Aditya Birla Capital Ltd Directors Report.

Dear Members,

The Board of Directors (the "Board") of Aditya Birla Capital Limited ("your Company"/ "the Company") is pleased to present the 13th (Thirteenth) Annual Report and the Audited Financial Statements (Consolidated and Standalone) of your Company for the financial year ended 31st March, 2020 ("financial year under review").

FINANCIAL SUMMARY

Your Companys financial performance (Consolidated and Standalone) for the financial year ended 31st March, 2020 as compared to the previous financial year ended 31st March, 2019 is summarised below:

Particulars

Consolidated

Standalone

2019-20 2018-19 2019-20 2018-19
Revenue from operations 16,792.29 15,163.51 199.82 177.78
Profit before share of Joint Venture Companies, exceptional items and Tax 1038.81 1,154.81 56.82 18.68
Share of Profit / (Loss) of Joint Venture Companies 250.92 225.84 - -
Exceptional Items (9.99) - (29.17) (30.32)
Profit / (Loss) before Tax 1279.74 1,380.65 27.65 (11.64)
Tax Expense 413.63 569.35 (2.2) (2.04)
Profit / (Loss) after Tax Attributable to: 866.11 811.3 29.85 (9.6)
Owners of the Company 919.78 870.94 29.85 (9.6)
Non-Controlling Interest (53.67) (59.64) - -
Other Comprehensive Income Attributable to: 74.63 5.58 (0.46) 0.03
Owners of the Company 24.18 2.19 (0.46) 0.03
Non-Controlling Interest 50.45 3.39 - -
Total Comprehensive Income Attributable to: 940.74 816.88 29.39 (9.57)
Owners of the Company 943.96 873.13 29.39 (9.57)
Non-Controlling Interest (3.22) (56.25) - -
Profit / (Loss) attributable to owners of the Company 919.78 870.94 29.85 (9.6)

The above figures are extracted from the Consolidated and Standalone Financial Statements prepared in accordance with Indian Accounting Standards ("Ind AS") as notified under Sections 129 and 133 of the Companies Act, 2013 ("the Act") read with the Companies (Accounts) Rules, 2014 and other relevant provisions of the Act and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations").

RESULTS OF OPERATIONS AND THE STATE OF COMPANYS AFFAIRS

Highlights of the Companys Consolidated performance for the financial year ended 31st March, 2020 are as under:

• Consolidated Revenue: Rs. 18,028 Crore (grew 9% year on year)

• Consolidated Net Profit: Rs. 920 Crore (grew 6% year on year)

• Active Customer base grew to 20 million

• Raised over Rs. 15,000 Crore of long-term funds during the year for lending businessess

In accordance with the provisions of the Act, Regulation 33 of the SEBI Listing Regulations and applicable Accounting Standards, the Audited Consolidated Financial Statements of the Company for the financial year 2019-20, together with the Auditors Report form part of this Annual Report.

The Audited Financial Statements including the Consolidated Financial Statements of the Company as stated above and the Financial Statements of each of the Subsidiaries and all other documents required to be attached thereto are available on

the Companys website at https://www.adityabirlacapital.com/ Investor-Relations. The financial results of the Company and its Subsidiaries are elaborated in the Management Discussion and Analysis Report, which forms part of this Annual Report.

ACCOUNTING METHOD

The Consolidated and Standalone financial statements of the Company have been prepared in accordance with the Accounting Standards notified under Sections 129 and 133 of the Act, read with the Companies (Accounts) Rules 2014, the Companies (Indian Accounting Standards) Rules, 2015, as amended, the Insurance Laws (Amendment) Act, 2015, the Insurance Regulatory and Development Authority (Preparation of Financial Statements and Auditors Report of Insurance Companies) Regulations, 2002 (the "IRDA Financial Statements Regulations"), orders/circulars/ directions issued by the Insurance Regulatory and Development Authority of India (the "IRDAI") in this regard and the guidelines/ Master Directions/Circulars/notifications issued by the National Housing Bank and the Reserve Bank of India ("RBI") to the extent applicable.

Presentation of financial statements

The Audited Financial Statements of the Company for the financial year under review have been disclosed as per Division III of Schedule III to the Act.

MATERIAL EVENTS DURING THE YEAR:

a) Issue and Allotment of equity shares on preferential basis:

• The Board of Directors at its Meeting held on 5th September, 2019 approved the issuance of 21 Crore equity shares at Rs. 100 each (face value of Rs. 10 each at a premium of Rs. 90 each) of the Company on a preferential basis to:

i) Grasim Industries Limited (the "Promoter");

ii) Surya Kiran Investments Pte. Limited; and / or IGH Holdings Private Limited; and / or Pilani Investment and Industries Corporation Limited (collectively, the "Members of the Promoter Group");

iii) Jomei Investments Limited ("Jomei"); and

iv) PI Opportunities Fund-I ("PI Opportunities"), subject to shareholders approval;

• For the purpose of allotment of equity shares to Jomei, applications were made to the Competition Commission of India ("CCI") and Department of Economic Affairs ("DEA"), on 11th September, 2019;

• The Company vide filings dated 12th September, 2019, made applications to the Stock Exchanges for in-principle approval prior to allotment of securities

o In-principle approvals received from BSE Limited and National Stock Exchange of India Limited on 20th September, 2019 and 1st October, 2019 respectively;

• The Shareholders of the Company approved the aforesaid issuance of equity shares on preferential basis vide Extra-Ordinary General Meeting held on 5th October, 2019;

• Allotment of equity shares to the Promoter, Members of the Promoter Group and PI Opportunities was made on 16th October, 2019 post receipt of the Subscription money;

• CCI approval was received by Jomei on 24th October, 2019;

• DEA approval was received by the Company on 21st February, 2020;

• Allotment of equity shares to Jomei was made on 27th February, 2020 post receipt of the Subscription money;

b) Impact on the Business Continuity of the Company

and subsidiaries amidst the spread of Covid-19 is

provided below:

The World Health Organization declared Novel Coronavirus (COVID-19) as a global pandemic on 11th March, 2020. The Government of India on 24th March, 2020 announced nationwide lockdown for containment of the pandemic initially for 21 days and which was later extended until 17th May, 2020. Various directions and advisories were issued by State Governments / Public Authorities under the Epidemic Act, 1897 against mass gatherings and other measures to reduce public contact for the safety and well-being of the public at large, including orders under Disaster Management Act, 2005 ("Act").

Amidst the above pandemic, the Company and its subsidiaries invoked their respective Business Continuity Plans (‘BCP) and adopted work from home policy to ensure the business operations continue uninterrupted and at the same time, ensuring their safety of customers, employees and support staff while managing the requirement of all stakeholders. Further, in line with the regulatory directives, the Company set up Crisis Management Committee/ War room to assess and evaluate the risks and associated control measures to safeguard the Company and employees from any adverse situation and accelerated digitization and automation for seamless business operations for key functions. Regular communication in this regard was initiated and sent to employees and customers by the subsidiaries informing them about the steps being taken to continue servicing including standards of hygiene and safety practised by the employees at branches (after their reopening) and also promoting self-servicing options like call centre, website, WhatsApp, bots, etc.,

This unprecedented situation has impacted business and markets resulting in high uncertainty and volatility. The Company and its subsidiaries are continuously monitoring the situation and evaluating all processes, systems and infrastructure to enable work from home with adequate controls in place. The Company is also adhering to all the requirements and guidelines issued by various regulatory authorities and the Risk Management Committees, Audit Committees and Boards of the respective Companies have been kept apprised of all material developments from time to time. The Company has also done detailed impact assessment of COVID-19 on reported earnings, financial results and solvency position which demonstrate that there is a nil impact on its going concern status and suitable disclosures as applicable have been included in the Annual Accounts.

Further details are provided in the Management Discussion and Analysis Report which forms part of this Annual Report.

HOLDING/ SUBSIDIARIES/ JOINT VENTURE/ ASSOCIATE COMPANY

Holding Company

Grasim Industries Limited is the holding Company of your Company.

Subsidiaries

As a Core Investment Company, the Company is primarily a holding company, holding investments in its subsidiaries. The Company conducts its business through its Subsidiaries in the various business segments in which they operate. As on 31st March, 2020, the Company had 20 (Twenty) Indian Subsidiaries and 6 (Six) Foreign Subsidiaries (including step down Subsidiaries).

During the financial year under review, the major changes with respect to the subsidiaries of your Company are as under:

• i) The Honble National Company Law Tribunal, Bench at Ahmedabad, vide its order dated 13th December, 2019, sanctioned the Scheme of Arrangement for transfer of Transaction business of Aditya Birla MyUniverse Limited to Aditya Birla Finance Limited, wholly-owned subsidiaries of the Company, under Sections 230 - 232 of the Companies Act, 2013;

ii) Aditya Birla MyUniverse Limited ("ABMU"), wholly- owned subsidiary of the Company, carried out the following businesses viz.:

a) offered an online platform for personal finance products such as Mutual Funds, Loans, Credit Cards, etc. The platform also offered Group Life and Group Health Insurance to its customers and carried opportunities to offer other personal financial products as well such as gold, fixed deposits, bank accounts, etc. in the personal

finonno cnoro

b) ABMU was also engaged in marketing and promotional activities on its website for its partners by hosting marketing and promotional campaigns / banners. (collectively referred to as the "Transaction Business").

The other business carried out by ABMU was inter alia, providing software technology development and Information Technology Enabled Services ("ITES") to other companies (hereinafter referred to as "IT & ITES Business").

As a result of a change in the regulatory framework, it was decided to restructure the Company.

iii) The name of Aditya Birla MyUniverse Limited, was changed to Aditya Birla Capital Technology Services Limited (with effect from 3rd March, 2020) and it continues to offer and operate its "IT & ITES Business". The demerged transaction business would strengthen the wealth management business of Aditya Birla Finance Limited.

• Global Clean Energy Fund SPC, was deregistered with effect from 31st March, 2020. Hence, it ceased to be a foreign subsidiary of your Company.

MATERIAL SUBSIDIARIES

As required under Regulations 16(1)(c) and 46 of the SEBI Listing Regulations, the Board has approved and adopted the Policy for determining Material Subsidiaries. The Policy has been amended effective from 1st April, 2019 in line with the amendments made to the SEBI Listing Regulations. The Policy is available on the Companys website at https://www.adityabirlacapital.com/ Investor-Relations/Policies-and-Codes.

During the financial year under review, Aditya Birla Sun Life Insurance Company Limited, Aditya Birla Finance Limited, Aditya Birla Sun Life AMC Limited and Aditya Birla Housing Finance Ltd were the material subsidiaries of the Company.

REGISTRATION AS A CORE INVESTMENT COMPANY

("CIC")1

The Company is registered as a Non-Deposit taking Systemically Important - Core Investment Company ("CIC-ND-SI") pursuant to the receipt of Certificate of Registration from the Reserve Bank of India dated 16th October, 2015, under Section 45-IA of the Reserve Bank of India Act, 1934 ("RBI Act"). During the financial year under review, the Company complied with all the applicable regulations notified by the Reserve Bank of India.

TRANSFER TO RESERVES

An amount of Rs. 5.88 Crore was transferred to Special Reserve in terms of Section 45-IC of the RBI Act during the financial year under review. An amount of Rs. 5.16 Crore was transferred to General Reserve during the financial year under review.

 

(1Please note that RBI does not accept any responsibility or guarantee of the present position as to the financial soundness of the Company or the correctness of any of the statements or representations made or opinions expressed by the Company and for repayment of deposits/ discharge of liabilities by the Company.)

DIVIDEND

Your Directors do not recommend any dividend for the financial year under review. In terms of the provisions of Regulation 43A of the SEBI Listing Regulations, your Company has formulated and adopted a Dividend Distribution Policy. The policy is attached as Annexure I to the Boards Report and is available on your Companys website at https://www.adityabirlacapital.com/ investor-relations/policies-and-codes.

SHARE CAPITAL

The Companys paid-up Equity Share Capital was Rs. 2,413.76 Crore as on 31st March, 2020 as compared to Rs. 2,201.40 Crore as on 31st March, 2019.

During the financial year under review, the Company allotted 2,99,422 Equity Shares pursuant to exercise of Stock Options and Restricted Stock Units granted under ABCL Incentive Scheme for Stock Options and Restricted Stock Units - 2017 and 20,56,923 Equity Shares pursuant to exercise of Stock Options, Restricted Stock Units and Performance Restricted Stock Units granted under Aditya Birla Capital Limited Employee Stock Option Scheme 2017.

The Board at its Meeting held on 5th September, 2019 appointed Mr. Sailesh Kumar Daga, Company Secretary and Compliance Officer of the Company to act as the Nodal Officer and Mr. Pramod Bohra, Joint Vice President, to act as the Deputy Nodal Officer for and on behalf of the Company for the purpose of verification of claims and co-ordination with Investor Education and Protection Fund Authority. Their details are available on the website of the Company at https://www.adityabirlacapital.com/ investor-relations/shareholder-centre.

DEPOSITORY

The Companys Equity Shares are tradable in electronic mode. As on 31st March, 2020, the Companys total Equity paid-up Share capital comprised of 2,41,37,60,708 Equity Shares, out of which 2,38,27,61,536 (98.72%) Equity Shares were held in dematerialised mode.

In view of the numerous advantages offered by the Depository System, the Members holding shares in physical mode are advised to avail the facility of dematerialisation.

CREDIT RATING

CRISIL Limited has assigned a rating of "CRISIL A1 + " and ICRA Limited has assigned a rating of "[ICRA] A1+" for the Commercial Paper Programme of the Company for the amount of Rs. 2,700 Crore and Rs. 1,000 Crore respectively. ICRA Limited has assigned a [ICRA] AAA (stable) rating for issue of Rs. 800 Crore NonConvertible Debenture Programme of the Company, if any.

PUBLIC DEPOSITS

The Company, being a Non-Deposit taking Systemically Important Core Investment Company, has not accepted any

deposits from the public during the financial year under review in accordance with Section 73 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014.

PARTICULARS OF LOANS GIVEN, INVESTMENT MADE, GUARANTEES GIVEN OR SECURITY PROVIDED

The Company is registered as Core Investment Company with RBI. Thus, the provisions of Section 186 except sub-section (1) of the Act are not applicable to the Company.

CONSERVATION OF ENERGY & TECHNOLOGY ABSORPTION

The Company primarily being an Investment Company, is not involved in any industrial or manufacturing activities. The Companys activities involve very low energy consumption and therefore has no particulars to report pursuant to Section 134(3)(m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014.

FOREIGN EXCHANGE EARNINGS AND OUTGO

There were no foreign exchange earnings during the financial year under review as well as during the previous financial year. The foreign exchange outgo during the financial year under review was Rs. 0.17 Crore as compared to Rs. 1.57 Crore, during the previous financial year.

PARTICULARS OF EMPLOYEES

Disclosures pertaining to remuneration and other details, as required under Section 197(12) of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is attached as Annexure II to the Boards Report.

Details as required under Section 197(12) of the Act, read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, with respect to information of employees of the Company will be provided upon request by a Member. In terms of the provisions of Section 136(1) of the Act, the Report and Accounts, as set out therein, are being sent to all the Members of your Company whose email address(es) are registered with the Company / Depository Participants. via electronic mode, excluding the aforesaid Annexure which shall be made available for inspection by the Members via electronic mode. If any Member is interested in obtaining a copy thereof, the Member may write to the Company Secretary at the Registered Office of the Company in this regard.

BUSINESS RESPONSIBILITY REPORT

In terms of Regulation 34(2)(f) of SEBI Listing Regulations, Business Responsibility Report has been enclosed as a separate Section in this Annual Report, describing the initiatives taken by the Company and is also available on your Companys website at https://www.adityabirlacapital.com/investor-relations/ financial-reports.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There were no material changes and commitments, affecting the financial position of the Company from the end of the financial year up to the date of this Report excluding the impact of the spread of COVID-19 pandemic, the impact of which on the financial position of the Company is still unfolding.

CHANGE IN NATURE OF BUSINESS

During the financial year under review, there has been no change in the nature of business of the Company.

EMPLOYEE STOCK OPTIONS

Employee Stock Options have been recognised as an effective instrument to attract talent and align the interest of employees with that of the Company, thereby providing an opportunity to the employees to share in the growth of the Company and to create long-term wealth in the hands of employees, thereby, acting as a retention tool.

In view of the above, your Company had formulated "Aditya Birla Capital Limited Employee Stock Option Scheme 2017" ("Scheme 2017") for the employees of the Company and its Subsidiaries.

Your Company had also adopted "ABCL Incentive Scheme for Stock Options and Restricted Stock Units - 2017" ("ABCL Incentive Scheme"), pursuant to the Composite Scheme of Arrangement between erstwhile Aditya Birla Nuvo Limited and Grasim Industries Limited and the Company and their respective Shareholders and Creditors.

The aforesaid ESOP Schemes are in compliance with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014.

Your Company also adopted the "Aditya Birla Capital Limited Stock Appreciation Rights Scheme 2019" ("SARs Scheme 2019"), which is a cash based plan linked to the actual stock price movement over the plan tenure. Further details on the same have been elaborated in the Corporate Governance Report which forms part of this Annual Report.

There were no material changes made to the aforesaid schemes during the financial year under review.

The details/disclosure(s) on the aforesaid Employee Stock Option Scheme(s) as required to be disclosed under the SEBI (Share Based Employee Benefits) Regulations, 2014 are available on the Companys website at https://www.adityabirlacapital.com/ investor-relations/financial-reports.

Certificates from the Statutory Auditors on the implementation of your Companys Employee Stock Option Scheme(s) will be made available via electronic mode at the ensuing Annual General Meeting ("AGM") of the Company for inspection by the Members.

MANAGEMENT DISCUSSION AND ANALYSIS

Pursuant to Regulation 34 of SEBI Listing Regulations, the Management Discussion and Analysis Report for the financial year under review, is presented as a separate section, which forms part of this Annual Report.

CORPORATE GOVERNANCE

The Company is committed to maintaining the highest standards of Corporate Governance and adhering to the Corporate Governance requirements set out by the Securities and Exchange Board of India. Corporate Governance principles form an integral part of the core values of the Company. The Corporate Governance Report as stipulated under Regulation 34(3) read with Schedule V of the SEBI Listing Regulations forms an integral part of this Annual Report. The requisite certificate from the Statutory Auditors of the Company confirming compliance with the requirements of Corporate Governance is attached as Annexure III to the Boards Report.

STATEMENT CONTAINING SALIENT FEATURES OF FINANCIAL STATEMENTS OF SUBSIDIARIES

A report on the performance and financial position of each of the Companys Subsidiaries as per Section 129(3) of the Act read with the Companies (Accounts) Rules, 2014, in the prescribed form AOC-1 is attached as Annexure IV to the Boards Report.

RISK MANAGEMENT

The Company is a Core Investment Company ("CIC") and its operations are limited to those of a CIC. The risks therefore largely relate to investments made in its Subsidiaries. The operations of each of the Subsidiaries, the risks faced by them and the risk mitigation tools used to manage them are reviewed periodically by their Risk Management Committees. The same are considered by the Board of the Company, as well. Details of the same are covered in the Management Discussion and Analysis Report, which forms part of this Annual Report. The Company has in place a Risk Management Policy which has been uploaded on the website of the Company at https://www.adityabirlacapital. com/investor-relations/policies-and-codes.

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

During the financial year under review, all transactions entered into by the Company with related parties were in ordinary course of business and on an arms length basis and were not considered material as per the provisions of Section 188 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 23 of the SEBI Listing Regulations. Hence, disclosure in form AOC-2 under Section 134(3)(h) of the Act, read with the Rule 8 of the Companies (Accounts of Companies) Rules, 2014, is not applicable.

Prior omnibus approval of the Audit Committee is obtained for Related Party Transactions ("RPTs") which are of a repetitive

nature and entered into the ordinary course of business and at arms length. A statement on RPTs specifying the details of the transactions, pursuant to each omnibus approval granted, is placed on a quarterly basis for review by the Audit Committee.

The details of contracts and arrangements with related parties of your Company for the financial year under review, are given in notes to the Standalone Financial Statements, which forms part of this Annual Report. The Policy on Related Party Transactions, as approved by the Board, is available on your Companys website at https://www.adityabirlacapital.com/investor-relations/policies- and-codes.

INTERNAL FINANCIAL CONTROLS

Your Company has well-established internal control systems in place which are commensurate with the nature of its business and size and scale and complexity of its operations. Standard operating procedures (SOP) and Risk Control Matrices are in place designed to provide a reasonable assurance and are being continuously monitored and updated.

In addition to the above, internal audits are undertaken on periodic basis which independently validate the existing controls as per scope assigned to them. The Internal audit program is reviewed by the Audit Committee at the beginning of the year to ensure that the coverage of the areas is adequate. Reports of the internal auditors are regularly reviewed by the management and corrective action is initiated to strengthen the controls and enhance the effectiveness of the existing systems. Significant audit observations are presented to the Audit Committee along with the status of management actions and the progress of implementation of recommendations.

Your Company also periodically engages outside experts to carry out independent reviews of the effectiveness of various business processes. The observations and best practices suggested are reviewed by the Management and Audit Committee and appropriately implemented with a view to continuously strengthen internal controls.

INTERNAL AUDIT

The Company has in place an adequate internal audit framework to monitor the efficacy of internal controls with the objective of providing to the Audit Committee and the Board of Directors, an independent, objective and reasonable assurance on the adequacy and effectiveness of the organisations risk management, control and governance processes.

The framework is commensurate with the nature of the business and the size of its operations. Internal auditing at the Company involves the utilisation of a systematic methodology for analysing business processes or organisational problems and recommending solutions to add value and improve the organisations operations.

The audit approach verifies compliance with the regulatory, operational and system related procedures and controls.

D RECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Act and to the best of their knowledge and belief and according to the information and explanations obtained from the Management, the Directors of your Company state that:-

i. in the preparation of the Annual Accounts for the financial year ended 31st March, 2020, the applicable accounting standards have been followed and there were no material departures from the same;

ii. the Directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2020 and of the profit of the Company for financial year ended on that date;

iii. the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. the Directors had prepared the Annual Accounts on a ‘going concern basis;

v. the Directors had laid down Internal Financial Controls and such Internal Financial Controls were adequate and were operating effectively; and

vi. the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

As on 31st March, 2020, the Board of Directors of your Company ("the Board") comprised of 7 (Seven) Directors including 3 (Three) Non-Executive Directors and 4 (Four) Independent Directors. Your Directors on the Board possess experience and competency and are renowned in their respective fields. All Directors are liable to retire by rotation except Independent Directors whose term of 5 consecutive years was approved by the Members of the Company.

Appointment/Resignation of Directors

No Director was appointed/has resigned from the Board during the financial year under review.

Detailed information on the Directors is provided in the Corporate Governance Report, which forms part of this Annual Report.

Retirement by Rotation

As per the provisions of the Act and the Articles of Association of the Company, Dr. Santrupt Misra retires from the Board by rotation this year and being eligible, has offered himself for re-appointment.

The information as required to be disclosed under regulation 36(3) of the SEBI Listing Regulations in case of re-appointment of Dr. Santrupt Misra is provided in the Notice of the ensuing Annual General Meeting.

Declaration by Independent Directors

Pursuant to Section 149(7) of the Act read with the Companies (Appointment and Qualifications of Directors) Rules, 2014, the Company had received declarations from all the Independent Directors of the Company confirming that they meet the ‘criteria of Independence as prescribed under Section 149(6) of the Act. The Independent Directors have also submitted their respective declarations as required under Section 149(7) of the Act and Regulation 16(1) of the SEBI Listing Regulations that they are not aware of any circumstance or situation, which exists or is anticipated, that could impair or impact their ability to discharge their duties with an independent judgement and without any external influence as required under Regulation 25 of the SEBI Listing Regulations.

Key Managerial Personnel

In terms of the provisions of Sections 2(51) and 203 of the Act, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Mr. Ajay Srinivasan, Chief Executive Officer (CEO), Mrs. Pinky Mehta, Chief Financial Officer (CFO) and Mr. Sailesh Kumar Daga, Company Secretary (CS), are the Key Managerial Personnel of your Company.

ANNUAL PERFORMANCE EVALUATION

The evaluation framework for assessing the performance of the Directors of your Company comprises of contributions at the Meeting(s) and strategic perspective or inputs regarding the growth and performance of your Company, amongst others.

Pursuant to the provisions of the Act and SEBI Listing Regulations and in terms of the Framework of the Board Performance Evaluation, the Nomination, Remuneration and Compensation Committee and the Board of Directors have carried out an annual performance evaluation of the Board itself, performance of various Committees of the Board, Individual Directors and the Chairman. The manner in which the evaluation has been carried out has been set out in the Corporate Governance Report, which forms an integral part of this Annual Report. The details of the programme for familiarisation of the Independent Directors of your Company are available on your Companys website at www.adityabirlacapital.com/about-us/board-of-Directors.

Outcome of the evaluation

The Board of your Company was satisfied with the functioning of the Board and its committees. The committees are functioning well and besides their committees terms of reference, as mandated by law, important issues are brought up and discussed in the committee meetings. The Board was also satisfied with the contribution of directors, in their respective capacities, which reflects the overall engagement of the individual directors.

MEETINGS OF THE BOARD AND ITS COMMITTEES Board

The Board meets at regular intervals to discuss and decide on the Companys performance and strategies. During the financial year under review, the Board met 5 (Five) times.

The Meetings of the Board were held on 4th May, 2019, 2nd August, 2019, 5th September, 2019, 7th November, 2019 and 31st January, 2020.

Further details on the Board Meetings are provided in the Corporate Governance Report, which forms part of this Annual Report.

Audit Committee

During the financial year under review, the Audit Committee reviewed the internal controls put in place to ensure that the accounts of your Company are properly maintained and that the accounting transactions are in accordance with prevailing laws and regulations. In conducting such reviews, the Committee found no material discrepancy or weakness in the internal control system of your Company. The Committee also reviewed the procedures laid down by your Company for assessing and managing risks.

Further details on the Audit Committee are provided in the Corporate Governance Report, which forms part of this Annual Report.

During the financial year under review, all recommendations made by the Audit Committee were accepted by the Board.

Nomination, Remuneration and Compensation Committee

Your Company has a duly constituted Nomination, Remuneration and Compensation Committee ("NRC"), with its composition, quorum, powers, role and scope in line with the applicable provisions of the Act and SEBI Listing Regulations.

Further details on the NRC are provided in the Corporate Governance Report, which forms part of this Annual Report.

The NRC has formulated a policy on remuneration under the provisions of Section 178(3) of the Act, which is attached as Annexure V to the Boards Report and the same is uploaded on the website of the Company at https://www.adityabirlacapital. com/investor-relations/policies-and-codes.

Other Committees

Details of all the other Committees of the Board are provided in the Corporate Governance Report, which forms part of this Annual Report.

ANNUAL RETURN

Pursuant to the provisions of Section 134(3)(a) of the Act, the extract of annual return for the financial year ended 31st March, 2020 in Form MGT-9 under the provisions of 92(3) of the Act has been attached as Annexure VI to the Boards Report. The Annual Return in form MGT-7 for financial year 2018-19 is also available on the Companys website at https://www.adityabirlacapital. com/investor-relations/financial-reports.

AUDITORS

STATUTORY AUDITORS, THEIR REPORT AND NOTES TO FINANCIAL STATEMENTS

Pursuant to the provisions of Section 139 of the Act and the Companies (Audit and Auditors) Rules, 2014, as amended,

M/s. Deloitte Haskins & Sells, LLP, Chartered Accountants (Firm Registration No.:117366W/W-100018, LLP Identification No.: AAB-8737) had been appointed as Statutory Auditors of the Company for a term of 5 (Five) years i.e. from the Tenth Annual General Meeting till the conclusion of Fifteenth Annual General Meeting of the Company.

The Company has received a letter from M/s. Deloitte Haskins & Sells LLP, confirming that they are not disqualified from continuing to act as Statutory Auditors of the Company.

The observation(s) made in the Auditors Report are selfexplanatory and therefore, do not call for any further comments under Section 134(3)(f) of the Act.

The Auditors Report does not contain any qualifications, reservations, adverse remarks or disclaimer. The Statutory Auditors have not reported any incident of fraud to the Audit Committee or the Board of Directors under Section 143(12) of the Act during the financial year under review.

SECRETARIAL AUDITORS

Pursuant to the requirements of Section 204(1) of the Act read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed M/s. Makarand M. Joshi & Co., Practicing Company Secretaries, to conduct the Secretarial Audit for the financial year under review. The Secretarial Audit Report in Form MR-3 for the financial year under review, as received from M/s. Makarand M. Joshi & Co., Company Secretaries, is attached as Annexure VII to the Boards Report.

Pursuant to Regulation 34(3) and Schedule V of the SEBI Listing Regulations, the Annual Secretarial Compliance Report for the financial year under review is attached as Annexure VIII to the Boards Report.

The Secretarial Audit Report and the Annual Secretarial Compliance Report do not contain any qualifications, reservations or adverse remarks. The Annual Secretarial Compliance Report for the financial year 2019-20 has also been submitted to the Stock Exchanges.

COST RECORDS AND COST AUDITORS

The provisions of Cost Audit and Records as prescribed under Section 148 of the Act, are not applicable to the Company.

CORPORATE SOCIAL RESPONSIBILITY

In accordance with Section 135 of the Act, your Company has a Corporate Social Responsibility ("CSR") Committee. The CSR Committee has formulated and recommended to the Board, a Corporate Social Responsibility Policy ("CSR Policy") indicating the activities to be undertaken by the Company, which has been approved by the Board.

The CSR Policy is available on the Companys website at https://www.adityabirlacapital.com/investor-relations/policies- and-codes.

In view of aggregate losses as per the calculation of net profits as per the provisions of the Act, your Company was not required to spend any amount towards CSR during the financial year under review. Accordingly, no CSR activity was undertaken by the Company. The Company does however have an active CSR programme through its subsidiaries.

Further details on the CSR Committee are provided in the Corporate Governance Report, which forms part of this Annual Report.

WHISTLE BLOWER POLICY / VIGIL MECHANISM

In compliance with the provisions of Section 177(9) of the Act read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 22 of the SEBI Listing Regulations, the Company has formulated a Whistle blower policy/ vigil mechanism for Directors and Employees to report concerns, details of which are covered in the Corporate Governance Report, which forms part of this Annual Report.

The Company has revised the Whistle-Blower policy to insert "reporting of incidents of leak or suspected leak of Unpublished Price Sensitive Information (UPSI)" in terms of Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, as amended and the revised policy was approved by the Audit Committee and the Board. The said policy is available on the Companys website at https://www.adityabirlacapital.com/investor-relations/policies- and-codes.

POLICY ON PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

Your Company has in place an appropriate policy which is in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013. An Internal Complaints Committee has been set up to redress complaints, if any, received regarding sexual harassment of women. The Company has complied with the provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. All employees (permanent, contractual, temporary, trainees) are covered under this policy. We further state that during the financial year under review, there were no complaints received/cases filed / cases pending under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

HUMAN RESOURCES

Our Purpose at Aditya Birla Capital and our subsidiaries is to help our customers lead fulfilling lives through financial solutions we offer and it is our strong workforce spread across every part of the country that makes this happen. It is the zeal and passion with which our people do business by keeping the customer and her / his needs always at the forefront that bring our Vision and Purpose alive.

Human capital therefore has always been the most valued asset for us at Aditya Birla Capital and the Human Resources function is focused on building, nurturing and growing this asset.

Today, Aditya Birla Capital the Company along with its subsidiaries boasts of a 21,000+ multi-generational diverse and agile workforce. Our people practices are centered around strengthening capabilities for the current and future, building strong leadership succession, developing talent and rewarding excellence.

Over the years, the Human Resources function accross the Company and subsidiaries has established robust talent management practices, development interventions, productivity improvement initiatives and reward mechanisms, thereby enabling achievement of organizational goals and key milestones through people.

Our culture is of utmost importance to us and the Human Resources function plays a vital role in ensuring that our people get the opportunities to perform, develop and succeed in a fair, transparent, meritocratic and enabling ecosystem. Our employee engagement scores on Pride, Advocacy and Loyalty have been increasing year on year and this is a strong indication of the undeterred focus that the Human Resources function has towards employee happiness, engagement and retention.

The Human Resources function works relentlessly towards ensuring a balance between the changing demands of the business while protecting the interest, well-being and growth of our people.

As on 31st March, 2020, there were 29 permanent employees on the rolls of the Company.

SECRETARIAL STANDARDS OF ICSI

Your Directors confirm that the applicable Secretarial Standards issued by the Institute of Company Secretaries of India, have been complied with.

OTHER DISCLOSURES

In terms of applicable provisions of the Act and SEBI Listing

Regulations, your Company discloses that during the financial year under review:

1. Your Company has not issued shares (including sweat equity shares) to the employees of the Company under any scheme save and except under Employee Stock Option Schemes referred to in this Report.

2. Your Company has not made any Scheme for provision of money for the purchase of its own shares by employees or by trustees for the benefit of employees.

3. No significant or material orders were passed by the Regulators or Honble Courts or Tribunals which impact the going concern status and Companys operations in future.

4. No public issue, rights issue, bonus issue, shares issued with differential voting rights, etc. were made by the Company. The details of preferential allotment of equity shares by the Company are mentioned separately in this Report.

ACKNOWLEDGEMENTS

Your Directors take this opportunity to express their appreciation for the support and co-operation extended by our various partners and other business associates. Your Directors gratefully acknowledge the ongoing co-operation and support provided by all Regulatory bodies.

Your Directors place on record their appreciation for the exemplary contribution made by the employees of the Company and its Subsidiaries at all levels. Their dedicated efforts and enthusiasm have been pivotal to your Company and its subsidiaries growth.