Equitas AR20 PDF

ANNUAL REPORT 2019-20 Equitas Holdings Limited
CONTENTS
Company Overview Financial Statements

Standalone
Key Performance Indicators 01
Independent Auditors’ Report 52
Chairman’s Insights 02
Balance Sheet 58
Statement of Profit and Loss 59
Cash Flow Statement 60
Statement of Changes in Equity 61
Notes to Accounts 62
Consolidated
Statutory Reports Independent Auditors’ Report 106
Balance Sheet 112
Directors’ Report 04
Statement of Profit and Loss 113
Management Discussion and Analysis 21
Cash Flow Statement 114
Report on Corporate Governance 29
Statement of Changes in Equity 116
Business Responsibility Report 44
Notes to Accounts 118
Form AOC-1 – Financial Position
of Subsidiaries 189
Received CSR Award from

the Ministry of Corporate
Affairs, Government of
India, for Contribution
to National Priority
Areas – Slum
Area Development.
Company Overview 1
EQUITAS HOLDINGS LIMITED (EHL) is a non-deposit taking,

systemically important core investment company (CIC-ND-SI)
registered with the Reserve Bank of India (RBI). EHL’s operations and
activities are limited to investing in and providing loans to group
companies. The Company operates two subsidiaries: Equitas Small
Finance Bank Limited (ESFB), licensed under Section 22 of the Banking
Regulations Act, 1949 to carry on the business of small finance bank
and Equitas Technologies Private Limited (ETPL), engaged in the
business of freight aggregation.
Equitas (Erstwhile NBFC) was launched with the aim of improving
the quality of life by increasing total household asset value of those
who are not effectively serviced by the formal financial sector, by
providing transparent and trustworthy access to relevant financial
products and services by deploying cutting-edge technology
platforms and forming partnerships and alliances.
Consolidated Performance Highlights FY 2019-20
BALANCE SHEET SIZE (` Cr) 33% NO. OF ACTIVE LOAN ACCOUNTS 21%
20,835 24,19,063
NETWORTH (` Cr) 14% TOTAL DEPOSITS (` Cr) 20%
2,784 10,679
LOAN AUM (` Cr) 32% RETAIL DEPOSITS (` Cr) 133%
15,440 3,849
DISBURSEMENTS (` Cr) 16% NO. OF DEPOSIT ACCOUNTS 89%
9,911 11,74,156
% represents YoY growth
Annual Report 2019-20

2 EQUITAS HOLDINGS LIMITED
Chairman’s Insights
Delivering concrete results

ESFBL has adopted the strategy to create a long-term
granular retail liability franchise and has achieved
satisfying results in its endeavour. ESFBL has also
energised itself with a comfortable, sustainable and
scalable growth in advances and, in the process, has
developed and launched many innovative products to
attract customers.
and difficulties will sort themselves We existed for and continue to serve
Dear Shareholders, out in the near future. My prayers the ‘neglected’ sectors and society,
and good wishes are with you all in who did not have a formal source of
It gives me immense pleasure to
staying safe and healthy during this income and were ‘underserved’ by
share my views with you through
pandemic situation. other players, and continue to do so,
this Annual Report – about what we
to this day. We have demonstrated
are, what we set out to accomplish, Looking back at my association
to the society and the powers
and what we have achieved so with Equitas, I realised that I have
that be – that this part of society,
far. It is also important to analyse been part of this ‘experience’ for
which has remained unserved and
our achievements through the the last 13 years. In the middle of
underserved, can be enabled to
lens of our declared strengths – 2007, when I was exposed to the
discharge its societal obligations,
accountability, transparency and organisation, I must admit that
as well as other segments. We
full disclosure. what drove me into this orbit as
supported their cause and instilled
the commitment and vision of the
Before I delve deeper into our confidence in them. In targetting
people behind Equitas to deliver a
performance, it is crucial to outline our synergies at this segment,
product that was distinctive, that
the external environment in which our business has grown with their
was socially relevant and that served
we currently operate in. We seem support, and we remain proud to be
a greater purpose. That vision has
to be in a cauldron being pushed a beacon of hope to these people.
remained unaltered to date. I can
here and there by forces beyond
assure you all that those objectives While we were doing this, we did
our comprehension and control,
have not been whittled even by a not forget to invoke our motto of
that dictate our economic and social
small measure. being relevant, accountable, and
progress. From somewhere around
transparent. We were the first
the middle of the last financial You may recall that we started out
among micro-finance organisations
year, we had noticed worrying signs with Micro-Financing. As we moved
to openly declare the process of
of a downtrend in our economy. ahead, along with the tremendous
interest calculation, issue passbooks
That has been compounded by support of our investors and other
and inculcate a sense of trust in
the outbreak of a pandemic that stakeholders, we progressively
these people unmindful of the fact
poses a significant threat to the added vehicle financing, mortgage
that our return on investments was
community’s wellbeing and safety. financing and a host of other
comparatively lower than that of
activities. All these milestones have
However, we are not alone in this; our competitors.
merged to form the organisation
most countries across the globe
that we have today. Between then Let me assure you, dear
are going through this process of
and now, our primary objective of shareholders, that commitment
‘adjustment’. Hope and faith are our
being socially relevant has been an and philosophy guides us even
constant companions to tide over the
unwavering constant and has not today. Equitas is proud to be a
crisis. I do hope that the problems
changed a bit. participant in this social movement.
Company Overview 3
Apart from the businesses based of funding. The Bank has also One other condition laid down
on these principles, we have energised itself with a comfortable, by the RBI was that the banking
committed ourselves to grow with sustainable and scalable growth subsidiary must be listed separately
our customers, and their happiness in advances and, in the process, by the end of the third year of
was somewhat enhanced by a has developed and launched many the start of business. For us, the
clutch of welfare measures. We innovative products to attract deadline was September 4, 2019.
started all these activities well customers. Your Board believes
Your Company had approached the
ahead of government-mandated that the Bank is on the right track.
RBI and SEBI with a proposal that
CSR initiatives. Lower-than-expected growth in
could have helped it to achieve this.
the last quarter is attributed to
We run medical camps, eight Our proposal did not receive the
factors beyond its control. As the
schools for children from low- recognition from the authorities,
economy stabilises after exiting the
income families, teach our members resultant to which, the Bank
‘lockdown’, the Bank will pursue its
skills and expertise to enable them initiated the move to go in for an
carefully laid out plans. The Bank
to advance in life as a professional IPO. Requisite permissions were
has made significant investments
or a businessperson. Our schools received in February-March 2020.
in new-age technologies to deliver
are being run as part of our The IPO was scheduled around the
superior experiences to customers
social commitment, and I have no end of March 2020. Unfortunately,
and increase operational efficiency
hesitation to admit that these have the listing of the Bank had to be
and reach. These investments have
contributed to the welfare of our put on hold due to the coronavirus
started yielding results.
constituents. I am very proud to outbreak. We plan to resume
report that many of our students Equitas Technologies has been our efforts in this direction as
have topped their districts and state adopting modern methods of soon, as possible when a clear
in board examinations. transport engineering and we are situation emerges.
hopeful of making a successful
It is our deep desire that the 5% of Our investors have faced a situation
venture out of it. These are visible
our profits, used for our societal where the market price of the
signs of improvement in this
activities, will help us to achieve Company’s shares witnessed a
business in the later part of the past
even nobler objectives in the future. downward trend, in line with the
year, and in the current quarter.
perceptible drop in market value
BUSINESS
STAKEHOLDERS of shares of companies in the
We are a Holding Company (Holdco)
You are the most critical engine financial sector, including banks,
and our business is carried out
for growth. I am glad to note that for reasons that the world economy
by the two subsidiaries – a major
you understand us completely and is undergoing a period of stress.
part of our activity is the Small
are a source of great strength. We expect this phase to get over
Finance Bank (SFB), one of the
It is gratifying to note that as soon and normal activities to
first to commence operations as
shareholders, we have a mix of resume in the market. I thank all
a bank, and a small part of our
institutional and retail investors, our investors for their continued
activity relates to the setting
and the Board and I are very support and patience during these
up of an electronic platform for
grateful for all your support. challenging times.
transportation. The published
accounts give details of the I am aware of the fact that at the Until last year, we had held
functioning of these businesses. Initial Public Offer of the Company physical meeting of shareholders
You may be glad to know in 2016, all of you had stood by us. which enabled the Board, the
that our businesses have been We will not forget the support that management, and the shareholders
progressively improving. we have received from all of you. to exchange ideas. This year, we
will hold virtual meetings, but
For the Bank, we have a separate We are a core investment NBFC,
we remain open to exchange
Board, which comprises competent regulated by the Reserve Bank of
of ideas as ever.
professionals and is chaired by India. NBFC regulations require
Mr. Arun Ramanathan, IAS (Retired). us to direct a major part of our The Board and I personally
A Board of competent professionals resources in ‘investments’. The thank our investors and other
assists him. I must compliment Bank is our major investment. It stakeholders, for their continued
Mr. Arun Ramanathan and his implies, therefore, that for us to interest in us. We are grateful to
colleagues for running the Bank reward our investors, we must get you for entrusting us with the
efficiently. My compliments to a return on our investment. The responsibility of protecting your
Mr. P N Vasudevan, the MD & CEO Bank is governed by the objectives interests. We assure you that we will
of the Bank, for his significant and regulations of the RBI, and earnestly do this with the exemplary
contribution to the development the central bank does not permit standards of transparency,
of the business. dividend payments by a Bank in its accountability and reliability,
initial years, even if the institution guided by our purpose and promise
The Bank has adopted the strategy
makes profits. We had explained as a social institution.
to create a long-term granular retail
this position at the last meeting of
liability franchise and has achieved
our shareholders. We expected the
satisfying results in its endeavour. May God bless you.
restriction to be lifted this year, but
The Bank continues to focus on
the RBI has blocked dividends by all
growth of retail deposits, which RANGACHARY N.
banks this year.
provide a stable and low-cost source Chairman

Directors’ Report
To,
The Members,
Equitas Holdings Limited
Your Directors have pleasure in presenting the Thirteenth Annual Report together with the audited accounts of the
Company on a Consolidated and Standalone basis for the Financial Year ended March 31, 2020 (FY 2019-20).
1. Financial Results
The summary of Company‘s financial performance, both on a Consolidated and Standalone basis for FY 2019-20
compared to the previous year, FY 2018-19 is given below:
(` in lakhs)
Consolidated Standalone
Particulars
2019-20 2018-19 2019-20 2018-19
Total Revenue 293,590 235,853 1,907 2,252
Less: Total Expenditure 261,973 208,722 607 980
Profit before taxation 31,617 27,131 1,300 1,272
Provision for taxation 11,017 9,474 530 339
Profit after taxation[A] 20,600 17,657 770 933
Other Comprehensive Income [B] 119 40 (1) 1
Total comprehensive Income for the year, 20,719 17,697 769 934
net of tax [A+B]
Transfer to Statutory Reserve 6,245 5,451 154 187
Transfer to Special reserve 483 264 Nil Nil
Transfer to investment fluctuation reserve 276 843 Nil Nil
2. Dividend 7. Investment in Subsidiaries

The Directors do not recommend any During the year under review, the Company had
dividend for the year. infused a capital of ` 200 lakhs in its Subsidiary,
Equitas Technologies Private Limited by subscribing
3. Transfer to Reserves to its equity shares on a rights basis.
Your Company has transferred a sum of ` 154 lakhs
to Statutory Reserve as required under the Reserve 8. The State of Company’s affairs
Bank of India Act, 1934. The Company continues to be categorised as a Non-
Banking Financial Institution - Non-Deposit taking
4. Capital Adequacy - Systemically Important Core Investment Company
The Capital Adequacy Ratio of the Company stands (CIC-ND-SI) under the RBI Regulations.
at 97.19% as of March 31, 2020 as against the
minimum capital adequacy requirements of 30% 9. Statutory Disclaimer
stipulated by RBI.
The Company is having a valid Certificate of
Registration dated September 1, 2016 issued
5. Material Changes and Commitments by the RBI under Section 45-IA of the Reserve
There were no material changes and commitments Bank of India Act, 1934. However, RBI does not
between the end of FY 2019-20 and the date of accept any responsibility or guarantee about the
this report, affecting the position of the Company present position as to the financial soundness of
except the impact of COVID-19 pandemic and the Company or for the correctness of any of the
enforced lockdown on the business of the Group, statements or representations made or opinions
details of which are covered under Management expressed by the Company and for discharge of any
Discussion & Analysis, forming part of this Report. liability by the Company.
6. Share Capital Neither there is any provision in law to keep, nor

The Company, during the year, has issued in does the Company keep any part of the deposits with
aggregate, 328,497 Equity Shares to its employees RBI and by issuing a Certificate of Registration to
and the employees of its Subsidiaries under the the Company, RBI neither accepts any responsibility
Equitas Employees Stock Option Scheme, 2015. nor guarantees the payment of deposits to any
depositor or any person who has lent any sum
Pursuant to the aforesaid issue and allotment of to the Company.
Equity Shares, the paid-up share capital of the
Company stood at ` 3,417,899,950 as at March 10. Fixed Deposits
31, 2020 as compared to ` 3,414,614,980 as at The Company has not accepted any deposits from
March 31, 2019. the public since inception.
Statutory Reports 5
11. Subsidiary Companies The Bank filed Draft Red Herring Prospectus (DRHP)
The Company conducts its business through the for the proposed IPO, with SEBI on December 16,
following two subsidiaries: 2019. The DRHP proposed primary issue of upto
Sl. Name of the
` 550 crore and Offer for Sale by Equitas Holdings
Activities Limited, the promoter selling shareholder of upto
No. Subsidiary
1 Equitas Small ESFBL is engaged in Banking business. 8,00,00,000 (Eight crore only) shares.
Finance Bank Its various activities are outlined in
Limited (ESFBL) the Management Discussion and However, due to the COVID-19 global pandemic
Analysis Report which forms part of and consequent lockdowns across the country, the
this Report. launching of the IPO and listing have been delayed.
2 Equitas ETPL is engaged in freight facilitation Management and the Board of Directors of ESFBL
Technologies business under the brand name of remain committed to completing the IPO of shares
Private Limited ‘Wowtruck’. The Company provides a once normalcy in business operations following the
(ETPL) common platform for customers and lockdown is restored.
truck owners to connect online and
carry out transactions on a real time 14. Performance and Financial Position of
basis. Subsidiaries
As required under Section 129 of the Act read
with Rule 5 of Companies (Accounts) Rules, 2014, a

As required under Regulations 16(1) (c) & 46
statement containing salient features of financial
of Securities Exchange Board of India (Listing
statements of each of the Subsidiaries has been
Obligations and Disclosure Requirements)
appended to the financial statements.
Regulations, 2015 “SEBI Listing Regulations”, the
Board of Directors had approved the Policy for
15. Consolidated Financial Statements
determining Material Subsidiaries (“Policy”). The
The Consolidated Financial Statements which have
details of the Policy are available on the website
been prepared in accordance with the Companies
of the Company https://www.equitas.in/pdf/EHL_
Act, 2013 (“the Act”) and the relevant Accounting
Policy_Materiality.pdf.
Standards form part of this Annual Report.
12. Corporate Social Responsibility
16. Management Discussion and Analysis Report
he Company has laid down a Corporate Social
T
In accordance with the SEBI Listing Regulations,
Responsibility Policy, which is disclosed on our website
the Management Discussion and Analysis Report
ht tps: // w w w.equitas.in /pdf/ EHL- CSR- Polic y.pdf.
highlighting the business-wise details forms part
In accordance with the Policy, the Company and its
of this Report.
Subsidiary, ESFBL contribute higher of 5% of its net
profits as against the prescribed 2% of average net
17. Corporate Governance Report
profits made during the preceding three financial years.
A report on Corporate Governance containing the
Equitas Development Initiatives Trust, a registered
details as required under the SEBI Listing Regulations
Public Charitable Trust to implement schemes and
forms part of this Report.
projects approved as per the CSR policy. A report on
CSR activities is enclosed as Annexure – I.

The Executive Director & CEO and the Chief
Financial Officer have submitted a certificate to the
13. Listing of shares of ESFBL
Board regarding the financial statements and other
In accordance with the terms and conditions of the
matters as required under Regulation 17(8) of SEBI
grant of Small Finance Bank (SFB) licence, ESFBL
Listing Regulations.
is required to list its shares within three years
of commencement of business i.e., on or before
18. Business Responsibility Report
September 4, 2019. Also, the Company, as the
Business Responsibility Report is attached and forms
promoter of ESFBL is required to maintain a minimum
part of this Report.
stake of 40% (forty percent) in ESFBL for a period of
5 (five) years from the date of commencement of
19. Board Meetings
business of the bank (i.e., until September 04, 2021).
During FY 2019-20, the Board of Directors of the
Company met five times. The details of the Meetings
In order to ensure compliance with the aforesaid
are given in the Report on Corporate Governance.
licensing conditions, a Scheme of Arrangement
The maximum interval between any two Meetings
was formulated between ESFBL, the Company and
did not exceed 120 days, as prescribed in the Act.
its shareholders, proposing issue of shares of ESFBL
for no cash consideration to shareholders of the
20. Composition of Audit Committee
Company by capitalising securities premium, free
The Company has constituted an Audit Committee
reserves and surplus in the profit and loss account.
in terms of the requirements of the Act and
This Scheme was submitted to SEBI through Stock
Regulation 18 of SEBI Listing Regulations. The
Exchanges for approval in February 2019. As this
composition of the same is disclosed in the Corporate
Scheme was returned by SEBI in September 2019,
Governance Report.
ESFBL has initiated steps to list its shares through an
Initial Public Offer (IPO).

21. Directors & Key Managerial Personnel Section 152 of the Act provides that two-thirds of
As on the date of this Report, the Company has six the total numbers of Directors are liable to retire
Independent Directors including a woman Director. by rotation out of which one-third shall retire from
office at every AGM. In terms of Section 149(13), the
Change in Directors provisions of retirement of Directors by rotation
The Board of Directors of the Company at its Meeting shall not be applicable to Independent Directors and
held on August 02, 2019, had appointed Mr. Jayaraman an Independent Director shall not be included in the
Chandrasekaran as Additional Director of the total number of Directors liable to retire by rotation.
Company w.e.f. August 02, 2019. Further, the Board at
its Meeting held on November 08, 2019 had appointed
Accordingly, Mr. Bhaskar S, Non-Executive Non-
Mr. John Alex as Whole-Time Director of the Company Independent Director, retires by rotation this year,
designated as Executive Director & Chief Executive and being eligible, offers himself for re-appointment.
Officer (ED & CEO) in the place of Mr. Bhaskar S, who The Board recommends his re-appointment as
ceased to be an ED & CEO w.e.f. close of office hours on Director of the Company liable to retire by rotation.
October 20, 2019. However, Mr. Bhaskar S, continues to Appropriate resolution in this regard is being placed
be a Non-Executive Director w.e.f. October 21, 2019. for approval of the shareholders at the ensuing
Annual General Meeting.

Resolutions for appointment of Mr. Jayaraman
Chandrasekaran as a Director and Mr. John Alex as a
The Appointment of Independent Director(s)
Director and Whole-Time Director (ED & CEO) of the during the year were made with satisfaction of the
Company are being placed before the shareholders Board after ascertaining the integrity, experience,
for approval at the ensuing Annual General Meeting expertise and proficiency of the Director.
(AGM) and the same has been included in the Notice
of AGM. Brief profile of the above appointees has Key Managerial Personnel
been annexed to the Notice of AGM. As at March 31, 2020, the Company had the following
Key Managerial Personnel (KMPs):
Mr Rangachary N, Chairman & Independent Director Sl.
of the Company was appointed with effect from Name of the KMP Designation
No.
May 7, 2015 for a period of five years. He continues 1 Mr. John Alex Executive Director & Chief Executive
to satisfy the criteria of independence as provided in Officer (ED & CEO)
Section 149(6) of the Act, Rules framed thereunder 2 Ms. Srimathy R Chief Financial Officer (CFO)
and Regulation 16(1)(b) of SEBI (Listing Obligations 3 Ms. Deepti R Company Secretary (CS)
and Disclosure Requirements) Regulations, 2015
(“SEBI Listing Regulations”). However, considering
22. Declaration from Independent Directors
the fact that Mr Rangachary has been associated

The Board has received declarations from the
with the Company for more than ten years and
Independent Directors as required under Section
that his continued association would immensely
149(7) of the Act and Regulation 16(1)(b) of SEBI
benefit the Company, your Directors recommend
Listing Regulations and the Board is satisfied that
his re-appointment with effect from May 7, 2020 as
the Independent Directors meet the criteria of
a Non-Executive Non-Independent Director of the
independence as mentioned in the Act and Code of
Company, as a good governance practice.
Conduct for Directors.
Mr Rajaraman P V and Mr Arun Ramanathan,
23. Evaluation of Board Performance
Independent Directors of the Company were
The performance of the Chairman, the Board, Audit
appointed with effect from May 7, 2015 for a period
Committee (ACB), Nomination, Remuneration &
of five years. Your Directors recommend their re-
Governance Committee (NRGC), Corporate Social
appointment for the approval of shareholders,
Responsibility Committee (CSR), Stakeholders’
for a period of five years with effect from May 7,
Relationship Committee (SRC) and that of individual
2020, as their continued association as Independent
Directors for the Year 2019-20 were evaluated on
Directors and as Members of various Committees of
the basis of criteria approved by the Board. Some
the Board would immensely benefit the Company.
of the performance indicators, based on which
the independent directors are evaluated include
The Company has familiarised the Independent
contribution to setting strategy and policy directions,
Directors of the Company, their roles and
concern for stakeholders, approach to issues placed
responsibilities in the Company, nature of industry
before the Board, exercising of own judgement and
in which the Company operates, business model of
voicing opinion freely.
the Company, etc. The details of the familiarisation
programme imparted to Independent Directors
All Directors were provided the criteria for evaluation
are available on the website of the Company
which were duly filled in and sent to the Secretary to
h t t p s: / / w w w.e q u i t a s .in / p d f/ Fa milia ri s a tio n -
NRGC. The feedback was then collated and shared
Programme-for-Independent-Directors.pdf.
in confidence with the Chairman of NRGC.

The terms and conditions of appointment of
he Chairman of NRGC discussed the same with the
T
Independent Directors are also available on the
other Members of the Committee. Later at the Board
website of the Company https://www.equitas.in/
pdf/EHL-ID-Appt-TermsnConditions.pdf.
Statutory Reports 7
Meeting, the Chairman of NRGC shared the feedback 3)

they have taken proper and sufficient care
with the Chairman of the Board and the other Directors. for the maintenance of adequate accounting
records in accordance with the provisions of the
24. Policy on Directors’ appointment & Act for safeguarding the assets of the Company
remuneration and for preventing and detecting fraud and
Pursuant to the provisions of Section 178 of the other irregularities;
Act, the Company has formulated and adopted
Policy on selection of Directors and Remuneration 4) they have prepared the annual accounts on a
Policy which are disclosed on our website, under going concern basis;
Policies Section. https://www.equitas.in/pdf/
EHLFit&ProperPolicy.pdf. https://www.equitas.in/ 5) they have laid down internal financial controls
pdf/EHLRemunerationPolicy.pdf. to be followed by the Company and that such
internal financial controls are adequate and
25. Directors’ Responsibility Statement operating effectively;
The Board of Directors of the Company, to the best
of their knowledge and belief, confirm that: 6)
they have devised proper systems to ensure
compliance with the provisions of all applicable
1)
in the preparation of the annual accounts, laws and that such systems were adequate and
the applicable accounting standards have operating effectively.
been followed along with proper explanation
relating to material departures, if any; 26. Overall remuneration
Details of all elements of remuneration paid to all
2) they have selected such accounting policies and the Directors are given in the Corporate Governance
applied them consistently and made judgments Report. The Independent Directors of the Company
and estimates that are reasonable and prudent are not entitled to stock options.
so as to give a true and fair view of the state of
affairs of the Company as at March 31, 2020 and
of the profit of the Company for that period;
Details of remuneration as required to be provided under Section 197 of the Act read with Rule 5 of
Companies (Appointment and Qualification of Managerial Personnel) Rules, 2014
Ratio of
(i) Ratio of Remuneration of each Director with
remuneration* % increase in
Median employee’s Remuneration and the Name of the Director to median remuneration in the
percentage increase in remuneration remuneration of financial year
employees
Mr. Rangachary N, Chairman1 0.47:1
Mr. Arun Ramanathan Nil
Ms. Jayshree Ashwinkumar Vyas, 0.24:1
Independent Director1
Mr. Jayaraman Chandrasekaran, 0.16:1
Independent Director2
Mr. Rajaraman P V, Independent 0.24:1
Director1 Please refer the
Mr. Viswanatha Prasad, Independent 0.35:1 note below
Director1
Mr. Bhaskar S, (As ED & CEO from 7.04:1
April 1, 2019 to October 20, 2019 and
as Non-Executive Director and from
October 21, 2019 to March 31, 2020)3
Mr. John Alex, ED & CEO (from 2.73:1

November 8, 2019)2
1
Remuneration decreased by 8.61% during the year.
2
Comparison not feasible since appointed during the year.
3
Comparison not feasible since ceased to be ED & CEO during the year.
*Does not include sitting fee paid to directors for attending the Meetings
of Board and Committees.
(ii) the percentage increase in remuneration of Increase in remuneration of KMP is as follows:
Chief Financial Officer, Chief Executive Officer,
CFO 17%
Company Secretary or Manager, if any, in the
financial year; CS 7.80%

(iii) the percentage increase in the median 7.80%

remuneration of employees in the financial
year;
(iv) the number of permanent employees on the 5 (five)
rolls of the Company as on March 31, 2020 Details of remuneration of these employees as required under Rule 5 (2)
of Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014 are enclosed as Annexure - II
(v) average percentile increase already made The average percentage increase in salaries of employees other than the
in the salaries of employees other than the managerial personnel in the last financial year was 13.11%.
managerial personnel in the last financial There was a change in ED & CEO during the year. Hence comparison is not
year and its comparison with the percentile feasible.
increase in the managerial remuneration and
justification thereof and point out if there are
any exceptional circumstances for increase in
the managerial Remuneration.
(vi) affirmation that the remuneration is as per the The remuneration is as per the Remuneration Policy of the Company.
remuneration policy of the Company.
None of the employees drew remuneration beyond effect. The said matter is being placed before the
the limits specified under Rule 5(2) of Companies shareholders for their approval at the ensuing AGM.
(Appointment and Remuneration of Managerial
Personnel) Rules, 2014. The Company has received the written consent(s)
and certificate(s) of eligibility in accordance with
27. Whistle Blower Policy/Vigil Mechanism Sections 139, 141 and other applicable provisions of
The Company has devised a Vigil mechanism for the Act and Rules issued thereunder, from M/s. T R
Directors and employees through the adoption of Chadha & Co LLP. Further, they have confirmed that
Whistle Blower Policy, details whereof is available they hold a valid certificate issued by the Peer Review
on the Company’s website https://www.equitas.in/ Board of the Institute of Chartered Accountants
pdf/EHL-Whistle-Blower-Policy.pdf. of India (ICAI).
28. Auditors 29. Details in respect of frauds, if any, reported by

Statutory Auditors Auditors:
M/s S R Batliboi & Associates LLP (“SRB”), Chartered There have been no frauds reported during the
Accountants, were appointed as Statutory Auditors Financial Year ended March 31, 2020.
of the Company for a period of five years from
the conclusion of 10th AGM held in 2017 till the 30. Secretarial Auditors
conclusion of 15th AGM to be held in 2022.
The Secretarial Audit Report of M/s B Ravi &
Associates, Practising Company Secretaries for

SRB’s term of appointment in the Company’s FY 2019-20 is enclosed as Annexure–III.
Subsidiary, Equitas Small Finance Bank Limited
(ESFBL) would end after the conclusion of ensuing Your Company has complied with the applicable
AGM of ESFBL in terms of the extant regulations of Secretarial Standards relating to ‘Meetings of
Reserve Bank of India in this regard. the Board of Directors’ and ‘General Meetings’
during the year.
In this connection, SRB has expressed that they would
not be in a position to obtain sufficient participation 31. Explanations or comments by the Board on
in the audit of the Consolidated Financial Statements every qualification, reservation or adverse
of the Company after ceasing to be auditors of remark or disclaimer made by Statutory
ESFBL and accordingly have communicated their Auditors or Secretarial Auditors
intent to resign as auditors of the Company upon There are no qualifications, reservations, adverse
issuing review report on results of the Company for remarks or disclaimers made by the Statutory
the quarter ending June 30, 2020. Auditors or Secretarial Auditors.
Consequent to the above, the Board of Directors of 32. Information as per Section 134 (3) (q) of
the Company, on May 29, 2020 has recommended the Act read with Rule 8 of the Companies
appointment of M/s T R Chadha & Co LLP, Chartered (Accounts) Rules, 2014
Accountants, having Registration Number (Firm During FY 2019-20, the Company had no activity
Registration No: 006711N/ N500028) as Statutory relating to conservation of energy or technology
Auditors of the Company in view of having common absorption. Also, there were no foreign currency
network of Auditors for the Company & ESFBL, for earnings or outgo.
a period of five years from the conclusion of 13th
Annual General Meeting till the conclusion of 18th 33. Details of Employees Stock Option Scheme
Annual General Meeting of the Company to be held
Nomination, Remuneration & Governance
in the year 2025 subject to resignation of SRB taking Committee constituted by the Board of Directors
of the Company, administers the Employee Stock
Statutory Reports 9
Option Schemes, formulated by the Company, outstanding warrants and conversions) of the
from time to time. Company at the time of grant - Nil
Information as required under Section 62 of the

Other details relating to Stock Options
Act and Rule 12 of the Companies (Share Capital as required under SEBI (Share Based
and Debentures) Rules, 2014 and SEBI (Share Employee Benefits) Regulations, 2014
Based Employee Benefits) Regulations, 2014 (SEBI are displayed on the Company’s website,
Regulations): https://www.equitas.in/holdeqis/pages/forms/
Sl.
uploads/geme-agm-agm-nf-ehl-esop-data_
Information required Particulars annual-report-19-20.pdf
No.
1 Number of Options granted during 470,060
the year 34. Particulars of contracts or arrangements with
2 Number of Options vested during 1,761,904 related parties
the year All the Related Party Transactions that were entered
3 Number of Options exercised 328,497 into during FY 2019-20 were on an arm’s length
during the year basis and were in the ordinary course of business.
4 Number of shares arising as a 328,497
result of exercise of Options Pursuant to Section 134(3)(h) read with Rule 8(2) of
5 Number of Options forfeited/ 12,613,704 the Companies (Accounts) Rules, 2014, there are no
lapsed during the year transactions to be reported under Section 188(1) of
6 Exercise Price (`) 115 the Act, in form AOC-2.
7 Money realised by exercise of 20,270,999
Options (`) All Related Party Transactions as required under
8 Total number of Options 172,308 Indian Accounting Standard (Ind AS-24) are reported
outstanding in Note No.32 forming part of Financial Statements
9 Option Granted but not vested 42,500 of your Company.
10 Options Vested but not exercised 129,808
11 Total number of Options available 36,768,978
The Company’s Policy on dealing with
for grant Related Party Transactions is available on the
12 Variation of terms of options Nil Company’s website https://www.equitas.in/pdf/
EHLPolicyonRelatedPartyTransactions.pdf.
Note: Refer Note 41 to the Standalone Financial statements
and Note 53 to the Consolidated Financial Statements
35. Risk Management
Employee-wise details of options granted to The Company is a Core Investment Company (CIC)
1. Key Managerial Personnel: Nil and its operations are limited to being a CIC. The
risks therefore primarily relate to investments
2. Any other employee who receives a grant of made in its subsidiaries. The operations of each of
options in any one year of options amounting the subsidiaries, the risks faced by them and the
to five percent or more of options granted risk mitigation tools followed by them to manage
during that year: these risks are reviewed periodically by the Risk
Management Committees/Audit Committees and
% of the Boards of the respective subsidiaries. The same
No. of Exercise
Name Designation options
options Price
granted
are considered by the Risk Management Committee
and Board of the Company, as well. Details of the
Sridharan N* Chief Financial 25,000 115 5.32
Officer (ESFBL)
same are covered in the Management Discussion
and Analysis Report.
Dheeraj Mohan* Senior Vice 25,000 115 5.32
President &
Head - Strategy,
36. Internal Financial controls
Investor The Company has clear delegation of authority and
Relations, standard operating procedures. These are reviewed
BI & Analytics periodically by the Audit Committee of the Company.
(ESFBL) These measures help in ensuring adequacy of
internal financial controls commensurate with the
Prabhakaran A* Executive Vice 30,000 115 6.38 nature and scale of operations of the Company.
President &
Head - CPC &
37. Loans/Guarantees /Investments
CS (ESFBL)
Details of loans, guarantees and investments covered
under Section 186 of the Act are provided in Notes 8
*The rights attached to Options granted by the Company
including the aforesaid were subsequently surrended
& 32 forming part of Financial Statements.
by the employees.
38. Disclosure under the Sexual Harassment of
3. Identified employees who were granted options Women at Workplace (Prevention, Prohibition
during any one year, equal to or exceeding and Redressal) Act, 2013
one percent of the issued capital (excluding The Company has in place a Policy on Prevention
of Sexual Harassment in line with the requirements

of The Sexual Harassment of Women at Workplace 41. Dividend Distribution Policy

(Prevention, Prohibition & Redressal) Act, 2013.
The Dividend Distribution Policy of the
Internal Complaints Committee has been set up to Company is available on our website
redress complaints received under the Policy. No https://www.equitas.in/polices.php
complaint has been received by the Company under
this Policy so far. 42. Depository System
As the Members are aware, the Company’s Equity
39. Significant and Material Orders Passed by the Shares are tradable in electronic form. As on March
Regulators or Courts 31, 2020, out of the Company’s total equity paid-

There have been no significant and material up share capital comprising of 34,17,89,995 Equity
orders passed by Regulators or Courts or Tribunals Shares, only 99,586 equity shares were in physical
impacting the going concern status and the future form and the remaining shares were in electronic
operations of the Company. Further, no penalties form. In view of the numerous advantages offered by
have been levied by RBI/any other Regulators on the the Depository System, the Members holding shares
Company during the year under review. in physical form are advised to avail themselves of
the facility of dematerialisation.
However, RBI vide its letter dated September 6,
2019 imposed the following regulatory action for Acknowledgement
non-compliance with SFB licensing guidelines with The Directors thank the investors and customers
respect to listing of shares of the Bank within three for reposing confidence in Equitas. The Directors
years of the commencement of business: gratefully acknowledge the guidance and support
extended by RBI, SEBI, Stock Exchanges, Depositories
i)
The Bank is not permitted to open new and other statutory authorities. Your Directors
branches till further advice place on record their sincere thanks to its valued
constituents for their support and patronage. The
ii)
The remuneration of MD & CEO of the Board also expresses its deep sense of appreciation
Bank stands frozen, at the existing level, till to the employees at all levels for their unstinted
further advice. commitment to the growth of Equitas.
The Bank initiated immediate steps to list its shares For and on behalf of the Board of Directors
through Initial Public Offer (IPO) of its shares, details
of which are provided under paragraph 13 above. John Alex Rangachary N
ED & CEO Chairman
40. Extract of Annual Return Chennai Bengaluru
The extract of Annual Return in Form No. MGT- May 29, 2020
9 as required under Section 92(3) of the Act and
prescribed in Rule 12 of the Companies (Management
and Administration) Rules, 2014 is appended as
Annexure – IV to this Report. The Annual Return in
Form No. MGT-7 is available in the website of the
Company https://www.equitas.in/
Statutory Reports 11
Corporate Social Responsibility (CSR) Report Annexure I
[Pursuant to clause (o) of sub-section (3) of section 134 of the Companies Act, 2013 and Rule 9 of the Companies
(Corporate Social Responsibility) Rules, 2014]
1. A brief outline of the Company’s CSR Policy, 3. The average net profit of the Company for last
including overview of projects or programs three financial years has been:
proposed to be undertaken and a reference to Particulars ` in lakhs
the web-link to the CSR Policy and projects or Profit - 2018-19 1,302.14
programs: Profit - 2017-18 979.43
CSR policy of the Company is available on our website Profit - 2016-17 768.25
https://www.equitas.in/pdf/EHL-CSR-Policy.pdf Average PROFIT for CSR purpose 1,016.61
2% of average Profit for last three years * 20.00

The oversight of Projects entrusted to Equitas
Development Initiatives Trust (EDIT) (through which *Prescribed CSR Expenditure
the Company carries on CSR activities) is done by the
CSR Committee of the Board. 4. Details of CSR contribution made by the
Company to EDIT during the Financial Year:
2. The Composition of CSR Committee as on Particulars ` in lakhs
March 31, 2020 was: CSR contribution made during the year 33.41
a)
Mr. Arun Ramanathan, Chairman & TOTAL 33.41
Independent Director
b) Mr. P V Rajaraman, Independent Director Details of utilisation of CSR contribution
EDIT has reported having utilised the CSR
c) Ms. Jayshree Ashwinkumar Vyas, Independent
contribution of ` 27.05 lakhs (including opening
Director
balance of unutilised CSR contribution of ` 41.42
d) Mr. John Alex, ED & CEO lakhs made by EHL) towards educational initiatives.
5. Details of expenditure:
` in lakhs
(1) (2) (3) (4) (5) (6) (7) (8)
Amount spent on the
Cumulative
projects or programs Amount
Sector in Amount outlay expenditure
Sub – heads: spent: Direct
S. CSR project or activity which Projects or (budget) project upto the
(1) Direct expenditure or through
No identified the Project programs or programs reporting
on projects or implementing
is covered wise period
programs agency*
(FY 2019-20)
(2) Overheads
1 Providing support to Education Seven schools 33.41 33.41 33.41 Through
Seven Matriculation in Tamil implementing
schools set up by Nadu located agency –EDIT,
Equitas and run by at Karur, a public
Equitas Development Trichy, Salem, charitable
Initiatives Trust Coimbatore, trust
(EDIT) for students Dindigul,
from socially and Cuddalore and
economically weaker Kumbakonam
sections of the society
TOTAL 33.41 33.41 33.41
6. A responsibility statement of the CSR Committee that the implementation and monitoring of CSR
Policy is in compliance with CSR objectives and Policy of the Company.
We hereby confirm on behalf of the CSR Committee that the implementation and monitoring of CSR Policy is in
compliance with the CSR objectives and Policy of the Company.
John Alex Arun Ramanathan

ED & CEO (Chairman – CSR Committee)
Place: Chennai
Date: May 29, 2020

12
Annexure II
Information as required under Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014
(forming part of Directors’ Report for FY 2019-20)
Details of Top Ten employees in terms of remuneration drawn during the year
There are only five employees on the rolls of the Company as on March 31, 2020 and hence the details of their remuneration are provided below:
Remuneration
Educational Age Experience during Joining % of Equity
S No Employee Name Designation Previous employment and designation
Qualification (in years) (in years) FY 2019-20 Date shares held
(` in lakhs)
EQUITAS HOLDINGS LIMITED
1 Mr. John Alex Executive Director & B.Sc 63 37 23.27 08-Nov-19 0.00% Executive Vice President, Equitas Small
Chief Executive Officer Finance Bank Limited
2 Ms. Srimathy R Chief Financial Officer ACA 37 10 19.55 01-Aug-17 0.00% AVP - Finance & Accounts, Equitas Small
Finance Bank Limited
3 Ms. Deepti R Company Secretary B.Com(CS)., ACS 29 6 8.77 01-Jul-16 0.00% Company Secretary, Tamilnadu
Petroproducts Limited
4 Ms. Vidya B A Deputy Manager - B. Com, MBA 49 25 4.26 01-Dec-14 0.00% Deputy Manager, Jain Jubilant Cars Pvt Ltd
Finance & Accounts
5 Mr. Srinivasa Prasad C Deputy Manager - B.Com. 36 13 7.08 14-Jul-16 0.00% Senior Executive (Secretarial), BGR Energy
Secretarial Systems Limited
6 Mr Bhaskar S Executive Director & B.Sc., ACA 63 36 59.19 01-Nov-14 0.41% Chief Financial Officer, Equitas Micro
Chief Executive Officer Finance Limited
(till October 20, 2019)
None of the aforesaid employees are employed on contractual basis and none of them are related to any Director of the Company.
For and on behalf of the Board of Directors
John Alex Rangachary N

ED & CEO Chairman
May 29, 2020 Chennai Bengaluru
Secretarial Audit Report Annexure III

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]
The Members, (c)

The Securities and Exchange Board of India
EQUITAS HOLDINGS LIMITED (Issue of Capital and Disclosure Requirements)
CIN: L65100TN2007PLC064069 Regulations, 2018;
410A, 4th Floor, Spencer Plaza,
(d)
The Securities and Exchange Board of
Phase II No.769, Mount Road, Anna Salai
India (Share Based Employee Benefits)
Chennai-600002
Regulations, 2014;
Dear Members, (e)
India (Issue and Listing of Debt Securities)
We have conducted the secretarial audit of the compliance Regulations, 2008; (was not applicable to the
of applicable statutory provisions and the adherence to Company during the period under review);
good corporate practices by EQUITAS HOLDINGS LIMITED
(f)
(hereinafter called the “Company”). Secretarial Audit
(Delisting of Equity Shares) Regulations, 2009
was conducted in a manner that provided us a reasonable
(was not applicable to the Company during the
basis for evaluating the corporate conducts/statutory
period under review);
compliances and expressing our opinion thereon.
(g)
Based on our verification of the Company’s books, (Registrars to an Issue and Share Transfer Agents)
papers, minute books, forms and returns filed and Regulations, 1993; (was not applicable to the
other records maintained by the Company and also Company during the period under review);
the information provided by the Company, its officers,
(h)
agents and authorised representatives during the
(Buyback of Securities) Regulations, 2018 (was
conduct of secretarial audit, we hereby report that in
not applicable to the Company during the
our opinion, the Company has, during the audit period
period under review);
covering the financial year ended on 31st March, 2020
complied with the statutory provisions listed hereunder (i)
and also that the Company has proper Board-processes India (Listing Obligations and Disclosure
and compliance-mechanism in place to the extent, in the Requirements) Regulations, 2015 (“SEBI LODR”);
manner and subject to the reporting made hereinafter:
(vi) The following industry specific laws, directions:
We have examined the books, papers, minute books,
(a) Reserve Bank of India Act, 1934;
forms and returns filed and other records maintained by
the Company for the financial year ended on 31st March, (b)
Systemically Important Non-Deposit taking
2020 according to the provisions of: Company and Deposit taking Company (Reserve
Bank) Directions, 2016
(i)
The Companies Act 2013 (“the Act”) and the
(c)
Core Investment Companies (Reserve Bank)
rules made thereunder issued by the Ministry of
Directions, 2016
Corporate Affairs from time to time;
(d) RBI Master Direction – Information Technology
(ii)
The Securities Contracts (Regulation) Act, 1956
Framework for NBFCs
(‘SCRA’) and the rules made thereunder to the
extent applicable; (e)
Liquidity Risk Management Framework for
NBFCs and Core Investment Companies
(iii) The Depositories Act, 1996 and the Regulations and
Bye-laws framed thereunder; (f)
Master Circular – “Non-Banking Financial
Companies – Corporate Governance (Reserve
(iv)
Foreign Exchange Management Act, 1999 and
Bank) Directions, 2015”
the rules and regulations to the extent of Foreign
Direct Investment;
We further report that based on the information
(v) The following Regulations and Guidelines prescribed received, explanations given, process explained, records
under the Securities and Exchange Board of India maintained, statutory compliance and statutory internal
Act, 1992 (‘SEBI Act’) as amended:- audit reports submitted to the Board on quarterly
basis, there are adequate systems and processes in the
(a)
Company commensurate with the size and operations
(Substantial Acquisition of Shares and
of the Company to monitor and ensure compliance with
Takeovers) Regulations, 2011;
applicable labour laws, Goods and Service Tax laws and
(b)
The Securities and Exchange Board of other applicable Laws, rules, regulations and guidelines
India (Prohibition of Insider Trading) framed by the statutory authorities from time to time.
Regulations, 2015; The Company is regular in making statutory payments

and there have been no prosecution or notices issued to 3. Has taken on record in its Board Meeting held on
the Company or its officers. 30.01.2020, the surrender of 98,86,035 (Ninety-eight
lakhs eighty-six thousand and thirty-five) stock
We have also examined compliance with the applicable options granted under the Equitas Employee Stock
clauses of the following: Option Scheme, 2015 pursuant to implementation
of ESFBL ESOP Scheme, 2019.
(i) Secretarial Standards 1 and 2 issued by The Institute
of Company Secretaries of India. 4.
Received a communication from BSE Limited
dated 13.09.2019, returning the draft scheme of
(ii)
The Listing Agreements entered into by the arrangement between the Company and ESFBL
Company with BSE Limited and National Stock and advised to resubmit the same after complying
Exchange of India Limited. with the provisions of clause III(A)(1)(a) of annexure
I of the circular no CFD/DIL3/CIR/2017/21 dated
During the period under review, the Company has 10.03.2017. The Company in its response informed
complied with the provisions of the Act, Rules, Regulations, stock exchanges that ESFBL will initiate necessary
Guidelines, Standards, etc. mentioned above. steps to list the shares of the Bank through Initial
Public Offer (IPO), which is expected to be completed
It was observed that due to administrative reasons there by March 2020 under normal circumstances.
was a delay of six hours in communicating the audited
financial results (standalone and consolidated) for the 5. An inspection under Section 45N of the Reserve Bank
quarter and year ended 31.03.2019, the fact of which of India, 1934 was carried out during November
was intimated to the stock exchange and no penalty was 2019 by Department of Supervision, Reserve Bank
levied by Stock exchange in this regard. of India, Chennai with reference to the financial
position as on March 31, 2019. The observations
The Board of Directors of the Company is duly arising out of inspection were reported to the
constituted with proper balance of Executive Director(s), Company vide their letter dated December 13, 2019
Non- Executive Directors and Independent Directors. and the Company had responded to the same within
The changes in the composition of the Board of Directors the time prescribed by RBI. Also, on February 27,
that took place during the period under review were 2020, the Company had reported the further status
carried out in compliance with the provisions of the Act of compliance to the observations issued by RBI vide
and SEBI LODR. its letter dated January 27, 2020.
Adequate notice is given to all directors to schedule the 6.

On 06.09.2019 intimated to the Stock Exchanges
Board Meetings, agenda and detailed notes on agenda that, ESFBL (subsidiary of the Company) has received
were sent at least seven days in advance, and a system a letter dated 06.09.2019 from the Reserve Bank
exists for seeking and obtaining further information and of India advising that their request for extension
clarifications on the agenda items before the meeting of time line for listing of shares of ESBL cannot
and for meaningful participation at the meeting. The be acceded to. As ESFBL was in violation of para 6
company had convened Board meeting at shorter notice of the Guidelines for licensing of SFBs, RBI placed
by complying with the requirements of the Act. regulatory actions stating that ESFBL is not allowed
to open branches till further advice and the
All decisions were taken unanimously at the Board remuneration of the MD & CEO shall stand frozen at
meeting and with requisite majority at the Annual the existing level till further advise. The fact of the
General Meeting. There was no Extra- ordinary General same has been intimated to the stock exchanges on
Meeting convened during the period under review. 06.09.2019. Subsequently ESFBL has made a plea to
the Reserve Bank of India vide letter dated 09.09.2019
We further report that during the audit period requesting to stay the restrictions imposed in the
the Company: - letter. The plea was however rejected by RBI vide
their letter dated 18.09.2019. The Reserve Bank of
1. In the meeting of the Nomination, Remuneration India vide letter dated 31.12.2019 has permitted
& Governance Committee of the Board held on the Bank to open 240 banking outlets including
02.08.2019 approved grant of 4,70,060 (Four conversion of 142 asset offices into banking outlets.
Lakh seventy thousand and sixty) options to the
eligible employees under Equitas Employees Stock Place: Chennai Signature:
Option Scheme, 2015 Date: 09.04.2020 Name of Company Secretary in
practice: Dr. B Ravi
2. In its Board Meeting held on 08.11.2019 accorded
FCS No.: 1810 CP No.: 3318
in-principal approval to sell 15%of its holdings in
its subsidiary Company- Equitas Small Finance Bank MANAGING PARTNER
Limited to comply with the terms and conditions B RAVI & ASSOCIATES
of license granted by the Reserve Bank of India Firm Registration Number:
subject to the consent of the SEBI. During the period P2016TN052400
under review, the Board through Circular resolution UDIN: F001810B000150123
appointed M/s Cyril Amarchand Mangaldas as legal
counsel for this purpose.
The Members,
CIN: L65100TN2007PLC064069
410A, 4th Floor, Spencer Plaza,
Phase II, No.769, Mount Road, Anna Salai
Chennai-600002
Dear Members,
Sub: Our Report of even date is to be read along with this letter.
1. Maintenance of secretarial record is the responsibility of the management of the company. Our responsibility is
to express an opinion on these secretarial records based on our audit.
2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about
the correctness of the contents of the Secretarial records. The verification was done to ensure that correct facts
are reflected in secretarial records. We believe that the processes and practices followed provide a reasonable
basis for our opinion.
3.
We have not verified the correctness and appropriateness of financial records and books of accounts
of the company.
4. Wherever required, we have obtained the Management representation about the compliance of laws, rules and
regulations and happening of events etc.,
5. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the
responsibility of management. Our examination was limited to the verification of procedures on test basis.
6. The Secretarial Audit report is neither an assurance as to the future viability of the company nor of the efficacy
or effectiveness with which the management has conducted the affairs of the company.
Place: Chennai Signature:

Date: 09.04.2020 Name of Company Secretary in practice: Dr. B Ravi
FCS No.: 1810 CP No.: 3318
MANAGING PARTNER
B RAVI & ASSOCIATES
Firm Registration Number: P2016TN052400

FORM NO. MGT 9 Annexure IV

Extract of Annual Return
As on March 31, 2020
(forming part of Directors’ Report for FY 2019-20)
Pursuant to Section 92 (3) of the Companies Act, 2013 and rule 12(1) of the Company
(Management & Administration) Rules, 2014
I. Registration & Other Details:

1 CIN L65100TN2007PLC064069
2 Registration Date 22.06.2007
3 Name of the Company EQUITAS HOLDINGS LIMITED
4 Category/Sub-category of the Company Company Limited by shares
5 Address of the Registered office & contact details 410A, 4th Floor, Spencer Plaza, Phase II, No.769, Mount Road,
Anna Salai, Chennai - 600002
6 Whether listed company Yes
7 Name, Address & contact details of the Registrar & Transfer KFin Technologies Private Limited
Agent, if any. Karvy Selenium Tower B, Plot No. 31-2, Gachibowli Financial
District, Nanakramguda, Hyderabad - 500032
8 Phone 040 6716 2222
9 Email ID rajitha.cholleti@karvy.com
10 Contact person name Ms. Rajitha Cholletti
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)
S. No. Name and Description of main products / services % to total turnover of the company
1 Services of holding equity of subsidiary companies 100
III. Particulars of Holding, Subsidiary and Associate Companies

SN Name and address of the Company CIN/GLN % of shares held Applicable Section
1 Equitas Small Finance Bank Limited U65191TN1993PLC025280 95.49 2(87)
4th Floor, Phase II, Spencer Plaza,
No. 769, Mount Road, Anna Salai,
Chennai - 600002
2 Equitas Technologies Private Limited U72900TN2015PTC102697 99.57 2(87)
601, 6th Floor, Phase I, Spencer Plaza,
No. 769, Mount Road, Anna Salai,
Chennai - 600002
IV. Share Holding Pattern

(Equity share capital breakup as percentage of total equity)
(i) Category-wise Share Holding
No. of Shares held at the beginning of the year No. of Shares held at the end of the year
[As on 31-March-2019] [As on 31-March-2020] % Change
Category of Shareholders during the
% of Total % of Total year
Demat Physical Total Demat Physical Total
Shares Shares
A. Promoters: Nil (The company is professionally managed an has no identifiable promoters)
B. Public Shareholding
1. Institutions
a) Mutual Funds 122484019 0 122484019 35.87% 107518974 0 107518974 31.46% -4.41%
b) Banks / FI 6416328 0 6416328 1.88% 589929 0 589929 0.17% -1.71%
c) Central Govt 0 0 0 0.00% 0 0 0 0.00% 0.00%
d) State Govt(s) 0 0 0 0.00% 0 0 0 0.00% 0.00%
e) Venture Capital Funds 0 0 0 0.00% 0 0 0 0.00% 0.00%
f) Insurance Companies 0 0 0 0.00% 0 0 0 0.00% 0.00%
g) FII/FPIs 63412197 0 63412197 18.57% 97976894 0 97976894 28.67% 10.09%
h) Foreign Venture Capital 0 0 0 0.00% 0 0 0 0.00% 0.00%
Funds
i) Others (specify) 14472692 0 14472692 4.24% 5867871 0 5867871 1.72% -2.52%
Alternate Investment
Funds
Qualifed Institutional 0 0 0 0.00% 3788202 0 3788202 1.11% 1.11%
Buyers
Sub-total (B)(1):- 206785236 0 206785236 60.56% 215741870 0 215741870 63.12% 2.56%
No. of Shares held at the beginning of the year No. of Shares held at the end of the year
[As on 31-March-2019] [As on 31-March-2020] % Change
Category of Shareholders during the
% of Total % of Total year
Demat Physical Total Demat Physical Total
Shares Shares
2. Non-Institutions
a) Bodies Corp.
i) Indian 22567239 0 22567239 6.61% 5120848 0 5120848 1.50% -5.11%
ii) Overseas 44988805 0 44988805 13.18% 44988805 0 44988805 13.16% -0.01%
b) Individuals
i) Individual shareholders 31555602 152897 31708499 9.29% 36586918 99586 36686504 10.73% 1.45%
holding nominal share
capital upto ` 1 lakh
ii) Individual shareholders 30870582 0 30870582 9.04% 36162941 0 36162941 10.58% 1.54%
holding nominal share
capital in excess of ` 1
lakh
c) Others (specify)
Foreign Nationals 0 0 0 0.00% 0 0 0 0 0.00%
Non-Resident Indians 285460 45000 330460 0.10% 590722 0 590722 0.17% 0.08%
NRI - NonRepatriation 665820 0 665820 0.19% 725512 0 725512 0.21% 0.02%
Trusts 2029689 0 2029689 0.59% 204635 0 204635 0.06% -0.53%
NBFC 21376 0 21376 0.01% 18401 0 18401 0.01% 0.00%
Clearing Members 1493792 0 1493792 0.44% 1549757 0 1549757 0.45% 0.02%
Sub-total (B)(2):- 134478365 197897 134676262 39.44% 125948539 99586 126048125 36.88% -2.56%
Total Public (B) 341263601 197897 341461498 100.00% 341690409 99586 341789995 100.00% 0.00%
C. Shares held by 0.00 0.00 0.00 0.00% 0 0 0 0 0.00%
Custodian for GDRs &
ADRs
Grand Total (A+B+C) 341263601 197897 341461498 100.00% 341690409 99586 341789995 100.00% 0.00%
(ii) Shareholding of Promoters: NIL (The company is professionally managed Company and has no identifiable
promoters)
(iii) Change in Promoters’ Shareholding (please specify, if there is no change): Not Applicable
(iv) Shareholding Pattern of top ten Shareholders

(Other than Directors, Promoters and Holders of GDRs and ADRs):
Shareholding at
Cumulative Shareholding
the beginning of
during the year
S No For each of the Top 10 shareholders Date Reason the year
% of total
No. of shares No. of shares
shares
1 CDC Group PLC
At the beginning / end of the year 26,791,230 26,791,230 7.84%
2 International Finance Corporation
3 Composite Capital Master Fund LP
At the beginning of the year - - 0.00%
Datewise increase/decrease during the year 28/02/2020 Transfer 5,234,907 5,234,907 1.53%
06/03/2020 Transfer 7,701,093 12,936,000 3.78%
13/03/2020 Transfer 70,000 13,006,000 3.81%
At the end of the year 31/03/2020 13,006,000 3.81%
4 Ashish Dhawan
At the beginning of the year 7,864,256 7,864,256 2.30%
31/05/2019 Transfer 1,205,890 9,500,000 2.78%
07/06/2019 Transfer 435,990 9,935,990 2.91%
14/06/2019 Transfer 64,010 10,000,000 2.93%
15/11/2019 Transfer 1,500,000 11,500,000 3.36%
22/11/2019 Transfer 1,100,000 12,600,000 3.69%

Shareholding at
the beginning of
during the year
S No For each of the Top 10 shareholders Date Reason the year
% of total
No. of shares No. of shares
shares
5 Franklin India Smaller Companies Fund
At the beginning of the year - -
27/03/2020 Transfer 425,000 10,197,603 2.98%
31/03/2020 Transfer 1,875,000 12,072,603 3.53%
6 Franklin Templeton Investment Funds
Datewise increase/decrease during the year 20/03/2020 Transfer (70,200) 11,422,232 3.34%
7 Franklin India Prima Fund
At the beginning of the year 0 0 0.00%
8 RIMCO India Limited
9 ELLIPSIS PARTNERS LLC
At the beginning of the year - 0 0.00%
19/04/2019 Transfer 2,000,000 2,000,000 0.59%
26/04/2019 Transfer 682,456 2,682,456 0.79%
03/05/2019 Transfer 173,980 2,856,436 0.84%
10/05/2019 Transfer 1,342,700 4,199,136 1.23%
17/05/2019 Transfer 2,300,864 6,500,000 1.90%
09/08/2019 Transfer 209,942 6,709,942 1.96%
08/11/2019 Transfer 252,269 6,962,211 2.04%
15/11/2019 Transfer 1,537,789 8,500,000 2.49%
22/11/2019 Transfer 250,000 8,750,000 2.56%
10 MASSACHUSETTS INSTITUTE OF TECHNOLOGY
Datewise increase/decrease during the year 05/04/2019 Transfer 270,410 2,180,567 0.64%
26/04/2019 Transfer 182,811 2,363,378 0.69%
10/05/2019 Transfer 95,583 2,458,961 0.72%
17/05/2019 Transfer 97,934 2,556,895 0.75%
31/05/2019 Transfer 460,140 3,017,035 0.88%
07/06/2019 Transfer 88,711 3,105,746 0.91%
05/07/2019 Transfer 112,159 3,217,905 0.94%
19/07/2019 Transfer 223,511 3,441,416 1.01%
13/09/2019 Transfer 172,070 3,613,486 1.06%
20/09/2019 Transfer 172,070 3,785,556 1.11%
27/09/2019 Transfer 1,113,828 4,899,384 1.43%
30/09/2019 Transfer 33,595 4,932,979 1.44%
04/10/2019 Transfer 1,402,943 6,335,922 1.85%
06/12/2019 Transfer 605,936 6,941,858 2.03%
06/03/2020 Transfer 667,793 7,609,651 2.23%
27/03/2020 Transfer 669,152 8,278,803 2.42%
(v) Shareholding of Directors and Key Managerial Personnel:

Shareholding at
Shareholding of each Director and the beginning of
S No Date Reason during the year
Key Managerial Personnel the year
No. of shares No. of shares % of total shares
1 Bhaskar S (as ED & CEO until
20/10/2019 and as Non-Executive
Director from 21/10/2019)
At the beginning / end of the 1,405,000 1,405,000 0.41%
year
2 John Alex - ED & CEO (since
08/11/2019)
At the beginning / end of the 41,615 41,615 0.01%
year
3 Srimathy R - CFO
At the beginning of the year 1,197 1,197 0.00%
Datewise increase/decrease 20/09/2019 Transfer 126 1,323 0.00%
during the year
At the end of the year 1,323 0.00%
3 Deepti R - CS
At the beginning / end of the 0.00 0.00 0.00%
year
V. Indebtedness
Indebtedness of the Company including interest outstanding/accrued but not due for payment
(Amt. `/Lacs)
Secured Loans
Total
Particulars excluding Unsecured Loans
Indebtedness
deposits
Indebtedness at the beginning of the financial year
Change in Indebtedness during the financial year NIL
Indebtedness at the end of the financial year
VI. Remuneration of Directors and Key Managerial Personnel

A. Remuneration to Managing Director/ Whole-time Directors and/or Managers
ED & CEO ED & CEO Total Amount
Mr. Bhaskar S Mr. John Alex
S
Particulars of Remuneration (upto October 20, (From November
No.
2019) 08, 2019)
(in `/Lakhs) (in `/Lakhs) (in `/Lakhs)
1 Gross salary
(a) Salary as per provisions contained in section 17(1) of the Income-tax 52.04 22.13 74.17
Act, 1961
(b) Value of perquisites u/s 17(2) Income-tax Act, 1961 5.57 0.06 5.63
(c) Profits in lieu of salary under section 17(3) Income- tax Act, 1961 0.00 0.00 0.00
2 Stock Option 0.00 0.00 0.00
3 Sweat Equity 0.00 0.00 0.00
4 Commission
- as % of profit 0.00 0.00 0.00
- others, specify 0.00 0.00 0.00
5 Others - Contribution to provident fund 1.59 1.10 2.69
Total (A) 59.20 23.29 82.49
Ceiling as per the Companies Act, 2013 135.50 75.50

B. Remuneration to Other Directors

(` In Lakhs)
Fee for attending

Sl Board/Committee
Name of the Director Remuneration Others Total
No Meetings
(excluding GST)
1 Mr Rangachary N 4.04 3.50 - 7.54

2 Mr Arun Ramanathan - 5.50 - 5.50
3 Mr Jayshree Ashwinkumar Vyas 2.02 3.50 - 5.52
4 Mr Jayaraman Chandrasekaran 1.34 2.00 - 3.34
5 Mr Rajaraman P V 2.02 6.25 - 8.27
6 Mr Viswanatha Prasad S 3.03 5.75 - 8.78
7 Mr Bhaskar S (from October 21, 2019 as Non- 0.90 2.25 - 3.15
Executive Director)
Total (B) 13.35 28.75 - 42.10
Total Managerial Remuneration (A+B)
Overall Ceiling as per the Act (1% of Profits for 13.35
Financial Year 2019-20 Computed under Section 197
of the Act)
C. Remuneration to Key Managerial Personnel other than MD/Manager/WTD

(` In Lakhs)
S CS CFO Total Amount
Particulars of Remuneration
No. Ms. Deepti R Ms. Srimathy R
1 Gross salary
(a) Salary as per provisions contained in section 17(1) of the 8.39 18.69 27.08
Income-tax Act, 1961
(b) Value of perquisites u/s 17(2) Income-tax Act, 1961 -
(c) Profits in lieu of salary under section 17(3) Income- tax Act, 1961 -
2 Stock Option 0.00 0.00 0.00
3 Sweat Equity 0.00 0.00 0.00
4 Commission
- as % of profit 0.00 0.00 0.00
- others, specify 0.00 0.00 0.00
5 Others - Contribution to provident fund 0.39 0.87 1.26
Total (C) 8.78 19.56 28.34
VII. Penalties/ Punishment/ Compounding of Offences:
Section of the Details of Penalty / Punishment/ Appeal made, if any

Type Brief Description
Companies Act Compounding fees imposed (give Details)
COMPANY / DIRECTORS / OTHER

OFFICERS IN DEFAULT

ED & CEO Chairman
Management Discussion & Analysis
Business Environment markets. The coronavirus outbreak and subsequent

Indian Economic Overview disruptions to economic activity are likely to negatively
The Indian economy underwent a slowdown in impact asset quality.
FY 2019-20, due to weak private consumption, lower
gross fixed investments, sluggish manufacturing, and In its monetary policy report in March 2020, the RBI
stress in the banking and NBFC sector. Although green- predicted credit growth to remain modest, reflecting
shoots of recovery were visible in the third quarter, the weak demand and risk aversion due to the disruptions
outbreak of the coronavirus pandemic globally and in caused by the coronavirus pandemic. The central bank
India compelled the Government to impose a nationwide announced several measures to inject large liquidity into
lockdown, bringing economic activities to a halt. the system, improve asset quality, facilitate and incentivise
bank credit flows, and stabilise financial markets.
During the first ten months, Index of Industrial
Production (IIP) recorded 0.6% on average, down from The measures include:
4.4% during the year-earlier period. A sharp decline
was seen across the capital goods (-11.6%), consumer • Cut in reverse repo rate to 3.75%
durables (-6.2%), and construction and infrastructure
• Targeted long-term repo operations (TLTRO-2) to the
goods (-2.5%) sectors. Inflation as measured by the
tune of ` 50,000 crores for investment grade bonds,
Consumer Price Index (CPI) remained within the RBI’s
commercial paper and non-convertible debentures of
median target of 4.0% until September 2019. However,
NBFCs with at least 50% of the total amount going
post September 2019, it overshot for the next 5 straight
to small and mid-sized NBFCs and Micro Finance
months to hit a six-year high of 7.59% in January 2020
Institutions (MFIs)
before moderating to 6% in February, primarily due to
elevated food and vegetable prices. • Refinancing facility to NABARD, SIDBI, and NHB to the
tune of ` 50,000 crores to enable them to meet their
The Indian government and the RBI announced several sectoral credit needs
measures to revive the economy. Policy reforms such
• Ways and Means Advances (WMA) for states was raised
as the rationalisation in Goods and Services Tax (GST)
by 60% above the level seen since March 31, 2020.
rates, corporate tax rate cuts in September 2019 and
boost rural and infrastructure spending were expected • Banks will need to hold 10% higher provision on
to show tangible results. Further, the transmission of certain accounts for which moratorium is granted
policy rate cuts to bank lending rates was improving,
• Banks not to make any dividend pay-outs pertaining
with favourable implications for both consumption and
to FY 2019-20 until further instructions
investment demand.
• For all accounts, where three months moratorium
However, the coronavirus outbreak has considerably is granted, the 90-day NPA classification norm will
altered this outlook. Although the magnitude of the not be applicable
impact has yet to be ascertained, the IMF predicts
• Liquidity coverage ratio for banks brought down from
the “worst downturn since the Great Depression” in
100% to 80% upto September 30, 2020
the 1930s, with the global economy likely to contract
by 3% in 2020. India is forecast to growth at 1.9% in
Small Finance Bank (SFB) Industry Overview
FY 2020-21, before recovering from next year onwards.
The RBI, with an aim to drive financial inclusion for the
However, risks to the forecast are skewed on the
unbanked and underbanked sections of the economy,
downside and it is very early to predict the extent of the
introduced Small Finance Banks (SFBs). In the three years
impact it will have on the Indian economy.
of their existence, SFBs have made a remarkable impact
and gained significant scale with a combined asset
Banking Sector overview
portfolio size of over ` 15,367 crores and a deposit base
Bank credit growth decelerated to a five-decade low of
of over ` 10,788 crores, as on March 31, 2020.
6.1% in FY 2019-20, against the backdrop of a slowing
economy. In the week ended March 27, 2020, bank
Assets under management of SFBs grew at a CAGR of
advances stood at ` 103.71 lakh crores as against ` 97.71
26%, from FY 2015-16 to FY 2018-19. Overall deposit
lakh crores as on March 29, 2019. Aggregate bank deposits
base of SFBs grew by 109% to around ` 555 billion
grew by 7.9% to ` 135.71 lakh crores from ` 125.73 lakh
in FY 2019-20.
crores in FY 2018-19. The overall credit-deposit (C-D) ratio
was at 75.7% in December 2019.
After reviewing the performance of the existing SFBs, the
RBI announced ‘on tap’ licensing in September 2019. Most
Financial conditions have tightened, posing challenges
of the licensing guidelines remain unchanged, except for
for financial stability and depositor sentiment, especially
promoter exit. Under the new guidelines, promoters will
in the wake of a private bank default and massive sell-
have the option to fully exit from the bank gradually
offs by foreign portfolio investors in debt and equity
after completing the lock-in period of five years.

Factors driving growth for the SFB Industry:

• Lack of formal banking services for a significant section of India’s population
• Shift from unorganised to organised banking
• Access to funds at cheaper cost enabling SFBs to compete better in the market
• Existing infrastructure provides deeper penetration into semi-urban and rural areas
• Supportive regulatory environment and government thrust towards financial inclusion
SFBs to gain from the expanding Middle Class
Over time, the lower middle

219Mn 293Mn 386Mn and the upper middle class are
expected to become the most
significant portions of the
Primary focus areas population
High High High
for large private
1Mn (1%) 8Mn (3%) 29Mn (7%)
sector banks By 2030, India will move to an
economy led by it’s aspirational
Upper Mid Upper Mid Upper Mid middle class. The lower middle
16Mn (7%) 61Mn (21%) 168Mn (44%) class will eventually need similar
products and services as the
higher segments expect today
Lower Mid Lower Mid Lower Mid
Target market 51Mn (23%) 97Mn (33%) 132Mn (34%) Currently the lower middle
for ESFB class is catered primarily by
SFBs NBFCs and MFIs for their
Low Low
Low financial needs.
127Mn 57Mn
151Mn (69%) (43%) (15%) ESFB has a well diversified
product bouquet with an
2005 2018 2030P established track record of
running these products
Business Overview
The consolidated financial results for FY 2019-20 include:
• Equitas Holdings Limited [EHL]

• Equitas Small Finance Bank Limited [ESFB]
• Equitas Technologies Private Limited [ETPL], which is in its early stage of operations
On a consolidated basis, EHL reported a PAT of ` 206.00 crores versus ` 176.57 crores for the previous year.
Financial performance – FY 2019-20

Consolidated
` crores
Particulars FY 2019-20 FY 2018-19
Revenue from Operations 2,890.11 2,288.17
Other Income 45.79 70.36
Total Revenue 2,935.90 2,358.53
Finance costs 1,190.93 966.42
Operating expenses 1,428.80 1,120.80
Total Expenses 2,619.73 2,087.22
Profit before tax 316.17 271.31
Provision for tax 110.17 94.74
Profit after tax 206.00 176.57
Other Comprehensive Income 1.19 0.40
Total Comprehensive Income, Net of tax 207.19 176.97
Standalone
` crores
Total Income 19.07 22.52
Operating Expenses 6.07 9.80
Profit before tax 13.00 12.72
Provision for tax 5.30 3.39
Profit after tax 7.70 9.33
Other Comprehensive Income -0.01 0.01
Total Comprehensive Income, Net of tax 7.69 9.34
Overview of Subsidiaries bank will continue to focus on growing retail deposits to

Equitas Small Finance Bank Limited (ESFB) provide us with stable and low-cost source of funding.
Our approach and business strategy
We are a leading SFB offering a range of banking products Also as part of its Digital Banking, strategy the Bank
and services to customers with a focus on serving the rolled out “Selfe Savings” and “Selfe FD” an online
financially unserved and underserved customer segments product, which enables potential customers to open a
in India. Our strength lies in promoting financial inclusion bank account online without the need to meet a Bank
within these segments. staff or fill up an application form. The initial response
from customers has been very encouraging.
Our objective of building a stable, sustainable and
scalable portfolio is progressing well, as we continue to During the past financial year, the Bank witnessed
diversify our advances portfolio. The recently launched healthy growth in advances and deposits while keeping
New Commercial Vehicle loans and Working Capital operating expenses tepid.
loans, in line with our strategy of leveraging the skills
we honed over the past decade is gaining momentum. Operating Performance
The strategy to diversify and offer a wide array of Deposits
financiering solutions to the segments that we operate As of March 31, 2020, CASA deposits stood at ` 2,208
in continues to progress well. We are confident that with crores comprising a Current Account balance of ` 347
the seeding of these products early on, our Bank will crores and a Savings Account balance of ` 1,861 crores.
enjoy a competitive edge in the years to come. Term Deposits stood at ` 8,470 crores. Retail TD stood at
` 3,849 crores i.e. 45% of Term Deposits. Total deposits
On the liabilities front, the strategy of the bank is to stood at ` 10,679 crores.
create a long-term, granular retail liability franchise. The
Particulars (` crores) FY 2019-20 FY 2018-19 YoY %

Demand Deposits 347.29 480.56 -28%
Savings Bank Deposits 1,861.16 1,793.13 4%
Term Deposits 8,470.20 6,606.18 28%
Retail Deposits 3,849.04 1,655.23 133%
Bulk Deposits 4,621.16 4,950.95 -7%
Total Deposits 10,678.65 8,879.87 20%
Advances
The Bank’s advances grew by 32%; total advances grew to ` 15,440 crores. The Bank’s unsecured portfolio reduced
from 29% in FY 2018-19 to 25% in FY 2019-20.
The recently launched products such as New Commercial Vehicle loans and Working Capital loans, in line with our
strategy of leveraging the skills we honed over the past decade continues to do well.
` crores March 31, 2020 March 31, 2019 YoY %

Micro Finance 3,628.30 3,073.27 18%
Small Business Loans (Incl. HF) 6,278.32 4,570.11 37%
Vehicle Finance 3,795.76 2,961.38 28%
MSE Finance (Working Capital) 798.99 342.24 133%
Corporate Loans 743.75 398.93 86%
Others 195.27 383.90 -49%
Total 15,440.39 11,729.83 32%
Equitas Technologies Private Limited (ETPL) business and operates the ‘Wowtruck’ platform. ETPL
ETPL, incorporated on October 27, 2015, is a subsidiary of has branches in Chennai, Coimbatore and offers services
EHL. ETPL is in the freight facilitation-cum-aggregation throughout Tamil Nadu.

Business Model and Value proposition enabled), and UPI /IMPS/e NACH, Prepaid cards & ETC
‘Wowtruck’ provides technology-based services that enabled through API plug ins for partners and clients
are mutually beneficial to freight operators and their to avail payment services through direct (host to host)
customers. While customers benefit from ease of integration, lending greater flexibility and scale of
booking, transparency in pricing, and non-cash payment business. The Bank as a part of transaction acquiring
options, transporters benefit from reduced idle time. The business of Payments is now live on Acquiring of POS and
platform will also help formalise the transport sector, ETC enabled transactions.
which will translate into improved banking facilities for
the sector participants as transactions on the platform We have successfully setup our very own DEM (Data
improve their digital footprint. Exchange Model) for Cheque Truncation System (CTS)
with enhanced security, replacing the existing Clearing
‘Wowtruck’ also launched intercity operations from House Interface (CHI). We have implemented a Data
April, 2019 and has been rendering its services to clients Mart for centralised MIS Reporting and analytics. Lastly,
like, Amazon, Waycool, Linfox (HUL), Apollo Pharmacy, our technology infrastructure readiness enabled us to
Kerry Indev, Nippon Express, PEPS Mattress etc., Wow immediately enable most of our staff to Work From Home,
Truck distinguishes itself from others by providing more when the need arose towards the end of March 2020.
tech based services. This feature enables the client to plan
their logistics, with bulk booking, online bill submission Treasury Operations
and reconciliation, MIS etc. The Bank’s Treasury completed third full year of
operations this year, based out of a well-equipped
Business Update premises at the Head Office in Chennai. The Bank is a
• The platform has on boarded over 1.25+ lakhs member of Fixed Income, Money Markets & Derivatives
customers to date Association [FIMMDA] and holds an AD II category license
for dealing in Forex.
• The platform on boarded over 14,238
transporters in FY 2019-20
Treasury focuses on real-time funds management,
• 85,426 truckloads were delivered in FY 2019-20 comprising of Cash Reserve Ratio (CRR), Statutory
Liquidity Ratio (SLR) and Liquidity Coverage Ratio (LCR).
• Offering vehicles on fixed contract basis as
The Bank’s treasury manages liquidity risk and always
well to clients
maintains sufficient liquidity under the LCR framework
• The mobile app attracted ~70% of total orders. set out by the Bank’s ALCO. Government securities
investments are maintained in line with regulatory
• The platform received an average of 3 bids from
norms governing SLR investments. Treasury is also active
transporters for every booking.
in SLR trading and investments, and generates revenue in
addition to interest income earned from SLR investments
Other Functions – a brief overview
with focus on optimising portfolio yields.
Information Technology [IT]
ESFB continues to make significant investments in
Treasury functions as the Bank’s interface for market
technology. In FY 2019-20 envisaging a Digital First
counterparts and has successfully leveraged excellent
approach, we re-launched Selfe platform to provide
rapport built up with them, to aid in fund raising
customers with an even faster digital on-boarding option
and other activities. Treasury also closely works with
from the comfort of their homes. On this platform, a
the liabilities team to aid deposit mobilisation, while
customer can open a savings account or fixed deposit
optimising cost of funds and seeking to broad base our
account in under 5 minutes with just Aadhaar and PAN.
liabilities profile.
These digital products have been a phenomenal success
in recent times. Plans are afoot to elevate the Customer
During the year, Treasury raised funds using a mix of
experience with digitally enabled customer life cycle
instruments such as Certificates of Deposit [CDs], Term
management featuring Video enabled KYC fulfilment
Money, Inter Bank Participatory Certificates [IBPCs]
and Virtual RM interactions.
and Refinance from Financial institutions at optimal
cost. The Bank has also participated in the primary
We also introduced a tab-based on-boarding facility
market in equities, focusing on revenue generation and
for bank personnel, to meet prospective customers and
diversification.
complete their on boarding digitally, in minutes. In a
world of possibilities, we have started opening up our
Risk Management
API kit enabling Banking as a Service (BaaS) enabling
Managing risk is fundamental to financial services
Bank to collaborate with Fintech talent and leverage
industry, in general and in particular, to banks. It is a
Innovation led Co creation. We have launched our first
basic key to ensure sustained profitability and stability.
partnership with an emerging Fintech (BankOpen) to
While risks are assumed after appropriate considerations,
drive new SMB (Small & Medium Business) customer
some risks may arise due to unintended consequences of
acquisition; customers are provided with a rich suite of
internal actions or external events. The Bank views Risk
products through the BankOpen portal (invoicing/ GST
Management as one of its core competencies and tries to
payments/ expense dashboard) combined with API based
ensure that risks are identified, assessed and managed in a
banking services powered by Equitas.
timely manner. The Bank’s Risk Management framework
aligns risk and capital management to business strategies,
ESFB is also live on various NPCI Payment products,
aimed to protect its financial strength, reputation and
offering services likeMicro ATM (AePS/ Card+PIN
ensures support to business activities for adding value to by providing continual learning experiences on products
customers while creating sustainable shareholder value. and processes. 14,183 Man Days of Classroom Learning
Programs and 45,043 Man Hours of E-Learning Programs
The Bank has an independent integrated risk covering 11,450 employees were done during the year.
management function covering credit risk, market risk, 19 Virtual Training Sessions were conducted for close to
assets liabilities management [ALM], operational risk 300 employees in Liabilities division for the launch of
and information security risk functions. The risk function Elite Savings Account. Managerial and Senior Managerial
is headed by Chief Risk Officer [CRO], who reports to the employees form the foundation of the Bank. Over the
MD & CEO of the Bank. The Risk Management Committee last couple of years, we have expanded this segment as
[RMC] of the Board is responsible for overall governance they anchor critical functions. An exclusive Leadership
framework for the risk management of the Bank. The RMC Development Program was designed and rolled out
of the Board is supported by various management level for over 260 Managers across the Bank. Mobile based
committees – Executive Risk Management Committee, Learning App “E-Clapp” was launched and the coverage
Asset Liability Committee, Credit Risk Management and usage of which has touched 91% of the employees.
Committee, Operational Risk Management Committee Talent Management Structure was introduced in HR to
and Information Security & Cyber Risk Committee. strengthen On-boarding, Performance Management,
Competency Building and Employee Engagement. High
Compliance Achievers Club – Bank level special recognition program
The Bank is committed to adhering to the highest to retain consistent performers was launched. Equitas is
standards of regulatory compliance, governance and strongly committed to a robust cultural composition, in
ethics. The Compliance Department, headed by the Chief alignment with its values and mission statements to be
Compliance Officer [CCO], functions as an independent effective in ensuring the enduring success of the Bank.
unit to assist the Management team in identifying The internalisation of the core values and demonstration
compliance risks across the Bank and mitigating them by of anchor behaviours across the team will create
framing appropriate policies, procedures and oversight. awareness, enhance alignment and bring in a sense
The Compliance Department also provides advisory of togetherness cutting across division/departmental
support by reviewing products and processes rolled out boundaries. The Culture Workshop was thus framed
by the Bank and has in place the required framework for and the values were propagated. So far, 97 workshops
transaction monitoring and testing the implementation covering more than 1,700 employees were conducted.
of regulations, ensuring right Governance structures and Human Resources team will continue to play a pivotal
handling regulatory relationships, including proactively role in ensuring that we have a high-performing and
engaging with the regulators for industry-level initiatives. engaged workforce equipped to deliver results.
Internal Audit Corporate Social Responsibility

The Bank’s Internal Audit function provides independent The Mission of Equitas Group is ‘Empowering through
assurance to the Board of Directors on an ongoing basis Financial Inclusion’. In line with this Mission, besides
on the quality and effectiveness of its internal controls, providing finance at reasonable cost to those who are
risk management, governance systems and processes. not effectively serviced by the mainstream financial
Internal Audit Department undertakes various Audits institutions, Equitas has developed a wide range of
like Risk Based Internal Audit [RBIA] of the branches, initiatives towards improving the quality of life of its
Credit Audit, Revenue Audit, Information System Audit, low-income constituents. These initiatives are carried out
Thematic Audits and Management Audit of the Head through a ‘not-for-profit’ Trust -- Equitas Development
Office Departments. Concurrent Audit is being carried Initiatives Trust [EDIT] established by the Company.
out for various areas like Treasury operations, KYC
compliance, Payroll, Operations of central processing As per the CSR Policy, contributions up to 5% of net profit
units, other expenditure etc., based on the risk in each financial year, subject to minimum contribution
assessment and regulatory requirements. stipulated under the Companies Act, 2013 are made to
EDIT to carry out CSR initiatives.
Human Resources
Our vision is to “Create the most valuable bank for all The various CSR activities undertaken include: i)
stakeholders through happy employees”. The Bank running eight schools (seven owned schools and one
ended the year with a manpower strength of over school belonging to VSKD Trust, is managed by us). Our
16,106 employees up from 14,608 last year. Newer student’s strength for 2019-20 academic year stands,
business like Used Car Finance, Affordable Housing, Agri around 5,700 ii) skill development of women through
Business and Liabilities have seen employee strength training in tailoring & embroidery, doll making, artificial
increasing. Women employees constitute 11% of the jewellery making, candle making etc., iii) pavement
total workforce of the bank. There was an average of dwellers rehabilitation programs [Equitas Birds Nest],
more than 60% increase in per employee disbursement iv) placement coordination for unemployed youth of
productivity in the Retail Assets division (*February 2020 low income communities by networking with employers
vs March 2019 figures) contributed largely by Emerging through job fairs and v) conducting primary health camps
business. The Bank has made concerted efforts to through tie-ups with hospitals.
ensure that the employees’ capabilities are developed

Nature of Activity FY 2019-20 Cumulative

No. of eye-camp participants [A] 212,738 2,499,592
No. of spectacles [free of cost] 8,289 116,564
No. of cataract operations[free of cost] 1,727 32,520
People covered in other Medical camps [B] 206,774 3,608,339
Total [Eye camps + Med. Camps] [A]+[B] 419,512 6,107,985
Participants in skill training programs 39,513 549,953
No. of people accessing Health Helpline 6,360 32,056
Placements for Unemployed youth 26,228 187,087
Swasth Mahila Health Education 102,856 268,220
Equitas Birds Nest [Pavement Dwellers Rehabilitation program] 308 1,991
In addition, the Bank through its Micro Finance On a positive note, the pandemic has helped the bank
loan programs supported about 18,134 persons introspect its processes, disaster and business continuity
with disabilities during FY 2019-20 and cumulatively readiness, merits of “Work-From-Home”, technology
over 50,849 persons. Of these, around 2,275 visually infrastructure and reaffirm its focus on digital
challenged persons were supported during the year and led initiatives.
cumulatively 7,815. Encouraged by this inclusive model we
have mainstreamed 193 Transgender in women’s group. Cautionary Statement
Statements made in this MD&A describing the Group’s
Outlook and challenges objectives, projections, estimates, general market
The COVID-19 pandemic has brought up an trends, expectations etc., may constitute ‘forward
unprecedented set of challenges for both, the economy looking statements’ within the ambit of applicable laws
and the population. In FY 2020-21, we foresee an and regulations. These ‘forward looking statements’
impact on the Bank’s growth primarily led by extended involve a number of risks, uncertainties and other factors
lockdowns, social distancing norms enforced across the that could cause actual results to differ materially from
country and the general economic slowdown that may those suggested by the ‘forward looking statements’.
prevail post the pandemic. These risks and uncertainties include, but are not limited
to, our ability to successfully implement our strategies,
However, the Bank primarily focuses on the micro and future levels of non-performing advances, our growth
small enterprises that belong to the underbanked and and expansion, the adequacy of our allowance for credit
unbanked segment of the society. These tiny enterprises losses, our provisioning policies, technological changes,
mostly engage in the non-discretionary consumption investment income, cash flow projections, our exposure
sectors that have shown resilience to economic cycles in to market risks or other risks.
the past. As these enterprises reopen and generate cash
flows, we are optimistic that the Bank will be able to For and on behalf of the Board of Directors
grow, maintain its asset quality and continue its progress
towards financial inclusion. John Alex Rangachary N
ED & CEO Chairman
Independent Auditor’s Report on compliance with the conditions of Corporate Governance as per provisions
of Chapter IV of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements)
Regulations, 2015, as amended
To risks associated in compliance of the Corporate

The Members of Equitas Holdings Limited Governance Report with the applicable criteria.
Summary of procedures performed include:
1.
The Corporate Governance Report prepared
by Equitas Holdings Limited (hereinafter the i. Read and understood the information prepared
“Company”), contains details as specified in by the Company and included in its Corporate
regulations 17 to 27, clauses (b) to (i) of sub- Governance Report;
regulation (2) of regulation 46 and para C, D, and
E of Schedule V of the Securities and Exchange ii. Obtained and verified that the composition of
Board of India (Listing Obligations and Disclosure the Board of Directors with respect to executive
Requirements) Regulations, 2015, as amended and non-executive directors has been met
(the “Listing Regulations”) (“Applicable criteria”) throughout the reporting period;
for the year ended March 31, 2020 as required
by the Company for annual submission to the iii. Obtained and read the Register of Directors as
Stock exchange. on March 31, 2020 and verified that at least one
independent woman director was on the Board
Management’s Responsibility of Directors throughout the year;
2.
The preparation of the Corporate Governance
Report is the responsibility of the Management iv.
Obtained and read the minutes of Annual
of the Company including the preparation and General Meeting held on August 2, 2019;
maintenance of all relevant supporting records
and documents. This responsibility also includes v. Obtained and read the minutes of the following
the design, implementation and maintenance of meetings of the Board of Directors / Committees
internal control relevant to the preparation and held between April 1, 2019 and March 31, 2020:
presentation of the Corporate Governance Report.
(a) Board of Directors;
3.
The Management along with the Board of
Directors are also responsible for ensuring that the (b)
Audit Committee;
Company complies with the conditions of Corporate
Governance as stipulated in the Listing Regulations, (c) Nomination, Remuneration & Governance
issued by the Securities and Exchange Board of India. Committee;
Auditor’s Responsibility (d) Stakeholders Relationship Committee;

4.
Pursuant to the requirements of the Listing
Regulations, our responsibility is to provide a (e) Risk Management Committee;
reasonable assurance in the form of an opinion
whether, the Company has complied with the (f)
Corporate Social Responsibility
conditions of Corporate Governance as specified in Committee and
the Listing Regulations.
(g) IT Strategy Committee
5.
We conducted our examination of the Corporate
Governance Report in accordance with the vi.
Obtained necessary declarations from the
Guidance Note on Reports or Certificates for Special directors of the Company.
Purposes and the Guidance Note on Certification of
Corporate Governance, both issued by the Institute vii. Obtained and read the policy adopted by the
of Chartered Accountants of India (“ICAI”). The Company for related party transactions.
Guidance Note on Reports or Certificates for Special
Purposes requires that we comply with the ethical viii.
Obtained the schedule of related party
requirements of the Code of Ethics issued by the transactions during the year and balances at
Institute of Chartered Accountants of India. the year- end. Obtained and read the minutes
of the audit committee meeting where in such
6.
We have complied with the relevant applicable related party transactions have been pre-
requirements of the Standard on Quality Control approved prior by the audit committee.
(SQC) 1, Quality Control for Firms that Perform Audits
and Reviews of Historical Financial Information, and ix.
Performed necessary inquiries with the
Other Assurance and Related Services Engagements. management and also obtained necessary
specific representations from management.
7. The procedures selected depend on the auditor’s
judgement, including the assessment of the

8.
The above-mentioned procedures include 11.
This report is addressed to and provided to the
examining evidence supporting the particulars in members of the Company solely for the purpose of
the Corporate Governance Report on a test basis. enabling it to comply with its obligations under the
Further, our scope of work under this report did not Listing Regulations with reference to compliance
involve us performing audit tests for the purposes with the relevant regulations of Corporate
of expressing an opinion on the fairness or accuracy Governance and should not be used by any other
of any of the financial information or the financial person or for any other purpose. We have no
statements of the Company taken as a whole. responsibility to update this report for events and
circumstances occurring after the date of this report.
Opinion
9.
Based on the procedures performed by us, as For S.R. Batliboi & Associates LLP
referred in paragraph 7 above, and according to Chartered Accountants
the information and explanations given to us, we ICAI Firm Registration Number: 101049W/E300004
are of the opinion that the Company has complied
with the conditions of Corporate Governance as per Aniruddh Sankaran
specified in the Listing Regulations, as applicable Partner
for the year ended March 31, 2020, referred to in Membership Number: 211107
paragraph 4 above. UDIN: 20211107AAAACI8626
Other matters and Restriction on Use Place of Signature: Chennai

10. This report is neither an assurance as to the future Date: June 19, 2020
viability of the Company nor the efficiency or
effectiveness with which the management has
conducted the affairs of the Company.
Report on Corporate Governance
1. Corporate Governance Philosophy Regulations”) and the provisions of Section 149

The philosophy of Equitas on Corporate Governance of the Companies Act, 2013 (“the Act”).
envisages adherence to the highest levels of
transparency, accountability and fairness, in all iii.
The Board of Directors met Five (5) times
areas of its operations and in all its interactions with during the year 2019-20 viz. May 10, 2019,
stakeholders. Equitas deals with borrowers who July 09, 2019, August 02, 2019, November 08,
are mostly from the economically weaker sections 2019 and January 30, 2020. The gap between
of the society with poor linkages to mainstream two Meetings did not exceed one hundred
financial markets. Right from inception, the and twenty days.
Company’s policies and processes have been fine-
tuned to ensure utmost clarity and fairness while iv. The names and categories of Directors on the
dealing with such clients. The Governance and Value Board, their attendance at Board Meetings and
Creation Rating by CRISIL captures some of the best at the last Annual General Meeting (“AGM”),
practices the Company adopts in transacting with its name of other listed entities in which the
clients as well as employees. Director is a director and the number of Board
and Committee Chairmanships /Memberships
Corporate Governance Rating held by them as well as their shareholding as
Equitas Group has always been recognised for its on March 31, 2020 are given below.
adherence to the highest standards of corporate
governance. The Company has been rated by v.
None of the Directors on the Board holds
Institutional Investor Advisory Services (IIAS), a directorships in more than ten public companies;
proxy advisory firm as among the Top 5 companies None of the Independent Directors serves as
on the Indian Corporate Governance Scorecard, out an independent director on more than seven
of the 50 companies that listed on BSE between listed entities. Necessary disclosures including
April 2015 and March 2017. the declaration under Regulation 25(8) of SEBI
Listing Regulations have been obtained from
2. Board of Directors the Independent Directors.
i. As on March 31, 2020, the Company’s Board
comprised of eight experts drawn from diverse vi.
There is no relationship between Directors
fields / professions. inter-se.
ii. The composition of Board is in conformity with vii. In the opinion of the Board, the Independent
Regulation 17 of SEBI (Listing Obligations and Directors continue to meet the criteria of
Disclosure Requirements) Regulations, 2015, independence as mentioned under SEBI Listing
as amended from time to time (“SEBI Listing Regulations and that they are independent of
the management.
No. of No. of Committee

No. of Directorships in No. of
Board positions in public
Attendance public companies$ shares
Name of Meetings companies$$ Directorship in other
at the last held in
the Director attended listed entities
AGM the
during Membership Chairmanship Membership Chairmanship
Company
FY 2019-20
Mr. Rangachary 5 Yes 5 3 4 Nil Independent Director in Nil
N* (Chairman 1. Orient Green Power
Non-Executive Company Limited
Non-Independent 2. Salzer Electronics
Director) Limited
3. Kaycee Industries
Limited
Mr. Arun 5 No 2 1 2 1 Independent Director in Nil
Ramanathan 1. Thirumalai
(Non-Executive Chemicals Limited
Independent 2. Equitas Small
Director) Finance Bank
Limited (Debt
Listed)
Ms. Jayshree 4 No 3 Nil 2 Nil Independent Director Nil
Ashwinkumar Vyas in BSE Limited
(Non-Executive
Independent
Director)
No. of No. of Committee

No. of Directorships in No. of
Board positions in public
Attendance public companies$ shares
Name of Meetings companies$$ Directorship in other
at the last held in
the Director attended listed entities
AGM the
during Membership Chairmanship Membership Chairmanship
Company
FY 2019-20
Mr. Rajaraman P 5 Yes Nil Nil Nil Nil Nil Nil
V (Non-Executive
Independent
Director)
Mr. Jayaraman 2 NA 2 NA Nil Nil Nil Nil
Chandrasekaran#
(Non-Executive
Independent
Director)
Mr. Viswanatha 5 Yes Nil Nil Nil Nil Managing Director, Nil
Prasad S (Non- Caspian Impact
Executive Investments Private
Independent Limited (Debt listed)
Director)
Mr. Bhaskar S### 5 Yes Nil Nil Nil Nil Nil 1,405,000
(Non-Executive
Non-Independent
Director)
Mr. John Alex$$$ 2 NA Nil Nil Nil Nil Nil 41,615
(Executive Director
& Chief Executive
Officer)
*The Board has recommended his re-appointment as a Non-Executive Non- Independent Director w.e.f. May 7, 2020.
$Excluding Directorship in private limited companies, foreign companies and companies under Section 8 of the Act.
$$Audit Committee and Stakeholders’ Relationship Committee in public limited companies alone are considered.
$$$ Mr. John Alex appointed as an ED & CEO from the Board w.e.f. November 08, 2019.
#Mr. Jayaraman Chandrasekaran appointed as an Independent Director w.e.f. closing hours of August 02, 2019.
###Mr Bhaskar S retired on October 20, 2019 as ED & CEO of the Company and continued as Non-Executive Director w.e.f October 21, 2019.
Familiarisation programme for Directors

All Independent Directors inducted on the Board undergo an orientation programme. Presentations are
made by Chief Executives and Senior Management giving an overview of the group structure, its businesses
including its subsidiaries, the environment in which it operates, its various regulators and the Board
constitution. The details of the familiarisation programme for Directors are available on the Company’s website
https://www.equitas.in/pdf/Familiarisation-Programme-for-Independent-Directors.pdf
Board qualification, expertise and attributes

S. No. Name of Director Designation Special Knowledge / Practical Experience
1. Mr. Rangachary N Chairman Taxation | Insurance | Finance |Accountancy | Business
Administration | Governance | General Management
2. Mr. Arun Ramanathan Independent Director Business Administration | Finance |Economics |Accountancy
| Public Administration |Corporate Governance | General
Management
3. Mr. Jayaraman Chandrasekaran Independent Director Banking |Business Administration | Corporate strategy |
Treasury operations | Governance |General Management
4. Ms. Jayshree Ashwinkumar Vyas Independent Director Banking| Accountancy | Business Administration |Corporate
Governance | General Management
5. Mr. Rajaraman P V Independent Director Public Administration | Finance |Corporate Governance |
Business Management
6. Mr. Viswanatha Prasad S Independent Director Business Administration |Finance | Investment Banking
|Corporate strategy | Corporate Governance | General
Management
7. Mr. Bhaskar S Non-Executive Non- Accountancy | Finance |Taxation |Auditing |Corporate law
Independent Director & Governance| Treasury operations |General Management
8. Mr. John Alex Executive Director & Chief Banking |Administration | Social initiatives |General
Executive Officer Management
The Company’s Board comprises of qualified Members who bring in the required skills, competence and
expertise that allow them to make effective contributions to the Board and its Committees. The Board
Members are committed to ensure that the Company’s Board is in compliance with the highest standards of
Corporate Governance.

The Board, while considering a person for Board for its noting and/or approval, information is
appointment as Director, determines suitability of provided on all significant matters. The Company
the person as a Director on the Board, based upon diligently ensures that the information furnished
qualification, track record, expertise, integrity by Management to the Board of the Company is
and undertakes necessary due diligence to ensure comprehensive and of a very high order.
that the appointee Director fulfills the criteria for
Board membership as mentioned in the Policy for Separate Meeting of Independent Directors
ascertaining ‘fit and proper’ status of Directors During the year under review, the Independent
https://www.equitas.in/pdf/EHLFit&ProperPolicy.pdf Directors had a separate Meeting on May 10, 2019
and other ‘fit and proper criteria’. without the presence of the Management team and
the Non-Independent Directors of the Company.
The Board has identified the following areas of At the said Meeting, Independent Directors
expertise, which are fundamental for effective of the Company reviewed the performance of
functioning of the Company viz., Accountancy / Chairman, Non-Independent Directors and Board
Finance/ Economics / Corporate Law & Governance/ as a whole and assessed the quality, quantity and
General Management/ Administration, as timeliness of flow of information between the
mentioned in the aforesaid policy. The Board of Management and the Board.
Directors of the Company satisfies the required
levels of competency / skillset. 3. Committees of the Board
The Board at present has six (6) Committees viz.,
Information to the Board Audit Committee of the Board (ACB), Nomination,
In advance of each Meeting, the Board is presented Remuneration & Governance Committee (NRGC),
with relevant information on various matters Corporate Social Responsibility Committee (CSRC),
relating to the working of the Company, especially Stakeholders Relationship Committee (SRC), Risk
those that require deliberation and guidance at the Management Committee (RMC) and IT Strategy
highest level. Presentations are also made to the Committee (ITSC). The Board fixes the terms of
Board by different functional heads on important reference of Committees and also delegates powers
matters from time to time. Directors have separate from time to time. The Minutes of the Meetings of
and independent access to Management. In addition the Committee(s) are placed before the Board.
to items which are required to be placed before the
Meetings & Attendance:

Nomination,
Name of the Committee Stakeholders’ Corporate Social Risk IT Strategy
Audit Committee Remuneration
Relationship Responsibility Management Committee
(ACB) & Governance
Committee (SRC) Committee (CSRC) Committee (RMC) (ITSC)
Committee
No. of Meetings held 4 4 5 2 2 2

Date of Meetings May 10, 2019, May 10, 2019, May 10, 2019, May 10, 2019 & May 10, 2019 & August
August 02, 2019, August 02, 2019, July 09, 2019, November 08, November 08, 02, 2019 &
November 08, 2019 November 08, August 02, 2019, 2019 2019 January 30,
& January 30, 2020 2019 & January November 08, 2020
30, 2020 2019 & January
30, 2020
Mr. Rangachary N 3 - - - - -
(Chairman)*
Mr. Arun Ramanathan - 4 5 2 - -
(Chairman of SRC & CSRC
and Member of NRGC)
Ms. Jayshree Ashwinkumar - 3 - 2 - -
Vyas (Member of NRGC &
CSRC)
Jayaraman 2 - - - 1 1
Chandrasekara# (Member
of ACB, RMC & ITSC)
Mr. Rajaraman P V 4 3 4 2 1 -
(Chairman of NRGC and
Member of ACB, CSRC &
SRC)
Viswanatha Prasad S 4 4 - - 2 2
(Chairman of ACB, RMC
& ITSC and Member of
NRGC)

Nomination,
Name of the Committee Stakeholders’ Corporate Social Risk IT Strategy
Audit Committee Remuneration
Relationship Responsibility Management Committee
(ACB) & Governance
Committee (SRC) Committee (CSRC) Committee (RMC) (ITSC)
Committee
Bhaskar S## 1 - 5 - 2 2
(ED & CEO till October 20,
2019 & Member of SRC,
RMC, ACB and ITSC)
John Alex$ - - 1 - - 1
(ED & CEO)
* Mr. Rangachary N was a Member of the Audit Committee until November 8, 2019.
$Mr. John Alex appointed as ED & CEO w.e.f. November 08, 2019.
#Mr. Jayaraman Chandrasekaran appointed as an Independent Director w.e.f. closing hours of August 02, 2019.
## Mr. Bhaskar S inducted as a Member of ACB w.e.f November 9, 2019
Terms of Reference of Audit Committee (e) Reviewing, with the Management, the quarterly
The role of Audit Committee, among others includes: financial statements before submission to the
Board for approval;
(a) Oversight of the Company’s financial reporting
process and the disclosure of its financial (f)
Reviewing, with the management, the
information to ensure that the financial statement of uses / application of funds raised
statement is correct, sufficient and credible; through an issue (public issue, preferential
issue, rights issue etc.), the statement of funds
(b) Recommending to the Board, the appointment, utilised for purposes other than those stated
remuneration and terms of appointment of in the offer document/ prospectus/ notice and
the statutory auditors and internal auditors the report submitted by the monitoring agency
of the Company; monitoring the utilisation of proceeds of a
public or rights issue and making appropriate
(c)
Approval of payment to statutory auditors recommendations to the Board to take up steps
for any other services rendered by in this matter;
statutory auditors;
(g)
Reviewing and monitoring the auditor’s
(d) Reviewing, with the Management, the annual independence, performance and effectiveness
financial statements and auditor’s report of audit process;
thereon before submission to the Board for
approval, with particular reference to: (h)
Approval or any subsequent modification
of transactions of the Company with
(i)
Matters required to be included in the related parties;
Directors’ Responsibility Statement to be
included in the Board’s report in terms of (i)
Scrutiny of inter-corporate loans
clause (c) of sub-section 3 of Section 134 of and investments;
the Companies Act, 2013;
(j)
Valuation of undertakings or assets of the
(ii) Changes, if any, in accounting policies and Company, wherever it is necessary;
practices and reasons for the same;
(k)
Evaluation of Internal Financial Controls and
(iii)
Major accounting entries involving Risk Management Systems;
estimates based on the exercise of
judgment by Management; (l)
Reviewing, with the management, the
performance of statutory and internal
(iv)
Significant adjustments made in the auditors and the adequacy of the internal
financial statements arising out of control systems;
audit findings;
(m)
Reviewing the adequacy of internal audit
(v)
Compliance with accounting and function, if any, including the structure of
other legal requirements relating to the internal audit department, staffing
financial statements; and seniority of the official heading the
department, reporting structure coverage and
(vi) Disclosure of any related party transactions; frequency of internal audit;
(vii)
Modified opinion(s) in the (n)
Discussion with internal auditors on any
draft audit report. significant findings and follow up thereon;
(o)
Reviewing the findings of any internal
investigations by the internal auditors into
matters where there is suspected fraud or (iv) Internal audit reports relating to internal
irregularity or a failure of internal control control weaknesses;
systems of a material nature and reporting the
matter to the Board; (v)
The appointment, removal and terms
of remuneration of the Chief Internal
(p) Discussion with statutory auditors before the Auditor shall be subject to review by the
audit commences, about the nature and scope Audit Committee
of audit as well as post-audit discussion to
ascertain any area of concern; (vi) Statement of deviations:
(q) To look into the reasons for substantial defaults (a)
quarterly statement of deviation(s)
in the payment to the depositors, debenture including report of monitoring
holders, shareholders (in case of non-payment agency, if applicable, submitted
of declared dividends) and creditors; to stock exchange(s) in terms of
Regulation 32(1); and
(r)
To review the functioning of the whistle
blower mechanism; (b)
annual statement of funds utilised
for purposes other than those stated
(s)
Approval of appointment of the CFO (i.e., in the offer document/prospectus/
the whole-time Finance Director or any other notice in terms of Regulation 32(7).
person heading the finance function or
discharging that function) after assessing the The powers of Audit Committee shall include
qualifications, experience, background etc. the following:
of the candidate; (i) To investigate any activity within its
terms of reference;
(t) Review the financial statements, in particular the
investments made by the Subsidiary Company; (ii) To seek information from any employee;
(u) Laying down and review of procedures relating (iii)

To obtain outside legal or other
to risk assessment and risk minimisation professional advice; and
to ensure that executive management
control risk through means of a properly (iv)
To secure attendance of outsiders with
defined framework; relevant expertise, if it considers necessary.
(v)
Review and monitoring of implementation Terms of Reference of Nomination, Remuneration &
and functioning of the Policy for Prevention of Governance Committee
Sexual harassment at work place; (a)
Formulation of the criteria for determining
qualifications, positive attributes and
(w)
To periodically review and monitor independence of a director and recommend to
implementation of Internal Code of Conduct the Board a policy, relating to the remuneration
for Prevention of Insider Trading; of the directors, key managerial personnel and
other employees;
(x)
To review the utilisation of loans and / or
advances from / investment by the holding (b)
Formulation of criteria for evaluation
company in the Subsidiary exceeding ` 100 of performance of independent
crore or 10% of the asset size of the Subsidiary, directors and the Board;
whichever is lower and
(c) Devising a policy on Board diversity;
(y)
Carrying out any other function prescribed
under the law. (d)
Identifying persons who are qualified to
become directors and who may be appointed
The Audit Committee shall mandatorily review in senior management in accordance with the
the following information: criteria laid down and recommend to the Board
(i) Management discussion and analysis of their appointment and removal and evaluation
financial condition and result of operations; of Director’s performance;
(ii)
Statement of significant related party (e)
Determining whether to extend or continue
transactions (as defined by the Audit the term of appointment of the independent
Committee), submitted by the Management director, on the basis of the report of performance
evaluation of independent directors;
(iii)
Management letters/ letters of internal
control weaknesses issued by the (f) Recommend to the Board, all remuneration, in
statutory auditor; whatever form payable to the Managing and
Whole-time Directors and senior management
of the Company from time to time;

(g)
Administration and superintendence in (xi)
To construe, clarify and interpret the
connection with the employees stock option terms of the scheme and options granted
scheme (the Scheme) under the broad policy pursuant to the Scheme.
and framework laid down by the Company and/
or by the Board of Directors; (i)
To study the report issued by CRISIL on the
Governance Rating as well as the Guidelines
(h) Formulate from time to time specific parameters on Corporate Governance and Corporate Social
relating to the Scheme, including, Responsibility issued by Ministry of Corporate
Affairs, SEBI and other authorities.
(i)
The quantum of options to be granted
under the Scheme to a particular eligible (j)
To study the best practices and benchmarks
employee or to category or group of of leading Indian corporates as well as
eligible employees and in aggregate; international best practices.
(ii)
Determination of eligibility conditions (k)
To recommend to the Board, the draft set
and selection of eligible employees to of governance guidelines to achieve the
whom options may from time to time be highest level of governance on par with
granted hereunder; global benchmarks.
(iii) The vesting period and the exercise period (l) Based on approval by the Board, to oversee the
within which the eligible employee should implementation of the same, both at the Board
exercise the options and those options level and Management level.
would lapse on failure to exercise the
options within the exercise period; (m)
Carry out any other function as may be
prescribed under the law.
(iv)
The conditions under which options
vested in eligible employee may lapse Performance evaluation criteria
in case of termination of employment The Nomination, Remuneration & Governance
for misconduct; Committee has drawn out a Policy for evaluation of
the Board, its Committees, Chairman and Directors
(v) The specified time period within which the and the same has been approved by the Board of
eligible employee shall exercise the vested Directors of the Company. The process for Board
options in the event of termination or Evaluation is given in the Board’s Report.
resignation of an eligible employee;
Remuneration of Directors
(vi)
The right of an eligible employee to Remuneration Policy
exercise all the options vested in him at The Company has in place a Remuneration Policy
one time or at various points of time within which is guided by the principles and objectives as
the exercise period; enumerated in Section 178 of the Act which is also
disclosed on our website https://www.equitas.in/
(vii)
The procedure for making a fair and pdf/EHLRemunerationPolicy.pdf. The compensation
reasonable adjustment to the number of to the only Executive Director of the Company is
options and to the exercise price in case within the limits prescribed under the Act. He is not
of corporate actions such as rights issues, paid Sitting fees for any Board/ Committee Meeting
bonus issues, etc.; attended by him.
(viii) Make rules by which all options including

The remuneration to the Non-Executive /
non-vested options vest immediately Independent Directors has been fixed at a level, not
in case of sale, transfer or takeover of exceeding 1% of the net profits of the Company
the Company or amalgamation of the calculated in accordance with Section 198 of the
Company with any other company, etc. Act. Non-Executive / Independent Directors who
and provide for rules related to exercise are on the Board of the Company as well as in the
period under such circumstances; Subsidiary Company (ies) are paid remuneration
either by the Company or Subsidiary Company(ies).
(ix)
Make rules related to performance
based vesting of such part of the options The Independent Directors of the Company are not
granted to eligible employees as the eligible for stock options. The Directors are not paid/
Committee may decide; entitled to any remuneration except as disclosed in
this Report. There is no pecuniary relationship or
(x) To prescribe, amend and rescind rules and transaction between the Company and the Non-
regulations relating to the Scheme; Executive/Independent Directors.
All Directors, except the Executive Director, were paid a sitting fee of ` 50,000 for attending every Meeting of
the Board and ` 25,000 for every Meeting of Committees. The details of sitting fees paid to Non-Executive /
Independent Directors for the year ended March 31, 2020 are as follows:
Commission Sitting Fees (in `)

Name
(in `) Board Committee
Mr. Rangachary N 403,830 250,000 100,000
Mr. Arun Ramanathan Nil 250,000 300,000
Ms. Jayshree Ashwinkumar Vyas 201,920 200,000 150,000
Mr. Jayaraman Chandrasekaran 134,060 100,000 100,000
Mr. Rajaraman P V 201,920 250,000 375,000
Mr. Viswanatha Prasad S 302,880 250,000 325,000
Mr. Bhaskar S 89,921 100,000 125,000
Remuneration of Executive Director & Chief Executive Officer (ED & CEO) for FY 2019-20:
Bhaskar S* John Alex*
Amount (` in Amount (` in
Sl.
Particulars lakhs) lakhs)
No. (Until October 20, (From November
2019) 8, 2019)
1 Salary 52.04 22.12
2 Perquisites 5.57 0.06
3 Stock Option - -
4 Sweat Equity - -
5 Commission
-as % of profit - -
-others - -
6 Others – Employer’s Contribution to Provident Fund etc. 1.59 1.10
7 Medical reimbursement - -
Total 59.20 23.29
* Consequent to cessation of Mr. Bhaskar S as ED & CEO w.e.f. October 21, 2019, Mr. John Alex was appointed in his place w.e.f.
November 08, 2019.

There are no performance linked incentives, (f) To allot shares on exercise of options granted
service contracts, notice period or severance fees to employees under the Equitas Employees
to the Directors. Stock Option Scheme, 2015 or such other
Scheme formulated by the Company from
Terms of Reference of Stakeholders’ Relationship time to time; and
Committee
(a) Resolving the grievances of the security holders (g)
Carrying out any other function as
of the Company, including complaints related prescribed under the law.
to the transfer / transmission of shares, non-
receipt of annual report and non-receipt of Name, designation and address of Compliance
declared dividends, issue of new / duplicate Officer:
certificates, general meetings etc; Ms. Deepti R
Company Secretary
(b) Review of measures taken for effective exercise Equitas Holdings Limited
of voting rights by shareholders; 410A, 4th Floor Spencer Plaza,
Phase-II, No.769, Mount Road,
(c) Review of adherence to the service standards Anna Salai,
adopted by the Company in respect of various Chennai 600 002
services rendered by the Registrar & Share Telephone: +91 44 4299 5000
Transfer Agent; Fax: +91 44 4299 5050
Email: secretarial@equitas.in
(d) Review of various measures taken for reducing
the quantum of unclaimed dividends and Details of investor complaints received and
ensuring timely receipt of dividend warrants/ redressed during FY 2019-20 are as follows:
annual reports/statutory notices by the Particulars No. of complaints
shareholders of the company; Pending at the beginning of the year 0
Received during the year 1
(e)
Issue of duplicate certificates and new Resolved during the year 1
certificates on split/consolidation/renewal; Remaining unresolved at the end 0
of the year

Terms of Reference of Corporate Social controls risk through means of a properly

Responsibility Committee defined framework; and
(a) Review the mission of the Organisation from
time to time and ensure it stays aligned to the (i)
Carrying out any other function as
changing context of the Organisation; prescribed under the law.
(b)
Ensure alignment of the business goals and Terms of Reference of IT Strategy Committee
objectives of the Company in line with the (a)
Approving IT strategy and policy documents
mission of the Organisation; and ensuring that the management has put an
effective strategic planning process in place;
(c)
Bring specific focus on certain excluded
segments of client community and set (b)
Ascertaining that management has
benchmark for the same; implemented processes and practices that
ensure that the IT delivers value to the business;
(d) Review all the social activities of the Company
and suggest to the Board of Trustees suitable (c)
Ensuring IT investments represent a balance
measures for enhancing the efficacy of of risks and benefits and that budgets
these activities; are acceptable;
(e) Deploy such tools of measurement as maybe (d)

Monitoring the method that management
relevant and available from time to time to study uses to determine the IT resources needed to
the impact of the social performance activities achieve strategic goals and provide high-level
of the Company and benchmark the same with direction for sourcing and use of IT resources;
other MFIs in India and around the world;
(e) Ensuring proper balance of IT investments for
(f) Disseminate information related to the social sustaining NBFC’s growth and becoming aware
performance of the Organisation in such about exposure towards IT risks and controls.
manner as deemed appropriate;
(f)
Instituting an appropriate governance
(g)
Review the amount spent on social activities mechanism for outsourced processes, if
and advise the Board on its efficacies; and any, comprising of risk based policies and
procedures, to effectively identify, measure,
(h) To formulate and recommend to the Board, the monitor and control risks associated with
CSR policy of the Company. outsourcing in an end to end manner;
Terms of Reference of Risk Management Committee (g) Defining approval authorities for outsourcing
(a)
To assess periodically, risks to the effective depending on nature of risks and materiality
execution of business strategy and review key of outsourcing;
leading indicators;
(h) Undertaking a periodic review of outsourcing
(b) To review and approve the Risk Management strategies and all existing material
framework of the Company on annual basis; outsourcing arrangements;
(c)
To review periodically, the risk management (i)
Periodically reviewing the effectiveness of
processes and practices of the Company; policies and procedures;
(d) To ensure that the Company is taking appropriate (j)

Evaluating the risks and materiality of
measures to achieve prudent balance between all prospective outsourcing based on the
risk and reward in its business activities; framework developed by the Board;
(e) Evaluation of significant risk exposures of the (k) Communicating significant risks in outsourcing
Company and assessing management’s action to the Board of Directors of the Company on a
to mitigate the exposure in a timely manner; periodic basis;
(f)
To co-ordinate with the activities of Audit (l)
Ensuring an independent review and
Committee where there is any instance of audit in accordance with approved policies
overlap with the audit activities; and procedures;
(g) To periodically report to the Board including risk (m)

Ensuring that contingency plans have been
management and risk minimisation procedures; developed and tested adequately and
(h)
Laying down and review of procedures (n)
Any other role/responsibility as regulated by
relating to risk assessment & risk minimisation RBI Directions from time to time.
to ensure that executive management
4. Annual General Body Meetings

Details relating to last three Annual General Meetings:
No. of Special
Year Date Time Location
Resolution(s) passed
2019 August 02, 2019 4.30 P.M. Sri Thyaga Brahma Gana Sabha, Vani Mahal, One
103,G N Chetty Road, T Nagar, Chennai – 600 017.
2018 July 27, 2018 2.45 P.M. Sri Thyaga Brahma Gana Sabha, Vani Mahal, One
103, G N Chetty Road, T Nagar, Chennai – 600 017.
2017 June 30, 2017 10.15 A.M. Sri Thyaga Brahma Gana Sabha, Vani Mahal, Six
103, G N Chetty Road, T Nagar, Chennai – 600 017.

All the proposed resolutions, including Special The financial results and other information filed by
Resolutions, were passed by the shareholders as set the Company from time to time are also available on
out in their respective Notices. the website of the Stock Exchanges i.e. BSE Limited
and National Stock Exchange of India Limited. The

D etails of special resolution passed said stock exchanges have introduced NSE Electronic
through postal ballot: Application Processing System (NEAPS) and BSE
Listing centre. Various compliances as required /
There were no resolution(s) passed through Postal prescribed under the SEBI Listing Regulations are
Ballot during FY 2019-20. filed through these systems.
5. Means of Communication Annual Report containing audited standalone and

The quarterly, half-yearly and annual financial consolidated financial statements together with
results of the Company are published in one English Board’s Report, Corporate Governance Report,
and Regional language [Tamil] newspapers viz., Management Discussion and Analysis Report,
Business Standard and Makkal Kural, respectively. Auditors Report and other important information
The Company’s financial results and official news are circulated to the Members entitled thereto
releases, presentations made to institutional through permitted mode(s).
investors/ analysts are hosted on the Company’s
website https://www.equitas.in under the Investor
Information Section.
6. General Shareholder Information

Pursuant to the General Circular No. 14/2020 dated April 8, 2020,
General Circular No. 17/2020 dated April 13, 2020 and General
Circular No. 20/2020 dated May 5, 2020, issued by the Ministry of
Day, Date & Mode of AGM Corporate Affairs, the 13th Annual General Meeting (AGM) for
the year ended March 31, 2020 is scheduled on Monday, August
10, 2020 at 3.00 PM IST through Video Conferencing / Other Audio
Visual Means (VC/OAVM).
Financial year April 1, 2019 to March 31, 2020
The name and address of each stock exchange(s) at which BSE Limited
the listed entity's securities are listed and a confirmation Phiroze Jeejeebhoy Towers
about payment of annual listing fee to each of such Stock Dalal Street
exchange(s): Mumbai – 400 001
National Stock Exchange of India Limited

Exchange Plaza
Bandra Kurla Complex (BKC)
Bandra (East)
Mumbai – 400051
Listing Fees Listing fees payable to the stock exchanges for the financial
year 2019-20 have been paid in full.
Stock Code BSE – 539844
NSE – EQUITAS
ISIN INE988K01017
Book Closure Date August 4, 2020 to August 10, 2020 (both days inclusive)
Market price data- high, low during each month in last Details are provided in the table below
financial Year
Performance in comparison to broad-based indices such as Details are provided in the chart below
BSE Sensex, CRISIL Index, etc.

Registrar and Share Transfer Agents; KFin Technologies Private Ltd (“KFINTECH”)
Selenium Tower B,
Plot number 31-32, Gachibowli, Financial District,
Nanakramguda,
Hyderabad 500 032
Contact Person: Ms Rajitha Cholleti
Ph: +91 40 6716 1508
Website: www.kfintech.com
Share transfer system 99.97% of the equity shares of the Company are held in electronic
mode. Transfer of these shares are done through the Depositories
with no involvement of the Company. As regards transfer of shares
held in physical form, the transfer documents can be lodged with
KFINTECH at the address mentioned above. Transfer of shares in
physical form is normally processed within ten to twelve days from
the date of receipt, if the documents are complete in all respects.
Distribution of shareholding (as on 31.03.2020) Details are provided in the table below
Dematerialisation of shares and liquidity (as on 31.03.2020) The total shares held in dematerialised form: 99.97%
Outstanding Global Depository Receipts or American Nil
Depository Receipts or warrants or any convertible
instruments, conversion date and likely impact on equity
Commodity price risk or foreign exchange risk and hedging Nil
activities
Plant locations Nil
Address for correspondence Company Secretary
410A, 4th Floor, Spencer Plaza, Phase II,
No.769,Mount Road, Anna Salai, Chennai 600002
Tel: +91 44 4299 5000
Fax: + 91 44 4299 5050
Email: secretarial@equitas.in
Market price data - High, Low during each month in last Financial Year:
BSE NSE
Month
High Low High Low
Mar-20 113.10 32.75 113.20 32.50
Feb-20 117.05 102.00 117.20 101.90
Jan-20 120.50 99.00 120.70 98.70
Dec-19 114.45 98.80 114.00 98.75
Nov-19 110.15 82.60 110.35 82.50
Oct-19 106.85 90.85 106.85 90.80
Sep-19 119.60 92.60 119.65 92.60
Aug-19 115.85 97.90 115.90 97.75
Jul-19 131.15 106.20 129.60 106.10
Jun-19 143.55 117.60 143.65 117.60
May-19 142.70 120.60 142.50 120.15
Apr-19 139.30 126.40 139.45 126.25
Equitas Holdings Ltd. and CNX Nifty
Equitas Holding and CNX NIFTY

13,000.00 155.00
12,000.00 135.00
11,000.00
115.00
10,000.00
95.00
9,000.00
75.00
8,000.00
7,000.00 55.00
6,000.00 35.00
Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20
CNX NIFTY Equitas
Equitas Holdings Ltd. and S&P BSE Sensex
Equitas Holding and BSE Sensex

42,000.00 155.00
40,000.00 135.00
38,000.00
115.00
36,000.00
95.00
34,000.00
75.00
32,000.00
30,000.00 55.00
28,000.00 35.00
Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20
BSE Sensex Equitas
Shareholding pattern as on March 31, 2020:

Description No. of holders No. of Shares % Equity
Foreign Corporate Bodies 3 44,988,805 13.16
Foreign Portfolio Investors 86 97,976,894 28.67
Non-Resident Indians / Non-Resident Indians - Non Repatriable 1,152 1,316,234 0.39
Mutual Funds 19 107,518,974 31.46
Resident Individuals 295,166 72,849,445 21.31
Bodies Corporates 951 5,120,848 1.49
Alternative Investment Fund 11 5,867,871 1.72
Banks / Indian Financial Institutions 2 589,929 0.17
Others(Trusts, Qualified Institutional Buyer, Clearing Members, NBFC) 206 5,560,995 1.63
Total 297,596 341,789,995 100.00
Distribution of equity shareholding as on March 31, 2020:

No. of
Category (Shares) % of shareholders No. of shares % of shares
shareholders
1-500 280,909 94.39 14,845,670 4.34
501- 1000 9,130 3.07 6,921,940 2.03
1001- 2000 4,174 1.40 5,921,060 1.73
2001- 3000 1,239 0.42 3,100,073 0.91
3001- 4000 529 0.18 1,861,911 0.54
4001- 5000 392 0.13 1,816,578 0.53
5001- 10000 595 0.20 4,258,560 1.25
10001& Above 628 0.21 303,064,203 88.67
Total 297,596 100.00 341,789,995 100.00

7. Other Disclosures clearance from Designated Persons for dealing in

A. Related Party Transactions the securities of the Company as per the criteria
The particulars of transactions between the specified therein and prohibits the purchase or sale
Company and its related parties, as defined under of securities of the Company while in possession of
Section 2(76) of the Act and in Accounting Standard Unpublished Price Sensitive Information in relation
18, are set out in the financial statements. The to the Company besides during the period when the
Board has put in place a policy on related party trading window is closed.
transactions and the same has been uploaded
on the Company’s website https://www.equitas. H. Certification on non-incurrence of disqualification
in/pdfEHLPolicyonRelatedPartyTransactions.pdf. M/s B Ravi & Associates, Practising Company
There were no materially significant related party Secretaries have given a certificate to the Board
transactions having potential conflict with the confirming that none of the Directors on the Board
interests of the Company, during the year 2019-20. of the Company have been debarred or disqualified
from being appointed or continuing as directors
B. Details of non-compliances by the company, of companies by the Board/Ministry of Corporate
penalties, strictures imposed on the company Affairs or any such statutory authority. The said
by the stock exchanges or SEBI or any statutory certificate forms part of this Report.
authorities on any matter related to capital markets
during the last three years: I. Details of fee remitted to Statutory Auditors
Nil The total fees incurred by the Company and its
Subsidiary, ESFBL on a consolidated basis for
C. Whistle blower policy the services rendered by Statutory auditors for
The Company has established a Whistle Blower FY 2019-20 is given below:
Policy pursuant to which Directors, employees and
Company ESFBL
vendors of the Company can report their concerns Particulars
(` in lakhs) (` in lakhs)
on unethical and improper behavior, practices, (i) In capacity as auditors
actual or suspected fraud or violation of the Audit fees (includes fee for 37.20 53.40
Company’s Code of Conduct or any other wrongful limited review)
conduct in the Company or of its employees. None Statutory Certificates 2.75 41.90
of the personnel has been denied access to the Other Reporting services 1.81 Nil
Audit Committee. Reimbursement of expenses 0.07 1.17
(ii) Other capacity
D. Mandatory Requirements IPO Related Nil 158.43
The Company is in compliance with the Network entity - Ernst & Young Nil 33.43
mandatory requirements. LLP
E. Non-Mandatory Requirements
J. Disclosures relating to Sexual Harassment of
The Company has a record of unqualified financial
Women at Workplace (Prevention, Prohibition and
statements from inception.
Redressal) Act, 2013

During the year, Auditors have had separate Particulars Details
discussions with the Audit Committee without the No. of complaints filed during FY 2019-20
presence of the Management team. No. of complaints disposed of during FY 2019-20
Nil
No. of complaints pending as at the end of
The Company has complied with the requirement FY 2019-20
of having separate persons to the post of Chairman
and Managing Director / Chief Executive Officer. 8. Compliance
Mr. Rangachary N is the Chairman of the Board The Company is in compliance with the requirements
and Mr. John Alex is the Executive Director & Chief stipulated under Regulations 17 to 27 and Clauses
Executive Officer of the Company. (b) to (i) of sub-regulation (2) of Regulation 46 of
SEBI Listing Regulations and amendments thereto,
F. Subsidiary Companies as applicable, with regard to Corporate Governance.
A policy on material subsidiaries has been formulated
and the same is posted on the Company’s website, S R Batliboi & Associates LLP, Statutory Auditors
https://www.equitas.in/pdf/EHL_Policy_Materiality have certified that the Company has complied with
pdf. The financial statements of subsidiary companies the mandatory requirements as stipulated under
are tabled at the Board Meeting every quarter. SEBI Listing Regulations.
G. Internal Code of conduct for Prevention of Insider 9. ED & CEO and CFO Certification
Trading ED & CEO and CFO have given a certificate to
The Board has adopted an Internal Code of Conduct the Board as per Regulation 17 of SEBI Listing
for Prevention of Insider Trading in the securities Regulations. The said certificate forms part of
of the Company. The Code inter alia requires pre- this Annual Report.
10. Code Of Conduct

The Company has laid down a Code of Conduct for the Members of Board of Directors and Senior Management
Personnel. The Code of Conduct is available on the website of the Company at https://www.equitas.in/pdf/
CodeofConductforDirectors.pdf.
11. Equity Shares in the Demat Suspense Account

In accordance with the requirement of Regulation 34(3) and Schedule V Part F of SEBI Listing Regulations, the
Company reports that there are no equity shares lying in the demat suspense account which were issued in
dematerialised form pursuant to the public issue of the Company.
Number
Number of
Particulars of equity
shareholders
shares
Aggregate number of shareholders and the outstanding shares in the demat suspense account of the Nil Nil
Company as on April 1, 2019.
Shareholders who approached the Company for transfer of shares from demat suspense account Nil Nil
during the year.
Shareholders to whom shares were transferred from the demat suspense account during the year Nil Nil
Aggregate number of shareholders and the outstanding shares in the demat suspense account of the Nil Nil
Company as on March 31, 2020
12. Transfer of Unclaimed / Unpaid Amounts to the Investor Education and Protection Fund:
The Company has not declared any dividends from its incorporation. Hence, there is no unclaimed dividend
relating to the earlier financial years, which needs to be transferred to the Investors Education and Protection
Fund, in terms of Section 125 of the Act.
For and on behalf of the Board of Directors

ED & CEO Chairman
I confirm that for the Financial Year ended March 31, 2020, Members of the Board and Senior Management
Personnel have affirmed compliance with the Code of Conduct as applicable to them.
John Alex
ED & CEO
May 29, 2020 Chennai

Compliance Certificate
The Board of Directors

Madam/Dear Sirs,
This is to certify that:
1. We have reviewed Financial Statements and the Cash Flow Statement for the Financial Year ended March 31,
2020 and that to the best of our knowledge and belief:
a. these statements do not contain any materially untrue statement or omit any material fact or contain
statements that might be misleading;
b. these statements together present a true and fair view of the Company’s affairs and are in compliance with
existing Accounting Standards, applicable laws and regulations.
2. There are, to the best of our knowledge and belief, no transactions entered into by the Company during the year
which are fraudulent or illegal or violative of Company’s Code of Conduct.
3. We accept responsibility for establishing and maintaining internal controls for Financial Reporting and we have
evaluated the effectiveness of internal control systems of the Company pertaining to financial reporting. There
have been no deficiencies in the design or operation of such internal controls.
4. There have not been any:
a. Significant change in internal control over financial reporting during the year;
b. Significant change in accounting policies during the year and that the same have been disclosed in the notes
to the financial statements; and
c. Instance of significant fraud of which we have become aware and the involvement therein, if any, of
the management or an employee having a significant role in the Company’s internal control system over
financial reporting.
Thanking You,
Yours truly,
For Equitas Holdings Limited
John Alex Srimathy R

ED & CEO CFO
Date: May 29, 2020

Place: Chennai
Certificate of Non-Disqualification of Directors

(Pursuant to Regulation 34(3) and clause (10)(i) of Para C of Schedule V of SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015)
Based on the scrutiny of relevant records, forms, returns and information provided by EQUITAS HOLDINGS LIMITED
(the ‘Company’), CIN: L65100TN2007PLC064069, having its registered office at 410A, 4th Floor, Spencer Plaza, Phase
II, No.769, Mount Road, Anna Salai, Chennai 600002 and verification of disclosures and declarations given by the
Directors under applicable statutes and also based on the verification of facts regarding the Board of Directors
of the Company, available in the public domain, we hereby certify that as on 31.03.2020, none of the Directors on
the Board of the Company have been debarred or disqualified from being appointed or continuing as Director of
companies either by the Securities and Exchange Board of India or the Ministry of Corporate Affairs or any such
statutory authority.
Place: Chennai Signature:

Date: 17.04.2020 Name of Company Secretary in practice: Dr. B Ravi
FCS No.: 1810 CP No.: 3318

Managing Partner
B Ravi & Associates
Firm Registration Number: P2016TN052400
UDIN: F001810B000162344

Business Responsibility Report

(Pursuant to Regulation 34 (2)(f) of the Securities and Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015 (“Listing Regulations”)
Introduction
Equitas Holdings Limited is a Core Investment Company which carries on business through its subsidiaries viz., Equitas
Small Finance Bank Limited (ESFBL) and Equitas Technologies Private Limited (ETPL) (collectively referred as “Equitas
Group”). The disclosures in this report are aligned to the Principles of Business Responsibility as prescribed under the
National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business (NVG-SEE) released
by Ministry of Corporate Affairs, Government of India. This report provides transparent and relevant information on
the Equitas Group’s efforts and its performance against the nine principles of Business Responsibility.
Section A: General information about the company

1 Corporate Identity Number (CIN) of the Company L65100TN2007PLC064069
2 Name of the Company Equitas Holdings Limited
3 Registered address 410A, 4th Floor, Phase II, Spencer Plaza No. 769, Mount Road,
Anna Salai, Chennai – 600002
4 Website www.equitas.in
5 Email id secretarial@equitas.in
6 Financial year reported 2019-20
7 Sector(s) that the Company is engaged in (industrial activity National Industrial Classification 2008 Section K: Financial and
code-wise) Insurance Activities Code: 64191
8 Three key products/services of the Company (as in balance Core Investment Company making investments in Subsidiary
sheet) Companies
9 Number of international locations Nil
10 Number of National locations Equitas Group has operations in more than 853 locations across 15
States/Union Territories (including National Capital Territory) of
the country.
11 Markets served by the Company – Local/State/National/ National
International
Section B: Financial details of the company

S. No. Particulars Details
1. Paid up capital (` in lakhs) 34,179
2 Total turnover (` in lakhs) 1,906.87
3 Total profit after taxes (` in lakhs) 769.38

4 Total spending on Corporate Social Responsibility (CSR) as a 4.34%
percentage of Profit After Tax (%)
5 List of activities in which expenditure in 4 above has been Educational Initiatives carried out through Equitas Development
incurred Initiatives Trust (EDIT), a Public Charitable Trust set up by the
Company, which runs schools in Seven locations across Tamil Nadu.
Details of CSR activities carried out by Equitas Group are discussed
under MD&A report, which form part of the Annual Report.
Section C – Other Details

1. Does the Company have any Subsidiary Company/ Companies? Yes
2. Do the Subsidiary Company/Companies participate in the BR Yes. Equitas Group as a whole actively carries out the BR
Initiatives of the parent Company? If yes, then indicate the initiatives.
number of such Subsidiary Company(s)
3. Do any other entity/entities (e.g. suppliers, distributors No
etc.) that the Company does business with, participate in
the BR initiatives of the Company? If yes, then indicate the
percentage of such entity/entities? [Less than 30%, 30-60%,
More than 60%]
Section D: BR Information
1. Details of Director(s) responsible for BR
(a) Details of the Director responsible for implementation of the BR policy(ies)
1. DIN: 08584415
2. Name: Mr. John Alex
3. Designation: ED & CEO
(b) Details of the BR head

1. DIN (if applicable): 08584415
2. Name: Mr. John Alex
3. Designation: ED & CEO
4. Telephone number: + 91 44 4299 5000
5. e-mail id: corporate@equitas.in
2. Principle-wise (as per National Voluntary Guidelines) BR Policy(ies)

Equitas Holdings Limited is a Core Investment Company which carries on the business through its Subsidiaries
viz., ESFBL and ETPL. Therefore, the following sections capture BR compliances at the Group level.
No. Questions P1 P2 P3 P4 P5 P6 P7 P8 P9
1 Do you have a policy(ies) for.... Y Y Y Y Y Y N Y Y
2 Has the policy been formulated in consultation with Y Y Y Y Y Y - Y Y
the relevant stakeholders?
3 Does the policy conform to any national / Y Y Y Y Y Y - Y Y
international Standards?
If yes, specify? (50 words)*
4 Has the policy been approved by the Board? Y Y Y Y Y Y - Y Y
5 Does the Company have a specified Committee Y Y Y Y Y Y - Y Y
of the Board/ Director/ Official to oversee the
implementation of the policy?
6 Indicate the link for the policy to be viewed online All Policies which are statutorily required to be displayed on our
website www.equitas.in
7 Has the policy been formally communicated to all Communication on policies covering all internal and external
relevant internal and external stakeholders? stakeholders is an on-going process.
8 Does the Company have in-house structure to Y Y Y Y Y Y - Y Y
implement the policy(ies)
9 Does the Company have a grievance redressal Y Y Y Y Y Y - Y Y
mechanism related to the policy(ies) to address
stakeholders’ grievances related to the policy(ies)
10 Has the Company carried out independent audit / The Heads of Departments are responsible for effective
evaluation of the working of these policies by an implementation of the Policies. The Compliance Department
internal or external agency? of ESFBL monitors the adherence to implementation of policies
mandated by RBI.
* All Policies have been formulated after detailed deliberations on best practices adopted by banks and financial institutions and
customised as per our requirements.
P1
Code of Conduct adopted for employees, P4
The interests of the marginalised and
Directors and senior management and Whistle vulnerable stakeholders are addressed through
Blower Policy ensure conducting of business Priority Sector Lending and Financial Inclusion.
with Ethics, Transparency and Accountability. The Fair Practices Code protects the interests
of customers who are primarily from the
P2
Fair Practices Code promote responsible vulnerable sections of the society. Corporate
lending and banking practices. It ensures guard Social Responsibility [CSR] Policy seeks to engage
against over-leveraging to ensure sustainability, with client communities through community
throughout the life cycle of the customer. development initiatives and improve their life
and life style on a holistic basis. This Policy can
P3
Policy on Prevention of Sexual Harassment be viewed online at www.equitas.in
and Whistle Blower Policy, endeavors to
maintain an organisation wide environment P5
Code of Conduct for employees lays down
of care, concern, nurturing and to provide acceptable employee behavior while
an opportunity to women employees to dealing with clients on various aspects,
accomplish their professional aspirations. This including human rights.
Policy can be viewed online at www.equitas.in.

P6 Policy on Environmental and Social Safeguards employees are expected to demonstrate throughout
framework for Micro & Small Enterprises their tenure as employees of the organisation. It
ensures integration of environmental and also guides all employees to uphold the values of
social safeguards into the appraisal process of Equitas Group. The Code covers aspects related
loan applications for micro & small enterprises. but not limited to ethics, accountability, conflict of
interest, bribery and corruption. Equitas Group has
P7
While there is no specific policy outlined in also adopted Code of Conduct for Directors & Senior
respect of this Principle, Equitas Group, through Management to provide a framework to the Board
various trade bodies and associations, puts members and Senior Management in ensuring
forth a number of suggestions with respect to adoption of highest ethical standards in managing
the financial services sector. the affairs of the Group. The Group’s commitment
to ethics and accountability is emphasised upon in
P8 The very idea behind differentiated licensing all interaction with the stakeholders, right from the
of Small Finance Banks is to further the agenda time of association with the Group.
of financial inclusion and bring about equitable
development. Hence, the entire operations of 2.
How many stakeholder complaints have been
the Company’s Subsidiary are aligned towards received in the past financial year and what
this commitment. Further, in accordance with percentage was satisfactorily resolved by the
the Corporate Social Responsibility Policy, management? if so, provide details thereof, in about
Equitas Group carries out various social 50 words or so.
initiatives to promote equitable development Equitas Group has established various channels
amongst its client communities. of communication, including grievance redressal
mechanisms, for stakeholders to communicate
P9
Equitas Group has undertaken wide range their expectations and concerns. The details of the
of social initiatives under Corporate Social stakeholder complaints are as below:
Responsibility Policy to improve the quality
of life of its client communities. Details of Complaints
% of complaints
Particulars received during
the same are given in the MD&A Report, resolved
2019-20
which forms part of the Annual Report. ESFBL
has a Board approved Customer Grievance Customer complaints 1,979 97.3%
Redressal Policy for expeditious redressal of Investor complaints 1 100%
customer grievances.
Principle 2: Businesses should provide goods and services
Governance related to BR that are safe and contribute to sustainability throughout
their life cycle
(a) Indicate the frequency The performance on
with which the Board of aspects of BR is reviewed
1.
List up to 3 of your products or services whose
Directors, Committee of by CEO on a periodic
design has incorporated social or environmental
the Board or CEO assesses basis i.e., at least once a
concerns, risks and/or opportunities.
the BR performance of the year.
The Bank believes that it has a critical role to carry
Company (Within 3 months,
3-6 months, Annually, More
out in furthering financial inclusion in the nation
than 1 year). to accomplish inclusive growth and equitable
development. Towards this end, the Bank caters to
(b) Does the Company publish Business Responsibility those who do not have access to formal financial
a BR or a Sustainability Report forms part of the
system by offering loan products such as Micro
Report? What is the Annual Report. The same
Finance, Commercial Vehicle Finance, Housing
hyperlink for viewing this can be viewed at
Finance, Loan against Property, Agri Loans, Gold
report? How frequently it is https://www.equitas.in/
Loans, Business Loans etc. Along these lines, we are
published? annual-reports.php
actively involved in financial inclusion. The Bank
principally deals with financially vulnerable sections
Section E: Principle-Wise Performance of the society and hence it is even more critical to
Principle 1: Businesses should conduct and govern be mindful and responsible in lending to guard the
themselves with ethics, transparency and accountability borrowers from getting over leveraged. The Bank
carries out due diligence to ascertain the repayment
1.
Does the policy relating to ethics, bribery and capacity of the borrowers before lending.
corruption cover only the company? Does it extend
to the Group/ Joint Ventures/ Suppliers/Contractors/ Micro Finance: Micro lending is targeted at women
NGOs/Others? who belong to the economically weaker sections of
Equitas Group has put in place a Code of Conduct the society (with household income less than ` 1.6
which covers all its employees. The Code articulates lakhs per annum). Most of these loans are for income
the ethical principles and acceptable behavior that the generation purposes, which provide assistance
to our customers to increase their household installation of CFL and other low energy consuming
income, develop financial independence over time office gear, limited printer and copier utilisation.
and for most of our customers, an opportunity to
become part of the formal financial system. All of 3.
Does the company have procedures in place for
our customers are included in the Credit Bureau sustainable sourcing (including transportation)? If
database thereby ensuring their inclusion into the yes, what percentage of your inputs was sourced
formal economy. sustainably? Also, provide details thereof, in about
50 words or so.
Vehicle Finance: These loans are provided As a responsible corporate citizen, Equitas Group
predominantly to first time entrepreneurs in the endeavors to reduce the environmental impact of
commercial logistics service industry, who have its operations. The Bank has made conscious efforts
the expertise but lack capital to own a commercial to reduce the usage of paper through various
vehicle of their own. This loan provides them with digital initiatives, some of which have been outlined
the opportunity to own their business and improve elsewhere in this document.
or develop their socio-economic standing.
4. Has the company taken any steps to procure goods

MSE and Financial Intermediaries: The Bank provides and services from local & small producers, including
capital in the form of term loans to enterprises communities surrounding their place of work? if
which are small and have turnover in the range of yes, what steps have been taken to improve their
` 1 – 10 crores. The loan sizes typically vary between capacity and capability of local and small vendors?
` 10 – 100 lakhs. The business of Equitas Group is service oriented
and not material resource intensive. The human
Housing Finance: The Bank supports the aspiration resource and other services required for our
of owning a house for a large segment of low- day-to-day activities are by and large sourced within
income families by focusing on affordable housing. the neighborhood to the extent feasible.
The Bank also offers the benefits accruing under
Pradhan Mantri Awas Yojana to deserving A significant number of the financial products offered
beneficiaries from economically weaker sections by the Bank are utilised for empowering business
and low-income groups. enterprise, innovation and capacity building among
the financially vulnerable segments of the society. It
2. For each such product, provide the following details empowers them to scale up business activities. In the
in respect of resource use (energy, water, raw long-run, this prompts better financial prospects for
material etc.) per unit of product (optional): local businesses, which are clients of the Bank. The
(a) Reduction during sourcing/production/ improved business environment indirectly benefits
distribution achieved since the previous year other local businesses, which are not clients.
throughout the value chain?
(b) Reduction during usage by consumers The Bank has set up Business Correspondents (BCs)
(energy, water) has been achieved since channel of banking, which aims to empower local
the previous year? business owners, usually micro-businesses, to act as
The Bank consciously endeavors to reduce the centers of banking.
use of paper. Towards this end, tab-based loan
processing is being used in micro finance lending. 5.
Does the company have a mechanism to recycle
Similarly, opening Selfe FD and Selfe savings account products and waste? If yes, what is the percentage
through digital platforms, initiatives are also being of recycling of products and waste (separately as
implemented in other segments as well. We have <5%, 5-10%, >10%). Also, provide details thereof, in
also introduced eco-friendly paper pads, pens & about 50 words or so.
pencils at our boardroom. Our operational practices are engaged to constantly
reduce utilisation of paper and dynamic measures
The account holders of the Bank are advised to are being implemented across different processes
embrace paper-free banking practices like e-mail (Refer to Principle 2: Question 2) to facilitate the
account statements, internet banking, mobile same. Our digital banking and other related activities
banking, e-Wallet, Electronic Toll Collection and additionally endeavor to meet sustainability
other such activities. objectives of waste reduction and more efficient
resource utilisation. On this front, we have
We pursue other sustainable practices to reduce our accomplished 56% customer digital penetration,
impact on the environment and promote efficient which significantly reduces consumption of paper
consumption of resources viz., Heating, Ventilation and other unsustainable resources.
and Air Conditioning (HVAC) run time observing,

Principle 3 – Businesses should promote the well-being imparted through the e-learning platform and
of all employees learning days allocated for the same every month.
1 Total number of Employees 16,159
2 Total number of employees 28 The details of employees who underwent skill up-
hired on contractual basis gradation training during FY 2019-20 are as follows:
3 Number of permanent 1,745 Permanent Employees 11,450
women employees Permanent Women Employees 1,645
4 Number of permanent 86 Contractual Employees Nil
employees with disabilities Employees with Disabilities Nil
5 Is there an employee Equitas Group engages with
association that is employees through various Principle 4: Businesses should respect the interests of, and
recognised by management fora to obtain constructive be responsive towards all stakeholders, especially those
6 Percentage of your feedback. Regular Audio bridges who are disadvantaged, vulnerable and marginalised.
permanent employees are conducted offering an
who are members of this opportunity for all employees 1. Has the company mapped its internal and external
recognised employee to directly express their views, stakeholders?
association ideas and feedback to the top Equitas Group engages with multiple stakeholders
management. through formal and informal channels of
While there is a structured communication. The key stakeholder groups are
employee grievance redressal identified as follows:
mechanism in place, employees
i) Customers
are also encouraged to directly
approach CEO and Audit ii) Employees
Committee in case of serious
grievances or unethical practices. iii) Investors
iv) Vendors / Service Providers
7. Please indicate the number of complaints relating
v) Regulators
to child labour, forced labour, involuntary labour,
sexual harassment in the last financial year and vi) Community
pending, as on the end of the financial year.
Equitas Group constantly strives to keep the channels
No. of of communication open and transparent with all its
No. of
complaints
complaints stakeholders, with a view to maximising stakeholder
pending as satisfaction and value creation.
No. Category filed during
at the end
the financial
of financial
year 2.
Out of the above, has the company identified
year
1 Child labour/ forced labour/ Nil Nil the disadvantaged, vulnerable & marginalised
involuntary labour stakeholders?
2 Sexual Harassment 7 Nil Equitas Group engages with vulnerable and
3 Discriminatory Employment Nil Nil marginalised sections of society through its loan
products, employment practices, community
engagement initiatives and technology-enabled
8.
What percentage of your under mentioned
services. Through the Rural and Inclusive banking
employees were given safety & skill up-gradation
activities, the Bank engages with economically
training in the last year?
excluded sections of the society to create financial
literacy and further the agenda of financial inclusion
All employees are given periodical training on
through specialised products.
precautions and procedures to be followed in cases
of emergencies such as fire, earthquake and other
3.
Are there any special initiatives taken by the
natural calamities.
company to engage with the disadvantaged,
vulnerable and marginalised stakeholders? if so,

In respect of skill training, Equitas Group has
provide details thereof, in about 50 words or so.
institutionalised learning and development process
Equitas Group directly or through its implementing
to create right competencies across various levels
agency, Equitas Development Initiatives Trust (EDIT)
and help in career progression of employees. The
engages with stakeholders such as women, people
key focus during the year has been on imparting
with disabilities, unemployed youth and pavement
functional and technical training to the employees.
dwellers to create a positive impact through
Virtual Training Sessions were conducted for
community development initiatives.
employees in Branch Banking for the launch of Elite
Savings Account. Leadership Development Programs
EDIT runs seven schools primarily for socially and
for Managers were designed and conducted
economically weaker sections of society. These
completely in-house. Special recognition program
schools provide affordable schooling to students
“High Achievers Club” for consistent top performers
belonging to economically weak backgrounds,
of Equitas was launched. Extensive training was
with an emphasis on the quality of the education social safeguards into the appraisal process of loan
imparted. Around 5,700 students have benefitted applications for micro & small enterprises.
from these schools.
2.
Does the company have strategies/ initiatives to

EDIT has empowered around half a million address global environmental issues such as climate
women by imparting training in easily learnable change, global warming etc.? If yes, please give
vocational skills such as tailoring, doll making and hyperlink for webpage etc.
artificial jewellery making enabling them to earn In regard of its activities, Equitas Group focuses on
additional income. decreasing the utilisation of paper to lessen the
carbon footprint. Towards this end, the Bank has
EDIT actively conducts job fairs across India for embarked its digital footprint over its products
unemployed youth of low income communities, offerings and has been a consistent leader across
thereby providing gainful employment to over Small Finance Banks. Our focus is to empower clients
1,80,000 unemployed youth from lower income with ease of access and to transact efficiently and
segment. The recruitment and employment practices effectively using our variety of Digital offerings,
of Equitas Group are also attuned towards talent along these lines lessening the dependence on
spotting and acquisition from among marginalised paper-based banking activities. The operations
sections of the society. of ETPL are carried out by utilising mobile and
online applications. A number of new activities and
EDIT also provides access to affordable healthcare products are through digital channels.
through various medical initiatives and medical
camps which has benefitted over 6 million We have made extensive progress in this strategy
people cumulatively. by accomplishing about 56% digital penetration
among our clients. We give an assortment of digital
Principle 5: Businesses should respect and promote offerings - Internet and Mobile banking, Electronic
human rights toll collection, Digital Savings account opening,
Virtual Debit card, Digital fund transfers etc.
1. Does the policy of the company on human rights
cover only the company or extend to the Group/

Our efficient operational practices, digital
Joint Ventures/ Suppliers/Contractors/NGOs/others?
banking and environment management practices
Equitas Group is committed to upholding the
help us reduce our environmental footprint and
dignity of every individual engaged or associated
help us achieve environmentally sustainable
with the Group. A strong commitment to human
business practices.
rights is embedded in the Fair Practices Code as
well as Employee Code of Conduct which lays down
3.
Does the company identify and assess potential
acceptable behaviour on various aspects including
environmental risks?
human rights. All employees who have direct
Equitas Group is aware of the potential
interface to customers including collection staff
environmental risks. We have also integrated
are trained to be polite and courteous to customers
environmental and social safeguards into the loan
under all circumstances. This code is applicable for
appraisal process.
all employees, associates, business partners and
Group companies with utmost importance placed
4. Does the company have any project related to clean
on fairness and transparency.
development Mechanism? If so, provide details
thereof, in about 50 words or so. Also, whether any
2.
How many stakeholder complaints have been
environmental compliance report is filed?
received in the past financial year and what percent
As detailed under Points 1-3 above, Equitas Group,
was satisfactorily resolved by the management?
through its initiatives, is aware of the importance
Kindly refer to response to Principle 1 – Question 2.
of safeguarding the environment. As on date, the
Group did not carry out any project related to the
Principle 6: Business should respect, protect and make
Clean Development Mechanism.
efforts to restore the environment
1. Does the policy related to Principle 6 cover only the 5. Has the company undertaken any other initiatives
Company or extends to the Group/Joint Ventures/ on – clean technology, energy efficiency, renewable
Suppliers/ Contractors/NGOs/Others energy etc.? If yes, please give hyperlink for web
Equitas Group recognises the need to respect, page etc.
protect and make efforts to restore the environment As explained above, Equitas Group focuses on
in all its activities. Some of the initiatives taken in reducing the usage of paper and provides alternate
this regard have been outlined under Principle banking channels like internet banking, mobile
2 – Question 2. banking, ATMs, Tab-based account opening, online
& mobile account opening etc.

The Group also endeavors to promote sound
environmental, social and governance standards
Focus is placed on energy efficiency, through
(ESG). The Bank has a Policy on Environmental practices including installation of CFL & LED light
and Social Safeguards framework for Micro & fixtures and installation of similar energy efficient
Small Enterprises, integrating environmental and office equipment. We also aim to leverage digital

banking and digital business initiatives to reduce Principle 8: Businesses should support inclusive growth
environmental impact related to usage of paper and equitable development
and reducing the need for travel by customers
The main focus of Equitas Group is inclusive growth
to bank branches.
and equitable development. The word “Equitas” is
a Latin word meaning justice, fairness and equity.

The Group has also implemented paperless
Towards this end, we wish to state that the very idea
recruitment process from application by the
behind differentiated licensing of Small Finance Banks
candidate to offer letter generation. This has
is to further the agenda of financial inclusion and bring
reduced the need for travel by recruitment
about equitable development. Hence, the operations of
executives and candidates. This also reduces paper
ESFBL are primarily directed towards inclusive growth
and printer usage during the recruitment process.
and equitable development.
We have also introduced eco-friendly paper pads,
pens & pencils at our boardroom.
The Bank through its Micro Finance loan programs
supported about 18,134 persons with disabilities during
6. Are the emissions/Waste generated by the company
FY 2019-20 and cumulatively over 50,489 persons. Of
within the permissible limits given by CPCB/SPCB for
these, around 2,275 visually challenged persons were
the financial year being reported?
supported during the year and cumulatively 7,815.
The operations of Equitas Group do not result in any
Encourged by this inclusive model we have mainstreamed
significant environmental or pollution related issues.
193 Transgender in women’s group.
7. Number of show cause/ legal notices received from
1.
Does the company have specified programmes /
CPCB/SPCB which is pending (i.e. not resolved to
initiatives/ projects in pursuit of the policy related
satisfaction) as on end of Financial Year.
to Principle 8? If yes, details thereof.
The operations of Equitas Group do not result in
The focus of Equitas Group is to improve the
any significant environmental or pollution related
quality of life of customers by increasing their total
issues. No notices were received by the Group as on
household asset value. Customers, who have not
March 31, 2020.
been able to access formal financing, are provided
transparent and trustworthy access to financing.
Principle 7: Businesses, when engaged in influencing
The Group has also developed a wide range of social
public and regulatory policy, should do so in a responsible
initiatives towards improving the quality of life of
manner
its client communities. As a Bank, we have been
1. Is your company a member of any trade and chamber able to enhance our association with the financially
or association? If yes, name only those major ones excluded section of the society. We not only offer
that your business deals with: credit, which is typically of a short-term nature but
Some of the key trade and industry associations also liabilities products like deposits, insurance etc.
where the Group is represented, include:
Equitas Group also undertakes various activities
i. Indian Banks’ Association (IBA)
through the Equitas Development Initiatives Trust
ii.
Fixed Income Money Market and Derivatives (EDIT) which support inclusive growth and equitable
Association (FIMMDA) development. These CSR initiatives include providing
high quality affordable education to students
iii.
SaDhan – The Association of Community
belonging to economically weaker sections,
Development Finance Institutions
providing vocational skills to the unemployed to
iv. Association of Mutual Funds in India (AMFI) include them in the formal economy, providing
free healthcare etc. Details of such activities are
v. Confederation of Indian Industry (CII)
explained in other sections of this report.
vi. The Indus Entrepreneurs (TiE)
2. Are the programmes / projects undertaken through
2.
Have you advocated/lobbied through above in-house team/own foundation/external NGO/
associations for the advancement or improvement government structures/any other organisation?
of public good? If yes, specify the broad areas Inclusive growth and equitable development
(governance and administration, economic reforms, is provided to customers through our banking
inclusive development policies, energy security, activities, especially through the financing activities
water, food security sustainable Business Principles, of the Inclusive Banking division and Emerging
others) Enterprise Banking division of the Bank.
Through various industry associations and in various
forums, Equitas has promoted various social and CSR programmes are undertaken by Equitas Group,
welfare initiatives like responsible lending, financial directly as well as through implementing agency,
literacy, creation of a more transparent financial Equitas Development Initiatives Trust, a registered
system, ease of credit access to the underbanked/ public charitable trust. CSR initiatives carried out by
unbanked, operational ease of providing loans to Equitas Group are detailed in the MD & A Report,
economically excluded sections of the economy, etc. which forms part of the Annual Report.
3.
Have you done any impact assessment of your care initiatives, vocational skills training programs,
initiative? provides educational assistance & scholarships
Social Impact study was conducted for all social and micro-credit facilitation as required by the
initiatives for the period from 2016-2018 by an rehabilitated families for their holistic development.
external agency (Social Audit Network). The
outcomes of CSR activities carried out through Principle 9: Businesses should engage with and provide
EDIT have been aligned to 8 of the Sustainable value to their customers and consumers in a responsible
Developmental Goals (SDG’s) thereby leading to manner
social impact on the followings SDG’s
1. What percentage of customer complaints/consumer
1.
Ending Poverty in slums using the cases are pending as on the end of financial year.
Holistic Ecosystem 2.7% of the customer complaints are pending as
at the end of the Financial Year 2019-20. All the
2. Extending Health Services pending complaints have since been resolved within
the prescribed timelines.
3. Quality Education through its Schools
2. Does the company display product information on
4. Gender Equality the product label, over and above what is mandated
as per local laws?
5. Decent work & Economic growth through its The Group endeavors to provide transparent
job Fairs and skill training information on its products through its website
which has detailed information on product features,
6. Reduced inequalities service charges and fees applicable. In respect of
the Bank, interest rates for various deposit schemes
7. Sustainable Cities & Community are published on the website. SMS alerts are sent
to customers when charges or fees get triggered or
8. Partnership for the Goals levied in their deposit accounts.
4.
What is your company’s direct contribution to
As an NBFC-MFI, Equitas was the pioneer in
community development projects - amount in INR disclosing the interest rates on reducing balance
and the details of the projects undertaken? basis in the customer passbook, which later became
The details of the contribution towards CSR a regulatory norm for the industry.
initiatives are available in CSR Report forming part
of Annual Report. 3. Is there any case filed by any stakeholder against
the company regarding unfair trade practices,
5. Have you taken steps to ensure that this community irresponsible advertising and/or anti-competitive
development initiative is successfully adopted by behaviour during the last five years and pending
the community? Please explain in 50 words, or so. as on end of financial year. If so, provide details
CSR initiatives are reviewed by Board-level CSR thereof, in about 50 words or so.
Committee of the respective entities, on a periodic Nil
basis. The Group closely tracks not only the number
of beneficiaries but also qualitative improvement in 4. Did your company carry out any consumer survey /
the lives of beneficiaries. The educational initiatives consumer satisfaction trends?
undertaken through implementing agency, EDIT The Bank has an active customer service
creates enduring value for the beneficiaries by department, which ensures that continuous steps
empowering people to rise above their existing are taken to ensure customer satisfaction in all
socio-economic constraints. The Schools run by their dealings with the Group. During the year, the
EDIT cater predominantly to people from the Bank conducted a customer loyalty study. The study
lower income group. The children studying in these provided insights into the areas the Bank needed to
schools develop English speaking skills apart from focus for improving its “Truly Loyal” indicator.
their academic pursuits, where they are continuing
to do well. This apart, they also develop life skills
and get their personality shaped which would go
a long way in changing the future outlook of their For and on behalf of the Board of Directors
life. The Bank is also involved in a pavement dwellers
uplifting program, called Equitas Bird’s Nest (EBN). John Alex Rangachary N
Through this program, more than 308 homeless ED & CEO Chairman
pavement dwelling families were provided formal May 29, 2020 Chennai Bengaluru
housing in FY 2019-20. EBN also conducts health

Independent Auditor’s Report
To the Members of Equitas Holdings Limited Emphasis of Matter

Report on the Audit of the Standalone Financial We draw attention to the following matters:
Statements
a.
note no 2.1 to the accompanying financial
Opinion
statements, which describes the economic and
We have audited the accompanying standalone financial
social disruption the Company is facing as a result of
statements of Equitas Holdings Limited (“the Company”),
COVID-19 pandemic, and its possible consequential
which comprise the Balance sheet as at March 31, 2020, the
implications, on the Company’s operations and
Statement of Profit and Loss, including the statement of
financial metrics.
Other Comprehensive Income, the Cash Flow Statement
and the Statement of Changes in Equity for the year then b.
note no 8c to the accompanying financial
ended, and notes to the financial statements, including statements regarding management’s plans relating
a summary of significant accounting policies and other to compliance by Equitas Small Finance Bank
explanatory information. Limited, the Company’s subsidiary, with the relevant
licensing guidelines of the Reserve Bank of India.
In our opinion and to the best of our information and
according to the explanations given to us, the aforesaid Our opinion is not modified in respect of
standalone financial statements give the information these above matters.
required by the Companies Act, 2013, as amended (“the
Act”) in the manner so required and give a true and Key Audit Matters
fair view in conformity with the accounting principles Key audit matters are those matters that, in our
generally accepted in India, of the state of affairs of the professional judgement, were of most significance in
Company as at March 31, 2020, its profit including other our audit of the standalone financial statements for the
comprehensive income its cash flows and the changes in financial year ended March 31, 2020. These matters were
equity for the year ended on that date. addressed in the context of our audit of the standalone
financial statements as a whole, and in forming our
Basis for Opinion opinion thereon, and we do not provide a separate
We conducted our audit of the standalone financial opinion on these matters. For each matter below, our
statements in accordance with the Standards on Auditing description of how our audit addressed the matter is
(SAs), as specified under section 143(10) of the Act. provided in that context.
Our responsibilities under those Standards are further
described in the ‘Auditor’s Responsibilities for the We have determined the matters described below to be
Audit of the Standalone Financial Statements’ section the key audit matters to be communicated in our report.
of our report. We are independent of the Company We have fulfilled the responsibilities described in the
in accordance with the ‘Code of Ethics’ issued by the ‘Auditor’s responsibilities for the audit of the standalone
Institute of Chartered Accountants of India together financial statements’ section of our report, including in
with the ethical requirements that are relevant to our relation to these matters. Accordingly, our audit included
audit of the financial statements under the provisions of the performance of procedures designed to respond to
the Act and the Rules thereunder, and we have fulfilled our assessment of the risks of material misstatement of
our other ethical responsibilities in accordance with the standalone financial statements. The results of our
these requirements and the Code of Ethics. We believe audit procedures, including the procedures performed
that the audit evidence we have obtained is sufficient to address the matters below, provide the basis for
and appropriate to provide a basis for our audit opinion our audit opinion on the accompanying standalone
on the standalone financial statements. financial statements.
Key audit matters How our audit addressed the key audit matter
Assessment of Impairment of Investment in Equitas Technologies India Private Limited, a subsidiary Company
As at March 31, 2020, the financial statements of Equitas In respect of investments in ETPL, where the management
Technologies India Private Limited (“ETPL”), a subsidiary determined that there were indicators of impairment, we
company indicates risk of impairment. performed the following procedures:
The Company’s investments are subject to assessment of • We gained an understanding of the entity’s process of
impairment, which process involves significant judgements and assessing impairment of its investments.
assessments, including over determination of the amount of
• We tested controls over the value in use of the investment,
impairment provision, if any, that needs to be recognised.
including the significant assumptions, inputs, calculations,
Further, the economic and business consequences of the methodologies and judgements.
COVID-19 pandemic as described in Note 2.1 to the financial
statements, significant social disruption and disturbance and • We tested the key assumptions used in forecasting revenues
slowdown of economic activity, can have possible implications and costs, having regard to supporting documentation,
on the judgements and estimates used in the valuation of the agreements, and past experience,.
subsidiary.
Financial Statements 53
Assessment of Impairment of Investment in Equitas Technologies India Private Limited, a subsidiary Company
The Company has made investments of ` 2,200 lakhs (2019 • We assessed, understood, and tested where relevant, the
` 2,000 lakhs) in ETPL. In testing for impairment, the Company methodology followed by EHL to determine realisable value
estimates the recoverable value based on: for valuation of the investment in subsidiary, including
method of valuations used to assess impairment, input data
The Company has made investments of ` 2,200 lakhs (2019
used, external market information on market valuation,
` 2,000 lakhs) in ETPL. In testing for impairment, the Company
comparable transactions in market space, etc.
estimates the recoverable value based on:
• We read and assessed minutes of management internal
• Revenue and cost forecasts, which are affected by ETPL’s
meetings and presentations where key judgements were
expansion plans, business and strategic changes underway
discussed, including those used to determine the recoverable
and the changing competitive environment, changes
value based on independent valuation by external experts.
in business / operational models (including in response
to COVID-19); and • We analyzed and understood results of stress tests performed
in the provisioning considering the overall impact on the
• Key assumptions used in the recoverability and valuation
estimates used for impairment assessment of investments on
assessments (discount rates, growth rates, macroeconomic
account of the COVID-19 pandemic through scenario analysis
assumptions, etc.)
• Assessed disclosures included in the standalone financial
Due to significance of judgements and estimate used in
statements in respect of impairment provision.
assessing the impairment provision, this audit area is considered
a key audit matter.
Other Information that were operating effectively for ensuring the accuracy
The Company’s Board of Directors is responsible for the and completeness of the accounting records, relevant
other information. The other information comprises the to the preparation and presentation of the standalone
information included in the Annual Report, but does financial statements that give a true and fair view and
not include the standalone financial statements and our are free from material misstatement, whether due to
auditor’s report thereon. fraud or error.
Our opinion on the standalone financial statements does In preparing the standalone financial statements,
not cover the other information and we do not express management is responsible for assessing the Company’s
any form of assurance/conclusion thereon. ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the
In connection with our audit of the standalone financial going concern basis of accounting unless management
statements, our responsibility is to read the other either intends to liquidate the Company or to cease
information and, in doing so, consider whether such operations, or has no realistic alternative but to do so.
other information is materially inconsistent with the
financial statements or our knowledge obtained in the Those Board of Directors are also responsible for
audit or otherwise appears to be materially misstated. overseeing the Company’s financial reporting process.
If, based on the work we have performed, we conclude
that there is a material misstatement of this other Auditor’s Responsibilities for the Audit of the
information, we are required to report that fact. We Standalone Financial Statements
have nothing to report in this regard. Our objectives are to obtain reasonable assurance
about whether the standalone financial statements as
Responsibilities of Management for the a whole are free from material misstatement, whether
Standalone Financial Statements due to fraud or error, and to issue an auditor’s report
The Company’s Board of Directors is responsible for the that includes our opinion. Reasonable assurance is a high
matters stated in section 134(5) of the Act with respect to level of assurance, but is not a guarantee that an audit
the preparation of these standalone financial statements conducted in accordance with SAs will always detect a
that give a true and fair view of the financial position, material misstatement when it exists. Misstatements
financial performance including other comprehensive can arise from fraud or error and are considered
income, cash flows and changes in equity of the Company material if, individually or in the aggregate, they could
in accordance with the accounting principles generally reasonably be expected to influence the economic
accepted in India, including the Indian Accounting decisions of users taken on the basis of these standalone
Standards (Ind AS) specified under section 133 of financial statements.
the Act read with the Companies (Indian Accounting
Standards) Rules, 2015, as amended. This responsibility As part of an audit in accordance with SAs, we exercise
also includes maintenance of adequate accounting professional judgement and maintain professional
records in accordance with the provisions of the Act skepticism throughout the audit. We also:
for safeguarding of the assets of the Company and for
preventing and detecting frauds and other irregularities; • Identify and assess the risks of material misstatement
selection and application of appropriate accounting of the standalone financial statements, whether due
policies; making judgements and estimates that are to fraud or error, design and perform audit procedures
reasonable and prudent; and the design, implementation responsive to those risks, and obtain audit evidence
and maintenance of adequate internal financial controls, that is sufficient and appropriate to provide a basis

for our opinion. The risk of not detecting a material so would reasonably be expected to outweigh the public
misstatement resulting from fraud is higher than for interest benefits of such communication.
one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or Report on Other Legal and Regulatory
the override of internal control. Requirements
1.
As required by the Companies (Auditor’s Report)
• Obtain an understanding of internal control relevant
Order, 2016 (“the Order”), issued by the Central
to the audit in order to design audit procedures that
Government of India in terms of sub-section (11) of
are appropriate in the circumstances. Under section
section 143 of the Act, we give in the “Annexure 1”
143(3)(i) of the Act, we are also responsible for
a statement on the matters specified in paragraphs
expressing our opinion on whether the Company has
3 and 4 of the Order.
adequate internal financial controls with reference
to financial statements in place and the operating
2.
As required by Section 143(3) of the Act,
effectiveness of such controls.
we report that:
• Evaluate the appropriateness of accounting policies
used and the reasonableness of accounting estimates (a)
We have sought and obtained all the
and related disclosures made by management. information and explanations which to the best
of our knowledge and belief were necessary
• Conclude on the appropriateness of management’s use
for the purposes of our audit;
of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material
(b)
In our opinion, proper books of account as
uncertainty exists related to events or conditions that
required by law have been kept by the Company
may cast significant doubt on the Company’s ability
so far as it appears from our examination
to continue as a going concern. If we conclude that
of those books;
a material uncertainty exists, we are required to
draw attention in our auditor’s report to the related
(c)
The Balance Sheet, the Statement of Profit
disclosures in the financial statements or, if such
and Loss including the Statement of Other
disclosures are inadequate, to modify our opinion. Our
Comprehensive Income, the Cash Flow
conclusions are based on the audit evidence obtained
Statement and Statement of Changes in Equity
up to the date of our auditor’s report. However, future
dealt with by this Report are in agreement with
events or conditions may cause the Company to cease
the books of account;
to continue as a going concern.
• Evaluate the overall presentation, structure and (d)
In our opinion, the aforesaid standalone
content of the standalone financial statements, financial statements comply with the
including the disclosures, and whether the standalone Accounting Standards specified under Section
financial statements represent the underlying 133 of the Act, read with Companies (Indian
transactions and events in a manner that achieves Accounting Standards) Rules, 2015, as amended;
fair presentation.
(e)
On the basis of the written representations
We communicate with those charged with governance
received from the directors as on March 31,
regarding, among other matters, the planned scope
2020 taken on record by the Board of Directors,
and timing of the audit and significant audit findings,
none of the directors is disqualified as on March
including any significant deficiencies in internal control
31, 2020 from being appointed as a director in
that we identify during our audit.
terms of Section 164 (2) of the Act;
We also provide those charged with governance with
(f) With respect to the adequacy of the internal
a statement that we have complied with relevant
financial controls over financial reporting of the
ethical requirements regarding independence, and to
Company with reference to these standalone
communicate with them all relationships and other
financial statements and the operating
matters that may reasonably be thought to bear on our
effectiveness of such controls, refer to our
independence, and where applicable, related safeguards.
separate Report in “Annexure 2” to this report;
From the matters communicated with those charged
(g) In our opinion, the managerial remuneration
with governance, we determine those matters that
for the year ended March 31, 2020 has been
were of most significance in the audit of the standalone
paid / provided by the Company to its directors
financial statements for the financial year ended March
in accordance with the provisions of section 197
31, 2020 and are therefore the key audit matters. We
read with Schedule V to the Act;
describe these matters in our auditor’s report unless
law or regulation precludes public disclosure about the
(h) With respect to the other matters to be included
matter or when, in extremely rare circumstances, we
in the Auditor’s Report in accordance with
determine that a matter should not be communicated in
Rule 11 of the Companies (Audit and Auditors)
our report because the adverse consequences of doing
Rules, 2014, as amended in our opinion and to iii.

There were no amounts which were
the best of our information and according to required to be transferred to the
the explanations given to us: Investor Education and Protection Fund
by the Company.
i. The Company has disclosed the impact of
pending litigations on its financial position
For S.R. Batliboi & Associates LLP
in its standalone financial statements Chartered Accountants
– Refer Note 35 to the standalone ICAI Firm Registration Number: 101049W/E300004
financial statements;
per Aniruddh Sankaran
ii. The Company did not have any long-term Partner
contracts including derivative contracts Membership Number: 211107
UDIN: 20211107AAAABU3392
for which there were any material
foreseeable losses; Place of Signature: Chennai
Date: May 29, 2020
Annexure 1 to the independent auditor’s report of even date on the financial statements of
Equitas Holdings Limited (the ‘Company’)
(i) (a) The Company has maintained proper records (vi) To the best of our knowledge and as explained, the
showing full particulars, including quantitative Company is not in the business of sale of any goods.
details and situation of Property, plant Therefore, in our opinion, the provisions of clause
and equipment. 3(vi) of the Order are not applicable to the Company.
(b)
Property, plant and equipment have been (vii) (a)
The Company is regular in depositing with
physically verified by the management during appropriate authorities undisputed statutory
the year and no material discrepancies were dues including provident fund, employees’
identified on such verification. state insurance, income-tax, goods and services
tax, cess and other statutory dues applicable to
(c) According to the information and explanations it. Dues with respect to service tax, value added
given by the management, the title deeds of tax, duty of custom, duty of excise and sales tax
immovable properties included in property, are not applicable to the Company.
plant and equipment are held in the name
of the Company. (b) According to the information and explanations
given to us, no undisputed amounts payable
(ii) The Company’s business does not involve inventories in respect of provident fund, employees’ state
and, accordingly, the requirements under paragraph insurance, income-tax, sales tax, service tax,
4(ii) of the Order are not applicable to the Company. value added tax, goods and services tax, cess
and other material statutory dues applicable
(iii)
According to the information and explanations were outstanding, at the year end, for a period
given to us, the Company has not granted any of more than six months from the date they
loans, secured or unsecured to companies, firms, became payable.
Limited Liability Partnerships or other parties
covered in the register maintained under section (c) According to the information and explanations
189 of the Companies Act, 2013. Accordingly, the given to us, there are no dues of sales-tax,
provisions of clause 3(iii)(a), (b) and (c) of the Order service tax, customs duty, income tax, excise
are not applicable to the Company and hence not duty, value added tax, goods and services tax
commented upon. and cess which have not been deposited on
account of any dispute.
(iv)
In our opinion and according to the information
and explanations given to us, provisions of Section (viii) The Company did not have any outstanding loans or
185 and 186 of the Companies Act 2013 in respect borrowing dues in respect of a financial institution
of loans to directors including entities in which or bank or government or dues to debenture holders
they are interested and in respect of loans and during the year
advances given, investments made and, guarantees,
and securities given have been complied with (ix) According to the information and the explanation
by the company. given by the management, the Company has not
raised any money by way of initial public offer/
(v) The Company has not accepted any deposits within further public offer /debt instruments and term
the meaning of Sections 73 to 76 of the Act and the loans, hence reporting under (ix) of the Order is not
Companies (Acceptance of Deposits) Rules, 2014 (as applicable to the Company
amended). Accordingly, the provisions of clause 3(v)
of the Order are not applicable.

(x)
Based upon the audit procedures performed for (xiv) According to the information and explanations given
the purpose of reporting the true and fair view to us and on an overall examination of the balance
of the financial statements and according to sheet, the company has not made any preferential
the information and explanations given by the allotment or private placement of shares or fully or
management, we report that no fraud on or by the partly convertible debentures during the year under
officers and employees of the Company has been review and hence not commented upon.
noticed or reported during the year.
(xv)
According to the information and explanations
(xi) Based on our audit procedures performed for the given by the management, the Company has
purpose of reporting the true and fair view of the not entered into any non-cash transactions with
financial statements and according to the information directors or persons connected with him as referred
and explanations given by the management, we to in Section 192 of Companies Act, 2013.
report that the managerial remuneration has been
paid / provided in accordance with the requisite (xvi) According to the information and explanations given
approvals mandated by the provisions of Section 197 to us, we report that the Company has registered as
read with Schedule V to the Companies Act, 2013. required, under Section 45-IA of the Reserve Bank
of India Act, 1934.
(xii) In our opinion, the Company is not a Nidhi company.
Therefore, the provisions of clause 3(xii) of the For S.R. Batliboi & Associates LLP
Order are not applicable to the Company and hence Chartered Accountants
ICAI Firm Registration Number: 101049W/E300004
not commented upon.
(xiii)
According to the information and explanations Partner
given by the management, transactions with the Membership Number: 211107
related parties are in compliance with Section 177 UDIN: 20211107AAAABU3392
and 188 of Companies Act, 2013 where applicable
Place of Signature: Chennai
and the details have been disclosed in the notes Date: May 29, 2020
to the financial statements, as required by the
applicable accounting standards.
Annexure 2 to the Independent Auditor’s Report of even date on the

Standalone Financial Statements of Equitas Holdings Limted
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of
the Companies Act, 2013 (“the Act”)
We have audited the internal financial controls over Auditor’s Responsibility

financial reporting of Equitas Holdings Limited (the Our responsibility is to express an opinion on the
“Company”) as of March 31, 2020 in conjunction with Company’s internal financial controls over financial
our audit of the standalone financial statements of the reporting with reference to these standalone financial
Company for the year ended on that date. statements based on our audit. We conducted our
audit in accordance with the Guidance Note on Audit
Management’s Responsibility for Internal Financial of Internal Financial Controls Over Financial Reporting
Controls (the “Guidance Note”) and the Standards on Auditing
The Company’s Management is responsible for as specified under section 143(10) of the Companies Act,
establishing and maintaining internal financial controls 2013, to the extent applicable to an audit of internal
based on the internal control over financial reporting financial controls and, both issued by the Institute of
criteria established by the Company considering the Chartered Accountants of India. Those Standards and
essential components of internal control stated in the the Guidance Note require that we comply with ethical
Guidance Note on Audit of Internal Financial Controls requirements and plan and perform the audit to obtain
Over Financial Reporting issued by the Institute of reasonable assurance about whether adequate internal
Chartered Accountants of India. These responsibilities financial controls over financial reporting with reference
include the design, implementation and maintenance of to these standalone financial statements was established
adequate internal financial controls that were operating and maintained and if such controls operated effectively
effectively for ensuring the orderly and efficient conduct in all material respects.
of its business, including adherence to the Company’s
policies, the safeguarding of its assets, the prevention Our audit involves performing procedures to obtain
and detection of frauds and errors, the accuracy and audit evidence about the adequacy of the internal
completeness of the accounting records, and the timely financial controls over financial reporting with reference
preparation of reliable financial information, as required to these standalone financial statements and their
under the Companies Act, 2013. operating effectiveness. Our audit of internal financial
controls over financial reporting included obtaining Inherent Limitations of Internal Financial Controls
an understanding of internal financial controls over Over Financial Reporting With Reference to these
financial reporting with reference to these standalone Standalone Financial Statements
financial statements, assessing the risk that a material Because of the inherent limitations of internal financial
weakness exists, and testing and evaluating the design controls over financial reporting with reference to these
and operating effectiveness of internal control based standalone financial statements, including the possibility
on the assessed risk. The procedures selected depend of collusion or improper management override of
on the auditor’s judgement, including the assessment controls, material misstatements due to error or fraud
of the risks of material misstatement of the financial may occur and not be detected. Also, projections of
statements, whether due to fraud or error. any evaluation of the internal financial controls over
financial reporting with reference to these standalone
We believe that the audit evidence we have obtained financial statements to future periods are subject to
is sufficient and appropriate to provide a basis for our the risk that the internal financial control over financial
audit opinion on the internal financial controls over reporting with reference to these standalone financial
financial reporting with reference to these standalone statements may become inadequate because of changes
financial statements. in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
Meaning of Internal Financial Controls Over
Financial Reporting With Reference to these Opinion
Financial Statements In our opinion, the Company has, in all material respects,
A company’s internal financial control over financial adequate internal financial controls over financial
reporting with reference to these standalone financial reporting with reference to these standalone financial
statements is a process designed to provide reasonable statements and such internal financial controls over
assurance regarding the reliability of financial reporting financial reporting with reference to these standalone
and the preparation of financial statements for external financial statements were operating effectively as at
purposes in accordance with generally accepted March 31, 2020, based on the internal control over
accounting principles. A company’s internal financial financial reporting criteria established by the Company
control over financial reporting with reference to these considering the essential components of internal control
standalone financial statements includes those policies stated in the Guidance Note on Audit of Internal Financial
and procedures that (1) pertain to the maintenance of Controls Over Financial Reporting issued by the Institute
records that, in reasonable detail, accurately and fairly of Chartered Accountants of India.
reflect the transactions and dispositions of the assets
of the company; (2) provide reasonable assurance
that transactions are recorded as necessary to permit Chartered Accountants
preparation of financial statements in accordance with ICAI Firm Registration Number: 101049W/E300004
generally accepted accounting principles, and that
receipts and expenditures of the company are being made per Aniruddh Sankaran
only in accordance with authorisations of management Partner
and directors of the company; and (3) provide reasonable Membership Number: 211107
UDIN: 20211107AAAABU3392
assurance regarding prevention or timely detection
of unauthorised acquisition, use, or disposition of the Place of Signature: Chennai
company’s assets that could have a material effect on the Date: May 29, 2020
financial statements.

Standalone Balance sheet

as at March 31, 2020
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)
As at As at
Particulars Notes
31-Mar-2020 31-Mar-2019
Assets
Financial assets
Cash and cash equivalents 5 243.97 405.23
Bank balance other than cash and cash equivalents 6 18,162.03 17,403.44
Other Financial Assets 7 669.89 444.27
Investment in subsidiaries 8 149,120.56 156,187.00
Non-financial assets
Current tax assets (Net) 24 803.96 690.66
Deferred tax assets 25 - 42.59
Property, plant and equipment 9a 13.64 2.04
Capital work in Progress 9a 9.60 -
Investment Properties 9b 5,436.19 5,449.93
Right-of-use (ROU) asset 28 23.11 -
Intangible assets 9a 0.04 0.09
Other non-financial assets 10 3.31 4.17
Total Assets 174,486.30 180,629.42
Liabilities and equity
Financial liabilities
Trade Payables
Total outstanding dues of micro enterprises and small enterprises 11 - -
Total outstanding dues of creditors other than micro enterprises and small 11 41.42 6.00
enterprises
Other financial liabilities 12 189.66 369.92
Non-financial liabilities
Current tax liabilities (Net) 24 175.05 48.23
Deferred tax liabilities 25 94.18 -
Other Non-financial liabilities 13 5.45 5.27
Provisions 14 48.21 43.84
Total liabilities 553.97 473.26
Equity
Equity Share capital 15 34,179.00 34,146.15
Other Equity 16 139,753.33 146,010.01
Total equity 173,932.33 180,156.16
Total liabilities and equity 174,486.30 180,629.42
Summary of significant accounting policies 3
The accompanying notes form an integral part of the Financial Statements.

As per our report of even date For and on behalf of Board of Directors of
For S.R. Batliboi & Associates LLP Equitas Holdings Limited
Chartered Accountants
per Aniruddh Sankaran N Rangachary John Alex S Viswanatha Prasad

Partner Chairman ED and CEO Director
Membership No. 211107 DIN:00054437 DIN: 08584415 DIN:00574928
Place: Chennai Place: Bangalore Place: Chennai Place: Hyderabad
Date: 29 May 2020 Date: 29 May 2020 Date: 29 May 2020 Date: 29 May 2020
Srimathy R Deepti R
Chief Financial Officer Company Secretary
Place: Chennai Membership no: A35488
Date: 29 May 2020 Place: Chennai
Date: 29 May 2020
Standalone Statement of Profit and Loss

for the year ended March 31, 2020
Note Year Ended Year Ended

Particulars
No. 31-Mar-2020 31-Mar-2019
Revenue from operations
Interest income 17 1,482.97 1,389.02
Rental income 18 216.02 215.43
Guarantee Income 18 61.40 461.21
Total revenue from operations 1,760.39 2,065.66
Other income 19 146.48 186.20
Total income 1,906.87 2,251.86
Expenses
Employee benefits expenses 20 117.48 113.34
Impairment of Financial Instruments 21 109.31 418.11
Finance costs 22 25.17 122.99
Depreciation and amortisation 9a 88.74 84.35
Others expenses 23 266.78 241.15
Total Expense 607.48 979.94
Profit before tax 1,299.39 1,271.92
Tax Expenses
Current tax 24 295.62 350.67
Current tax relating to prior periods 97.35 -
Less: MAT credit entitlement - (84.67)
Net current tax expense 392.97 266.00
Deferred tax (Net) 25 137.04 72.68
Total tax expenses 530.01 338.68
Profit for the year (a) 769.38 933.24
Other Comprehensive Income:
Items not to be reclassified to profit or loss in subsequent periods:
Re-measurement gains/(losses) on defined benefit obligations (net) (0.93) 0.73
Income tax effect on the above 0.28 (0.21)
Total Other comprehensive Income (b) (0.65) 0.52
Total comprehensive Income for the year, net of tax (a + b) 768.73 933.76
Earnings per equity share
Basic earnings per equity share 26 0.23 0.27
Diluted earnings per equity share 26 0.23 0.27
Summary of significant accounting policies 3


Srimathy R Deepti R
Date: 29 May 2020

Standalone Cash Flow Statement

Year ended Year ended

Particulars
31 March 2020 31 March 2019
A. Cash Flow From Operating Activities
Profit before tax 1,299.39 1,271.92
Adjustments to reconcile profit before tax to net cash flows:
Depreciation and amortisation 88.74 84.35
Unwinding of interest cost on financial guarantee obligation 14.70 122.99
Guarantee income (61.40) (461.21)
Liabilities no longer required written back (131.33) (184.55)
Rental Income (216.02) (215.43)
Impairment on Financial Instruments 109.31 418.11
Re-measurement gains/(losses) on defined benefit obligations (net) (0.93) 0.73
(Profit)/Loss on sale of property, plant and equipment (0.90) 0.10
Interest cost on lease 0.84 -
Employee expenses on share based payments 0.28 0.49
Operating profit before working capital changes 1,102.68 1,037.50
(Increase)/decrease in loans and advances - 12,170.00
(Increase)/decrease in other financial assets (9.83) (185.36)
(Increase)/decrease in other non-financial assets 0.86 (0.75)
Redemption / (Investment) in fixed deposits (net) (758.59) (12,508.44)
Increase/(decrease) in provisions (4.94) (5.46)
Increase/(decrease) in financial liabilities 9.61 11.80
Increase/(decrease) in non-financial liabilities 0.18 (0.73)
Cash used in operations 339.97 518.56
Direct taxes paid (379.45) (349.56)
Net Cash flow from/(used in) operating activities (A) (39.48) 169.00
B. Cash Flow From Investing Activities
Addition to property, plant and equipment (91.05) (666.45)
Investment in subsidiary (200.00) -
Investment in PPE/ROU Assets (4.70) -
Proceeds from sale of property, plant and equipment 0.90 3.89
Net Cash flow from/(used in) Investing Activities (B) (294.85) (662.56)
C. Cash Flow From Financing Activities
Proceeds from fresh issue of equity share capital, including securities premium 173.84 518.12
Share application money received - 28.84
Interest cost on lease Assets/ ROU Assets (0.77) -
Net Cash flow from/(used in) Financing Activities (C) 173.07 546.96
Net Increase/Decrease in cash and cash equivalent D = (A+B+C) (161.26) 53.40
Cash and Cash Equivalents - Opening Balance (E) 405.23 351.83
Cash and Cash Equivalents - Closing Balance (D) + (E) 243.97 405.23
Net cash provided by / (used in) operating activities includes
Interest received 1,473.19 1,215.49
Components of Cash and Cash Equivalents at the end of the year
Current account with Banks 243.85 160.23
Short term deposits - 245.00
Cash on Hand 0.12 -
Total Cash and Cash Equivalents 243.97 405.23

Srimathy R Deepti R
Date: 29 May 2020
Standalone Statement of Changes in Equity

(a) Equity share capital

Particulars No. of shares Amount
Equity shares of ` 10 each issued, subscribed and fully paid
Opening balance as on 1st April 2018 340,429,976 34,043.00
Add: Shares issued during 2018-19 1,031,522 103.15
Balance as on 31st March 2019 341,461,498 34,146.15
Add: Shares issued during 2019-20 328,497 32.85
Balance as on 31st March 2020 341,789,995 34,179.00
(b) Other equity

Items of Other
Reserves and Surplus Comprehensive
Share
Income (OCI) Total other
Particulars application
Share Based equity
Securities Statutory Retained money
Payment FVTOCI Reserve
premium Reserves Earnings
Reserve
As at March 31, 2018 129,587.06 1,409.09 7,804.60 4,489.09 66.67 13.42 143,369.93
Add: Profit for the year - - 933.24 - - - 933.24
Items of Other Comprehensive Income (OCI) - - - - - 0.52 0.52
Sub Total 129,587.06 1,409.09 8,737.84 4,489.09 66.67 13.94 144,303.69
Transfer from retained earnings to Statutory - 186.65 (186.65) - - - -
Reserves
Premium on issue of share capital under 625.85 - - - (584.79) - 41.06
ESOP scheme 2015
Share application money received - - - - 546.96 - 546.96
Addition on account of ESOP cost - - - 1,262.51 - - 1,262.51
Transfer of ESOP cost to retained earnings - - 1,794.59 (1,794.59) - - -
upon lapse of options
Transfer of ESOP cost to securities premium - - - (144.21) (144.21)
upon exercise
As at March 31, 2019 130,212.91 1,595.74 10,345.78 3,812.80 28.84 13.94 146,010.01
Add: Adjustment for lease liability (0.25) (0.25)
Add: Profit for the year - - 769.38 - - - 769.38
Items of Other Comprehensive Income (OCI) - - - - - (0.65) (0.65)
Sub Total 130,212.91 1,595.74 11,114.91 3,812.80 28.84 13.29 146,778.49
Transfer from retained earnings to Statutory - 153.88 (153.88) - - - -
Reserves
Premium on issue of share capital under 224.91 - - - (169.83) - 55.08
ESOP scheme 2015
Share capital - - - - (32.85) - (32.85)
Share application money received - - - - 173.84 - 173.84
Addition on account of ESOP cost - - - 443.40 - - 443.40
Transfer of ESOP cost to retained earnings - - 4,124.83 (4,124.83) - - -
upon lapse / transfer of options
Adjustment on account of modification of - - (7,609.55) - - - (7,609.55)
ESOP scheme 2015
Transfer of ESOP cost to securities premium - - - (55.08) - (55.08)
upon exercise
As at March 31, 2020 130,437.82 1,749.62 7,476.31 76.29 - 13.29 139,753.33
Srimathy R Deepti R
Date: 29 May 2020

Summary of Significant Accounting Policies and Notes forming part of the Standalone
Financial Statements for the year ended March 31, 2020
1. Corporate information relevant to the Company’s operations and other

Equitas Holdings Limited (“the Company” / “EHL”) market factors and information, management has
was incorporated on June 22, 2007. The Company is concluded that no adjustments are required to the
a public limited Company incorporated under the Company’s financial results at this time. However,
provisions of Companies Act 1956. The registered the full extent of impact of the COVID-19 pandemic
office of the Company is located at 410A, 4th on the operations, and financial metrics (including
Floor, Spencer Plaza, Phase II, Mount Road, Anna impact on provisioning on financial instruments)
Salai, Chennai – 600 002. The Company received will depend on government and regulatory
certificate of registration dated September 1, 2016 guidelines and future developments which are
as a non-deposit taking Systemically Important uncertain and incapable of estimation at this time.
Core Investment Company (CIC-ND-SI), from the (Also refer note 4.1)
Reserve Bank of India (“RBI”) to carry on the
business as a Non-Banking Financial Institution. 2.2 Presentation of financial statements
The Company presents its balance sheet in order
The Company is the holding Company of its of liquidity. An analysis regarding recovery or
subsidiaries Equitas Small Finance Bank Limited settlement within 12 months after the reporting
and Equitas Technologies Private Limited date (current) and more than 12 months after the
(collectively, the ‘Group’). reporting date (non–current) is presented in Note 29.
2. Basis of preparation Financial assets and financial liabilities are generally

The standalone financial statements of the reported gross in the balance sheet. They are only
Company have been prepared on accrual basis offset and reported net when, in addition to having
in accordance with Indian Accounting Standards an unconditional legally enforceable right to offset
(Ind AS) notified under the Companies (Indian the recognised amounts without being contingent
Accounting Standards) Rules, 2015 (as amended). on a future event, the parties also intend to settle
on a net basis in the normal course of business,
The Standalone financial statements have been event of default or insolvency or bankruptcy of the
prepared on a historical cost basis, except for Company and/or its counterparties.
fair value through other comprehensive income
(‘FVTOCI’) instruments, all of which have been 3. Significant accounting policies
measured at fair value. 3.1 Financial instruments – initial recognition
3.1.1 Date of recognition
The Balance Sheet, the Statement of Profit and Financial assets and liabilities, with the exception
Loss and the Statement of Changes in Equity are of loans, debt securities, deposits and borrowings
prepared and presented in the format prescribed are initially recognised on the transaction date,
in the Division III of Schedule III to the Act. The i.e., the date that the Company becomes a party to
Statement of Cash Flows has been prepared and the contractual provisions of the instrument. Loans
presented as per the requirements of Ind AS 7 are recognised when funds are transferred to the
“Statement of Cash Flows”. customers’ account. The Company recognises debt
securities, deposits and borrowings when funds
The Standalone financial statements are presented reach the Company.
in Indian Rupees (`) and all values are rounded to the
nearest Lakhs, except when otherwise indicated. 3.1.2 Initial measurement of financial instruments
The classification of financial instruments at initial
2.1 Impact of COVID-19 pandemic recognition depends on their contractual terms and
The novel coronavirus (COVID-19) pandemic (as the business model for managing the instruments.
declared by WHO) is causing significant disturbance Financial instruments are initially measured at their
and slowdown of economic activity globally and fair value, except in the case of financial assets and
in India. The Company has evaluated impact of financial liabilities recorded at fair value through
COVID-19 on its business operations, assessed profit and Loss (‘FVTPL’), transaction costs are
the Company’s liquidity position and evaluated added to, or subtracted from, this amount.
the recoverability and carrying value of its assets
including property plant and equipment, investment 3.1.3 Measurement categories of financial assets and
properties, right of use assets and investments as at liabilities
March 31, 2020. Based on its review, consideration The Company classifies all of its financial assets
of internal and external information up to the based on the business model for managing the
date of approval of these financial statements assets and the asset’s contractual terms, measured
current indicators of future economic conditions at either Amortised Cost, FVOCI or FVTPL
Financial liabilities, other than loan commitments information when assessing newly originated or
and financial guarantees, are measured at newly purchased financial assets going forward.
amortised cost or FVTPL when fair value
designation is applied. 3.2.1.2 The SPPI test
As a second step of its classification process the
3.2 Financial assets and liabilities Company assesses the contractual terms of financial
3.2.1 Bank balances, Loans, Trade receivables and to identify whether they meet the SPPI test.
financial investments at amortised cost
The Company measures Bank balances, Loans, ‘Principal’ for the purpose of this test is defined as the
Trade receivables and other financial investments fair value of the financial asset at initial recognition
at amortised cost if both of the following and may change over the life of the financial asset
conditions are met: (for example, if there are repayments of principal
or amortisation of the premium/discount).
• The financial asset is held within a business
model with the objective to hold financial assets
The most significant elements of interest
in order to collect contractual cash flows within a lending arrangement are typically the
consideration for the time value of money and
• The contractual terms of the financial asset give
credit risk. To make the SPPI assessment, the
rise on specified dates to cash flows that are
Company applies judgement and considers relevant
solely payments of principal and interest (SPPI)
factors such as the currency in which the financial
on the principal amount outstanding.
asset is denominated, and the period for which the
The details of these conditions are outlined below. interest rate is set.
3.2.1.1 Business model assessment 3.2.2 Financial assets or financial liabilities held for
The Company determines its business model at the trading
level that best reflects how it manages groups of The Company classifies financial assets as held for
financial assets to achieve its business objective. trading when they have been purchased or issued
primarily for short-term profit making through
The Company’s business model is not assessed on trading activities or form part of a portfolio of
an instrument-by-instrument basis, but at a higher financial instruments that are managed together,
level of aggregated portfolios and is based on for which there evidence of a recent pattern of
observable factors such as: short-term profit is taking. Held-for-trading assets
and liabilities are recorded and measured in the
• How the performance of the business model balance sheet at fair value. Changes in fair value
and the financial assets held within that business are recognised in net gain on fair value changes.
model are evaluated and reported to the entity’s Interest and dividend income or expense is recorded
key management personnel in net gain on fair value changes according to the
terms of the contract, or when the right to payment
• The risks that affect the performance of the
has been established.
business model (and the financial assets held
within that business model) and, in particular,
Included in this classification are debt securities,
the way those risks are managed
equities, and customer loans that have been
• How managers of the business are compensated acquired principally for the purpose of selling or
(for example, whether the compensation is based repurchasing in the near term.
on the fair value of the assets managed or on the
contractual cash flows collected) 3.2.3 Equity instruments
All investments in equity instruments classified
• The expected frequency, value and timing
under financial assets are initially measured at fair
of sales are also important aspects of the
value, the Company may, on initial recognition,
Company’s assessment
irrevocably elect to measure the same either at

The business model assessment is based on FVTOCI or FVTPL.
reasonably expected scenarios without taking
‘worst case’ or ‘stress case’ scenarios into account.
The Company makes such election on an
If cash flows after initial recognition are realised in instrument-by-instrument basis. Fair value
a way that is different from the Company’s original changes on an equity instrument is recognised as
expectations, the Company does not change the other income in the Statement of Profit and Loss
classification of the remaining financial assets unless the Company has elected to measure such
held in that business model, but incorporates such instrument at FVTOCI. Fair value changes excluding

dividends, on an equity instrument measured at • Change in counterparty

FVTOCI are recognised in OCI. Amounts recognised
• If the modification is such that the instrument
in OCI are not subsequently reclassified to the
would no longer meet the SPPI criterion
Statement of Profit and Loss. Dividend income
on the investments in equity instruments are • If the modification does not result in cash flows
recognised as ‘Other Income’ in the Statement of that are substantially different, the modification
Profit and Loss. does not result in de recognition. Based on the
change in cash flows discounted at the original
3.2.4 Financial assets and financial liabilities at fair EIR, the Company records a modification gain or
value through profit or loss loss, to the extent that an impairment loss has
Financial assets and financial liabilities in this not already been recorded.
category are those that are not held for trading and
have been either designated by management upon 3.4.2 Derecognition of financial assets other than due to
initial recognition or are mandatorily required to substantial modification
be measured at fair value under Ind AS 109. 3.4.2.1 Financial assets
A financial asset is derecognised when the rights
Financial assets and financial liabilities at FVTPL to receive cash flows from the financial asset
are recorded in the balance sheet at fair value. have expired. The Company also derecognises the
Changes in fair value are recorded in profit and financial asset if it has both transferred the financial
loss with the exception of movements in fair value asset and the transfer qualifies for derecognition.
of liabilities designated at FVTPL due to changes
in the Company’s own credit risk. Such changes in A transfer only qualifies for derecognition if
fair value are recorded in the Own credit reserve either:, the Company has transferred substantially
through OCI and do not get recycled to the profit all the risks and rewards of the asset or has neither
or loss. Interest earned or incurred on instruments transferred nor retained substantially all the risks
designated at FVTPL is accrued in interest income and rewards of the asset, but has transferred
or finance cost, respectively, using the EIR, taking control of the asset. Control is considered to be
into account any discount/ premium and qualifying transferred if and only if, the transferee has the
transaction costs being an integral part of practical ability to sell the asset in its entirety to an
instrument. Interest earned on assets mandatorily unrelated third party and is able to exercise that
required to be measured at FVTPL is recorded using ability unilaterally and without imposing additional
contractual interest rate. restrictions on the transfer.
3.3 Reclassification of financial assets and liabilities When the Company has neither transferred nor
The Company does not reclassify its financial assets retained substantially all the risks and rewards
subsequent to their initial recognition, apart from and has retained control of the asset, the asset
the exceptional circumstances in which the Company continues to be recognised only to the extent of the
acquires, disposes of, or terminates a business line. Company’s continuing involvement, in which case,
Financial liabilities are never reclassified. the Company also recognises an associated liability.
The transferred asset and the associated liability
3.4 Derecognition of financial assets and liabilities are measured on a basis that reflects the rights and
3.4.1 Derecognition of financial assets due to obligations that the Company has retained.
substantial modification of terms and conditions
The Company derecognises a financial asset, such Continuing involvement that takes the form of a
as a loan to a customer, when the terms and guarantee over the transferred asset is measured
conditions have been renegotiated to the extent at the lower of the original carrying amount of the
that, substantially, it becomes a new loan, with asset and the maximum amount of consideration
the difference recognised as a derecognition the Company could be required to pay.
gain or loss, to the extent that an impairment
loss has not already been recorded. The newly In case when transfer of a part of financial asset
recognised loans are classified as Stage 1 for ECL qualifies for derecognition, any difference between
measurement purposes. the proceeds received on such sale and the carrying
value of the transferred asset is derecognised as
When assessing whether or not to derecognise a a gain or loss on decrease of such financial asset
loan to a customer, amongst others, the Company previously under amortised cost category.
considers the following factors:
3.4.3 Financial liabilities has improved and the loan has been
A financial liability is derecognised when the reclassified from Stage 2.
obligation under the liability is discharged,
cancelled or expires. Where an existing financial Stage 2: When a loan has shown a significant
liability is replaced by another from the same lender increase in credit risk since origination,
on substantially different terms, or the terms of the Company records an allowance
an existing liability are substantially modified, for the LTECLs. Stage 2 loans also
such an exchange or modification is treated as include facilities, where the credit risk
a derecognition of the original liability and the has improved and the loan has been
recognition of a new liability. The difference reclassified from Stage 3.
between the carrying value of the original financial
liability and the consideration paid is recognised in Stage 3:
Loans considered credit-impaired.
profit or loss. The Company records an allowance
for the LTECLs.
3.5 Impairment of financial assets
3.5.1 Overview of the ECL principles 3.5.2 The calculation of ECL
The Company records allowance for expected The Company calculates ECLs to measure the
credit losses for all loans, other debt financial expected cash shortfalls, discounted at an
assets not held at FVTPL, together with loan approximation to the EIR. A cash shortfall is the
commitments and financial guarantee contracts, in difference between the cash flows that are due to
this section all referred to as ‘financial instruments’. an entity in accordance with the contract and the
Equity instruments are not subject to impairment cash flows that the entity expects to receive.
under Ind AS 109.
The mechanics of the ECL calculations are outlined
The ECL allowance is based on the credit losses below and the key elements are, as follows:
expected to arise over the life of the asset (the
lifetime expected credit loss or LTECL), unless there PD he Probability of Default is an estimate of
T
has been no significant increase in credit risk since the likelihood of default over a given time
origination, in which case, the allowance is based horizon. A default may only happen at a
on the 12 months’ expected credit loss (12mECL)). certain time over the assessed period, if the
facility has not been previously derecognised
The 12mECL is the portion of LTECLs that represent and is still in the portfolio.
the ECLs that result from default events on a
financial instrument that are possible within the 12 EAD T
he Exposure at Default is an estimate of the
months after the reporting date. exposure at a future default date (in case
of Stage 1 and Stage 2), taking into account
Both LTECLs and 12mECLs are calculated on either expected changes in the exposure after the
an individual basis or a collective basis, depending reporting date, including repayments of
on the nature of the underlying portfolio of principal and interest, whether scheduled by
financial instruments. contract or otherwise, expected drawdowns
on committed facilities, and accrued interest
The Company has established a policy to perform from missed payments. In case of Stage 3
an assessment, at the end of each reporting loans EAD represents exposure when the
period, of whether a financial instrument’s default occurred.
credit risk has increased significantly since initial
recognition, by considering the change in the risk LGD T
he Loss Given Default is an estimate of the
of default occurring over the remaining life of the loss arising in the case where a default occurs
financial instrument. at a given time. It is based on the difference
between the contractual cash flows due

Based on the above process, the Company and those that the lender would expect to
categorises its loans into Stage 1, Stage 2 and Stage receive, including from the realisation of
3, as described below: any collateral. It is usually expressed as a
percentage of the EAD.
Stage 1: When loans are first recognised, the
Company recognises an allowance Impairment losses and releases are accounted for
based on 12mECLs. Stage 1 loans also and disclosed separately from modification losses
include facilities where the credit risk

or gains that are accounted for as an adjustment of 3.7 Determination of fair value
the financial asset’s gross carrying value The Company measures financial instruments,
such as, derivatives at fair value at each

The mechanics of the ECL method are balance sheet date.
summarised below:
Fair value is the price that would be received to sell
Stage 1: The 12mECL is calculated as the portion an asset or paid to transfer a liability in an orderly
of LTECLs that represent the ECLs that transaction between market participants at the
result from default events on a financial measurement date. The fair value measurement is
instrument that are possible within based on the presumption that the transaction to sell
the 12 months after the reporting the asset or transfer the liability takes place either:
date. The Company calculates the
12mECL allowance based on the • In the principal market for the asset or liability, or
expectation of a default occurring in
• In the absence of a principal market, in the most
the 12 months following the reporting
advantageous market for the asset or liability
date. These expected 12-month
default probabilities are applied to
The principal or the most advantageous market
a forecast EAD and multiplied by the
must be accessible by the Company.
expected LGD and discounted by an
approximation to the original EIR.
The fair value of an asset or a liability is measured
using the assumptions that market participants
Stage 2: When a loan has shown a significant
would use when pricing the asset or liability,
increase in credit risk since origination,
assuming that market participants act in their
the Company records an allowance for
economic best interest.
the LTECLs PDs and LGDs are estimated
over the lifetime of the instrument.
A fair value measurement of a non-financial asset
The expected cash shortfalls are
takes into account a market participant’s ability to
discounted by an approximation to
generate economic benefits by using the asset in
the original EIR.
its highest and best use or by selling it to another
market participant that would use the asset in its
Stage 3: For loans considered credit-impaired,
highest and best use.
the Company recognises the lifetime
expected credit losses for these loans.
The Company uses valuation techniques that are
The method is similar to that for Stage
appropriate in the circumstances and for which
2 assets, with the PD set at 100%.
sufficient data are available to measure fair value,
maximising the use of relevant observable inputs
3.5.3 Forward looking information
and minimising the use of unobservable inputs.
In its ECL models, the Company relies on a
broad range of forward looking information as
In order to show how fair values have been
economic inputs.
derived, financial instruments are classified
based on a hierarchy of valuation techniques, as
The inputs and models used for calculating ECLs
summarised below:
may not always capture all characteristics of the
market at the date of the financial statements. To
• Level 1 financial instruments− Those where the
reflect this, qualitative adjustments or overlays are
inputs used in the valuation are unadjusted
made as temporary adjustments.
quoted prices from active markets for identical
assets or liabilities that the Company has access to
3.6 Write-offs
at the measurement date. The Company considers
Financial assets are written off either partially
markets as active only if there are sufficient
or in their entirety only when the Company has
trading activities with regards to the volume and
determined that recovery is remote. If the amount
liquidity of the identical assets or liabilities and
to be written off is greater than the accumulated
when there are binding and exercisable price
loss allowance, the difference is recorded as an
quotes available on the balance sheet date.
expense in the period of write off. Any subsequent
recoveries are credited to impairment on financial • Level 2 financial instruments− Those where
instrument on statement of profit and loss. the inputs that are used for valuation and are
significant, are derived from directly or indirectly tep 1: Identify contract(s) with a customer: A
S
observable market data available over the entire contract is defined as an agreement between two
period of the instrument’s life. Such inputs include or more parties that creates enforceable rights
quoted prices for similar assets or liabilities and obligations and sets out the criteria for every
in active markets, quoted prices for identical contract that must be met.
instruments in inactive markets and observable
inputs other than quoted prices such as interest tep 2: Identify performance obligations in the
S
rates and yield curves, implied volatilities, and contract: A performance obligation is a promise in
credit spreads. In addition, adjustments may be a contract with a customer to transfer a good or
required for the condition or location of the service to the customer.
asset or the extent to which it relates to items
that are comparable to the valued instrument. Step 3: Determine the transaction price: The
However, if such adjustments are based on transaction price is the amount of consideration
unobservable inputs which are significant to the to which the Company expects to be entitled in
entire measurement, the Company will classify exchange for transferring promised goods or
the instruments as Level 3. services to a customer, excluding amounts collected
on behalf of third parties.
• Level 3 financial instruments− Those that
include one or more unobservable input that is
Step 4: Allocate the transaction price to the
significant to the measurement as whole.
performance obligations in the contract: For a
3.8 Recognition of interest income contract that has more than one performance
3.8.1 The effective interest rate method obligation, the Company allocates the transaction
Interest income is recorded using the effective price to each performance obligation in an amount
interest rate (EIR) method for all financial that depicts the amount of consideration to which
instruments measured at amortised cost, debt the Company expects to be entitled in exchange
instrument measured at FVOCI and debt instruments for satisfying each performance obligation.
designated at FVTPL. The EIR is the rate that
discounts estimated future cash receipts through
Step 5: Recognise revenue when (or as) the
the expected life of the financial instrument to the Company satisfies a performance obligation
net carrying amount of the financial asset.
3.9.1 Dividend Income
3.8.2 Interest income Dividend income (including from FVOCI
The Company calculates interest income by investments) is recognised when the Company’s
applying the EIR to the gross carrying amount of right to receive the payment is established, it is
financial assets other than credit-impaired assets probable that the economic benefits associated
with the dividend will flow to the entity and
When a financial asset becomes credit-impaired and the amount of the dividend can be measured
is, therefore, regarded as ‘Stage 3’, the Company reliably. This is generally when the shareholders
calculates interest income by applying the effective approve the dividend.
interest rate to the net amortised cost of the
financial asset. If the financial assets cures and is 3.10 Cash and cash equivalents
no longer credit-impaired, the Company reverts to Cash and cash equivalents comprises of Cash in
calculating interest income on a gross basis. Hand, demand deposits with other banks and
Balances with RBI and Balances with Banks and
3.9 Recognition of income and expenses Money at Call and Short Notice.
Revenue (other than for those items to which Ind
AS 109 Financial Instruments are applicable) is Cash equivalents are short-term balances (with
measured at fair value of the consideration received an original maturity of three months or less from
or receivable. Ind AS 115 Revenue from contracts the date of acquisition), highly liquid investments
with customers outlines a single comprehensive that are readily convertible into known amounts
model of accounting for revenue arising from of cash and which are subject to insignificant
contracts with customers and supersedes current risk of changes in value. For the purpose of the
revenue recognition guidance found within Ind ASs. consolidated statement of cash flows, cash and
cash equivalents consist of cash and short-term
The Company recognises revenue from contracts deposits, as defined above, net of outstanding
with customers based on a five step model as set bank overdrafts as they are considered an integral
out in Ind 115: part of the Company’s cash management.

3.11 Investment Properties Estimated useful

life specified
Investment property represents property held to Estimated useful
under Schedule
earn rentals or for capital appreciation or both. Asset life as assessed
II of the
by the Company
Companies Act
Investment properties are measured initially at 2013
cost, including transaction costs. Subsequent to Office Equipment 3 Years 5 Years
initial recognition, investment properties are Computer Equipment 3 Years 3 years
stated at cost less accumulated depreciation and Furniture and Fixtures 3 Years 10 years
accumulated impairment loss, if any. Vehicles 4 Years 8 Years
Depreciation on building classified as investment The management believes that these estimated
property has been provided on the straight-line useful lives are realistic and reflect fair
method over a period of 50 years based on the approximation of the period over which the assets
Company’s estimate of their useful lives taking are likely to be used. The residual values, useful
into consideration technical factors, which is the lives and methods of depreciation of property,
same as the period prescribed in Schedule II to the plant and equipment are reviewed at each financial
Companies Act 2013. year end and adjusted prospectively, if appropriate

Though the Company measures investment Property plant and equipment is derecognised
property using cost based measurement, the on disposal or when no future economic benefits
fair value of investment property is disclosed in are expected from its use. Any gain or loss arising
the notes. Fair values are determined based on on derecognition of the asset (calculated as the
an annual evaluation performed by an external difference between the net disposal proceeds and
independent valuer applying valuation models. the carrying amount of the asset) is recognised in
other income / expense in the statement of profit
Investment properties are derecognised either and loss in the year the asset is derecognised. The
when they have been disposed of or when they are date of disposal of an item of property, plant and
permanently withdrawn from use and no future equipment is the date the recipient obtains control
economic benefit is expected from their disposal. of that item in accordance with the requirements
The difference between the net disposal proceeds for determining when a performance obligation is
and the carrying amount of the asset is recognised satisfied in Ind AS 115.
in the statement of profit and loss in the period
of derecognition. 3.13 Impairment of non–financial assets
The Company assesses, at each reporting date,
3.12 Property, plant and equipment whether there is an indication that an asset may
Property plant and equipment is stated at cost be impaired. If any indication exists, or when
excluding the costs of day–to–day servicing, annual impairment testing for an asset is required,
less accumulated depreciation and accumulated the Company estimates the asset’s recoverable
impairment in value. Changes in the expected useful amount. An asset’s recoverable amount is the
life are accounted for by changing the amortisation higher of an asset’s or cash-generating unit’s (CGU)
period or methodology, as appropriate, and fair value less costs of disposal and its value in use.
treated as changes in accounting estimates. Recoverable amount is determined for an individual
asset, unless the asset does not generate cash
Depreciation is calculated using the straight–line inflows that are largely independent of those from
method as per the useful life prescribed in Schedule other assets or Group of assets. When the carrying
II to Companies Act, 2013 except in respect of the amount of an asset or CGU exceeds its recoverable
following categories of assets, in whose case the amount, the asset is considered impaired and is
life of the assets has been assessed as per the written down to its recoverable amount.
table below, based on technical advice, taking
into account the nature of the asset, the estimated In assessing value in use, the estimated future cash
usage of the asset, the operating conditions of flows are discounted to their present value using a
the asset, past history of replacement, anticipated pre-tax discount rate that reflects current market
technological changes, manufacturers warranties assessments of the time value of money and the
and maintenance support etc. risks specific to the asset. In determining fair value
less costs of disposal, recent market transactions are Any increase in the liability relating to financial
taken into account. If no such transactions can be guarantees is recorded in the statement of profit
identified, an appropriate valuation model is used. and loss in credit loss expense. The premium is
These calculations are corroborated by valuation recognised in the statement of profit and loss in
multiples, quoted share prices for publicly traded net fees and commission income on a straight-line
companies or other available fair value indicators. basis over the life of the guarantee.
The Company bases its impairment calculation on 3.15 Retirement and other employee benefits
detailed budgets and forecast calculations, which Retirement benefit in the form of provident fund is
are prepared separately for each of the Company’s a defined contribution scheme. The Company has
CGUs to which the individual assets are allocated. no obligation, other than the contribution payable
These budgets and forecast calculations generally to the provident fund. The Company recognises
cover a period of five years. For longer periods, a contribution payable to the provident fund scheme
long-term growth rate is calculated and applied as an expense, when an employee renders the
to project future cash flows after the fifth year. related service. If the contribution payable to the
To estimate cash flow projections beyond periods scheme for service received before the balance
covered by the most recent budgets/forecasts, sheet date exceeds the contribution already paid,
the Company extrapolates cash flow projections the deficit payable to the scheme is recognised as
in the budget using a steady or declining growth a liability after deducting the contribution already
rate for subsequent years, unless an increasing rate paid. If the contribution already paid exceeds the
can be justified. In any case, this growth rate does contribution due for services received before the
not exceed the long-term average growth rate for balance sheet date, then excess is recognised as
the products, industries, or country or countries an asset to the extent that the pre-payment will
in which the entity operates, or for the market in lead to, for example, a reduction in future payment
which the asset is used. or a cash refund.
Impairment losses of continuing operations, are The Company operates a defined benefit gratuity
recognised in the statement of profit and loss. plan in India, which requires contributions to be
made to a separately administered fund.
For assets, an assessment is made at each reporting
date to determine whether there is an indication The cost of providing benefits under the defined
that previously recognised impairment losses no benefit plan is determined using the projected
longer exist or have decreased. If such indication unit credit method.
exists, the Company estimates the asset’s or CGU’s
recoverable amount. A previously recognised
Remeasurements, comprising of actuarial
impairment loss is reversed only if there has been gains and losses, the effect of the asset ceiling,
a change in the assumptions used to determine excluding amounts included in net interest on
the asset’s recoverable amount since the last the net defined benefit liability and the return
impairment loss was recognised. The reversal is on plan assets (excluding amounts included in net
limited so that the carrying amount of the asset interest on the net defined benefit liability), are
does not exceed its recoverable amount, nor recognised immediately in the balance sheet with a
exceed the carrying amount that would have corresponding debit or credit to retained earnings
been determined, net of depreciation, had no through OCI in the period in which they occur.
impairment loss been recognised for the asset Remeasurements are not reclassified to profit or
in prior years. Such reversal is recognised in the loss in subsequent periods.
statement of profit or loss unless the asset is carried
at a revalued amount, in which case, the reversal is Past service costs are recognised in profit or loss on
treated as a revaluation increase. the earlier of:
3.14 Financial guarantees • The date of the plan amendment or

Financial guarantees are initially recognised in curtailment, and
the financial statements (within ‘other liabilities’)
• The date that the Company recognises related
at fair value, being the premium received.
restructuring costs
Subsequently, the liability is measured at the higher
of the amount of loss allowance determined as per
Net interest is calculated by applying the discount
impairment requirements of Ind AS 109 and the
rate to the net defined benefit liability or asset.
amount recognised less cumulative amortisation.
The Company recognises the following changes in

the net defined benefit obligation as an expense in Current income tax relating to items recognised
the consolidated statement of profit and loss: outside profit or loss is recognised outside profit
or loss (either in other comprehensive income or
• Service costs comprising current service in equity). Current tax items are recognised in
costs, past-service costs, gains and losses on correlation to the underlying transaction either in
curtailments and non-routine settlements; and OCI or directly in equity. Management periodically
evaluates positions taken in the tax returns with
• Net interest expense or income
respect to situations in which applicable tax
regulations are subject to interpretation and
3.16 Share based payments
establishes provisions where appropriate.
Employee stock compensation cost for stock
options is recognised as per the Guidance Note on
3.18.2 Deferred taxes
Accounting for Employee Share-based Payments,
Deferred tax is provided on temporary differences
issued by the Institute of Chartered Accountants
at the reporting date between the tax bases of
of India and IND AS 102. The Company measures
assets and liabilities and their carrying amounts for
compensation cost relating to the employee
financial reporting purposes.
stock options (equity settled) using the fair
value method. The compensation cost, if any, is
Deferred tax liabilities are recognised for all taxable
amortised uniformly over the vesting period of the
temporary differences, except:
options. The Company initially measures the cost of
equity-settled transactions with employees using a
• Where the deferred tax liability arises from the
binomial model to determine the fair value of the
initial recognition of an asset or liability in a
liability incurred at the time of grant. Estimating
transaction that is not a business combination
fair value for share-based payment transactions
and, at the time of the transaction, affects neither
requires determination of the most appropriate
the accounting profit nor taxable profit or loss
valuation model, which is dependent on the terms
and conditions of the grant. This estimate also • In respect of taxable temporary differences
requires determination of the most appropriate associated with investments in subsidiaries,
inputs to the valuation model including the where the timing of the reversal of the temporary
expected life of the share option, volatility and differences can be controlled and it is probable
dividend yield and making assumptions about that the temporary differences will not reverse
them. The assumptions and models used for in the foreseeable future
estimating fair value for share-based payment
Deferred tax assets are recognised for all deductible
transactions are disclosed in Note 41.
temporary differences, the carry forward of unused
tax credits and any unused tax losses. Deferred tax
3.17 Provisions
assets are recognised to the extent that it is probable
Provisions are recognised when the Company has a
that taxable profit will be available against which
present obligation (legal or constructive) as a result
the deductible temporary differences, and the
of past events, and it is probable that an outflow
carry forward of unused tax credits and unused tax
of resources embodying economic benefits will be
losses can be utilised, except:
required to settle the obligation, and a reliable
estimate can be made of the amount of the
• When the deferred tax asset relating to the
obligation. When the effect of the time value of
deductible temporary difference arises from
money is material, the Company determines the
the initial recognition of an asset or liability in
level of provision by discounting the expected cash
a transaction that is not a business combination
flows at a pre-tax rate reflecting the current rates
specific to the liability. The expense relating to any
provision is presented in the statement of profit
and loss net of any reimbursement. • In respect of deductible temporary differences
associated with investments in subsidiaries,
3.18 Taxes associates and interests in joint ventures,
3.18.1 Current taxes deferred tax assets are recognised only to the
Current tax assets and liabilities for the current and extent that it is probable that the temporary
prior years are measured at the amount expected differences will reverse in the foreseeable future
to be recovered from, or paid to, the taxation and taxable profit will be available against which
authorities. The tax rates and tax laws used to the temporary differences can be utilised
compute the amount are those that are enacted,
The carrying amount of deferred tax assets is
or substantively enacted, by the reporting date in
reviewed at each reporting date and reduced
the countries where the Company operates and
to the extent that it is no longer probable that
generates taxable income.
sufficient taxable profit will be available to allow Upon distribution of non-cash assets, any difference
all or part of the deferred tax asset to be utilised. between the carrying amount of the liability and
Unrecognised deferred tax assets are re-assessed the carrying amount of the assets distributed is
at each reporting date and are recognised to the recognised in the statement of profit and loss.
extent that it has become probable that future
taxable profits will allow the deferred tax asset 4. Significant accounting judgements, estimates
to be recovered. and assumptions

The preparation of the Company’s financial
Deferred tax assets and liabilities are measured statements requires management to make
at the tax rates that are expected to apply in the judgements, estimates and assumptions that affect
year when the asset is realised or the liability is the reported amount of revenues, expenses, assets
settled, based on tax rates (and tax laws) that and liabilities, and the accompanying disclosures,
have been enacted or substantively enacted at the as well as the disclosure of contingent liabilities.
reporting date. Uncertainty about these judgements and estimates
could result in outcomes that require a material
Deferred tax relating to items recognised outside adjustment to the carrying amount of assets or
profit or loss is recognised outside profit or loss liabilities affected in future periods.
(either in other comprehensive income or in
equity). Deferred tax items are recognised in
In the process of applying the Company’s
correlation to the underlying transaction either in accounting policies, management has made the
OCI or directly in equity. following judgements and estimates which have a
significant risk of causing a material adjustment to
Deferred tax assets and deferred tax liabilities are the carrying amounts of assets and liabilities within
offset if a legally enforceable right exists to set off the next financial year.
current tax assets against current tax liabilities and
the deferred taxes relate to the same taxable entity The key assumptions concerning the future and
and the same taxation authority. other key sources of estimation uncertainty at the
reporting date, that have a significant risk of causing
3.18.3 Goods and services tax /value added taxes paid on a material adjustment to the carrying amounts
acquisition of assets or on incurring expenses of assets and liabilities within the next financial
Expenses and assets are recognised net of the goods year, are described below. The Company based its
and services tax/value added taxes paid, except: judgements and estimates on parameters available
when the standalone financial statements were
• When the tax incurred on a purchase of assets prepared. Existing circumstances and assumptions
or services is not recoverable from the taxation about future developments, however, may change
authority, in which case, the tax paid is recognised due to market changes or circumstances arising
as part of the cost of acquisition of the asset or as that are beyond the control of the Company.
part of the expense item, as applicable Such changes are reflected in the assumptions
when they occur.
• When receivables and payables are stated with
the amount of tax included
4.1 Estimation uncertainties relating to the global
health pandemic from COVID-19 (COVID19)
The net amount of tax recoverable from, or payable
The Company has considered the possible effects
to, the taxation authority is included as part of
that may result from the pandemic relating
receivables or payables in the balance sheet.
to COVID-19 on the carrying amounts of its
assets including property plant and equipment,
3.19 Dividends on ordinary shares
investment properties, right of use assets and
The Company recognises a liability to make
investments as at March 31, 2020. In developing
cash or non-cash distributions to equity holders
the assumptions relating to the possible future
when the distribution is authorised and the
uncertainties in the global economic conditions
distribution is no longer at the discretion of the
because of this pandemic, the Company, as at the
Company. As per the Companies Act, 2013, a
date of approval of these financial statements has
distribution is authorised when it is approved
used internal and external sources of information
by the shareholders. A corresponding amount is
including credit reports and related information,
recognised directly in equity.
estimates from market sources on he expected
future performance. The Company has performed
Non-cash distributions are measured at the fair
sensitivity analysis on the assumptions used and
value of the assets to be distributed with fair value
based on current estimates expect the carrying
re-measurement recognised directly in equity.
amount of these assets will be recovered. Events

occurring after the date of approval of these • Selection of forward-looking macroeconomic

financial statements may require a change in the scenarios and their probability weightings, to
estimates adopted herein. (Refer note 2.1) derive the economic inputs into the ECL models
4.2 Fair value of financial instruments It has been the Company’s policy to regularly review
The fair value of financial instruments is the price its models in the context of actual loss experience
that would be received to sell an asset or paid and adjust when necessary.
to transfer a liability in an orderly transaction in
the principal (or most advantageous) market at 4.4 Provisions and other contingent liabilities
the measurement date under current market The Company operates in a regulatory and legal
conditions (i.e., an exit price) regardless of whether environment that, by nature, has a heightened
that price is directly observable or estimated using element of litigation risk inherent to its operations.
another valuation technique. When the fair values As a result, it is involved in various litigation,
of financial assets and financial liabilities recorded arbitration and regulatory investigations and
in the balance sheet cannot be derived from active proceedings in the ordinary course of the
markets, they are determined using a variety Company’s business.
of valuation techniques that include the use of
valuation models. The inputs to these models are When the Company can reliably measure the
taken from observable markets where possible, but outflow of economic benefits in relation to a specific
where this is not feasible, estimation is required in case and considers such outflows to be probable,
establishing fair values. Judgements and estimates the Company records a provision against the case.
include considerations of liquidity and model Where the probability of outflow is considered to
inputs related to items such as credit risk (both own be remote, or probable, but a reliable estimate
and counterparty), funding value adjustments, cannot be made, a contingent liability is disclosed.
correlation and volatility.

Given the subjectivity and uncertainty of
4.3 Impairment of financial assets determining the probability and amount of losses,
The measurement of impairment losses across all the Company takes into account a number of factors
categories of financial assets requires judgement, including legal advice, the stage of the matter
in particular, the estimation of the amount and and historical evidence from similar incidents.
timing of future cash flows and collateral values Significant judgement is required to conclude on
when determining impairment losses and the these estimates.
assessment of a significant increase in credit
risk. These estimates are driven by a number of 4.5 Changes in accounting policies and disclosures
factors, changes in which can result in different New and amended standards
levels of allowances. The Company applied Ind AS 116 Leases for the first
time. The nature and effect of the changes as a
The Company’s ECL calculations are outputs of result of adoption of this new accounting standard
complex models with a number of underlying is described below.
assumptions regarding the choice of variable inputs
and their interdependencies. Elements of the ECL The Company’s leased asset consists of leases
models that are considered accounting judgements for buildings. The Company assesses whether
and estimates include: a contract contains a lease, at inception of a
contract. A contract is, or contains, a lease If the
• The Company’s criteria for assessing if there has contract conveys the right to control the use of an
been a significant increase in credit risk and so identified asset for a period of time in exchange
allowances for financial assets should be measured for consideration. To assess whether a contract
on a LTECL basis and the qualitative assessment conveys the right to control the use of an identified
asset, the Company assesses whether: (i) the
• The segmentation of financial assets when their
contract involves the use of an identified asset (ii)
ECL is assessed on a collective basis
the Company has substantially all of the economic
• Development of ECL models, including the benefits from the use of the asset through the
various formulas and the choice of inputs period of the lease and (iii) the Company has the
right to direct the use of the asset.
• Determination of associations between
macroeconomic scenarios and, economic inputs,
At the date of commencement of the lease, the
such as unemployment levels and collateral
Company recognises a right-of-use asset (“ROU”)
values, and the effect on PDs, EADs and LGDs
and a corresponding lease liability for all lease
arrangements in which it is a lessee, except for are evaluated for recoverability whenever events
leases with a term of twelve months or less (short- or changes in the circumstances indicate that their
term leases) and low value leases. For these short- carrying amounts may not be recoverable.
term and low value leases, the Company recognises
the lease payments as an operating expense on a The lease liability is initially measured at amortised
straight-line basis over the term of the lease. Leases cost at the present value of the future lease
are classified as finance leases whenever the terms payments. The lease payments are discounted
of the lease transfer substantially all the risks and using the incremental borrowing rates in the
rewards of ownership to the lessee. All other leases country of domicile of the leases. Lease liabilities
are classified as operating leases. The Company are remeasured with a corresponding adjustment
enters into operating leases as a lessee for renting to the related right-of-use asset if the Company
of branch premises. changes its assessment if the whether it will
exercise an extension or a termination option.
Certain lease arrangements include the options
to extend or terminate the lease before the end ROU asset has been presented under Property, plant
of the lease term. ROU assets and lease liabilities and equipment while lease liability is presented
includes these options when it is reasonably certain under Other Financial Liabilities in the Balance
that they will be exercised. Sheet. Lease payments made by the Company are
classified as financing cash flows.
Right-of-Use assets are depreciated from the
commencement date on a straight-line basis over
The effect of adoption of Ind AS 116 is
the shorter of the lease term. Right-of-use assets given in note 28.

Notes to standalone financial statements

5 Cash and cash equivalents

As at As at
Particulars
March 31, 2020 March 31, 2019
Cash on hand 0.12 -
Balances with bank
Current accounts 243.85 160.23
In deposits accounts - free of lien (original maturity less than 3 months) - 245.00
Total 243.97 405.23
6 Bank Balances other than cash and cash equivalents

As at As at
Particulars
March 31, 2020 March 31, 2019
Fixed deposits with bank - free of lien (original maturity more than 3 months) 18,162.03 17,403.44
Total 18,162.03 17,403.44
Fixed deposits earn interest at fixed rate or floating rate based on daily bank deposit rates
7 Other financial assets (at amortised cost)

As at As at
Particulars
March 31, 2020 March 31, 2019
Interest Accrued 212.95 203.17
Security deposits 12.66 12.84
Rent Receivable 431.44 215.43
Other assets 12.84 12.83
Total 669.89 444.27
8 Investment in subsidiaries (at cost)

As at As at
Particulars
March 31, 2020 March 31, 2019
Unquoted equity shares
In India
Investment in Equitas Small Finance Bank Limited 147,488.56 154,655.00
1,005,943,363 equity shares of Equitas Small Finance Bank Limited of ` 10 each fully paid up
(As at 31 March 2019 - 1,005,943,363).
Investment in Equitas Technologies Private Limited 2,200.00 2,000.00
22,000,000 equity shares of Equitas Technologies Private Limited of ` 10 each fully paid up (As
at 31 March 2019 - 20,000,000)
Total - Gross 149,688.56 156,655.00
Less: Impairment loss allowance 568.00 468.00
Total - Net 149,120.56 156,187.00
8a. The investments in subsidiaries include cost of share based payments amounting to ` 76.29 lakhs (March 31, 2019
– ` 7,242.73 lakhs), given to the employees of Equitas Small Finance Bank as part of the share based payments
schemes. The investments also includes fair value of the corporate guarantee given to Equitas Small Finance Bank
amounting to ` 2,726.38 lakhs (March 31, 2019 – ` 2,726.38 lakhs).
8b. Impairment loss allowance of ` 568 lakhs (March 31, 2019 - ` 468 lakhs) represents impairment on investments
made in Equitas Technologies Private Limited.
8c. As a precondition to small finance bank licensing guidelines issued by the Reserve Bank of India, amongst other
conditions, Equitas Small Finance Bank Limited (the “Bank”), a subsidiary of the Company, was required to be
listed within 3 years from the date of commencement of operations (i.e from 5th September 2016). In the absence
of Securities Exchange Board of India’s (“SEBI”) approval to a scheme of arrangement, which would have resulted
in the listing of the Bank’s shares, and the consequent non-compliance of the relevant listing condition, the
Reserve Bank of India vide its letter dated September 06, 2019 has imposed regulatory action on the Bank, by
way of restriction on opening of new branches and on the remuneration of the MD & CEO of the Bank frozen at
current level, till further advice. (In December 2019, the Bank obtained specific approval of the RBI for opening
240 banking outlets). On September 10, 2019, the Board of Directors of the Bank approved an initial public offer

and listing of the equity shares on stock exchanges in India, to comply with the licensing guidelines. Subsequently,
the Bank filed a Draft Red Herring Prospectus with SEBI on December 16, 2019 and Stock Exchanges (National
Stock Exchange of India Limited and BSE Limited). The Bank received in principle approval from stock exchanges
and observations from the SEBI on its Draft Red Herring Prospectus (“DRHP”). In March 2020, the Bank filed a
revised DRHP after addressing the SEBI’s comments, and was in the process of completing the Initial Public Offer
(“IPO”) of shares. However, due to the COVID-19 global pandemic and consequent lockdowns across the country,
the completion of the listing process and the IPO of shares has been delayed. Management and the Board of
Directors remain committed to completing the IPO of shares in due course, once normalcy in business operations
is restored. Read with the above, the Bank continues normal course of business and operates as a going concern,
and no adjustments have been considered necessary in this regard.
9a Property, plant and equipment

Intangible
Office Capital Work
Particulars Computers Vehicles Sub total assets - Total
equipment in Progress
Software
Gross carrying value:
At 1st April 2018 1.14 0.26 16.30 17.70 1.55 19.25 106.77
Additions - - - - - - 141.17
Disposals - - (7.77) (7.77) - (7.77) (247.94)
At 31 March 2019 1.14 0.26 8.53 9.93 1.55 11.48 -
Additions 0.10 - 14.31 14.41 - 14.41 76.64
Disposals - - (8.53) (8.53) - (8.53) (67.04)
At 31 March 2020 1.24 0.26 14.31 15.81 1.55 17.37 9.60
Depreciation
At 1st April 2018 0.72 0.22 5.16 6.10 0.89 6.99 -
Charge for the year 0.37 0.04 5.16 5.57 0.57 6.14 -
Disposals - - (3.78) (3.78) - (3.78) -
Other adjustments - - - - - - -
At 31 March 2019 1.09 0.26 6.54 7.89 1.46 9.35 -
Charge for the year 0.07 - 2.74 2.81 0.05 2.87 -
Disposals - - (8.53) (8.53) - (8.53) -
Other adjustments - - - - - -
At 31 March 2020 1.16 0.26 0.74 2.18 1.51 3.69 -
Net Block
At 31 March 2019 0.05 - 1.99 2.04 0.09 2.13 -
At 31 March 2020 0.08 - 13.57 13.64 0.04 13.68 9.60
9b Investment property
Particulars Land - Freehold Building Total
At 1st April 2018 1,531.85 3,331.26 4,863.11
Additions 496.01 231.74 727.75
Disposals - - -
At 31 March 2019 2,027.86 3,563.00 5,590.86
Additions - 67.04 67.04
Disposals - -
At 31 March 2020 2,027.86 3,630.04 5,657.90
Depreciation
At 1st April 2018 - 62.72 62.72
Charge for the year - 78.21 78.21
Disposals - - -
Other adjustments - - -
At 31 March 2019 - 140.93 140.93
Charge for the year - 80.78 80.78
Disposals - - -
Other adjustments - - -
At 31 March 2020 - 221.71 221.71
Net Block
At 31 March 2019 2,027.86 3,422.07 5,449.93
At 31 March 2020 2,027.86 3,408.33 5,436.19


Depreciation and amortisation expense for the year also includes amortisation of right of use asset of ` 5.10 lakhs
(Previous year ` Nil). Also refer note 28.
Income earned and expenses incurred in connection with Investment properties

Year Ended Year Ended
Particulars
March 31, 2020 March 31, 2019
Rental income 216.02 215.43
Direct operating expenses from property that generate rental income 13.97 2.76
Direct operating expenses from property that did not generate rental income - -
Contractual obligations
There are contractual obligations to construct or develop investment properties. (Also refer note 34)
Fair value
As at As at
Particulars
March 31, 2020 March 31, 2019
Investment properties 6,424.66 6,140.21
Fair value is estimated on the basis of level - 2 inputs, in accordance with Ind AS 113.
Sensitivity Analysis
Sensitivity of the
Valuation Significant
Particulars Range input to fair value Fair value Sensitivity
technique unobservable input
(weighted average)
Investment properties Professional Price per sq. feet ` 1,868 - 5% sensitivity on rate 6,424.66 321.23
As at March 31, 2020 valuer ` 2,747 per per sq. feet
sq. feet
10 Other non-financial assets (considered good) (unsecured)

As at As at
Particulars
March 31, 2020 March 31, 2019
Prepaid expenses 3.31 4.17
Total 3.31 4.17
11 Trade payables (Refer note 29)

As at As at
Particulars
March 31, 2020 March 31, 2019
Total outstanding dues of micro enterprises and small enterprises - -
Total outstanding dues of creditors other than micro enterprises and small enterprises 41.42 6.00
41.42 6.00
12 Other financial liabilities (at amortised cost)

As at As at
Particulars
March 31, 2020 March 31, 2019
Financial Guarantee Obligations 138.83 307.49
Accrued expenses 14.03 49.21
Liability for capital expenditure 13.22 13.22
ROU leased liability 23.58 -
Total 189.66 369.92
13 Other Non-financial liabilities

As at As at
Particulars
March 31, 2020 March 31, 2019
Statutory Dues 5.45 5.27
Total 5.45 5.27

14 Provisions
As at As at
Particulars
March 31, 2020 March 31, 2019
Expected credit loss (ECL) allowance on receivables (Refer Note 14.1 below) 21.77 12.46
Employee benefits (refer Note 30.2) 26.44 31.38
Total 48.21 43.84
14.1 Movement of ECL allowance on receivables

As at As at
Particulars
March 31, 2020 March 31, 2019
Opening Balance 12.46 46.24
Provision on new exposures 9.31 12.46
Provision on exposures derecognised or matured (excluding write-offs) - (20.30)
Changes to models and inputs used for ECL calculations - (25.94)
ECL allowance - closing balance 21.77 12.46
14.2 Credit quality of assets

The table below shows the credit quality and the maximum exposure to credit risk based on the Company’s internal
credit rating system and year-end stage classification
a) Loan to subsidiary
March 31, 2020 March 31, 2019
Internal rating grade
Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total
High grade - - - - - - - -
Total - - - - - - - -
An analysis of changes in the gross carrying amount and the corresponding ECL allowances in relation to Loan
to subsidiary is as follows:
FY 2019-20 FY 2018-19
Particulars
Opening balance of - - - - 12,170.00 - - 12,170.00
outstanding exposure
Exposure derecognised or - - - - (12,170.00) - - (12,170.00)
repaid
Closing balance of - - - - - - - -
ECL on loan to subsidiary

March 31, 2020 March 31, 2019
High grade - - - - - - - -
Total - - - - - - - -
Reconciliation of ECL balance on loan to subsidiary is given below:

FY 2019-20 FY 2018-19
Particulars
ECL allowance - opening - - - - 16.11 - - 16.11
balance
Provision on exposures - - - - (16.11) - - (16.11)
derecognised or repaid
ECL allowance - closing - - - - - - - -
balance


b) Rent receivable
March 31, 2020 March 31, 2019
High grade 431.44 - - 431.44 215.43 - - 215.43
Total 431.44 - - 431.44 215.43 - - 215.43
An analysis of changes in the gross carrying amount and the corresponding ECL allowances in relation to Rent
receivable is as follows:
FY 2019-20 FY 2018-19
Particulars
Gross carrying amount - 215.43 - - 215.43
Opening balance
Provision on new exposure 216.01 - - 216.01 215.43 - - 215.43
Provision on exposure - - - - - - - -
Closing balance of 431.44 - - 431.44 215.43 - - 215.43
ECL on rent receivable

March 31, 2020 March 31, 2019
High grade 21.77 - - 21.77 12.46 - - 12.46
Total 21.77 - - 21.77 12.46 - - 12.46
Reconciliation of ECL balance on Rental Income is given below:

FY 2019-20 FY 2018-19
Particulars
ECL allowance - opening 12.46 - - 12.46 - -
balance
Provision on new exposure 9.31 - - 9.31 12.46 - - 12.46
Provision on exposure - - - - - - - -
ECL allowance - closing 21.77 - - 21.77 12.46 - - 12.46
balance
c) Other commitments - Financial guarantee

March 31, 2020 March 31, 2019
High grade 138.83 - - 138.83 307.49 - - 307.49
Total 138.83 - - 138.83 307.49 - - 307.49
An analysis of changes in the gross carrying amount and the corresponding ECL allowances in relation to Other
commitments is as follows:
FY 2019-20 FY 2018-19
Particulars
Opening balance of 307.49 - - 307.49 829.77 - - 829.77
Exposure derecognised or 168.66 - - 168.66 522.28 - - 522.28
repaid
Closing balance of 138.83 - - 138.83 307.49 - - 307.49

ECL on Financial guarantee

March 31, 2020 March 31, 2019
High grade - - - - - - - -
Total - - - - - - - -
Reconciliation of ECL balance on Financial Guarantee is given below:

FY 2019-20 FY 2018-19
Particulars
ECL allowance - opening - - - - 46.24 - - 46.24
balance
Provision on exposures - - - - (20.30) - - (20.30)
derecognised or matured
(excluding write-offs)
Changes to models/ inputs - - - - (25.94) - - (25.94)
used for ECL calculations
ECL allowance - closing - - - - - - - -
balance
15 Share Capital
As at March 31, 2020 As at March 31, 2019
Particulars
No. of shares Amount No. of shares Amount
Authorised
Equity shares of ` 10 each 440,000,000 44,000.00 440,000,000 44,000.00
Compulsorily convertible preference shares of ` 10 each 10,000,000 1,000.00 10,000,000 1,000.00
Issued, subscribed and paid up
Equity shares of ` 10 each 341,789,995 34,179.00 341,461,498 34,146.15
a) Reconciliation of shares outstanding at the beginning and at the end of the reporting period
As at Mar 31, 2020 As at Mar 31, 2019
Particulars
Equity shares
At the beginning of the year 341,461,498 34,146.15 340,429,976 34,043.00
Exercise of options under ESOP scheme 328,497 32.85 1,031,522 103.15
Outstanding at the end of the year 341,789,995 34,179.00 341,461,498 34,146.15
Terms/ rights attached to equity shares

The Company has only one class of equity shares having a par value of ` 10. Each holder is entitled to one vote per
equity share. Dividends are paid in Indian Rupees. Dividend, if any, proposed by the Board of Directors is subject to
the approval of the shareholders at the Annual General Meeting, except in the case of interim dividend. Repayment
of capital will be in proportion to the number of equity shares held.
During the year, the company allotted 3,28,497 (Previous Year 1,031,522) Equity Shares of ` 10 each to eligible
employees pursuant to exercise of options under the Employee Stock Options Scheme at applicable premiums.
Details of Shareholding more than 5% shares in the company

As at Mar 31, 2020 As at Mar 31, 2019
Particulars
No of Shares % holding No of Shares % holding
Equity Shares of ` 10 each fully paid
CDC Group Plc 26,791,230 7.84% 26,791,230 7.85%
26,791,230 7.84% 26,791,230 7.85%


15.1 Shares reserved for issuance

Refer Note 41 with respect to ESOP Scheme.
16 Other Equity
As at As at
Particulars
March 31, 2020 March 31, 2019
Securities premium reserve 130,437.82 130,212.91
Statutory reserves 1,749.62 1,595.74
Retained earnings 7,476.31 10,345.78
Share based payment reserve 76.29 3,812.80
FVTOCI reserve 13.29 13.94
Share application money - 28.84
Total 139,753.33 146,010.01
a. Securities premium reserve

The Securities premium received during the year represents the premium received towards allotment of 3,28,497
shares under ESOP Scheme. This balance in the reserve shall be utilised in accordance with the provisions of
Section 52 of the Companies Act towards issuance of fully paid bonus shares, write-off of preliminary expenses,
commission / discount expenses on issue of shares / debentures, premium payable on redemption of redeemable
preference shares / debentures and buy back of its own shares / securities under Section 68 of the Companies Act.
As at As at
Particulars
March 31, 2020 March 31, 2019
Balance at the beginning of the year 130,212.91 129,587.06
Premium on issue of share capital under ESOP Scheme 224.91 625.85
Balance at the end of the year 130,437.82 130,212.91
b. Statutory Reserve
As per Section 45-IC of the Reserve Bank of India Act, 1934, the Company is required to create a reserve fund at
the rate of 20% of the Profit after Tax as per statutory GAAP.
As at As at
Particulars
March 31, 2020 March 31, 2019
Transfer from retained earnings to Statutory Reserves 153.88 186.65
c. Retained Earnings
The amount that can be distributed by the Company as dividends to its Equity Shareholders is determined based
on the financial statements of the Company and also considering the requirements of the Companies Act, 2013.
Thus, the amounts reported below are not distributable in entirety and includes non distributable items including
unrealised gains, notional gains and any change in carrying amount of an asset or of a liability on measurement
of the asset or the liability at fair value, etc.
As at As at
Particulars
March 31, 2020 March 31, 2019
Profit for the year 769.38 933.24
Transfer from retained earnings to Statutory Reserves (153.88) (186.65)
Adjustment for ROU asset (refer note 16g) (0.25) -
Transfer of ESOP cost to retained earnings upon lapse of options 4,124.83 1,794.59
Adjustment on account of modification of ESOP Scheme 2015 (refer note 16h) (7,609.55) -

d. Share Based Payment Reserve

The balance represents reserves created to the extent of granted options based on the Employees Stock Option
Schemes. Under Ind AS 102, fair value of the options granted is to be expensed out over the life of the vesting
period as employee compensation costs reflecting period of receipt of service.
As at As at
Particulars
March 31, 2020 March 31, 2019
Addition on account of ESOP cost 443.40 1,262.51
Transfer of ESOP cost to retained earnings upon lapse of options (4,124.83) (1,794.59)
Transfer of ESOP cost to securities premium upon exercise (55.08) (144.21)
Balance at the end of the year 76.29 3,812.80
e. FVTOCI Reserve
This reserve represents the cumulative gains and losses arising on the remeasurement on defined
benefit obligations.
As at As at
Particulars
March 31, 2020 March 31, 2019
Balance at the beginning of the year 13.94 13.42
Addition during the year (0.65) 0.52
Balance at the end of the year 13.29 13.94
f.
Impairment reserve
The Reserve Bank of India, on March 13, 2020 notified Circular no: RBI/2019-20/170 DOR (NBFC).CC.PD.
No.109/22.10.106/2019-20 Implementation of Indian Accounting Standards requiring the Company to create an
impairment reserve to the extent of shortfall in ECL provision as compared to the provision as required by Income
Recognition and Asset Classification and Provisioning norms. The Company has performed this assessment as at
March 31, 2020, and the provision required as per Income Recognition and Asset Classification and Provisioning
norms is found to be ` NIL. Accordingly, no impairment reserve is created. Refer Note 43 for further details.
g. Impact of adoption of Ind AS 116

Effective April 1, 2019, the Company adopted Ind AS 116 “Leases”, applied to all lease contracts existing on April
1, 2019 using the modified retrospective method and has taken the cumulative adjustment to retained earnings,
on the date of initial application. Accordingly, comparatives for the year ended March 31, 2019 have not been
retrospectively adjusted. On transition, the adoption of the new standard resulted in recognition of Right-of-Use
asset (ROU) of ` 3.00 Lakhs, and a lease liability of ` 3.25 Lakhs. The cumulative effect of applying the standard
resulted in ` 0.25 Lakhs being debited to retained earnings. Please refer to note 28 for further details.
h. Adjustment on account of modification of ESOP Scheme 2015

During the year ended March 31, 2020, 98,86,251 number of options issued under the ESOP Scheme 2015 were
replaced with 3,34,87,873 options issued, under the Equitas ESOP Scheme 2019 issued by its subsidiary (Equitas
Small Finance Bank Limited), to employees of Equitas Small Finance Bank and also Equitas Holdings Limited.
Accordingly, there has been a reversal of retained earnings and securities premium reserve of ` 3,484.72 lakhs
and ` 4,124.83 lakhs respectively, and a cumulative reversal of investment in subsidiary (Equitas Small Finance
Bank Limited) of ` 7,609.55 lakhs.


17 Interest income (On Financial Instruments measured at Amortised Cost)

Particulars
31-Mar-2020 31-Mar-2019
Interest on deposit with Banks - 19.10
Interest on deposit with Related Parties 1,482.97 1,105.25
Interest Income on Loans to Related Parties - 264.67
Total 1,482.97 1,389.02
18 Revenue from Contracts with Customers (also refer note 32.2)

Particulars
31-Mar-2020 31-Mar-2019
Rental Income 216.02 215.43
Guarantee Income 61.40 461.21
Total 277.42 676.64
19 Other income
Particulars
31-Mar-2020 31-Mar-2019
Other Miscellaneous Income - 1.65
Dividend income 5.50 -
Profit from sale of assets 0.90 -
Bad Debts recovered 8.75 -
Liabilities no longer required written back 131.33 184.55
Total 146.48 186.20
20 Employee benefit expenses

Particulars
31-Mar-2020 31-Mar-2019
Salaries and wages (Including bonus) 92.80 103.72
Contribution to provident and other funds 4.43 5.28
Gratuity expense (Refer Note 30.2) 13.88 3.03
Share based payment to employees 5.78 0.49
Staff welfare expenses 0.59 0.82
Total 117.48 113.34
21 Impairment of financial instruments

Particulars
31-Mar-2020 31-Mar-2019
Corporate Loan Exposure (net) - (16.11)
Financial Guarantee Exposure (net) - (46.24)
Rental Income Receivable 9.31 12.46
Investment in Subsidiary 100.00 468.00
Total 109.31 418.11
22 Finance Cost
Particulars
31-Mar-2020 31-Mar-2019
Interest Cost - lease 0.84 -
Interest Cost - financial guarantee obligation 14.70 122.93
Interest Cost - others 9.63 0.06
25.17 122.99

23 Other expenses
Particulars
31-Mar-2020 31-Mar-2019
Advertisement & business promotion 3.87 3.61
Communication expenses 1.09 7.42
Professional & consultancy fee 28.86 25.26
Payments to auditors (Refer Note A below) 50.26 46.56
Directors' remuneration & sitting fees 47.28 44.89
Registrar fee and general meeting expenses 41.40 27.59
Miscellaneous expenses 0.95 3.94
Insurance expenses 6.27 5.84
Printing and stationery 0.04 2.03
Rates and taxes 48.89 29.99
Rent - 6.35
Repairs & maintenance - others 2.12 4.63
Travelling & conveyance 2.34 2.56
Contributions towards CSR activities (Refer note B below) 33.41 30.32
Guarantee expenses - 0.06
Loss assets written-off - 0.10
Total 266.78 241.15
A. Payment to auditors (excluding taxes)

Particulars
31-Mar-2020 31-Mar-2019
As auditors
Statutory audit (including consolidation) 26.00 21.80
Limited review (including consolidation) 9.00 6.00
Certification fees 2.75 2.50
In other capacity
Tax audit 2.20 2.00
Other reporting services 1.81 7.20
Others
Reimbursement of expenses 0.07 0.14
Total 41.83 39.64
B. Details of CSR expenditure:

Particulars March 31, 2020 March 31, 2019
(a) Gross amount required to be spent by the Company during the year 20.00 14.00
Yet to be paid
In cash Total
in cash
b) Amount spent during the year ending on March 31, 2020:
i) Construction/acquisition of any asset - - -
ii) On purposes other than (i) above 33.41 - 33.41
Yet to be paid
In cash Total
in cash
b) Amount spent during the year ending on March 31, 2019:
ii) On purposes other than (i) above 30.32 - 30.32
The Company in accordance with its CSR Policy has implemented CSR activities, through the Equitas Development
Initiatives Trust, a public charitable trust established by the Company.


The Board of Directors have approved a donation of ` 33.41 lakh (Previous Year ` 30.32 lakh) to Equitas
Development Initiatives Trust for the year ended March 31, 2020 (Refer Note 32.2)
C. Disclosure in accordance with Section 182 of the Companies Act, 2013

The Company incurred ` Nil (March 31, 2019: ` Nil) as contribution to political parties, etc.
D. Disclosure in accordance with Section 183 of the Companies Act, 2013

The Company incurred ` Nil (March 31, 2019: ` Nil) as contribution to nation defence fund or any other Fund
approved by the Central Government for the purpose of national defence.
24 Income Tax
The effective income tax rate for 31 March 2020 is 25.17% (31 March 2019: 29.12%)
Statement of profit and loss

The components of income tax expense for the years ended 31 March 2020 and 2019 are:
Current tax 295.62 350.67
Current tax towards prior periods 97.35 -
MAT credit entitlement - (84.67)
Deferred tax relating to origination and reversal of temporary differences 137.04 72.68
Total tax charge reported in the statement of profit and loss 530.01 338.68
Balance sheet
Current tax asset 803.96 690.66
Current tax liability 175.05 48.23
Other Comprehensive Income (OCI)

Tax effect on
Re-measurement gains/(losses) on defined benefit obligations (net) 0.28 (0.21)
Income tax charged to OCI 0.28 (0.21)
24.1 Reconciliation of the total tax charge

The tax charge shown in the statement of profit and loss differs from the tax charge that would apply if all profits
had been charged at India corporate tax rate. A reconciliation between the tax expense and the accounting
profit multiplied by India’s domestic tax rate for the years ended 31 March 2020 and 2019 is, as follows:
Accounting profit before tax 1,299.39 1,271.92
At India’s statutory income tax rate of 25.17% (2019: 29.12%) 327.03 370.38
Income not subject to tax
Financial guarantee income (46.15) (205.83)
Non–deductible expenses
Impairment allowance for financial assets 25.17 136.29
Interest expenses on financial guarantee 3.70 35.80
Difference in tax base for donations and CSR expenses 4.20 2.04
Current tax towards prior periods 97.35 -
Other disallowances 118.71 -
Income tax expense reported in the statement of profit and loss 530.01 338.68
Pursuant to The Taxation Laws (Amendment) Ordinance, 2019 ( the “Ordinance”) issued on September 20, 2019,
the Income tax rates have been changed with effect from April 1, 2019. The Company has elected to exercise
the option permitted by the Ordinance and has accordingly recognised provision for income taxes for the year
ended March 31, 2020, and remeasured the balance of net deferred tax assets, at the rates prescribed by the
Ordinance; and the tax expenses include ` 84.67 lakhs of write off of MAT credit available and are net off ` 5.72
lakhs, resulting from write back of deferred tax liability pertaining to earlier years

25 Deferred tax
March 31, 2020 March 31, 2020 2019-20 2019-20
Particulars Deferred tax Deferred tax Income
OCI
assets liabilities statement
Depreciation 2.27 - 0.67 -
Impairment allowance for financial assets 5.48 - (1.85) -
Provision for employee benefits 6.66 - 4.29 0.28
Rent receivable - 108.59 45.86 -
Other temporary differences - - 3.40 -
Reversal of MAT credit entitlement - - 84.67 -
Total 14.41 108.59 137.04 0.28
Deferred tax liabilities (net) 94.18
Also refer note 24.1 for change in statutory income tax rate
March 31, 2019 March 31, 2019 2018-19 2018-19

Particulars Deferred tax Deferred tax Income
OCI
Depreciation 2.94 - (1.02) -
Impairment allowance for financial assets 3.63 - 14.53 -
Provision for employee benefits 10.68 - (0.16) (0.21)
Rent receivable - 62.73 62.73 -
Other temporary differences 3.40 - (3.40) -
MAT credit entitlement 84.67 - - -
Total 105.32 62.73 72.68 (0.21)
Deferred tax Asset (net) 42.59
26 Earnings per equity share

The following reflects the profit and share data used in the basic and diluted EPS computations:
Total operations for the year

Particulars
31-Mar-2020 31-Mar-2019
Profit after tax - Basic earnings per equity share 769.38 933.24
Weighted average number of equity shares in calculating basic EPS 341,689,290 341,029,144
Basic earnings per equity share 0.23 0.27
Profit after tax - Diluted earnings per equity share 775.16 933.73
Weighted average number of equity shares in calculating basic EPS 341,689,290 341,029,144
Effect of dilution:
Add: Dilutive impact of ESOPs 64,566 81,811
Weighted average number of equity shares in calculating Diluted EPS 341,753,856 341,110,956
Diluted earnings per equity share 0.23 0.27
27 Expenditure and income in foreign currency: NIL
28 Lease - as lessee
Lease disclosure under Ind-AS 116 for the current year ended 31 March 2020
A. Implementation of Ind-AS 116

This note explains the impact of the adoption of Ind-AS 116 Leases on the financial statements
Under the erstwhile standard, Ind-AS 17 - Leases, the leases in which a substantial portion of the risk and rewards
of the ownership were retained by the lessor were classified as operating leases. Under Ind-AS 116, the Company
recognises right-of-use assets and lease liabilities for leases i.e. these leases are on the balance sheet. Lease
liabilities as at 1 April 2019 were measured at the present value of the remaining lease payments, discounted
using the lessee’s incremental borrowing rate of 8%. This change is in accordance with the transitional provisions
of Ind-AS 116.


Effective April 1, 2019, the Company adopted Ind AS 116 “Leases”, applied to all lease contracts existing on April
retrospectively adjusted. On transition, the adoption of the new standard resulted in recognition of Right-of-Use
asset (ROU) of ` 3.00 Lakhs, and a lease liability of ` 3.25 Lakhs. The cumulative effect of applying the standard
resulted in ` 0.25 Lakhs being debited to retained earnings.
B. The company has taken premises on operating leases for office. The lease generally are for a term of 33 months
with a renewal option for 22 months.
The carrying amount of Right-of-Use assets recognised and the movement during the year is as given below:
As at
Particulars
March 31, 2020
Opening balance (as at April 1, 2019) 3.00
Additions 25.21
Depreciation expenses (5.10)
As at 31st March 2020 23.11
The company has not sub-leased any of the properties taken on lease.
Below are the carrying amounts of lease liabilities and the movements during the period:
As at
Particulars
March 31, 2020
Opening balance (as at 1st April 2019 ) 3.25
Additions 25.21
Interest 0.84
Payments (5.73)
As at 31st March 2020 23.58
Current 6.24
Non-Current 17.34
The following are the amounts recognised in profit and loss account :
Year Ended
Particulars
31-Mar-2020
Depreciation charge for Right-of-Use assets 5.10
Interest expense on lease liabilities 0.84
Total amount recognised in profit and loss account 5.94
28.1 Lease - as lessor

The company has provided premises on operating leases for running schools. The details of maturity profile of
future operating lease receivable are given below:
For the year ended For the year ended
Particulars
March 31, 2020 March 31, 2019
Future lease rentals payable at the end of the year
- Not later than one year 215.43 215.43
- Later than one year but not later than five years 862.29 861.70
- Later than five years 4,001.57 4,218.17
Total minimum lease rent recognised in the Profit and loss account 216.02 215.43
Total of future minimum sub lease payments expected to be received under non- - -
cancellable sub-lease
The company has not sub-leased any of the properties taken on lease. There are no provisions relating to
contingent rent. Also Refer note 4.5

29 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’)
and relied upon by the auditors, there are no amounts due to MSME as at March 31, 2020. The relevant particulars
are furnished below:
As at March 31, As at March 31,
Particulars
2020 2019
Principal amount due to suppliers under MSMED Act, as at the year end - -
Interest accrued and due to suppliers under MSMED Act, on the above amount as at - -
the year end
Payment made to suppliers (other than interest) beyond the appointed date, during - -
the year
Interest paid to suppliers under MSMED Act (other than Section 16) - -
Interest due and payable to suppliers under MSMED Act, for payments already made - -
Interest accrued and remaining unpaid at the year end to suppliers under MSMED Act - -
30 Retirement benefit plan

30.1 Defined contribution plan
The Company makes Provident Fund contributions to State administered fund for qualifying employees. The
Company is required to contribute a specified percentage of the payroll costs to the Fund. The Company
recognised ` 4.43 lakh (For the year ended March 31, 2019: ` 5.28 lakh) towards Provident Fund contributions in
the Statement of Profit and Loss. The contributions payable to the fund by the Company is at rates specified in
the rules of the scheme.
30.2 Defined benefit plans

Particulars
March 31, 2020 March 31, 2019
Change in defined benefit obligations during the year
Present value of defined benefit obligation at beginning of the year 15.17 16.35
Current service cost 13.32 1.99
Interest cost 0.56 1.04
Benefits paid (13.80) (3.48)
Remeasurement effect of experience adjustments 0.93 (0.73)
Present value of defined benefit obligation at end of the year 16.18 15.17
Change in fair value of assets during the year
Plan assets at beginning of the year - -
Expected return on plan assets - -
Actual company contributions - -
Actuarial loss - -
Plan assets at end of the year - -
Liability recognised in the balance sheet
Present value of defined benefit obligation 16.18 15.17
Fair value of plan assets - -
Net liability recognised in the balance sheet 16.18 15.17
Cost of defined benefit plan for the year
Current service cost 13.32 1.99
Interest cost 0.56 1.04
Expected return on plan assets - -
Net cost recognised in the statement of profit and loss and OCI 13.88 3.03
Remeasurement
Effect of experience adjustments (0.93) 0.73
Total remeasurement gain recognised in OCI (0.93) 0.73
Return on plan assets - -
Actuarial assumptions
Discount rate (Refer note (a)) 5.81% 6.86%
Interest rate (Rate of return on assets) NA NA
Future salary increase (Refer note (b)) 10.00% 10.00%
Mortality table Indian Assured Indian Assured
Lives (2012-14) Lives (2006 -08)
Attrition rate (Refer note (b)) 20.00% 20.00%


Notes:
a) Discount rate is based on the prevailing market yields of Indian Government Bonds as at the balance sheet
date for the estimated term of the obligation.
b) The estimate of future salary increase takes into account inflation, seniority, promotion and other relevant
factors. Further, the Management revisits the assumptions such as attrition rate, salary escalation etc., taking
into account, the business conditions, various external/internal factors affecting the Company.
c) Experience Adjustments:
Particulars
March 31, 2020 March 31, 2019
Projected Benefit Obligation 16.18 15.17
Fair Value of Plan Assets - -
(Deficit)/ Surplus (16.18) (15.17)
Experience Adjustments on Plan Liabilities - Gains - 0.73
Experience Adjustments on Plan Assets - Loss (0.93) -
Amount
Expected Contribution in the following years to the fund NA
Expected Maturity Profile of Benefit Payments 19.38 lakhs
Within the next 12 months 12.20
(next annual reporting period)
Between 2 and 5 years 7.18
Between 5 and 10 years -
Beyond 10 years -
As is to be expected, an increase in the discount rate reduces the DBO and vice versa
Discount Rate: An increase in Discount Rate would reduce the DBO and a decrease in discount rate would
increase the DBO.
In this case, an increase of 0.5% of Discount rate would decrease DBO by: -0.62%
Similarly, a decrease by 0.5% will increase DBO by: 0.64%
Salary Escalation Rate: An increase in Salary Escalation Rate increases the DBO, and vice versa
In this case, an increase of 0.5% of salary escalation rate would increase DBO by: 0.64%
Similarly, a decrease by 0.5% will decrease DBO by: -0.62%
Staff Exit Rate: The direction of movement of DBO for changes in the Exit Rate would depend on the
relative values of the Discount Rate and the Salary Escalation Rate.
In this case, an increase of 0.5% of Staff Exit rate would change DBO by: -0.12%
Similarly, a decrease by 0.5% will change DBO by: 0.13%
Discount Rate Future Salary increase

Particulars
0.5% increase 0.5% decrease 0.5% increase 0.5% decrease
Impact on DBO (0.10) 0.10 0.10 (0.10)
30.3 Compensated Absences

The key assumptions used in the computation of provision for compensated absences as per the Actuarial
Valuation done by an Independent Actuary are as given below:
Assumptions
March 31, 2020 March 31, 2019
Discount Rate 5.81% 6.86%
Future Salary Increase 10.00% 10.00%
Mortality Rate Indian Assured Indian Assured
Lives (2012-14) Lives (2006 -08)
Attrition rate 20% 20%

Sensitivity
The Defined Benefit Obligation (DBO) is sensitive to changes in the Discount Rate, the Salary Escalation Rate and
the Staff Exit Rate.
Discount Rate: An increase in the Discount rate reduces the DBO, and vice versa
Similarly, a decrease by 0.5% will increase D.B.O by: 0.98%
Salary Escalation Rate: An increase in Salary Escalation Rate increases the DBO, 0.98%
and vice versa
In this case, an increase of 0.5% of salary escalation rate would increase DBO by: -0.95%
Similarly, a decrease by 0.5% will decrease DBO by:

Particulars
Impact on DBO (0.02) 0.02 0.10 (0.10)
31 Maturity analysis of assets and liabilities

March 31, 2020 March 31, 2019
Assets Within 12 Beyond 12 Within 12 Beyond 12
Total Total
months months months months
Cash and cash equivalents 243.97 - 243.97 405.23 - 405.23
Bank Balance other than cash and cash 8,379.32 9,782.71 18,162.03 5,113.59 12,289.85 17,403.44
quivalents
Other financial assets 268.31 401.58 669.89 80.40 363.87 444.27
Investments - 149,120.56 149,120.56 - 156,187.00 156,187.00
Non-financial Assets
Current tax asset (Net) - 803.96 803.96 - 690.66 690.66
Deferred tax asset (Net) - - - - 42.59 42.59
Other non-financial assets 3.31 - 3.31 4.17 - 4.17
Property, plant and equipment - 13.64 13.64 - 2.04 2.04
Capital work in progress - 9.60 9.60 - -
Intangible assets - 0.04 0.04 - 0.09 0.09
ROU asset - 23.11 23.11 - - -
Investment property - 5,436.19 5,436.19 - 5,449.93 5,449.93
Total assets 8,894.91 165,591.39 174,486.30 5,603.39 175,026.03 180,629.42
Financial Liabilities
Total outstanding dues of creditors other than 41.42 - 41.42 6.00 - 6.00
micro enterprises and small enterprises
Other financial liabilities 84.06 105.60 189.66 71.37 298.55 369.92
Non-Financial Liabilities
Current tax liability 175.05 - 175.05 48.23 - 48.23
Other non-financial liabilities 5.45 - 5.45 5.27 - 5.27
Provisions 5.23 42.98 48.21 8.07 35.77 43.84
Deferred tax liabilities (Net) - 94.18 94.18 - - -
Total liabilities 311.21 242.76 553.97 138.94 334.32 473.26
Net 8,583.70 165,348.63 173,932.33 5,464.45 174,691.71 180,156.16


32 Related party disclosures

32.1 List of related parties and nature of relationship
Relationship Name of the party
Subsidiary Equitas Small Finance Bank Limited
Equitas Technologies Private Limited
Key Management Personnel S Bhaskar, Executive Director and CEO (till October 20, 2019)
John Alex, Executive Director and CEO (w.e.f November 8, 2019)
R Srimathy, Chief Financial Officer
Jayashree S Iyer, Company Secretary (till November 2, 2018)
Deepti R, Company Secretary (w.e.f November 3, 2018)
Independent/ Non Executive Directors Mr Rangachary N, Chairman
Mr Arun Ramanathan
Ms Jayshree Ashwinkumar Vyas
Mr Rajaraman P V
Mr Viswanatha Prasad S
Mr. Jayaraman Chandrasekaran (w.e.f August 2, 2019)
Mr. S Bhaskar (w.e.f October 21, 2019)
Mr Yogesh Chand Nanda ( Ceased w.e.f. March 28, 2019)
Mr. Raghavan M S - (Resigned w.e.f April 27, 2018)
Enterprises over which the Company or its Key Equitas Development Initiatives Trust
management personnel is able to exercise significant Equitas Dhanyakosha India
influence Equitas Healthcare Foundation (w.e.f. March 13, 2018)
32.2 Transactions with the Related Parties

Particulars
March 31, 2020 March 31, 2019
Income
Guarantee Income
Equitas Small Finance Bank Limited 183.36 645.76
Rental Income
Equitas Development Initiatives Trust 216.02 215.43
Interest on loans to related parties
Equitas Small Finance Bank Limited - 264.67
Interest on deposits placed with related parties
Equitas Small Finance Bank Limited 1,482.97 1,105.25
Expenses
Reimbursement of expenses
Equitas Small Finance Bank Limited - 0.34
Interest cost on Financial Guarantee
Donation
Equitas Development Initiatives Trust 33.41 30.32
Share based payment to employees
Key Managerial Personnel 3.10 0.30
Dividend income
Key Managerial Personnel 2.99 -
Loss on sale of vehicle
Key Managerial Personnel - 0.10
Profit on sale of vehicle
Key Managerial Personnel 0.90 -
Remuneration to Key Managerial Personnel *
S Bhaskar, Executive Director and CEO (till October 20, 2019) 59.20 63.26
John Alex (from November 8, 2019) 23.29 -
R Srimathy, Chief Financial Officer (from August 1, 2017) 19.56 16.20
Jayashree Iyer , Company Secretary (till November 2, 2018) - 30.76
Deepti R, Company Secretary (from November 3, 2018) 8.78 3.17
*excludes employer's contribution to various funds, non-monetary perquisites and provisions made for gratuity and leave benefits,
as these are determined for the Company as a whole


Particulars
March 31, 2020 March 31, 2019
Remuneration and Sitting Fees to Non-Executive Directors 42.10 40.25
Other Transactions
Deposits placed
Deposits matured
Withdrawals and funds transfer
Receipts and interest credits
Loans recovered
Equitas Small Finance Bank Limited - 12,170.00
Investment in Equity Shares of Subsidiaries, including premium
Equitas Technologies Private Limited 200.00 -
Guarantees revoked
Equitas Small Finance Bank Limited - 15,000.00
Balance as at Year End
Deposits
Interest Receivable on Deposits
Balances with Current Accounts
Corporate Guarantees
Financial Guarantee Obligation
Equitas Technologies Private Limited 2,200.00 2,000.00
Maximum Outstanding during the year
Deposits
Balances with Current Accounts
Equitas Small Finance Bank Limited 1,149.78 999.49
Corporate Guarantees
Financial Guarantee Obligation
Equitas Technologies Private Limited 2,200.00 2,000.00
Under the ESOP Scheme 2015, 126 shares (previous year - 6,858) were allotted to Key Managerial Personnel.
During the year, ESFB, the subsidary of the Company established a employee stock option scheme titled ESFB
Employees Stock Option Scheme, 2019 (ESFB ESOP 2019) effective from November 22, 2019. Under the plan, the Bank
was authorised to issue a replacement option for the Scheme under the Holding Company to eligible employees of
the Bank and the Company. Each option entitles for application and allotment of one fully paid share on payment of
exercise price during the exercise period.
The options granted to the key managerial personnel as of 31st March 2020 is as provided below:


As at March 31, 2020 - Options from ESFB

Exercise Price in
Name of the KMP Grant Date Expiry date No of options
rupees
John Alex 22-Nov-19 30-Nov-23 27.00 154,050
John Alex 22-Nov-19 30-Nov-23 27.00 40,000
John Alex 29-Jan-20 29-Jan-24 38.00 53,664
Srimathy Raghunathan 22-Nov-19 30-Nov-23 27.00 7,524
Srimathy Raghunathan 22-Nov-19 30-Nov-23 27.00 1,290
Srimathy Raghunathan 29-Jan-20 29-Jan-24 38.00 4,048
Srimathy Raghunathan 29-Jan-20 29-Jan-25 38.00 4,048
Deepti R 22-Nov-19 30-Nov-23 27.00 2,550
Deepti R 22-Nov-19 30-Nov-23 27.00 810
267,984
The options vested and outstanding for the key managerial personnel as of 31st March 2019 is as provided below:
As at March 31, 2019 - Options from EHL

Exercise Price in
Name of the KMP Grant Date Expiry date No of options
rupees
Bhaskar S 05-Jul-16 01-Aug-20 184.00 24,300
Srimathy Raghunathan 09-May-14 30-Jun-21 43.34 798
Srimathy Raghunathan 01-Jul-16 01-Jul-21 178.00 1,225
Deepti R 05-Aug-16 01-Sep-21 173.00 607
26,930
33
Segment information
For management purposes, the Company’s operations are organised into only one segment - Core investment
operations in India. The Management Committee comprises of ED & CEO and CFO, ( ED & CEO being the head
of the Management Committee). It reviews and monitors the operating results of the operating segment for
the purpose of making decisions about resource allocation and performance assessment using profit or loss and
return on capital employed.
34
Commitments and contingencies
To meet the financial needs of its subsidiary, the Company enters into various irrevocable commitments,
which primarily consist of guarantee on loan availed by the subsidiary. Further the Company is also exposed to
contingent liabilities arising from legal claims.
Particulars
March 31, 2020 March 31, 2019
Claims against the company not acknowledged as debts
- Income tax matters - 1,067.37
- Guarantees for loans takes by subsidiaries 5,200.00 5,200.00
Commitments
- Estimated amount of contracts remaining to be executed on capital account and not 28.09 15.03
provided for
35
Legal claims
The Company operates in a regulatory and legal environment by nature, there are various litigation, arbitration
and regulatory proceedings in the ordinary course of its business. The Company has formal controls and policies
for managing legal claims.
i. Matters wherein management has concluded the Company’s liability to be probable have accordingly been
provided for in the books (included under Note 14).
ii. Matters wherein management has concluded the Company’s liability to be possible have accordingly been
disclosed in Note 34.

iii.
Matters wherein management is confident of succeeding in these litigations and have concluded the
Company’s liability to be remote. This is based on the relevant facts of judicial precedents and as advised by
legal counsel which involves various legal proceedings and claims, in different stages of process.
36
Capital
The Company maintains an actively managed capital base to cover risks inherent in the business and is meeting
the capital adequacy requirements of the local banking supervisor, Reserve Bank of India (RBI) of India. The
adequacy of the Company’s capital is monitored using, among other measures, the regulations issued by RBI.
Company has complied in full with all its externally imposed capital requirements over the reported period.
36.1
Capital management
The primary objectives of the Company’s capital management policy are to ensure that the Company complies
with externally imposed capital requirements and maintains strong credit ratings and healthy capital ratios in
order to support its core investment activity and to maximise shareholder value.
The Company manages its capital structure and makes adjustments to it according to changes in economic
conditions and the risk characteristics of its activities. In order to maintain or adjust the capital structure, the
Company may adjust the amount of dividend payment to shareholders, return capital to shareholders or issue
capital securities. No changes have been made to the objectives, policies and processes from the previous years.
However, they are reviewed by the Board.
36.2 Regulatory capital

Particulars 2020 2019
Common Equity Tier1 (CET1) capital 171,318.32 180,151.90
Other Tier 2 capital instruments - -
Total capital 171,318.32 180,151.90
Risk weighted assets 176,273.42 185,616.23
CET1 capital ratio 97.19% 97.06%
Tier 2 capital ratio 0.00% 0.00%
Regulatory capital consists of CET 1 capital, which comprises share capital, share premium, retained earnings
including current year profit and non-controlling interests less accrued dividends and goodwill.
Refer note 42 for basis of preparation. As per note 42, the regulatory capital as at March 31, 2019 has been
restated under Ind AS. Accordingly the total capital - 1,70,559.08 lakhs, risk weighted assets - 1,76,122.60 lakhs
and CET 1 captial ratio -96.84% as at March 31, 2019 is restated as given above.
37
Fair value measurement
37.1
Valuation principles
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
in the principal (or most advantageous) market at the measurement date under current market conditions (i.e.,
an exit price), regardless of whether that price is directly observable or estimated using a valuation technique.
In order to show how fair values have been derived, financial instruments are classified based on a hierarchy of
valuation techniques, as explained below.
37.2
Valuation governance
The Company’s fair value methodology and the governance over its models includes a number of controls
and other procedures to ensure appropriate safeguards are in place to ensure its quality and adequacy. The
independent price verification process for financial reporting is ultimately the responsibility of the independent
price verification team within Finance which reports to the Chief Financial officer.
37.3 Assets and liabilities by fair value hierarchy

Set out below is a comparison, by class, of the carrying amounts and fair values of the Company’s financial
instruments that are not carried at fair value in the financial statements. This table does not include the fair
values of non–financial assets and non–financial liabilities.


Carrying
31-Mar-20 Level 1 Level 2 Level 3 Total
amount
Assets measured at fair value on a
recurring basis
Financial Assets
Cash and cash equivalents 243.97 243.97 - - 243.97
Bank balance other than cash and cash 18,162.03 18,162.03 - - 18,162.03
equivalents
Other Financial Assets 669.89 - - 669.89 669.89
Investment in subsidiaries 149,120.56 531,562.96 531,562.96
Total financial assets 168,196.45 18,406.00 531,562.96 669.89 550,638.85
Trade Payables
Total outstanding dues of creditors 41.42 - - 41.42 41.42
other than micro enterprises and small
enterprises
Other financial liabilities 189.66 - - 189.66 189.66
Total financial liabilities 231.08 - - 231.08 231.08
Carrying
amount
Assets measured at fair value on a
recurring basis
Financial Assets
Cash and cash equivalents 405.23 405.23 - - 405.23
Bank balance other than cash and cash 17,403.44 17,403.44 - - 17,403.44
equivalents
Other Financial Assets 444.27 - - 444.27 444.27
Investment in subsidiaries 156,187.00 - 466,094.94 - 466,094.94
Total financial assets 174,439.94 17,808.67 466,094.94 444.27 484,347.88
Trade Payables
Total outstanding dues of creditors 6.00 - - 6.00 6.00
enterprises
Other financial liabilities 369.92 - - 369.92 369.92
Total financial liabilities 375.92 - - 375.92 375.92
37.4 Valuation methodologies of financial instruments or on discounted cash flow models, as explained
not measured at fair value above, which incorporate the credit risk element
Below are the methodologies and assumptions through the discount factor.
used to determine fair values for the above
financial instruments which are not recorded and 37.4.3 Investment in subsidiary
measured at fair value in the Company’s financial The company being a core investment company has
statements. These fair values were calculated for no separate business operations on a standalone
disclosure purposes only. basis. The equity shares of the Company are listed
in stock exchanges in India and it is estimated that
37.4.1 Loans and advances to customers the value of the shares of the Company are derived
The fair values of loans and receivables are from the operations in its investments in subsidiary.
estimated by discounted cash flow models that Accordingly, the management has considered the
incorporate assumptions for credit risks, probability value of its shares in active market as the value of
of default and loss given default estimates. Credit investment in its subsidiary having operations.
risk is derived from market observable data. Where
such information is not available, the Company uses 38 Risk Management Framework
historical experience and other information used in The Company is a Core Investment Company (CIC)
its collective impairment models. and its operations are limited to being a CIC. The
risks therefore relate to investments made in its
37.4.2 Off balance sheet items Subsidiaries and other investments. The operations
Estimated fair values of off-balance sheet positions of each of the subsidiaries, the risks faced by them
are based on market prices for similar instruments and the risk mitigation tools followed by them to

manage these risks are reviewed periodically by the available to the company on acceptable terms. The
Audit Committees and the Boards of the respective company has developed internal control processes
Subsidiaries and other investments. and contingency plans for managing liquidity
risk. This incorporates an assessment of expected
The Company always regard that managing the risks cash flows and the availability of unencumbered
that affect its business as a fundamental activity, receivables which could be used to secure funding
as they influence performance, reputation and by way of assignment if required. Refer Note 39 for
future success. Effective risk management involves the summary of maturity profile of undiscounted
taking an integrated and balanced approach to cashflows of the Company’s financial assets and
risk and reward, and assists in achieving objectives financial liabilities as at reporting period.
of mitigating potential loss or damage and
optimising financial growth opportunities. Risk 38.3 Concentration of Risk/Exposure
management framework of the Company is aimed Concentration of credit risk arise when a number
at aligning capital to investment strategy, to of counterparties or exposures have comparable
protect Company’s financial strength, reputation economic characteristics, or such counterparties
and to ensure support to various investment are engaged in similar activities or operate in
activities while enhancing shareholder value. same geographical area or industry sector so that
The company has a well-established risk reporting collective ability to meet contractual obligations jess
and monitoring framework. This provides the level uniformly affected by changes in economic, political
and direction of the risks, which are arrived at based or other conditions. The Company’s investments
on the two level risk thresholds for the identified consist of investment in equity shares of subsidiaries
Key Risk Indicators and are aligned to the overall and the management believes that it will not
company’s risk appetite framework approved by be affected by changes in regulatory, economic,
the board. The company also developed such risk political or other conditions.
reporting and monitoring mechanism. The company
identifies and monitors risks periodically. This 38.4 Market Risk Management
process enables the company to reassess the top Market Risk may be defined as the possibility of
critical risks in a changing environment that need loss to a Company caused by changes in the market
to be focused on. variables such as interest rates, credit spreads,
equity prices, etc. The market risk for the Company
38.1 Risk Management Governance is governed by ‘Market Risk Policy’ and ‘Treasury &
Risk management is the responsibility of the Board Investment Policy’, which are approved by the Board.
of Directors, which approves risk policies and the These policies ensure that transactions in debt and
delegation matrix. The Board is supported by capital markets are conducted in accordance with
various management committees as part of the Risk acceptable business practices and are as per the
Governance framework. The Company operates extant regulatory guidelines. Also refer note 40.
within overall limits set by the Board and Committees
to whom powers are delegated by the Board. 38.5 Credit risk and impairment assessment
Impairment risk of investment refers to the
The Audit Committee of the Board assists the Board deterioration in value of investments in subsidiaries
in carrying out its oversight responsibilities as they / group companies through operational and credit
relate to the company’s financial and other reporting risks. The Company being a CIC company is exposure
practices, internal control, and compliance with to credit risk and impairment risk of investments and
laws, regulations, and ethics. From risk management loans to counter parties. Counter party exposures
perspective, it review the adequacy of Company’s are reviewed periodically by the management for
risk management policies, processes and report the credit risk / impairment risk and are approved by
matter to the Board of Directors. the management.
38.2 Liquidity and Fund Management As per Indian Accounting standard Ind AS 109 Non-
Liquidity risk is defined as the risk that the company banking financial institutions are required to move
will encounter difficulty in meeting obligations from a standardised and regulatory approach to
associated with financial liabilities that are settled by Expected Credit Loss model for recognising an
delivering cash or another financial asset. Liquidity impairment allowance on their financials assets.
risk arises because of the possibility that the company The Company records allowance for expected credit
might be unable to meet its payment obligations losses for all loans, other debt financial assets not
when they fall due as a result of mismatches in the held at FVTPL, together with loan commitments and
timing of the cash flows under both normal and stress financial guarantee contracts. Equity instruments
circumstances. Such scenarios could occur when are not subject to impairment under Ind AS 109.
funding needed for illiquid asset positions is not The ECL allowance is based on the credit losses


expected to arise over the life of the asset (the default on their obligations in the future. It is
lifetime expected credit loss or LTECL), unless there an unbiased estimate on the likelihood of the
has been no significant increase in credit risk since loan not being repaid by the borrower within
origination, in which case, the allowance is based on a particular time. The Probability of Default is
the 12 months’ expected credit loss (12mECL)). The computed based on Company’s assessment of
12mECL is the portion of LTECLs that represent the the credit history of the borrower/ investment.
ECLs that result from default events on a financial The accounts / investments which are more than
instrument that are possible within the 12 months 90 DPD or have a significant rating downgrade
after the reporting date. Both LTECLs and 12mECLs are considered as default.
are calculated on either an individual basis or a
collective basis, depending on the nature of the Probability of Default (both 12m and LTECL)
underlying portfolio of financial instruments. is computed based on rating migration and
is assessed considering the Company’s past
The Company performs an assessment, at the end experience and also inputs / benchmarks from
of each reporting period, of whether a financial external credit rating agencies.
instrument’s credit risk has increased significantly
since initial recognition, by considering the change b) Exposure at Default
in the risk of default occurring over the remaining The Exposure at Default is an estimate of the
life of the financial instrument. exposure at a future default date (in case

Based on the above process, the Company expected changes in the exposure after the
categorises its loans into Stage 1, Stage 2 and Stage reporting date, including repayments of
3, as described below: principal and interest, whether scheduled by
contract or otherwise, expected drawdown

Stage 1: When loans are first recognised, the on committed facilities, and accrued interest
Company recognises an allowance based on from missed payments. In case of Stage 3
12mECLs. Stage 1 loans also include facilities where loans EAD represents exposure when the
the credit risk has improved and the loan has been default occurred.
reclassified from Stage 2.
c) Loss Given Default
Stage 2: When a loan has shown a significant increase The Loss Given Default is an estimate of the
in credit risk since origination, the Company records loss arising in the case where a default occurs
an allowance for the LTECLs. Stage 2 loans also at a given time. It is based on the difference
include facilities, where the credit risk has improved between the contractual cash flows due and
and the loan has been reclassified from Stage 3. those that the lender would expect to receive,
including from the realisation of any collateral.

Stage 3: Loans considered credit-impaired. The It is usually expressed as a percentage of the
Company records an allowance for the LTECLs. Exposure at Default (EAD). The Company
computes Loss Given Default based on the
38.6 Computation of ECL historical recovery experience.
The Company calculates ECLs to measure the
expected cash shortfalls, discounted at an 38.7 Forward Looking Information
approximation to the EIR. A cash shortfall is the In its ECL models, the Company relies on a broad
difference between the cash flows that are due in range of forward looking information as economic
accordance with the contract and the cash flows inputs, such as Gross Domestic Product (GDP) and
that expected to be received. Index of Industrial Production.
The mechanics of the ECL calculations are outlined The inputs and models used for calculating ECLs
below and the key elements are, as follows: may not always capture all characteristics of the
market at the date of the financial statements. To
a) Probability to Default reflect this, qualitative adjustments or overlays are
Probability of default (PD) is defined as the occasionally made as temporary adjustments when
probability of whether the borrower will such differences are significantly material.

39 Analysis of financial assets and liabilities by remaining contractual maturities

The table below summarises the maturity profile of the undiscounted cash flows of the Company’s financial
assets and liabilities as on the reporting year end date.
Less than 3 3 to 12
Particulars On demand 1 to 5 years Over 5 years Total
months months
As at 31 March 2020
Financial assets
Cash and cash equivalent and other bank 243.97 3,565.00 4,814.32 9,782.71 18,406.00
balances
Investment in Subsidiaries 149,120.56 149,120.56
Trade receivables - 216.07 52.24 401.58 - 669.89
Total undiscounted financial assets 243.97 3,781.07 4,866.56 10,184.29 149,120.56 168,196.45
Other financial liabilities 42.09 41.96 99.07 6.54 189.66
Total undiscounted financial liabilities - 42.09 41.96 99.07 6.54 189.66
Net undiscounted financial assets/ 243.97 3,738.98 4,824.60 10,085.22 149,114.02 168,006.79
(liabilities)
Less than 3 3 to 12
Particulars On demand 1 to 5 years Over 5 years Total
months months
As at 31 March 2019
Financial assets
Cash and cash equivalent and other bank 160.23 245.00 4,868.59 12,534.85 - 17,808.67
balances
Investment in Subsidiaries - - - - 156,187.00 156,187.00
Trade receivables 3.23 64.34 135.60 101.34 139.76 444.27
Total undiscounted financial assets 163.46 309.34 5,004.19 12,636.19 156,326.76 174,439.94
Other financial liabilities - 70.66 6.71 298.55 - 375.92
Total undiscounted financial liabilities - 70.66 6.71 298.55 - 375.92
Net undiscounted financial assets/ 163.46 238.68 4,997.48 12,337.64 156,326.76 174,064.02
(liabilities)
40 Total market risk exposure

31-Mar-20 31-Mar-19
Particulars Carrying Carrying
Traded risk Non-traded risk Traded risk Non-traded risk
amount amount
Assets
Cash and cash equivalent and 18,406.00 - 18,406.00 17,808.67 - 17,808.67
other bank balances
Other Financial Assets 669.89 - 669.89 444.27 - 444.27
Financial investments– 149,120.56 - 149,120.56 156,187.00 - 156,187.00
amortised cost
Total 168,196.45 - 168,196.45 174,439.94 - 174,439.94
Liabilities
Trade payables 41.42 - 41.42 6.00 - 6.00
Other liabilities 189.66 - 189.66 369.92 - 369.92
Total 231.08 - 231.08 375.92 - 375.92
41 Share based payments

On December 17, 2007, the Company established an Employees Stock Option Scheme 2007 (ESOP Scheme 2007).
Under the plan, the Company is authorised to issue upto 5,620,000 Equity Shares of ` 10 each to eligible employees
of the Company and its Subsidiaries. Employees covered by the plan are granted an option to purchase shares of
the Company subject to the requirements of vesting. A Remuneration and Nomination Committee constituted
by the Board of Directors of the Company administers the plan.


During the year ended March 31, 2013, the Company one-third of the original exercise price determined
established a new employee stock option scheme at the grant date.
titled Equitas Employees Stock Option Scheme, 2012
(ESOP Scheme 2012) effective from November 10, During the year ended March 31, 2016, the Company
2012. Under the plan, the Company was authorised established a new employee stock option scheme
to issue upto 1,000,000 Equity Shares of ` 10 each titled Equitas Employees Stock Option Scheme, 2015
to eligible employees of the Company and its (ESOP Scheme 2015) effective from September 7,
Subsidiaries. Further, the outstanding options under 2015. Under the plan, the Company was authorised
the ESOP Scheme 2007 has been transferred and to issue up to 22,200,000 Equity Shares of ` 10
made available for grant under the new scheme. each to eligible employees of the Company and its
Subsidiaries. Further, the outstanding options under
During the year ended March 31, 2014, the Company the ESOP Scheme 2014 has been transferred and
established a new employee stock option scheme made available for grant under the new scheme.
titled Equitas Employees Stock Option Scheme,
2014 (ESOP Scheme 2014) effective from July 18, During the year the Company has granted 4,70,060
2014. Under the plan, the Company was authorised stock options to its eligible employees under Equitas
to issue upto 10,500,000 Equity Shares of ` 10 Employees Stock Option Scheme, 2015 (ESOP Scheme
each to eligible employees of the Company and its 2015) at an exercise price of ` 115 per option. The
Subsidiaries. Further, the outstanding options under aforesaid grant was approved by Nomination
the ESOP Scheme 2012 has been transferred and Remuneration & Governance committee at its
made available for grant under the new scheme. Meeting held on August 02, 2019.
During the year ended March 31, 2015, pursuant During the year ended March 31, 2020, 98,86,251
to the issue of bonus shares for the existing number of options issued under the ESOP Scheme
shareholders, the Company granted 2 additional 2015 were replaced with 3,34,87,873 options issued,
options for every 1 option outstanding to be under the ESFB ESOP 2019 issued by its subsidiary
exercised as on the date of bonus issue. Further, the (Equitas Small Finance Bank Limited), to employees
exercise price for each option was been reduced to of Equitas Small Finance Bank and also Equitas
Holdings Limited. (also refer note 16h)
As at March 31, 2020, 172,308 (As at March 31, 2019 - 1,26,44,449) options were outstanding, which were granted
at various exercise prices. The following are the outstanding grants as at March 31, 2020:
ESOP Scheme after Date of Date of Board Exercise Options Method of

Vesting Period Particulars
transfer Grant Approval Price granted settlement
ESOP Scheme 2012 30-Jun-14 to 30-Jun-17 Grant 12 04-May-13 04-May-13 40.00 633,150 Equity
ESOP Scheme 2012 31-Dec-14 to 31-Dec-17 Grant 13 15-Nov-13 15-Nov-13 40.00 2,202,225 Equity
ESOP Scheme 2012 30-Jun-15 to 30-Jun-18 Grant 14 09-May-14 09-May-14 43.34 2,934,600 Equity
ESOP Scheme 2015 01-Jul-17 to 01-Jul-20 Grant 19 01-Jul-16 01-Jul-16 178.00 7,597,900 Equity
ESOP Scheme 2015 01-Sep-17 to 01-Sep-20 Grant 21 05-Aug-16 05-Aug-16 173.00 1,840,150 Equity
ESOP Scheme 2015 01-Oct-17 to 01-Oct-20 Grant 22 10-Sep-16 10-Sep-16 182.00 2,007,200 Equity
ESOP Scheme 2015 01-Nov-17 to 01-Nov-20 Grant 23 21-Oct-16 21-Oct-16 183.00 2,038,500 Equity
ESOP Scheme 2015 01-Feb-18 to 01-Feb-21 Grant 24 01-Feb-17 01-Feb-17 165.00 5,063,450 Equity
ESOP Scheme 2015 05-May-18 to 05-May-21 Grant 25 05-May-17 05-May-17 164.00 2,610,600 Equity
ESOP Scheme 2015 31-Jan-19 to 31-Jan-22 Grant 27 31-Jan-18 31-Jan-18 151.00 137,150 Equity
ESOP Scheme 2015 02-Aug-2019 to 01 Sep 20 Grant 33 02-Aug-19 02-Aug-19 115.00 330,060 Equity
* The outstanding options under the ESOP Scheme 2012 has been transferred and made available for grant under the new scheme
Employees Stock Option Scheme, 2015 (ESOP Scheme 2015) effective from September 7, 2015 approved by the shareholders
on June 22, 2016.

Exercise Period: Eligible to exercise the options during the next three years from the date of vesting.
Manner of vesting: Service condition:
In a graded manner over four years and one year period with 30%, 30%,20% and 20% of
the grants vesting in each year commencing from the start date of the first tranche for
four year options and full options vesting in a year for one year options.
Performance condition:
Subject to eligible employees meeting the specified performance conditions.
Movement of options outstanding under ESOP

March 31, 2020 March 31, 2019
Particulars Weighted Weighted

Number of Shares Average Exercise Number of Shares Average Exercise
Price (`) Price (`)
Outstanding at the beginning of the year 12,644,449 142.74 17,981,734 141.15
Granted During the period 470,060 115.00 1,692,115 140.25
Exercised during the year 328,497 61.70 1,031,522 56.69
Expired during the year 2,727,453 155.82 5,997,878 152.06
Transferred during the year 9,886,251 140.45 - -
Outstanding at the end of the year 172,308 153.61 12,644,449 142.74
Options exercisable at the end of the year 129,808 148.73 6,321,259 136.36

Particulars
March 31, 2020 March 31, 2019
Range of exercise price (`) 40 to 183 40 to 184
Weighted average remaining contractual life (in years) 2.02 2.98
Weighted average fair value of options granted 19.50 36.66
Weighted average market price of shares on the date of exercise(`) 117.33 141.45
Fair value methodology

The fair value of options is computed on the date of the grant, using Black-Scholes options pricing model with
the following inputs.
Risk Free Interest Expected Fair Value of the Option (`)

Grant Grant Date Expected Volatility
Rate Life(In years) 1st Stage 2nd Stage 3rd Stage 4th Stage
Grant 12 04-May-13 7.12% to 7.23% 2.67 to 5.67 33% to 37% 2.92 5.07 6.31 7.99
Grant 13 15-Nov-13 8.50% to 8.68% 2.64 to 5.67 34% to 39% 4.34 7.08 8.53 9.93
Grant 14 09-May-14 8.38% to 8.60% 2.64 to 5.67 33% to 38% 8.56 11.59 13.38 15.68
Grant 15 12-Nov-14 8.50% to 8.68% 2.64 to 5.67 35% to 39% 7.80 11.66 14.41 16.50
Grant 16 07-May-15 7.74% to 7.79% 2.67 to 5.67 33% to 37% 10.46 14.58 18.40 20.67
Grant 18 06-Nov-15 7.43% to 7.64% 2.67 to 5.67 33.80% to 37% 16.00 18.79 23.55 26.87
Grant 19 01-Jul-16 7.03% to 7.34% 2.50 to 5.50 23.60% to 26% 40.66 53.39 61.83 70.45
Grant 21 05-Aug-16 6.78% to 7.04% 2.58 to 5.58 22.80% to 26% 38.63 51.40 59.26 67.35
Grant 22 10-Sep-16 6.71% to 6.91% 2.58 to 5.58 22% to 25% 40.22 53.26 62.47 70.88
Grant 23 21-Oct-16 6.70% to 7.00% 2.50 to 5.50 23.10% to 39.20% 40.45 52.49 61.08 87.23
Grant 24 01-Feb-17 6.45% to 6.84% 2.58 to 5.58 22.20% to 24.70 % 35.88 47.18 55.01 63.46
Grant 25 05-May-17 6.24% to 6.59% 2.56 to 5.66 19.48% to 22.55% 31.50 40.25 50.31 57.50
Grant 27 31-Jan-18 6.87% to 7.45% 2.50 to 5.51 18.00% to 21.62% 28.39 37.69 48.24 55.83
Grant 33 02-Aug-19 5.89% 2.5 14.23% 19.05 NA NA NA


42 Additional Information as required by Reserve Bank of India, Master Direction - Core Investment Companies
(Reserve Bank) Directions, RBI/DNBR/2016-17/39, Master Direction DNBR. PD. 003/03.10.119/2016-17,
August 25, 2016
As mentioned in the basis of preparation detailed in Note 2 to these standalone financial statements, the
Company has adopted Indian Accounting Standards (‘Ind AS’) notified under Section 133 of the Companies
Act 2013 (‘the Act’) read with Companies (Indian Accounting Standards) Rules, 2015 as amended, from April
1, 2018 and consequently these standalone financial statements for the year ended March 31, 2020 has been
prepared under Ind AS.
The regulatory disclosures contained in Note 36.2 and Note 42 are required to be disclosed in the financial
statements by the Company in accordance with the requirements of the Master Directions for Non-Banking
Financial Company - Systemically Important Non-Deposit taking Company Directions, 2016 dated September 1,
2016 read with the applicable guidance / regulations issued by the RBI in this regard.
As at March 13, 2020, pursuant to the clarifications issued by the RBI vide Circular no: RBI/2019-20/170 DOR
(NBFC).CC.PD.No.109/22.10.106/2019-20 Implementation of Indian Accounting Standards, the disclosures in note
36.2 and 42 have been prepared in accordance with Ind AS. These disclosures as at 31st March 2019 has been
restated as per IndAS.
As at March 31, 2020

Sl.
Particulars Amount
No. Amount overdue
Outstanding
Liabilities side:
1 Loans and advances availed by the CIC inclusive of interest accrued thereon
but not paid:
(a) Debentures: Nil Nil
Secured
Unsecured
(other than falling within the meaning of public deposits*)
(b) Deferred Credits
(c) Term Loans
(d) Inter-corporate loans and borrowing
(e) Commercial Paper
(f) Other Loans (specify nature)
As at
Sl.
Particulars March 31, 2020
No.
Amount overdue
Assets side:
2 Break-up of Loans and Advances including bills receivables [other than those included in (4) below]:
(a) Secured -
(b) Unsecured -
3 Break up of Leased Assets and stock on hire and other assets counting towards AFC activities
(i) Lease assets including lease rentals under sundry debtors: Nil
(a) Financial lease
(b) Operating lease
(ii) Stock on hire including hire charges under sundry debtors: Nil
(a) Assets on hire
(b) Repossessed Assets
(iii) Other loans counting towards AFC activities Nil
(a) Loans where assets have been repossessed
(b) Loans other than (a) above
4 Break-up of Investments:
Current Investments:
1. Quoted: Nil
(i) Shares: (a) Equity
(b) Preference

As at
Sl.
No.
Amount overdue
(ii) Debentures and Bonds
(iii) Units of mutual funds
(iv) Government Securities
(v) Others (please specify)
2. Unquoted: Nil
(i) Shares:
(a) Equity
(b) Preference
Long Term investments:
1. Quoted: Nil
(b) Preference
2. Unquoted:
(i) Shares: (a) Equity 146,885.89
(b) Preference -
(ii) Debentures and Bonds -
(iii) Units of mutual funds -
(iv) Government Securities -
(v) Others (please specify) -
Amount net of provisions

Category
Secured Unsecured Total
5 Borrower group-wise classification of assets financed as in (2) and
(3) above:
1. Related Parties **
(a) Subsidiaries - - -
(b) Companies in the same group - - -
(c) Other related parties - - -
other than related parties
Total - - -
Market Value /
Book Value (Net
Category Break up or fair
of Provisions)
value or NAV
6 Investor group-wise classification of all investments (current and long term) in
shares and securities (both quoted and unquoted):
(a) Subsidiaries 146,885.89 146,885.89
(b) Companies in the same group
(c) Other related parties
Other than related parties
Total 146,885.89 146,885.89


Sl. Particulars Amount

No. Outstanding
7 Other information
i) Gross Non-Performing Assets
(a) Related parties Nil
(b) Other than related parties
(ii) Net Non-Performing Assets
(iii) Assets acquired in satisfaction of debt Nil
Notes:
1. As defined in Core Investment Companies (Reserve Bank) Directions, 2016.
2. Provisioning norms shall be applicable as prescribed in these Directions.
3. All Accounting Standards and Guidance Notes issued by ICAI are applicable including for valuation of
investments and other assets as also assets acquired in satisfaction of debt. However, market value in respect
of quoted investments and break up/fair value/NAV in respect of unquoted investments shall be disclosed
irrespective of whether they are classified as long term or current in (4) above.
Additional Information as required by Reserve Bank of India, Master Direction - Core Investment Companies
(Reserve Bank) Directions, RBI/DNBR/2016-17/39, Master Direction DNBR. PD. 003/03.10.119/2016-17, August 25,
2016
Sl.
Particulars Amount
No. Amount overdue
Outstanding
Liabilities side:
1 Loans and advances availed by the CIC inclusive of interest accrued thereon but not
paid:
(a) Debentures:
Secured
Unsecured
(other than falling within the meaning of public deposits*)
(b) Deferred Credits Nil Nil
(c) Term Loans
(d) Inter-corporate loans and borrowing
(e) Commercial Paper
(f) Other Loans (specify nature)
As at
Sl.
No.
Amount overdue
Assets side:
2 Break-up of Loans and Advances including bills receivables [other than those included in (4) below]:
(a) Secured -
(b) Unsecured -
3 Break up of Leased Assets and stock on hire and other assets counting towards AFC activities
(i) Lease assets including lease rentals under sundry debtors: Nil
(a) Financial lease
(b) Operating lease
(ii) Stock on hire including hire charges under sundry debtors: Nil
(a) Assets on hire
(b) Repossessed Assets
(iii) Other loans counting towards AFC activities Nil
(a) Loans where assets have been repossessed
(b) Loans other than (a) above

As at
Sl.
No.
Amount overdue
4 Break-up of Investments:
Current Investments:
1. Quoted: Nil
(b) Preference
2. Unquoted: Nil
(i) Shares:
(a) Equity
(b) Preference
Long Term investments:
1. Quoted: Nil
(b) Preference
2. Unquoted:
(i) Shares: (a) Equity 146,685.89
(b) Preference -
(ii) Debentures and Bonds -
(iii) Units of mutual funds -
(iv) Government Securities -
(v) Others (please specify) -
Amount net of provisions

Category
Secured Unsecured Total
5 Borrower group-wise classification of assets financed as in (2) and
(3) above:
(a) Subsidiaries * - - -
(b) Companies in the same group - - -
(c) Other related parties - - -
other than related parties
Total - - -
* No specific provisions are made against these exposures.
Market Value /
Book Value (Net
Category Break up or fair
of Provisions)
value or NAV
6 Investor group-wise classification of all investments (current and long term) in
shares and securities (both quoted and unquoted):
(a) Subsidiaries 146,685.89 146,685.89
(b) Companies in the same group - -
(c) Other related parties - -
Other than related parties - -
Total 146,685.89 146,685.89


Sl. Particulars Amount

No. Outstanding
7 Other information
i) Gross Non-Performing Assets
(ii) Net Non-Performing Assets
(iii) Assets acquired in satisfaction of debt Nil
As per Master Directions, no specific non-performing asset provision is required to be made on these disclosures
under Previous GAAP.
Notes:
1. As defined in Core Investment Companies (Reserve Bank) Directions, 2016.
2. Provisioning norms shall be applicable as prescribed in these Directions.
3. All Accounting Standards and Guidance Notes issued by ICAI are applicable including for valuation of
investments and other assets as also assets acquired in satisfaction of debt. However, market value in respect
of quoted investments and break up/fair value/NAV in respect of unquoted investments shall be disclosed
irrespective of whether they are classified as long term or current in (4) above.
43 Additional Information as required by Reserve Bank of India, Implementation of Indian Accounting

Standards ,Circular no: RBI/2019-20/170 DOR (NBFC).CC.PD.No.109/22.10.106/2019-20 as at 31st
March 2020
Difference
Loss
Gross Provisions between
Asset allowances
Carrying Net Carrying required as Ind AS 109
classification (Provisions)
amount as amount per IRACP provisions
as per Ind AS as required
per Ind AS (4) norms and IRACP
109 (1) under Ind AS
(2) (5) norms
109 (3)
(6) = (5) - (3)
Asset Classification as per RBI norms
Performing Assets
Standard Stage 1 - - - - -
Stage 2 - - - - -
Subtotal
Non-Performing Assets (NPA)
Substandard Stage 3 - - - - -
Doubtful - up to 1 year Stage 3 - - - - -
1 to 3 years Stage 3 - - - - -
More than 3 years Stage 3 - - - - -
Subtotal for doubtful - - - - -
Loss - - - - -
Subtotal for NPA - - - - -
Other items such as guarantees, loan Stage 1 431.44 21.77 409.67 - (21.77)
commitments, etc. which are in the (refer note
scope of Ind AS 109 but not covered A below)
under current Income Recognition, Asset
Classification and Provisioning (IRACP) Stage 2 - - - - -
norms Stage 3 - - - - -
Subtotal 431.44 21.77 409.67 - (21.77)
Total Stage 1 431.44 21.77 409.67 - (21.77)
Stage 2 - - - - -
Stage 3 - - - - -
Total 431.44 21.77 409.67 0 (21.77)
Note A
The ECL provision recorded is on financial instruments in the nature of rent receivables which fall within the
scope of Ind AS 109 but are not covered by the Income Recognition and Asset Classification and Provisioning

norms. Hence, column 5 for such items is given as nil. There are no assets in the nature of loans which fall within
the scope of Income Recognition Asset Classification and Provisioning norms which require disclosure under this
note. As the requirement for this disclosure is only from the year ended March 31, 2020, no comparatives as at
March 31, 2019 are provided.
44 Exposures to Real Estate Sector

i) The Company does not have any direct exposure to the real estate sector.
ii) The Company has the following indirect exposures to the real estate sector, through its subsidiary Equitas
Small Finance Bank Limited.
Sl As at As at
Particulars
No March 31, 2020 March 31, 2019
(a) Direct Exposures
(i) Residential Mortgages - Lending fully secured by Mortgages on residential Nil Nil
property that is or will be occupied by the borrower or that is rented
- of which housing loans eligible for inclusion in priority sector advances are Nil Nil
rendered
(ii) Commercial Real Estate
Lending secured by mortgages on commercial real estate (office buildings, retail Nil Nil
space, multi purpose commercial premises, multi family residential buildings,
multi tenanted commercial premises, industrial or warehouse space, hotels, land
acquisition, development and construction, etc.). Exposure would also include
non fund based (NFB) limit
(iii) Investments in Mortgage Backed Securities (MBS) and other securitised
exposures –
a. Residential Nil Nil
b. Commercial Real Estate Nil Nil
(b) Indirect Exposures
Fund based and non-fund based exposures on National Housing Bank (NHB) and Nil Nil
Housing Finance Companies (HFCs).
Total exposure to Real Estate Sector Nil Nil
45 Events after reporting date

There have been no events after the reporting date that require disclosure in these financial statements. The
financial statements have been approved for issue on May 29, 2020 by the Board of Directors of the Company.
46 Prior period figures have been regrouped/ reclassified wherever necessary.

Srimathy R Deepti R
Date: 29 May 2020

Independent Auditor’s Report
To the Members of Equitas Holdings Limited that the audit evidence we have obtained is sufficient
Report on the Audit of the Consolidated Financial and appropriate to provide a basis for our audit opinion
Statements on the consolidated financial statements.
Opinion
We have audited the accompanying consolidated financial Emphasis of Matter
statements of Equitas Holdings Limited(hereinafter We draw attention to the following matters:
referred to as “the Holding Company”), its subsidiaries
a.
note no 2.1 to the accompanying consolidated
(the Holding Company and its subsidiaries together
financial statements, which describes the economic
referred to as “the Group”) comprising of the consolidated
and social disruption the Company is facing as
Balance sheet as at March 31, 2020, the consolidated
a result of COVID-19 pandemic, and its possible
Statement of Profit and Loss, including Statement of
consequential implications, on the Company’s
other comprehensive income, the consolidated Cash
operations and financial metrics.
Flow Statement and the consolidated Statement of
Changes in Equity for the year then ended, and notes
b.
note no 39.1 to the accompanying consolidated
to the consolidated financial statements, including a
financial statements regarding management’s plans
summary of significant accounting policies and other
relating to compliance by Equitas Small Finance Bank
explanatory information (hereinafter referred to as “the
Limited, the Company’s subsidiary, with the relevant
consolidated financial statements”).
licensing guidelines of the Reserve Bank of India.
In our opinion and to the best of our information and
Our opinion is not modified in respect of above matters.
according to the explanations given to us and based
on the consideration of reports of other auditors on
Key Audit Matters
separate financial statements and on the other financial
Key audit matters are those matters that, in our
information of a subsidiary, the aforesaid consolidated
professional judgment, were of most significance in our
financial statements give the information required by
audit of the consolidated Ind AS financial statements
the Companies Act, 2013, as amended (“the Act”) in
for the financial year ended March 31, 2020. These
the manner so required and give a true and fair view
matters were addressed in the context of our audit of
in conformity with the accounting principles generally
the consolidated financial statements as a whole, and
accepted in India, of the consolidated state of affairs
in forming our opinion thereon, and we do not provide
of the Group, as at March 31, 2020, their consolidated
a separate opinion on these matters. For each matter
profit including other comprehensive income, their
below, our description of how our audit addressed the
consolidated cash flows and the consolidated statement
matter is provided in that context.
of changes in equity for the year ended on that date.
We have determined the matters described below to be
Basis for Opinion
the key audit matters to be communicated in our report.
We conducted our audit of the consolidated financial
We have fulfilled the responsibilities described in the
statements in accordance with the Standards on
Auditor’s responsibilities for the audit of the consolidated
Auditing (SAs), as specified under section 143(10) of
financial statements section of our report, including in
the Act. Our responsibilities under those Standards are
relation to these matters. Accordingly, our audit included
further described in the ‘Auditor’s Responsibilities for
the performance of procedures designed to respond to
the Audit of the Consolidated Financial Statements’
our assessment of the risks of material misstatement
section of our report. We are independent of the Group
of the consolidated financial statements. The results of
in accordance with the ‘Code of Ethics’ issued by the
audit procedures performed by us and by other auditors
Institute of Chartered Accountants of India together
of components not audited by us, as reported by them in
with the ethical requirements that are relevant to our
their audit reports furnished to us by the management,
audit of the financial statements under the provisions of
including those procedures performed to address the
the Act and the Rules thereunder, and we have fulfilled
matters below, provide the basis for our audit opinion
our other ethical responsibilities in accordance with
on the accompanying consolidated financial statements.
these requirements and the Code of Ethics. We believe
Provision for Financial Instruments based on expected credit loss model
Financial instruments, which include advances to customers, • We read and assessed the Bank’s impairment provisioning
represents a significant portion of the total assets of the Bank. policy with reference to Ind-AS 109 and the provisioning
The Bank has advances (net) aggregating ` 15,105.79 crores as at framework approved by the Board of Directors as well as
March 31, 2020. relevant regulatory guidelines and pronouncements.
Provision for Financial Instruments based on expected credit loss model
As per the expected credit loss model of the bank developed in • For expected credit loss provision against outstanding
accordance with the principles set out in Ind-AS 109 on Financial exposures classified across various stages, we obtained
Instruments, the Bank estimates the probability of loss / expected
an understanding of the Group’s provisioning
loss based on past experience and future considerations. This
methodology (including factors that affect the
involves a significant degree of estimation and judgements,
probability of default, loss given defaults and exposure
including determination of staging of financial instruments;
at default; various forward looking, micro- and macro-
estimation of probability of defaults, loss given defaults,
exposure at defaults; and forward looking factors, micro- and
economic factors), the underlying assumptions and the
macro-economic factors, in estimating the expected credit sufficiency of the data used by management.
losses. Additionally, the economic and business consequences • We performed tests of controls and details on a
of the COVID-19 pandemic as described in Note 2.1 to the sample basis in respect of the staging of outstanding
financial statements, significant social disruption and disturbance exposures, implementation of Group policy in
and slowdown of economic activity, moratoriums granted response to COVID-19 and other relevant data used in
to borrowers, the related regulatory directives and also the
impairment computations.
applicable accounting directions, further affect expected credit
loss under the ECL approach. • We obtained an understanding of the basis and
methodology adopted by management to determine
Due to the significance of the amounts involved, judgments
12 month and life-time probability of defaults and the
involved in classification of loans, relative complexity of various
assumptions and estimates used, uncertainties related to
loss given defaults for various homogenous segments
COVID-19 and determination of related provisions, this audit area in retail loans, and on an individual basis for corporate
is considered a key audit matter. loans, and tested the same on a sample basis.
• We tested on a sample basis, the Exposure at Default
used in the ECL calculation
• We enquired with the management regarding
significant judgments and estimates involved
in the impairment computation and additional
management overlay provision arising from the
effects of the COVID-19 pandemic, and evaluated the
reasonableness thereof.
• We tested the arithmetical accuracy of computation
of ECL provision performed by the Company
in spreadsheets
• Assessed disclosures included in the consolidated
financial statements in respect of expected credit
losses including the specific disclosures made with
regard to the impact of COVID-19 on ECL estimation.
(b) IT Systems and Controls
There has been a major enhancement in the information • We included specialized IT auditors as part of our audit
technology (IT) infrastructure of the Equitas Small Finance Bank’s team for testing IT general controls, application controls
(a subsidiary company) (the ‘Bank’), in the current year. During the and IT dependent manual controls implemented by
current year, as the IT systems and processes continue to mature in the Bank, and testing the information produced by the
view of the evolving business and regulatory landscape, frequent Bank’s IT systems.
changes in the technology environment have been carried out
by the Bank.
• We tested the design and operating effectiveness of
the Bank’s IT access controls over the key information
The IT infrastructure is critical for effective and efficient systems that are related to financial reporting.
functioning of the Bank’s business operations as well as for timely
and accurate financial reporting. Accordingly, the Bank has • We tested IT general controls in the nature of controls
continued to invest in its IT infrastructure in the current year as over logical access, changes management, and other
well. aspects of IT operational controls. These included
testing that requests for access to systems were
Due to the pervasive nature and complexity of the IT environment
reviewed and authorized.
and considering that several systems and process have been
implemented in recent past, and as a result the IT control • We considered the control environment relating to
environment may not have matured, it is considered a key audit various interfaces, configuration and other application
matter. controls identified as key to our audit.
• In addition, we tested the key application controls
with respect to financial reporting to evaluate their
operating effectiveness.
• If deficiencies were identified, we tested compensating
controls or performed alternate procedures

Other Information Those respective Board of Directors of the companies

The Holding Company’s Board of Directors is responsible included in the Group are also responsible for overseeing
for the other information. The other information the financial reporting process of the relevant entities.
comprises the information included in the Annual
report, but does not include the consolidated financial Auditor’s Responsibilities for the Audit of the
statements and our auditor’s report thereon. Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about
Our opinion on the consolidated financial statements whether the consolidated financial statements as a
does not cover the other information and we do not whole are free from material misstatement, whether
express any form of assurance conclusion thereon. due to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance is a high
In connection with our audit of the consolidated level of assurance, but is not a guarantee that an audit
financial statements, our responsibility is to read the conducted in accordance with SAs will always detect a
other information and, in doing so, consider whether material misstatement when it exists. Misstatements can
such other information is materially inconsistent with arise from fraud or error and are considered material if,
the consolidated financial statements or our knowledge individually or in the aggregate, they could reasonably
obtained in the audit or otherwise appears to be materially be expected to influence the economic decisions
misstated. If, based on the work we have performed, we of users taken on the basis of these consolidated
conclude that there is a material misstatement of this financial statements.
other information, we are required to report that fact.
We have nothing to report in this regard. As part of an audit in accordance with SAs, we exercise
professional judgment and maintain professional
Responsibilities of Management for the skepticism throughout the audit. We also:
Consolidated Financial Statements
The Holding Company’s Board of Directors is responsible • Identify and assess the risks of material misstatement
for the preparation and presentation of these consolidated of the consolidated financial statements, whether due
financial statements in terms of the requirements of the to fraud or error, design and perform audit procedures
Act that give a true and fair view of the consolidated responsive to those risks, and obtain audit evidence
financial position, consolidated financial performance that is sufficient and appropriate to provide a basis
including other comprehensive income, consolidated for our opinion. The risk of not detecting a material
cash flows and consolidated statement of changes in misstatement resulting from fraud is higher than for
equity of the Group in accordance with the accounting one resulting from error, as fraud may involve collusion,
principles generally accepted in India, including the forgery, intentional omissions, misrepresentations, or
Indian Accounting Standards (Ind AS) specified under the override of internal control.
section 133 of the Act read with the Companies (Indian
• Obtain an understanding of internal control relevant
Accounting Standards) Rules, 2015, as amended. The
to the audit in order to design audit procedures
respective Board of Directors of the companies included
that are appropriate in the circumstances. Under
in the Group are responsible for maintenance of adequate
section 143(3)(i) of the Act, we are also responsible
accounting records in accordance with the provisions of
for expressing our opinion on whether the Holding
the Act for safeguarding of the assets of the Group and for
Company has adequate internal financial controls
preventing and detecting frauds and other irregularities;
with reference to financial statements in place and
selection and application of appropriate accounting
the operating effectiveness of such controls.
policies; making judgments and estimates that are
reasonable and prudent; and the design, implementation • Evaluate the appropriateness of accounting policies
and maintenance of adequate internal financial controls, used and the reasonableness of accounting estimates
that were operating effectively for ensuring the accuracy and related disclosures made by management.
and completeness of the accounting records, relevant to
• Conclude on the appropriateness of management’s
the preparation and presentation of the consolidated
use of the going concern basis of accounting and,
financial statements that give a true and fair view and
based on the audit evidence obtained, whether
are free from material misstatement, whether due to
a material uncertainty exists related to events or
fraud or error, which have been used for the purpose of
conditions that may cast significant doubt on the
preparation of the consolidated financial statements by
ability of the Group to continue as a going concern.
the Directors of the Holding Company, as aforesaid.
If we conclude that a material uncertainty exists, we
are required to draw attention in our auditor’s report
In preparing the consolidated financial statements, the
to the related disclosures in the consolidated financial
respective Board of Directors of the companies included
statements or, if such disclosures are inadequate, to
in the Group are responsible for assessing the ability of
modify our opinion. Our conclusions are based on
the Group to continue as a going concern, disclosing, as
the audit evidence obtained up to the date of our
applicable, matters related to going concern and using the
auditor’s report. However, future events or conditions
going concern basis of accounting unless management
may cause the Group to cease to continue as a
either intends to liquidate the Group or to cease
going concern.
operations, or has no realistic alternative but to do so.
• Evaluate the overall presentation, structure and disclosures included in respect of these subsidiaries, and
content of the consolidated financial statements, our report in terms of sub-sections (3) of Section 143 of
including the disclosures, and whether the the Act, in so far as it relates to the aforesaid subsidiary,
consolidated financial statements represent the is based solely on the report of such other auditor.
underlying transactions and events in a manner that
achieves fair presentation. Our opinion above on the consolidated financial
statements, and our report on Other Legal and Regulatory
• Obtain sufficient appropriate audit evidence
Requirements below, is not modified in respect of the
regarding the financial information of the entities
above matters with respect to our reliance on the work
or business activities within the Group of which
done and the reports of the other auditors and the
we are the independent auditors, to express an
financial statements and other financial information
opinion on the consolidated financial statements.
certified by the Management.
We are responsible for the direction, supervision and
performance of the audit of the financial statements
Report on Other Legal and Regulatory
of such entities included in the consolidated financial
Requirements
statements of which we are the independent auditors.
As required by Section 143(3) of the Act, based on our
For the other entities included in the consolidated
audit and on the consideration of report of the other
financial statements, which have been audited by
auditor on separate financial statements and the
other auditors, such other auditors remain responsible
other financial information of subsidiary, as noted in
for the direction, supervision and performance of
the ‘other matter’ paragraph we report, to the extent
the audits carried out by them. We remain solely
applicable, that:
responsible for our audit opinion.
We communicate with those charged with governance of (a)
We/the other auditors whose report we have
the Holding Company and such other entities included in relied upon have sought and obtained all the
the consolidated financial statements of which we are the information and explanations which to the best of
independent auditors regarding, among other matters, our knowledge and belief were necessary for the
the planned scope and timing of the audit and significant purposes of our audit of the aforesaid consolidated
audit findings, including any significant deficiencies in financial statements;
internal control that we identify during our audit.
(b) In our opinion, proper books of account as required
We also provide those charged with governance with by law relating to preparation of the aforesaid
a statement that we have complied with relevant consolidation of the financial statements have been
ethical requirements regarding independence, and to kept so far as it appears from our examination of
communicate with them all relationships and other those books and reports of the other auditors;
matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards. (c) The Consolidated Balance Sheet, the Consolidated
Statement of Profit and Loss including the Statement
From the matters communicated with those charged of Other Comprehensive Income, the Consolidated
with governance, we determine those matters that were Cash Flow Statement and Consolidated Statement
of most significance in the audit of the consolidated of Changes in Equity dealt with by this Report are
financial statements for the financial year ended March in agreement with the books of account maintained
31, 2020 and are therefore the key audit matters. We for the purpose of preparation of the consolidated
describe these matters in our auditor’s report unless financial statements;
law or regulation precludes public disclosure about the
matter or when, in extremely rare circumstances, we (d) In our opinion, the aforesaid consolidated financial
determine that a matter should not be communicated in statements comply with the Accounting Standards
our report because the adverse consequences of doing specified under Section 133 of the Act, read with
so would reasonably be expected to outweigh the public Companies (Indian Accounting Standards) Rules,
interest benefits of such communication. 2015, as amended;
Other Matter (e) On the basis of the written representations received
We did not audit the financial statements and other from the directors of the Holding Company as on
financial information, in respect of one subsidiary, whose March 31, 2020 taken on record by the Board of
financial statements include total assets of ` 3.10 crores as Directors of the Holding Company and the reports
at March 31, 2020, and total revenues of ` 4.71 crores and of the statutory auditors who are appointed under
net cash outflows of ` 0.44 crores for the year ended on Section 139 of the Act, of its subsidiary companies,
that date. Those financial statements and other financial none of the directors of the Group’s companies
information have been audited by other auditors, is disqualified as on March 31, 2020 from being
which financial statements, other financial information appointed as a director in terms of Section 164
and auditor’s reports have been furnished to us by the (2) of the Act;
management. Our opinion on the consolidated financial
statements, in so far as it relates to the amounts and

(f)
With respect to the adequacy and the operating – Refer Note 43.1 to the consolidated
effectiveness of the internal financial controls financial statements;
over financial reporting with reference to these
consolidated financial statements of the Holding ii. Provision has been made in the consolidated
Company and its subsidiary companies, refer to our financial statements, as required under the
separate Report in “Annexure 1” to this report; applicable law or accounting standards, for
material foreseeable losses, if any, on long-
(g) The provisions of section 197 read with Schedule term contracts including derivative contracts –
V of the Act are not applicable to the Holding Refer (a) Note 8.1 to the consolidated financial
Company, its subsidiaries, associates and jointly statements in respect of such items as it
controlled companies/joint ventures and joint relates to the Group,
operations incorporated in India for the year ended
March 31, 2020; iii. There were no amounts which were required
to be transferred to the Investor Education
(h) With respect to the other matters to be included and Protection Fund by the Holding Company
in the Auditor’s Report in accordance with Rule 11 and its subsidiaries during the year ended
of the Companies (Audit and Auditors) Rules, 2014, March 31, 2020.
as amended, in our opinion and to the best of our
information and according to the explanations given
to us and based on the consideration of the report of Chartered Accountants
the other auditor on separate financial statements ICAI Firm Registration Number: 101049W/E300004
as also the other financial information of the
subsidiary, as noted in the ‘Other matter’ paragraph: per Aniruddh Sankaran
Partner
i.
The consolidated financial statements Membership Number: 211107
UDIN: 20211107AAAABV9678
disclose the impact of pending litigations
on its consolidated financial position of the Place of Signature: Chennai
Group, in its consolidated financial statements Date: May 29, 2020
Annexure 1 to the Independent Auditor’s Report of dven date on the

Consolidated Financial Statements Of Equitas Holdings Limited
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of
Section 143 of the Companies Act, 2013 (“the Act”)
In conjunction with our audit of the consolidated include the design, implementation and maintenance
financial statements of Equitas Holdings Limited as of of adequate internal financial controls that were
and for the year ended March 31, 2020, we have audited operating effectively for ensuring the orderly and
the internal financial controls over financial reporting efficient conduct of its business, including adherence to
of Equitas Holdings Limited (hereinafter referred to as the respective companies’ policies, the safeguarding of
the “Holding Company” or “EHL”) and Equitas Small their assets, the prevention and detection of frauds and
Finance bank Limited, a subsidiary company of EHL, errors, the accuracy and completeness of the accounting
(together referred to as “Applicable Companies”). EHL’s records, and the timely preparation of reliable financial
other subsidiary Equitas Technologies Private Limited information, as required under the Act.
is exempted from reporting on internal control over
financial reporting vide MCA notification no G.S.R 583 Auditor’s Responsibility
(E) dated June 13, 3017, read with corrigendum dated Our responsibility is to express an opinion on the
July 13, 2017. Applicable Companies’ internal financial controls over
financial reporting with reference to these consolidated
Management’s Responsibility for Internal Financial financial statements based on our audit. We conducted
Controls our audit in accordance with the Guidance Note on Audit
The respective Board of Directors of the Applicable of Internal Financial Controls Over Financial Reporting
Companies, are responsible for establishing and (the “Guidance Note”) and the Standards on Auditing,
maintaining internal financial controls based on both, issued by Institute of Chartered Accountants of
the internal control over financial reporting criteria India, and deemed to be prescribed under section 143(10)
established by the Holding Company considering the of the Act, to the extent applicable to an audit of internal
essential components of internal control stated in the financial controls. Those Standards and the Guidance
Guidance Note on Audit of Internal Financial Controls Note require that we comply with ethical requirements
Over Financial Reporting issued by the Institute of and plan and perform the audit to obtain reasonable
Chartered Accountants of India. These responsibilities assurance about whether adequate internal financial
controls over financial reporting with reference to these Inherent Limitations of Internal Financial Controls
consolidated financial statements was established and Over Financial Reporting With Reference to these
maintained and if such controls operated effectively in Consolidated Financial Statements
all material respects. Because of the inherent limitations of internal financial
controls over financial reporting with reference to
Our audit involves performing procedures to obtain these consolidated financial statements, including
audit evidence about the adequacy of the internal the possibility of collusion or improper management
financial controls over financial reporting with reference override of controls, material misstatements due to error
to these consolidated financial statements and their or fraud may occur and not be detected. Also, projections
operating effectiveness. Our audit of internal financial of any evaluation of the internal financial controls over
controls over financial reporting included obtaining financial reporting with reference to these consolidated
an understanding of internal financial controls over financial statements to future periods are subject to
financial reporting with reference to these consolidated the risk that the internal financial control over financial
financial statements, assessing the risk that a material reporting with reference to these consolidated financial
weakness exists, and testing and evaluating the design statements may become inadequate because of changes
and operating effectiveness of internal control based in conditions, or that the degree of compliance with the
on the assessed risk. The procedures selected depend policies or procedures may deteriorate.
on the auditor’s judgement, including the assessment of
the risks of material misstatement of the consolidated Opinion
financial statements, whether due to fraud or error. In our opinion, the Applicable Companies have
maintained, in all material respects, adequate internal
We believe that the audit evidence we have obtained financial controls over financial reporting with reference
and the audit evidence obtained by the other auditors to these consolidated financial statements and such
in terms of their reports referred to in the Other Matters internal financial controls over financial reporting with
paragraph below, is sufficient and appropriate to provide reference to these consolidated financial statements
a basis for our audit opinion on the internal financial were operating effectively as at March 31,2020, based
controls over financial reporting with reference to these on the internal control over financial reporting criteria
consolidated financial statements. established by the Holding Company considering the
essential components of internal control stated in the
Meaning of Internal Financial Controls Over Guidance Note on Audit of Internal Financial Controls
Financial Reporting With Reference to these Over Financial Reporting issued by the Institute of
Consolidated Financial Statements Chartered Accountants of India.
A company’s internal financial control over financial
reporting with reference to these consolidated financial Other Matters
statements is a process designed to provide reasonable Our report under Section 143(3)(i) of the Act on the
assurance regarding the reliability of financial reporting adequacy and operating effectiveness of the internal
and the preparation of financial statements for external financial controls over financial reporting with reference
purposes in accordance with generally accepted to these consolidated financial statements of the Holding
accounting principles. A company’s internal financial Company, insofar as it relates to one subsidiary, which is
control over financial reporting with reference to these a company incorporated in India, is based on the report
consolidated financial statements includes those policies of the auditor of such subsidiary.
and procedures that (1) pertain to the maintenance of
records that, in reasonable detail, accurately and fairly For S.R. Batliboi & Associates LLP
reflect the transactions and dispositions of the assets Chartered Accountants
of the company; (2) provide reasonable assurance
that transactions are recorded as necessary to permit
preparation of financial statements in accordance with Partner
generally accepted accounting principles, and that Membership Number: 211107
receipts and expenditures of the company are being made UDIN: 20211107AAAABV9678
only in accordance with authorisations of management
Place of Signature: Chennai
and directors of the company; and (3) provide reasonable Date: May 29, 2020
assurance regarding prevention or timely detection
of unauthorised acquisition, use, or disposition of the
company’s assets that could have a material effect on the

Consolidated Balance sheet

as at March 31, 2020
As at As at
Particulars Notes
31-Mar-2020 31-Mar-2019
Assets
Financial assets
Cash and cash equivalents 6 253,179 125,479
Bank balance other than cash and cash equivalents 7 536 530
Loans and advances 8 1,510,579 1,157,437
Trade receivable 9 53 2
Investment 10 234,442 234,590
Other Financial Asset 11 13,141 8,810
Current tax asset (Net) 32 1,798 1,577
Deferred tax asset 33 15,394 12,428
Property, plant and equipment 13 13,164 16,782
Capital work in Progress 13 237 162
Investment Property 13 5,436 5,450
Right of Use (ROU) Asset 44 26,582 -
Other non-financial assets 12 1,068 1,431
Other intangible assets 13 7,913 6,815
Total Assets 2,083,522 1,571,493
Liabilities and equity
Trade Payables
Total outstanding dues of micro enterprises 14 - -
and small enterprises
Total outstanding dues of creditors other than 14 13,570 8,449
micro enterprises and small enterprises
Debt securities 15 21,976 52,633
Borrowings (other than debt securities) 16 641,697 354,036
Deposits 17 1,067,865 887,987
Other financial liabilities 18 38,037 16,315
Current tax liabilities (Net) 32 488 362
Deferred tax liabilities 33 94 -
Provisions 19 8,526 6,448
Other Non-financial liabilities 20 955 893
Total liabilities 1,793,208 1,327,123
Equity
Equity share capital 21 34,179 34,146
Other equity 22 244,185 210,224
Equity attributable to owners of the company 278,364 244,370
Non controlling interest 11,950 -
Total Liability and Equity 2,083,522 1,571,493
Summary of significant accounting policies

Srimathy R Deepti R
Date: 29 May 2020
Consolidated Statement of Profit and Loss

Note Year Ended Year Ended

Particulars
No. 31-Mar-2020 31-Mar-2019
Interest income 23 277,520 219,464
Revenue from contract with customers 24 10,937 8,811
Net gain on fair value changes 25 338 327
Rental income 26 216 215
Total revenue from operations 289,011 228,817
Other income 27 4,579 7,036
Total income 293,590 235,853
Expenses
Finance costs 28 119,093 96,642
Impairment on Financial assets 29 25,055 10,129
Employee benefits expenses 30 72,557 56,765
Depreciation and amortisation 13 14,547 9,276
Others expenses 31 30,721 35,910
Total Expense 261,973 208,722
Profit before tax 31,617 27,131
Tax Expenses
Current tax 32 13,604 14,052
Current tax towards prior periods 97 -
Deferred tax (Net) 33 (2,684) (4,578)
Total tax expenses 11,017 9,474
Profit for the year 20,600 17,657
Other Comprehensive Income:
Items not to be reclassified to profit or loss in subsequent periods:
Re-measurement gains/(losses) on defined benefit obligations (net) 103 55
Debt instruments measured at FVOCI 55 6
Income tax impact (39) (21)
Total Other comprehensive Income for the year, net of tax 119 40
Total comprehensive Income for the year, net of tax 20,719 17,697
Net profit for the year attributable to
Owners of the company 20,461 17,659
Non-controlling interest 139 (2)
Total comprehensive income for the year attributable to
Owners of the company 20,577 17,699
Non-controlling interest 142 (2)
Earnings per equity share
Basic earnings per equity share 34 6.03 5.18
Diluted earnings per equity share 34 6.03 5.18
Summary of significant accounting policies

Srimathy R Deepti R
Date: 29 May 2020

Consolidated Cash Flow Statement


Particulars
31 March 2020 31 March 2019
A. Cash Flow From Operating Activities
Profit before tax 31,617 27,131
Adjustments to reconcile profit before tax to net cash flows:
Depreciation and amortisation 14,547 9,276
Net gain on fair value change (338) (327)
Impairment on Financial assets 25,055 10,129
Re-measurement gains/(losses) on defined benefit obligations (net) 103 55
Impact on Effective interest rate (EIR) on financial assets 4,605 5,671
Fair valuation impact on financial assets (1,794) (961)
Impairment impact on financial instruments 402 (111)
Rental income (216) (215)
Loss on sale of property, plant and equipment 26 11
Interest expenses on borrowings 43,617 45,919
Interest expenses on lease 2,283 -
Employee expenses on share based payments 1,113 1,263
Operating profit before working capital changes 121,020 97,841
(Increase)/decrease in loans and advances (381,193) (386,565)
(Increase)/decrease in trade receivables (51) (2)
(Increase)/Decrease in investments 533 151,569
(Increase)/decrease in other financial assets (5,005) 800
(Increase)/decrease in other non-financial assets 157 (197)
Increase/(decrease) in deposits 179,892 332,862
Increase/(decrease) in trade payables 5,121 1,275
Increase/(decrease) in provisions 4,002 (851)
Increase/(decrease) in financial liabilities (7,906) (12,509)
Increase/(decrease) in financial liabilities 62 (137)
Cash used in operations (83,368) 184,086
Direct taxes paid (13,796) (14,763)
Net Cash flow used in from/(used in) operating activities (A) (97,164) 169,323
B. Cash Flow From Investing Activities
Addition to fixed assets (7,490) (5,417)
Addition to investment property (67) (728)
Interest paid on ROU lease liability (2,283) -
Payment of lease liability (3,656) -
Proceeds from sale of property, plant and equipment 248 693
(Increase)/decrease in bank balance other than cash and cash equivalents (6) 5,902
Net Cash flow used in from/(used in) Investing Activities (B) (13,254) 450
C. Cash Flow From Financing Activities
Increase/(decrease) in borrowings (net) 263,301 (109,465)
Interest paid on borrowings (49,976) (50,207)
Proceeds from fresh issue of equity share capital, including securities premium 24,793 585
Share application money received - (38)
Net Cash flow used in from/(used in) Financing Activities (C) 238,118 (159,125)
Net Increase/Decrease in cash and cash equivalent D = (A+B+C) 127,700 10,648
Consolidated Cash Flow Statement


Particulars
31 March 2020 31 March 2019
Cash and Cash Equivalents - Opening Balance (E) 125,479 114,831
Cash and Cash Equivalents - Closing Balance (D) + (E) 253,179 125,479
Net cash provided by / (used in) operating and financing activities
Interest received 275,754 219,705
Interest paid (49,976) (50,207)
Components of Cash and Cash Equivalents at the end of the year
Cash and cash equivalents 6 253,179 125,479
Total Cash and Cash Equivalents 253,179 125,479

Srimathy R Deepti R
Date: 29 May 2020

(a) Equity share capital
116
Particulars No. of shares Amount

Balance as on March 31, 2018 340,429,976 34,043
Add: Shares issued during the year 1,031,522 103
Add: Shares issued during the year 328,497 33
(b) Other equity

Items of Other
Share Non
Income (OCI)
Particulars application Total controlling
Investment Share based money interest

Statutory Capital Securities Special Investment Retained
Fluctuation payment FVTOCI Reserve
Reserve reserve premium Reserve reserve Earnings
Reserve reserve
As at March 31,2018 13,820 1,328 140,322 326 230 - 4,488 30,374 67 24 190,979 2
Profit for the year - - - - - - - 17,659 - - 17,659 (2)
Other Comprehensive Income - - - - - - - - - 40 40 -
Sub total 13,820 1,328 140,322 326 230 - 4,488 48,033 67 64 208,678 -
- - - -
Transfer from retained earnings 5,451 - - - - - - (5,451) - - - -
to Statutory Reserves
Transfer from retained earnings - - - 264 - - - (264) - - - -
to Special reserve
Transfer from retained earnings - - - - - 843 - (843) - - - -

to Investment Fluctuation reserve
Addition on account of ESOP cost - - - - - - 1,102 - - - 1,102 -
Premium on issue of share capital - - 626 - - - - (585) - 41 -
under ESOP Scheme 2015
Share application money received - - - - - - - - 547 - 547 -
Transfer of ESOP cost to retained - - - - - - (1,635) 1,635 - - - -
earnings upon lapse of options
Transfer of ESOP cost to securities - - - - - - (144) - - - (144) -
premium upon exercise
As at March 31, 2019 19,271 1,328 140,948 590 230 843 3,811 43,110 29 64 210,224 -
Consolidated Statement of Changes in Equity
Profit for the year - - - - - - - 20,461 - - 20,461 139

Other Comprehensive Income - - - - - - - - - 116 116 3
Minority interest created - - - - - - - (7,062) - - (7,062) 11,808
Sub total 19,271 1,328 140,948 590 230 843 3,811 56,509 29 180 223,739 11,950
Items of Other
Share Non
Income (OCI)
Particulars application Total controlling
Investment Share based money interest
Statutory Capital Securities Special Investment Retained
Fluctuation payment FVTOCI Reserve
Reserve reserve premium Reserve reserve Earnings
Reserve reserve
Effect of adoption of Ind AS 116 - - - - - - - (910) - - (910) -
Leases
Deferred tax on Effect of - - - - - - - 227 - - 227 -
adoption of Ind AS 116 Leases
Financial Statements
Transfer from retained earnings 6,245 - - - - - - (6,245) - - - -

to Statutory Reserves
Transfer from retained earnings - - - 483 - - - (483) - - - -
to Special reserve
Transfer from retained earnings - - - - - 276 - (276) - - - -
to Investment Fluctuation reserve
Addition on account of ESOP cost - - - - - - 1,114 - - - 1,114 -
Minority interest created - - - - - - - - - - - -
Premium on issue of share capital - - 20,099 - - - - - (203) - 19,896 -
under ESOP Scheme 2015
Share application money received - - - - - - - - 174 - 174 -
Transfer of ESOP cost to retained - - - - - - (4,266) 4,266 - - - -
earnings upon lapse of options
Adjustment on account of 7,609 (7,609)
modification of ESOP scheme 2015

Transfer of ESOP cost to securities - - - - - - (55) - - (55) -
premium upon exercise
As at March 31, 2020 25,516 1,328 161,047 1,073 230 1,119 8,213 45,479 - 180 244,185 11,950

Consolidated Statement of Changes in Equity

Srimathy R Deepti R
Date: 29 May 2020

117
Summary of Significant Accounting Policies and Notes forming part of the Consolidated
1 Corporate information c The excess of Cost to the Company of

Equitas Holdings Limited (“the Company” / “EHL”) its Investment in the Subsidiaries over
was incorporated on June 22, 2007. The Company is the Company’s portion of the Equity is
a public limited Company incorporated under the recognised in the Financial Statements as
provisions of Companies Act 1956. The registered Goodwill, being an asset in the Consolidated
office of the Company is located at 410A, 4th Floor, Financial Statement. The carrying value of
Spencer Plaza, Phase II, No.769, Mount Road, Anna Goodwill is tested for impairment as at the
Salai, Chennai – 600 002. The Company received end of each reporting year. The goodwill is
certificate of registration dated September 1, determined separately for each subsidiary
2016 from the Reserve Bank of India (“RBI”) to Company and such amounts are not set off
commence / carry on the business as a Non-Banking between different entities.
Financial Institution .
d The excess of the Company’s portion of
The Company is a non-deposit taking Systemically Equity of the Subsidiaries on the acquisition
Important Core Investment Group (CIC-ND- date over its Cost of Investment is treated as
SI) registered with Reserve Bank of India vide Capital Reserve.
certificate no. N-07.00822. The Company is the
holding Company of its subsidiaries Equitas Small The financial statements of the following subsidiary
Finance Bank Limited and Equitas Technologies companies have been considered for consolidation:
Private Limited (collectively, the ‘Group’).
Country of
Name of Entity Relationship % of holding
2 Basis of preparation Incorporation
The consolidated financial statements of the Group Equitas Small Subsidiary India 95.49%
have been prepared in accordance with Indian Finance Bank
Accounting Standards (Ind AS) notified under the Limited
Companies (Indian Accounting Standards) Rules, Equitas Subsidiary India 99.57%
2015 (as amended from time to time). Technologies
Pvt Ltd
The consolidated financial statements have been
prepared on a historical cost basis, except for 2.1 Impact of COVID -19 pandemic
fair value through other comprehensive income The COVID-19 pandemic (declared as such by the
(FVTOCI) instruments, other financial assets held for World Health Organisation on March 11, 2020),
trading and financial assets and liabilities designated has contributed to a significant decline and
at fair value through profit or loss (FVTPL), all of volatility, and a significant decrease in economic
which have been measured at fair value activity, in global and Indian markets. The Indian
government announced a strict 40-day lockdown

The consolidated financial statements are in India to contain the spread of the virus till May
presented in Indian Rupees (INR) and all values 3, 2020, which was further extended till May 31,
are rounded to the nearest Lakhs, except when 2020 with some relaxations in specific areas. This
otherwise indicated. has led to significant disruptions and dislocations
for individuals and businesses, impacting regular
Principles of Consolidation banking operations including lending, fund-
The Consolidated Financial Statements relating to mobilisation, and collection activities. In respect
the Group, have been prepared on the following of the Equitas Small Finance Bank’s loan book,
basis: Management has made provisions as more fully
a The Financial Statements of the Group explained in note 4.1. However, the full extent
have been combined on a line-by-line basis of impact of the COVID-19 pandemic on the
by adding together the book values of operations, and financial metrics (including impact
like items of assets, liabilities, income and on provisioning on advances) will further depend
expenses, after eliminating material intra- on government and regulatory guidelines and
group balances and intra-group transactions future developments which are uncertain and
resulting in unrealised profits or losses unless incapable of estimation at this time.
cost cannot be recovered, as per Ind-AS 110 –
Consolidated Financial Statements. 2.2 Presentation of financial statements
The Group presents its balance sheet in order
b The Financial Statements of the Subsidiaries
of liquidity. An analysis regarding recovery or
used in the Consolidation are drawn up
settlement within 12 months after the reporting
to the same reporting date as that of the
date (current) and more than 12 months after the
Company i.e. 31 March 2020
reporting date (non–current) is presented in Note 41.
Financial assets and financial liabilities are generally at amortised cost if both of the following
reported gross in the balance sheet. They are only conditions are met:
offset and reported net when, in addition to having
an unconditional legally enforceable right to offset • The financial asset is held within a business
the recognised amounts without being contingent model with the objective to hold financial assets
on a future event, the parties also intend to settle in order to collect contractual cash flows
on a net basis in all the following circumstances:
• The contractual terms of the financial asset give
rise on specified dates to cash flows that are
• The normal course of business
solely payments of principal and interest (SPPI)
• The event of default on the principal amount outstanding.
• The event of insolvency or bankruptcy of the • The details of these conditions are outlined below.
Group and/or its counterparties
3.2.1.1 Business model assessment
3. Significant accounting policies The Group determines its business model at the
3.1 Financial instruments – initial recognition level that best reflects how it manages groups of
3.1.1 Date of recognition financial assets to achieve its business objective.-
Financial assets and liabilities, with the exception
of loans, debt securities, deposits and borrowings The Group’s business model is not assessed on an
are initially recognised on the transaction date, instrument-by-instrument basis, but at a higher
i.e., the date that the Group becomes a party to level of aggregated portfolios and is based on
the contractual provisions of the instrument. Loans observable factors such as:
are recognised when funds are transferred to the
customers’ account. The Group recognises debt • How the performance of the business model
securities, deposits and borrowings when funds and the financial assets held within that business
reach the Group. model are evaluated and reported to the entity’s
key management personnel
3.1.2 Initial measurement of financial instruments
• The risks that affect the performance of the
The classification of financial instruments at initial
business model (and the financial assets held
recognition depends on their contractual terms and
within that business model) and, in particular,
the business model for managing the instruments.
the way those risks are managed
Financial instruments are initially measured at their
fair value, except in the case of financial assets and • How managers of the business are compensated
financial liabilities recorded at FVTPL, transaction (for example, whether the compensation is
costs are added to, or subtracted from, this amount. based on the fair value of the assets managed or
on the contractual cash flows collected)
3.1.3
Measurement categories of financial assets
• The expected frequency, value and timing
and liabilities
of sales are also important aspects of the
Group’s assessment
The Group classifies all of its financial assets based
on the business model for managing the assets and
The business model assessment is based on
the asset’s contractual terms, measured at either: reasonably expected scenarios without taking
‘worst case’ or ‘stress case’ scenarios into account.
• Amortised cost, If cash flows after initial recognition are realised
in a way that is different from the Group’s original
• FVTOCI,
expectations, the Group does not change the
• FVTPL classification of the remaining financial assets
held in that business model, but incorporates such
Financial liabilities, other than loan commitments information when assessing newly originated or
and financial guarantees, are measured at newly purchased financial assets going forward.
amortised cost or FVTPL when fair value
designation is applied. 3.2.1.2 The SPPI test
As a second step of its classification process the
3.2 Financial assets and liabilities Group assesses the contractual terms of financial to
3.2.1 Bank balances, Loans, Trade receivables and identify whether they meet the SPPI test.
financial investments at amortised cost
The Group measures Bank balances, Loans, Trade ‘Principal’ for the purpose of this test is defined as the
receivables and other financial investments fair value of the financial asset at initial recognition

and may change over the life of the financial asset 3.2.4 Equity instruments at FVTOCI
(for example, if there are repayments of principal The Group subsequently measures all equity
or amortisation of the premium/discount). investments at fair value through profit or loss,
unless the Group’s management has elected to
The most significant elements of interest within a classify irrevocably some of its equity investments
lending arrangement are typically the consideration as equity instruments at FVTOCI, when such
for the time value of money and credit risk. To make instruments meet the definition of Equity under
the SPPI assessment, the Group applies judgement Ind AS 32 Financial Instruments: Presentation
and considers relevant factors such as the currency and are not held for trading. Such classification is
in which the financial asset is denominated, and determined on an instrument-by-instrument basis.
the period for which the interest rate is set.
Gains and losses on these equity instruments
3.2.2 Financial assets or financial liabilities held for are never recycled to profit or loss. Dividends
trading are recognised in profit or loss as dividend
The Group classifies financial assets as held for income when the right of the payment has been
trading when they have been purchased or issued established, except when the Group benefits from
primarily for short-term profit making through such proceeds as a recovery of part of the cost
trading activities or form part of a portfolio of of the instrument, in which case, such gains are
financial instruments that are managed together, recorded in OCI. Equity instruments at FVTOCI are
for which there is evidence of a recent pattern of not subject to an impairment assessment.
short-term profit taking. Held-for-trading assets
and liabilities are recorded and measured in the 3.2.5 Debt securities and other borrowed funds
balance sheet at fair value. Changes in fair value After initial measurement, debt issued and other
are recognised in net gain on fair value changes. borrowed funds are subsequently measured at
Interest and dividend income or expense is recorded amortised cost. Amortised cost is calculated by
in net gain on fair value changes according to the taking into account any discount or premium on
terms of the contract, or when the right to payment issue funds, and costs that are an integral part of
has been established. the Effective Interest Rate (‘EIR’).
Included in this classification are debt securities, 3.2.6 Financial assets and financial liabilities at fair
equities, and customer loans that have been value through profit or loss
acquired principally for the purpose of selling or Financial assets and financial liabilities in this
repurchasing in the near term. category are those that are not held for trading and
have been either designated by management upon
3.2.3 Debt instruments at FVTOCI initial recognition or are mandatorily required to
Debt instruments are measured at FVTOCI when be measured at fair value under Ind AS 109.
both of the following conditions are met:
Financial assets and financial liabilities at FVTPL
The instrument is held within a business model, the are recorded in the balance sheet at fair value.
objective of which is achieved by both collecting Changes in fair value are recorded in profit and
contractual cash flows and selling financial assets loss with the exception of movements in fair value
of liabilities designated at FVTPL due to changes
The contractual terms of the financial asset in the Group’s own credit risk. Such changes in
meet the SPPI test fair value are recorded in the Own credit reserve
through OCI and do not get recycled to the profit

FVTOCI debt instruments are subsequently or loss. Interest earned or incurred on instruments
measured at fair value with gains and losses designated at FVTPL is accrued in interest income
arising due to changes in fair value recognised in or finance cost, respectively, using the EIR, taking
OCI. Interest income and foreign exchange gains into account any discount/ premium and qualifying
and losses are recognised in profit or loss in the transaction costs being an integral part of
same manner as for financial assets measured instrument. Interest earned on assets mandatorily
at amortised cost. Where the Group holds more required to be measured at FVTPL is recorded using
than one investment in the same security, they are contractual interest rate.
deemed to be disposed of on a first–in first–out
basis. On derecognition, cumulative gains or losses 3.2.7 Undrawn loan commitments
previously recognised in OCI are reclassified from Undrawn loan commitments are commitments
OCI to profit or loss. under which, over the duration of the commitment,
the Group is required to provide a loan with pre-
specified terms to the customer. Undrawn loan
commitments are in the scope of the Expected The Group has transferred its contractual rights to
Credit Loss (‘ECL’) requirements. receive cash flows from the financial asset
The nominal contractual value of undrawn loan Or

commitments, where the loan agreed to be
provided is on market terms, are not recorded in It retains the rights to the cash flows, but has
the balance sheet. assumed an obligation to pay the received cash
flows in full without material delay to a third party
3.3 Reclassification of financial assets and liabilities under a ‘pass–through’ arrangement
The Group does not reclassify its financial assets
subsequent to their initial recognition, apart from
Pass-through arrangements are transactions
the exceptional circumstances in which the Group whereby the Group retains the contractual rights
acquires, disposes of, or terminates a business to receive the cash flows of a financial asset
line. Financial liabilities are never reclassified. The (the ‘original asset’), but assumes a contractual
Company did not reclassify any of its financial obligation to pay those cash flows to one or more
assets or liabilities in FY 2019-20 and FY 2018-19. entities (the ‘eventual recipients’), when all of the
following three conditions are met:
3.4 Derecognition of financial assets and liabilities
3.4.1 Derecognition of financial assets due to The Group has no obligation to pay amounts to the
substantial modification of terms and conditions eventual recipients unless it has collected equivalent
The Group derecognises a financial asset, such amounts from the original asset, excluding short-
as a loan to a customer, when the terms and term advances with the right to full recovery of the
conditions have been renegotiated to the extent amount lent plus accrued interest at market rates
that, substantially, it becomes a new loan, with
the difference recognised as a derecognition The Group cannot sell or pledge the original asset
gain or loss, to the extent that an impairment other than as security to the eventual recipients
loss has not already been recorded. The newly
recognised loans are classified as Stage 1 for ECL The Group has to remit any cash flows it collects on
measurement purposes behalf of the eventual recipients without material
delay. In addition, the Group is not entitled to
When assessing whether or not to derecognise a reinvest such cash flows, except for investments
loan to a customer, amongst others, the Group in cash or cash equivalents including interest
considers the following factors: earned, during the period between the collection
date and the date of required remittance to the
• Change in counterparty eventual recipients.
• If the modification is such that the instrument
A transfer only qualifies for derecognition if either:
would no longer meet the SPPI criterion
If the modification does not result in cash flows The Group has transferred substantially all the risks
that are substantially different, the modification and rewards of the asset
does not result in derecognition. Based on the
change in cash flows discounted at the original Or
EIR, the Group records a modification gain or
loss, to the extent that an impairment loss has not The Group has neither transferred nor retained
already been recorded. substantially all the risks and rewards of the asset,
but has transferred control of the asset
3.4.2 Derecognition of financial assets other than due to
substantial modification The Group considers control to be transferred if
3.4.2.1 Financial assets and only if, the transferee has the practical ability
A financial asset is derecognised when the rights to sell the asset in its entirety to an unrelated third
to receive cash flows from the financial asset have party and is able to exercise that ability unilaterally
expired. The Group also derecognises the financial and without imposing additional restrictions
asset if it has both transferred the financial asset on the transfer.
and the transfer qualifies for derecognition.
When the Group has neither transferred nor
The Group has transferred the financial asset if, retained substantially all the risks and rewards
and only if, either: and has retained control of the asset, the asset
continues to be recognised only to the extent of

the Group’s continuing involvement, in which case, Based on the above process, the Group categorises
the Group also recognises an associated liability. its loans into Stage 1, Stage 2 and Stage 3, as
The transferred asset and the associated liability described below:
are measured on a basis that reflects the rights and
obligations that the Group has retained. Stage 1:
When loans are first recognised,
the Group recognises an allowance
Continuing involvement that takes the form of a based on 12mECLs. Stage 1 loans also
guarantee over the transferred asset is measured include facilities where the credit risk
at the lower of the original carrying amount of the has improved and the loan has been
asset and the maximum amount of consideration reclassified from Stage 2.
the Group could be required to pay.
3.4.3 Financial liabilities
the Group records an allowance for
A financial liability is derecognised when the
the LTECLs. Stage 2 loans also include
obligation under the liability is discharged,
facilities, where the credit risk has
cancelled or expires. Where an existing financial
improved and the loan has been
liability is replaced by another from the same lender
on substantially different terms, or the terms of
an existing liability are substantially modified, Stage 3 Loans considered credit-impaired.
such an exchange or modification is treated as The Group records an allowance
a derecognition of the original liability and the for the LTECLs.
recognition of a new liability. The difference
between the carrying value of the original financial 3.5.2 The calculation of ECL
liability and the consideration paid is recognised in The Group calculates ECLs to measure the expected
profit or loss. cash shortfalls, discounted at an approximation
to the EIR. A cash shortfall is the difference
3.5 Impairment of financial assets between the cash flows that are due to an entity
3.5.1 Overview of the ECL principles in accordance with the contract and the cash flows
The Group records allowance for expected credit that the entity expects to receive.
losses for all loans, other debt financial assets not
held at FVTPL, together with loan commitments The mechanics of the ECL calculations are outlined
and financial guarantee contracts, in this section below and the key elements are, as follows:
all referred to as ‘financial instruments’. Equity
instruments are not subject to impairment PD The Probability of Default is an estimate of
under Ind AS 109. the likelihood of default over a given time
horizon. A default may only happen at a
The ECL allowance is based on the credit losses certain time over the assessed period, if the
expected to arise over the life of the asset (the facility has not been previously derecognised
lifetime expected credit loss or LTECL), unless there and is still in the portfolio.
has been no significant increase in credit risk since
EAD The Exposure at Default is an estimate of the
origination, in which case, the allowance is based
exposure at a future default date (in case
on the 12 months’ expected credit loss (12mECL)).
expected changes in the exposure after the
The 12mECL is the portion of LTECLs that represent
reporting date, including repayments of
principal and interest, whether scheduled by
financial instrument that are possible within the 12
contract or otherwise, expected drawdowns
months after the reporting date.
on committed facilities, and accrued interest
from missed payments. In case of Stage 3
Both LTECLs and 12mECLs are calculated on either
loans EAD represents exposure when the
an individual basis or a collective basis, depending
default occurred,.
on the nature of the underlying portfolio of
financial instruments.
LGD The Loss Given Default is an estimate of the
loss arising in the case where a default occurs
The Group has established a policy to perform
at a given time. It is based on the difference
an assessment, at the end of each reporting
between the contractual cash flows due
period, of whether a financial instrument’s
and those that the lender would expect to
credit risk has increased significantly since initial
receive, including from the realisation of
recognition, by considering the change in the risk
any collateral. It is usually expressed as a
of default occurring over the remaining life of the
percentage of the EAD..
financial instrument.
Impairment losses and releases are accounted for • Unemployment rates

and disclosed separately from modification losses
• House price indices
or gains that are accounted for as an adjustment of
the financial asset’s gross carrying value
The inputs and models used for calculating ECLs
may not always capture all characteristics of the

The mechanics of the ECL method are
market atthe date of the financial statements. To
summarised below:
occasionally made as temporary adjustments when
Stage 1: The 12mECL is calculated as the portion
such differences are significantly material.
of LTECLs that represent the ECLs that
result from default events on a financial
3.6 Collateral valuation
instrument that are possible within
To mitigate its credit risks on financial assets, the
the 12 months after the reporting
Group seeks to use collateral, where possible.
date. The Company calculates the
The collateral comes is in the form of real estate.
12mECL allowance based on the
Collateral, unless repossessed, is not recorded on
expectation of a default occurring in
the Group’s balance sheet. However, the fair value
the 12 months following the reporting
of collateral affects the calculation of ECLs. It is
date. These expected 12-month
generally assessed, at a minimum, at inception
default probabilities are applied to
and re-assessed on a regular basis. However, some
a forecast EAD and multiplied by the
collateral, for example, cash or securities relating
expected LGD and discounted by an
to margining requirements, is valued daily.
approximation to the original EIR.
Non-financial collateral, such as real estate,
increase in credit risk since origination, is valued based on data provided by third
the Company records an allowance for parties such as mortgage brokers, or based on
the LTECLs PDs and LGDs are estimated housing price indices.
over the lifetime of the instrument.
The expected cash shortfalls are 3.7 Collateral repossessed
discounted by an approximation to The Group’s policy is to determine whether a
the original EIR. repossessed asset can be best used for its internal
operations or should be sold. Assets determined
Stage 3: For loans considered credit-impaired,
to be useful for the internal operations are
the Company recognises the lifetime
transferred to their relevant asset category at the
expected credit losses for these loans.
lower of their repossessed value or the carrying
The method is similar to that for Stage
value of the original secured asset. Assets for which
2 assets, with the PD set at 100%.
selling is determined to be a better option are
transferred to assets held for sale at their fair value
When estimating LTECLs for undrawn
(if financial assets) and fair value less cost to sell
loan commitments, the Company
for non-financial assets at the repossession date in,
estimates the expected portion of the
line with the Group’s policy.
loan commitment that will be drawn
down over its expected life. The ECL
3.8 Write-offs
is then based on the present value of
Financial assets are written off either partially or
the expected shortfalls in cash flows if
in their entirety only when the Group has stopped
the loan is drawn down. The expected
pursuing the recovery. If the amount to be written
cash shortfalls are discounted at
off is greater than the accumulated loss allowance,
an approximation to the expected
the difference is first treated as an addition to the
EIR on the loan.
allowance that is then applied against the gross
carrying amount. Any subsequent recoveries are
Loan commitment For an undrawn commitment,
credited to impairment on financial instrument on
ECLs are calculated and presented together
statement of profit and loss.
with the loan. For loan commitments, the ECL is
recognised along with advances
3.9 Forborne and modified loans
The Group sometimes makes concessions or
3.5.3 Forward looking information
modifications to the original terms of loans as a
In its ECL models, the Group relies on a broad
response to the borrower’s financial difficulties,
range of forward looking information as economic
rather than taking possession or to otherwise
inputs, such as
enforce collection of collateral. The Group
considers a loan forborne when such concessions
• GDP growth
or modifications are provided as a result of 3.10 Determination of fair value

the borrower’s present or expected financial The Group measures financial instruments, such as,
difficulties and the Group would not have agreed derivatives at fair value at each balance sheet date.
to them if the borrower had been financially
healthy. Indicators of financial difficulties include Fair value is the price that would be received to sell
defaults on covenants, or significant concerns an asset or paid to transfer a liability in an orderly
raised by the Credit Risk Department. Forbearance transaction between market participants at the
may involve extending the payment arrangements measurement date. The fair value measurement is
and the agreement of new loan conditions. Once based on the presumption that the transaction to sell
the terms have been renegotiated, any impairment the asset or transfer the liability takes place either:
is measured using the original EIR as calculated
before the modification of terms. It is the Group’s • In the principal market for the asset or liability, or
policy to monitor forborne loans to help ensure
• In the absence of a principal market, in the most
that future payments continue to be likely to occur.
advantageous market for the asset or liability
Derecognition decisions and classification between
Stage 2 and Stag 3 are determined on a case-by-
The principal or the most advantageous market
case basis. If these procedures identify a loss in
must be accessible by the Group.
relation to a loan, it is disclosed and managed as an
impaired Stage 3 forborne asset until it is collected
The fair value of an asset or a liability is measured
or written off.
using the assumptions that market participants
would use when pricing the asset or liability,
When the loan has been renegotiated or modified
assuming that market participants act in their
but not derecognised, the Group also reassesses
economic best interest.
whether there has been a significant increase in
credit risk. The Group also considers whether the
A fair value measurement of a non-financial asset
assets should be classified as Stage 3. Once an
takes into account a market participant’s ability to
asset has been classified as forborne, it will remain
generate economic benefits by using the asset in
forborne for a minimum 24-month probation
its highest and best use or by selling it to another
period. In order for the loan to be reclassified out
market participant that would use the asset in its
of the forborne category, the customer has to meet
highest and best use.
all of the following criteria.
The Group uses valuation techniques that are
• All of its facilities has to be considered performing
appropriate in the circumstances and for which
• The probation period of two years has passed sufficient data are available to measure fair value,
from the date the forborne contract was maximising the use of relevant observable inputs
considered performing and minimising the use of unobservable inputs.
• Regular payments of more than an insignificant
In order to show how fair values have been
amount of principal or interest have been made
derived, financial instruments are classified
during at least half of the probation period
based on a hierarchy of valuation techniques, as
summarised below:
The customer does not have any contract that is
more than 30 days past due. If modifications are
• Level 1 financial instruments −Those where the
substantial, the loan is derecognised.
inputs used in the valuation are unadjusted
quoted prices from active markets for identical
3.9.1 Debt instruments measured at fair value through
assets or liabilities that the Group has access to
OCI
at the measurement date. The Group considers
The ECLs for debt instruments measured at
markets as active only if there are sufficient
FVTOCI do not reduce the carrying amount of
trading activities with regards to the volume and
these financial assets in the balance sheet, which
liquidity of the identical assets or liabilities and
remains at fair value. Instead, an amount equal
when there are binding and exercisable price
to the allowance that would arise if the assets
quotes available on the balance sheet date.
were measured at amortised cost is recognised
in OCI as an accumulated impairment amount, • Level 2 financial instruments−Those where
with a corresponding charge to profit or loss. The the inputs that are used for valuation and
accumulated loss recognised in OCI is recycled to are significant, are derived from directly or
the profit and loss upon derecognition of the assets. indirectly observable market data available over
the entire period of the instrument’s life. Such
inputs include quoted prices for similar assets
or liabilities in active markets, quoted prices between two or more parties that
for identical instruments in inactive markets creates enforceable rights and
and observable inputs other than quoted prices obligations and sets out the criteria for
such as interest rates and yield curves, implied every contract that must be met.
volatilities, and credit spreads. In addition,
Step 2: Identify performance obligations in
adjustments may be required for the condition
the contract: A performance obligation
or location of the asset or the extent to which
is a promise in a contract with a
it relates to items that are comparable to the
customer to transfer a good or service
valued instrument. However, if such adjustments
to the customer.
are based on unobservable inputs which are
significant to the entire measurement, the Step 3: Determine the transaction price: The
Group will classify the instruments as Level 3. transaction price is the amount of
consideration to which the Group
• Level 3 financial instruments −Those that expects to be entitled in exchange for
include one or more unobservable input that is transferring promised goods or services
significant to the measurement as whole. to a customer, excluding amounts
collected on behalf of third parties.
3.11 Recognition of interest income
Step 4:
Allocate the transaction price to
3.11.1 The effective interest rate method
the performance obligations in the
Under Ind AS 109 interest income is recorded
contract: For a contract that has more
using the effective interest rate (EIR) method for
than one performance obligation, the
all financial instruments measured at amortised
Group allocates the transaction price
cost, debt instrument measured at FVTOCI and
to each performance obligation in
debt instruments designated at FVTPL. The EIR is
an amount that depicts the amount
the rate that exactly discounts estimated future
of consideration to which the Group
cash receipts through the expected life of the
expects to be entitled in exchange for
financial instrument or, when appropriate, a
satisfying each performance obligation.
shorter period, to the net carrying amount of the
financial asset. Step 5:
Recognise revenue when
(or as) the Group satisfies a
3.11.2 Interest income performance obligation
The Group calculates interest income by applying
the EIR to the gross carrying amount of financial 3.12.1 Dividend Income
assets other than credit-impaired assets Dividend income (including from FVTOCI
investments) is recognised when the Company’s
When a financial asset becomes credit-impaired right to receive the payment is established, it is
and is, therefore, regarded as ‘Stage 3’, the Group probable that the economic benefits associated
calculates interest income by applying the effective with the dividend will flow to the entity and
interest rate to the net amortised cost of the the amount of the dividend can be measured
financial asset. If the financial assets cures and is reliably. This is generally when the shareholders
no longer credit-impaired, the Group reverts to approve the dividend.
calculating interest income on a gross basis.
3.12.2 Leasing
3.12 Recognition of income and expenses The Group’s lease asset consists of leases for
Revenue (other than for those items to which Ind buildings. The Group assesses whether a contract
AS 109 Financial Instruments are applicable) is contains a lease, at inception of a contract. A
measured at fair value of the consideration received contract is, or contains, a lease If the contract
or receivable. Ind AS 115 Revenue from contracts conveys the right to control the use of an
with customers outlines a single comprehensive identified asset for a period of time in exchange
model of accounting for revenue arising from for consideration. To assess whether a contract
contracts with customers and supersedes current conveys the right to control the use of an identified
revenue recognition guidance found within Ind ASs. asset, the Group assesses whether: (i) the contract
involves the use of an identified asset (ii) the Group
The Group recognises revenue from contracts has substantially all of the economic benefits from
with customers based on a five step model as set the use of the asset through the period of the lease
out in Ind 115: and (iii) the Group has the right to direct the use of
the asset. Refer note 5
Step 1: Identify contract(s) with a customer:
A contract is defined as an agreement

3.13.1 Group as a lessee The Group, based on technical assessment made

Leases that do not transfer to the entities of the by technical expert and management estimate,
Group substantially all of the risks and benefits depreciates certain items of building over estimated
incidental to ownership of the leased items are useful lives which are different from the useful
operating leases. Operating lease payments are life prescribed in Schedule II to the Companies
recognised as an expense in the statement of profit Act, 2013. The management believes that these
and loss on a straight-line basis over the lease estimated useful lives are realistic and reflect fair
term, unless the increase is in line with expected approximation of the period over which the assets
general inflation, in which case lease payments are are likely to be used.
recognised based on contractual terms. Contingent
rental payable is recognised as an expense in the The residual values, useful lives and methods of
period in which they it is incurred. depreciation of property, plant and equipment are
reviewed at each financial year end and adjusted
3.14 Cash and cash equivalents prospectively, if appropriate
Cash and cash equivalents comprises of Cash in
Hand, demand deposits with other banks and Property plant and equipment is derecognised
Balances with RBI and Balances with Banks and on disposal or when no future economic benefits
Money at Call and Short Notice. are expected from its use. Any gain or loss arising
on derecognition of the asset (calculated as the
Cash equivalents are short-term balances (with difference between the net disposal proceeds and
an original maturity of three months or less from the carrying amount of the asset) is recognised in
the date of acquisition), highly liquid investments other income / expense in the statement of profit
that are readily convertible into known amounts and loss in the year the asset is derecognised. The
of cash and which are subject to insignificant date of disposal of an item of property, plant and
risk of changes in value. For the purpose of the equipment is the date the recipient obtains control
consolidated statement of cash flows, cash and of that item in accordance with the requirements
cash equivalents consist of cash and short-term for determining when a performance obligation is
deposits, as defined above, net of outstanding satisfied in Ind AS 115.
bank overdrafts as they are considered an integral
part of the Group’s cash management. 3.16 Impairment of non–financial assets
The Group assesses, at each reporting date,
3.15 Property, plant and equipment whether there is an indication that an asset may be
Property plant and equipment is stated at cost impaired. If any indication exists, or when annual
excluding the costs of day–to–day servicing, impairment testing for an asset is required, the
less accumulated depreciation and accumulated Group estimates the asset’s recoverable amount.
impairment in value. Changes in the expected useful An asset’s recoverable amount is the higher of an
life are accounted for by changing the amortisation asset’s or cash-generating unit’s (CGU) fair value less
period or methodology, as appropriate, and costs of disposal and its value in use. Recoverable
treated as changes in accounting estimates. amount is determined for an individual asset, unless
the asset does not generate cash inflows that are
Depreciation is calculated using the straight– largely independent of those from other assets or
line method to write down the cost of property groups of assets. When the carrying amount of an
and equipment to their residual values over their asset or CGU exceeds its recoverable amount, the
estimated useful lives. Land is not depreciated. asset is considered impaired and is written down to
its recoverable amount.
The estimated useful lives are, as follows:
In assessing value in use, the estimated future cash
Estimated useful
flows are discounted to their present value using a
Estimated useful pre-tax discount rate that reflects current market
life specified under
Asset life as assessed by
Schedule II of the assessments of the time value of money and the
the Company
Companies Act 2013 risks specific to the asset. In determining fair value
Office Equipment 3 Years 5 Years less costs of disposal, recent market transactions
Computer 3 Years 3 years are taken into account. If no such transactions
Equipment can be identified, an appropriate valuation model
Furniture and 3 Years 10 years is used. These calculations are corroborated
Fixtures by valuation multiples, quoted share prices for
Vehicles 4 Years 8 Years publicly traded companies or other available fair
value indicators.
The Group bases its impairment calculation on 3.18 Retirement and other employee benefits
detailed budgets and forecast calculations, which Retirement benefit in the form of provident fund
are prepared separately for each of the Group’s is a defined contribution scheme. The Group has
CGUs to which the individual assets are allocated. no obligation, other than the contribution payable
These budgets and forecast calculations generally to the provident fund. The Group recognises
cover a period of five years. For longer periods, a contribution payable to the provident fund scheme
long-term growth rate is calculated and applied as an expense, when an employee renders the
to project future cash flows after the fifth year. related service. If the contribution payable to the
To estimate cash flow projections beyond periods scheme for service received before the balance
covered by the most recent budgets/forecasts, the sheet date exceeds the contribution already paid,
Group extrapolates cash flow projections in the the deficit payable to the scheme is recognised as
budget using a steady or declining growth rate a liability after deducting the contribution already
for subsequent years, unless an increasing rate paid. If the contribution already paid exceeds the
can be justified. In any case, this growth rate does contribution due for services received before the
not exceed the long-term average growth rate for balance sheet date, then excess is recognised as
the products, industries, or country or countries an asset to the extent that the pre-payment will
in which the entity operates, or for the market in lead to, for example, a reduction in future payment
which the asset is used. or a cash refund.
Impairment losses of continuing operations, are The Group operates a defined benefit gratuity
recognised in the statement of profit and loss. For plan in India, which requires contributions to be
assets, an assessment is made at each reporting made to a separately administered fund.
date to determine whether there is an indication The cost of providing benefits under the defined
that previously recognised impairment losses no benefit plan is determined using the projected
longer exist or have decreased. If such indication unit credit method.
exists, the Group estimates the asset’s or CGU’s
recoverable amount. A previously recognised
Remeasurements, comprising of actuarial
impairment loss is reversed only if there has been gains and losses, the effect of the asset ceiling,
a change in the assumptions used to determine excluding amounts included in net interest on
the asset’s recoverable amount since the last the net defined benefit liability and the return
impairment loss was recognised. The reversal is on plan assets (excluding amounts included in net
limited so that the carrying amount of the asset interest on the net defined benefit liability), are
does not exceed its recoverable amount, nor recognised immediately in the balance sheet with a
exceed the carrying amount that would have corresponding debit or credit to retained earnings
been determined, net of depreciation, had no through OCI in the period in which they occur.
impairment loss been recognised for the asset Remeasurements are not reclassified to profit or
in prior years. Such reversal is recognised in the loss in subsequent periods.
statement of profit or loss unless the asset is carried
at a revalued amount, in which case, the reversal is Past service costs are recognised in profit or loss on
treated as a revaluation increase. the earlier of:
3.17 Financial guarantees • The date of the plan amendment or

Financial guarantees are initially recognised in curtailment, and
the financial statements (within ‘other liabilities’)
• The date that the Group recognises related
at fair value, being the premium received.
restructuring costs
Subsequently, the liability is measured at the higher
of the amount of loss allowance determined as per
Net interest is calculated by applying the discount
impairment requirements of Ind AS 109 and the
rate to the net defined benefit liability or asset.
amount recognised less cumulative amortisation.
The Group recognises the following changes in the
net defined benefit obligation as an expense in the
Any increase in the liability relating to financial
consolidated statement of profit and loss:
guarantees is recorded in the statement of profit
and loss in credit loss expense. The premium
• Service costs comprising current service
received is recognised in the statement of profit
costs, past-service costs, gains and losses on
and loss in net fees and commission income on a
curtailments and non-routine settlements; and
straight line basis over the life of the guarantee.
• Net interest expense or income

3.19 Share based payments evaluates positions taken in the tax returns with
Employee stock compensation cost for stock respect to situations in which applicable tax
options is recognised as per the Guidance Note on regulations are subject to interpretation and
Accounting for Employee Share-based Payments, establishes provisions where appropriate.
issued by the Institute of Chartered Accountants
of India and IND AS 102. The Group measures 3.21.2 Deferred taxes
compensation cost relating to the employee Deferred tax is provided on temporary differences
stock options using the fair value method. The at the reporting date between the tax bases of
compensation cost, if any, is amortised uniformly assets and liabilities and their carrying amounts for
over the vesting period of the options. The Group financial reporting purposes.
initially measures the cost of equity-settled
transactions with employees using a binomial Deferred tax liabilities are recognised for all taxable
model to determine the fair value of the liability temporary differences, except:
incurred at the time of grant. Estimating fair value
for share-based payment transactions requires • Where the deferred tax liability arises from the
determination of the most appropriate valuation initial recognition of an asset or liability in a
model, which is dependent on the terms and transaction that is not a business combination
conditions of the grant. This estimate also requires and, at the time of the transaction, affects neither
determination of the most appropriate inputs the accounting profit nor taxable profit or loss
to the valuation model including the expected
• In respect of taxable temporary differences
life of the share option, volatility and dividend
associated with investments in subsidiaries,
yield and making assumptions about them. The
where the timing of the reversal of the temporary
assumptions and models used for estimating fair
differences can be controlled and it is probable
value for share-based payment transactions are
that the temporary differences will not reverse
disclosed in Note 53.
in the foreseeable future
3.20 Provisions

Deferred tax assets are recognised for all
Provisions are recognised when the Group has a
deductible temporary differences, the carry
present obligation (legal or constructive) as a result
forward of unused tax credits and any unused tax
of past events, and it is probable that an outflow
losses. Deferred tax assets are recognised to the
of resources embodying economic benefits will be
extent that it is probable that taxable profit will be
required to settle the obligation, and a reliable
available against which the deductible temporary
estimate can be made of the amount of the
differences, and the carry forward of unused tax
obligation. When the effect of the time value of
credits and unused tax losses can be utilised, except
money is material, the Group determines the level
of provision by discounting the expected cash
• When the deferred tax asset relating to the
flows at a pre-tax rate reflecting the current rates
deductible temporary difference arises from
specific to the liability. The expense relating to any
the initial recognition of an asset or liability in
provision is presented in the statement of profit
a transaction that is not a business combination
and loss net of any reimbursement.
3.21 Taxes
3.21.1 Current taxes • In respect of deductible temporary differences
Current tax assets and liabilities for the current and associated with investments in subsidiaries,
prior years are measured at the amount expected associates and interests in joint ventures,
to be recovered from, or paid to, the taxation deferred tax assets are recognised only to the
authorities. The tax rates and tax laws used to extent that it is probable that the temporary
compute the amount are those that are enacted, or differences will reverse in the foreseeable future
substantively enacted, by the reporting date in the and taxable profit will be available against which
countries where the Group operates and generates the temporary differences can be utilised
taxable income.
The carrying amount of deferred tax assets is
Current income tax relating to items recognised reviewed at each reporting date and reduced
outside profit or loss is recognised outside profit to the extent that it is no longer probable that
or loss (either in other comprehensive income or sufficient taxable profit will be available to allow
in equity). Current tax items are recognised in all or part of the deferred tax asset to be utilised.
correlation to the underlying transaction either in Unrecognised deferred tax assets are re-assessed
OCI or directly in equity. Management periodically at each reporting date and are recognised to the
extent that it has become probable that future the carrying amount of the assets distributed is
taxable profits will allow the deferred tax asset recognised in the statement of profit and loss.
to be recovered.
4. Significant accounting judgements, estimates
Deferred tax assets and liabilities are measured and assumptions
at the tax rates that are expected to apply in the The preparation of the Group’s financial statements
year when the asset is realised or the liability is requires management to make judgements,
settled, based on tax rates (and tax laws) that estimates and assumptions that affect the reported
have been enacted or substantively enacted at the amount of revenues, expenses, assets and liabilities,
reporting date. and the accompanying disclosures, as well as the
disclosure of contingent liabilities. Uncertainty
Deferred tax relating to items recognised outside about these assumptions and estimates could result
profit or loss is recognised outside profit or loss in outcomes that require a material adjustment to
(either in other comprehensive income or in the carrying amount of assets or liabilities affected
equity). Deferred tax items are recognised in in future periods.
correlation to the underlying transaction either in
OCI or directly in equity. Judgements
In the process of applying the Group’s accounting
Deferred tax assets and deferred tax liabilities are policies, management has made the following
offset if a legally enforceable right exists to set off judgements, which have a significant risk of causing
current tax assets against current tax liabilities and a material adjustment to the carrying amounts of
the deferred taxes relate to the same taxable entity assets and liabilities within the next financial year.
and the same taxation authority.
Estimates and assumptions
3.21.3 Goods and services tax /value added taxes paid on The key assumptions concerning the future and
acquisition of assets or on incurring expenses other key sources of estimation uncertainty at
Expenses and assets are recognised net of the goods the reporting date, that have a significant risk
and services tax/value added taxes paid, except: of causing a material adjustment to the carrying
amounts of assets and liabilities within the next
• When the tax incurred on a purchase of assets financial year, are described below. The Group
or services is not recoverable from the taxation based its assumptions and estimates on parameters
authority, in which case, the tax paid is recognised available when the consolidated financial
as part of the cost of acquisition of the asset or statements were prepared. Existing circumstances
as part of the expense item, as applicable and assumptions about future developments,
however, may change due to market changes or
• When receivables and payables are stated with
circumstances arising that are beyond the control
the amount of tax included
of the Group. Such changes are reflected in the
assumptions when they occur.
The net amount of tax recoverable from, or payable
to, the taxation authority is included as part of
4.1 Estimation of uncertainties relating to the global
receivables or payables in the balance sheet.
health pandemic from COVID-19 (COVID19)
In terms of the COVID-19 Regulatory Package of the
3.22 Dividends on ordinary shares
RBI, Bank (Subsidiary of the Company) has granted
The Group recognises a liability to make cash or
a moratorium as permitted under the relevant
non-cash distributions to equity holders of the
guidelines of the RBI and as approved by the Board
parent when the distribution is authorised and
of Directors of the Bank. Estimates and associated
the distribution is no longer at the discretion of
assumptions applied in preparing the financial
the Group. As per the corporate laws in India,
Statements, especially for the expected credit loss
a distribution is authorised when it is approved
on advances, are based on historical experience
by the shareholders. A corresponding amount is
and other emerging/forward looking factors
recognised directly in equity.
including those arising on account of the COVID-19
pandemic. The Bank has used early indicators of
Non-cash distributions are measured at the fair
moratorium and delayed payment metrics observed
value of the assets to be distributed with fair value
along with an estimation of potential stress on
re-measurement recognised directly in equity.
probability of defaults and exposure at default due
to COVID-19 situation in developing the estimates
Upon distribution of non-cash assets, any difference
and assumptions to assess the expected credit loss
between the carrying amount of the liability and
on loans and has recognised an expected credit loss

of Rs 17,924 lakhs, including a management overlay interdependencies. Elements of the ECL models
of Rs 10,899 lakhs. The provision held by the bank is that are considered accounting judgements and
higher than the minimum as per RBI norms, having estimates include:
regard to the RBI circular dated March 13, 2020.
• The Group’s criteria for assessing if there
4.2 Fair value of financial instruments has been a significant increase in credit
The fair value of financial instruments is the price risk and so allowances for financial assets
that would be received to sell an asset or paid should be measured on a LTECL basis and the
to transfer a liability in an orderly transaction in qualitative assessment
the principal (or most advantageous) market at
• The segmentation of financial assets when their
the measurement date under current market
ECL is assessed on a collective basis
conditions (i.e., an exit price) regardless of whether
that price is directly observable or estimated using • Development of ECL models, including the
another valuation technique. When the fair values various formulas and the choice of inputs
of financial assets and financial liabilities recorded
• Determination of associations between
in the balance sheet cannot be derived from active
macroeconomic scenarios and, economic inputs,
markets, they are determined using a variety
such as unemployment levels and collateral
of valuation techniques that include the use of
values, and the effect on PDs, EADs and LGDs
valuation models. The inputs to these models are
taken from observable markets where possible, but • Selection of forward-looking macroeconomic
where this is not feasible, estimation is required in scenarios and their probability weightings, to
establishing fair values. Judgements and estimates derive the economic inputs into the ECL models
include considerations of liquidity and model
• It has been the Group’s policy to regularly
inputs related to items such as credit risk (both own
review its models in the context of actual loss
and counterparty), funding value adjustments,
experience and adjust when necessary.
correlation and volatility.
4.5 Provisions and other contingent liabilities
4.3 Effective Interest Rate (EIR) method
The Group operates in a regulatory and legal
The Group’s EIR methodology, recognises interest
environment that, by nature, has a heightened
income / expense using a rate of return that
element of litigation risk inherent to its operations.
represents the best estimate of a constant rate of
As a result, it is involved in various litigation,
return over the expected behavioural life of loans
arbitration and regulatory investigations and
given / taken and recognises the effect of potentially
proceedings in the ordinary course of the
different interest rates at various stages and other
Group’s business.
characteristics of the product life cycle (including
prepayments and penalty interest and charges).
When the Group can reliably measure the outflow
of economic benefits in relation to a specific case
This estimation, by nature, requires an element
and considers such outflows to be probable, the
of judgement regarding the expected behaviour
Group records a provision against the case. Where
and life-cycle of the instruments, as well expected
the probability of outflow is considered to be
changes to India’s base rate and other fee income/
remote, or probable, but a reliable estimate cannot
expense that are integral parts of the instrument.
be made, a contingent liability is disclosed.
4.4 Impairment of financial asset

Given the subjectivity and uncertainty of
The measurement of impairment losses across all
determining the probability and amount of losses,
categories of financial assets requires judgement,
the Group takes into account a number of factors
in particular, the estimation of the amount and
including legal advice, the stage of the matter
timing of future cash flows and collateral values
and historical evidence from similar incidents.
when determining impairment losses and the
Significant judgement is required to conclude on
assessment of a significant increase in credit
these estimates.
risk. These estimates are driven by a number of
factors, changes in which can result in different
5
Changes in accounting policies and disclosures
levels of allowances.
The Group applied Ind AS 116 Leases for the first
time. The nature and effect of the changes as a
The Group’s ECL calculations are outputs of complex
result of adoption of this new accounting standard
models with a number of underlying assumptions
is described below.
regarding the choice of variable inputs and their
At the date of commencement of the lease, the the shorter of the lease term. Right-of-use assets
Group recognises a right-of-use asset (“ROU”) are evaluated for recoverability whenever events
and a corresponding lease liability for all lease or changes in the circumstances indicate that their
arrangements in which it is a lessee, except for carrying amounts may not be recoverable.
leases with a term of twelve months or less (short-
term leases) and low value leases. For these short- The lease liability is initially measured at amortised
term and low value leases, the Group recognises cost at the present value of the future lease
the lease payments as an operating expense on a payments. The lease payments are discounted using
straight-line basis over the term of the lease. Leases the incremental borrowing rates in the country
are classified as finance leases whenever the terms of domicile of the leases. Lease liabilities are
of the lease transfer substantially all the risks and remeasured with a corresponding adjustment to
rewards of ownership to the lessee. All other leases the related right-of-use asset if the Group changes
are classified as operating leases. The Group enters its assessment if the whether it will exercise an
into operating leases as a lessee for renting of extension or a termination option.
branch premises.
ROU asset has been presented under Property,
Certain lease arrangements include the options plant and equipment while lease liability is
to extend or terminate the lease before the end presented under Other Financial Liabilities in the
of the lease term. ROU assets and lease liabilities Balance Sheet. Lease payments made by the Group
includes these options when it is reasonably certain are classified as financing cash flows.
that they will be exercised.

The effect of adoption of Ind AS 116 is
Right-of-Use assets are depreciated from the given in note 44.
commencement date on a straight-line basis over

Notes to Consolidated financial statements

6 Cash and cash equivalents

As at As at
Particulars
March 31, 2020 March 31, 2019
Cash on hand 13,849 11,586
Balances with Reserve Bank of India (In current account) 24,237 28,684
Balances with bank (in current account) 7,093 6,838
Money at call and short notice
With Banks 208,000 -
With other institutions - 22,983
Lending under Reverse Repo - 55,388
Total 253,179 125,479
7 Bank balance other than cash and cash equivalents

As at As at
Particulars
March 31, 2020 March 31, 2019
Balances with bank
In Other deposits account 353 -
In Other deposits account - Lien 183 530
Total 536 530
Fixed deposits and other balances with banks earns interest at fixed rate or floating rates based on bank deposit rates
8 Loans and advances

As at As at
Particulars
March 31, 2020 March 31, 2019
Term loans at amortised cost
Micro and small enterprises loan 568,447 419,143
Vehicle Finance loan 379,576 296,138
Housing loan 59,385 37,868
Micro finance loan 362,830 307,327
Business loan -Unsecured 15,703 35,151
MSE & Financial Intermediaries 154,274 74,117
Other loans 3,824 3,239
Total - Gross 1,544,039 1,172,983
Less: ECL Impairment allowance (Refer Note 8b below) 33,460 15,546
Total - Net 1,510,579 1,157,437
(a) Secured by tangible assets (property, plant and equipment including land and building) 1,009,799 755,203
(b) Secured by book debts, inventories, fixed deposit and other working capital items 154,274 74,117
(c) Unsecured 379,966 343,663
Total - Gross 1,544,039 1,172,983
Less: ECL Impairment allowance (Refer Note 8b below) 33,460 15,546
Total - Net 1,510,579 1,157,437
A) Loans and Advances
Loans repayable on Demand 57,766 27,900
Term Loans 1,486,273 1,145,083
Total - Gross 1,544,039 1,172,983
B) Loans and Advances
Loans in India 1,544,039 1,172,983
Loans outside India - -
Total - Gross 1,544,039 1,172,983
8b. Movement ECL impairment allowance

ECL impairment allowance - Opening Balance 15,546 11,791
New assets originated or purchased 8,976 6,462
Assets derecognised or repaid (excluding write offs) (1,722) (2,859)
Impact on year end ECLs of exposures transferred between stages during the year 12,747 2,278
Amounts written off (2,087) (2,126)
ECL impairment allowance - Closing Balance 33,460 15,546
(Also refer Note 8.1)

Note 8.1 Micro and small enterprises loan

8.1.1 Credit quality of assets
The table below shows the credit quality and the maximum exposure to credit risk based on the Group’s
internal credit rating system and year-end stage classification. The amounts presented are gross of impairment
allowances. Details of the Group’s internal grading system are explained in Note 47 and policies on whether ECL
allowances are calculated on an individual or collective basis are set out in Note 47.
March 31, 2020 March 31, 2019
Particulars Stage 3 Stage 3

Stage 1 Stage 2 Stage 1 Stage 2
Collective/ Total Collective/ Total
Collective Collective Collective Collective
Individual Individual
High 475,960 - - 475,960 397,803 - - 397,803
Standard 58,253 5,342 - 63,595 5,659 984 - 6,643
Potential Sub-Standard - 9,073 - 9,073 - 3,339 - 3,339
Defaulted but Not impaired - - 1,884 1,884 - - 755 755
Defaulted And Impaired - - 17,506 17,506 - - 10,281 10,281
Individually impaired - - 429 429 - - 322 322
Total 534,213 14,415 19,819 568,447 403,462 4,323 11,358 419,143
8.1.2 A
n analysis of changes in the gross carrying amount and the corresponding ECL allowances in relation to
Micro and small enterprises loan is, as follows:
March 31, 2020 March 31, 2019

Gross Carrying amount 403,462 4,323 11,358 419,143 227,879 4,018 7,676 239,573
opening balance
New assets originated or 248,453 1,099 1,071 250,623 233,318 531 333 234,182
purchased
Assets derecognised or (99,846) (658) (711) (101,215) (53,478) (628) (463) (54,569)
repaid (excluding write offs)
Transfers to Stage 1 602 (447) (155) - 549 (294) (255) -
Transfers to Stage 2 (12,128) 12,322 (194) - (2,541) 2,715 (174) -
Transfers to Stage 3 (6,264) (2,220) 8,484 - (2,232) (2,018) 4,250 -
Amounts written off (66) (4) (34) (104) (33) (1) (9) (43)
Gross carrying amount 534,213 14,415 19,819 568,447 403,462 4,323 11,358 419,143
closing balance
8.1.3 Reconciliation of ECL balance is given below:

March 31, 2020 March 31, 2019

ECL allowance - opening 231 14 399 644 138 15 282 435
balance
New assets originated or 40 53 38 131 51 1 13 65
purchased
Assets derecognised or (31) (2) (36) (69) (17) (1) (28) (46)
Transfers to Stage 1 - - - - 1 (1) - -
Transfers to Stage 2 (805) 814 (9) - (7) 8 (1) -
Transfers to Stage 3 (210) (70) 280 - (86) (78) 164 -
Impact on year end ECLs of 1,013 116 (83) 1,046 157 70 (25) 202
exposures transferred between
stages during the year
Amounts written off (3) - (8) (11) (6) - (6) (12)
ECL allowance - closing 235 925 581 1,741 231 14 399 644
balance


8.2 Vehicle Finance loan

March 31, 2020 March 31, 2019

High 241,493 - - 241,493 224,457 - - 224,457
Standard 50,605 26,982 - 77,587 35,313 8,550 - 43,863
Potential Sub-Standard - 41,728 - 41,278 3,380 10,712 - 14,092
Defaulted but Not impaired - - 1,234 1,234 - - 1,453 1,453
Individually impaired - - 2,240 2,240 - - 454 454
Total 292,098 68,710 18,768 379,576 263,150 19,262 13,726 296,138
8.2.2 An analysis of changes in the gross carrying amount and the corresponding ECL allowances in relation to
Vehicle Finance loan is, as follows:
March 31, 2020 March 31, 2019

Gross Carrying amount 263,150 19,262 13,726 296,138 191,844 21,491 13,148 226,483
opening balance
New assets originated or 202,690 20,359 1,609 224,658 191,708 5,108 1,326 198,142
purchased
Assets derecognised or (119,739) (11,367) (3,648) (134,754) (104,437) (14,678) (3,518) (122,633)
Transfers to Stage 1 747 (667) (80) - 1,200 (1,150) (50) -
Transfers to Stage 2 (44,877) 45,047 (170) - (12,107) 12,156 (49) -
Transfers to Stage 3 (7,362) (2,936) 10,298 - (4,092) (2,935) 7,027 -
Amounts written off (2,511) (988) (2,967) (6,466) (966) (730) (4,158) (5,854)
closing balance

March 31, 2020 March 31, 2019

ECL allowance - opening 3,922 830 3,974 8,726 3,194 1,066 3,789 8,049
balance
New assets originated or 2,668 2,349 465 5,482 2,883 193 388 3,464
purchased
Assets derecognised or (723) (195) (273) (1,191) (827) (365) (270) (1,462)
Transfers to Stage 2 (5,314) 5,335 (21) - (525) 528 (3) -
Transfers to Stage 3 (2,211) (880) 3,091 - (1,196) (884) 2,080 -
Amounts written off (174) (161) (1,535) (1,870) (91) (131) (1,868) (2,090)
ECL allowance - closing 3,919 8,135 5,486 17,540 3,922 830 3,974 8,726
balance

8.3 Housing loan

March 31, 2020 March 31, 2019

High 50,255 - - 50,255 33,552 - - 33,552
Standard 3,959 887 - 4,846 717 279 - 996
Potential Sub-Standard - 1,123 - 1,123 - 707 - 707
Defaulted but Not impaired - - 414 414 - - 211 211
Individually impaired - - 68 68 - - 65 65
Total 54,214 2,010 3,161 59,385 34,269 986 2,613 37,868
Housing loan is, as follows:
March 31, 2020 March 31, 2019

Gross Carrying amount 34,269 986 2,613 37,868 23,961 1,287 1,929 27,177
opening balance
New assets originated or 26,404 281 34 26,719 14,554 32 14 14,600
purchased
Transfers to Stage 2 (1,235) 1,337 (102) - (424) 445 (21) -
Gross carrying amount 54,214 2,010 3,161 59,385 34,269 986 2,613 37,868
closing balance

March 31, 2020 March 31, 2019

ECL allowance - opening 73 8 307 388 56 8 232 296
balance
New assets originated or 13 28 4 45 7 - 2 9
purchased
Assets derecognised or (7) (1) (18) (26) (4) - (30) (34)
Transfers to Stage 2 (145) 148 (3) - (3) 3 - -
Impact on year end ECLs of 183 59 (58) 184 67 69 (13) 123
ECL allowance - closing 66 205 312 583 73 8 307 388
balance


8.4 Micro finance loan

March 31, 2020 March 31, 2019

High 264,410 - - 264,410 297,826 - - 297,826
Standard 91,521 805 - 92,326 4,508 320 - 4,828
Potential Sub-Standard - 1,325 - 1,325 - 1,927 - 1,927
Individually impaired - - - - - - - -
Total 355,931 2,130 4,769 362,830 302,334 2,247 2,746 307,327
Micro finance loan is, as follows:
March 31, 2020 March 31, 2019

Gross Carrying amount 302,334 2,247 2,746 307,327 223,562 760 1,602 225,924
opening balance
New assets originated or 261,708 504 407 262,619 238,615 1,298 350 240,263
purchased
Assets derecognised or (202,830) (2,855) (1,428) (207,113) (156,818) (1,121) (921) (158,860)
Transfers to Stage 1 277 (257) (20) - (3,028) 1,835 1,193 -
Transfers to Stage 2 (2,835) 2,879 (44) - 3 (525) 522 -
Transfers to Stage 3 (2,720) (388) 3,108 - - - - -
Amounts written off (3) - - (3) - - - -
closing balance

March 31, 2020 March 31, 2019

ECL allowance - opening 1,173 18 1,868 3,059 830 6 1,090 1,926
balance
New assets originated or 263 802 1,579 2,644 1,771 361 238 2,370
purchased
Assets derecognised or (446) (28) 137 (337) (602) (9) (625) (1,236)
Transfers to Stage 1 15 (2) (13) - (826) 15 811 -
Transfers to Stage 2 (11) 41 (30) - - (355) 355 -
Transfers to Stage 3 (11) (3) 14 - - - - -
Impact on year end ECLs of - - - - - - - -
Amounts written off - - - - - - (1) (1)
ECL allowance - closing 983 828 3,555 5,366 1,173 18 1,868 3,059
balance

8.5 Business loan -Unsecured

March 31, 2020 March 31, 2019

High 9,696 - - 9,696 30,972 - - 30,972
Standard 671 146 - 817 659 112 - 771
Potential Sub-Standard - 431 - 431 19 872 - 891
Total 10,367 577 4,759 15,703 31,650 984 2,517 35,151
Business loan is, as follows
March 31, 2020 March 31, 2019

Gross Carrying amount 31,650 984 2,517 35,151 40,697 421 462 41,580
opening balance
New assets originated or 19 - - 19 12,181 100 136 12,417
purchased
Transfers to Stage 1 8 (8) - - - - - -
Transfers to Stage 2 (551) 554 (3) - (872) 872 - -
Amounts written off (89) (39) (106) (234) (15) (6) - (21)
Gross carrying amount 10,367 577 4,759 15,703 31,650 984 2,517 35,151
closing balance

March 31, 2020 March 31, 2019

ECL allowance - opening 541 35 1,571 2,147 653 14 292 959
balance
New assets originated or - - - - 196 3 86 285
purchased
Assets derecognised or (93) (1) - (94) (47) - - (47)
Transfers to Stage 1 - - - - - - - -
Transfers to Stage 2 (150) 150 - - (31) 31 - -
Amounts written off (6) (6) (186) (198) (3) (2) (12) (17)
ECL allowance - closing 425 153 2,555 3,133 541 35 1,571 2,147
balance


8.6 MSE & Financial Intermediaries

March 31, 2020 March 31, 2019

High 145,485 - - 145,485 71,307 - - 71,307
Standard 379 4,982 - 5,361 626 7 - 633
Potential Sub-Standard - 2,574 - 2,574 664 1,186 - 1,850
Defaulted but Not impaired - - - - - - - -
Defaulted And Impaired - - 854 854 - - 327 327
Total 145,864 7,556 854 154,274 72,597 1,193 327 74,117
Other Loan is, as follows:
March 31, 2020 March 31, 2019

Gross Carrying amount 72,597 1,193 327 74,117 32,625 - 1 32,626
opening balance
New assets originated or 104,876 498 197 105,571 59,048 1,193 5 60,246
purchased
Assets derecognised or (24,953) (471) 10 (25,414) (18,755) - - (18,755)
Transfers to Stage 2 (6,336) 6,336 - - - - - -
Transfers to Stage 3 (320) - 320 - (321) - 321 -
Amounts written off - - - - - - - -
Gross Carrying amount 145,864 7,556 854 154,274 72,597 1,193 327 74,117
closing balance

March 31, 2020 March 31, 2019

ECL allowance - opening 275 21 196 492 67 - - 67
balance
New assets originated or 313 225 116 654 245 21 3 269
purchased
Assets derecognised or (15) (1) (5) (21) (34) - - (34)
Transfers to Stage 2 (3,607) 3,607 - - - - - -
Impact on year end ECLs of 3,720 135 (9) 3,846 190 - - 190
ECL allowance - closing 505 3,987 479 4,971 275 21 196 492
balance

8.7 Other Loans

March 31, 2020 March 31, 2019

High 2,830 - - 2,830 2,498 - - 2,498
Standard 146 202 - 348 167 77 - 244
Potential Sub-Standard - 206 - 206 - 208 - 208
Defaulted And Impaired - - 354 354 - - 221 221
Total 2,976 408 440 3,824 2,665 285 289 3,239
Other Loan is, as follows:
March 31, 2020 March 31, 2019

Gross Carrying amount 2,665 285 289 3,239 2,787 753 397 3,937
opening balance
New assets originated or 1,692 384 215 2,291 1,490 259 131 1,880
purchased
Transfers to Stage 2 (23) 23 - - (19) 19 - -
Amounts written off (1) - - (1) - - - -
Gross Carrying amount 2,976 408 440 3,824 2,665 285 289 3,239
closing balance

March 31, 2020 March 31, 2019

ECL allowance - opening 6 - 84 90 5 - 54 59
balance
New assets originated or 1 - 35 36 - - - -
purchased
Assets derecognised or - - - - - - - -
Impact on year end ECLs of - - - - 7 - 24 31
ECL allowance - closing 6 - 120 126 6 - 84 90
balance


9 Trade Receivables
As at As at
Particulars
March 31, 2020 March 31, 2019
Considered good
Outstanding for a period not exceeding six months from the date they were due for payment 53 2
53 2
No trade or other receivable are due from directors or other officers of the Group either severally or jointly with any
other person. Nor any trade or other receivable are due from firms or private companies respectively in which any
director is a partner, a director or a member
10 Investment
As at As at
Particulars
March 31, 2020 March 31, 2019
At Amortised cost
A) In India
Government Securities 178,478 108,269
Total - Gross 178,478 108,269
Less: Impairment loss allowance - -
Total - Net 178,478 108,269
Fair value through other comprehensive income

A) In India
Treasury bills and Commercial papers 55,449 126,301
Equity instruments* 20 20
2,00,000 Equity shares (As at March 31, 2020 & March 31, 2019 2,00,000 Shares) of
`10 each fully paid up in Alpha Micro Finance Consultants Private Limited
Total - Gross 55,469 126,321
Total - Net 55,469 126,321
* The Group has designated certain unquoted instruments as FVTOCI on the basis that these are not held for trading.
Fair value through profit and loss account

A) In India
Government securities 495 -
Total - Gross 495 -
Total - Net 495 -
Total - Net Investments 234,442 234,590
10.1 Impairment losses on financial investments subject to impairment assessment

10.1.1 Investments measured at amortised cost
Credit quality of assets
The table below shows the gross carrying amount of the Group’s debt instruments measured at amortised cost
by credit risk, based on the Group’s internal credit rating system and year-end stage classification.
March 31, 2020 March 31, 2019
Particulars Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3
Total Total
Individual Individual Individual Individual Individual Individual
High grade 178,478 - - 178,478 108,269 - - 108,269
Total 178,478 - - 178,478 108,269 - - 108,269

10.1.2 Investments measured at fair valuation through other comprehensive income

The table below shows the fair value of the Group’s debt instruments measured at Fair valuation though other
comprehensive income by credit risk, based on the Group’s internal credit rating system and year-end stage
classification. The amount presented are gross of impairment allowances.
March 31, 2020 March 31, 2019

Total Total
High grade 55,449 - - 55,449 126,301 - - 126,301
Standard grade 20 - - 20 20 - - 20
Total 55,469 - - 55,469 126,321 - - 126,321
An analysis of changes in the fair value is, as follows:

March 31, 2020 March 31, 2019
Total Total
Fair value - Opening balance 126,321 - - 126,321 289,931 - - 289,931
New assets originated or 322,125 - - 322,125 606,396 - - 606,396
purchased
Assets derecognised or (393,032) - - (393,032) (770,012) - - (770,012)
Change in fair value 55 - - 55 6 - - 6
Fair value - Closing balance 55,469 - - 55,469 126,321 - - 126,321
10.1.3 Investments measured at Fair valuation through profit and loss account
The table below shows the fair value of the Group’s debt instruments measured at fair value through profit and
loss account by credit risk, based on the Group’s internal credit rating system and year-end stage classification.
The amount presented are gross of impairment allowances.
March 31, 2020 March 31, 2019

Total Total
High grade 495 - - 495 - - - -
Total 495 - - 495 - - - -
An analysis of changes in the fair value is, as follows:

March 31, 2020 March 31, 2019
Total Total
Fair value - Opening balance - - - - - - - -
New assets originated or 623,948 - - 623,948 - - - -
purchased
Assets derecognised or (623,453) - - (623,453) - - - -
Change in fair value - - - - - - - -
Fair value - Closing balance 495 - - 495 - - - -


11 Other financial assets

As at As at
Particulars
March 31, 2020 March 31, 2019
Security deposit 2,095 1,846
Rent receivable 431 215
Other assets* 10,615 6,749
Total Other financial assets 13,141 8,810
*Includes expense amounting to ` 868 lakhs relating to listing of shares under Initial Public Offer (“IPO”) of ESFB, the subsidiary. These
expense will be drawn down from the Securities Premium Reserve upon completion of the IPO in accordance with the provision of Companies
Act 2013 and the Banking Regulation Act 1949.
11.1 Rent Receivable

11.1.1 An analysis of changes in the gross carrying amount and the corresponding ECL allowances in relation to Rent
March 31, 2020 March 31, 2019
Particulars
Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2l Stage 3 Total
High 431 - - 431 215 215
Total 431 - - 431 215 - - 215
11.1.2 An analysis of changes in the gross carrying amount and the corresponding ECL allowances in relation to Rent
March 31, 2020 March 31, 2019
Particulars
Gross Carrying amount 215 - - 215 - - - -
opening balance
New exposures 216 - - 216 215 - - 215
Exposure derecognised or - - - - - - - -
repaid
Gross Carrying amount 431 - - 431 215 - - 215
closing balance

March 31, 2020 March 31, 2019
Particulars
ECL allowance - opening 12 - - 12
balance
New exposure 9 - - 9 12 - - 12
ECL allowance - closing 21 21 12 - - 12
balance
12 Other non financial assets

As at As at
Particulars
March 31, 2020 March 31, 2019
Prepaid expenses 1,068 1,431
Total 1,068 1,431
13 Property, plant and equipment
Servers,
Improvement Intangible Capital
Office Furniture Printers and Electrical
Particulars on lease hold Computers Vehicles ATM assets - Total Work in
equipment and fittings network fittings
premises Software Progress
equipment
At 1st April 2018 9,673 6,862 2,778 1,621 1,540 3,088 191 2,346 8,617 36,716 222
Additions 845 382 448 186 564 455 31 - 2,205 5,116 301
Disposals (24) (32) (3) (21) (797) - - - - (877) (361)
At 31 March 2019 10,494 7,212 3,223 1,786 1,307 3,543 222 2,346 10,822 40,955 162
Additions 691 293 539 132 681 877 33 4 4,151 7,401 990
Disposals (19) (41) (168) (15) (535) - - - (294) (1,072) (915)
At 31 March 2020 11,166 7,464 3,594 1,903 1,453 4,420 255 2,350 14,679 47,284 237
Depreciation
At 1st April 2018 1,378 2,336 1,334 558 240 629 43 330 1,845 8,693 -
Charge for the year 1,431 2,489 1,020 611 383 721 40 342 2,161 9,198 -
Disposals (24) (31) (2) (22) (454) - - - - (533) -
At 31 March 2019 2,785 4,794 2,352 1,147 169 1,350 83 672 4,006 17,358 -
Charge for the year 1,432 2,071 840 534 441 891 52 347 3,052 9,660 -
Disposals (19) (40) (165) (15) (278) - - - (294) (811) -
At 31 March 2020 4,198 6,825 3,027 1,666 332 2,241 135 1,019 6,764 26,207 -
Net Block
At 31 March 2019 7,709 2,418 871 639 1,138 2,193 139 1,674 6,816 23,597 162
At 31 March 2020 6,968 639 567 237 1,121 2,179 120 1,331 7,915 21,077 237
Depreciation charge for the year

At 31 March 2019 1,431 2,489 1,020 611 383 721 40 342 2,161 9,198
At 31 March 2020 1,432 2,071 840 534 441 891 52 347 3,052 9,660

143

Investment property
Particulars Land - Freehold Building Total
At 1st April 2018 1,532 3,331 4,863
Additions 496 232 728
Disposals - - -
At 31 March 2019 2,028 3,563 5,591
Additions - 67 67
Disposals - - -
At 31 March 2020 2,028 3,630 5,658
Depreciation
At 1 April 2018 - 63 63
Charge for the year - 78 78
Disposals - - -
At 31 March 2019 - 141 141
Charge for the year - 81 81
Disposals - - -
At 31 March 2020 - 222 222
Net Block
At 31 March 2019 2,028 3,422 5,450
At 31 March 2020 2,028 3,408 5,436
Depreciation charge for the year

At 31 March 2019 - 78 78
At 31 March 2020 - 81 81
Depreciation and amortisation expense for the year also includes amortisation of right of use asset of ` 4,806 lakhs
(Previous year ` Nil). Also refer note 44.
Income earned and expenses incurred in connection with Investment properties

Particulars
March 31, 2020 March 31, 2019
Rental income 216 215
Direct operating expenses from property that generate rental income 14 3
Direct operating expenses from property that did not generate rental income - -
Contractual obligation
There are contractual obligations to construct or develop investment properties. (Also refer note 43)
Fair value
As at As at
Particulars
March 31, 2020 March 31, 2019
Investment properties 6,425 6,140
Sensitivity Analysis
Sensitivity of the
Valuation Significant
Particulars Range input to fair value Fair value Sensitivity
technique unobservable input
(weighted average)
Investment properties Professional Price per sq. feet ` 1,868 - 5% sensitivity on rate 6,425 321
As at March 31, 2020 valuer ` 2,747 per per sq. feet
sq. feet
14 Trade Payables (Refer note 44.2)

As at As at
Particulars
March 31, 2020 March 31, 2019
Total outstanding dues of micro enterprises and small enterprises - -
Total outstanding dues of creditors other than micro enterprises and small enterprises 13,570 8,449
13,570 8,449

15 Debt Securities (at amortised cost)

As at As at
Particulars
March 31, 2020 March 31, 2019
Debentures
- Secured - 5,993
- Unsecured 21,976 46,640
21,976 52,633
Details of Debentures - secured

The Secured Redeemable Non-Convertible Debentures are secured by hypothecation of specified Receivables under
Financing activities
The Group has not defaulted in the repayment of dues to Debenture holders.
The rate of interest for Secured Redeemable Non-Convertible Debentures is Nil (PY 12.67% p.a.)
Details of Debentures - unsecured

The rate of interest for Unsecured Redeemable Non-Convertible Debentures range from 13.80%to 16.00% p.a.
(PY 10.15% to 16% p.a) with maturity tenor from 395 days to 911 days and have a bullet repayment schedule.
EIR on debentures ranges from 14.15% to 16.13%, ( PY 10.29% to 16.13%) having a maturity period from 2021 to 2022.
As at March 2020
Maturity within Maturity more
EIR Range
1 year than 1 year
13%-15% 27 14,952
15%-17% 6 6,991
As at March 2019
EIR Range
1 year than 1 year
10%-13% 19,186 -
13%-15% 11,522 17,930
15%-17% 3 3,992
16 Borrowing other than debt securities (at amortised cost)

As at As at
Particulars
March 31, 2020 March 31, 2019
Term loans
From Banks
- Secured 23,366 -
- Unsecured 152,064 1,014
From others
- Secured 3,645 9,048
- Unsecured 462,622 343,974
Total 641,697 354,036
Details of term loans from banks and others - secured

The loans are secured by hypothecation of specified receivables under fianancing activities and lien on specified fixed
deposits with banks.
The Group has not defaulted in the repayment of dues to banks and other parties.
The rate of interest range from 4.40% to 11.50% p.a (PY 8.40% to 11.50% p.a) with maturity tenor from 486
days to 2192 days.


Details of term loans from banks and others - unsecured

The rate of interest range from 3% to 10.90% p.a (4.93% to 11.40% p.a) with maturity tenor from 22 days to 1286 days.
EIR on borrowings ranges from 3% to 11.89% (9.48% to 11.89% p.a) and having a maturity period 2020 to 2025
As at March 2020
From Banks
EIR Range
1 year than 1 year
3%-8% 152,130 23,300
From Others
EIR Range
1 year than 1 year
3%-8% 20,094 24,456
8%-10% 160,928 246,623
10%-12% 8,046 6,120

From Banks
EIR Range
1 year than 1 year
4%-8% 1,014 -
From Others
EIR Range
1 year than 1 year
4%-8% 7,096 12,260
8%-10% 111,836 189,876
10%-12% 17,934 14,020
17 Deposits (at amortised cost)

As at As at
Particulars
March 31, 2020 March 31, 2019
Demand deposit 34,729 48,056
Savings bank deposit 186,116 179,313
Term deposit 843,245 658,720
Total 1,064,090 886,089
Deposits (at fair value )

Term deposit from Staff 3,775 1,898
Total 1,067,865 887,987
18 Other financial liabilities (at amortised cost)

As at As at
Particulars
March 31, 2020 March 31, 2019
Bills payable 5,144 6,262
Other financial liabilities 3,252 10,040
Liability for capital expenditure 13 13
ROU-Leased Liability 29,628 -
Total 38,037 16,315

19 Provisions
As at As at
Particulars
March 31, 2020 March 31, 2019
Loan commitment (Refer note 19.1.3) 24 17
Employee benefits
Gratuity (Refer Note 40) 1,080 306
Others (Refer Note 43.1.iv ) 7,422 6,125
Total 8,526 6,448
19.1 Loan Commitment

19.1.1 Credit quality of assets / exposure
March 31, 2020 March 31, 2019

Particulars Stage 1 Stage 2 Stage 1 Stage 2
Stage 3 Total Stage 3 Total
Individual Individual Individual Individual
High 12,707 - - 12,707 11,403 - - 11,403
Standard - - - - - - - -
Potential Sub-Standard - 31 - 31 - 6 - 6
Defaulted but Not impaired - - - - - - - -
Defaulted And Impaired - - - - - 12 - 12
Individually impaired - - - - - - -
Total 12,707 31 - 12,738 11,403 18 - 11,421
19.1.2 An analysis of changes in the gross carrying amount and the corresponding ECL allowances in relation to other
undrawn commitments is as follows:
Gross exposure reconciliation
March 31, 2020 March 31, 2019
Gross Carrying amount 11,403 18 - 11,421
opening balance
New assets originated or 12,529 25 - 12,554 18,838 14 - 18,852
purchased
Exposure derecognised or (11,219) (18) - (11,237) 11,228 4 - 11,232
closed (excluding write offs)
Transfers to Stage 1 - - - - (18,649) (14) - (18,663)
Transfers to Stage 2 (6) 6 - - - - - -
Transfers to Stage 3 - - - - (2) 2 - -
Amounts written off - - - - (12) 12 - -
Gross Carrying amount 12,707 31 - 12,738 11,403 18 - 11,421
closing balance

March 31, 2020 March 31, 2019
ECL allowance - opening 17 - - 17 69 - - 69
balance
New assets originated or 24 - - 24 13 - - 13
purchased
Exposure derecognised or (17) - - (17) (65) - - (65)
closed (excluding write offs)


March 31, 2020 March 31, 2019

ECL allowance - closing 24 - - 24 17 - - 17
balance
20 Other Non-financial liabilities

As at As at
Particulars
March 31, 2020 March 31, 2019
Statutory Dues 955 893
Total 955 893
21 Share capital
As at As at
Particulars
March 31, 2020 March 31, 2019
Authorised
440,000,000 (FY20: 440,000,000 & FY19: 440,000,000) Equity Shares of ` 10/- each 44,000 44,000
10,000,000 (FY20: 10,000,000 & FY19: 10,000,000) compulsorily convertiable preference 1,000 1,000
shares of ` 10/- each
Issued, subscribed and paid up
341,789,995 (FY19: 341,461,498) Equity Shares of `10/- each 34,179 34,146
a) Reconciliation of shares outstanding at the beginning and at the end of the reporting period
As at Mar 31, 2020 As at Mar 31, 2019
Particulars
Equity shares
At the beginning of the year 341,461,498 34,146 340,429,976 34,043
Add: Shares issued during the year 328,497 33 1,031,522 103
Outstanding at the end of the year 341,789,995 34,179 341,461,498 34,146
Terms/ rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs 10. Each holder is entitled to one vote
per equity share. Dividends are paid in Indian Rupees. Dividend, if any, proposed by the Board of Directors
is subject to the approval of the shareholders at the Annual General Meeting, except in the case of interim
dividend. Repayment of capital will be in proportion to the number of equity shares held.
During the year, the company allotted 328,497 (Previous Year 1,031,522) Equity Shares of Rs 10 each to eligible
employees pursuant to exercise of options under the Employee Stock Options Scheme at applicable premiums.
Details of Shareholders holding more than 5% shares in the company

As at Mar 31, 2020 As at Mar 31, 2019
Particulars
Equity Shares of ` 10 each fully paid
CDC Group Plc 26,791,230 7.84% 26,791,230 7.85%
26,791,230 7.84% 26,791,230 7.85%
Shares reserved for issuance

Refer Note 53 with respect to ESOP Scheme.

22 Other Equity
As at As at
Particulars
March 31, 2020 March 31, 2019
Securities premium reserve 161,047 140,948
Statutory reserve 25,516 19,271
Capital reserve 1,328 1,328
Special reserve 1,073 590
Investment reserve 230 230
Investment fluctuation reserve 1,119 843
Share based payment reserve 8,213 3,811
Retained earnings 45,479 43,110
FVTOCI reserve 180 64
Share application money - 29
Total 244,185 210,224
a. Securities premium reserve

The Securities premium received during the year represents the premium received towards allotment of 3,28,497
shares under ESOP Scheme of the Company and 47,786,736 shares alloted by the Bank. This balance in the
reserve shall be utilised in accordance with the provisions of Section 52 of the Companies Act towards issuance
of fully paid bonus shares, write-off of preliminary expenses, commission / discount expenses on issue of shares
/ debentures, premium payable on redemption of redeemable preference shares / debentures and buy back of
its own shares / securities under Section 68 of the Companies Act.
As at As at
Particulars
March 31, 2020 March 31, 2019
Balance at the beginning of the year 140,948 140,322
Premium on issue of share capital 19,874 -
Premium on issue of share capital under ESOP Scheme 225 626
Balance at the end of the year 161,047 140,948
b. Statutory reserve
The Company and its banking subsidiary are required to create a statutory reserve fund every year as per
Banking Regulation Act and RBI Regulations. Accordingly, for the year ended March 31, 2020 ` 6,245 lakhs
(Previous year ` 5,451 lakhs) had been transferred by these entities to statutory reserve.
As at As at
Particulars
March 31, 2020 March 31, 2019
Transfer from retained earnings to Statutory Reserves 6,245 5,451
c. Capital reserve
Capital reserve consist of the excess of the company’s portion of equity of the subsidiaries on the acquisition
date over its cost of investment.
As at As at
Particulars
March 31, 2020 March 31, 2019
Adjustments - -


d. Special reserve
The banking subsidiary of the company is required to transfer an amount as required by Section 36(1)(viii) of
Income Tax Act, 1961. Accordingly, for the year ended March 31, 2020 ` 483 lakhs (Previous year ` 264 lakhs) had
been transferred to special reserve.
As at As at
Particulars
March 31, 2020 March 31, 2019
Balance at the beginning of the year 590 326
Transfer from retained earnings to Special reserve 483 264
Balance at the end of the year 1,073 590
e. Investment reserve
The banking subsidiary is required to create an investment reserve for reversal of excess depreciation on
investments in accordance with the Reserve Bank of India guidelines.
As at As at
Particulars
March 31, 2020 March 31, 2019
Transfer from retained earnings to Investment reserve - -
Balance at the end of the year 230 230
f. Investment fluctuation reserve

The banking subsidiary is required to create an investment fluctuation reserve in accordance with the Reserve
Bank of India guidelines. Accordingly, for the year ended March 31, 2020 ` 276 lakhs (Previous year ` 843 lakhs)
had been transferred to the reserve.
As at As at
Particulars
March 31, 2020 March 31, 2019
Balance at the beginning of the year 843 -
Transfer from retained earnings to Investment Fluctuation reserve 276 843
Balance at the end of the year 1,119 843
g. Retained Earnings
The amount that can be distributed by the Company as dividends to its Equity Shareholders is determined
based on the financial statements of the Company and also considering the requirements of the Companies
Act, 2013. Thus, the amounts reported below are not distributable in entirety and includes non distributable
items including unrealised gains, notional gains and any change in carrying amount of an asset or of a liability
on measurement of the asset or the liability at fair value, etc.
As at As at
Particulars
March 31, 2020 March 31, 2019
Profit for the year 20,461 17,659
Transfer from retained earnings to Statutory Reserves (6,245) (5,451)
Transfer from retained earnings to Special reserve (483) (264)
Transfer from retained earnings to Investment fluctuation reserve (276) (843)
Minority interest created (7,062) -
Adjustment for ROU asset (683) -
Adjustment on account of modification of ESOP scheme 2015 (7,609) -
Transfer of ESOP cost to retained earnings upon lapse of options 4,266 1,635
Effective April 1, 2019, the Group adopted Ind AS 116 “Leases”, applicable to all lease contracts existing on April
retrospectively adjusted. On transition, the adoption of the new standard resulted in recognition of Right-of-
Use asset (ROU) of ` 25,096 Lakhs, and a lease liability of ` 27,942 Lakhs. The cumulative effect of applying the
standard resulted in ` 910 Lakhs being debited to retained earnings. Please refer to note 44 for further details.

h. Share Based Payment Reserve

The balance represents reserves created to the extent of granted options based on the Employees Stock Option
Schemes. Under Ind AS 102, fair value of the options granted is to be expensed out over the life of the vesting
period as employee compensation costs reflecting period of receipt of service.
As at As at
Particulars
March 31, 2020 March 31, 2019
Addition on account of ESOP cost 1,114 1,102
Transfer of ESOP cost to retained earnings upon lapse of options (4,266) (1,635)
Adjustment on account of modification of ESOP scheme 2015 7,609 -
Transfer of ESOP cost to securities premium upon exercise (55) (144)
i. FVTOCI Reserve
This reserve represents the cumulative gains and losses arising on the remeasurement on defined benefit
obligations and debt instruments remeasured at FVTOCI.
As at As at
Particulars
March 31, 2020 March 31, 2019
Addition during the year 116 40
Balance at the end of the year 180 64
j Impairment reserve
The Reserve Bank of India, on March 13, 2020 notified Circular no: RBI/2019-20/170 DOR (NBFC).CC.PD.
No.109/22.10.106/2019-20 Implementation of Indian Accounting Standards requiring the Company to create an
impairment reserve to the extent of shortfall in ECL provision as compared to the provision as required by IRACP
norms. The Company has performed this assessment as at March 31, 2020, and the provision required as per
IRACP norms is found to be adequate. Accordingly, no impairment reserve is created. Refer note 52.
23 Interest Income
Particulars
March 31, 2020 March 31, 2019
On Financial Assets measured at Amortised Cost
Interest income from financial investments 10,135 8,189
Interest income on loans to customers 254,179 189,763
On Financial Assets measured at fair value through OCI
Interest income from investments in debt instruments 5,694 18,208
On Financial Assets classified at fair value through profit or loss
Interest income from investments in debt instruments 528 -
Interest on deposit with banks 6,779 3,051
Other interest Income 205 253
Total Interest income 277,520 219,464
24 Revenue from contract with customers

Particulars
March 31, 2020 March 31, 2019
Fee income that are recognised over a period of time 1,472 1,189
Fee income that are recognised at point in time 8,998 7,451
Fees and commision income 53 24
Income from advertisement 300 147
Freight income 114 -
Total 10,937 8,811


25 Net gain on fair value change

Particulars
March 31, 2020 March 31, 2019
Others
Gain/(loss) on sale of debt FVOCI instrument 338 327
Total Net gain/(loss) on fair value changes 338 327
Fair value changes:

Realised 338 327
Unrealised - -
Total Net gain/(loss) on fair value changes 338 327
26 Rental Income
Particulars
March 31, 2020 March 31, 2019
Rental Income from investment properties 216 215
Total 216 215
27 Other income
Particulars
March 31, 2020 March 31, 2019
Income from sale of Priority Sector Lending Certificate 2,234 2,815
Others 2,345 4,221
Total 4,579 7,036
28 Finance Cost
Particulars
March 31, 2020 March 31, 2019
Interest cost on Financial liabilities measured at amortised cost
Debt securities 6,527 14,969
Deposits 72,315 49,859
Borrowings (other than debt securities) 37,172 31,065
Interest on Government securities 600 516
Interest Expenses - Rent 186 233
Interest Expenses - Lease 2,283 -
Interest Expenses - others 10 -
Total 119,093 96,642
29 Impairment on financial assets

he below table show impairment loss on financial assets charge to statement of profit and loss based on category
T
of financial assets.
On Financial assets measured at amortised cost
Particulars
March 31, 2020 March 31, 2019
Loans 25,039 10,181

Loan commitment 7 (52)
Provision for Standard receivables 9 -
Total 25,055 10,129
2019-20
Particulars
Stage 1 Stage 2 Stage 3 Others Total
Loans and advances to customers (82) 13,307 4,688 7,126 25,039
Loan commitments 7 - - - 7
Provision for Standard receivables 9 - - - 9
Total impairment loss (66) 13,307 4,688 7,126 25,055

2018-19
Particulars
Stage 1 Stage 2 Stage 3 Others Total
Loans and advances to customers 1,278 (185) 2,659 6,429 10,181
Loan commitments (52) - - - (52)
Total impairment loss 1,226 (185) 2,659 6,429 10,129
30 Employee benefit expenses

Particulars
March 31, 2020 March 31, 2019
Salaries and wages 64,112 50,198
Contribution to provident and other funds 3,700 2,928
Gratuity expense (Refer Note 40) 1,096 783
Share based payment to employees 1,118 1,263
Staff Welfare 2,531 1,593
Total 72,557 56,765
31 Other expenses
Particulars
March 31, 2020 March 31, 2019
Advertisement & business promotion 1,866 1,811
Communication expenses 2,126 2,095
Professional & consultancy fee 2,950 2,196
Payments to auditor (Refer Note A below) 148 135
Electricity expenses 1,331 1,256
Directors' sitting fee 241 133
Miscellaneous expenses 2,228 6,030
Insurance expenses 831 636
Printing and stationery 1,033 972
Rates and taxes 2,266 2,170
Rent 202 5,935
Brokerage fees 1,275 1,292
Repairs & maintenance - others 2,111 1,943
Travelling & conveyance 5,035 4,056
Information technology expenses 4,767 3,789
Cash handling charges 773 517
Contributions towards CSR activities (Refer Note B below) 1,360 905
Registrar fee and general meeting expenses 41 28
Freight Payments 111 -
Loss on sale of assets 26 11
Total 30,721 35,910
A. Payment to auditors (excluding taxes)

Particulars
March 31, 2020 March 31, 2019
As auditors
Statutory audit 86 92
Certification 45 21
In other capacity
Tax audit 6 5
Other reporting services 2 7
Others
Reimbursement of expenses 1 2
Total 140 127
The above amount is excluding ` 158 lakhs (previous year – Nil) for services in relation to listing of shares under Initial
Public offer (IPO ) for ESFB, the subsidiary which have been recorded under other assets. Also refer Schedule 11.


B. Details of CSR expenditure:

Particulars
March 31, 2020 March 31, 2019
a) Gross amount required to be spent by the Group during the year 388 249
In cash Yet to be paid Total

b) Amount spent during the year on 31st March 2020
ii) On purposes other than (i) above 1,360 - 1,360
In cash Yet to be paid Total

b) Amount spent during the year on 31st March 2019
i) Construction/acquisition of any asset
ii) On purposes other than (i) above 905 - 905
The Company in accordance with its CSR Policy has implemented CSR activities, through the Equitas Development
Initiatives Trust, a public charitable trust established by the Group.
C. Disclosure in accordance with Section 182 of the Companies Act, 2013

The Group incurred ` Nil (March 31, 2019: ` Nil) as contribution to political parties, etc.
D. Disclosure in accordance with Section 183 of the Companies Act, 2013

The Group incurred ` Nil (March 31, 2019: ` Nil) as contribution to nation defence fund or any other Fund
approved by the Central Government for the purpose of national defence.
32 Income Tax
Statement of profit and loss
Particulars
March 31, 2020 March 31, 2019
The components of income tax expense for the years ended 31 March 2020 and 2019 are:
Current tax (net) 13,701 14,052
Deferred tax (2,684) (4,578)
Total 11,017 9,474
Other Comprehensive Income (OCI)

Particulars
March 31, 2020 March 31, 2019
Tax effect on
Re-measurement gains/(losses) on defined benefit obligations (net) (26) (19)
Debt instruments measured at FVOCI (13) (2)
Income tax charged to OCI (39) (21)
Balance sheet
Current tax asset 1,798 1,577
Current tax liabilities 488 362
32.1 Pursuant to The Taxation Laws (Amendment) Ordinance, 2019 ( the “Ordinance”) issued on September 20, 2019,
the Company and its subsidaries has elected to exercise the option for a lower tax rate at 25.17%, as permitted
by the Ordinance. Accordingly, the Group has recognised provision for income taxes for the year ended March
31, 2020, and remeasured the balance of net deferred tax assets, at the new rates as indicated above; and the
tax expense for the year includes ` 85 lakhs of write off of MAT credit previously available and ` 3,466 lakhs
resulting from write down of deferred tax assets as at March 31 2019, and is net of ` 6 lakhs resulting from write
back of deferred tax liability as at March 31, 2019, pertaining to earlier years.

32.2 Reconciliation of the total tax charge

The tax charge shown in the statement of profit and loss differs from the tax charge that would apply if all profits
had been charged at India corporate tax rate. A reconciliation between the tax expense and the accounting
profit multiplied by India’s domestic tax rate for the years ended March 31, 2020 and 2019 is, as follows:

Particulars
March 31, 2020 March 31, 2019
Accounting profit before tax 31,617 27,131
At India’s statutory income tax rate 7,957 9,402
Adjustment in respect of current income tax
Deduction under Section 80JJAA (124) (312)
Impact of difference in tax base for donation & CSR expense 176 174
Others 61 210
Current tax towards prior periods (525) -
Impact of rate change in deferred tax 3,472 -
Income tax expense reported in the statement of profit and loss 11,017 9,474
33 Deferred tax
As at As at Year Ended Year Ended
March 31, 2020 March 31, 2020 March 31, 2020 March 31, 2020
Particulars
Deferred tax Deferred tax Income OCI
Impact of expected credit losses 8,627 1,483 (2,451) -
Provision for employee benefits 2,220 - 215 -
Depreciation 1,666 - (619) -
EIR impact on financial instruments 4,485 24 126 -
Fair valuation impact on financial instruments and others - 816 (51) -
Rent receivable - 109 46 -
MAT credit entitlement - - 85 -
Other temporary differences 1,004 - (99) (39)
Others (statutory reserve) - 270 64 -
Total 18,002 2,702 (2,684) (39)
Deferred tax assets (net) 15,300 - - -
Also refer note 32.1 for change in statutory income tax rate
As at As at Year Ended Year Ended

March 31, 2019 March 31, 2019 March 31, 2019 March 31, 2019
Particulars
Deferred tax Deferred tax Income OCI
Impact of expected credit losses 5,715 1,022 (1,136) -
Provision for employee benefits 2,435 - 100 -
Depreciation 1,047 - (1,274) -
EIR impact on financial instruments 4,643 56 (2,012) -
Fair valuation impact on financial instruments and others 3 831 (213) -
Rent receivable - 63 63 -
MAT credit entitlement 85 - - -
Other temporary differences 678 - (198) (21)
Others (statutory reserve) - 206 92 -
Total 14,606 2,178 (4,578) (21)
Deferred tax assets (net) 12,428


34 Earnings per equity share

Particulars
March 31, 2020 March 31, 2019
The following reflects the profit and share data used in the basic and diluted EPS computations:
Profit after tax 20,600 17,657
Weighted average number of equity shares in calculating basic 341,689,290 341,029,144
Profit after tax 20,600 17,657

Add: Share based payment to employees 1,118 1,263
Adjusted Profit after tax 21,718 18,920
Effect of dilution:
Add: Effect of ESOPs which are Dilutive 64,566 81,811
Weighted average number of equity shares in calculating Diluted 341,753,856 341,110,956

Profit after tax ( excluding minority interest) 20,461 17,659
Profit after tax (excluding minority interest) 20,461 17,659

Add: Share based payment to employees 1,118 1,263
Adjusted Profit after tax 21,579 18,922
Effect of dilution:
Add: Effect of ESOPs which are Dilutive 64,566 81,811
Weighted average number of equity shares in calculating Diluted 341,753,856 341,110,956
35 Transferred financial assets that are derecognised in their entirety

he Group transfers its loan receivables through securitisation route. The group has availed the exemption under Ind
T
AS 101 to derecognise such assets. The Group continues to retain Minimum Retention Requirement (MRR) as per RBI
guidelines. The exposure to such financial assets are summarised below.
As at As at
Particulars
March 31, 2020 March 31, 2019
No of SPVs sponsored by the Group for securitisation transactions 2 5
Total amount of securitised assets as per books of the SPVs sponsored by the Group 23,345 48,728
Carrying amount of transferred asset 2,777 12,421
Total amount of exposures retained by the Group to comply with Minimum Retention - -
requirement
Minimum Retention Requirement (MRR) as on the Date of Balance Sheet - -
a) Off-balance sheet exposures - -
First loss (Corporate Guarantee) 2,179 2,889
Others (fixed deposits) - -
b) On-balance sheet exposures - -
First loss (Cash Collateral & Retained Assets) 428 3,019
Others - -

As at As at
Particulars
March 31, 2020 March 31, 2019
Amount of exposure to securtisation transactions other than MRR - -
i) Exposure to own securtisation - -
First loss - -
Others - -
ii) Exposure to third party securtisation - -
First loss - -
Others - -
i) Exposure to own securtisation - -
First loss 21 128
Others - -
ii) Exposure to third party securtisation - -
First loss - -
Others - -
The maturity of the carrying amount is as given below:
As at As at
Particulars
March 31, 2020 March 31, 2019
Within 1 month 960 1,505
1 to 3 months 682 1,545
3 to 6 months 811 2,320
6 months to 1 year 324 4,127
1 to 2 years - 2,924
2 to 3 years - -
More than 3 years - -
Assignment
As at As at
Particulars
March 31, 2020 March 31, 2019
Number of Direct Assignments 1 1
Total amount of Loans directly transferred / Assigned 11,111 11,111
Carrying amount of transferred asset 240 1,353
Total amount of exposures retained by the Group to comply with - -
Minimum Retention Requirement (MRR) as on the Date of Balance Sheet - -
First loss - -
Others - -
First loss - -
Others - 112
Amount of exposure to Assignement transactions other than MRR - -
i) Exposure to own Assignement - -
First loss - -
Others - -
ii) Exposure to third party Assignement - -
First loss - -
Others - -


As at As at
Particulars
March 31, 2020 March 31, 2019
i) Exposure to own Assignement - -
First loss - -
Others - -
ii) Exposure to third party Assignement - -
First loss - -
Others - -
The maturity of the carrying amount is as given below:
As at As at
Particulars
March 31, 2020 March 31, 2019
Within 1 month 240 400
1 to 3 months - 317
3 to 6 months - 371
6 months to 1 year - 264
1 to 2 years - -
2 to 3 years - -
More than 3 years - -
As per the agreement, the Group has an option to re-purchase the financial asset derecognised when the
carrying value of such assets is less than or equal to 10% of the original amount sold to the SPV.
36 Related party disclosures

36.1 List of related parties and nature of relationship
Key Management Personnel S Bhaskar, Executive Director and CEO (till October 20, 2019)
John Alex, Director and CEO (w.e.f November 8, 2019)
R Srimathy, Chief Financial Officer
Jayashree S Iyer, Company Secretary (till November 2, 2018)
Deepti R, Company Secretary (w.e.f November 3, 2018)
Independent / Non Executive Directors Mr Rangachary N, Chairman
Mr Arun Ramanathan
Ms Jayshree Ashwinkumar Vyas
Mr Rajaraman P V
Mr Viswanatha Prasad S
Mr. Jayaraman Chandrasekaran (w.e.f August 2, 2019)
Mr. S Bhaskar (w.e.f October 21, 2019)
Mr Yogesh Chand Nanda ( Ceased w.e.f. March 28, 2019)
Mr. Raghavan M S - (Resigned w.e.f April 27, 2018)
Enterprises over which the Group or its Key management Equitas Development Initiatives Trust
personnel is able to exercise significant influence
Equitas Dhanyakosha India
Equitas Healthcare Foundation (w.e.f. March 13, 2018)
36.2 Transactions with the Related Parties

As at As at
Particulars
March 31, 2020 March 31, 2019
Income
Rental Income
Equitas Development Initiatives Trust 216 215
Interest on term deposits

As at As at
Particulars
March 31, 2020 March 31, 2019
Donation
Equitas Development Initiatives Trust 1,123 895
Equitas Healthcare Foundation 237 30
Remuneration to Key Managerial Personnel *
S Bhaskar, Executive Director and CEO (till October 20, 2019) 59 63
John Alex (from November 8, 2019) 23 -
R Srimathy, Chief Financial Officer (from August 1, 2017) 20 16
Jayashree Iyer, Company Secretary (till 2nd Nov 18) - 31
Deepti R, Company Secretary (from 3rd Nov 18) 9 3
Remuneration / Sitting Fees to Non-Executive Directors 42 40
* excludes employer’s contribution to various funds, non-monetary perquisites and provisions made for gratuity and leave
benefits, as these are determined for the Company as a whole
Other Transactions
Deposits received
Deposits matured
Equitas Development Initiatives Trust 670 -
Saving Deposits and Interest
Equitas Development Initiatives Trust 3,992 2,330
Demand Deposits
Equitas Dhanyakosha India - 0
Profit/(Loss) on sale of vehicle
Key Managerial personnel - Jayashree S Iyer* - 0
Profit/(Loss) on sale of vehicle
Key Managerial personnel - S Bhaskar 1 -
* Loss during previous year less than 1 lakh
As at As at
Particulars
March 31, 2020 March 31, 2019
Withdrawals and fund transfers from Savings Deposits
Equitas Development Initiatives Trust 3,838 1,978
Equitas Healthcare Foundation 1 -
Withdrawals and fund transfers from Demand Deposits
Equitas Dhanyakosha India 2 -
Reimbursement of Expenses
Equitas Development Initiatives Trust - 22
Share based payment to employees
Key Managerial Personnel 5 1
Balances outstanding at the end of the year
Term Deposit outstanding
Interest Payable on term deposits
Equitas Development Initiatives Trust 4 -
Demand Deposits
Equitas Dhanyakosha India - 2
Savings Deposit

Term Deposit outstanding


As at As at
Particulars
March 31, 2020 March 31, 2019
Demand Deposits
Equitas Dhanyakosha India 2 2
Savings Deposit
Under the ESOP Scheme 2015, 126 shares (previous year - 6,858) were allotted to Key Managerial Personnel.
During the year, ESFB, the subsidary of the Company established a employee stock option scheme titled ESFB
Employees Stock Option Scheme, 2019 (ESFB ESOP 2019) effective from November 22, 2019. Under the plan,
the Bank was authorised to issue a replacement option for the Scheme under the Holding Company to eligible
employees of the Bank and the Company. Each option entitles for application and allotment of one fully paid
share on payment of exercise price during the exercise period.
The options granted for the key managerial personnel as of March 31, 2020 is as provided below:
As at March 31, 2020 - Options from ESFB

Name of the KMP Grant Date Expiry date Exercise Price No of options
John Alex 22-Nov-19 30-Nov-23 27 154,050
John Alex 22-Nov-19 30-Nov-23 27 40,000
John Alex 29-Jan-20 29-Jan-24 38 53,664
Srimathy Raghunathan 22-Nov-19 30-Nov-23 27 7,524
Srimathy Raghunathan 22-Nov-19 30-Nov-23 27 1,290
Srimathy Raghunathan 29-Jan-20 29-Jan-24 38 4,048
Srimathy Raghunathan 29-Jan-20 29-Jan-25 38 4,048
Deepti R 22-Nov-19 30-Nov-23 27 2,550
Deepti R 22-Nov-19 30-Nov-23 27 810
267,984
The options vested and outstanding for the key managerial personnel as of March 31, 2019 is as provided below:
As at March 31, 2019 - Options from EHL

Name of the KMP Grant Date Expiry date Exercise Price No of options
Bhaskar S 05-Jul-16 01-Aug-20 184 24,300
Srimathy Raghunathan 09-May-14 30-Jun-21 43 798
Srimathy Raghunathan 01-Jul-16 01-Jul-21 178 1,225
Deepti R 05-Aug-16 01-Sep-21 173 607
26,930
37 Key Management Personnel of the material subsidary

Key Management Personnel Vasudevan PN, MD & CEO
N Sridharan, Chief Financial Officer
Sampathkumar KR, Company Secretary
Independent / Non Executive Directors Arun Ramanathan
Arun Kumar Verma
N Balakrishnan
Lalitha Lakshmanan
Nagarajan Srinivasan
Sridhar Ganesh
Srinivasan N
Tabassum Inamdar
Vinod Kumar Sharma
Navin Puri (from 1st Aug 19)

Transactions with the Key Management Personnel of the material subsidary

For the Year For the Year
Particulars
March 31, 2020 March 31, 2019
Remuneration paid to Key Management Personnel (excludes employer's share of contribution
to various funds and non-monetary perquisites)
Vasudevan PN, MD & CEO 165 111
N Sridharan, Chief Financial Officer 94 79
Sampathkumar KR, Company Secretary 24 18
Term Deposits received 335 473
Term Deposits closed 69 288
Interest on Term Deposits 36 8
Savings Deposits and Interest 525 659
Withdrawals and fund transfers from Savings Deposits 541 653
Balances outstanding at the end of the year

As at As at
Particulars
March 31, 2020 March 31, 2019
Term Deposits outstanding 552 267
Interest Payable on term deposits 5 3
Saving Deposit outstanding 85 100

As at As at
Particulars
March 31, 2020 March 31, 2019
Term Deposits 578 268
Savings Deposits 448 282
38 Segment reporting
During the year ending 31st March 2020, the Group was organised into business segments as disclosed below.
The Management Committee comprises of ED & CEO and CFO, ( ED & CEO being the head of the Management
Committee). It reviews and monitors the operating results of the operating segment for the purpose of making
decisions about resource allocation and performance assessment. Segment performance is evaluated based
on operating profits or losses and is measured consistently with operating profits or losses in the consolidated
Expenses which are not directly identifiable to each reportable segment have been allocated on the basis of
associated revenues of the segment and manpower efforts. All other expenses which are not attributable
or allocable to segments have been disclosed as unallocable expenses. Assets and liabilities that are directly
attributable or allocable to segments are disclosed under each reportable segment. All other assets and
liabilities are disclosed as unallocable. Fixed assets that are used interchangeably amongst segments are not
allocated to primary and secondary segments. The Group has its business only in India; hence, there are no
Geographical segments.
For the year ended March 31, 2020

Banking and
Particulars Others Total
finance
I Segment revenue
Interest income 277,520 - 277,520
Revenue from contract with customers 10,470 467 10,937
Net gain on fair value changes 338 - 338
Rental income - 216 216
Total revenue from operations 288,328 683 289,011
Other income 4,551 28 4,579
Total Income 292,879 711 293,590


Banking and
finance
II Segment Expenses
Finance costs 119,079 14 119,093
Impairment on Financial Instruments 25,046 9 25,055
Employee benefits expenses 72,214 343 72,557
Depreciation, amortisation and impairment 14,430 117 14,547
Others expenses 30,221 500 30,721
Total Expense 260,990 983 261,973
III Segment results (Profit before tax) 31,889 (272) 31,617

Tax expenses 11,017 - 11,017
Profit after tax 20,872 (272) 20,600
V Segment Assets 2,076,457 7,065 2,083,522
VI Segment Liabilties 1,792,731 477 1,793,208
VII Capital employed 283,726 6,588 290,314

(Segment Assets - Segment Liabilities)
For the year ended March 31, 2019

Banking and
finance
I Segment revenue
Interest income 219,445 19 219,464
Revenue from contract with customers 8,640 171 8,811
Net gain on fair value changes 327 - 327
Rental income - 215 215
Total revenue from operations 228,412 405 228,817
Other income 7,029 7 7,036
Total Income 235,441 412 235,853
II Segment Expenses
Finance costs 96,642 - 96,642
Impairment on Financial Instruments 10,129 - 10,129
Employee benefits expenses 56,414 351 56,765
Depreciation, amortisation and impairment 9,177 99 9,276
Others expenses 35,388 522 35,910
Total Expense 207,750 972 208,722
III Segment results (Profit before tax) 27,691 (560) 27,131

Tax expenses 9,474 - 9,474
Profit after tax 18,217 (560) 17,657
V Segment Assets 1,565,441 6,052 1,571,493
VI Segment Liabilties 1,326,935 188 1,327,123
VII Capital employed 238,506 5,864 244,370

(Segment Assets - Segment Liabilities)

39 Investment in subsidiaries and structured entities

Consolidated Subsidiaries
The consolidated financial statements include the financial statements of Group and its subsidiaries. Group does
not have any joint ventures or associates. Equitas Holdings Limited is the ultimate parent of the Group.
Significant subsidiaries of Group are:
Country of % equity interest % equity interest

Name of subsidiary
incorporation
31-Mar-20 31-Mar-19
Equitas Small Finance Bank Limited India 95.49% 100%
Equitas Technologies Private Limited India 99.57% 99.50%
The Bank issued 47,458,239 equity shares of face value of `10 each on preferential basis at a premium of ` 42.68
each for total cash consideration of ` 25001 lakhs on December 11, 2019.
39.1 Compliance with licensing condition

As a precondition to small finance bank licensing guidelines issued by the Reserve Bank of India, amongst
other conditions, Equitas Small Finance Bank (the “Bank”), a subsidiary of the Company, was required to be
listed within 3 years from the date of commencement of operations (i.e from 5th September 2016). In the
absence of Securities Exchange Board of India’s (“SEBI”) approval to a scheme of arrangement, which would
have resulted in the listing of the Bank’s shares, and the consequent non-compliance of the relevant listing
condition, the Reserve Bank of India vide its letter dated September 06, 2019 has imposed regulatory action
on the Bank, by way of restriction on opening of new branches and on the remuneration of the MD & CEO of
the Bank frozen at current level, till further advice. (In December 2019, the Bank obtained specific approval of
the RBI for opening 240 banking outlets). On September 10, 2019, the Board of Directors of the Bank approved
an initial public offer and listing of the equity shares on stock exchanges in India, to comply with the licensing
guidelines. Subsequently, the Bank filed a Draft Red Herring Prospectus with SEBI on December 16, 2019 and
Stock Exchanges (National Stock Exchange of India Limited and BSE Limited). The Bank received in principle
approval from stock exchanges and observations from the SEBI on its Draft Red Herring Prospectus (“DRHP”).
In March 2020, the Bank filed a revised DRHP after addressing the SEBI’s comments, and was in the process
of completing the Initial Public Offer (“IPO”) of shares. However, due to the COVID-19 global pandemic and
consequent lockdowns across the country, the completion of the listing process and the IPO of shares has been
delayed. Management and the Board of Directors remain committed to completing the IPO of shares in due
course, once normalcy in business operations is restored. Read with the above, the Bank continues normal
course of business and operates as a going concern, and no adjustments have been considered necessary in this
regard in the Group’s financial statements.
40 Retirement benefit plan

40.1 Defined contribution plan
Provident Fund
The group makes Provident Fund contributions to State administered fund for qualifying employees. The group
is required to contribute a specified percentage of the payroll costs to the Fund. The Company recognised Rs
3,543 lakhs (Previous Year: ` 2,875 lakhs) towards Provident Fund contributions in the Statement of Profit and
Loss. The contributions payable to the fund by the group is at rates specified in the rules of the scheme.


40.2 Defined Benefit Plans

Gratuity
The Group has a funded gratuity scheme for its employees and the Gratuity liability has been made based on the
actuarial valuation done as at the year end. The details of actuarial valuation as provided by the Independent
Actuary is as follows:
Change in defined benefit obligations during the Year

Present value of defined benefit obligation at beginning of the year 2,370 1,806
Current service cost 1,083 743
Interest cost 158 157
Benefits paid (220) (164)
Remeasurement effect of experience adjustments (103) (173)
Present value of Defined Benefit Obligation at End of the Year 3,288 2,370
Change in Fair Value of Assets during the Year
Plan Assets at beginning of the year 2,063 1,185
Add: Adjustments to the opening balance - -
Expected return on plan assets 145 118
Actual company contributions - 878
Benefits paid out of the asset - -
Return on plan assets excluding expected income - (118)
Plan Assets at End of the Year 2,208 2,063
Liability Recognised in the Balance Sheet
Present value of defined benefit obligation 3,288 2,370
Fair value of plan assets 2,208 2,063
Unrecognised actuarial (gain) / loss -
Net Liability Recognised in the Balance Sheet 1,080 306
Cost of Defined Benefit Plan for the Year
Net interest cost 158 157
Expected return on plan assets (145) (118)
Remeasurements (recognised in OCI)
a. Effect of experience adjustments 103 173
b. (Return) on plan assets - (118)
Net Cost Recognised in statement of profit and loss and OCI 1,199 837
Employer expense (P&L)
Net interest cost 158 157
Expected return on plan assets (145) (118)
Total expenses recognised in statement of profit and loss 1,096 783
Remeasurement
Effect of experience adjustments 103 173
(Return) on plan assets - (118)
Total remeasurement loss / (gain) recognised in OCI 103 55
Acturial Assumptions
Discount rate (Refer Note (b)) 6.06% 7.01%
Interest rate (Estimated rate of return on assets) 7.00% 8.05%
Future salary increase (Refer Note (a)) 10.00% 10.00%
Attrition rate (Refer Note (a)) 20.00% 20.00%
Notes:
a) The estimate of future salary increase takes into account inflation, seniority, promotion and other relevant factors. Further, the
Management revisits the assumptions such as attrition rate, salary escalation etc., taking into account, the business conditions
based on external and internal factors.
b) Discount rate is based on the prevailing market yields of Indian Government Bonds as at the Balance Sheet date for the estimated
term of the obligation.

Experience Adjustments:
For the Year For the Year For the Year For the Year For the Year
Particulars Ended Ended Ended Ended Ended
31 March 2020 31 March 2019 31 March 2018 31 March 2017 31 March 2016
Projected benefit obligation 3,288 2,370 1,806 1,353 219
Fair value of plan assets 2,208 2,063 1,185 1,049 299
Surplus/ (Deficit) (1,080) (306) (621) (304) 80
Experience adjustments on 103 173 158 (664) 4
plan liabilities - gains
Experience adjustments on - (118) (80) (104) (25)
plan assets - gains / (losses)
Amount
Expected Contribution in the following years to the fund 900
Expected Maturity Profile of Benefit Payments
Within the next 12 months (next annual reporting period) 75
Between 2 and 5 years 1,339
Between 5 and 10 years 9,289
Beyond 10 years -
Sensitivity
The Defined Benefit Obligation (D.B.O) is sensitive to changes in the Discount Rate, the Salary Escalation Rate and the
Staff Exit Rate.
Discount Rate: An increase in Discount Rate reduces the D.B.O. and vice versa
In this case, an increase of 0.5% of Discount rate would decrease D.B.O by: -2.38%
Salary Escalation Rate: An increase in Salary Escalation Rate increases the D.B.O, and vice versa
In this case, an increase of 0.5% of salary escalation rate would increase D.B.O by: 2.47%
Similarly, a decrease by 0.5% will decrease D.B.O by: -2.38%
Staff Exit Rate: The direction of movement of D.B.O for changes in the Exit Rate would depend on the
In this case, an increase of 0.5% of Staff Exit rate would change D.B.O by: -0.43%
Similarly, a decrease by 0.5% will change D.B.O by: 0.46%

Particulars
Impact on D.B.O (78) 81 81 (78)
Compensated Absences
The key assumptions used in the computation of provision for compensated absences as per the Actuarial
Valuation done by an Independent Actuary are as given below:

Assumptions
March 31, 2020 March 31, 2019
Discount Rate 6.06% 7.01%

Future Salary Increase 10.00% 10.00%
Mortality Rate Indian Assured Lives Indian Assured Lives
(2012 -14) (2006 -08)
Attrition rate 20.00% 20.00%


Sensitivity
The Defined Benefit Obligation (D.B.O) is sensitive to changes in the Discount Rate, the Salary Escalation Rate and the
Staff Exit Rate.
Salary Escalation Rate: An increase in Salary Escalation Rate increases the DBO, and vice versa
In this case, an increase of 0.5% of salary escalation rate would increase DBO by: 2.53%
Similarly, a decrease by 0.5% will decrease DBO by: -2.43%

Particulars
Impact on DBO (121) 126 126 (121)

41 Maturity analysis of assets and liabilities

31 March 2020 31 March, 2019
Assets Within 12 Beyond 12 Within 12 Beyond 12
Total Total
months months months months
Financial assets
Cash and cash equivalents 244,117 9,062 253,179 114,674 10,805 125,479
Bank balance other than cash and cash 354 182 536 87 443 530
equivalents
Loans and advances 448,611 1,061,968 1,510,579 444,363 713,074 1,157,437
Trade Recievable 53 - 53 2 - 2
Investment 138,649 95,793 234,442 165,594 68,996 234,590
Other Financial Asset 10,650 2,491 13,141 5,901 2,909 8,810
Current tax asset - 1,798 1,798 - 1,577 1,577
Deferred tax asset - 15,394 15,394 - 12,428 12,428
PPE - 21,314 21,314 - 23,759 23,759
Investment property - 5,436 5,436 - 5,450 5,450
ROU Asset - 26,582 26,582 - - -
Other non-financial assets 1,068 - 1,068 1,431 - 1,431
Total assets 843,502 1,240,020 2,083,522 732,052 839,441 1,571,493
Liabilities
Current tax liabilities 488 - 488 362 - 362
Deferred tax liabilities - 94 94 - -
Total outstanding dues of creditors 13,570 - 13,570 8,449 - 8,449
enterprises
Debt securities 23 21,953 21,976 30,711 21,922 52,633
Borrowings 341,097 300,600 641,697 138,575 215,461 354,036
Deposits 665,091 402,774 1,067,865 545,621 342,366 887,987
Other financial liabilities 12,909 25,128 38,037 16,279 36 16,315
Other Non-financial liabilities 955 - 955 893 - 893
Provisions 2,207 6,319 8,526 2,005 4,443 6,448
Total liabilities 1,036,340 756,868 1,793,208 742,895 584,228 1,327,123
In computing the above information, certain assumptions have been made by management. The actual outflows may
be lower than the above estimates as deposits rollover assumptions are not considered in the maturity profile on a
conservative basis.
42 Change in liabilities arising from financing activities

As at 1 April As at 31 March
Particulars Cash flows Other
2019 2020
Debt securities 52,633 (30,729) 72 21,976
Borrowings other than debt securities 354,036 282,388 5,273 641,697
Deposits 887,987 171,453 8,425 1,067,865
ROU lease liability 27,942 1,686 - 29,628
Total liabilities from financing activities 1,322,598 424,798 13,770 1,761,166
As at 1 April As at 31 March
Particulars Cash flows Other
2018 2019
Debt securities 211,598 (161,452) 2,487 52,633
Borrowings other than debt securities 334,977 14,209 4,850 354,036
Deposits 557,702 324,362 5,923 887,987
Total liabilities from financing activities 1,104,277 177,119 13,260 1,294,656
Other Column includes the effect of accrued but not paid interest on borrowings, amortisation of processing fees.


43 Contingent liabilities, commitments and leasing arrangements

To meet the financial needs of customers, the Group enters into various irrevocable commitments, which
primarily consist of undrawn commitment to lend. Further the Group is also exposed to contingent liabilities
arising from legal claims.
As at As at
Particulars
March 31, 2020 March 31, 2019
Claims against the company not acknowledged as debts
- Service Tax Matters 125 87
- Income Tax - 1,079
- Others 170 105
Guarantees given on behalf of constituents in India 2,401 3,070
Guarantees for loans taken 5,200 5,200
Loan commitment 12,738 11,421
Estimated amount of contracts remaining to be executed on capital account and not 28 15
provided for
Total 20,662 20,977
Claims against the Group not acknowledged as debts includes liability on account of Service tax, and other
legal cases filed against the group. The Group is a party to various legal proceedings in the ordinary course
of business which are contested by the Group and are therefore subjudice. The Group does not expect the
outcome of these proceedings to have a material adverse impact on the Group’s financial position.
Guarantees represent irrevocable assurances given by the Group on securitised assets, to make payments in the
event of customers failing to fulfil their financial obligations.
43.1 Legal claims

The Group operates in a regulatory and legal environment that, by nature, has a heightened element of
litigation risk inherent in its operations. As a result, the Group is involved in various litigation, arbitration and
regulatory proceedings in the ordinary course of its business. The Group has formal controls and policies for
managing legal claims.
i. Matters wherein management has concluded the Group’s liability to be probable have accordingly been
provided for in the books
ii. Matters wherein management has concluded the Group’s liability to be possible have accordingly been
disclosed in Note 43
iii.
Matters wherein management is confident of succeeding in these litigations and have concluded the
Group’s liability to be remote. This is based on the relevant facts of judicial precedents and as advised by
legal counsel which involves various legal proceedings and claims, in different stages of process.
iv. There are numerous interpretative issues relating to the Supreme Court (SC) judgement on Provident Fund
dated 28th February, 2019. As a matter of caution, the Group has made a provision on a retrospective basis
from the date of inception of the company. Accordingly, based on internal computation, the Group has
provided ` 550 lakhs towards provident fund and interest theron @ simple rate of interest in terms of the
provisions of section 7Q of the The Employees’ Provident Funds and Miscellaneous provisions Act, 1952. The
Group will update its provision, on receiving further clarity on the subject.
44 Operating Lease - as lessee

Lease disclosure under Ind-AS 116 for the current year ended 31 March 2020
A. Implementation of Ind-AS 116

This note explains the impact of the adoption of Ind-AS 116 Leases on the financial statements
Under the erstwhile standard, Ind-AS 17 - Leases, the leases in which a substantial portion of the risk and
rewards of the ownership were retained by the lessor were classified as operating leases. Under Ind-AS 116,
the Group recognises right-of-use assets and lease liabilities for leases i.e. these leases are on the balance
sheet. Lease liabilities as at 01 April 2019 were measured at the present value of the remaining lease payments,

discounted using the lessee’s incremental borrowing rate of 7%. This change is in accordance with the transitional
provisions of Ind-AS 116.
Effective April 1, 2019, the Group adopted Ind AS 116 “Leases”, applicable to all lease contracts existing on April
retrospectively adjusted. On transition, the adoption of the new standard resulted in recognition of Right-of-
Use asset (ROU) of ` 25,096 Lakhs, and a lease liability of ` 27,942 Lakhs. The cumulative effect of applying the
standard resulted in ` 910 Lakhs being debited to retained earnings.
B. The Company and its subsidaries has taken premises on operating leases for office. The lease generally are
for a term of 3 to 9 years with a renewal options.
i) Amount recognised in Balance sheet
a) Right-of-use assets
Opening balance 25,095
Additions 5,342
Depreciation expenses (4,806)
As at 31st March 2020 25,631
The company has not sub-leased any of the properties taken on lease.
b) Lease liabilities
As at 1st April 2019 27,942
Additions 5,342
Interest 2,283
Payments (5,939)
As at 31st March 2020 29,628
Current 4,502
Non current 25,126
ii) Amount recognised in the Statement of Profit and Loss
a) Depreciation charge for Right-of-use assets 4,806

b) Interest expense on lease liabilities ( included in finance cost) 2,283
Total amount recognised in profit and loss account 7,089
44.1 Operating Lease - as lessor
For the year ended For the year ended

Particulars
March 31, 2020 March 31, 2019
Future lease rentals payable at the end of the year

- Not later than one year 215 215
- Later than one year but not later than five years 862 862
- Later than five years 4,002 4,218
Total minimum lease payments recognised in the Profit and loss account 216 215
Total of future minimum sub lease payments expected to be received under non- - -
cancellable sub-lease
The Group has not sub-leased any of the properties taken on lease. There are no provisions relating to
contingent rent.


44.2 Micro, Small and Medium Enterprises

Based on and to the extent of the information received by the Group from the suppliers during the year regarding
their status under the Micro, Small and Medium Enterprises Development Act, 2006 (‘MSMED Act’) and relied
upon by the auditors, there are no amounts due to MSME as at March 31, 2020. The relevant particulars are
furnished below:
As at As at
Particulars
March 31, 2020 March 31, 2019
Principal amount due to suppliers under MSMED Act, as at the year end - -
Interest accrued and due to suppliers under MSMED Act, on the above amount as - -
at the year end
Payment made to suppliers (other than interest) beyond the appointed date, - -
during the year
Interest paid to suppliers under MSMED Act (other than Section 16) - -
Interest due and payable to suppliers under MSMED Act, for payments already made - -
Interest accrued and remaining unpaid at the year end to suppliers under MSMED Act - -
45 Capital
The Group maintains an actively managed capital base to cover risks inherent in the business and is meeting
the capital adequacy requirements of the local banking supervisor, Reserve Bank of India (RBI) of India. The
adequacy of the Group’s capital is monitored using, among other measures, the regulations issued by RBI.
The Group has complied in full with all its externally imposed capital requirements over the reported period.
45.1 Capital management

The primary objectives of the Group’s capital management policy are to ensure that the Group complies with
externally imposed capital requirements and maintains strong credit ratings and healthy capital ratios in order
to support its business and to maximise shareholder value.
The Group manages its capital structure and makes adjustments to it according to changes in economic
conditions and the risk characteristics of its activities. In order to maintain or adjust the capital structure, the
Group may adjust the amount of dividend payment to shareholders, return capital to shareholders or issue
capital securities. No changes have been made to the objectives, policies and processes from the previous years.
However, they are under constant review by the Board.
46 Fair value measurement

Valuation principles
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
in the principal (or most advantageous) market at the measurement date under current market conditions (i.e.,
an exit price), regardless of whether that price is directly observable or estimated using a valuation technique.
valuation techniques, as explained below.
valuation techniques, as explained in Note 3.2
Valuation governance
The Group’s fair value methodology and the governance over its models includes a number of controls and
other procedures to ensure appropriate safeguards are in place to ensure its quality and adequacy. The
independent price verification process for financial reporting is ultimately the responsibility of the independent
price verification team within Finance which reports to the Chief Financial officer.

Assets and liabilities by fair value hierarchy

The following table shows an analysis of financial instruments recorded at fair value by level of the fair
value hierarchy:
Mar-20 Level 1 Level 2 Level 3 Total

Asset measured at fair value on recurring basis
Debt securities 55,449 - - 55,449
Equity instruments - - 20 20
Total financial investments at FVOCI 55,449 - 20 55,469
Staff loan - - 92 92
Security deposit - - 2,095 2,095
Total financial assets measured at fair value on reccuring basis 55,449 - 2,207 57,656
Liabilities measured at fair value on recurring basis
Staff deposit - - 3,775 3,775
Total financial assets measured at fair value on reccuring basis - - 3,775 3,775
Mar-19 Level 1 Level 2 Level 3 Total

Asset measured at fair value on recurring basis
Debt securities 126,301 - - 126,301
Equity instruments - - 20 20
Total financial investments at FVOCI 126,301 - 20 126,321
Staff loan - - 1,094 1,094
Security deposit - - 1,692 1,692
Total financial assets measured at fair value on reccuring basis 126,301 - 2,806 129,107
Liabilities measured at fair value on recurring basis
Staff deposit - - 1,898 1,898
Total financial assets measured at fair value on reccuring basis - - 1,898 1,898
Fair value of financial instruments not measured at fair value

Valuation methodologies of financial instruments not measured at fair value
Below are the methodologies and assumptions used to determine fair values for the above financial instruments
which are not recorded and measured at fair value in the Group’s financial statements. These fair values
were calculated for disclosure purposes only. The below methodologies and assumptions relate only to the
instruments in the above tables and, as such, may differ from the techniques and assumptions.
Short-term financial assets and liabilities

For financial assets and financial liabilities that have a short-term maturity (less than twelve months), the carrying
amounts, which are net of impairment, are a reasonable approximation of their fair value. Such instruments
include: cash and balances, Trade receivables, Contract assets, balances other than cash and cash equivalents,
trade payables and contract liability without a specific maturity. Such amounts have been classified as Level 2
on the basis that no adjustments have been made to the balances in the balance sheet .
Loans to customers
The fair values of loans and receivables are estimated by discounted cash flow models that incorporate
assumptions for delinquencies, interest rate risk, remaining tenor, etc. Credit risk for large corporate and a
subset of the small business lending, when appropriate, is derived from market observable data, Fair values of
consumer lending and mortgage portfolios are calculated using a portfolio-based approach, grouping loans
as far as possible into homogenous groups based on similar characteristics. The Group then calculates the
fair value to the entire portfolio, using discounted cash flow models that incorporate interest rate estimates
considering all significant characteristics of the loans.
Financial asset at amortised cost

The fair values financial of held-to-maturity investments are estimated using a discounted cash flow model
based on contractual cash flows using actual or estimated yields and discounting by yields incorporating the
counterparties’ credit risk.


Debt securities
The fair value of issued debt is estimated by a discounted cash flow model incorporating the Group’s own credit
risk. The Group estimates and builds its own credit spread from market-observable data such as secondary prices
for its traded debt and the credit spread on credit default swaps and traded debt of itself.
Off-balance sheet positions

Estimated fair values of off-balance sheet positions are based on market prices for similar instruments or
on discounted cash flow models, as explained above, which incorporate the credit risk element through the
discount factor.
Set out below is a comparison, by class, of the carrying amounts and fair values of the Group’s financial
instruments that are not carried at fair value in the financial statements. This table does not include the fair
values of non–financial assets and non–financial liabilities.
Carrying
value
Financial Assets
Cash and cash equivalents 253,179 253,179 - - 253,179
Bank balance other than cash and cash equivalents 536 536 - - 536
Loans and advances 1,510,487 - - 1,591,112 1,591,112
Financial assets Amortised Cost
Government debt securities 178,478 184,378 - - 184,378
Other Financial Asset 11,046 - - 11,046 11,046
Total financial assets 1,953,726 438,093 - 1,602,158 2,040,251
Total outstanding dues of creditors other than micro 13,570 - - 13,570 13,570
enterprises and small enterprises
Debt securities 21,976 21,976 - - 21,976
Borrowings (other than debt securities) 641,697 641,697 - - 641,697
Deposits 1,064,090 - - 1,064,090 1,064,090
Other financial liabilities 38,037 - - 38,037 38,037
Total financial liabilities 1,779,370 663,673 - 1,115,697 1,779,370
Carrying
value
Financial Assets
Cash and cash equivalents 125,479 125,479 - - 125,479
Bank balance other than cash and cash equivalents 530 530 - - 530
Loans and advances 1,156,343 - - 1,164,532 1,164,532
Financial assets Amortised Cost -
Government debt securities 108,269 109,186 - - 109,186
Other Financial Asset 7,118 - - 7,118 7,118
Total financial assets 1,397,739 235,195 - 1,171,650 1,406,845
Total outstanding dues of creditors other than micro 8,449 - - 8,449 8,449
enterprises and small enterprises
Debt securities 52,633 52,633 - - 52,633
Borrowings (other than debt securities) 354,036 354,036 - - 354,036
Deposits 886,089 - - 886,089 886,089
Other financial liabilities 16,315 - - 16,315 16,315
Total financial liabilities 1,317,522 406,669 - 910,853 1,317,522

47 Risk Management Framework delegation matrix. The Board is supported by

The Group always regard that managing the risks various management committees as part of the Risk
that affect its business as a fundamental activity, Governance framework. The Group operates within
as they influence performance, reputation and overall limits set by the Board and Committees to
future success. Effective risk management involves whom powers are delegated by the Board.
taking an integrated and balanced approach to risk
and reward, and assists in achieving objectives of Risk Management Committee (RMC) is a Board
mitigating potential loss or damage and optimising level Sub committee, which decides risk policies
financial growth opportunities. and strategy for integrated risk management
containing various risk exposures of the Group.
Risk management framework of the Group is
aimed at aligning capital to business strategy, to The Group has management level committees to
protect Group’s financial strength, reputation and address various risks viz. Credit Risk Management
to ensure support to various business activities Committee for Credit Risk, Asset Liability
while enhancing shareholder value. Management Committee (ALCO) for ALM and
Market Risk, Operational Risk Management
The Group’s risk structure has a “three lines Committee for Operational Risk, Information &
of defense” concept, which ensures that risk Cyber Risk Committee for information security and
management is part of the culture, and effectively management level Risk Management Committee
cascaded throughout the Group. Responsibilities for integrated risk management.
for risk management at each line of defense are
defined, thereby providing clarity in the roles and The Audit Committee of the Board assists the
responsibilities. Board in carrying out its oversight responsibilities
as they relate to the company’s financial and
The Group has adopted the following “Three Lines other reporting practices, internal control, and
of Defense” approach for risk management. compliance with laws, regulations, and ethics.
From risk management perspective, it review
• At the first line of defense are the various business the adequacy of Group’s risk management
lines that the Group operates. The business lines policies, processes and report the matter to the
assume risk-taking positions on a day-to-day basis Board of Directors.
within the approved framework and boundaries.
There are executives or risk control units who Risk Management Department
manages and monitors the risk on an ongoing The Risk management department is vested with
basis as per the laid out policies and processes. responsibility of risk management in the Group
as per the guidelines of SFB by the regulator. The
• The second line of defense is made up of
department is headed by Chief Risk Officer (CRO)
Risk Management Department, Finance and
who reports directly to the Managing Director of
Compliance functions. This line provides
the Group. The department primarily addresses
assurance, challenge and oversight of the activities
Credit risk, Operational risk, ALM & Market Risk
conducted by the first line and provides periodic
and Information Security Risk.
reporting to the Board. The Risk management
department is structured independent of the

The department has built risk management
business units.
framework for each of the key risk areas as
• The third line of defense is the audit function per the approaches and guidelines laid by the
that provides an independent assessment of the regulator (RBI). The department is responsible for
first and second line of defense and reports to the identification, measurement, monitoring and
the audit committee of the Board management of risks. The department has built
internal capital adequacy assessment abilities and
The Group has designed this multi-layered risk initiate preparation of risk profile and risk appetite
structure that augments the risk evaluation and requirements for the short-term goals and long
management capabilities, whilst also allows for term goals of the Group.
the nimbleness required to adapt to the changing
business and regulatory environment in an efficient Credit Risk Management
and effective manner. Credit risk is defined as the possibility of losses
due to credit rating downgrade, inability or
Risk Management Governance unwillingness of a customer or counterparty to
Risk management is the responsibility of the Board meet commitments (both principal and interest)
of Directors, which approves risk policies and the in relation to lending, trading, settlement and


other financial transactions. Accordingly, credit events, which includes but is not limited to legal
risk losses result from reduction in portfolio value risk. It is inherent in all activities arising out of a
arising from actual or perceived deterioration in Group’s business and operations and could result
credit quality. in financial losses, litigation, regulatory fines or
other damage to the Group. The severity of impact
Credit risk management system is required to on the Group, its employee and customers is
identify, measure, monitor and control credit risks dependent on the efficacy with which operational
as well as to determine that Group holds adequate risk is managed by the Group. The goal is to keep
capital against credit risk and there is adequate operational risk at appropriate levels, in light of
compensation in risk reward trade off. the Group’s financial strength, the characteristics
of its businesses, the markets in which it operates,
The Credit Risk Management Committee (CRMC),
and the competitive and regulatory environment
a Management Committee, shall review and in which it operates. The objective of operational
monitor the adequacy and effectiveness of credit risk management function is to create robust policy
risk management framework. The Credit Risk to identify the inherent operational risk across all
Management function is responsible to lay down products & processes, measure monitor and control
the credit risk management policy, monitor the operational risk inherent in all such products /
risks and provide all required information to the activities / processes, establish Key Risk Indicators
committee, establish scoring and rating framework, through Risk Control Self-Assessment, and identify
assess capital for credit risk etc. operational loss events. The Group’s operational
risk management committee (ORMC) is responsible
ALM & Market Risk Management for overseeing all material operational risks,
Market Risk may be defined as the possibility of loss responds to risk issues and ensures adequacy and
to Group caused by changes in the market variables effectiveness of operational risk controls.
such as interest rates, credit spreads, equity prices,
etc. The market risk for the Group is governed by Information & Cyber Security
‘Market Risk Policy’ and ‘Treasury & Investment The Group has an independent information
Policy’, which are approved by the Board. These security department, which addresses information
policies ensure that transactions in debt and and cyber security related risks. The Group has a
capital markets are conducted in accordance with defined governance structure in place under the
acceptable business practices and are as per the Information Security & Cyber Risk Committee,
extant regulatory guidelines. which includes representatives from Business,
Operations, IT, HR and other Risk Management
Market Risk Management unit is independent functions that is responsible for overall IT Risks.
of the dealing function and the settlements Group Information and Cyber Risk Committee
function. The unit is responsible for identifying provides direction for mitigating the operational
and escalating any risk, limit excesses on a timely risk in IT security. This unit has put in place place
basis. The unit is also responsible to establish a risk-based Cyber-security framework to manage
comprehensive risk management policy to identify, the threats arising from cyber security. The key
measure and manage liquidity and interest responsibilities include a) to create mechanisms to
rate risk. The other responsibilities include a) to identify and review the risk and impact of incidents
establish linkages between ALM system and other b) to establish a suitable Cyber Crisis Management
risk management systems in the Group in order Plan (CCMP), c) to ensure robust data security
to monitor the risks on an integrated basis b) To measures to protect and preserve customer and
identify ALM risks associated with the Group’s transaction data d) to establish and manage a
portfolio, develop appropriate risk measurement Cyber Security Operations Centre (Cyber SOC) with
methodology for managing and mitigating the capacity to monitor various logs / incidents in real
ALM Risk. c) To provide inputs for capital planning time / near real time.
in order to meet the future funding requirements,
with the set goal of profit planning / business Enterprise Risk Management (ERM) Function
growth. d) To conduct ALCO atleast on monthly The key responsibilities of this ERM include:
basis to appraise the management for enabling
informed decision making • Assess and measure the Group risk profile,
risk appetite, strategic plans and overall
Operational Risk Management capital adequacy.
Operational Risk is defined as the risk of losses
• Keep the Board, RMC and Senior Management
resulting from inadequate or failed internal
informed of the ICAAP process, capital adequacy
processes, people and systems or from external

and major changes in capital assessments and Stage 2:

When a loan has shown a significant
risk management guidelines and ensure ICAAP is increase in credit risk since origination,
carried out at-least annually. the Group records an allowance for
the LTECLs. Stage 2 loans also include
• Build and review stress-testing framework
facilities, where the credit risk has
considering the inter-linkages of
improved and the loan has been
various risk factors.
Impairment Assessment
Stage 3:
Loans considered credit-impaired.
With the implementation of Indian Accounting
The Group records an allowance
Standard IndAS 109, the non-banking financial
for the LTECLs.
institutions are required to move from a
standardised and regulatory approach to Expected
For the purpose of ECL, the Group classify the
Credit Loss model for recognising an impairment
Advances portfolio basis the product groups and
allowance on their financials assets.
assess increase in credit risk at each reporting
period based on days past due (DPD)
The Group records allowance for expected credit
losses for all loans, other debt financial assets not
Exposure Stage I Stage II Stage III
held at FVTPL, together with loan commitments and
financial guarantee contracts. Equity instruments Retail 0-30 dpd 31-90 dpd Above 90 dpd
Corporate 0-60 dpd 61-90 dpd Above 90 dpd
are not subject to impairment under Ind AS 109.
For the purpose of staging, the Group also
The ECL allowance is based on the credit losses
considers various other factors such as External
expected to arise over the life of the asset (the
Rating downgrade, last 6 month behaviour of the
lifetime expected credit loss or LTECL), unless there
account etc. The below mentioned factors are also
has been no significant increase in credit risk since
considered which might impair the credit quality
origination, in which case, the allowance is based
in the near future though the exposure falls under
on the 12 months’ expected credit loss (12mECL)).
Stage I based on DPD (Days Past Due) date status as
of reporting period. The Group carefully evaluate
The 12mECL is the portion of LTECLs that represent
the impact of below factors on those financial
assets and accordingly categorise such assets under
financial instrument that are possible within the 12
“Stage II” or “Stage III” as appropriate
months after the reporting date.
• legal disputes
Both LTECLs and 12mECLs are calculated on either
an individual basis or a collective basis, depending • Fraudulent incidents
on the nature of the underlying portfolio of
• Breach of critical loan covenants, not
financial instruments.
waived by the Group
The Group performs an assessment, at the end • Borrower filing bankruptcy
of each reporting period, of whether a financial
• Significant rating downgrade
instrument’s credit risk has increased significantly
since initial recognition, by considering the change • Dispute on title of the collateral securities
in the risk of default occurring over the remaining

The Group also considers other qualitative
life of the financial instrument.
factors and repayment history and considers
guidances from ICAI for staging of advances to
Based on the above process, the Group categorises
which moratorium has been extended under
its loans into Stage 1, Stage 2 and Stage 3, as
the COVID regulatory package issued by RBI and
described below:
approved by Board
Stage 1:
When loans are first recognised,
Computation of ECL
the Group recognises an allowance
The Group calculates ECLs to measure the expected
based on 12mECLs. Stage 1 loans also
cash shortfalls, discounted at an approximation to
include facilities where the credit risk
the EIR. A cash shortfall is the difference between
has improved and the loan has been
the cash flows that are due in accordance with


the contract and the cash flows that expected so on. The marginal PD is arrived for each bucket
to be received. as a % of total no of loans originated during each
financial year. The Lifetime PD for each financial

The mechanics of the ECL calculations are outlined year wise portfolio is arrived by sing cumulative PD
below and the key elements are, as follows: which gives an idea about a borrower’s chance of
default over a longer time horizon. This is obtained
a) Probability to Default using survival rates
Probability of default (PD) is defined as the
probability of whether the borrower will default The overall marginal PD for each bucket is computed
on their obligations in the future. It is an unbiased based on weighted average of the default rate of
estimate on the likelihood of the loan not being the entire portfolio originated across all previous
repaid by the borrower within a particular time. financial years since inception. Similarly, the overall
The Probability of Default is computed based on Lifetime PD is also computed based on weighted
Group’s assessment of the credit history of the average method.
borrower. Basis the default history, the 12mECL and
LTECL are estimated.
For Corporate exposures and MSE portfolio
wherein no sufficient historic default data is
For retail loan portfolio, the Group uses Vintage available, the PD is computed based on External
model to compute PD. In Vintage model, for each / Internal rating migration. For exposure, where
financial year wise originated portfolio, the no of external rating is not available, the internal rating
loans turned default during the entire loan tenure is mapped to equivalent external rating and the
is mapped for every 12 month bucket ie no of loans relevant default rate as per CRISIL Rating migration
went into default in first 12m, no of loan went into matrix is applied.
default in next 12 month ie 13 to 24 months and
The internal rating Grades are

Product Grade PD range across all stages
Micro and small enterprises loan High 0.52% - 3.08%
Standard 0.52% - 10.87%
Potential Sub-standard 0.1087
Defaulted and impaired / Not Impaired / individually impaired 1
Vehicle Finance Loan High 0.13% - 10.88%
Standard 0.13% - 23.36%
Potential Sub-standard 3.85% - 23.36%
Housing Loan High 0.42% - 3.08%
Standard 0.42% - 9.14%
Micro Finance Loan High 0.16% - 1.23%
Standard 0.16% - 2.28%
Business Loan - Unsec High 2.85% - 8.57%
Standard 2.85% - 18.75%
MSE & Financial Intermediaries High 0.002
Standard 0.86% - 3.83%
Note: For VF, the overall PD range is provided considering the lowest PD and highest PD applicable at each portfolio segment level.
Accordingly, the PD range will be different for each portfolio segment viz., New CV, Used CV, Strategic funding, etc

b) Exposure at Default the Group records an allowance for

The Exposure at Default is an estimate of the the LTECLs PDs and LGDs are estimated
exposure at a future default date (in case of Stage over the lifetime of the instrument. The
1 and Stage 2), taking into account expected expected cash shortfalls are discounted by
changes in the exposure after the reporting date, an approximation to the original EIR.
including repayments of principal and interest,
Stage 3: For loans considered credit-impaired, the
whether scheduled by contract or otherwise,
Group recognises the lifetime expected
expected drawdowns on committed facilities, and
credit losses for these loans. The method
accrued interest from missed payments. In case of
is similar to that for Stage 2 assets, with
Stage 3 loans EAD represents exposure when the
the PD set at 100%.
default occurred
Loan Commitment: When estimating LTECLs for
c) Loss Given Default
undrawn loan commitments, the Group estimates
The Loss Given Default is an estimate of the loss
the expected portion of the loan commitment that
arising in the case where a default occurs at a
will be drawn down over its expected life. The ECL
given time. It is based on the difference between
is then based on the present value of the expected
the contractual cash flows due and those that the
shortfalls in cash flows if the loan is drawn down.
lender would expect to receive, including from the
The expected cash shortfalls are discounted at an
realisation of any collateral. It is usually expressed
approximation to the expected EIR on the loan.
as a percentage of the Exposure at Default (EAD).
For an undrawn commitment, ECLs are calculated
together with the loan. For loan commitments,
The Group computes Loss Given Default based
the ECL is recognised and shown under
on the historical recovery experience. The Group
undrawn commitment”
considers all components of collections / recovery
of cash flows / collateral realisation and the timing Portfolio Segmentation
of the receipt. For Vehicle Finance and Micro While computing ECL, the Group segments the
Finance portfolio, the Group computes LGD based Portfolio based on the common risk drivers. The
on historical recovery experience. In case of other Group has bifurcated the Loan book as small ticket
retail portfolio viz., Housing Loan and Loan against loan (Retail) and Large ticket loan. The Retail book
property portfolio, where there is no enough is further segmented into homogeneous pools
recovery experience primarily by way of collateral based attributes such as the type of product viz
realisation is available, the Group computes the LGD Micro finance, Housing finance etc. and type of
based on net exposure which is equal to current vehicle such as Heavy commercial vehicle, Light
exposure at default less discounted collateral value Commercial vehicle etc.
post applying appropriate haircut.
Forward Looking Information

For Corporate and MSE portfolio where the Under
IndAS109, the allowance for credit losses
portfolio vintage is not more than 2 years, the Group is based on reasonable and supportable forward
currently applies LGD rates as prescribed under FIRB looking information obtainable without undue
vide RBI ref DBOD.No.BP.BC.67/21.06.202/2011-12 cost or effort which takes into consideration
dt. 22.12.2011. of current conditions and forecast of future
economic conditions.
The PD, LGD thus computed are applied to the
portfolio of the Group at the end of each reporting The Group shall rely on a broad range of forward
period as under looking information as economic inputs. The Group
shall use the relevant macroeconomic inputs such
Stage 1: The 12mECL is calculated as the portion
as Gross Domestic Product (GDP), Consumer Price
of LTECLs that represent the ECLs that
Index (CPI), Index of Industrial production (IIP), etc.
result from default events on a financial
to measure the uncertainty and sensitivity of ECL
instrument that are possible within the
estimates by reckoning the forward looking macro-
12 months after the reporting date. The
economic conditions. The Group also considers
Group calculates the 12mECL allowance
other forward looking inputs arising out of any
based on the expectation of a default
unforeseen events. In case where no correlation is
occurring in the 12 months following the
obtained forward looking estimates are factored
reporting date. These expected 12-month
through management overlay
default probabilities are applied to the
EAD and multiplied by the expected LGD The inputs and models used for calculating ECLs
and discounted by an approximation to may not always capture all characteristics of the
the original EIR. market at the date of the financial statements. To
Stage 2:
When a loan has shown a significant
made as temporary adjustments.
48 Overview of modified and forborne loans
178
The table below includes Stage 2 and 3 assets that were modified and, therefore, treated as forborne during the period, with the related modification loss suffered by
the Group.
Particulars 2019-20 2018-19
Amortised costs of financial assets modified during the period - 26

Net modification loss - -
The table below shows the gross carrying amount of previously modified financial assets for which loss allowance has changed to 12mECL measurement
during the period:
As at 31st March 2020

Post modification Pre-modification

Particulars
Gross carrying Corresponding Gross carrying Corresponding
amount ECL amount ECL
Facilities that have cured since modification and are now measured using 12mECLs 3 - 75 -
(Stage 1)
Facilities that reverted to (Stage 2/3) LTECLs having once cured - - - -
The following tables provide a summary of the Group’s forborne assets at March 31, 2020. Accounting policies for forbearance are described in Note 3.9
31-Mar-20
Stage 1 Stage 2 Stage 3
Permanent Total Permanent Total Total non-

Particulars Gross Temporary Temporary Temporary Permanent Total Forbearance
modification performing modification performing performing
carrying modification Refinancing modification Refinancing modification modification Refinancing forborne ratio
to terms & forborne to terms & forborne forborne
amount to T&Cs to T&Cs to T&Cs to T&Cs loans (Note 1)
conditions loans conditions loans loans
Loans
Micro Finance 398 - 227 - 227 - 6 6 - 165 - 165 398 0.03%
Loans
Total 398 - 227 - 227 - 6 - 6 - 165 - 165 398 0.03%
Note 1: Represents Total forborne loans/Gross Carrying amount
31-Mar-20
Gross amount of forborne loans ECLs of forborne loans
Particulars
Stage 1 Stage 1 Stage 2 Stage 2 Stage 3 Stage 3 Total
Stage 1 Stage 2 Stage 3 Total
Individual Collective Individual Collective Individual Collective
Loans
Micro Finance Loans 227 6 165 398 1 - - 38 39
Total 227 6 24 398 1 - - 38 39
As at 31st March 2019
Post modification Pre-modification
Particulars
Gross carrying Corresponding Gross carrying Corresponding
amount ECL amount ECL
Facilities that have cured since modification and are now measured using 12mECLs 75 - 75 51
(Stage 1)
Facilities that reverted to (Stage 2/3) LTECLs having once cured - - - -
The following tables provide a summary of the Group’s forborne assets at March 31, 2019. Accounting policies for forbearance are described in Note 3.9
31-Mar-19
Stage 1 Stage 3
Particulars Permanent Total Total non-

Gross Temporary Temporary Permanent Total
modification performing performing Forbearance
carrying modification Refinancing modification modification Refinancing forborne
to terms & forborne forborne ratio (Note 1)
amount to T&Cs to T&Cs to T&Cs loans
conditions loans loans
Loans
Micro Finance Loans 543 - 519 - 519 - 24 - 24 543 0.13%
Total 543 - 519 - 519 - 24 - 24 543 0.13%
Note 1: Represents Total forborne loans/Gross Carrying amount
31-Mar-19
Gross amount of forborne loans ECLs of forborne loans
Particulars Total
Stage 1 Stage 1 Stage 2 Stage 2 Stage 3 Stage 3
Stage 1 Stage 2 Stage 3 Total
Individual Collective Individual Collective Individual Collective
Loans
Micro Finance Loans 519 - 24 543 1 - - 16 17
Total 519 - 24 543 1 - - 16 17

179

49 Total Market Risk exposure

31-Mar-20 31-Mar-19
Carrying Non-traded Carrying Non-traded
Traded risk Traded risk
amount risk amount risk
Assets
Financial assets
Cash and cash equivalents 253,179 - 253,179 125,479 - 125,479
Bank balance other than cash and cash 536 - 536 530 - 530
equivalents
Loans and advances 1,510,579 - 1,510,579 1,157,437 - 1,157,437
Trade receivables 53 - 53 2 - 2
Investment
At Amortised cost 178,478 - 178,478 108,269 - 108,269
Fair value through other comprehensive 55,469 5,046 50,423 126,321 10,040 116,281
income
Fair value through profit and loss account 495 - 495 - - -
Other Financial Asset 13,141 - 13,141 8,810 - 8,810
Total 2,011,930 5,046 2,006,884 1,526,848 10,040 1,516,808
Trade Payables
Total outstanding dues of creditors 13,570 - 13,570 8,449 - 8,449
enterprises
Debt securities 21,976 - 21,976 52,633 - 52,633
Borrowings (other than debt securities) 641,697 - 641,697 354,036 - 354,036
Deposits 1,067,865 - 1,067,865 887,987 - 887,987

Other financial liabilities 38,037 - 38,037 16,315 - 16,315
Total 1,783,145 - 1,783,145 1,319,420 - 1,319,420
49.1 Analysis of Risk Concentration
The Group aims to maintain a diversified portfolio in terms of geography, industry, credit products, borrowers, groups, pricing and tenor. The
concentration risks are managed through setting up a limit on exposure viz. limit on single counterparty exposure, group borrower exposure,
Industry, sensitive sector exposure etc.
Sector-wise Analysis
Micro and
Financial Micro Business
31-Mar-20 Government small Vehicle Housing MSE Others Total
services finance Loan
enterprises
Financial Assets
Cash and cash equivalents 253,179 - - - - - - - - 253,179
Bank balance other than cash 536 - - - - - - - - 536
and cash equivalents

Loans and advances 70,567 - 568,447 379,576 59,385 362,830 15,703 83,707 3,824 1,544,039
Debt instruments at - 178,478 - - - - - - - 178,478
amortised cost
Debt securities at fair value - 55,449 - - - - - - 20 55,469
through OCI
Other Financial Asset 13,141 - - - - - - - - 13,141
337,423 233,927 568,447 379,576 59,385 362,830 15,703 83,707 3,844 2,044,842
Sector-wise Analysis
Micro and
Financial Micro Business
31-Mar-19 Government small Vehicle Housing MSE Others Total
services finance Loan
enterprises
Financial Assets
Cash and cash equivalents 125,479 - - - - - - - - 125,479
Bank balance other than cash 530 - - - - - - - - 530
and cash equivalents
Loans and advances 35,577 - 419,143 296,138 37,868 307,327 35,151 38,539 3,240 1,172,983
Debt instruments at - 108,269 - - - - - - - 108,269
amortised cost
Debt securities at fair value - 126,301 - - - - - - 20 126,321
through OCI
Other Financial Asset 8,810 - - - - - - - - 8,810
170,396 234,570 419,143 296,138 37,868 307,327 35,151 38,539 3,260 1,542,392

181

50 F air value of collateral and credit the Bank might be unable to meet its payment
enhancements held obligations when they fall due as a result of
Although collateral can be an important mitigation
mismatches in the timing of the cash flows under
of credit risk, it is the Group’s practice to lend on both normal and stress circumstances.
the basis of the customer’s ability to meet the
obligations out of cash flow resources rather Liquidity refers to the Bank’s ability to fund
than placing primary reliance on collateral and increase in assets or withdrawals of liabilities and
other credit risk enhancements. Based on the meet both expected and unexpected cash and
risk perception, the Group shall obtain sufficient collateral obligations at reasonable cost without
and suitable tangible collateral securities, adversely affecting its financial condition and
wherever required. liquidity risk arises where the Group is unable to
meet such obligations. The Bank’s Asset Liability
The Group’s loans are secured by way of first Management Committee (ALCO) is responsible for
and exclusive charge on all collaterals. In case overseeing the management and governance of
of Vehicle loans, the Group values the vehicle liquidity risk.
through proforma/tax invoice for new vehicles and
valuation by registered valuer for Used Vehicles.
Liquidity risk management in the Group is
Hypothecation endorsement is obtained in favour governed by Board approved Asset Liability
of the Bank in the Registration Certificate of the Management (ALM) Policy which provides the
Vehicle funded under the vehicle loans. framework for its monitoring & management. The
Bank actively manages its liquidity risk covering
In case of Loan against property and Housing loan, both market funding risk and market liquidity risk.
the value of the property at the time of origination The Bank maintains a diversified funding profile
will be arrived by obtaining valuation reports from with emphasis on building retail franchise to
the Group’s empanelled valuer. Security interest increase customer deposits. The Bank ensures that
is created by Mortgage through deposit of title there is sufficient liquidity headroom available,
deeds, which is registered wherever required by including liquid assets, at all times to manage
law, with the Sub-Registrar having jurisdiction over any contingency.
the immovable property.
Liquidity risk is assessed from both structural and
For working capital loans, apart from the charge dynamic perspective and the Bank uses various
on the immovable property, hypothecation on approaches like stock approach, cash flow approach
current assets are created. 70% of the Company’s & stress test approach to assess liquidity risk. The
loans are secured by way of collateral. Bank uses liquidity gap analysis to measure cash
flow mismatches at different time bands. The cash

In case of recovery from customer through flows are bucketed based on the residual maturity
realisation of collateral, any surplus remaining or expected behaviour of assets, liabilities and off-
after settlement of debt by way of sale of collateral balance sheet items. Bank also manages its liquidity
is refunded to the customer / borrower. on a dynamic basis to supplement the liquidity gap
analysis by estimating net cash outflow or inflows
51 Liquidity risk and funding management for business units considering their business
Liquidity risk is defined as the risk that the Group projection for the next 3 months. The Bank also
will encounter difficulty in meeting obligations employs stock approach to assess various aspects of
associated with financial liabilities that are settled liquidity risk such as stability of funds, liquid assets
by delivering cash or another financial asset. cover, funding concentration, etc.
Liquidity risk arises because of the possibility that

51.1 Maturity Pattern

Analysis of Maturity pattern of Assets and Liabilities by remaining residual maturities as at 31 March 2020:
Less than 3 3 to 12 1 to 5 Over 5

PARTICULARS Total
months months years years
Cash and cash equivalent and other bank balances 234,716 9,401 8,850 212 253,179
Bank balance other than cash and cash equivalents - 355 181 - 536
Loans and Advances (including receivables) 51,295 397,372 797,345 264,620 1,510,632
Investments 62,660 75,989 94,172 1,621 234,442
Other financial assets 9,506 1,144 419 2,072 13,141
Debt Securities 33 - 21,943 - 21,976
Borrowings (other than debt securities) 114,835 226,262 300,408 192 641,697
Deposits 216,145 448,946 402,670 104 1,067,865
Other Financial liabilities 8,415 4,494 19,313 5,815 38,037
Analysis of Maturity pattern of Assets and Liabilities by remaining residual maturities as at 31 March 2019:
Less than 3 3 to 12 1 to 5 Over 5

PARTICULARS Total
months months years years
Cash and cash equivalent and other bank balances 105,055 9,619 10,573 232 125,479
Bank balance other than cash and cash equivalents - 87 443 - 530
Advances ( including receivables) 141,253 303,114 559,689 153,383 1,157,439
Investments 105,428 60,166 67,644 1,352 234,590
Other Financial asset 3,830 2,071 1,085 1,824 8,810
Debt Securities 11,525 19,186 21,922 - 52,633
Borrowings (other than debt securities) 23,301 115,274 215,154 307 354,036
Deposits 233,471 312,150 342,298 68 887,987
Other Financial liabilities 16,262 17 36 - 16,315
51.2 Liquidity Coverage Ratio

The Group is adhering to the global minimum standard for liquidity ratio i.e Liquidity Coverage Ratio (LCR). It
aims to ensure that a bank has a adequate stock of unencumbered high-quality liquid assets (HQLA) that can be
converted into cash immediately to meet its liquidity needs for a 30 calendar day liquidity under stress scenario.
High quality liquid assets (HQLA) under LCR are divided into two parts i.e. Level 1 HQLA which comprises of
primarily cash, excess CRR, excess SLR securities and a portion of mandatory SLR as permitted by RBI (under MSF
and FALLCR) and Level 2 HQLA which comprises of investments in highly rated non‐financial corporate bonds
and listed equity investments considered at prescribed haircuts. Cash outflows are calculated by multiplying the
outstanding balances of various categories or types of liabilities by the outflow run‐off rates and cash inflows
are calculated by multiplying the outstanding balances of various categories of contractual receivables by the
rates at which they are expected to flow in under stress conditions.
The table below sets out the average LCR for FY 2019-20 and 2018-19:
High quality liquid Assets(HQLA) 349,003 2,401

Net outflow 272,993 1600
LCR 127.84% 150.10%


51.3 Market risk the Group’s earnings and capital. Interest rate
Market Risk may be defined as the possibility of risk results from both trading book and banking
loss to the Group caused by changes in the market book. The impact of interest rate risk on trading
variables such as interest rates, credit spreads, book is actively measured using trading book risk
equity prices, etc. The market risk for the Group is metrics like PV01, duration, etc. For banking book,
governed by ‘Market Risk Management Policy’ and interest rate risk arises through mismatches in re-
‘Treasury & Investment Policy’, which are approved pricing of interest rate sensitive assets (RSA), rate
by the Board. These policies ensure that transactions sensitive liabilities (RSL) and rate sensitive off-
in debt and capital markets are conducted in balance sheet items.
accordance with acceptable business practices and
are as per the extant regulatory guidelines. As interest rate risk can impact both net interest
income (NII) and value of capital, it is assessed
Market Risk Management unit is independent of and managed from both earning and economic
the dealing function and the settlements function perspective. Assets Liabilities Management
and reports directly to the Chief Risk Officer. The Committee (ALCO) is the guiding body for
unit is responsible for identifying and escalating management of IRRBB in the Banking subsidiary
any risk, limit excesses on a timely basis. This unit and ensure adherence sets the overall policy and
ensures that market risks are identified, assessed, risk limits as approved by the Board. Earning at
monitored and reported for management Risk (EaR) is a short term interest rate risk measure
decision making. which assesses the change in NII by estimating the
impact on interest income from rate sensitive assets
The Group is having position in the trading book and interest expense on rate sensitive liabilities
largely as liquidity buffer and not with the intent including off-balance sheet items. The Group has set
of any active trading. Group is therefore, largely limit for change in NII for given change in interest
keeping low duration money market instrument rates to manage the re-pricing gaps. The Group
to keep the market risk very low. The Group has also uses Economic Value of Equity (EVE), which is
also deployed market risk measurement tools like a long term risk measure to assess the change in
VaR, however considering the intent and type of value of equity due to change in economic value of
portfolio maintained, it is only used to assess the asset and liabilities. The duration gap approach is
quantum and direction of the risk rather using it used to determine the sensitivity of EVE. Modified
for trading or loss limits. duration is computed for all assets, liabilities
(excluding equity capital) and rate sensitive
51.4 Market risk (non-trading) – Interest Rate Risk derivatives to assess the Leveraged Duration Gap
Adverse movements in interest rates can affect / Duration of Equity. Leveraged Duration gap is
both interest earnings and fair or economic value computed and is subject to interest rate shocks to
of the financial instruments. The very nature of the assess the impact on EVE. The Group has defined a
financial intermediation business makes the Group threshold for change in EVE as percentage of net-
susceptible to interest rate risk and unmanaged worth for a given change in interest rate.
risk could potentially pose a significant threat to
52 Additional Information as required by Reserve Bank of India, Implementation of Indian Accounting Standards,
Circular no: RBI/2019-20/170 DOR (NBFC).CC.PD.No.109/22.10.106/2019-20 as at 31st March 2020
Asset Gross Loss allowances Provisions Difference

classification Carrying amount (Provisions) Net Carrying required between Ind AS
as per Ind AS as per as required under amount (4) as per IRACP 109 provisions and
109 (1) Ind AS (2) Ind AS 109(3) norms (5) IRACP norms (6)
Asset Classification as per RBI norms

Performing Assets
Standard Stage 1 1,395,663 6,139 1,389,512 6,233 (94)

Stage 2 95,806 14,233 81,577 10,366 3,867
Subtotal
Non-Performing Assets (NPA)
Substandard Stage 3 26,216 7,086 19,130 3,294 3,792

Doubtful - up to 1 year Stage 3 10,795 2,470 8,325 4,455 (1,985)
1 to 3 years Stage 3 11,255 1,712 9,543 5,408 (3,696)
More than 3 years Stage 3 3,294 1,773 1,521 2,884 (1,111)
Subtotal for doubtful 25,344 5,955 19,389 12,747 (6,792)
Loss 1,010 47 963 803 (756)

Subtotal for NPA 52,570 13,088 39,482 16,844 (3,756)
Other items such as guarantees, loan commitments, etc. Stage 1 12,707 24 12,683 - -
which are in the scope of Ind AS 109 but not covered Stage 2 31 - 31 - -
under current Income Recognition, Asset Classification and Stage 3 - - - - -
Provisioning (IRACP) norms
Subtotal 12,738 24 12,714 - -
Total Stage 1 1,395,663 6,139 1,389,524 - -

Stage 2 95,806 14,233 81,573 - -
Stage 3 52,570 13,088 39,482 - -
Total 1,544,039 33,460 1,510,579 33,443 17

185

53 Share based payments options for every 1 option outstanding to be

On December 17, 2007, the Company established exercised as on the date of bonus issue. Further, the
an Employees Stock Option Scheme 2007 (ESOP exercise price for each option was been reduced to
Scheme 2007). Under the plan, the Company is one-third of the original exercise price determined
authorised to issue upto 5,620,000 Equity Shares at the grant date.
of `10 each to eligible employees of the Company
and its Subsidiaries. Employees covered by the plan During the year ended March 31, 2016, the
are granted an option to purchase shares of the Company established a new employee stock option
Company subject to the requirements of vesting. scheme titled Equitas Employees Stock Option
A Remuneration and Nomination Committee Scheme, 2015 (ESOP Scheme 2015) effective from
constituted by the Board of Directors of the September 7, 2015. Under the plan, the Company
Company administers the plan. was authorised to issue up to 22,200,000 Equity
Shares of `10 each to eligible employees of
During the year ended March 31, 2013, the the Company and its Subsidiaries. Further, the
Company established a new employee stock outstanding options under the ESOP Scheme 2014
option scheme titled Equitas Employees Stock has been transferred and made available for grant
Option Scheme, 2012 (ESOP Scheme 2012) effective under the new scheme.
from November 10, 2012. Under the plan, the
Company was authorised to issue upto 1,000,000 During the year the Company has granted 470,060
Equity Shares of ` 10 each to eligible employees stock options to its eligible employees under
of the Company and its Subsidiaries. Further, the Equitas Employees Stock Option Scheme, 2015
outstanding options under the ESOP Scheme 2007 (ESOP Scheme 2015) at an exercise price of `115
has been transferred and made available for grant per option. The aforesaid grant was approved
under the new scheme. by Nomination Remuneration & Governance
committee at its Meeting held on August 02, 2019.
During the year ended March 31, 2014, the
Company established a new employee stock option During the year ended March 31, 2020, 9,886,251
scheme titled Equitas Employees Stock Option number of options issued under the ESOP Scheme
Scheme, 2014 (ESOP Scheme 2014) effective from 2015 were replaced with 33,487,873 options issued,
July 18, 2014. Under the plan, the Company was under the ESFB ESOP 2019 issued by its subsidiary
authorised to issue upto 10,500,000 Equity Shares (Equitas Small Finance Bank Limited), to employees
of `10 each to eligible employees of the Company of Equitas Small Finance Bank and also Equitas
and its Subsidiaries. Further, the outstanding Holdings Limited.
options under the ESOP Scheme 2012 has been
transferred and made available for grant under As at March 31, 2020, 172,308 (As at March 31, 2019 -
the new scheme. 12,644,449) options were outstanding, which were
granted at various exercise prices. The following
During the year ended March 31, 2015, pursuant are the outstanding grants as at March 31, 2020:
to the issue of bonus shares for the existing
shareholders, the Company granted 2 additional
ESOP Scheme after Date of Date of Board Exercise Options Method of

Vesting Period Particulars
transfer Grant Approval Price granted settlement
ESOP Scheme 2012 30-Jun-14 to 30-Jun-17 Grant 12 04-May-13 04-May-13 40.00 633,150 Equity
ESOP Scheme 2015 01-Jul-17 to 01-Jul-20 Grant 19 01-Jul-16 01-Jul-16 178.00 7,597,900 Equity
ESOP Scheme 2015 01-Sep-17 to 01-Sep-20 Grant 21 05-Aug-16 05-Aug-16 173.00 1,840,150 Equity
ESOP Scheme 2015 01-Oct-17 to 01-Oct-20 Grant 22 10-Sep-16 10-Sep-16 182.00 2,007,200 Equity
ESOP Scheme 2015 01-Nov-17 to 01-Nov-20 Grant 23 21-Oct-16 21-Oct-16 183.00 2,038,500 Equity
ESOP Scheme 2015 01-Feb-18 to 01-Feb-21 Grant 24 01-Feb-17 01-Feb-17 165.00 5,063,450 Equity
ESOP Scheme 2015 05-May-18 to 05-May-21 Grant 25 05-May-17 05-May-17 164.00 2,610,600 Equity
ESOP Scheme 2015 31-Jan-19 to 31-Jan-22 Grant 27 31-Jan-18 31-Jan-18 151.00 137,150 Equity
ESOP Scheme 2015 02-Aug-2019 to 01 Sep 20 Grant 33 02-Aug-19 02-Aug-19 115.00 330,060 Equity
* The outstanding options under the ESOP Scheme 2012 has been transferred and made available for grant under the new scheme
Employees Stock Option Scheme, 2015 (ESOP Scheme 2015) effective from September 7, 2015 approved by the shareholders
on June 22, 2016.

Exercise Period: Eligible to exercise the options during the next three years from the date of vesting.
Manner of vesting: Service condition:
In a graded manner over four years and one year period with 30%, 30%,20% and 20% of
the grants vesting in each year commencing from the start date of the first tranche for
four year options and full options vesting in a year for one year options.
Performance condition:
Subject to eligible employees meeting the specified performance conditions.
Movement of options outstanding under ESOP

March 31, 2020 March 31, 2019
Particulars Weighted Weighted

Number of Shares Average Exercise Number of Shares Average Exercise
Price (`) Price (`)
Outstanding at the beginning of the year 12,644,449 143 17,981,734 141
Granted During the period 470,060 115 1,692,115 140
Exercised during the year 328,497 62 1,031,522 57
Expired during the year 2,727,453 156 5,997,878 152
Transferred during the year 9,886,251 140 - -
Outstanding at the end of the year 172,308 154 12,644,449 143
Options exercisable at the end of the year 129,808 149 6,321,259 136
Range of exercise price (`) 40 to 183 40 to 184

Weighted average remaining contractual life (in years) 2.02 2.98
Weighted average fair value of options granted 19.50 36.66
Weighted average market price of shares on the date of exercise(`) 117.33 141.45
Fair value methodology

The fair value of options is computed on the date of the grant, using Black-Scholes options pricing model with
the following inputs.
Risk Free Interest Expected Fair Value of the Option (`)

Grant Grant Date Expected Volatility
Rate Life(In years) 1st Stage 2nd Stage 3rd Stage 4th Stage
Grant 12 04-May-13 7.12% to 7.23% 2.67 to 5.67 33% to 37% 2.92 5.07 6.31 7.99
Grant 13 15-Nov-13 8.50% to 8.68% 2.64 to 5.67 34% to 39% 4.34 7.08 8.53 9.93
Grant 14 09-May-14 8.38% to 8.60% 2.64 to 5.67 33% to 38% 8.56 11.59 13.38 15.68
Grant 15 12-Nov-14 8.50% to 8.68% 2.64 to 5.67 35% to 39% 7.80 11.66 14.41 16.50
Grant 16 07-May-15 7.74% to 7.79% 2.67 to 5.67 33% to 37% 10.46 14.58 18.40 20.67
Grant 18 06-Nov-15 7.43% to 7.64% 2.67 to 5.67 33.80% to 37% 16.00 18.79 23.55 26.87
Grant 19 01-Jul-16 7.03% to 7.34% 2.50 to 5.50 23.60% to 26% 40.66 53.39 61.83 70.45
Grant 21 05-Aug-16 6.78% to 7.04% 2.58 to 5.58 22.80% to 26% 38.63 51.40 59.26 67.35
Grant 22 10-Sep-16 6.71% to 6.91% 2.58 to 5.58 22% to 25% 40.22 53.26 62.47 70.88
Grant 23 21-Oct-16 6.70% to 7.00% 2.50 to 5.50 23.10% to 39.20% 40.45 52.49 61.08 87.23
Grant 24 01-Feb-17 6.45% to 6.84% 2.58 to 5.58 22.20% to 24.70 % 35.88 47.18 55.01 63.46
Grant 25 05-May-17 6.24% to 6.59% 2.56 to 5.66 19.48% to 22.55% 31.50 40.25 50.31 57.50
Grant 27 31-Jan-18 6.87% to 7.45% 2.50 to 5.51 18.00% to 21.62% 28.39 37.69 48.24 55.83
Grant 33 02-Aug-19 5.89% 2.5 14.23% 19.05 NA NA NA


54 Events after reporting date

There have been no events after the reporting date that require disclosure in these financial statements. The financial
statements have been approved for issue on May 29, 2020 by the Board of Directors of the Company.
55 Previous year figures

Previous year’s figures have been regrouped wherever necessary to conform to current year classification.

Srimathy R Deepti R
Date: 29 May 2020
Form AOC-1 - Financial Position of Subsidiaries
[Statement as required under Section 129 of the Companies Act, 2013 read with Rule 5 of Companies (Accounts) Rules, 2014]
Part “A” : Subsidiaries

SI.No. Particulars 1 2
1 Name of the Subsidary ESFBL ETPL
2 Reporting period for the subsidary concerned, if different from the holding Company's reporting period N.A N.A
3 Reporting currency and Exchange rate as on the last date of the relevant Financial year in the case of foreign subsidiaries N.A N.A
4 Share capital 105,340.16 2,209.60
5 Reserves and Surplus (Other Equity) 159,911.75 -1,961.44

6 Total assets 2,076,595.36 310.36
7 Total liabilities 2,076,595.36 310.36
8 Investments in shares/Mutual funds 20.00 -
9 Turnover ( Revenue from operations) 288,328.06 467.34

10 Profit before taxation 30,091.14 -20.56
11 Provision for taxation 10,487.13 -
12 Profit after taxation 19,604.01 -20.56
13 Total comprehensive income 19,721.70 -18.94
14 Proposed Dividend Nil -
15 % of shareholding 95.49% 99.57%
Part “B”: Associates and Joint Ventures - NIL

For and on behalf of Board of Directors of

N Rangachary John Alex S Viswanatha Prasad

Chairman ED and CEO Director
DIN:00054437 DIN: 08584415 DIN:00574928
Place: Bangalore Place: Chennai Place: Hyderabad
Date: 29 May 2020 Date: 29 May 2020 Date: 29 May 2020
Srimathy R Deepti R
Date: 29 May 2020

189
Notes
Notes
Notes
CORPORATE INFORMATION
BOARD OF DIRECTORS
MR. RANGACHARY N MR. RAJARAMAN P V

Chairman, Non-Executive Non-Independent Director
DIN 00054437
DIN 01658641
MR. ARUN RAMANATHAN MR. VISWANATHA PRASAD S

DIN 00308848
DIN 00574928
MS. JAYSHREE ASHWINKUMAR VYAS MR. BHASKAR S

Non-Executive Director
DIN 00584392
(ED & CEO till October 20, 2019 and
as Non-Executive Non-Independent Director
MR. JAYARAMAN CHANDRASEKARAN w.e.f October 21, 2019)
DIN 00010000
DIN 01118392
MR. JOHN ALEX

Executive Director and Chief Executive Officer
(Appointed w.e.f November 8, 2019)
DIN 08584415
KEY MANAGERIAL PERSONNEL
MS. SRIMATHY R MS. DEEPTI R

Registered Office Statutory Auditors
410A, 4th Floor, Spencer Plaza, Phase M/s. S R Batliboi & Associates LLP
II, No.769, Mount Road, Anna Salai 6th Floor, ‘A’ Block
Chennai – 600002 Tidel Park,
Tel : +91 44 4299 5000 No.4, Rajiv Gandhi Salai, Taramani
Fax : +91 44 4299 5050 Chennai – 600 113
Email : corporate@equitas.in Tel : +91 44 6117 9000
Website: https://www.equitas.in
CIN: L65100TN2007PLC064069
Bankers Registrar and Share Transfer Agent

EQUITAS SMALL FINANCE BANK LIMITED KFin Technologies Private Limited
Selenium Tower B
ICICI BANK LIMITED Plot No. 31-32 Gachibowli Financial District
Nanakramguda
STATE BANK OF INDIA Hyderabad – 500 032
Tel: +91 40 6716 2222
Email: einward.ris@kfintech.com
Website: https://karisma.kfintech.com
410A, 4th Floor, Spencer Plaza, Phase II,
No. 769, Anna Salai, Chennai – 600 002

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ANNUAL REPORT 2019-20 Equitas Holdings Limited

Company Overview Financial Statements

Received CSR Award from

EQUITAS HOLDINGS LIMITED (EHL) is a non-deposit taking,

Consolidated Performance Highlights FY 2019-20

Annual Report 2019-20

Delivering concrete results

Annual Report 2019-20

2. Dividend 7. Investment in Subsidiaries

6. Share Capital Neither there is any provision in law to keep, nor

Annual Report 2019-20

Meeting, the Chairman of NRGC shared the feedback 3) 

Mr. John Alex, ED & CEO (from 2.73:1

Annual Report 2019-20

(iii) the percentage increase in the median 7.80%

28. Auditors 29. Details in respect of frauds, if any, reported by

Information as required under Section 62 of the 

Annual Report 2019-20

of The Sexual Harassment of Women at Workplace 41. Dividend Distribution Policy

Corporate Social Responsibility (CSR) Report Annexure I

John Alex Arun Ramanathan

Annual Report 2019-20

For and on behalf of the Board of Directors

John Alex Rangachary N

Secretarial Audit Report Annexure III

The Members, (c) 

Annual Report 2019-20

Adequate notice is given to all directors to schedule the 6. 

Place: Chennai Signature:

Annual Report 2019-20

FORM NO. MGT 9 Annexure IV

I. Registration & Other Details:

II. Principal Business Activities of the Company

III. Particulars of Holding, Subsidiary and Associate Companies

IV. Share Holding Pattern

(iv) Shareholding Pattern of top ten Shareholders

Annual Report 2019-20

(v) Shareholding of Directors and Key Managerial Personnel:

VI. Remuneration of Directors and Key Managerial Personnel

Annual Report 2019-20

B. Remuneration to Other Directors

Fee for attending

1 Mr Rangachary N 4.04 3.50 - 7.54

C. Remuneration to Key Managerial Personnel other than MD/Manager/WTD

VII. Penalties/ Punishment/ Compounding of Offences:

Section of the Details of Penalty / Punishment/ Appeal made, if any

COMPANY / DIRECTORS / OTHER

John Alex Rangachary N

Management Discussion & Analysis

Business Environment markets. The coronavirus outbreak and subsequent

Annual Report 2019-20

Factors driving growth for the SFB Industry:

SFBs to gain from the expanding Middle Class

Over time, the lower middle

• Equitas Holdings Limited [EHL]

Financial performance – FY 2019-20

Overview of Subsidiaries bank will continue to focus on growing retail deposits to

Particulars (` crores) FY 2019-20 FY 2018-19 YoY %

` crores March 31, 2020 March 31, 2019 YoY %

6. Share Capital Neither there is any provision in law to keep, nor

Meeting, the Chairman of NRGC shared the feedback 3)

(iii) the percentage increase in the median 7.80%

28. Auditors 29. Details in respect of frauds, if any, reported by

Information as required under Section 62 of the

The Members, (c)

Adequate notice is given to all directors to schedule the 6.

(u) Laying down and review of procedures relating (iii)

(viii) Make rules by which all options including

Terms of Reference of Corporate Social controls risk through means of a properly

(e) Deploy such tools of measurement as maybe (d)

(d) To ensure that the Company is taking appropriate (j)

(g) To periodically report to the Board including risk (m)

5. Means of Communication Annual Report containing audited standalone and

11. Equity Shares in the Demat Suspense Account

Rules, 2014, as amended in our opinion and to iii.