Sundaram Finance Ltd Directors Report.

Your directors have pleasure in presenting the 68th Annual Report together with audited accounts for the year ended 31st March, 2021. The summarised financial results of the Company are presented hereunder:


(Rs. in cr.)
Particulars Year ended March 31, 2021 Year ended March 31, 2020
Revenue from Operations 3,953.74 3,842.09
Other Income 60.46 84.85
Total Revenue 4,014.20 3,926.94
Less: Total Expenses 2,957.90 2,981.82
Profit before exceptional items and tax 1,056.30 945.12
Add: Exceptional item NIL NIL
Profit before tax 1,056.30 945.12
Profit after Tax 809.05 723.95
Other Comprehensive Income 0.05 55.92
Surplus brought forward 519.51 444.76
Less: Transfer to COVID-19 Reserve (net of deferred tax) (20.34) 20.34
Amount available for appropriation 1,348.94 1,204.28
Appropriations to:
- Statutory Reserve 161.81 144.79
- General Reserve - 246.75
- Final 2018-19 - 138.88
- Interim 2019-20 - 111.10
- Final 2019-20 33.33 -
- Interim 2020-21 133.32 -
Dividend Tax - 43.25
Surplus carried to balance sheet 1,020.48 519.51


Your Company paid an interim dividend of Rs.12/- per share in February 2021. Your directors are pleased to recommend a final dividend of Rs.6/- per share, which, together with the interim dividend, would aggregate to a total dividend of Rs.18/-per share (180% on the face value of Rs.10/-), representing a dividend pay-out of 24.72%.

The Dividend Distribution Policy, formulated in accordance with the provisions of Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is attached as part of this report, vide Annexure I.


A detailed report on corporate governance, together with a certificate from the Secretarial Auditor, in compliance with the relevant provisions of SEBI (Listing Obligations and Disclosure Requirements), Regulations 2015, is attached as part of this report, vide Annexure II (i).

Compliance reports in respect of all laws applicable to the Company have been reviewed by the Board of Directors.


All transactions with related parties were in the ordinary course of business and on an arms length basis.

The Company did not enter into any material transaction with such related parties, under Section 188 of the Companies Act, 2013, during the year. Form AOC-2, as required under Section 134 (3) (h) of the Act, read with Rule 8 (2) of the Companies (Accounts) Rules 2014, is attached as part of this report, vide Annexure III (i). The Companys policy on Related Party Transactions is attached as part of this report, vide Annexure III (ii).

The Company did not enter into any transactions with any person or entity belonging to the promoter or promoter group and holding 10% or more shareholding in the Company.


Your Company, along with its subsidiaries and associates, has always responded in a responsible manner to the growing needs of the communities in which it operates. During the year, your Company has, in consonance with the CSR policy of the Company, undertaken a number of initiatives that contribute to society at large, in the areas of health, education, environment and preservation of the countrys rich culture and heritage.

The Annual Report on CSR Activities undertaken by the Company for the Financial Year 2020-21, prepared in the amended format, is annexed with this report, vide Annexure IV.


A Business Responsibility Report as required under Regulation 34(2) (f) of the SEBI (Listing Obligations and Disclosure Requirements), Regulations 2015, is enclosed as part of this report, vide Annexure V.


The Company has in place a Policy for prevention of Sexual Harassment, in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to redress complaints. All employees (permanent, contractual, temporary, trainees) are covered under this policy. No complaints were received during the financial year nor were any pending unresolved as on 31st March 2021.


In terms of Section 204 of the Companies Act, 2013 and the rules thereunder, the Company has appointed M/s Damodaran & Associates, Practising Company Secretaries, as the Secretarial Auditor of the Company. The Secretarial Audit Reports of the Company and its material unlisted subsidiary, viz., Sundaram Home Finance Limited, are annexed to this Report, vide Annexures VI(1) and VI(2) respectively.


Disclosure pursuant to Rule 5 (1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed, vide Annexure VII.


Based on the recommendations of the Nomination, Compensation & Remuneration Committee, your Board of Directors has amended the SFESOS by introducing Stock Appreciation Rights Scheme; the Board has granted, subject to regulatory approvals where necessary, 14,336 stock options and 2,384 Stock Appreciation Rights to select eligible employees, on 28th May 2021. The disclosure required under SEBI (Share Based Employee Benefits) Regulations, 2014 is furnished, vide Annexure VIII along with the amendments made to the SFESOS in Annexure IX.


As required under Section 92 (3) of the Companies Act, 2013 and Rule 12 (1) of the Companies (Management and Administration) Rules, 2014, the draft form MGT-7 is hosted on the Companys website in the link:


During the year under review, no significant and material orders were passed by the regulators, courts, or tribunals against the Company, impacting its going concern status or its future operations.


Your Company has no activity relating to conservation of energy or technology absorption. During 2020-21, expenditure in foreign currencies amounted to Rs.29.48 cr. Foreign currency earnings amounted to Rs.2.63 cr.



The financial year 2020-21 (FY21) was fraught with uncertainty across the globe as the once-in-a-century COVID-19 pandemic led to a significant loss of lives and livelihoods globally. This had a devastating impact on global growth that witnessed a contraction of 3.5% year on year (YOY). The IMF notes that "the adverse impact has been severe on women, youth, the poor, informally employed, and those who work in contact-intensive sectors." Countries, however, were quick to respond with sizeable stimulus measures. A total of US$30 trillion has been spent by countries across the world on fiscal and monetary stimuli spanning FY21 to offset the impact of the pandemic. The IMF estimates that the impact could have been at least three times worse "if not for extraordinary policy support." These policy measures and the gradual phased reopening of activity witnessed a sharp pickup in consumption, of which pent-up demand played a large part in the initial phases, moving back to pre-pandemic levels of activity on the back of rising vaccinations. While advanced economies, except China which grew in 2020, are expected to return to their pre-COVID GDP levels this year, all emerging economies and low-income countries are not expected to do so till 2023.

The global economic growth for 2021 is expected to be 5.5-6%, although a high degree of uncertainty surrounds this estimate. The recovery paths of different countries are expected to be substantially different. Most emerging economies have seen a significant setback to their poverty reduction efforts of the past few years. In light of differential impact and recovery trajectories between advanced and emerging economies, greater international collaboration will likely be crucial on both the economic and healthcare fronts (particularly related to vaccines) and the economic prospects will depend largely on the global communitys ability and willingness to fight the virus-increased resilience on the back of vaccinations and adherence to safety protocols will accelerate global progress, while new variants and strains that prolong the pandemic will depress global economic growth.


The first wave of COVID-19 infections in India spanned nearly the entire FY21 and caused significant economic disruption. The onset of the pandemic in India in the first quarter of FY21 was met with a series of national lockdowns that led to a sharp drop in activity. The contact-sensitive services segment was the most impacted and the largely informal nature of this segment in India, further worsened the economic impact on the nation. All told, the toll on Indias economy has been severe and the provisional estimates show a GDP growth in FY21 of (7.3)% YOY.

In response, the government and the RBI announced a slew of fiscal and monetary measures to overcome the difficulties caused by the national lockdowns. The year witnessed a number of government initiatives in the series of fiscally prudent Atma Nirbhar Bharat Abhiyan packages, including for agriculture and allied infrastructure. The key aspects of these measures started with food and health support during the lockdown. This was expanded on and followed up with other packages for MSMEs, NBFCs, migrant workers, agriculture, social sector funding, festival allowances and state government support. One notable highlight was the extension of the production-linked incentive (PLI) scheme to ten sectors. This is likely to have laid a key foundation for substantial capital expenditure and increased competitiveness for Indian industry in the years ahead.

In all, the Atma Nirbhar Bharat Abhiyan package of measures totalled Rs.17.2 lakh crores in support. While these announcements were timely, they were largely focused on supply-side support and longer-term reforms. Demand-side measures were not quite as large as the stimulus packages seen in developed economies; the Indian government and policy makers seemed to privilege fiscal prudence over nearterm economic stimulus.

The fiscal deficit for the 2020-21 was projected at 3.5% at the start of the year. However, the large loss of revenue for the centre due to the stringent COVID-19 related restrictions had led the government to target a higher fiscal slippage of 9.5% of GDP. The pickup in tax revenues during the last quarter is expected to bring down this deficit to just under 8%. Into the fiscal year 2021-22, the government has projected a fiscal deficit target of 6.8%. This is likely to worsen given the vicious second wave and the associated set of lockdowns leading to likely revenue shortfalls in the first quarter of FY22.

On the external front, the drop in growth had a positive rub-off on the currency. The sizeable stimulus measures in the western economies led to a constant inflow of money into emerging economies. India stood differentiated on its inherent strength and received large FII and FDI inflows in FY21. This stabilised the rupee that saw an appreciation of 2.6% against the dollar, ending the fiscal year at 73.1. The RBI cashed in on this opportunity and added $103bn to its forex reserves that currently stand at $579bn. Indias current account balance however, recorded a deficit of 0.2% of GDP after recording surplus (1.7% of GDP) during the three quarters ended December 2020.

The RBI more than compensated for the lack of substantial demand-side fiscal support through accommodative monetary policy to lessen the burden on borrowers and make abundant liquidity available during the difficult period of the pandemic. Starting the last week of March 2020, the RBI cut its key policy Repo rate by 115 basis points to 4% and cut the cash reserve ratio (CRR) by 100 basis points. Through various other liquidity tools like the long-term repo operations (LTRO), targeted long term repo operations (TLTRO), open market purchases (OMO), special liquidity to mutual funds and others, RBI infused a total liquidity of Rs.12.7 lakh crores into the system, resulting in a significant reduction in interest rates. The measures of extended regulatory forbearance, easing of asset classification norms, relaxation to banks on commercial real estate, moratorium extensions, introduction of a resolution framework, particularly for the MSME segment, and rationalisation of risk weights for individual housing, all helped ease systemic stress. To top it all, in the early weeks of the financial year 2021-22, the RBI introduced a government security acquisition program (G-SAP) that would work to keep market rates further in check besides ensuring an assured secondary market purchase limit of securities by RBI.

The financial year 2020-21 also witnessed the passing of bills on agricultural reform and labour laws. The bills on agriculture were set to do away with the inter-state and intrastate restrictions imposed earlier on sale of agricultural produce. In addition, the easing of contract farming laws is intended to enable greater participation from the private sector in procurement, storage, and transportation of agricultural produce, all of which were expected to unlock inefficiencies in the agricultural value chain. However, these bills currently remain suspended owing to large scale protests from farmers and other interest groups. The changes to the labour laws have been appreciated by the business community as it gives them the flexibility to deal with their employee workforce without compulsory notification to the government and facilitates the ease of doing business, even though the cost of establishment would substantially increase on account of changes in definition of "wages" and the associated emphasis on retiral savings as opposed to take-home pay.


The automotive sector was already witnessing bouts of weakness even before the commencement of financial year 2020-21. The onset of the COVID-19 pandemic only deepened the fall in this sector. The commercial vehicles (CV) segment was the worst affected, given its close linkages to overall economic growth. Even though the second half of the year was encouraging, on the whole, the sharp drop in economic activity and a postponement of the capex cycle led to a 28% YOY drop in MHCV volumes and a 17% YOY drop in LCV volumes. Increased e-commerce sales and brick- and-mortar businesses adopting door delivery enabled a ramp up in SCV sales, which partially cushioned the drop in volumes.

The financial year 2020-21 was a very strong year for tractors. Three consecutive years of good harvests, increased government spending in rural India, strong agricultural output and elevated farmer sentiment resulted in a 27% YOY growth in tractor sales volumes. Agriculture as an industry and rural India in general, were relatively unaffected by the pandemic, unlike urban India which bore the brunt of it. While concerns around job losses and weakness in urban demand appeared to be two key reasons that led to a 13% YOY decline in twowheeler volumes, the increased need for personal mobility by first-time owners led to a much lesser impact on passenger vehicle (PV) volumes that contracted by a mere 2% YOY. However, within the PV segment, utility vehicles witnessed growth of 8% YOY, as customers with higher income profiles were relatively less affected by the pandemic.


Your Companys disbursements at Rs.11,741 cr. (PY Rs.15,176 cr.) were down by 22.63% during the year under review, reflecting the marked decline in sales across the automotive sector owing to multiple factors as also the elevated risk perceptions in light of the pandemic-induced disruptions. Disbursements against Commercial Vehicles declined 41% in unit terms as compared to the market drop of 21%; disbursements against passenger cars and utility vehicles declined 3%, almost mirroring the overall market which was lower by 2%. Gross receivables managed by your Company as of March 31, 2021, stood at Rs.35,736 cr., as against Rs.35,088 cr., showing a marginal growth over the previous year. Your Companys tight rein on operating costs and its ability to raise resources at competitive rates enabled it to maintain its margins at a reasonably healthy level.

Reflecting the economic slowdown and the cash flow strains faced by its customers, your Companys delinquencies increased during the year. However, your Companys superior credit standards and systematic collections and recovery efforts ensured best-in-class performance on asset quality. Stage-3 assets, Gross and Net of ECL provisions, stood at 1.84% (PY 2.47%) and 1.01% (PY 1.65%) respectively, as at 31st March, 2021.

RBI, as part of the COVID relief, had announced various measures like additional credit relief, moratorium, and restructuring, aimed at alleviating the financial hardships for individuals and small business customers. Your Company extended the moratorium and restructuring support for providing timely relief to such customers. In addition, your Company also extended financing support to its MSME customers through the ECLGS window announced by the Government of India as part of the Atma Nirbhar Bharat Abhiyan package.

Your Company has been maintaining comfortable liquidity in the form of liquid investments and undrawn bank limits, to meet its maturing liabilities and did not opt for moratorium in respect of its debt obligations to its lenders.

Your Company registered a net profit of Rs. 809 cr. compared to Rs. 724 cr. in the previous year, a growth of 12%. Excluding the one-time gain of Rs. 53 cr. (on sale of equity shares in Sundaram Finance Holdings Ltd.) last year, net profit grew by 21% on a like-to-like basis. Your Companys net worth stood at Rs.6,179 cr., as on 31.3.2021. Capital adequacy (CRAR) at 22.06% was comfortably higher than the statutory requirement of 15%.

There are no significant changes in key financial ratios of the Company for F.Y. 2020-21 as compared to F.Y. 2019-20, except for the following:

Net Profit Margin (%)

Return on Net Worth(%)

March 2021 March 2020 Variance March 2021 March 2020 Variance
Ratios 20.15% 18.44% 9.33% 13.80% 13.67% 0.93%


a) Deposits

During the year, your Company mobilised fresh deposits aggregating to Rs. 708.52 cr. Renewal of deposits during the year amounted to Rs.1345.58 cr. representing 81% of the matured deposits of Rs.1631.16 cr. Deposits outstanding at the year-end were at Rs.4020.99 cr. as against Rs.3676.19 cr. in the previous year. The net accretion for the financial year was Rs.344.81 cr. As at 31st March 2021, 4090 TDRs amounting to Rs.36.06 cr. had matured for payment and were due to be claimed or renewed. After close followup, these figures are currently 3243 and Rs.24.53 cr. respectively. Continuous efforts are being made to arrange for repayment or renewal of these deposits. There has been no default in repayment of deposits or payment of interest thereon during the year. Investor Relation Services - Deposits continue to enjoy the ISO 9001:2015 Certification from Bureau Veritas (India) Private Limited.

During the year, your Companys outstanding deposits crossed Rs.4000 cr. As part of the digital initiative to provide support to depositors, your Company launched Online services to its depositors through Customer Portal / Mobile APP in September 2020.

b) Term Funding

During the year, your Company raised term funding from Banks, Mutual funds, Insurance companies and others in the form of non-convertible debentures and term loans to the tune of Rs.7526 cr., across varying tenors.

c) Bank Finance

As part of the overall funding plan, your Companys working capital limits with consortium banks were retained at Rs.3000 cr. During the year, your Company also issued several tranches of commercial paper aggregating to Rs.6500 cr. The maximum amount of outstanding commercial papers at any time was Rs.4475 cr. and the amount outstanding at the end of the year was Rs.2025 cr.

d) Assets Securitised / Assigned

During the year, your Company raised resources to the extent of Rs.493.70 cr. through securitisation and assignment of receivables.


Your Companys long term credit ratings have been retained at "AAA" (Highest Degree of Safety) with a "Stable Outlook", by both ICRA and CRISIL. The short-term borrowings (including commercial paper) are rated "A1+" (very strong degree of safety) by both ICRA and CRISIL. Fixed Deposits are rated "AAA" (Highest Credit Quality) by both ICRA and CRISIL.


The widespread disruption caused by the nationwide lockdown posed several challenges both in terms of people safety and technology. As a customer-facing business, your Company had to quickly reorient its approach and processes to respond to the emerging situation. While the primary objective was to ensure the safety of employees, customers, associates and other partners, it was vitally important to ensure that customer service levels were not compromised. Taking a cue from developments in other parts of the country, your Company took a number of steps to enable a "Work from home environment, ahead of the lockdown imposed by various state governments depending on the situation in the respective states. This included putting in place adequate IT security measures to safeguard the technology environment, while providing access to nearly 3000 users on a real time basis. This ensured continuity of operations and service to customers, especially our depositors. All deposit maturities as well as redemption of other liabilities were met on or before due dates.

All borrowers were kept regularly informed about the regulatory developments, especially regarding the grant of moratorium. This was done entirely using digital methods and last mile servicing was done by our employees using telephones and digital communications. The digital tools deployed were enhanced to improve the customer experience.

Detailed safety protocols were put in place to ensure that operating procedures including deep cleaning and fumigation, educating and training the staff to wear masks, importance of social distancing and hand sanitisation/washing with soap and avoiding physical contact. These are being reinforced and communicated to all our employees continuously, using digital technology. A vaccination drive was conducted in your Companys head office and coordinated efforts continue to ensure all employees, especially frontline staff, are vaccinated at the earliest.


The pandemic has caused significant economic damage. However, the central government, stretching itself within its framework of prudence, and the swift and frequent RBI policy measures have greatly helped to contain the negative impact. Initial projections for FY22 indicated an appreciable spurt in growth, in the range of 11-13% YOY. However, the second wave of the pandemic that has hit the country suddenly and with an unexpectedly high intensity has crippled economic activity in the first quarter of FY22. Infection levels have been at over four times that witnessed in the first wave. Mortality in absolute numbers has been correspondingly higher (although the mortality rate has remained between 1% and 1.5%). Worryingly, the second wave has spread wider into semi-urban and rural India. And to complicate matters, the pace of vaccinations has seen a sharp drop both on account of supply shortages of vaccines and vaccine hesitancy amongst citizens.

The lockdowns and associated restrictions that have been triggered in the states are likely to shave-off at least 150250bps from the FY22 GDP growth projection. The second wave has peaked in May and, optimistically, the economic damage from this wave of the pandemic could well be contained in the June quarter. This could then lead to a faster leg of recovery through a layer of pent-up demand led sales that could bolster full year growth numbers.

Realistically, Indias economic recovery in FY22 will be marked by a high degree of uncertainty. The countrys ability to mobilise vaccines at scale, ramp up the pace of vaccinations, and the speedy containment of virus spread in rural India will all be major determinants of consumer confidence returning and consequently of faster economic recovery. Continued adherence to safety protocols and minimising super-spreader events will ensure any subsequent "waves" are contained to ripples. The emergence of newer variants and strains of the virus will trigger disruptions which could depress consumer sentiment and consequently, economic activity.

Given how sensitive the commercial vehicle (CV) sector is to economic momentum, this segment is likely to take a while to recover. A dramatic turnaround seems unlikely. Even the expected recovery in second half of FY22 on the back of a 3-year downcycle may get pushed out. However, if the second wave is effectively contained within the first quarter of this financial year, there could be some support the sector may receive on the side-lines. The governments resolve to invest over Rs.100 lakh crore behind infrastructure through the National Infrastructure Pipeline should provide support to construction equipment as well as tippers, within the MHCV segment. Continued growth of e-commerce sales and direct- to-home models across sectors are expected to support the LSCV segment growth. Rising global agricultural prices and a good monsoon are most likely to help hold up growth in rural India and as a result, in tractors and farm equipment sales. However, the second waves significant inroads into rural India could soften growth in the tractor and farm equipment segment. It is expected that the need for personal mobility will continue to drive demand for passenger cars and utility vehicles. However, supply side challenges due to global shortage of semiconductors as well as rising commodity prices across steel and fuel are likely to dampen the recovery in demand.


The Company has a well-established internal financial control and risk management framework to ensure the highest standards of integrity and transparency in its operations and a strong corporate governance structure. Appropriate controls are in place to ensure:

a) the orderly and efficient conduct of business, including adherence to policies;

b) safeguarding of assets;

c) prevention and detection of frauds/errors;

d) accuracy and completeness of accounting records; and

e) timely preparation of reliable financial information.

The Board has adopted policies and procedures to ensure compliance and oversight to the implementation of its internal financial control and risk management framework.


Your Company has built a robust risk management framework over the years. Engaged as it is in retail financing, the Company has to manage various risks, including credit risk, liquidity risk, interest rate risk and operational risk. The Risk Management Committee and the Asset Liability Management Committee review and monitor these risks on a regular basis.

The primary objectives of the Risk Management Committee include:

i) To assist the Board in fulfilling its corporate governance oversight responsibilities with regard to the identification, evaluation and mitigation of strategic, operational, and external environment risks;

ii) To monitor and approve the enterprise risk management framework and associated practices of the Company;

iii) To periodically assess risks to the effective execution of business strategy by reviewing key leading indicators in this regard; and

iv) To periodically review the risk management processes and practices of the Company and ensure that the Company is taking the appropriate measures to achieve prudent balance between risk and reward in both ongoing and new business activities.

The primary responsibility of ALCO (Asset Liability Committee) includes:

i) Monitoring and advising on Liquidity risk management;

ii) Management of market risks;

iii) Funding and capital planning;

iv) Profit planning and growth projection; and

v) Forecasting and analysing What if scenario and preparation of contingency plans primary focus of ALCO on Liquidity and Interest Rate risks as stipulated under RBI guidelines.

The Company manages credit risk through stringent credit norms established through several decades of experience in retail lending and continues to follow the time-tested practice of personally assessing every borrower, before committing to a credit exposure. The Company monitors AIM on an ongoing basis to mitigate liquidity risk, while interest rate risks arising out of maturity mismatch of assets and liabilities are managed through regular monitoring of the maturity profiles. The Company also measures the interest rate risk by the duration gap method.

Operational risks can arise due to changes in business environment or changes in processes, affecting the control effectiveness. The internal audit team reviews the processes and controls to ensure the design effectiveness and adequacy of controls to mitigate risk. A stable and experienced risk management team and the Treasury team provide much- needed continuity and expertise in managing the dynamic changes in the market environment. Your Company has well- documented standard operating procedures for all processes to ensure superior control over transaction processing and regulatory compliance and periodical review of the same ensures that the risks including technology risks are under control. While meeting the strategic objectives is the primary goal, your Companys values and culture that are enshrined in the Sundaram Way of doing business and the obligations and commitment to our customers, employees, deposit holders and the community around us are the foundations on which its risk framework rests.

Your Company has additionally taken steps to adopt the Enterprise Risk Management (ERM) framework and map with the internal financial controls. This will assist in several ways to identify and mitigate risk besides acting as a safety monitoring mechanism.

The detailed Risk Management Framework of your Company has been furnished in the Notes to the Accounts under Note 38, for your information.

Your Company has implemented the policy on Liquidity Coverage Ratio with effect from 1st December 2020, as mandated by RBI. RBI introduced the Liquidity Risk Management framework for NBFCs in the year 2019-20. During the year, the Board of Directors approved the Liquidity Risk Management Policy and implemented the Liquidity coverage ratio (ICR). Your Company will maintain a sufficient liquidity buffer in terms of ICR and ensure adequate High Quality Liquid Assets (HQLA) in line with regulatory norms in order to prudently manage any potential acute liquidity stress scenarios.


Your Companys internal audit department independently evaluates the adequacy of control measures on a periodic basis and recommends improvements, wherever appropriate to suit the changes in business and control environment. The effectiveness and efficiency of the controls, and the design are regularly measured through process reviews and risk assessment. The Internal Audit team plays a vital role in monitoring the effectiveness of the Standard Operating Procedures and makes extensive use of software and analytical tools which enables effective offsite or remote auditing. A robust process that includes a continuous learning mechanism ensures that the Internal Audit team regularly updates its skills and knowledge base in order to analyse, assess, mitigate and continuously monitor the controls and guard against inadequacies including various risks that could pose a threat to your Companys strategic objectives, as part of key pillar or 3rd line of defence. Systematic identification of risks, red flags and early warning signals on a proactive basis enables quick decision-making on strengthening and redesigning the controls where required, through agile audit plans. The internal audit function is fully geared to meet the emerging challenges in the post COVID-19 era.

The internal audit department is staffed by highly qualified and experienced personnel and reports directly to the Audit Committee of the Board. The Audit Committee regularly reviews the audit findings as well as the adequacy and effectiveness of the internal control measures.

Additionally, an Information Security Assurance Service is also provided by independent external professionals. Based on their recommendations, the Company has implemented a number of control measures both in operational and IT-related areas, apart from information security related measures.

To ensure adequate strengthening of controls surrounding information security and mitigate technology risks, external information systems auditors carry out periodical and continuous reviews on both network and application systems. They work along with Internal Audit teams to ensure adequate independence while reviewing IT applications infrastructure and network management.

In the wake of COVID-19, the Internal Audit team along with the information systems auditors are redefining the scope of coverage to address future risks as part of the risk mitigation strategy and to facilitate strengthening of the internal IT control systems in line with the regulatory requirements.


Your Company is strictly following the IT Framework Master Directions laid down by RBI and conducts resilience drills regularly to safeguard the customers and shareholders data.

The IT Strategy Committee of your Company is periodically monitoring the robustness of your Companys infrastructure and its processes to protect the IT landscape. This committee also shares its expertise in strengthening various measures implemented by your Companys strong technology team.

Your Company has a state-of-the-art Data Centre catering not only to its own needs but also to those of its subsidiaries and associates, with a capacity of over 300 servers, managed by professionals providing 24/7 support, with over 99.99% uptime. The Data Centre is accredited for ISO/IEC 27001:2013 by TUV Rheinland for Information Security Management System. The Disaster Recovery Site for all critical applications is hosted at a separate facility located in a different seismic zone, with near real-time data replication. Your Company continues to invest in various new technologies, software tools and monitoring mechanisms to improvise and modernize the IT Infrastructure. Your Company has engaged in regular discussions with external consultants, industry experts to reinforce Information & Cyber Security methodologies. Periodic vulnerability assessment and penetration testing were carried out on the infrastructure to ascertain the effectiveness of the practices laid down by your Company.

With proficiency in a variety of technologies, our in-house IT team has proven capability to develop and maintain complex business applications that cater to the Companys operations and business functions. Your Company employs technology not only to enrich the jobs of our employees, but also to aid decision-making, provide better controls, manage risk, and enhance our customers experience. The end-to-end process of credit to the retail segment has been substantially digitised through mobile-enabled applications, credit decisioning automation that provides approval in under 30 seconds at the point-of-sale and direct payment into the dealers bank accounts via a "straight to bank" payment solution. Collections processes are automated through a homegrown "mCollect" application that enables monitoring, follow-up and resolution of all past-due accounts digitally. A range of digital payment solutions have been enabled for customers to transact electronically to update their accounts. These digital technology capabilities of your Company were put to test during the Covid-19 pandemic and succeeded in supporting both customers and staff during the lockdown and work from home phases of the pandemic. Significant investments continue to be made in technology to expand the automation of processes, augment the digital interfaces for customers and employees and enable delivery of the unique Rs.Sundaram Experience to customers. The modernization of IT application platforms to ensure reliability and minimise any risks of obsolescence is also a priority.

Your Company is in a relationship-centric business relying on physical interactions with customers and other stakeholders. The digital strategy has consciously been adopted to augment these relationships and for resources to be digitally available for customers, as and when they need them.


In accordance with the provisions of Section 129 (3) of the Companies Act, 2013, the Consolidated Financial Statements, drawn up in accordance with the applicable Accounting Standards, form part of the Annual Report. A separate statement containing the salient features of the financial statements of Subsidiaries and Associates in Form AOC-I forms part of the Annual Report.

The Consolidated profit after tax is Rs.1165.08 cr. as against Rs.791.54 cr. of the previous year. The total comprehensive income for the year was Rs.1210.89 cr. as against Rs.754.81cr.

The annual accounts of all the Subsidiary Companies have been posted on your Companys website - Detailed information, including the annual accounts of the Subsidiary Companies will be available for inspection by the members, through a digital platform which would be provided by the Company as physical inspection of documents at the registered office of the Company is not possible under the existing restrictive procedures advised by the Central and State Governments as safety measures to avoid the COVID-19 risk.


• Sundaram Finance Holdings Limited

Sundaram Finance Holdings Limited reported a gross income of Rs.39.76 cr. as against Rs.94.35 cr. in the previous year. Profit after tax was Rs.14.55 cr. as compared to Rs.61.39 cr. in the previous year, a clear reflection of disruption caused by the Covid-19 pandemic and its impact on the business operations of its associate companies, including their subsidiary companies, which in turn, have impacted the financials results of the Company. The Company has recommended a final dividend of Rs.0.50 per share (10%) for the year ended 31st March 2021.

• Sundaram Home Finance Limited

Sundaram Home Finance Limited approved loans aggregating to Rs.1446 cr. (Previous year Rs.2240 cr.). Disbursements during the year were lower by 41% at Rs.1254 cr. (PY Rs.2113 cr.). The Company earned a gross income of Rs.1039 cr. (PY Rs.1079 cr.) and reported a profit after tax at Rs.191.64cr. (PY Rs.218.15 cr.). The Net Profit after tax for the year ended 31st March 2021 is not comparable with that of the previous period, which included a onetime exceptional item of Rs.60.25 cr. on account of write back of deferred tax liability. The loan portfolio under management as at 31st March 2021 stood at Rs.9173 cr. as against Rs.9638 cr. in the previous year. Gross Stage -3 assets stood at 4.48% and net of ECL provisions stood at 1.09%, as at 31st March, 2021. The Board of Directors have recommended a final dividend of Rs.5.50 per share (55%) for the year ended 31st March 2021. This together with Interim dividend of Rs.1.50 per share (15%) already paid, would aggregate to a total dividend of Rs.7/- per share (70%).

• Sundaram Asset Management Company Limited (On consolidated basis)

The Company reported a consolidated gross income of Rs.288.15 cr. as against Rs.300.50 cr. in the previous year. Consolidated Profit after tax was Rs.55.13 cr. as compared to Rs.32.69 cr. during the previous year. The Average Assets under Management amounted to Rs. 36,962cr. for the year 2020-21 as compared to Rs. 36,916 cr. in the previous year. The Company has recommended a final dividend of Rs.7.50 per share (75%) for the year ended 31st March 2021.

• Sundaram Trustee Company Limited

Sundaram Trustee Company Limited earned a gross income of Rs. 1.37cr., as against Rs.1.48 cr., in the previous year and reported a profit after tax of Rs.0.72 cr. for the year, as against Rs.0.80 cr. in the previous year. The Company recommended a dividend of Rs.50 per share (500%) for the year ended 31st March 2021.

• LGF Services Limited

During the year, the Company reported a gross income of Rs.0.11cr. as against Rs. 0.19 cr. in the previous year. The profit after tax for the year was Rs.0.06 cr. as against Rs.0.11cr. in the previous year. The Company recommended a dividend of Rs.2.5 (25%) per share for the year.

• Sundaram Fund Services Limited

Sundaram Fund Services Limited earned an income of Rs. 4.94 cr. during the year as against and Rs.5.30 cr. in the previous year. The Company reported a profit after tax at Rs.0.11 cr. as against a profit of Rs.0.58 cr. in the previous year.


• Royal Sundaram General Insurance Co. Ltd (Royal Sundaram)

Royal Sundaram reported a Gross Written Premium (GWP) of Rs.2,883 cr. as compared to Rs.3,718 cr. in the previous year, impacted primarily by a drop in motor insurance sales due to the pandemic situation and the Companys decision to exit from writing crop business during the financial year 2020-21. The Company reported, as per IND AS, a profit after tax of Rs.313 cr. for the current year as against a loss after tax of Rs.76 cr. in the previous year. The current years profit was higher due to decline in motor claims in the early months of lock-down and marked to market (MTM) gain of Rs.137 cr. (net of tax)

on equity investments against the previous year MTM loss of Rs.72 cr. (net of tax) on equity investments.


The details regarding number of board meetings held during the financial year and composition of Audit Committee are furnished in the Corporate Governance Report. The details of all other Committees are provided elsewhere in this Annual Report.


Sri T T Srinivasaraghavan laid down his Managing Directorship on 31-3-2021. He served your Company in various capacities in an outstanding career spanning around four decades. During his long and illustrious career, Sri T T Srinivasaraghavan has provided dynamic leadership not only for your Company but also for the Non-Banking financial sector. Your Directors place on record their recognition and appreciation of Sri T T Srinivasaraghavans leadership, which has helped the Company to retain its pre-eminent position in the industry. Sri T T Srinivasaraghavan continues as a nonexecutive Director, and he would mentor the managerial and senior management of the Company.

Based on the recommendations of the Nomination, Compensation & Remuneration Committee:

a) Sri Harsha Viji, Deputy Managing Director, was appointed as the Executive Vice Chairman of the Company with effect from 1-4-2021;

b) Sri Rajiv C Lochan, Director-Strategy, took over as Managing Director on 1-4-2021; and

c) Sri A N Raju, Director (Operations) was appointed as Deputy Managing Director with effect from 1-4-2021.

The tenure of office of all these three Key Management Personnel is five years.


Sri S. Ram and Sri S Viji, Directors retire by rotation and being eligible, offer themselves for re-election which is subject to approval by a Special Resolution.


The Company has received necessary declaration from each Independent Director of the Company under Section 149 (7) of the Companies Act, 2013 that they meet with the criteria of their Independence laid down in Section 149 (6).


The Board has made a formal evaluation of its own performance and that of its committees and individual directors as required under Section 134(3) (p) of the Companies Act, 2013.


Your directors confirm that:

1. In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

2. The Company has selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

3. Proper and sufficient care has been exercised 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;

4. The annual accounts have been prepared on a going concern basis;

5. Adequate internal financial controls have been put in place and they are operating effectively; and

6. Proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.


As per the Guidelines for Appointment of Statutory Central Auditors (SCAs)/Statutory Auditors (SAs) of Commercial Banks (excluding RRBs), UCBs and NBFCs (including HFCs) ("RBI Guidelines") issued by the Reserve Bank of India (RBI) vide their Notification dated 27th April 2021, the existing Statutory Auditors of the Company would not be eligible to continue as the statutory auditors if their term has exceeded three years as on 30th September 2021 and the Company is required to appoint two independent Chartered Accountant firms in their place as the Joint Statutory Auditors for a maximum term of three (3) consecutive years.

Accordingly, M/s Sundaram & Srinivasan, Chartered Accountants, Chennai, who had been appointed as the Statutory Auditors of your Company, to hold office for a term of five (5) consecutive years from the conclusion of the 64th Annual General Meeting held on 20th July 2017 until the conclusion of the 69th Annual General Meeting, would be demitting office as the Statutory Auditors of the Company at the conclusion of the 68th Annual General Meeting, in compliance with the provisions of the RBI Guidelines.

Your Company has initiated steps to identify two Chartered Accountant firms for appointment as the Joint Statutory Auditors of the Company within the timeline stipulated in the RBI Guidelines. The appointment of the Joint Statutory Auditors will be subject to the approval of the shareholders at the 68th Annual General Meeting and will take effect from the conclusion of that Meeting.


Your directors gratefully acknowledge the support and cooperation extended to your Company by all its customers, depositors, shareholders, and bankers, as also the various mutual funds, insurance companies, automotive manufacturers and dealers.

Your directors also place on record their special appreciation of Team Sundaram for its dedication and commitment in delivering the highest quality of service to every one of our valued customers, especially in these difficult and trying times.

For and on behalf of the Board
Chennai 600 002 S VIJI
28.05.2021 Chairman