Ujjivan Financial Services Ltd. के अकाउंट के लिये नोट

Mar 31, 2023

Rights, preferences and restrictions attached to shares:

The Company has only one class of equity shares with voting rights (one vote per equity share). The distribution of dividend is in proportion to the number of equity shares held by the shareholders. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

The Company has not issued any bonus shares or allotted any shares as fully paid up pursuant to contract(s) without payment being received in cash and there were no buy-backs or any securities that are convertible into equity shares. Accordingly, no further disclosures are made in this regard.

Statutory Reserve :

Pursuant to the requirements of section 45 - IC of the Reserve Bank of India Act, 1934 ("the RBI Act") the Company is required to transfer not less than 20% of the profit after tax before any dividend is declared to the statutory reserve. Accordingly, the Company has transferred Rs.2,164 Lakhs to the statutory reserve for the year ended March 31, 2023 (March 31,2022: Rs.44 Lakhs). The utilisation of this reserve fund is governed by the provisions of the Reserve Bank of India Act.

Securities Premium Account:

Securities Premium account represents premium on issue of equity shares. The amount received in excess of the par value of equity shares is recognised as securities premium. The securities premium will be utilised in accordance with the provisions of section 52 of Companies Act, 2013.

Shares options outstanding account:

The share options outstanding account is used to recognise the grant date fair value of options issued to employees under the Company''s Employees stock option plan. The amounts recorded in share options outstanding account are transferred to securities premium upon exercise of stock options and transferred to general reserve on account of stock options not exercised by employees. (Also refer Note 25).

General Reserve:

This reserve represents balance transferred from Share Option Outstanding Account upon employee stock options that expired unexercised or upon forfeiture of options granted.

Retained earnings:

This is accretion of profits and represents surplus in statement of profit and loss.

Note 17 (b) - Corporate Social Responsibility Expenditure

Pursuant to the requirement of Section 135 of the Companies Act, 2013 and Rules made thereunder, the Company has spent the required amount towards CSR activities. These funds were primarily contributed to the corpus of implementing agency and utilised through out the year on CSR activities which are specified in Schedule VII of the Act.

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker ("CODM") of the Company. The CODM, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the CEO of the Company. The Company being a NBFC-ND-SI-CIC (Core Investment Company) registered with the RBI under section 45-IA of the Reserve Bank of India Act, 1934, operates only in one Business Segment, accordingly it does not have any separate reportable Segments as per Indian Accounting Standard 108 "Operating Segments". The Company being Core Investment Company derives its revenue from operations from its investment in subsidiary. In addition to this, company also earns interest income from the fixed deposits placed with other banks which are disclosed under "Other Income".

NOTE 22 - EMPLOYEES BENEFiT PLANS Post Employment Benefit Plans Defined contribution plans

The Company makes the provident fund contributions for employees at the rate of 12% of basic salary as per regulations. The contributions are made to registered provident fund administered by the Government. The obligation of the company is limited to the amount contributed and it has no further legal nor any contractual obligations.

Gratuity

The Gratuity scheme is a defined benefit plan, that provides For a lumpsum payment at the time of separation; based on scheme rules. The benefits are calculated on the basis of last drawn salary and the period of service at the time of separation and paid as lumpsum. There is a vesting period of 5 years.

(i) Risk Exposure

The Company is exposed to the following risks that affect the liabilities and cash flows,

1. Interest rates risk : the defined benefit obligation (DBO) calculated uses a discount rate based on government bonds. If bond yields fall, the defined benefit obligation will tend to increase.

2. Demographic risks: this is the risk of volatility of results due to unexpected nature of decrements that include mortality attrition, disability and retirement. The effects of these decrement on the DBO depends upon the combination of salary increase, discount rate, and vesting criteria and therefore not very straight forward. It is important not to overstate withdrawal rate because the cost of retirement benefit of a short caring employees will be less compared to long service employees.

Actuarial Risk:

It is the risk that benefits will cost more than expected. This can arise due to one of the following reasons Adverse Salary growth Experience: Salary hikes that are higher than the assumed salary escalation will result into an increase in Obligation at a rate that is higher than expected.

Variability in withdrawal rates: If actual withdrawal rates are higher than assumed withdrawal rate assumption than the Gratuity benefits will be paid earlier than expected. The impact of this will depend on whether the benefits are vested as at the resignation date.

(x) Key Assumptions

One of the principal assumptions is the discount rate, which should be based upon the market yields available on Government bonds at the accounting date with a term that matches that of the liabilities.

Actuarial Assumptions:Salary Escalation:

In projecting the salary increases there are three factors to consider - first is inflation level leading to a general change in salary level. The other two are career progression of the employees & productivity gains for the organisation. Where appropriate the salary increases, a periodic salary experience study with the Company''s data will be conducted as an input for the Company, when setting the assumption.

Demographic Assumptions:For Attrition / withdrawal

Withdrawal rates, both at early durations of service and near retirement date, not only have a significant impact on estimates of ''liability'' and ''contributions'' (more than of mortality in service) but are most difficult to estimate. The past may not be a guide to the future. Even if the past experience can be statistically analyzed and produce some meaningful rates, the future experience of withdrawals will depend on general economic conditions as also the particular conditions affecting the given employer''s business. Furthermore, withdrawal rates differ significantly from scheme to scheme and within a scheme from year to year. We examine these rates and any other information available and use best possible judgment to cater to the long term nature of the actuarial estimates being carrying out.

The Company manages its capital to ensure its ability to continue as going concern while optmising the returns to stakeholders. The capital structure of the Company consists of equity. The Management of the Company reviews the capital structure of the Company on a annual basis. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders or issue new shares. The Company''s policy is to maintain a stable and strong capital structure with a focus on total equity so as to maintain investor, creditor and market confidence and to sustain future development and growth of its business.

Refer note 24 for the details on critical ratios.

The carrying amounts of trade payables, other receivables, cash and cash equivalent including other current bank balances and other liabilities are considered to be the same as their fair values, due to current and short term nature of such balances. For financial assets and liabilities that are measured at amortised cost, the carrying amounts approximate their fair values. All the above financial assets and liabilities are valued at level 3.

NOTE 23 (C) - FiNANCiAL RiSK MANAGEMENT OBJECTiVES

The Company''s risk management is carried out by the Management under policies laid down by the Board of Directors. The Company''s activities expose it to liquidity risk. The Management of the Company monitors the risk exposures on a periodical basis and reports to the Board of Directors on the risks that it monitors and policies implemented to mitigate risk exposures.

1. Foreign currency risk

The company undertakes no transaction in foreign currency; consequently no exposure to exchange fluctuation.

2. Interest rate risk

The Company''s interest bearing financial assets are term deposits which earn interest at fixed bank deposit rate. Accordingly, the Company''s income and operating cash flows are substantially insensitive of changes in market interest rates. The interest bearing financial assets are placed in term deposit which are maturing within twelve months to minimise the interest rate risk. The Company did not have any borrowings during the year and as at the year end.

3. Credit risk

The Company maintains exposure in cash and cash equivalents and term deposits with banks. The Company has a portfolio of investment with Bank which has secure credit ratings hence the risk is reduced.

4. Liquidity risk

Liquidity risk is the risk that the Company may not be able to meet its obligations on time or at a reasonable price. liquidity analysis For non derivative financial liabilities-

The following table details the Company''s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The table have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company is required to pay.

The Management considers that the carrying amount of financial assets and financial liabilities recognised in these financial statements approximate their fair values.

Mitigating Liquidity Risk

The Company maintains sufficient liquid assets to meet for working capital requirements or expansion requirements in the form of term deposits with banks which can be liquidated on demand. The Company''s financial liabilities, consisting mainly of accrued expenses and other liabilities which are due within the next twelve months from the reporting date. The Company has sufficient funds to meet all maturing obligations.

5. Price Risk

Investments in Subsidiary are carried at cost, pursuant to the applicable accounting standard and carry no impact of price risk. The shares of the subsidiary are actively traded in the major recognised stock exchanges of India. There are no investments in mutual funds as at March 31,2023 and immediately preceding financial year ended March 31,2022.

25.2 Fair value of share options granted during the year

No share options were granted during the financial year ended March 31, 2023 and March 31, 2022. Options granted in earlier year were priced using Black and Scholes Model (''Model''). Vested ESOPs can be exercised within three years From their corresponding dates of vesting. ESOPs vested can be exercised between date of vesting and on or before option expiry date. The term of the option is assumed to be the sum of a) duration till vesting; and b) the midpoint of the remaining exercise period from date of vesting, in absence of historical exercise pattern. While the Company has been listed since 2016, the period of listing upto the Grant Dates is not commensurate with the expected term of the granted ESOPs. Accordingly, volatility of comparable companies have been considered for the purposes of valuation.

25.4 Share options exercised during the year

There are no shares excercised during the year ended March 31, 2023. Weighted average share price for the year ended March 31, 2022 is '' 200.93.

25.5 Share options outstanding at the end of the year

The share options outstanding at the end of the year had a weighted average exercise price of '' 385.05 (March 31, 2022: '' 390.78), and a weighted average remaining contractual life of 0.37 years (March 31, 2022: 0.55 years).

25.7 ESOP arrangement with subsidiary

With effect From February 1, 2017, the entity was demerged into Ujjivan Small Finance Bank Limited (USFB) resulting in the transfer of options From the employees of the Company to the employees of USFB (Subsidiary of the Company). As per Ind AS 102 Share-based Payment, stock options have to be fair valued on the grant date and expense has to be recognised over the vesting period. Pursuant to management decision, Impact of Ind AS 102 on account of options granted to the employees of subsidiary is treated as deemed investment in subsidiary in the Company''s books.

During the year ended March 31, 2020, the USFB has approved an ESOP scheme and an Employee Share Purchase Scheme (''ESPS'') for employees of USFB and its holding company, i.e., Ujjivan Financial Services Limited. Under ESOP 2019, total 628,782 options (March 31, 2022 - 601,561) were granted to the employees of the holding company to be vested over a period of 5 years and total 211,200 shares (March 31, 2022- 211,200) were purchased under ESPS 2019 scheme. Further, during the year ended March 31, 2022, two employees were transferred to the USFB to whom 264,441 ESOPs granted under the scheme. As per Ind AS 102 Share-based Payment, the fair value cost of the options for the period expired out of the vesting period and shares purchased were recognised in the statement of profit and loss and reimbursed to the subsidiary entity, i.e., USFB. As on March 31, 2023, towards remaining employees of the holding company, out of 364,341 options granted (March 31, 2022 - 337,120), 300,431 options are lapsed (March 31, 2022 - 282,176), 15,183 options were vested yet to be exercised (March 31, 2022 - 11,004) and 48,727 options were unvested (March 31, 2022 - 43,940).

NOTE 26 - RELATED PARTY DiSCLOSURETerms and Conditions of transactions with related parties:

The transactions with related parties are made in the ordinary course of business and the same is at arm''s length. Outstanding balances at the year end are unsecured and interest free other than fixed deposits and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. The Company has not recorded any impairment for receivables.

I Overseas Assets (for those with Joint Ventures and Subsidiaries abroad)

The Company did not have any overseas assets during and as at the year end (March 31,2022 - Nil).

J Disclosure on provisioning in the Balance Sheet

Provisions as per CIC Guidelines - As the Company is not engaged in the business of financing, it has not provided any loans/advances and therefore related compliance in relation to classification as standard asset, sub standard assets, doubtful and loss assets are not applicable.

The Company does not have any exposure to real estate sector, both direct and indirect.

K The Company has not obtained any Registrations / licenses / authorisations from other financial sector regulators and RBI has not levied any penalties on the Company during the year.

NOTE 28 - DiSCLOSURES RELATiNG TO SCALE BASED REGULATiONS APPLiCABLE TO CORE iNVESTMENT COMPANiES (CiC''S)

A The Company doesnot have any exposure to real estate sector, capital market, sectoral exposure and unhedged foreign currency exposure during the year. Investment in subsidiary is not considered for this purpose.

B The Company has not received any complaints from customers and from the Offices of Banking Ombudsman (OBOs) during the year.

D Related party disclosures - Refer note 26 for details.

E Divergence in asset classification and provisioning - There are no instances of divergence in asset classification and provisioning during the year.

F Breach of covenant - Not applicable to the Company, as the Company has not availed any loan availed / issued any debt securities.

NOTE 29 The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

NOTE 30 The Board of Directors of the Company and Ujjivan Small Finance Bank, the Subsidiary ("the Bank") in their respective meetings held on October 14, 2022 have approved a scheme of amalgamation of the Company with the Bank in terms of Sections 230 to 232 of the Companies Act, 2013. In terms of the said scheme, the Company will be amalgamated into and with the Bank and all its assets, liabilities, contracts, employees, licenses, records and approvals will be transferred to and will be deemed to have been transferred to and vested in the Bank, as a going concern, without any further act, instrument or deed, together with all its properties, assets, liabilities, rights, benefits and interest therein. All the Key Managerial Personnel, and other employees of the Company who are in employment as on the Effective Date shall become, and be deemed to have become, the staff and employees of the Bank, without any break or interruption in their services and on the same terms and conditions (and which are not less favourable than those) on which they are engaged by the Company as on the Effective Date. All proceedings by or against the Company shall continue by or against the Bank. The appointed date under the said Scheme is April 01, 2023 or such other date as may be approved by the NCLT. In consideration of the proposed merger, the Bank will allot to the shareholders of the Company as on the Record Date (to be fixed by the Board of the Bank), 116 (One hundred and sixteen) equity shares of the face value of Rs. 10/- each of the Bank, credited as fully paid-up, for every 10 (ten) equity shares of the face value of Rs. 10/- each fully paid-up held by such shareholders of the Company. The shares held by the Company in the Bank shall stand extinguished on the amalgamation taking effect. The RBI vide its letter dated February 01, 2023, has conveyed its "no-objection" to the said proposal for voluntary amalgamation of the Company with the Bank subject to NCLT and other regulatory approvals. Further, the Bank on March 09, 2023 has received the no-observation letters from the Stock Exchanges (NSE and BSE), based on which a joint application has been filed with the NCLT on March 29, 2023, by the Company and Bank. The Company is now awaiting the directions / orders from the Hon''ble NCLT, Bengaluru Bench.

NOTE 31

The Company does not hold any Benami Property which is either recorded or not recorded in the books of account and there are no proceedings initiated or pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder. Accordingly, no disclosures are made in this regard.

NOTE 32 BORROWINGS FROM BANKS OR FINANCIAL INSTITUTIONS

The Company does not have any borrowings from banks or financial institutions on the basis of security of current assets. Accordingly, no disclosures are made in this regard.

NOTE 33 WILFUL DEFAULTER:

The Company did not have any borrowings during the year or as at the year end and the Company has not been declared as wilful defaulter by any bank or financial institution or Government or Government Authorities or other lender. Accordingly, no disclosures are made in this regard.

NOTE 34 RELATIONSHIp wITH STRUCK OFF COMpANIES

As per the information available with the Company, the Company did not have any transactions with the companies struck off under section 248 of Companies Act, 2013 or section 560 of Companies Act, 1956 except the following.

NOTE 35 The Company has not advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries") with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries).

The Company has not received any fund from any party(s) (Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

NOTE 36 There are no transactions that are not recorded in the books of account that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).

NOTE 37 TRANSACTIONS IN CRYPTO CURRENCY OR VIRTUAL CURRENCY

The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year. Accordingly, no further disclosures are made in this regard.

NOTE 38 The COVID-19, a global pandemic has affected the world economy over the last two years. The extent to which any new wave of COVID-19 will impact the Subsidiary''s (Ujjivan Small Finance Bank Limited) operations will depend on ongoing as well as future developments, including, among other things, any new information concerning the severity of the COVID-19 pandemic and any action to contain its spread or mitigate its impact whether Government-mandated or elected by us.

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Mar 31, 2022

(ii) Rights, preferences and restrictions attached to shares:

The Company has only one class of equity shares with voting rights (one vote per equity share). The distribution of dividend is in proportion to the number of equity shares held by the shareholders. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

The Company has not issued any bonus shares or allotted any shares as fully paid up pursuant to contract(s) without payment being received in cash and there were no buy-backs or any securities that are convertible into equity shares. Accordingly, no further disclosures are made in this regard.

(iv) Information relating to Employee stock option plan (ESOP) including details of options issued, exercised and lapsed during the year and options outstanding at the end of the reporting year is set out in note. 24.

(v) There are no shares held by the promoters as at the end of the year and immediately preceeding financial year.

(a) Nature and purpose of each reserve is as under:

Statutory Reserve:

Pursuant to the requirements of section 45 - IC of the Reserve Bank of India Act, 1934 ("the RBI Act") the Company is required to transfer 20% of the profit after tax before any dividend is declared to the statutory reserve. Accordingly, the Company has transferred ''44.00 lakhs to the special reserve for the year ended 31 March 2022 (31 March 2021: ''59.00 lakhs). The utilisation of this reserve fund is governed by the provisions of the said Act.

Securities Premium Account:

Securities Premium account represents premium on issue of shares and the amount received in excess of the par value of equity shares has been classified as securities premium. The securities premium will be utilised in accordance with the provisions of section 52 of Companies Act, 2013.

Shares options outstanding account:

The share options outstanding account is used to recognise the grant date fair value of options issued to employees under the Company''s Employees stock option plan. The amounts recorded in share options outstanding account are transferred

to securities premium upon exercise of stock options and transferred to general reserve on account of stock options not exercised by employees. (Also refer Note 24)

General Reserve:

This reserve is created upon employee stock options that expired unexercised or upon forfeiture of options granted Retained earnings:

This reserve is created out of accretion of profits and represents surplus in statement of profit and loss.

Note 20. Segment Reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker ("CODM") of the Company. The CODM, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the MD/CEO of the Company. The Company being a NBFC-ND-SI-CIC (Core Investment Company) registered with the RBI under section 45-IA of the Reserve Bank of India Act, 1934, operates only in one Business Segment, accordingly it does not have any separate reportable Segments as per Indian Accounting Standard 108 "Operating Segments". The Company being Core Investment Company derives its revenue from operations from its investment in subsidiary. In addition to this, company also earns interest income from the fixed deposits placed with other banks which are disclosed under " Other Income".

Note 21. Employees Benefit Plans Post Employment Benefit Plans Defined contribution plans

The Company makes the provident fund contributions for employees at the rate of 12% of basic salary as per regulations. The contributions are made to registered provident fund administered by the Government. The obligation of the company is limited to the amount contributed and it has no further legal nor any contractual obligations.

Gratuity

The Gratuity scheme is a defined benefit plan, that provides for a lumpsum payment at the time of separation; based on scheme rules. The benefits are calculated on the basis of last drawn salary and the period of service at the time of separation and paid as lumpsum. There is a vesting period of 5 years.

(i) Risk Exposure

The Company is exposed to the following risks that affect the liabilities and cash flows,

1. Interest rates risk : the defined benefit obligation (DBO) calculated uses a discount rate based on government bonds. If bond yields fall, the defined benefit obligation will tend to increase.

2. Demographic risks: this is the risk of volatility of results due to unexpected nature of decrements that include mortality attrition, disability and retirement. The effects of these decrement on the DBO depends upon the combination of salary increase, discount rate, and vesting criteria and therefore not very straight forward. It is important not to overstate withdrawal rate because the cost of retirement benefit of a short caring employees will be less compared to long service employees.

Actuarial Risk:

It is the risk that benefits will cost more than expected. This can arise due to one of the following reasons

Adverse Salary Growth Experience: Salary hikes that are higher than the assumed salary escalation will result into an increase in Obligation at a rate that is higher than expected.

Variability in withdrawal rates: If actual withdrawal rates are higher than assumed withdrawal rate assumption than the Gratuity benefits will be paid earlier than expected. The impact of this will depend on whether the benefits are vested as at the resignation date.

(x) Key Assumptions

One of the principal assumptions is the discount rate, which should be based upon the market yields available on Government bonds at the accounting date with a term that matches that of the liabilities.

Actuarial Assumptions:

Salary Escalation:

In projecting the salary increases there are three factors to consider - first is inflation level leading to a general change in salary level. The other two are career progression of the employees & productivity gains for the organization. Where appropriate the salary increases, a periodic salary experience study with the client''s data will be conducted as an input for the client, when setting the assumption.

Demographic Assumptions:

For Attrition / Withdrawal

Withdrawal rates, both at early durations of service and near retirement date, not only have a significant impact on estimates of ''liability'' and ''contributions'' (more than of mortality in service) but are most difficult to estimate. The past may not be a guide to the future. Even if the past experience can be statistically analyzed and produce some meaningful rates, the future experience of withdrawals will depend on general economic conditions as also the particular conditions affecting the given employer''s business. Furthermore, withdrawal rates differ significantly from scheme to scheme and within a scheme from year to year. We examine these rates and any other information available and use best possible judgment to cater to the long term nature of the actuarial estimates being carrying out.

The above sensitivity analysis are based on a change in an assumption while holding all other assumptions constant. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method has been applied as and when calculating the defined benefit liability recognised in the balance sheet.

The method and types of assumptions used in preparing the sensitivity analysis did not change compare to the prior period.

Note 22 (A). Capital Management

The Company manages its capital to ensure its ability to continue as going concern while optmising the returns to stakeholders. The capital structure of the Company consists of equity. The Management of the Company reviews the capital structure of the Company on a annual basis. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders or issue new shares. The Company''s policy is to maintain a stable and strong capital structure with a focus on total equity so as to maintain investor, creditor and market confidence and to sustain future development and growth of its business.

Refer note 23 for the details on critical ratios.

The carrying amounts of trade payables, other receivables, cash and cash equivalent including other current bank balances and other liabilities are considered to be the same as their fair values, due to current and short term nature of such balances.

For financial assets and liabilities that are measured at amortised cost, the carrying amounts approximate their fair values. All the above financial assets and liabilities are valued at level 3.

Note 22 (C). Financial risk management objectives

The Company''s risk management is carried out by finance department under policies laid down by the Management. The Company''s activities expose it to liquidity risk. Finance department monitors the risk exposures on a periodical basis and reports to the Board of Directors on the risks that it monitors and policies implemented to mitigate risk exposures.

1. Foreign currency risk

The company undertakes no transaction in foreign currency; consequently no exposure to exchange fluctuation.

2. Interest rate risk

The Company''s interest bearing financial assets are term deposits which earn interest at fixed bank deposit rate. Accordingly, the Company''s income and operating cash flows are substantially insensitive of changes in market interest rates. The substantial portion is placed in term deposit which are maturing within twelve months to minimise the interest rate risk. The Company did not have any borrowings during the year and as at the year end.

3. Credit risk

The Company maintains exposure in cash and cash equivalents, term deposits with banks and investments in marketable debt investments including mutual funds. The Company has a portfolio of investment with counter-parties which have secure credit ratings hence the risk is reduced. Individual risk limits are set for each counter-party based on financial position, credit rating and past experience.

4. Liquidity risk

Liquidity risk is the risk that the Company could be unable to meet its short term financial demands.

Liquidity analysis for non derivative financial liabilities-

The following table details the Company''s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The table have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company is required to pay.

The Management considers that the carrying amount of financial assets and financial liabilities recognised in these financial statements approximate their fair values.

Mitigating Liquidity Risk

The Company maintains sufficient liquid assets to meet for working capital requirements or expansion requirements in the form of term deposits with banks which can be liquidated on demand. The Company''s financial liabilities, consisting mainly of accrued expenses and other liabilities which are due within the next twelve months from the reporting date. The Company has sufficient funds to meet all maturing obligations.

5. Price Risk

Investments in Subsidiary are carried at cost, pursuant to the applicable accounting standard and carry no impact of price risk. The shares of the subsidiary are actively traded in the major recognised stock exchanges of India. There are no investments in mutual funds as at March 31, 2022 and immediately preceeding financial year ended March 31, 2021.

24.2Fair value of share options granted during the year

No share options were granted during the financial year ended March 31, 2022 and March 31, 2021. Options granted in earlier year were priced using Black and Scholes Model (''Model''). Vested ESOPs can be exercised within three years from their corresponding dates of vesting. ESOPs vested can be exercised between date of vesting and on or before option expiry date. The term of the option is assumed to be the sum of a) duration till vesting; and b) the midpoint of the remaining exercise period from date of vesting, in absence of historical exercise pattern. While the Company has been listed since 2016, the period of listing upto the Grant Dates is not commensurate with the expected term of the granted ESOPs. Accordingly, volatility of comparable companies have been considered for the purposes of valuation.

24.4Share options exercised during the year

For the share options exercised during the year ended March 31, 2022 weighted average share price is ? 200.93 (For the year ending March 31, 2021: ? 221.89).

24.5Share options outstanding at the end of the year

The share options outstanding at the end of the year had a weighted average exercise price of ? 390.78 (March 31, 2021: ? 378.37), and a weighted average remaining contractual life of 0.55 years (March 31,2021: 0.92 years).

24.7 ESOP arrangement with subsidiary

With effect from February 1, 2017, the entity was demerged into Ujjivan Small Finance Bank Limited (USFB) resulting in the transfer of options from the employees of the Company to the employees of USFB (Subsidiary of the Company). As per Ind AS 102 Share-based Payment, stock options have to be fair valued on the grant date and expense has to be recognised over the vesting period. Pursuant to management decision, Impact of Ind AS 102 on account of options granted to the employees of subsidiary is treated as deemed investment in subsidiary in the Company''s books.

During the year ended March 31, 2020, the USFB has approved an ESOP scheme and an Employee Share Purchase Scheme (''ESPS'') for employees of USFB and its holding company, i.e., Ujjivan Financial Services Limited, being ESOP 2019 and ESPS 2019. Under ESOP 2019, total 473,240 options were granted to the employees of the holding company to be vested over a period of 5 years and total 211,200 shares were purchased under ESPS 2019 scheme. As per Ind AS 102 Share-based Payment, the fair value cost of the options for the period expired out of the vesting period and shares purchased were recognised in the statement of profit and loss and reimbursed to the subsidiary entity, i.e., USFB. As on March 31, 2022, out of 601,561 (March 31, 2021 - 472,240) options granted, 383,063 options are lapsed (March 31, 2021 - 282,176), 38,213 (March 31, 2021 -38,213) options were vested yet to be exercised and 180,285 (March 31, 2021 - 152,851) options were unvested.

Notes to the Standalone Financial Statements

for the year ended March 31,2022 C. Outstanding balance with related parties

(? in lakhs)

Description	March 31,2022	March 31,2021
Term deposit balance with Ujjivan Small Finance Bank Limited (including interest accrued)	10,616.69	9,205.34
Receivable to Ujjivan Small Finance Bank Limited	-	24.33

D. Remuneration paid to Key managerial personnel comprises of:

(? in lakhs)

Description	March 31,2022	March 31,2021
Short-term benefits	85.04	185.80
Other long-term benefits	4.40	11.94
Total	89.44	197.74

Note 26. Disclosure of details as required under Clause No. 30 Annexure V of Master Direction -Core Investment Companies (Reserve Bank) Direction, 2016 (as last updated on October 05,2020). A Components of Adjusted Net Worth (ANW) and other related information

(? in lakhs)

Description	March 31,2022	March 31,2021
ANW as a % of Risk Weighted Assets	149.00%	219.08%
Unrealized appreciation in the book value of quoted investments (? in Lakhs)	66,097.69	1,83,514.69
Diminution in the aggregate book value of quoted investments (? in Lakhs)	-	-
Leverage Ratio (In times) (Outside Liabilites/ Networth)	0.00061	0.00037
Investment in other CICs
		(? in lakhs)
Description		March 31,2021

a) Total amount representing any direct or indirect capital contribution made by one CIC in another CIC (including Not Applicable

name of CICs)

b) Number of CICs with their names wherein the direct or indirect capital contribution exceeds 10% of Owned Funds Not Applicable

c) Number of CICs with their names wherein the direct or indirect capital contribution is less than 10% of Owned Funds Not Applicable

C Off Balance Sheet Exposure

(? in lakhs)

I Description	March 31,2022	March 31,2021 I
i) Off balance sheet exposure	Nil	Nil
ii) Financial Guarantee as a % of total off-balance sheet exposure	Nil	Nil
iii) Non-Financial Guarantee as a% of total off-balance sheet exposure	Nil	Nil
iv) Off balance sheet exposure to overseas subsidiaries	Nil	Nil
v) Letter of Comfort issued to any subsidiary	Nil	Nil

D Investments

(? in lakhs)

I Description	March 31,2022	March 31,2021 I
1. Value of Investments	1,67,982.96	1,67,964.56
(i) Gross Value of Investments
(a) In India	1,67,982.96	1,67,964.56
(b) Outside India,	-	-
(ii) Provisions for Depreciation
(a) In India	-	-
(b) Outside India,	-	-
(iii) Net Value of Investments
(a) In India	1,67,982.96	1,67,964.56
(b) Outside India.	-	-

I Overseas Assets (for those with Joint Ventures and Subsidiaries abroad)

The Company did not have any overseas assets during and as at the year end (March 31,2021 - Nil).

J Disclosure on provisioning in the Balance Sheet

Provisions as per CIC Guidelines - As the Company is not engaged in the business of financing, it has not provided any loans/ advances and therefore related compliance in relation to classification as standard asset, sub standard assets, doubtful and loss assets are not applicable.

The company does not have any exposure to real estate sector, both direct and indirect.

K The Company has not obtained any Registrations/ licenses/ authorisations from other financial sector regulators and RBI has not levied any penalties on the Company during the year.

Note 27. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

Note 28. The Board of Directors of the Company (UFSL) and Subsidairy Bank have approved a scheme of amalgamation in terms of Sections 230 to 232 of the Companies Act, 2013. In terms of the said scheme, UFSL will be amalgamated into and with the Bank and its assets, liabilities, contracts, employees, licenses, records and approvals will be transferred to and will be deemed to have been transferred to and vested in our Bank, as a going concern, without any further act, instrument or deed, together with all its properties, assets, liabilities, rights, benefits and interest therein. All the Key Managerial Personnel, and other employees of UFSL who are in such employment as on the Effective Date shall become, and be deemed to have become, the staff and employees of the Bank, without any break or interruption in their services and on the same terms and conditions (and which are not less favourable than those) on which they are engaged by UFSL as on the Effective Date. All proceedings by or against UFSL shall continue by or against the Bank. The appointed date under the said Scheme is February 01, 2022 or such other date as may be approved by the NCLT. In consideration of the proposed merger, the Bank will allot 115 (One hundred and Fifteen) equity shares each of ''10/- for every 10 equity shares of ''10/- each held by its shareholders in UFSL. The shares held by UFSL in the Bank shall stand extinguished on the amalgamation taking effect. The Scheme is subject to the provisions of the Scheme document and receipt of the relevant regulatory and statutory approvals (including but not limited to NCLT) and in accordance with applicable law and the conditions prescribed by the SEBI and RBI.

Note 29. Details of Benami Property held:

The Company does not hold any Benami Property which is either recorded or not recorded in the books of account and there are no proceedings initiated or pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder. Accordingly, no disclosures are made in this regard.

Note 30. Borrowings from banks or financial institutions

The Company does not have any borrowings from banks or financial institutions on the basis of security of current assets. Accordingly, no disclosures are made in this regard.

Note 31. Wilful Defaulter:

The Company did not have any borrowings during the year or as at the year end and the company is not been declared as wilful defaulter by any bank or financial institution or Government or Government Authorities or other lender. Accordingly, no disclosures are made in this regard.

Note 33. The Company has not advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries") with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries).

The Company has not received any fund from any party(s) (Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

Note 34. There are no transactions that are not recorded in the books of account that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).

Note 35. Transactions in Crypto Currency or Virtual Currency

The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year. Accordingly, no further disclosures are made in this regard.

Note 36. During the year, India experienced a "second wave" of COVID-19, including a significant surge of cases following the discovery of mutant virus variant in the country. As a precautionary measure various Indian States had re-imposed localised / regional restrictions, which were gradually relaxed during the later part of the year.

The impact of COVID-19, including changes in customer behaviour and pandemic fears, as well as restrictions on business and individual activities, has led to significant volatility in global and Indian financial markets and a significant decrease in global and local economic activity, which may persist even after the restrictions related to the COVID-19 outbreak are lifted. The Company is a CIC-NBFC and its activities are limited to its investment which significantly comprises of Investment made in subsidiary, Ujjivan Small Finance Bank Limited ("the Bank"). The disruptions following the outbreak, have led to a decrease in loan originations and in collection efforts efficiency. India is emerging from the COVID-19 pandemic, however the extent to which the new wave of COVID-19 with reports of new virus variants, will impact the Bank''s operations and results will depend on ongoing as well as future developments, including among other things, any new information concerning the severity of the COVID-19 pandemic and any action to contain its spread or mitigate its impact whether government-mandated or elected by the Bank.

Based on the assessments made by the Management there is no material impact of COVID-19 on the Company which is required to be recognised in the standalone financial results. The Company has adequate liquidity and resources to service its obligations in the near future. Further, the impact of COVID-19 pandemic on the subsidiary''s financial results will depend on the future developments which are uncertain. Accordingly, no adjustments have been made to the standalone financial results.

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Mar 31, 2018

1 CORPORATE INFORMATION

Ujjivan Financial Services Limited is a Limited Company domiciled in India and incorporated under the provisions of the Companies Act, 1956. The Company was registered as NBFC-MFI under Non-Banking Financial Company Micro Finance Institutions (NBFC-MFIs) directions on September 05, 2013. The Company received approval from Reserve Bank of India (“RBI”) to set up a Small Finance Bank. Pursuant to the same, the company executed an agreement to transfer its Business undertaking to its wholly owned subsidiary Ujjivan Small Finance Bank Limited (“the Bank”). The bank commenced operations w.e.f 1st February 2017, on which date the Company ceased to operate as a Micro finance company. Pursuant to this change, the Company surrendered its NBFC - MFI license and received approval and certificate of registration as NBFC-ND-SI-CIC ( Core Investment Company ) from the RBI on October 10, 2017.

Note (i) : Relates to security deposits from erstwhile customers. Pursuant to RBI direction, the same deposit balances has been transferred to Ujjivan Small Finance Bank Limited in October 2017.

2 Additional information to the financial statements

2.1 Discontinued operations

During the previous year, pursuant to approval of the Shareholders and Reserve Bank of India, the Company has transferred the business to Ujjivan Small Finance Bank on a slump sale basis with effect from February 01, 2017 for a consideration of Rs.15,300,000,000/-.

2.3 Earnings in foreign currency - Rs. Nil (PY - Nil)

2.4 Expenditure in foreign currency - Rs. Nil (PY - Nil)

2.5 Details of Unhedged Foreign Currency Exposure - Rs. Nil (PY - Nil)

2.6 Disclosures required under Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006

There are no Micro and Small Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days at the Balance Sheet date. The above information regarding Micro Enterprises and Small Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company.

2.7 Disclosure of details as required under Clause No. 19 of Master Direction - Core Investment Companies (Reserve Bank) Direction, 2016.

(a) Proivisons as per CIC Guidelines - As the company is not engaged in the business of financing, it has not provided any loans/advances and therefore related compliance in relation to classification as standard asset, sub standard assets, doubtful and loss assets are not applicable.

(b) Exposure to real estate sector, both direct and indirect - NIL

(c) Maturity pattern of assets and liablilities.

2.8 Disclosure as required under Annexure I of Master Direction - Core Investment Companies (Reserve Bank,) Direction, 2016

Schedule to the Balance Sheet of a non-deposit taking Core Investment Company

Notes:

1) As defined in Core Investment Companies (Reserve Bank) Directions, 2016.

2) Provisioning n orms shall be applicable as prescribed in these Directions.

3) All Accounting Standards and Guidance Notes issued by ICAI are applicable including for valuation of investments and other assets as also assets acquired in satisfaction of debt. However, market value in respect of quoted investments and break up/fair value/NAV in respect of unquoted investments shall be disclosed irrespective of whether they are classified as long term or current in (4) above.

3.1 Employee Benefits:

The details of employee benefits are as given below:

(i) Defined Contribution Plans

During the year, the Company has recognized the following amounts in the statement of profit and loss

The estimates of future salary increases considered in actuarial valuation take account of inflation, seniority, promotion and other relevant factors such as supply and demand factors in the employment market.

Information of investment details of plan assets are not available hence not disclosed and the obligation is funded with LIC.

During the year, the Company completed the transfer of plan assets pursuant to Business Transfer Agreement on 31st October, 2017

Details relating to experience adjustment and expected future cashflow is given below

3.2 Segment Reporting

The Company is a RBI Registered NBFC-Core Investment Company and operates in a single segment (i.e. investments activities), no further disclosure is required to be given as per the notified AS-17 ‘Segment Reporting’.

3.3 Related Party Disclosure

A. List of Related Parities are Given below:

Key Management Personnel

Mrs. Sudha Suresh, Managing Director and CEO

Mr. Hiren Shah, Chief Financial Officer (Up to October 9, 2017)

Mr. Deepak Khetan Chief Financial Officer ( From March 29, 2018)

Mr. Sanjeev Barnwal, Company Secretary

Enterprises over which Key Management Personnel is able to exercise significant influence

Parinaam Foundation (Upto January 31, 2017)

Ujjivan Social Services Foundation

Ujjivan Small Finance Bank Limited (with effect Subsidiary of Company from July 4, 2016)

B. Transactions with Related Parties during the year

*Excludes amount of Rs. 328,870,395/- received by UFSL towards employees perquisite tax and securitisation closure related Fixed deposits & Income amounts on behalf of USFB and the same has been transferred to USFB.

3.4 Deferred Tax

In accordance with Accounting Standard -22 “Accounting for Taxes on Income”, the company has recognized deferred tax charge/(credit) as detailed below:

3.5 Employee Stock Option Plan

The Company has established Employee Stock Option Plan (ESOP) for compensation to its employees, being ESOP 2006, ESOP 2007, ESOP 2008, ESOP 2010, MD ESOP 2010 and ESOP 2015.

The guidance note issued by the Institute of Chartered Accountants of India requires the disclosure of pro forma net results and Earnings Per Share (EPS) both basic & diluted, had the Company adopted the fair value method amortising the stock compensation expense thereon over the vesting period, such expense for the year ended March 31,2018 amounts to Rs 8,02,35,588/- and the basic and diluted EPS would have been revised to Rs (0.63).

The Company confirms that the above information is given as per the records available with the Company. The Company has complied with the relevant regulations in this regard.

Note (i): SBN shall have the same meaning as provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated 8th November, 2016.

Note (ii): Our accounting system does not capture the denomination-wise details of disbursements,collections and expenditure.

Note (iii): This represents installments deposited by the customers directly to Company bank accounts as per representation given by the management.

Note (iv): Bank deposit slips do not contain denomination details of amount deposited. The company is in process of obtaining the same.

4 Corporate Social Responsibility

a) Gross amount required to be spent by the company during the financial year ended March 31, 2018 is Rs.47,156,625/- (PY. Rs.31,356,180/-).

b) Amount spent during the year 2017-18 on :

5 As at March 31, 2018, the Company has received an amount of Rs.2,369,747/- share application money (including a premium of Rs. 2,138,937) towards the exercise of 23081 vested options by eligible employees under various ESOP Schemes of the Company. The Company has sufficient authorised capital to cover the allotment of these shares and pending allotment of shares, the amounts are maintained in a designated bank account and are not available for use by the Company. The Company has completed the allotment of these shares on 17th April 2018 for the aforesaid options.

6 Previous year figures have been regrouped / reclassified wherever necessary to correspond with the current year classification / disclosure.

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Mar 31, 2017

iv) The company has only one class of equity shares with voting rights (one vote per share). The distribution of dividend is in proportion to the number of equity shares held by the shareholders.

* Transfer of 20% of the profit after Tax to the statutory reserves in accordance with the provisions of section 45 - IC Reserve Bank of India Act, 1934.

#The Board has recommended a dividend at the rate of 8% i.e. Rs. 0.80 per equity share for the FY 2016-17 subject to the approval of the Shareholders at the ensuing 13th Annual General Meeting (AGM).

i) Debentures are secured by hypothecation of book debts.

ii) Pursuant to the Business Transfer Agreement dated January 12, 2017 the company has transferred Long-term borrowings to Ujjivan Small Finance Bank Limited. (Refer Note 22.1)

(iii) Terms of repayment for borrowings including current maturities :

Note (i) : Relates to security deposits from erstwhile customers.

Note (ii) : Pursuant to the Business Transfer Agreement dated January 12, 2017 the Company has transferred borrowings to Ujjivan Small Finance Bank Limited. (Refer Note 22.1)

Note (iii) : Current maturities of long term debts

i) Pursuant to the Business Transfer Agreement dated January 12, 2017 the Company has transferred Short-term provisions to Ujjivan Small Finance Bank Limited. (Refer Note 22.1)

Note 1 Other non current assets

(Unsecured, considered good unless otherwise stated)

i) Pursuant to the Business Transfer Agreement dated January 12, 2017 the Company has transferred the portfolio to Ujjivan Small Finance Bank Limited. (Refer Note 22.1)

ii) Assets derecognized on account of securitization of receivables is Rs. NIL (P.Y.Rs. 3,242,158,514/-)

Note

(i) Balance with banks of Rs.13,548,822/- (P.Y. Rs.13,548,937/-) is to be used only for repayment of Security deposit of customers.

(ii) Under lien against loans availed by the Company.

(iii) Fixed deposits with Ujjivan Small Finance Bank Limited - Rs.1,000,000,000/-.

2 Additional information to the financial statements

3. Discontinued operations

During the year, pursuant to approval of the Shareholders and Reserve Bank of India, the Company has transferred the business to Ujjivan Small Finance Bank on a slump sale basis with effect from February 01, 2017 for a consideration of Rs.15,300,000,000/-.

i) Carrying amount of assets and liabilities transferred to Ujjivan Small Finance Bank Limited:

Note: Any and all pending Claims, proceedings, suits etc. in relation to the Company as on the Completion Date ("Proceedings"), shall continue to be dealt with and managed by the Company. However, where any payments (if any) become due and payable by the Company pursuant to any such proceeding, the same shall be borne by Ujjivan Small Finance Bank Limited ("USFB") Similarity, where any payments become due and payable to the Company pursuant to any proceeding, USFB shall be entitled to receive the benefit of the same.

4 Earnings in foreign currency - Rs. Nil (PY - Nil)

5 Expenditure in foreign currency - Rs. Nil (PY - Nil)

6 Disclosures required under Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006

There are no Micro and Small Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days at the Balance Sheet date. The above information regarding Micro Enterprises and Small Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the Auditors.

7 Asset Classification & Provisioning:

The Company follows Prudential Norms of the Reserve Bank of India (RBI) with regard to classification in respect of all loans extended to its customers. Loans where the installment is overdue for a period of ninety days or more or on which interest amount remained overdue for a period of ninety days or more is treated as Non performing assets.

The Company compiles with the prudential norms of the Reserve Bank of India (RBI) with regard to income recognition, asset classification and provisioning. The Company is following provisioning norms as recommended vide DNBS.CC.PD.No.250/03.10.01/201 1-12 dated 2 December 2011, DNBS.PD/CC.No. 263/03.10.038/201 1-12 dated 20 March 2012 and DNBS.(PD).CC. No. 347 /03.10.38/2013-14 dated 1 July 2013.

8 Asset Classification & Provisioning:

Accordingly the Company in line with guidelines laid down under the DNBS(PD)CC.No.347/30.10.038/ 201314 dated July 01,2013 has complied with provisions of RBI norms.

9 Disclosure Pursuant to Reserve Bank of India Notification DNBS.200/CGM (PK)-2008 dated 1^st August 2008

(ii) Exposure to Real Estate Sector

Direct exposure towards mortgages

(iii) Exposure to Capital Market

The Company does not have any exposure to Capital Market as at March 31, 2017

(iv) Maturity Pattern of Assets and Liabilities

Maturity pattern of certain items of assets and liabilities as on March 31, 2017

Notes:

10. The above information has been considered as per the Asset Liability Management (ALM) Report compiled by the Management and reviewed by the ALM committee.

Note:

The above summary is prepared based on the information available with the Company and relied upon by the auditors.

11 Disclosure as required under DNBS (PD) CC. No. 300 / 03.10.038/2012-13 dated August 3, 2012.

Margin Cap of the Company as on March 31, 2017 is 9.99%¹. This has been computed in compliance with MFIN in their representation to The Reserve Bank of India dated August 29, 2012 (Subject reference : RBI/2012-13/161 ONBS (PO) CC.No.300 /03.10.038/2012-13 dated August 3, 2012).

Note: In the above margin calculation the company has not considered Rs.2,117 Crore, which was borrowed towards the end of January 2017. The same was not utilized by the Company for it''s MFI business and was subsequently transferred to Ujjivan Small Finance Bank Limited as part of transfer of business undertaking on February 1, 2017. (Refer Note 22.1)

Note: Pursuant to the Business Transfer Agreement dated January 12, 2017 the Company has transferred portfolio to Ujjivan Small Finance Bank Limited. (Refer Note 22.1)

12. During the year there are no instances of Single Borrower Limit (SGL) / Group Borrower Limit (GBL) exceeding the sanctioned limit or outstanding or entire outstanding whichever is higher.

13. During the year Company has not given any advances with intangible collateral such as charge over the rights, licenses, authority etc.

14. Registration obtained from other financial sector regulators

During the year the Company has not obtained any registrations from other financial regulators. The company has applied for conversion to Core Investment Company.

15. Penalties imposed by RBI and other regulators

During the year there are no penalties imposed by RBI and other regulators.

16. Ratings assigned by credit rating agencies and migration of ratings during the year.

17. Derivatives:

The Company has no transactions / exposure in derivatives in the current year and previous year.

Note 18. Disclosures under Accounting Standards 23.1 Employee Benefits:

The details of employee benefits are as given below:

I Defined Contribution Plans

During the year, the Company has recognized the following amounts in the statement of profit and loss

The estimates of future salary increases considered in actuarial valuation take account of inflation, seniority, promotion and other relevant factors such as supply and demand factors in the employment market.

Information of investment details of plan assets are not available hence not disclosed.

19. Segment Reporting

The company''s business segment is micro finance services and the principal geographical segment is India. Accordingly no separate disclosure is required to be made under accounting standard 17, Segment Reporting

20. Details of leasing arrangements

The Company has taken on operating lease certain facilities and office premises for a period ranging from 11 months to 120 months which are non-cancellable for the period as reflected in the respective agreements. These lease agreements provide for increase in the lease payments by 10% to 15% over the period as mentioned in the agreements. The total minimum lease payments for the current period, in respect of operating leases, included under rent, aggregates to Rs.142,071,801/- (P.Y. Rs.121,422,881/-)

21. Initial Public Offer/Listing

The company has issued and allotted 17,055,277 shares at Rs.10 each at a premium of Rs.200 per share subsequent to the year end by way of Initial Public Offer(IPO). The shares of the company have been listed in National Stock Exchange and Bombay Stock Exchange subsequent to the IPO.

22. Employee Stock Option Plan

The Company has established Employee Stock Option Plan (ESOP) for compensation to its employees, being ESOP 2006, ESOP 2007, ESOP 2008, ESOP 2010, MD ESOP 2010 and ESOP 2015.

The guidance note issued by the Institute of Chartered Accountants of India requires the disclosure of pro forma net results and Earnings Per Share (EPS) both basic & diluted, had the Company adopted the fair value method amortizing the stock compensation expense thereon over the vesting period, the reported profit for the year ended March 31, 2017 would have been lower by Rs.1 19,550,825/- and the basic and diluted EPS would have been revised to Rs.16.73/- and Rs.16.11/- respectively.

Option activity under the plans is as given as below:

The Company confirms that the above information is given as per the records available with the Company. The Company has complied with the relevant regulations in this regard.

Note (i): SBN shall have the same meaning as provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated 8th November, 2016.

Note (ii): Our accounting system does not capture the denomination-wise details of disbursements, collections and expenditure.

Note (iii): This represents installments deposited by the customers directly to Company bank accounts as per representation given by the management.

Note (iv): Bank deposit slips do not contain denomination details of amount deposited. The company is in process of obtaining the same.

23. Corporate Social Responsibility

a) Gross amount required to be spent by the company during the year ended March 31, 2017 Rs. 31,356,180/- (PY. Rs. 16,500,523/-).

24. As at 31st March 2017, the Company has received an amount of Rs. 5,287,610/- share application money (including a premium of Rs. 4,464,158) towards the exercise of 82,345 vested options by eligible employees under various ESOP Schemes of the Company. The Company has sufficient authorized capital to cover the allotment of these shares and pending allotment of shares, the amounts are maintained in a designated bank account and are not available for use by the Company. The Company has completed the allotment of shares on April 13, 2017 for the aforesaid options.

25. Previous year figures have been regrouped / reclassified wherever necessary to correspond with the current year classification / disclosure.

Notes:

26. As defined in paragraph 2(1)(xii) of the Non-Banking Financial Companies Acceptance in public Deposit (Reserve Bank) Directions,1998.

27. Provisioning norms shall be applicable as prescribed in Systemically Important Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2015.

28. All Accounting Standards and Guidance Notes issued by ICAI are applicable including for valuation of investments and other assets also assets acquired in satisfaction of debt. However, market value in respect of quoted investments and break up/fair value/NAV in respect of unquoted investments should be disclosed irrespective of whether they are classified as long term or current in (4) above.

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Mar 31, 2016

1. Earnings in foreign currency - Rs, Nil (PY - Nil)

2. Expenditure in foreign currency - Rs, Nil (PY - Nil)

3. Disclosures required under Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006

There are no Micro and Small Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days at the Balance Sheet date. The above information regarding Micro Enterprises and Small Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the Auditors.

4. Asset Classification & Provisioning:

The Company follows Prudential Norms of the Reserve Bank of India (RBI) with regard to classification in respect of all loans extended to its customers. Loans where the installment is overdue for a period of ninety days or more or on which interest amount remained overdue for a period of ninety days or more is treated as Non performing assets.

The Company complies with the prudential norms of the Reserve Bank of India (RBI) with regard to income recognition, asset classification and provisioning. The Company is following provisioning norms as recommended vide DNBS.CC.PD. No.250/03.10.01/2011-12 dated 2 December 2011, DNBS.PD/CC.No. 263/03.10.038/2011-12 dated 20 March 2012 and DNBS. (PD).CC. No. 347 /03.10.38/2013-14 dated 1 July 2013.

Accordingly the Company in line with guidelines laid down under the DNBS(PD)CC.No.347/30.10.038/ 2013-14 dated July 01,2013 has provided 1% of the total outstanding portfolio as at March 31, 2016. The Company has made Rs,69,381,671/- in addition to the above mentioned RBI norms

Classification of Loans and provision made for Standard / sub standard / doubtful / loss assets are as given below:

5. Disclosure as required under DNBS (PD) CC. No. 300 / 03.10.038/2012-13 dated August 3, 2012 .

Margin Cap of the Company as on 31 March 2016 is 9.96%. This has been computed as suggested by MFIN in their representation to The Reserve Bank of India dated August 29, 2012 (Subject reference : RBI/2012-13/161 ONBS (PO) CC.No.300 /03.10.038/2012-13. dated August 3, 2012).

6. Disclosure as required under DNBR (PD) CC. No. 002 / 03.10.001/2014-15 dated November 10, 2014.

7. During the period there are no instances of Single Borrower Limit (SGL) / Group Borrower Limit (GBL) exceeding the sanctioned limit or outstanding or entire outstanding whichever is higher.

8. During the period company has not given any advances with intangible collateral such as charge over the rights, licenses, authority etc.

9. Registration obtained from other financial sector regulators

During the period the company has not obtained any registrations from other financial regulators.

10. Penalties imposed by RBI and other regulators

During the period there is no penalties imposed by RBI and other regulators.

Notes forming part of financial statements 25.9.10 Ratings assigned by credit rating agencies and migration of ratings during the year Particulars Rating Assigned

1. MFI Grading CRISIL MFR 1

Long Term Borrowing Rs, 3500 Crs - CARE A

NCD_100 Crs CARE A

NCD_100 Crs CARE A

NCD_100 Crs CARE A

2. Long Term Bank Facilities /Non covertible Debentures ^NCD_^{40 Crs CARE A}

NCD_60 Crs CARE A

NCD_50 Crs ICRA A (Stable)

NCD_40 Crs ICRA A - (Stable)

NCD_75 Crs ICRA A - (Stable)

3. Short Term Bank Facilities / Commercial Paper 50 Crs CRISIL A1

1.Oread

PTC Series A1 - ICRA A-(SO)

PTC Series A2 - ICRA BBB (SO)

2. Saika

PTC Series A1 - ICRA A (SO)

PTC Series A2 - ICRA A-(SO)

3. Opalina

PTC Series A - ICRA A- (SO)

4. Securitization Transantions 4.Hoshi

PTC Series A - ICRA A (SO)

5. Phoibe

PTC Series A - ICRA A (SO)

6. Megumi

PTC Series A1 - ICRA A (SO)

7. Juventas

PTC Series A1 - ICRA A (SO)

PTC Series A2 - ICRA BBB (SO)

11. Derivatives:

The Company has no transactions / exposure in derivatives in the current period and previous year.

Note 26 Disclosures under Accounting Standards 26.1 Employee Benefits:

The details of employee benefits are as given below:

I Defined Contribution Plans

During the year, the Company has recognized the following amounts in the statement of profit and loss

Notes forming part of financial statements

12. Related Party Disclosure

A. List of Related Parties are Given below:

Key Management Personnel Mr. Samit Ghosh , Managing Director

Mrs. Sudha Suresh, Chief Financial Officer Mr. Sanjeev Barnwal, Company Secretary Enterprises owned by Key Management Personnel Parinaam Foundation

Ujjivan Social Services Foundation

13. Details of leasing arrangements

The Company has taken on operating lease certain facilities and office premises for a period ranging from 11 months to 120 months which are non-cancellable for the period as reflected in the respective agreements. These lease agreements provide for increase in the lease payments by 10% to 15% over the period as mentioned in the agreements. The total minimum lease payments for the current period, in respect of operating leases, included under rent, aggregates to Rs,121,422,881/- (P.Y. Rs,92,189,270-)

14. Information on dividend for the year ended 31 March 2016

The Board of Directors recommend a final dividend of Rs,0.50 per equity share for the financial year ended March 31, 2016. The payment is subject to approval of the share holders in the ensuing Annual General Meeting of the Company as per the share holdings as on the book closure date. However, the Company has made provision in the books amounting to Rs,59,120,653/- based on share holdings as on 13 May 2016.

15. Initial Public Offer/Listing

The company has issued and allotted 17,055,277 shares at Rs,10 each at a premium of Rs,200 per share subsequent to the yearend by way of Initial Public Offer(IPO). The shares of the company have been listed in National Stock Exchange and Bombay Stock Exchange subsequent to the IPO.

16. Employee Stock Option Plan

The Company has established Employee Stock Option Plan (ESOP) for compensation to its employees, being ESOP 2006, ESOP 2007, ESOP 2008 and ESOP 2010.

The guidance note issued by the Institute of Chartered Accountants of India requires the disclosure of pro forma net results and Earnings Per Share (EPS) both basic & diluted, had the Company adopted the fair value method amortizing the stock compensation expense thereon over the vesting period, the reported profit for the year ended March 31, 2016 would have been lower by Rs,28,081,792/-and the basic and diluted EPS would have been revised to Rs,19.80/- and Rs,18.88/- respectively.

17. Corporate Social Responsibility

a) Gross amount required to be spent by the company during the year ended March 31, 2016 Rs, 16,500,523/-(PY Rs,9,012,511/-)

18. Previous year figures have been regrouped / reclassified wherever necessary to correspond with the current year classification / disclosure.