To the Members,
Your Directors are pleased to present the 19th Annual Report
of Ujjivan Financial Services Limited together with the audited financial statements for
the financial year ended March 31, 2023.
1. FINANCIAL RESULTS
The Directors' submit the Annual Report of Ujjivan Financial Services
Limited (the "Company" or "Ujjivan") together with the audited
financial statements for the financial year (FY) ended March 31, 2023.
(' in Crores)
| Particulars |
Standalone* |
consolidated* |
|
FY 2022-23 |
FY 2021-22 |
FY 2022-23 |
FY 2021-22 |
| Operating Income |
119 |
- |
4,421 |
2,995 |
| Other Income |
8 |
7 |
257 |
97 |
| Total Income |
127 |
7 |
4,679 |
3,092 |
| Less: Operational Expenses |
|
|
|
|
| Personnel Expenses |
1 |
1 |
930 |
822 |
| Administrative & CSR Expenses |
3 |
3 |
662 |
502 |
| Finance Charges |
- |
- |
1,493 |
1,071 |
| Depreciation |
0 |
0 |
163 |
155 |
| Impairment Losses on Financial Instruments |
- |
- |
(99) |
846 |
| Total Operational Expenses |
3 |
4 |
3,148 |
3,396 |
| ProFit/(Loss) Before Tax |
124 |
3 |
1,531 |
(304) |
| Less: Income tax |
16 |
1 |
308 |
1 |
| Less: Deferred tax |
0 |
0 |
83 |
(74) |
| ProFit/(Loss) After Tax |
108 |
2 |
1,140 |
(231) |
* as per Indian Accounting Standards (ind-AS)
2. DIvIDEND
In accordance with the Dividend Distribution Policy of the Company, the
Company with the approval of its directors through their resolution passed on March 10,
2023 has declared and paid an interim dividend of ' 5 (50%) per equity share which
translates to a Dividend Payout ratio of 56% for the FY 2022-23. The interim dividend
amount of ' 61 Crores was distributed to the shareholders on March 28, 2023. The Dividend
Distribution policy of the Company is available on the Company's website and can be
accessed from the link https://www.uiiivan. com/assets/web pdfs/239/original/4.Dividend
Distribution Policy 09022023.pdf
3. transfer to reserves
The Company transferred ' 22 Crores to Statutory Reserves. Transfer of
20% of the Profit after Tax to the statutory reserves is in accordance with the provisions
of section 45 - IC Reserve Bank of India Act, 1934.
4. credit rating
The Company has zero debt; hence no rating has been obtained from any
rating agencies during the year.
5. CAPITAL REQUIREMENTS
Adjusted Net Worth of a CIC-ND-SI shall at no point of time be less
than 30% of its aggregate risk weighted assets on balance sheet and risk adjusted value of
off-balance sheet items as on the date of the last audited balance sheet as at the end of
the financial year as per RBI CIC Master Directions.
The Company as of March 31, 2023 is in compliance with the below
capital requirements and all other mandatory ratios as required under RBI CIC Master
Directions:
| Ratios |
RBI Requirement |
Actuals (%) |
| Adjusted Networth (ANW) |
>30% of RWA |
188.87% |
| Investment ratio |
>90% of Net Assets |
97.65% |
| Equity Investment Ratio |
>60% of Net assets |
110.27% |
| Leverage Ratio |
<2.5 Times |
0.00063 |
6. CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS REPORT
In accordance with SEBI LODR Regulations, Management Discussion and
Analysis Report and Corporate Governance Report together with the
Certificate thereon From the Independent Practicing Company Secretary
is provided separately and Forms part of this Directors' Report.
7. EXTRACT OF ANNUAL RETURN
The Annual Return of the Company as on March 31, 2023 in Form MGT - 7
in accordance with Section 92(3) of the Act read with the Companies (Management and
Administration) Rules, 2014, is available on the website of our Company at
https://www.uiiivan. com/annual-return.
8. NO. OF MEETINGS OF THE BOARD DURING THE FY 2022-23
During the Financial Year 2022-23, our Board has met 9 (nine) times and
the meetings of our Board of Directors were held on April 18, 2022, May 19, 2022, June 23,
2022, August 04, 2022, October 14, 2022, November 11, 2022, February 09, 2023. March 10,
2023 and March 17, 2023. For further details, please refer to the Corporate Governance
Report, which forms part of this report.
9. DIRECTORS RESIGNATION / APPOINTMENT / REAPPOINTMENTS /
RETIRING DIRECTOR
(a) Re-appointment of director retiring by rotation
As per the provisions of the Companies Act, 2013, Mr. Narayan Anand
(DIN: 02110727) retires by rotation at the ensuing 19th AGM and being eligible,
seeks his re-appointment. The Board recommends his reappointment. Please refer item no. 2
of the 19th AGM Notice for further details.
10. DIRECTORS' RESPONSIBIUTY STATEMENT
Pursuant to Section 134(5) of the Companies Act, 2013, the Board of
Directors of the Company confirms and state that:
(i) in the preparation of the annual accounts, the applicable
accounting standards had been followed along with proper explanation relating to material
departures;
(ii) they have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and prudent so as to
give a true and fair view of the state of affairs of the company at the end of the
financial year and of the profit and loss of the company for that period;
(iii) they have taken proper and sufficient care for the maintenance of
adequate accounting records in
(iv) accordance with the provisions of this Act for safeguarding the
assets of the company and for preventing and detecting fraud and other irregularities;
(v) they have prepared the annual accounts on a going concern basis;
(vi) they have laid down internal financial controls to be followed by
the company and that such internal financial controls are adequate and were operating
effectively; and
(vii) they have devised proper systems to ensure compliance with the
provisions of all applicable laws and that such systems were adequate and operating
effectively.
Based on the framework of internal financial controls and compliance
systems established and maintained by the Company, audit of internal financial controls
and the reviews performed by management and the audit committee of the board, the board is
of the opinion that the Company's internal financial controls were adequate and effective
during the FY 2022-23.
11. DECLARATION BY INDEPENDENT DIRECTORS
The Company has received necessary declarations of independence from
each of its Independent Directors under section 149(7) of the Companies Act, 2013, that
he/she meets the criteria of independent director envisaged in section 149 (6) of the
Companies Act, 2013.
All Independent Directors have submitted the declaration of
Independence, as required pursuant to Section 149(7) of the Act and including the added
criteria prescribed under SEBI LODR Regulations, stating that they meet the criteria of
Independence as provided in section 149(6) of the Companies Act, 2013 and they are not
disqualified from continuing as Independent Directors of our Company.
In the opinion of the Board, all the Independent Directors meet the
criteria with regards to integrity, expertise and experience as required under applicable
laws.
The UFSL has also received from its directors a statement that they
have complied with the Code of Conduct for Directors and Senior Management of the UFSL.
12. NOMINATION AND REMUNERATION POLIOY
The Company pursuant to the provisions of Section 178 of the Companies
Act, 2013 has formulated and adopted a nomination and remuneration policy which is
disclosed on our website at the below link- https://www.uiiivan.com/mandatorv-policies
13. STATUTORY AUDiTORS
The Company had appointed Varma & Varma, Chartered Accountants (FRN
- 004532S) as the Statutory Auditors of the Company for a term of 3 (three) consecutive
financial years from 2021- 22 to 2023-24 with the approval of the shareholders in the 17
th Annual General Meeting held on September 29, 2021.
14. EXPLANATIONS OR COMMENTS BY THE BOARD ON EVERY QUALIFICATION,
RESERVATION OR ADVERSE REMARK OR DISCLAIMER MADE -
(i) Statutory Auditor's Report
There are no disqualifications, reservations, adverse remarks or
disclaimers in the auditor's report for the FY 2022-23.
(ii) By the company secretary in practice in his secretarial audit
report;
Secretarial Auditor
Mr. K. Jayachandran, Practicing Company Secretary (ACS No. 11309 and
Certificate of Practice No. 4031) was appointed as the Secretarial Auditor of the Company
to conduct secretarial audit of the Company for the year ended March 31,2023 as required
under Section 204 of the Companies Act, 2013 and the Rules made thereunder. The
secretarial audit report for FY 2022-23 is appended as "Annexure 1" to
the Board's Report.
As required under regulation 24A of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015, a separate secretarial audit report for the
year ended March 31,2023 given by the Secretarial Auditor Mr. K. Jayachandran, in the
format as prescribed by SEBI in this regard is appended as "Annexure 2"
The Secretarial Audit Report does not contain any qualification,
reservation or adverse remark made by the Secretarial Auditor.
Further, Mr. K. Jayachandran, Practicing Company Secretary (ACS No.
11309 and Certificate of Practice No. 4031) has through his certificate dated May 18, 2023
has certified that none of the directors on the Board of the
Company have been debarred or disqualified from being appointed or
continuing as director of companies by the Board / Ministry of Corporate Affairs or any
such statutory authority. The said certificate is appended as "Annexure 3" to
the Board's Report and should also form a part of the Corporate Governance Report of the
Board as required under the SEBI Listing Regulations.
15. COMPLIANCE WITH SECRETARIAL STANDARDS
The Company has complied with the provisions of Secretarial Standards
specified by the Institute of Company Secretaries of India and notified by the Ministry of
Corporate Affairs under Section 118(10) of the Companies Act, 2013.
16. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186
During the FY 2022-23, the Company has not given any loans and
guarantees to any-body corporate and has not made any investment under Section 186.
17. TRANSACTION WITH RELATED PARTIES
Pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the
Companies (Accounts) Rules, 2014, there are no transactions to be reported under Section
188(1) of the Act in Form AOC-2.
There were no contracts or arrangements or transactions entered into
during the year ended March 31,2023, which were not at arm's length basis. Your Directors
draw attention of the members to Note 26 to the standalone Financial Statements which sets
out other related party disclosures.
All Related Party Transactions as required under Accounting Standards
AS-18 are reported in Note 26 - Notes to Accounts of the Standalone financial statements
of the Company.
18. THE STATE OF THE COMPANY'S AFFAIRS
The Company is registered with RBI as a Non Deposit taking Systemically
Important Core Investment Company (NBFC-ND-SI-CIC). The Company is in compliance with the
conditions of the Master Direction - Core Investment Companies (Reserve Bank) Directions,
2016 as amended. Prior to its conversion to a Core Investment Company, the Company was one
of the largest microfinance institutions in the country. The conversion was done based on
the stipulation of the Reserve Bank of India while approving the Company to set up the
small finance bank business.
The Company is the promoter of 'Ujjivan Small Finance Bank Limited'
(hereinafter referred to as "USFB/Bank") and being a CIC the Company has its
investments primarily in USFB. The Company as on March 31, 2023 holds 73.67% equity in
USFB and holds preference shares of ' 200 Crores.
19. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL
POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR
OF THE COMPANY TO which THE financial STATEMENTS RELATE AND THE DATE OF THE REPORT;
Proposed Reverse Merger
Pursuant to the Guidelines for licensing of "Small Finance
Banks" in the private sector issued by RBI on November 27, 2014 ("SFB Licensing
Guidelines"), Ujjivan Financial Services Limited (UFSL) (Promoter of the Bank) was
required to reduce its shareholding in the Bank to 40% of the paid-up Equity Share capital
of the Bank within a period of five years from the date of commencement of business
operations by the Ujjivan Small Finance Bank Limited' (hereinafter referred to as
"USFB/Bank") i.e. by January 31, 2022 and thereafter required to reduce its
shareholding in the Bank to 30% and 26% of its paid-up Equity Share capital within a
period of 10 years and 12 years, respectively, from the date of commencement of the
business operations.
RBI vide its letter dated July 09, 2021 permitted the Bank to apply for
the amalgamation of holding company with small finance bank, in terms of provisions of
Master Direction on Amalgamation of Private Sector Banks, Directions, 2016 dated April 21,
2016, Three (3) months prior to completing five years from the date of commencement of
business of small finance bank.
Further, recommendations of the Internal Working Group to Review Extant
Ownership Guidelines and Corporate Structure for Indian Private Sector Banks, dated
October 20, 2020 and November 20, 2020 that, no intermediate sub-targets between five to
15 years may be required and that promoters may submit a dilution schedule which may be
examined and approved by the RBI, were accepted by RBI without any modification vide its
circular dated November 26, 2021.
Accordingly, the Bank has already initiated necessary steps for the
reverse merger of Ujjivan Financial Services Limited with the Bank in accordance with
applicable laws and guidelines. Merger of the Promoter entity with the Bank will suffice
the requirement of promoter shareholding dilution.
The Bank submitted an application to SEBI on November 01, 2021 seeking
their approval / exemption on the following:
• To relax three-year minimum promoter lock in requirements in the
Bank under Regulation 16(1)(a) of SEBI (Issue of Capital and Disclosure Requirements)
Regulations, 2018 to the extent required to implement the Scheme of Amalgamation.
• For adopting proposed scheme of amalgamation as a method to
achieve minimum public shareholding (MPS) by the Bank.
Subsequently, SEBI, vide its letter dated December 02, 2021 acceded to
relax the three-year minimum promoter lock-in requirements in the Bank to the extent
required to implement the Scheme soon after receiving final NCLT approval. However, SEBI
advised the Bank to ensure compliance with MPS as prescribed by SEBI Circulars dated
November 30, 2015 and February 22, 2018 and then proceed with the filing of the scheme
documents with the exchanges.
Therefore, in order to achieve the aforesaid MPS, the Bank on September
15, 2022 allotted 22,61,90,476 equity shares by way of Qualified Institutions Placement
(QIP), resultantly the promoter shareholding was brought down from 83.32% to 73.67%.
Basis the achievement of MPS the Bank's Board on October 14, 2022,
considered and approved a Scheme of Amalgamation ("Scheme") between UFSL and the
Bank and their respective shareholders and creditors under Sections 230 to 232 and other
applicable provisions of the Companies Act, 2013 and the rules made thereunder. The
following table highlights the progress made in the Reverse Merger process during the
financial year:
| Sr Process |
Date |
| 1. Approval of the Scheme of Amalgamation by the Board of
Directors of USFB and UFSL |
October 14, 2022 |
| 2. Filing of the Scheme and applications with the Stock
Exchanges |
October 19, 2022 |
| 3. Filing of the Scheme with the RBI for its No-Objection
Certificate |
October 19, 2022 |
| 4. Receipt of No-Objection Certificate from RBI by Ujjivan
Small Finance Bank Limited |
February 01, 2023 |
| 5. Receipt of No-Observation Letters from the Stock Exchanges |
March 09, 2023 |
| 6. Filing of Joint Application with the Hon'ble National
Company Law Tribunal (NCLT), Bengaluru Bench |
March 29, 2023 |
The Company now awaits the directions / orders From the Hon'ble NCLT on
the next course of action including holding of meetings of various stakeholders.
20. THE CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO, IN THE MANNER AS PRESCRIBED IN RULE 8(3) OF THE COMPANIES (ACCOUNTS)
RULES, 2014
Conservation of energy and technology absorption
Since the Company does not own any manufacturing facility, the
particulars relating to conservation of energy and technology absorption are not
applicable.
The Foreign Exchange earnings and outgo
There was no Foreign Exchange inflow and outflow during the year.
21. DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY
The Company is a non-operating holding Company and its main objects are
to carry on the business of making investments in group company(ies) in the form of
securities and providing guarantees etc. and to carry on financial activities, whether in
India or outside, in the nature of investment in bank deposits, money market instruments
(including money market mutual funds and liquid mutual funds), government securities, and
to carry on such other activities as may be permitted and prescribed by the relevant
statutory authorities for core investment companies from time to time.
Since USFB is a listed entity, the Company can only have a distant
oversight on the risk management practices adopted by USFB. The Company expects that the
risk management committee of USFB adopts the best risk practices, reviews its risk
management framework and verifies adherence to various risk parameters and compliances in
the best possible way.
The Company has a duly constituted Risk Management Committee of the
Board and has in place its risk management policy which highlights the functions,
implementation and the role of the committee and the board. Please refer the Corporate
Governance section for the composition and terms of reference of the Risk Management
Committee.
22. CORPORATE SOCIAL RESPONSIBILITY
The Corporate Social Responsibility (CSR) programs were started by the
Company in the year 2010 much before it was made mandatory under the Companies Act, 2013.
During, the year, the Company identified a beneficiary named
'Chinchpada Christian Hospital situated at Chinchpada P.O., Navapur Taluk, Nandurbar
District, Maharashtra - 425417, a registered charitable organisation.
The Company granted a sum of ' 5 Lakhs towards medical assistance for
poor patients, which was predominantly utilised towards their surgery cost. Please refer
the "Annexure 4" on Corporate Social Responsibility in the annual report
for a detailed write up on the CSR activities of the Company during the year.
A brief outline of the company's CSR policy is disclosed on our website
at the below link https://www.uiiivan.com/mandatorv-policies
23. BOARD EVALUATION
The board of directors has carried out an annual evaluation of its own
performance, board committees and individual directors pursuant to the provisions of the
Companies Act, 2013 and the corporate governance requirements as prescribed by Securities
and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations
2015 ("SEBI Listing Regulations") and SEBI guidance note on Board Evaluation.
Performance evaluation criteria for Board, Committees of the Board and
Directors were adopted by the Nomination Committee of the Board at its meeting held on
March 17, 2023. Evaluation formats and criteria of evaluation duly incorporated the
criteria and other parameters as suggested by SEBI vide their guidance note on evaluation
through their circular dated January 05, 2017.
The Board was evaluated comprehensively inter alia on the structure of
the Board, competency, experience and qualifications of directors, diversity in board,
regularity of the board meetings, effectiveness of board processes, independence of Board,
information sharing and overall functioning of the Board.
The performance of the board was evaluated by the board after seeking
inputs from all the directors on each of the above parameters of evaluation and the
performance of the committees was evaluated by the board after seeking inputs from the
committee members on the basis of the above parameters of evaluation.
The Board committees were evaluated inter alia on the basis of their
mandate, composition, attendance, functioning and independence.
INDEPENDENT DIRECTORS' EVALUATION OF NONINDEPENDENT DIRECTORS
In a separate meeting of independent directors held on March 17, 2023,
performance of non-independent directors, performance of the board as a whole and
performance of the Chairman was evaluated, taking into account the views of executive
directors and non-executive directors. The Independent Directors also assessed the
quality, quantity and timeliness of flow of information between the Company management and
the Board.
Performance of independent directors was evaluated by the entire board,
excluding the independent director being evaluated and was satisfied that each of the
independent director fulfills the independence criteria as specified in SEBI regulations
and that they are independent of the management.
24. DETAILS AS REQUIRED UNDER RULE 8 OF THE COMPANIES (ACCOUNTS) RULES,
2014
(i) The financial summary or highlights;
(' in Crores)
| Particulars |
Standalone* |
consolidated* |
|
FY 2022-23 |
FY 2021-22 |
FY 2022-23 |
FY 2021-22 |
| Operating Income |
119 |
- |
4,421 |
2,995 |
| Other Income |
8 |
7 |
257 |
97 |
| Total income |
127 |
7 |
4,679 |
3,092 |
| Less: Operational Expenses |
|
|
|
|
| Personnel Expenses |
1 |
1 |
930 |
822 |
| Administrative & CSR Expenses |
3 |
3 |
662 |
502 |
| Finance Charges |
- |
- |
1,493 |
1,071 |
| Depreciation |
0 |
0 |
163 |
155 |
| Impairment Losses on Financial Instruments |
- |
- |
(99) |
846 |
| Total Operational Expenses |
3 |
4 |
3,148 |
3,396 |
| Profit/(Loss) Before Tax |
124 |
3 |
1,531 |
(304) |
| Less: Income tax |
16 |
1 |
308 |
1 |
| Less: Deferred tax |
0 |
0 |
83 |
(74) |
| Profit/(Loss) After Tax |
108 |
2 |
1,140 |
(231) |
* as per Indian Accounting Standards (ind-AS)
(ii) Highlights of performance of subsidiaries, associates and joint
venture companies and their contribution to the overall performance of the company during
the period
'Ujjivan Small Finance Bank Limited' ("USFB") is a material
listed subsidiary of the Company and is a small finance bank licensed by the RBI in terms
of Section 22 of the Banking Regulation Act, 1949. USFB was incorporated on July 04, 2016
and commenced its operations as a small finance bank w.e.f. February 01, 2017. The Company
as on March 31, 2023 holds 73.67% equity in USFB.
Pursuant to the provisions of section 129(3) of the Companies Act, 2013
read with Companies (Accounts) Rules, 2014, a statement containing salient features of the
financial statements of the Company's subsidiaries in Form AOC-1 is annexed as "Annexure
5" to this report.
Key business and financial performance highlights of the material
listed subsidiary 'ujjivan small Finance Bank Limited' (usFB) (in i-GAAP):
• Gross advances at ' 24,085 Crores as on March 31, 2023 as
against ' 18,162 Crores as on March 31, 2022; growth of 33% Y-o-Y
• Disbursement during FY 2022-23 was ' 20,037 Crores as against '
14,113 Crores during FY 2021-22; growth of 42%
• Total deposit of ' 25,538 as on March 31, 2023 as against '
18,292 as on March 31, 2022; growth of 40%
• CASA increased by 35% from ' 4,993 Crores in March 2022 to 6,744
Crores in March 2023
• 76.9 Lakh customers in March 2023 as against 64.8 Lakh customers
in March 2022
• 42.5 Lakh borrowers in March 2023 as against 37.9 Lakh borrowers
in March 2022
• CRAR of 25.8% in March 2023 as against 19.0% in March 2022
• Number of branches increased to 629 in March 2023 as against 575
in March 2022. Number of ATMs increased from 492 to 517 during FY 2022-23
• Total income increased to ' 4,754 Crores in March 2023 from '
3,173 Crores in March 2022; an increase of 50%
• Net interest income grew to ' 2,698 Crores in March 2023 from '
1,774 Crores in March 2022; an increase of 52%
• Profit after Tax (PAT) for FY 2022-23 is ' 1,100 Crores as
against ' (415) Crores in FY 2021-22
• Return on Asset (ROA) for FY 2022-23 is 3.9% as against (1.9%)
in FY 2021-22
• Return on Equity (ROE) for FY 2022-23 is 31.4% as against
(13.8%) in FY 2021-22
• GNPA at 2.6% in March 2023 as against 7.1% in March 2022
• NNPA at 0.04% in March 2023 as against 0.6% in March 2022
• Cost to income ratio decreased to 54.8% in FY 2022-23 from 70.1%
in FY 2021-22
• Cost of fund declined marginally to 6.5% in March 2023 from 6.3%
in March 2022, due to rise in interest rates
• 18 th IBA Technology Conference, Expo & Awards - Payment and
small finance bank category:-
o Best IT Risk Management
o Special Prize - Best AI&ML Adoption Bank
o Special Prize - Best Fintech Collaboration
• India Fraud Risk Management Summit & Awards 2023: Best
Transaction Fraud Monitoring and Decisioning
• IBSi Global FinTech Innovation Awards 2022: Best Risk Management
Implementation Category:- Best Project Implementation Most Impactful project
USFB - Key Ratios as on March 31, 2023
(' in Crores)
| Particulars |
FY 2022-23 |
| Average Yield - across segment |
18.4% |
| Cost of Funds (CoF) |
6.5% |
| Net Interest Margin (NIM) |
9.5% |
| Return on Assets (ROA) |
3.9% |
| Return on Equity (RoE) |
31.4% |
| Cost to income |
54.8% |
| Capital Adequacy (CRAR) |
25.8% |
| NNPA |
0.04% |
| LCR |
180% |
The Company currently carries on financial activity business in the
nature of investments in bank deposits or other permissible securities and investment in
shares of subsidiary and derives its value primarily from its investments in the Bank. The
Bank contributes 99.78% of the consolidated total income of the Group.
(iii) The change in the nature of business, if any;
There is no change in the nature of the business of the Company during
the FY 2022-23. The Company continues to be a Non Deposit taking Systemically Important
Core Investment Company (NBFC-ND-SI-CIC).
(iv) The details of directors or key managerial personnel who were
appointed or have resigned during the year;
| Sr. Name |
Designation |
din /pan |
Date of Appointment/ change/ cessation |
Reason |
| 1. Mr. Radhakrishnan Ravi |
CEO & CFO |
ADSPR7011F |
April 19, 2022 |
Appointment |
(v) The names of companies which have become or ceased to be its
Subsidiaries, joint ventures or associate companies during the year;
None
(vi) Deposits from public
During the year, the Company has not accepted any deposits from public
and as such, no amount on account of principal or interest on deposits from public was
outstanding as on the date of the balance sheet.
However, the subsidiary of the Company 'Ujjivan Small Finance Bank
Limited' which is a Small Finance Bank has outstanding deposits of ' 25,538 Crores as on
March 31,2023.
(vii) The details of significant and material orders passed by the
regulators or courts or tribunals impacting the going concern status and company's
operations in future;
None
(viii) The details in respect of adequacy of internal financial
controls (iFc) with reference to the Financial Statements
In respect of internal financial control, the Board has adopted the
policies and procedures for ensuring the orderly and efficient conduct of its business,
including adherence to the Company's policies, the safeguarding of its assets, the timely
prevention and detection of frauds and errors, the accuracy and completeness of the
accounting records and the timely preparation of reliable financial information.
Further, the management regularly reviews the control for any possible
changes and takes appropriate actions.
25. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND:
As required under Section 124 of the Act, there were no amounts were
transferred during the Financial Year 2022-23, to the Investor Education and Protection
Fund established by the Central Government.
26. DETAILS OF LOANS FROM DIRECTORS AND THEIR RELATIVES:
During the financial the Company has not taken any loans from the
Directors and their relatives of the Company.
27. CHANGE IN THE SHAREHOLDING OF THE COMPANY:
During the financial year there were no changes in the share Capital of
the Company.
28. DETAILS IN RESPECT OF FRAUDS REPORTED BY THE AUDITORS UNDER SECTION
143(12) OF THE COMPANIES ACT 2013:
There have been no frauds reported by the auditors pursuant to Section
143 (12) of the Companies Act, 2013.
29. ESOP RELATED & OTHER DISCLOSURES
(i) Details of equity shares with differential rights
The Company has not issued any equity shares with differential rights
during the year
(ii) Details of sweat equity shares issued
The Company has not issued any sweat equity shares during the year
(iii) Details of employee stock option scheme
The Company has established Employee Stock Option Plan (ESOP) For
compensation to its employees, being ESOP 2006, ESOP 2007, ESOP 2008, ESOP 2010, MD-ESOP
2010 and ESOP 2015.
As on March 31, 2023, only ESOP 2015 scheme is active.
ESOP 2015
The ESOP 2015 pool comprises of 65,79,899 options which includes the
original pool of 47,82,129 options and 17,97,770 options added from the lapsed options of
ESOP 2006, ESOP 2007, ESOP 2008 and ESOP 2010 with the approval of the shareholders at
their meetings held on November 03, 2015 and June 27, 2018.
As on March 31, 2023, out of the 55,15,880 options granted, 8,28,182
options has been exercised, 39,14,746 options are lapsed, 7,72,952 vested options are
unexercised and there is no option left to be vested. The Board (including its authorised
committee) has been authorised by the shareholders to include the lapsed / cancelled
options under its ESOP 2010 and ESOP 2015 back to the pool of ESOP 2015 and that the Board
is hereby authorised to grant such added back options to its eligible employees (which
includes the employees of its subsidiary).
The vesting period for the options granted under ESOP 2015 is for a
period of three years as under:
| Tranche |
Year of Grant |
Options Granted |
Year 1 |
Year 2 |
Year 3 |
| ESOP 2015 (Tranche 1) |
2015 |
1,469,800 |
34% |
33% |
33% |
| ESOP 2015 (Tranche 2)* |
2016 |
1,696,850 |
33% |
33% |
34% |
| ESOP 2015 (Tranche 3) |
2018 |
2,337,670 |
34% |
33% |
33% |
| ESOP 2015 (Tranche 4) |
2018 |
11,560 |
34% |
33% |
33% |
| Total |
|
5,515,880 |
|
|
|
* Post IPO, options were granted subsequent to the ratification of the
shareholders
No options were granted by the Company during the FY 2022-23.
The ESOP 2015 is in compliance with Securities and Exchange Board of
India (Share Based Employee Benefits) Regulations, 2014 (SEBI ESOP Regulations), the
Companies Act, 2013, and is implemented in accordance with guidance notes issued by ICAI
and the relevant accounting standards.
Revisions in the ESOP Schemes during the Year
None;
ESOP Schemes compliance Status
The ESOP 2015 is in compliance with Securities and Exchange Board of
India (Share Based Employee Benefits) Regulations, 2014 (SEBI ESOP Regulations) and the
Companies Act, 2013. The Company has received a certificate from the Secretarial Auditors
of the Company certifying that ESOP 2015 Scheme of the Company is being implemented in
accordance with the Securities and Exchange Board of India (Share Based Employee Benefits)
Regulations, 2014 and is in accordance with the resolutions passed by the Members of the
Company at a general meeting. The certificate enclosed as Annexure 6
The ESOP Schemes are implemented in accordance with guidance notes
issued by ICAI and the relevant accounting standards.
The weighted average fair value of the share options granted during the
financial year ended March 31, 2023 and March 31, 2022 is Nil. Options were priced using
Black and Scholes Model. Vested ESOPs can be exercised within three years from their
corresponding dates of vesting. Vested ESOPs can be exercised between the dates of vesting
and on or before option expiry dates. The term of the option is assumed to be the sum of
a) duration till vesting; and b) the midpoint of the remaining exercise period from date
of vesting, in absence of historical exercise pattern. While the Company has been listed
since 2016, the period of listing up to the Grant Dates is not commensurate with the
expected term of the granted ESOPs. Accordingly, volatility of comparable companies has
been considered for the purposes of valuation.
ESOP arrangement with subsidiary
With effect From February 01, 2017, the business undertaking of the
Company was transferred to USFB and all the employees of the Company except few identified
personnel have been transferred to USFB as part of the transfer of the business
undertaking. This has resulted in the transfer of options from the employees of the
Company to the employees of USFB. As per Ind AS 102 Share-based Payment, stock options
have to be fair valued on the grant date and expense has to be recognised over the vesting
period. Pursuant to management decision, Impact of Ind AS 102 on account of options
granted to the employees of subsidiary is treated as deemed investment in subsidiary in
the Company's books.
Administration of ESOP Schemes
The Governance, Nomination and Remuneration Committee of the Board
administer the Employee Stock Option Schemes, formulated by the Company from time to time.
Mandatory ESOP Disclosures
Disclosures as required under Section 62 of the Companies Act, 2013 (to
be read with Rule 12 of the Companies (Share Capital and Debenture) Rules, 2014, and SEBI
ESOP Regulations:
| Sr. Particulars |
March 31, 2023 |
| 1. Number of options granted and outstanding at the beginning
of the year (A) |
16,80,888 |
| 2. Number of options granted during the year (B) |
Nil |
| 3. Number of options vested during the year |
Nil |
| 4. Number of options exercised during the year |
Nil |
| 5. Number of shares arising as a result of exercise of
options (C) |
Nil |
| 6. Money realised during the year by exercise of options (in
') |
Nil |
| 7. Number of options Forfeited/Expired during the year (D) |
907,936 |
| 8. The exercise price of the outstanding options (in ') |
385.05 |
| 9. Number of options granted and in force at the end of year
= (A)+(B)-(C)-(D) |
772,952 |
| 10. Weighted average of remaining contractual life (years) at
the year end |
0.37 |
| 11. Variation of terms of the options |
None |
* Please refer to note 25 of the standalone financials for further
details on ESOP data
OPTIONS GRANTED TO KEY MANAGERIAL PERSONNEL (KMP) DURING THE YEAR
No option was granted to any of the KMP or to any other employee of the
Company or its subsidiary (USFB) during the year.
However, USFB on January 27, 2023 has granted its stock options to
below KMP of the Company to be vested in 4 years i.e. 20% each in in first 2 years and 30%
each in next 2 years.
Any other employee who receives a grant of options in any one year of
options amounting to five percent or more of options granted during that year:
- None
Identified employees who were granted options during any one year,
equal to or exceeding one percent of the issued capital (excluding outstanding warrants
and conversions) of the Company at the time of grant
- None
| employee Name |
Designation |
Options granted |
Exercise Price (in ') |
| Shashidhara S |
Company Secretary |
27221 |
27.5 |
30. VIGIL MECHANISM
The Company in compliance with Section 177 of the Companies Act, 2013
has a duly constituted Audit Committee of the Board. The composition of the Audit
Committee is as under:
| Sr. Directors No. |
Designation |
| 1. Mr. Sunil Vinayak Patel |
Chairman (Independent Director) Independent Director
Independent Director Non-Independent, Non-Executive |
| 2. Mr. K.R. Ramamoorthy |
|
| 3. Ms. Mona Kachhwaha |
|
| 4. Mr. Samit Ghosh |
|
Please refer to the Section on Corporate Governance for further details
on the Board Committees.
Further in compliance to Section 177 of the Companies Act, 2013 and
Regulation 22 of SEBI Listing Regulations, the Company has established a Whistle Blower
policy / Vigil Mechanism for the directors and employees to report genuine concerns or
grievances about unethical behavior, actual or suspected fraud or violation of the
company's Code of Conduct or Ethics Policy. The Company has a vigil mechanism process
wherein the employees are free to report violations of laws, rules, regulations or
unethical conduct to the whistle and ethics officer of the Company. Further, this policy
also specifically enables the employees of the Company and those of its subsidiary to
report instances of any leak of unpublished price sensitive information by the employees
of the Company and its subsidiary to any outsider which is not for legitimate business
purposes. This is to ensure the compliance of SEBI (Prohibition of Insider Trading)
Regulations, 2015 and Code of Conduct for Prevention of Insider Trading of the Company.
Name and Address of the Whistle and Ethics Officer
Mr. Shashidhara S - Company Secretary and Compliance Officer
Ujjivan Financial Services Limited
Grape Garden, No. 27, 3rd A Cross, 18th Main, 6th
Block, Bangalore - 560095, Karnataka
Email- shashidhara.s@uiiivanfin.com
Protected Disclosure against the Whistle and Ethics Officer in the
absence of the Managing Director should be addressed to the Chairman of the Company and
the Protected Disclosure against the Chairman of the Company should be addressed to the
Chairman of the Audit Committee.
Name and Address of the Chairman of the Company:
Mr. Samit Ghosh
Ujjivan Financial Services Limited
Grape Garden, No. 27, 3rd A Cross, 18th Main, 6th
Block, Bangalore - 560095, Karnataka
Email: samit.ghosh@uiiivanfin.com
name and Address of the chairman (Audit committee):
mr. sunil vinayak Patel
G-1, Avant Garde 193, 6th Main Road, Defence Colony, Indiranagar,
Bengaluru 560038, Karnataka Email: cpcon.blr@gmail.com
The confidentiality of those reporting violations is maintained and
they are not subiected to any discriminatory practice
The whistle blower policy of the Company is disclosed on our website at
the below link- https://www.uiiivan.com/mandatory-policies
31. REMUNERATION DETAILS OF DIRECTORS, KMPS, EMPLOYEES
| Sr. Particulars |
Disclosures |
|
| 1. The ratio of the remuneration of each Whole time director
to the median remuneration of the employees of the company for the financial year |
Not applicable since the Company does not have whole time
director |
|
| 2. The percentage increase in remuneration of each director,
Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in
the financial year |
kmp |
% increase in remuneration |
|
Mr. Radhakrishnan Ravi |
NIL |
|
Mr. Shashidhara S |
12.6% |
| 3. The percentage increase in the median remuneration of
employees in the financial year; |
12.6% increase in the median remuneration (only one employee
received an increase in remuneration for FY2022-23). |
|
| 4. The number of permanent employees on the rolls of company
as on March 31, 2023 |
3 |
|
| 5. Average percentile increase already made in the salaries
of employees other than the managerial personnel in the last financial year and its
comparison with the percentile increase in the managerial remuneration and justification
thereof and point out if there are any exceptional circumstances for increase in the
managerial remuneration |
The average increase in the salaries of employees (other than
managerial personnel) was Nil and the average increase in the managerial remuneration
during the last financial year was 12.6%. |
|
| 6. Affirmation that the remuneration is as per the
remuneration policy of the company |
Yes |
|
A statement showing the name of every employee of the company other
than disclosed above, whoa. if employed throughout the financial year, was in receipt
of remuneration for that year which, in the aggregate, was not less than one Crore and two
Lakhs rupees;
- None
b. if employed for a part of the financial year, was in receipt of
remuneration for any part of that year, at a rate which, in the aggregate, was not less
than eight Lakhs and fifty thousand rupees per month;
- None
c. if employed throughout the financial year or part thereof, was in
receipt of remuneration in that year which, in the aggregate, or as the case may be, at a
rate which, in the aggregate, is in excess of that drawn by the managing director or
whole-time director or manager and holds by himself or along with his spouse and dependent
children, not less than two percent of the equity shares of the company.
- None
information as per Rule 5(2) of chapter Xiii, the companies
(Appointment and Remuneration of Managerial Personnel) rules, 2014
The names of the top ten employees in terms of remuneration drawn:
The Company during the year ended March 31, 2023 had only the following
employees:
| Sr. Particulars |
Radhakrishnan Ravi |
Shashidhara S. |
Aakash Jaiswal* |
| i. Designation |
Chief Executive Officer & Chief Financial Officer |
Company Secretary and Compliance Officer |
Manager - Investor Relations |
| ii. Remuneration received |
3,420,000 |
2,084,960 |
318,139 |
| iii. nature of employment, whether contractual or otherwise; |
Permanent |
Permanent |
Permanent |
| iv. qualifications and experience of the employee |
CA, B.Sc (Maths), Member of The Institute of Internal
Auditors, Florida, USA 35+ years' experience |
CS, LLB, M.Com 14+ years' experience |
MBA (Finance) 5 years' experience |
| v. date of commencement of employment |
April 19, 2022 |
November 01, 2017 |
January 23, 2023 |
| vi. the age of such employee |
60 |
37 |
31 |
| vii. the last employment held by such employee before joining
the company |
Calega Resources Investment LLC |
GMR Ose Hungund Hospet Highways Pvt Ltd. |
State Bank of India, Ujjivan Financial Services Limited |
| viii. the percentage of equity shares held by the employee in
the company |
0.00% |
0.00% |
0.00% |
| ix. whether any such employee is a relative of any director
or manager of the company |
No |
No |
No |
* Joined w.e.f January 23, 2023
32. BUSINESS RESPONSIBILITY SUSTAINABILITY REPORTING ("BRSR")
The Board of the Company in its meeting held on May 18, 2023 has
approved the Business Responsibility Sustainability Report ("BRSR") of the
Company as stipulated under Regulation 34 (as amended) of SEBI Listing Regulations which
mandates that top 1000 listed companies based on market capitalisation as on March 31
should include its BRSR in its Annual Report. The Company is ranked 615 in the list as on
March 31, 2023.
A copy of the BRSR is appended as "Annexure 7" and has
also been hosted on the website of the Company at www.ujjivan.com and can be accessed from
the link below https://www.uiiivan.com/mandatorv- policies
Compliance of Sexual Harassment of Women at Workplace (Prevention,
Prohibition and redressal) Act, 2013
The Company has only 2 employees as on March 31, 2023 and the Sexual
Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 is not
applicable.
Disclosures in relation to the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013:
a. Number of complaints filed during the year : Nil
b. Number of complaint dismissed during the year : Nil
c. Number of complaint pending as on end of the financial year: Nil
Other disclosures
• The Company is not required to maintain cost records as
specified by the Central Government under sub-section (1) of Section 148 of the Companies
Act, 2013.
• The details of difference between amount of the valuation done
at the time of one time settlement and the valuation done while taking loan from the Banks
or Financial Institutions along with the reasons thereof: Not Applicable
• There are no applications made or any proceeding pending under
the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along with their
status as at the end of the financial year.
Green initiatives
Electronic copies of the Annual Report for the FY 2022-23 and the
Notice of the 19th AGM are being sent to all the members whose email addresses are
registered with the Company / Depository Participants. As per the relaxation given by SEBI
on account of Covid situation, physical copies of the Annual Report are not being sent to
members who have not registered their email address with their depositories.
Acknowledgement
Your Directors wishes to gratefully acknowledge the assistance and
guidance received from the RBI, ROC, Investors, Banks, Auditors, Lawyers, Accountants,
Vendors, Partner NGOs, Institutions and Foundations and Government Authorities and all our
well-wishers. The Board also wishes to place on record their warm appreciation for the
creative and dedicated efforts of staff at all levels.
| For and on behalf of the Board of Directors |
|
| Samit Ghosh |
sunil vinayak Patel |
| Chairperson |
Independent Director (Audit Committee Chairman) |
| DIN:00185369 |
DIN: 00050837 |
| Date: May 18, 2023 |
|
| Place: Bangalore |
|
|