Sundaram Finance Limited

Sundaram Finance Limited 67th Annual Report 2019-20 Board of Directors S Viji Chairman S Ram P N Venkatachalam S Mahalingam S Prasad S Ravindran Rajiv C Lochan Shobhana Ramachandhran R Raghuttama Rao T T Srinivasaraghavan Managing Director Harsha Viji Deputy Managing Director A N Raju Director (Operations) Audit Committee S Prasad Chairman S. Ravindran Shobhana Ramachandhran Stakeholders S Prasad Chairman Relationship Committee T T Srinivasaraghavan A N Raju Nomination, Compensation & P N Venkatachalam Chairman Remuneration Committee S Prasad S Ravindran Corporate Social Responsibility Shobhana Ramachandhran Chairman Committee S Ravindran T T Srinivasaraghavan Risk Management Committee T T Srinivasaraghavan Chairman Harsha Viji A N Raju M Ramaswamy Asset Liability Management Committee T T Srinivasaraghavan Chairman Harsha Viji A N Raju M Ramaswamy Information Technology Strategy Committee Sri S Mahalingam Chairman Sri P N Venkatachalam Sri Rajiv C Lochan Sri T T Srinivasaraghavan Sri A N Raju Sri V Ananthanarayanan Chief Financial Officer M Ramaswamy Secretary & Compliance Officer P Viswanathan Chief Risk Officer Rajmohan Vasudeva Pai Registered Office 21, Patullos Road, Chennai - 600 002 Tel: 044 2852 1181, Fax: 044 2858 6641 Email: [email protected] Website: www.sundaramfinance.in CIN L65191TN1954PLC002429 Auditors M/s. Sundaram & Srinivasan., Chartered Accountants 23, C.P. Ramaswamy Road, Alwarpet, Chennai 600 018 Information Security Assurance Services M/s. C.V. Ramaswamy & Co Office No. 1, Vidwan Sundaram Street, Nungambakkam, Chennai 600 034 Annual Report 1 2019-20 Management Team S Srinivasan Senior Vice President & Head – Corporate Finance D Ravindran Senior Vice President (Sundaram Infotech Solutions) M J Kulkarni National Head - MH&CE K Sankarakumar Senior Vice President & Head – Distribution N Ramachandran National Head - Auto & Head – North Deepa Ramesh Vice President (SIS) S Sivakumar Vice President & Head – Administration & Corporate Communications S Sridhar Vice President & Head - Treasury V Ananthanarayanan Chief Information Officer Rajesh Venkat Vice President & Head - Western Region C Balasubramanian Head - CCPD C Muralidharan Senior General Manager & Head – Karnataka A K Ganesan Senior General Manager & Head – TN - West G Vaikuntam Senior General Manager & Head – Recoveries & ARC R Sridharan Senior General Manager & Head – Indirect Taxation Balachander Gopinath Senior General Manager & Head – East H Venkatesan Senior General Manager & Head – Group Internal Audit S Balasubramanian Senior General Manager & Head – Andhra Region Venkatesh Kumaraswami Senior General Manager & Head – Deposits N Sri Raman National Head - Fleet Cards P Rajesh Srinivas National Head - Emerging Corporates Group R Sekar Head - Human Resources Gaurav Mittal Head - Emerging Financial Institutions N Raman Head - Internal Audit N Narayanan Head - Legal Subsidiaries Sundaram Home Finance Limited Sundaram Alternate Assets Limited Sundaram Asset Management Company Limited Sundaram Trustee Company Limited Sundaram Asset Management Singapore Pte. Limited LGF Services Limited Sundaram Fund Services Limited Bankers State Bank of India ICICI Bank Ltd Bank of India Axis Bank Ltd. Canara Bank Federal Bank Ltd. Indian Bank The Hongkong and Shanghai Banking Corporation Ltd. Bank of Baroda BNP Paribas HDFC Bank Ltd. Debenture Trustee Ms. Anjalee Athalye, Vice President - Operations IDBI Trusteeship Services Limited Asian Building, Ground Floor, 17, R. Kamani Marg, Ballard Estate, Mumbai – 400001 CURRENCY EQUIVALENTS `One Million = `10 Lakhs US$ 1 = Indian `75.3859 * `One Billion = `100 Crores or *RBI Reference Rate as on 31.03.2020 `10,000 Lakhs SUNDARAM FINANCE LIMITED 2 Contents Board's Report 4 Corporate Governance Report 19 Report on CSR Activities 36 Business Responsibility Report 38 Secretarial Audit Reports 44 Disclosure on Directors / KMP Remuneration (Rule 5) 48 Disclosure on Stock Options 50 Extract of Annual Return 51 Financial Highlights 75 Independent Auditors' Report 76 Balance Sheet 86 Statement of Profit and Loss 87 Cash Flow Statement 90 Notes to the Accounts 92 Consolidated Financial Statements Balance Sheet 170 Statement of Profit and Loss 171 Cash Flow Statement 176 Notes to the Accounts 178 Independent Auditors' Report 245 Statement in Form AOC1 relating to 254 Subsidiaries / Associates / Joint Ventures Annual Report 3 2019-20 Board’s Report Your directors have pleasure in presenting the 67th Annual Report together with audited accounts for the year ended 31st March 2020. The summarised financial results of the Company are presented hereunder: FINANCIAL RESULTS: STANDALONE (` in cr.) Year ended Year ended Particulars March 31, 2020 March 31, 2019 Revenue from Operations 3842.09 3321.51 Other Income 84.85 20.56 Total Revenue 3926.94 3342.07 Less: Total Expenses 2981.82 2446.79 Profit before exceptional items and tax 945.12 895.28 Add: Exceptional item NIL 592.43 Profit before tax 945.12 1487.71 Profit after Tax 723.95 1126.31 Other Comprehensive Income 55.92 (4.02) Surplus brought forward 444.76 767.20 Less: Transfer to COVID-19 Reserve (net of deferred tax) 20.34 – Amount available for appropriation 1204.28 1889.49 Appropriations to: - Statutory Reserve 144.79 225.26 - General Reserve 246.75 997.30 Dividend - Interim 2017-18 – 55.55 - Final 2017-18 – 77.77 - Interim 2018-19 – 55.55 - Final 2018-19 138.88 – - Interim 2019-20 111.10 – Dividend Tax 43.25 33.30 Surplus carried to balance sheet 519.51 444.76 SUNDARAM FINANCE LIMITED 4 PAT Dividend (` in cr.) (` in cr.) 723.95 194.43 604.05* 563.44 144.44 495.35 133.32 127.77 FY 2016-17 2017-18 2018-19 2019-20 FY 2016-17 2017-18 2018-19 2019-20 EPS (`) 44.58 50.71 54.37 65.16 % 115 120 175* 130 *excludes Exceptional Profit - `522.26 cr. *includes Special Dividend - 50% DIVIDEND CORPORATE GOVERNANCE Your Company paid an interim dividend of `10/- per share A detailed report on corporate governance, together with in February 2020. Your directors are pleased to recommend a certificate from the Secretarial Auditor, in compliance a final dividend of` 3/- per share, which, together with the with the relevant provisions of SEBI (Listing Obligations and interim dividend, would aggregate to a total dividend of `13/- Disclosure Requirements), Regulations 2015, is attached as per share (130 % on the face value of `10/-), representing part of this report, vide Annexure II. a dividend pay-out of 22.90% (including dividend d istribution tax) Compliance reports in respect of all laws applicable to the Company have been reviewed by the Board of Directors. The Dividend Distribution Policy, formulated in accordance with the provisions of Regulation 43A of the SEBI RELATED PARTY TRANSACTIONS (Listing Obligations and Disclosure Requirements) Regulations, 2015, is attached as part of this report, vide All transactions entered into by the Company with related Annexure I. parties were in the ordinary course of business and on an Annual Report 5 2019-20 arm’s length basis. The Company did not enter into any Harassment of Women at the Workplace (Prevention, material transaction with such related parties, under Section Prohibition & Redressal) Act, 2013. An Internal Complaints 188 of the Companies Act, 2013, during the year. Form Committee (ICC) has been set up to redress complaints. All AOC-2, as required under Section 134 (3) (h) of the Act, read employees (permanent, contractual, temporary, trainees) with Rule 8 (2) of the Companies (Accounts) Rules 2014, is are covered under this policy. No complaints were received attached as part of this report, vide Annexure III (i). Further, during the financial year nor were any pending unresolved the Company’s policy on Related Party Transactions is attached as on 31st March 2020. as part of this report, vide Annexure III (ii). SECRETARIAL AUDIT The Company did not enter into any transactions with any In terms of Section 204 of the Companies Act, 2013 and person or entity belonging to the promoter or promoter group the rules thereunder, the Company has appointed M/s and holding 10% or more shareholding in the Company. Damodaran & Associates, Practising Company Secretaries, CORPORATE SOCIAL RESPONSIBILITY (CSR) as the Secretarial Auditor of the Company. The Secretarial Your Company, along with its subsidiaries and associates, has Audit Report as provided by them is annexed to this Report, always responded in a responsible manner to the growing vide Annexure VI. needs of the communities in which it operates. During the year, REMUNERATION TO DIRECTORS / KEY your Company has, in consonance with the CSR policy of the MANAGEMENT PERSONNEL Company, undertaken a number of initiatives that contribute to Disclosure pursuant to Rule 5 (1) of Companies (Appointment society at large, in the areas of health, education, environment and Remuneration of Managerial Personnel) Rules, 2014 is and preservation of the country’s rich culture and heritage. annexed, vide Annexure VII. The Annual Report on CSR Activities undertaken by the SUNDARAM FINANCE EMPLOYEE STOCK OPTION Company for the Financial Year 2019 – 2020, is annexed with SCHEME this report, vide Annexure IV. Based on the recommendations of the Nomination, BUSINESS RESPONSIBILITY REPORT Compensation and Remuneration Committee, your Board of A Business Responsibility Report as required under Regulation Directors has granted, subject to regulatory approvals where 34(2) (f) of the SEBI (Listing Obligations and Disclosure necessary, 9,375 stock options to select eligible employees, on Requirements), Regulations

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