Poonawalla Fin Director Discussions

To the Members,

Your Directors have pleasure in presenting the 43rd Annual Report along with the Audited Financial Statements of the Company for the financial year ended March 31, 2023.


( in Crore)


FY 2023

FY 2022

Total Income



Finance cost



Net income



Operating expenses



Pre-provisioning operating profit



Net loss on derecognition of financial instruments



Impairment on financial instruments



Profit before exceptional item and tax



Exceptional items



Profit before tax



Profit after tax



Retained earnings as at the beginning of the year



Profit after tax



Other comprehensive income on defined benefit plan



Retained earnings before appropriations




Transfer to reserve fund under Regulation 45-IC of Reserve Bank of India Act, 1934



Dividend paid



Retained earnings as at the end of the year




Total Income increased to 2,010.03 Crore in FY 2022-23 from 1,567.08 Crore in FY 2021-22.

Net Income on a standalone basis increased to 1,414.75 Crore in FY 2022-23 from 1,057.79 Crore in FY 2021-22.

The impairment on financials instruments decreased from 68.61 Crore in FY 2021-22 to (144.53) Crore in FY 2022-23.

The Company?s Profit after Tax ("PAT") on a standalone basis increased to 584.94 Crore in FY2022-23 from 293.20 Crore in FY2021-22.

The Company?s net interest margin ("NIM") increased to 10.7% in FY2022-23 as compared to 9.8 % in FY 2021-22.

On a Standalone basis, the Capital Risk Adequacy Ratio ("CRAR") for the year FY 2022-23 was 38.91% against the RBI stipulated norm of 15%.


The Management Discussion and Analysis, as required in terms of the Securities and Exchange Board of India

(Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"), forms part of this Boards Report.


During the year, there was no change in the nature of business of the Company or its Subsidiary.


There are no material changes or commitments affecting the financial position of the Company that have occurred between the end of the financial year and the date of this Report.


In accordance with the requirements in terms of Regulation 34 of SEBI Listing Regulations your Company had prepared Consolidated Financial Statements in accordance with Ind AS 110 - "Consolidated Financial Statements" and Ind AS 27 - "Separate Financial Statements". The Consolidated Financial Statements forms part of this Report.


The Company has one subsidiary, viz. Poonawalla Housing Finance Limited ("PHFL") and one Joint Venture Company Jaguar Advisory Services Private Limited ("JASPL").

During the year under review, Sanoti Properties LLP has acquired from the Company 4,53,62,281 equity shares of the Company?s Joint Venture with HDI Global SE for General Insurance Business in India named as Magma HDI General Insurance Company Limited ("Magma HDI") pursuant to receipt of all the applicable approvals. Subsequently, Magma HDI has ceased to be joint venture of your Company.

During FY 2022-23, no new subsidiary was incorporated/ acquired.

The Company?s policy for determination of material subsidiary, as adopted by the Board of Directors, in conformity with regulation 16 of the SEBI Listing Regulations, can be accessed on the Company?s website at https://poonawallafincorp.com/investor-governance. php

In terms of the said policy and provisions of regulation 16 of the SEBI Listing Regulations, PHFL is a material subsidiary of the Company.

Performance highlights of the Subsidiary and Joint Venture ("JV") are given below:

PHFL (Subsidiary Company)

PHFL has made disbursements of 2,585.20 Crore in FY 2022-23 against 1,970.13 Crore in previous year. PHFL has earned a PBT of 154.19 Crore for the year ended March 31, 2023 against 101.16 Crore in previous year.

During the year under review, the Board of Directors and the Shareholders of the Company had approved the divestment of all the 24,98,21,117 equity shares held by Company in its Subsidiary to Perseus SG Pte ltd, an entity affiliated to TPG Global LLC, at a purchase consideration based on a per equity share price of 152.84/- representing a total equity value of the Company of 3,900 Crore (Indian Rupees Three Thousand Nine Hundred Crore) subject to approvals from Reserve Bank of India (RBI) and lenders and completion of customary conditions.

The financial statements of the Subsidiary Company is also available on the Company?s website at https:// poonawallafincorp.com/investor-financials.php

JASPL (JV Company):

Jaguar Advisory Services Private Limited ("JASPL"), a Joint Venture with HDI Global SE is an advisory services Company domiciled in India. JASPL is a SPV of the Company. Pursuant to divestment of 11,000 equity shares constituting 48.89% of the share capital held by the Company in JASPL as approved by shareholders, the transactions will be consummated upon receipt of certain regulatory approvals. Accordingly, in line with the requirements of Ind AS 105 "Non-current assets Held for Sale", such investments have been designated as assets held for sale.

Pursuant to Section 129(3) of the Companies Act, 2013 (‘the Act?) a statement in Form AOC-1 containing the salient features of the Financial Statement of your Company?s subsidiary forms part of this report and hence not repeated here for the sake of brevity.


During the year the Company is proposing to transfer 117.00 Crore to Reserve as required under Regulation 45-IC of Reserve Bank of India Act, 1934 issued by Reserve Bank of India ("RBI").


The Board of Directors of the Company have at their meeting held on April 26, 2023, recommended a dividend @ 100 % on equity shares i.e 2/- per equity share of the face value of 2/- each for FY 2022-23 vis- a- vis @20 % on equity shares i.e 0.40 per equity shares in FY 2021-22 to deliver sustainable value to its shareholders. The dividend would be paid to all the equity shareholders, whose names would appear in the Register of Members / list of Beneficial Owners on the Record Date fixed for this purpose.

The dividend recommended is in accordance with the Company?s Dividend Distribution Policy.

The Dividend Distribution Policy, in terms of Regulation 43A of the SEBI Listing Regulations and as reviewed and adopted by the Board of Directors of the Company, is available on the Company?s website viz., https:// poonawallafincorp.com/investor-governance.php


Being a non-deposit taking systemically important Non-Banking Finance Company, your Company has not accepted any deposits from the public within the meaning of the provisions of the Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 2016 and the provisions of the Act.


Equity based compensation is an integral part of employee compensation across sectors which enables alignment of personal goals of the employees with organizational objectives by participating in the ownership of the Company through share-based compensation scheme/plan. Your Company believes in rewarding its employees as well as that of the Subsidiary Company for their continuous hard work, dedication and support, which has led the Company, and the Subsidiary Company on the growth path.

The Employee Stock Options ("ESOPs") granted to the employees of the Company and its Subsidiary currently operate under the following Schemes:

• Employees Stock Option Plan 2007 (ESOP 2007);

• Restricted Stock Option Plan 2014 (RSOP 2014); and

• Employees Stock Option Plan 2021 (ESOP 2021).

The aforesaid Schemes complied with the SEBI (Share Based Employee Benefits) Regulations, 2014 and SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 ("SEBI (SBEB&SE) Regulations, 2021"), to the extent applicable.

The Nomination and Remuneration Committee of the Board of Directors of the Company, inter alia, administers and monitors the Schemes in accordance with the SEBI (SBEB&SE) Regulations, 2021.

During the year, the Company granted ESOPs to the eligible employees of the Company, in accordance with the respective Schemes and as approved by the Nomination and Remuneration Committee.

The details of the ESOPs granted and outstanding as on March 31, 2023 along with other particulars as required by Regulation 14 of the SEBI (SBEB&SE) Regulations, 2021 is available on the website of the Company at https://poonawallafincorp.com/investor-governance. php

The certificate from the Secretarial Auditor, as required under Regulation 13 of the SEBI (SBEB&SE) Regulations 2021, stating that the ESOP Schemes have been implemented in accordance with the SEBI (SBEB&SE) Regulations, 2021 would be available for inspection by the Members during the Annual General Meeting ("AGM").

Grant wise details of ESOP vested, exercised and cancelled are also provided in the notes to the standalone financial statements.


During the year, your Company allotted 3,024,053 equity shares arising out of the exercise of Employees Stock Options granted to eligible employees of your Company and its Subsidiary.

Post allotment of the aforesaid equity shares, the total issued, subscribed and paid-up share capital of the Company as of March 31, 2023, stood at 1,53,58,95,184.00 comprising 76,79,47,592 equity shares of 2/- each.

The new equity shares issued shall rank pari-passu with the existing equity shares of the Company in all respects.



During the year, the Company has raised fresh secured term loans of 4,600 Crore from banks and financial Institutions for an average tenor of 3 to 7 years. Besides public sector banks/financial institutions incremental credit lines were received from private/foreign banks to diversify the borrowing base. The Company also raised commercial paper aggregating to 1,975 Crore and 500 Crore of non-convertible debentures raised during the year through private placement. The funds raised through non-convertible debentures were utilized for the purpose specified in the respective offer documents.


The Company continues to fulfil all the norms and standards laid down by RBI pertaining to nonperforming assets, capital adequacy, statutory liquidity assets, etc. As against the RBI norm of 15%, the capital to risk-weighted assets ratio of the Company was 38.91% as on March 31, 2023. In line with the RBI guidelines for Asset Liability Management ("ALM") system for NBFCs, the Company has an Asset Liability Management Committee, which meets quarterly to review its ALM risks and opportunities.


During the year under review, the long-term ratings assigned to various debt instruments and bank facilities of the Company were upgraded to ‘AAA; Stable? by CARE Ratings based on strong parentage, low leverage, improved asset quality, focused and diversified product approach in retail segment and a strong senior management team. In April 2023, CRISIL also upgraded the long-term rating assigned to debt instruments and bank facilities to ‘AAA/Stable?.

In September 2022, CARE Ratings upgraded the rating assigned to bank facilities and long-term debt instruments. Ratings of long-term Bank Facilities, Nonconvertible Debentures and Subordinated Debt were upgraded to CARE AAA; Stable, while ratings of Market Linked Debentures were upgraded to CARE PP-MLD AAA; Stable. Ratings of Perpetual Debt were upgraded to CARE AA+; Stable. The ratings assigned to Short-Term Bank facilities and Commercial Paper were reaffirmed at ‘CARE A1+.

In October 2022, CRISIL reaffirmed the rating of ‘CRISIL AA+/Stable assigned to bank facilities and non-convertible Debentures, and ‘CRISIL A1+ rating assigned to the Commercial Paper issue for an enhanced amount. In April 2023, CRISIL upgraded the

rating assigned to Bank facilities and Long-Term Debt instruments. Ratings of Long-Term Bank Facilities and Non-convertible Debentures were upgraded to ‘CRISIL AAA/Stable. The ratings assigned to Commercial Paper were reaffirmed at ‘CRISIL A1+.

There was no change in ratings assigned by ACUITE and Brickwork Ratings during the year.

‘AAA rating indicates highest degree of safety regarding timely servicing of financial obligations and lowest credit risk.

‘AA+ rating indicates high degree of safety regarding timely servicing of financial obligations and very low credit risk.

A summary of outstanding ratings is presented below:

Rating Agency

Instrument / Facility

Outstanding Rating (As on March 31, 2023)

CARE Ratings

Non-convertible debentures

AAA; Stable

Long Term Bank facilities

AAA; Stable

Market Linked Debentures (MLD)

AAA; Stable

Sub debt

AAA; Stable

Perpetual debt

AA+; Stable

Commercial paper/Short Term Bank Facilities



Non-convertible debentures

AA+ / Stable

Bank facilities

AA+ / Stable

Commercial paper /Short Term Bank Facilities



Non-convertible debentures

AA+ / Positive

Sub debt

AA+ / Positive

Brickwork Ratings

Non-convertible debentures

AA+ / Stable

Sub debt

AA+ / Stable

Perpetual debt

AA / Stable

*In April 2023, CRISIL also upgraded the long-term rating assigned to debt instruments and bank facilities to ‘AAA/Stable?.

A status of ratings assigned by rating agencies and migration of ratings during the year is provided in note to the standalone financial statements of the Company.


The Company, being an NBFC registered with the RBI and engaged in the business of giving loans in ordinary course of its business, is exempt from complying with the provisions of section 186 of the Companies Act, 2013 ("Act") with respect to loans. Accordingly, the disclosures of the loans given as required under the aforesaid section have not been made in this Board?s Report.

Particulars of loans and investments outstanding during the financial year are furnished in notes to the standalone financial statements of the Company.


The Risk Management Committee (RMC), functions in line with the Non-Banking Financial Companies - Corporate Governance ("Reserve Bank") Directions, 2015 and SEBI Listing Regulations. The Committee met six times during the year, its terms of reference and functioning are set out in the Corporate Governance Report. The Company understands that risk evaluation and risk mitigation is a function of the Board of the Company, and the Board of Directors are fully committed to developing a sound system for identification and mitigation of applicable risks viz., systemic and nonsystemic. For detailed Risk Management procedure of the Company, please refer to the Management Discussion & Analysis Report.


The Company has in place adequate internal financial controls with reference to financial statements,

commensurate with the size, scale, nature and complexity of its operations and regulatory requirements. A comprehensive review of the internal financial controls environment of the Company was undertaken during the year which covered testing of Process, IT and Entity level controls including review of key business processes for updating Risk Control, Matrices, etc. The risk and control matrices are annually reviewed, and control measures are tested and documented. Moreover, the Company continuously upgrades its systems and undertakes review of policies, guidelines, manuals, and authority matrix. The internal financial control is supplemented by extensive internal audits, regular reviews by the Management and standard policies and guidelines to ensure reliability of financial and all other records to prepare financial statements, its reporting and other data. The Audit Committee of the Board reviews internal audit reports given along with management responses. The Audit Committee also monitors the implemented suggestions. The Company has, in all material respects, adequate internal financial control over financial reporting and such controls are operating effectively. The Statutory Auditors of the Company have also certified on the existence and operating effectiveness of the internal financial controls relating to financial reporting as of March 2023.


Pursuant to Section 177(9) of the Act and Regulation 4(2) (d)(iv) of the SEBI Listing Regulations, the Company has in place a vigil mechanism named "Breach of Integrity and Whistle Blower (Vigil Mechanism) Policy" to provide a formal mechanism to the Directors and employees to report their concerns about unethical behavior, actual or suspected fraud or violation of the Company?s Code of Conduct or Business Ethics policy. The Policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee in appropriate and exceptional circumstances.

The details of the said Policy is explained in the Corporate Governance Report and is available on the website of the Company at https://poonawallafincorp. com/investor-governance.php.


Your Company firmly believes that employees are its greatest asset and foundation of our operations is human capital. The focus of the Human Resources (HR) strategy is to enable the growth of the Company through talent fulfilment for growth areas, capability building in emerging technologies and building internal talent pipeline. Your Company strives to create

a conducive environment for growth and development of our employees. Training & Development initiatives are being taken for employees from time to time. More details can be found in the human resource section in the Management Discussion & Analysis Report.


The Company has zero tolerance towards sexual harassment at the workplace and has adopted a ‘Policy for Prevention of Sexual Harassment? to prohibit, prevent or deter any acts of sexual harassment at workplace and to provide the procedure for the redressal of complaints pertaining to sexual harassment, thereby providing a safe and healthy work environment, in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act 2013 and the rules thereunder ("POSH Act"). The Company has complied with the provisions relating to the constitution of the Internal Committee under the POSH Act. During the year under review, no case of sexual harassment was reported to the Internal Committee ("IC"). The composition of IC is in accordance with POSH Act. To build awareness and appreciation of this area, we have implemented an online knowledge module leveraging our learning management system. We continue to strive harder with each passing year to ensure we succeed in bringing the best out of our people and enable the organization to create value for its shareholders and employees.


The Company has made unprecedented progress in establishing best-in-class technology infrastructure and ecosystem. A total paradigm shift has been executed by the Company from in-house developed applications landscape to Software-As-A-Service ("SAAS") model. This has enabled the Company to start benefiting from the latest features and integrations within a short time. By using SAAS applications, the Company has also leveraged industry best practices which are baked into these systems.

SAAS platform has been implemented for Enterprise Resource Planning ("ERP") system. This software system provided by a US-based technology giant is a market leader in the ERP space. As part of this implementation business processes have been aligned as per industry- best practices. There are multiple API based integrations thus enabling end-to-end automation of each process. Automation of procure-to-pay cycle will equally benefit the suppliers and employees. Deployment of this standard ERP product is a testament to our commitment to complete transparency in our operations.

Further technological advancements have been executed in asset management. With a large footprint of branches spread across the country, it was imperative to have traceability of all the Company assets and fixtures. This has now been achieved such that administration and technology departments have much better control over their assets.

A new Collections system has also been launched. This application is fully integrated with the core loan management system. Our collections officers can use the mobile app on which the cases allocated to them for collecting shall appear. Simple and convenient interface of this application will help improve collection efficiency of the Company.

On the infrastructure side also, we have seen a major upgradation. The on-premises data center has been completely shut down. This will result in substantial cost savings for the Company. With the entire technology infrastructure now hosted in cloud, the Company is poised very well to handle rapid upscaling of business with ease.

Looking forward, the Company has laid out a vision to increase focus on customer centricity. In alignment with this vision, it has been planned to enhance customer facing applications. As a first step a new mode of EMI payment, Bharat Bill Payment System (BBPS) has been introduced by the Company. With this initiative the penetration of digital payments will definitely see a huge rise.

Work is also underway at expanding the scope of data warehouse and implementing a data lake. This will enable analysts to use superior algorithms like machine learning and artificial intelligence to derive better insights into our customers? needs and their behaviors. The new platform will cater to internal MIS, analytics, and real time insights.


Some of the key initiatives undertaken by the Company during the year are:

> Public Relations

To create awareness about Poonawalla Fincorp Limited ("PFL") and the new management with external stakeholders and the media, we did an extensive Public Relations ("PR") campaign throughout the year. Through specific communication and messaging we reached out to our stakeholders and informed them about the organization?s development as well as work post-acquisition. We focused on getting the

right visibility for the Company and made sure that there is an overall positive sentiment for the organization. Some of the leading media houses including electronic channels, newspapers as well as online publications covered the growth story of the organization and gave us good visibility. The Company?s vision and mission were well placed in the media and we got excellent positive visibility for the Brand Poonawalla Fincorp. We successfully overshadowed the erstwhile Magma Fincorp?s legacy and were successful in positioning Poonawalla Fincorp as one of the leading NBFCs in the country with digital-first tech-led approach. We also positioned our organization as best in class financial products and solution providing company in the consumer and MSME financing space.

As part of our PR initiatives, we did an extensive media outreach to inform our stakeholders about the management, its vision along with its flawless execution. A healthy mix of english and regional media coverage has positioned Poonawalla Fincorp as a force to reckon within NBFC space.

a. Leadership Profiling at various leading publications

With strategic communication and media reach out we did some large format interviews for our top management with leading publications like Moneycontrol, Financial Express, Economic Times, Hindu Business Line, etc. This gave us media visibility and helped us position our leadership as an industry though leaders.

b. Digital PR campaigns

We are building the brand digitally through strategic content placements in the form of authored articles, press releases as well as opinion pieces. So far, successfully featured content on various leading digital publications like Moneycontrol, LiveMint, Hindustan Times, ETBFSI, Indian Express.

c. Regional Influencer Engine

Successfully identified, onboarded, and coordinated with various regional youtubers on creating content around brand Poonawalla Fincorp and its various products. So far 12 videos have been published and more than 10,000 people viewed these videos. These videos were made and published by various regional youtubers with a cumulative subscriber base of 3 Lakh.

> Employer Branding:

a. Launch of LinkedIn Brand management activity

Successfully positioned Poonawalla Fincorp as employer of choice through various interventions. We have started regularly posting about key milestones, important awards, and recognitions as well as various employee engagement activities. Some of the LinkedIn posts on important days and festivals helped us garner good engagement as well as followers for organization?s LinkedIn profile.

b. Events and PR for employer branding

The Company not only applied and was recognized in key employer branding platforms like Most Preferred Employer of the Year Awards 2022-23, but also build visibility in these forums through communication channels and leadership visibility. Poonawalla Fincorp was also featured in HR trend stories in key national publications through interviews and authored articles.

> Branding and Internal Communication

Effective and timely communication of all the important announcements as well as initiatives from the internal communications desk. Also, did end-to-end branding for all stakeholders like customers, channel partner, digital aggregators & employees.

Following are some of the important projects taken care by brand and internal communication team:

• Joy of Giving- Initiative to donate food to the needy ones in association with RobinHood Army- Successful communication amongst employees resulted in massive contribution for the initiative;

• Quarterly Organisational Townhalls;

• Rewards and Recognitions (R&R) rebranding and communication framework - both for employees as well as partners;

• Branch Branding - End to end branding activity as well as standardization of branding across branches (New as well relocated ones); and

• Business R&R for all product teams.

> Events and Awards:

a. Partnership with various events

Collaborated with marquee brands to participate in national level media events like News18?s Rising India Summit 2023, Yourstory?s Tech Sparks 2023, MoneyControl?s Fintech Summit 2023. These events attracted top think tanks of India and the financial and tech sectors, thus giving Poonawalla Fincorp significant visibility amongst our key stakeholders as well as helping the brand build thought leadership and visibility in key markets.

b. Awards and Recognitions

Awards and Recognitions received during the year:

• Most Preferred Workplaces 2022-23 by Merkesmen Daily in association with India Today;

• The Economic Times Best Brands 2022 at 5th Edition of Economic Times Conclave;

• Top CX Delivering Brands at 3rd Economic Times Customer Experience (CX) summit 2022;

• Best Digital NBFC of the year 2022 at 4th annual NBFC India summit;

• The Fastest Growing NBFC of the year at ELETS 100 leaders of excellence awards;

• Cybersecurity Financial Team of the year at Cyber Security Excellence Awards 2022; and

• Best NBFC in Customer Service at 4th annual NBFC India summit.

> Corporate Social Responsibility

During the Financial Year 2022-23, the Company did not have any obligation to spend under Corporate Social Responsibility as enumerated in Section 135(5) of the Act. The Company has spent an amount of 74.45 Lakh towards ongoing projects.


Poonawalla Fincorp strives to be the most trusted financial services brand with Quality of Customer Service being one of the pillars for our Company. Our Company also believes in ethics, integrity, good governance, professionalism, transparency, and customer satisfaction.

Several key initiatives were undertaken to enhance the

Customer Experience:

• Implementation of Net Promoter Score ("NPS") which is a leading indicator of Customer Loyalty and Cross Sell. PFL have tied up with Litmus World, a leading brand in Customer Loyalty Assessment to conduct NPS survey through unbiased customer feedback. Customer experience across key moments of truth - Sales, Onboarding, Service and Exit is conducted based on questionnaire to identify opportunities for improvement;

• Annual NPS score is 54, which is very competitive as per industry standards;

• Reaching out to customers digitally being a core area which our Company has started working on with data migration to start with several blueprints;

• With Customer Centricity at core, PFL embarked on the mission to enable its customer services digitally for real time instant servicing leading to instant resolution of customer Queries, via IVR and WhatsApp, with an average Self-Serve Adoption > 20% of the Overall QRGs.

Key Initiatives in FY23:

• Enhancement of Self-Service Adoption;

• Dedicated Social Media Desk;

• Enabled WhatsApp for real time Customer servicing;

• Centralized NOC Desk to dispatch proactively for POC Product.

To ensure we treat customers fairly; we have

implemented the following:


• Tariff sheet included in Welcome Letter to ensure complete transparency of all charges;

• System enabled acknowledgement for every request & complaint communicated to customer at the time of registration;

• Unbiased customer feedback recorded via NPS framework at critical moments of truth across the loan journey to understand customers? expectations.

Servicing customers in their preferred language

• Agreement copy in vernacular languages are available at branches;

• Sanction letters are also provided in vernacular language.

Handling Grievances effectively

• Complaints are resolved within defined Service Level Agreement ("SLA") as per the Case Type ("CT") Sub Type ("ST");

• Complaints Root Cause Analysis ("RCA") Forum conducted on a quarterly basis to address key process gaps, if any;

• Rigorous training and continuous improvements for front line staff conducted on a regular basis to ensure highest standards of service quality;

• Continuous Call Quality monitoring;

• All Grievance resolutions checked for service recovery; and

• Proactive approach to identify potential escalations/ grievances from customers for quick redressal.


The composition of the Board of Directors of the Company is governed by the Act and Regulation 17 of the SEBI Listing Regulations and is in conformity with the same. As on March 31, 2023, the Board of Directors comprised a combination of ten Directors as mentioned below:







Mr. Adar Cyrus Poonawalla






Mr. Abhay Bhutada





Mr. Amar Deshpande





Mr. Atul Kumar Gupta

Non- Executive Director



Mr. Sajid Fazalbhoy

Non- Executive Director



Mr. Bontha Prasada Rao





Mr. G. Jaganmohan Rao





Mr. Prabhakar Dalal





Mr. Sanjay Kumar





Mrs. Vijayalakshmi R Iyer




There were no changes in the Board composition during the year.

The Board mix provides a combination of professionalism, knowledge and experience required in the NBFC sector.


Mr. Bontha Prasada Rao (DIN: 01705080) was re-appointed as an Independent Director of the Company for a second term of three years with effect from December 10, 2022 to December 09, 2025 considering his expertise, skills and knowledge. His reappointment as Independent Director was approved by the Members of the Company through Postal Ballot passed on November 29, 2022. Mr. Rao is not liable to retire by rotation.

Retirement by Rotation:

In accordance with the provisions of Section 152 of the Act read with Articles of Association of the Company, Mr. Amar Deshpande (DIN: 07425556) retires by rotation at the ensuing AGM and being eligible, offers himself for re-appointment.

The Board of Directors of your Company recommends the re-appointment of the Director liable to retire by rotation at the ensuing AGM.

Appropriate resolution seeking your approval for the aforesaid re-appointment along with brief profile of the said Director is forming part of the Notice convening the 43rd AGM of your Company.

Key Managerial Personnel:

In terms of Section 203 of the Act, the following are the Key Managerial Personnel of the Company as on March 31, 2023:

1. Mr. Abhay Bhutada, Managing Director;

2. Mr. Sanjay Miranka, Chief Financial Officer; and

3. Mrs. Shabnum Zaman, Company Secretary.

There were no changes in Key Managerial Personnel during the year.

Declaration from Independent Directors:

The Company has received the necessary declaration from each Independent Director in accordance with Section 149(7) of the Act and Regulation 16(1)(b) and 25(8) of the SEBI Listing Regulations, that he/she meets the criteria of independence as laid out in Section 149(6) of the Act and Regulation 16(1)(b) of the SEBI Listing Regulations.

In terms of Regulation 25(8) of the SEBI Listing Regulations, Independent Director have confirmed that they are not aware of any circumstances or situation which exists or may be reasonably anticipated that could impair or impact their ability to discharge their

duties. Based upon the declarations received from the Independent Directors, the Board of Directors has confirmed that they meet the criteria of independence as mentioned under Regulation 16(1)(b) of the SEBI Listing Regulations and that they are independent of the management.

In terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended, Independent Directors of the Company have included their names in the data bank of Independent Directors maintained with the Indian Institute of Corporate Affairs. There has been no change in the circumstances affecting their status as Independent Directors of the Company.

In the opinion of the Board, the Independent Directors possess the requisite integrity, experience, expertise, and proficiency required under all applicable laws and the policies of the Company.

A separate meeting of the Independent Directors was held on January 20, 2023.

During the year under review, the Non-Executive Directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees and commission, as applicable, received by them.

Fit and Proper Policy:

The Company adheres to the process and methodology prescribed by the RBI in respect of the ‘Fit & Proper? criteria as applicable to NBFCs, signing of Deeds of Covenants which binds the Directors to discharge their responsibilities to the best of their abilities, individually and collectively in order to be eligible for being appointed/ re-appointed as a Director of the Company.

All the Directors of the Company have confirmed that they satisfy the "fit and proper" criteria as prescribed in Chapter XI of RBI Master Direction No. DNBR. PD. 008/ 03.10.119/2016-17 dated September 1, 2016 and that they are not disqualified from being appointed/ continuing as Directors in terms of Section 164(2) of the Act. The prescribed declarations / undertakings given by the Directors, are placed before the Nomination and Remuneration Committee for its review and noting.

Familiarisation Programme for Independent Directors:

In compliance with the requirement of Regulation 25 of SEBI Listing Regulations, the Company has put in place a Familiarisation Programme for the Independent Directors to familiarise them about the Company and their roles, rights, responsibilities in the Company.

The details of the Familiarisation Programme along with the number of hours spent by each of the Independent Directors during the Financial Year 2022-23 is explained in the Corporate Governance Report. The same is also available on the website of the Company at https:// poonawallafincorp.com/investor-financials.php

Performance Evaluation:

The Board conducted the performance evaluation of the Individual Directors, Board Committees, Board as a whole and the Chairman of the Board in accordance with the provisions of the Act and the SEBI Listing Regulations, including the Guidance Note on Board Evaluation issued by SEBI.

The Board evaluated the effectiveness of its functioning and that of the Committees and of individual Directors by seeking their inputs on various aspects of Board/Committee Governance through structured questionnaire.

The aspects covered in the evaluation included the contribution to and monitoring of corporate governance practices, participation in the long-term strategic planning and the fulfilment of Directors obligations and fiduciary responsibilities, including but not limited to, active participation at the Board and Committee meetings.

Also, the Nomination and Remuneration Committee has carried out an evaluation of every Director?s performance and reviewed the self-evaluation submitted by the respective Directors. These meetings were intended to obtain Directors? inputs on effectiveness of Board/ Committee processes.

The Board considered and discussed the inputs received from the Directors. Further, the Independent Directors at their meeting reviewed the performance and role of Non-Independent Directors and the Board as a whole and Chairperson of the Board Meeting of the Company. Further, the Independent Directors at their meeting had also assessed the quality, quantity, and timeliness of flow of information between the Company management and the Board that was necessary for the Board to effectively and reasonably perform their duties.

Outcome of evaluation process:

Based on inputs received from the members, it emerged that the overall performance evaluation of the Board, composition, and quality, understanding the business including risks, process and procedures, oversight of financial reporting process including internal controls and audit functions, ethics and compliances and monitoring activities, has been found to be reasonably good.

Similarly, the effectiveness of the Board Committees has been rated high. The Committees of the Board function effectively. Sufficient time is allotted for discussion of the agendas. Contrary views were also encouraged and the same were viewed in the right perspective. The performance of the Chairman of the Company has been found to be Excellent and was rated 5 within the overall rating scale of 1 to 5. The Chairman demonstrates effective leadership qualities and skills, provides strategic directions and guidance to the Company and addresses recommendations/ suggestions of the Board Members including divergent views. Overall, the Board was functioning very well in a cohesive and interactive manner. Last year recommendations of Independent Directors and Board on Performance Evaluation have been largely implemented.

Remuneration Policy:

The Board has, on the recommendation of the Nomination and Remuneration Committee adopted the Remuneration Policy, which inter alia includes policy for selection and appointment of Directors, Key Managerial Personnel, Senior Management Personnel and their remuneration. The salient features of the Remuneration Policy are stated in the Corporate Governance Report. The Remuneration Policy of the Company is available on the Company?s website under the web link https:// poonawallafincorp.com/investor-financials.php

Code of Conduct for Directors and Employees:

The Company has adopted a Code of Conduct for its Directors and employees including a Code of Conduct for Independent Directors which suitably incorporates the duties of Independent Directors as laid down in the Act. The said Codes can be accessed on the Company?s website at https://poonawallafincorp.com/investor- governance.php

In terms of the SEBI Listing Regulations, all Directors and Senior Management Personnel have affirmed compliance with their respective codes. The Managing Director has also confirmed and certified the same, which certification is provided at the end of the Report on Corporate Governance.


To the best of our knowledge and belief, your Directors make the following statements in terms of Section 134 (5) of the Act:

a. that in the preparation of the annual accounts for the year ended March 31, 2023, the applicable Ind AS have been followed along with proper explanation relating to material departures, if any;

b. that such accounting policies as mentioned in Notes to the annual accounts have been selected and applied consistently and judgement and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2023 and of the profit of the Company for the year ended on that date;

c. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. that the annual accounts have been prepared on a going concern basis;

e. that proper internal financial controls are in place and that the financial controls are adequate and are operating effectively; and

f. that proper systems to ensure compliance with the provisions of all applicable laws are in place and that such systems are adequate and operating effectively.


A minimum of four pre-scheduled Board meetings are held annually. Additional Board meetings are convened by giving appropriate notice to address the Company?s specific needs. In case of business exigencies or urgency of matters, resolutions are passed by circulation.

During the year under review, five Board Meetings and Seven Audit Committee Meetings were convened and held, the details of which are given in the Corporate Governance Report. The intervening gap between the meetings was within the period prescribed under the Act and SEBI Listing Regulations.


The Committees of the Board focus on certain specific areas and make informed decisions in line with the delegated authority.

Audit Committee

The Audit Committee presently comprises ofMr. Prabhakar Dalal who serves as the Chairman of the Committee, Mr. Amar Deshpande, Mr. G Jaganmohan Rao, Mr. Sanjay Kumar and Mrs. Vijayalakshmi R Iyer, as other members. The terms of reference of the Audit Committee have been furnished in the Corporate Governance Report. All the recommendations made by the Audit Committee during the year were accepted by the Board.

Nomination and Remuneration Committee

The Nomination and Remuneration Committee presently comprises of Mr. Prabhakar Dalal who serves as the Chairman of the Committee, Mr. Amar Deshpande and Mr. G Jaganmohan Rao as other members. The terms of reference of the Nomination and Remuneration Committee has been furnished in the Corporate Governance Report.

Stakeholders Relationship Committee

The Stakeholders? Relationship Committee presently comprises of Mr. Prabhakar Dalal who serves as the Chairman of the Committee, Mr. Amar Deshpande, Mr. Sajid Fazalbhoy and Mr. Sanjay Kumar as other members. The terms of reference of the Stakeholders? Relationship Committee have been furnished in the Corporate Governance Report.

Corporate Social Responsibility (CSR) Committee

The Corporate Social Responsibility Committee presently comprises of Mr. Abhay Bhutada who serves as the Chairman of the Committee and Mr. Amar Deshpande, Mr. G Jaganmohan Rao and Mrs. Vijayalakshmi R Iyer, as other members.

The Annual Report on CSR activities is annexed herewith and marked as Annexure 1. Further, in terms of the amended CSR Rules, the Chief Financial Officer has certified that the funds disbursed have been utilized for the purpose and in the manner approved by the Board.

The other Committees of the Board are the Asset Liability Management Committee, Risk Management Committee, IT Strategy Committee, Review Committee, and the Management Committee. The details of composition, terms of reference and number of meetings held for the respective Committees have been furnished in the Corporate Governance Report.


In line with the requirements of the Act and the SEBI Listing Regulations, the Company has in place a Policy on Related Party Transactions and the same can be accessed on the Company?s website at its weblink i.e., https://poonawallafincorp.com/investor-aovernance. php. All transactions with Related Parties are placed before the Audit Committee for approval. All related party transactions that were entered into during the financial year were on an arm?s length basis and in the ordinary course of business, the particulars of such transactions are disclosed in the notes to the financial statements. Disclosures of related party transactions of the Company with the promoter/promoter group

which holds 10% or more shareholding in the Company, if any, is given in note to the standalone financial statements.

All the related party transactions that were entered into during the year were on an arm?s length basis and in ordinary course of business. All the related party transactions that were entered into during the year were on an arm?s length basis and in ordinary course of business. The nature of related party transaction require disclosure in AOC -2, the same is attached with this Report as Annexure-2.


During the year under review there were no significant material orders passed by the Regulators/ Courts/ Tribunals against the Company which would impact the going concern status or its future operations.


Walker Chandiok & Co LLP, Chartered Accountants, (Firm Registration No. 001076N/N500013 have been appointed as the Statutory Auditors of the Company for a period of three years to hold office from the conclusion of the Forty-First AGM till the conclusion of the Forty-Fourth AGM as per Section 139 of the Act and Guidelines for Appointment of Statutory Central Auditors (SCAs)/ Statutory Auditors (Sas) of Commercial Banks (excluding RRBs), UCBs and NBFCs (including HFCs) dated April 27, 2021 issued by Reserve Bank of India ("RBI Circular"). The Statutory Auditors have given confirmation to the effect that they are eligible to be appointed and that they have not been disqualified in any manner from continuing as Statutory Auditors. The remuneration payable to the Statutory Auditors shall be determined by the Board of Directors based on the recommendation of the Audit Committee.

The standalone and the consolidated financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013. The notes on financial statements referred to in the Auditors? Report are self-explanatory and do not call for any further comments. The Auditors? Report does not contain any qualification, reservation, adverse remark, or disclaimer.

Pursuant to the RBI Circular and the Policy, the Company is required to appoint a Joint Statutory Auditor for a period of three years, to hold office from the conclusion of the Forty-Third AGM until the conclusion of the Forty- Sixth AGM of the Company.

In this regard, based on a review of the profile, including the size, experience and area of specialization and recommendation of the Audit Committee the Board has, on April 26, 2023, inter alia, approved and recommended for the approval of the members, the appointment of M/s. Kirtane & Pandit LLP, Chartered Accountants (Firm Registration Number: 105215W/W100057), as the Joint Statutory Auditor of the Company, for a period of three years to hold office from the conclusion of the Forty-Third AGM until the conclusion of the Forty- Sixth AGM of the Company for the purpose of the audit of the financial statements, with power to the Board (including the Audit Committee of the Board or any other person(s) authorized by the Board or Audit Committee in this regard), to do all such acts, matters, deeds and things as may be necessary or desirable in connection with or incidental for giving effect to the said appointment of the Joint Statutory Auditors.

M/s. Kirtane & Pandit LLP was established in 1956, the firm has offered over six decades of audit & quality assurance, value-added services, and a solution-driven system for all its clients. The firm endeavor to provide sound financial solutions and guidance to their clients. An institution of professionally authorized chartered accountants and financial advisors who are committed to strengthening the significance and optimizing the quality of deliverables while maintaining its goal of deep ethical commitment and professional responsibility.


Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board ofDirectors of the Company has appointed M/s. MKB & Associates, Practicing Company Secretaries [Membership No-7596] to conduct the Secretarial Audit for the FY 2022-23. The Secretarial Audit Report confirms that the Company has complied with the provisions of the Act, Rules, SEBI Listing Regulations and Guidelines and that the report does not contain any qualification. The Secretarial Audit Report for the financial year ended March 31, 2023, is annexed herewith and marked as Annexure-3.

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of your Company had appointed M/s. SIUT & Co LLP, Company Secretaries (Firm Registration No. L2021MH011500) to act as the Secretarial Auditor of the Company for FY 2023-24.

M/s. SIUT & Co LLP, Company Secretaries is a peer reviewed Practicing CS firm registered with the Institute of Company Secretaries of India (ICSI), providing services in diverse domains having more than three

decades of experiences in the field of Company Law and allied matters, Securities Laws, Foreign Exchange Management Laws, MSME, and Insolvency and Bankruptcy law, Secretarial Audit, Due Diligence & SEBI, Company Law etc.


Being an NBFC, maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Act are not applicable in respect of the business activities carried out by the Company.


The Company complies with all applicable Secretarial Standards issued by Institute of Company Secretaries of India.


In May 2021, SEBI made an amendment to Regulation 34(2)(f) of the SEBI Listing Regulations, by introducing enhanced disclosure requirements regarding ESG parameters through a revised format called Business Responsibility and Sustainability Report ("BRSR"). The BRSR format replaced the previous Business Responsibility Report. The revised disclosures were introduced to increase transparency in reporting and enable market participants to identify and assess sustainability-related risks and opportunities. BRSR is mandatory from FY 2022-23.

As a responsible organization we take various measures to mitigate our impact on the environment, ensure our conduct is responsible towards our internal and external stakeholders and invest in good governance practices. This year we have undertaken detailed stakeholder engagement on ESG as a part of materiality assessment, which will help us adopt a structured approach towards ESG and will also become a cornerstone of our ESG journey. Our various efforts towards responding to the stakeholder needs and concerns are addressed in the BRSR, covering the 9 principles of National Guidelines on Responsible Business Conduct ("NGRBC").

The BRSR provides an avenue for disclosing an overview of the entitys material ESG risks and opportunities, goals and targets related to sustainability and performance against them. As per Regulation 34 of the SEBI Listing Regulations, BRSR for FY 2022-23 is annexed as Annexure-4.


Your Company complies with the provisions laid down in Corporate Governance laws. It believes in and practices good corporate governance. The Company maintains transparency and also enhances corporate accountability. In terms of Regulation 34 of SEBI Listing Regulations read with Schedule V, the following forms part of this Report:

(i) Declaration regarding compliance to Code of Conduct by the Board Members and Senior Management Personnel;

(ii) A certificate from a Practicing Company Secretary that none of the directors on the Board of the Company have been debarred or disqualified from being appointed or continuing as directors of companies by the Board/Ministry of Corporate Affairs or any such statutory authority;

(iii) Report on the Corporate Governance; and

(iv) Practicing Company Secretaries Certificate regarding compliance of conditions of Corporate Governance.


Your Company does not have any activity requiring conservation of energy or technology absorption and foreign exchange earnings and outgo.


• During the year, there was no application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) and any onetime settlement with any Bank or Financial Institution during the year under review;

• The Company has not defaulted in repayment of loans from banks and financial institutions;

• There were no delays or defaults in payment of interest/principle of any of its debt securities;

• Disclosures pursuant to RBI Master Directions, unless provided in the Board?s Report, form part of the notes to the standalone financial statements;

• There was no raising of funds through Preferential Allotment, Rights Issues or Qualified Institutional Placements etc.


Pursuant to Sections 92 and 134(3) of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014 as amended, the Annual Return is available at the website of the Company at https://poonawallafincorp.com/i nvestor-financials.php


The information required under Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is disclosed in this report as Annexure 5.

In terms of the proviso to Section 136(1) of the Act, the report is being sent to all members, excluding the statement with respect to employees employed throughout the year and employees employed for part of the year who were in receipt of remuneration in excess of limits prescribed under Section 197 (12) of the Act read with Rule 5(2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The statement is available for inspection by any member on request. Any member interested in obtaining a copy of the said statement, may write an email to the Company Secretary at secretarial@poonawallafincorp.com


Pursuant to Section 124(5) of the Act read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, (as amended from time to time) relevant amount which remained unpaid or unclaimed for a period of seven years have been transferred by the Company, from time to time on due dates, to the Investor Education and Protection Fund ("IEPF"). During the year under review, your Company has transferred 5,00,692/- (Rupees Five Lakh Six Hundred Ninety-Two only) to IEPF Authority.

Pursuant to Section 124 (6) of the Act and read with Rule 6 of the Investor Education and Protection Fund

Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (as amended from time to time), all the underlying shares in respect of which dividends are not claimed/ paid for the last seven consecutive years or more are liable to get transferred to the IEPF. Accordingly, during the year under review, 20,299 equity shares of face value of 2/- each, were transferred to IEPF Authority.

The Company has uploaded the details of unpaid and unclaimed amounts lying with the Company as on July 29, 2022 (date of last Annual General Meeting) and also the details of equity shares transferred to IEPF Authority on the Company?s website https://poonawallafincorp.com/investor-info.php, and also on the Ministry of Corporate Affairs? website (www.mca.gov.in).


During the year under review, neither the Statutory Auditors nor the Secretarial Auditor has reported to the Audit Committee under Section 143 (12) of Act, any instances of fraud committed against the Company by its officers or employees, the details of which needs to be mentioned in the Board?s Report.


Your directors would like to record their appreciation of the hard work and commitment of the Company?s employees and warmly acknowledge the unstinting support extended by its bankers, shareholders, regulators and other stakeholders in contributing to the results.

For and on behalf of the Board