance Limited)
“Kanapathy Towers” Third Floor, 1391/A-1, Sathy Road
Ganapathy, Coimbatore – 641 006

NATIONAL ELECTRONIC FUND TRANSFER (NEFT) - MANDATE FORM

1. Shareholder’s Name : __________________________________________________

2. Folio Number : __________________________________________________

3. Number of Shares : __________________________________________________

4. Bank Name : __________________________________________________

5. Branch Name, Address and : __________________________________________________

Telephone No. __________________________________________________

6. Permanent Account Number (PAN) : __________________________________________________

7. Bank Account Number : __________________________________________________

(10-Digit or more number only)

8. Account type [Please tick 3] :

9. 9-Digit Code Number of the Bank : __________________________________________________

and Branch appearing on the MICR
cheque issued by the Bank

10. 11-Digit IFS Code :

11. Contact Number :

I agree to avail the NEFT introduced by RBI with respect to payment of dividend to me.
I hereby declare that the particulars given above are correct and complete. If the transaction is delayed or not effected at all
for reasons beyond the control of the Company, I would not hold Sakthi Finance Limited responsible.

Date .......................... Signature of the Sole/First Shareholder

(Please attach (i) self-attested photocopies of any two of your Passport / PAN Card / Driving License / Voter’s Identity Card
towards proof of identification and (ii) a blank cancelled cheque or photocopy of a cheque issued by your Bank for verification
of the 9-digit code Number provided above)

FOR THE ATTENTION OF HOLDERS OF SHARES IN PHYSICAL FORM

It is advised that the shares may be dematerialized with any of the depository participants at the earliest. This will be
convenient for the holders of shares to effect any transfer or transmission instantly.
Hence in the interest of the share holders, the company strongly recommends for dematerializing the shares with any of the
depository participants.
Meanwhile, for the holders of shares in physical form, to provide faster credit of dividend to their account, such holders of
shares are advised to provide information in the appended form.
$
 E-MAIL ADDRESS REGISTRATION FORM
(In terms of Circular Nos. 17/2011 and 18/2011 dated 21.04.2011 and 29.04.2011
respectively issued by Ministry of Corporate Affairs, Government of India)
(For shareholders who hold shares in physical form)

SKDC Consultants Limited

(Unit: Sakthi Finance Limited)
“Kanapathy Towers”
Third Floor, 1391/A-1, Sathy Road
Ganapathy
Coimbatore - 641 006
I/We, Member(s) of Sakthi Finance Limited, hereby give my/our consent to receive electronically Annual Report(s), Notice(s)
of General Meeting(s) and other document(s) that the Ministry of Corporate Affairs may allow them to be sent in electronic
mode.
I/We request you to note my/our e-mail address as mentioned below. If there is any change in the e-mail address, I/We will
promptly communicate it to you.

Folio No.

Name of the Sole/First Shareholder

E-mail address (to be registered)

Place :
Date : (Signature of Sole / First Shareholder)

Important Communication to Members

The Ministry of Corporate Affairs has taken a “Green Initiative in the Corporate Governance” by
allowing paperless compliances by the companies and has issued circulars stating that service of
notice / documents including Annual Report can be sent by e-mail to its members.
To support this green initiative of the Government:
a. members holding shares in electronic form are requested to register their e-mail addresses in
respect of their holdings through their Depository Participants concerned.
b. members who hold shares in physical form are requested to fill in and forward the E-mail Address
Registration Form as appended above of this Annual Report to
SKDC Consultants Limited, Registrars and Share Transfer Agents, “Kanapathy Towers”,
Third Floor, 1391/A-1, Sathy Road, Ganapathy, Coimbatore - 641 006.