Indian Indices
17,610.40 -5.90
60,843.15 910.91
( 1.52%)
Bank Nifty
40,669.30 156.30
( 0.39%)
Nifty IT
30,566.75 548.50
( 1.83%)
Global Indices
12,200.82 384.50
Dow Jones
34,053.94 -39.02
Hang Seng
21,660.47 -297.89
Nikkei 225
27,509.46 107.41
81.80 0.11
89.20 0.58
100.84 0.12
0.63 0.00


Spandana Sphoorty Financial Ltd
Industry :  Finance & Investments
BSE Code
ISIN Demat
Book Value()
NSE Symbol
Mar.Cap( Cr.)
Face Value()
Div & Yield %

As on: Feb 03, 2023 03:17 PM


The Members

of Spandana Sphoorty Financial Limited,

Your Directors have pleasure in presenting the 18th Annual Report on the business and operations of the Company together with the audited accounts for the financial year ended March 31,2021.


The standalone and consolidated financial statements for the financial year ended March 31, 2021, forming part of this Annual Report, have been prepared in accordance with the Indian Accounting Standards (Ind AS) as notified by the Ministry of Corporate Affairs.

Key highlights of financial performance of your Company are summarized below:

(Rs in Cr)

Particulars Standalone Consolidated
March 31, 2021 March 31, 2020 March 31, 2021 March 31, 2020
Income from Operations 1,442.91 1,409.49 1,482.63 1,435.30
Other Income 21.84 31.93 23.00 34.21
Profit Before Depreciation, Interest and Tax (PBDIT) 602.27 960.99 631.24 983.62
Depreciation 7.48 8.74 7.62 8.83
Financial charges 417.16 354.11 423.17 356.34
Profit Before Tax 177.63 598.14 200.45 618.45
Provision for Tax Current year 48.65 261.45 55.00 266.62
Profit/(Loss) After Tax 128.98 336.69 145.46 351.83
Transfer to Statutory Reserves 25.80 67.34 25.80 67.34
Balance carried to Balance sheet 103.18 269.35 119.66 284.49

During the Financial Year under review, the Income from operations of the Company increased to Rs 1,442.91 Cr as compared to FY 2019-20 which is mainly due to an increase in the AUM of the Company from Rs 6,660.72 Cr in FY 2019-20 to Rs 7,735.78 Cr and the Profit before Tax reduced to Rs 177.63 Cr as against Rs 598.14 Cr due to Covid-19 related write offs and provisions.

During the Financial Year under review, disbursements reached highest of Rs 2,426 Cr in Q4 FY 202021. Profitability rebounded in line with guidance, Normalized RoA stood at 10% and RoE stood at 26% for FY 2020-21. Capital Adequacy ratio was at 39.20% on a standalone basis. Your Company has generated Consolidated PPOP of Rs 846 Cr and PBT of Rs 200 Cr in FY 2020-21 on a consolidated basis.

Your Company has strong distribution network of 1,052 branches spread across 289 Districts of 18 states and best in class Collection Efficiency of 100.6% including arrears on a consolidated basis. Your Company has raised Rs 5,482 Cr of debt during FY 2020-21 in a disruptive environment. With the diversified lender base, your Company has raised Rs 1,175 Cr through money market instruments and Rs 700 Cr from retail investors through wealth management channel. Your Company has a strong funding access with adequate liquidity surplus of Rs 1,135 Cr as on March 31,2021.

All Loans which are standard as on February 29, 2020 and loans disbursed during the month of March, 2020 have been classified as Covid-19 affected portfolio and all Loans which are not standard as on February 29, 2020 and loans disbursed during FY 2020-21 have been classified as non Covid-19 affected portfolio. Majority of the loan book is Post Covid-19 which is disbursed after proper assessment of the income levels and business activities of the borrowers and the likely impact they would have due to pandemic. Based on the detailed assessment, your Company has identified certain risky portfolio which it has written-off during Q3 and Q4 of FY 2020-21.

Your Company has district level exposure which ensures low impact from region-specific issues viz. top 3 States constitute less than 48% of AUM, no State has more than 18.5% of AUM, no District has more than 2.25% of AUM and no Branch has more than 0.25% of AUM.

Your Company had started transition to monthly repayment in late-2019, in response to borrowers demand, driven by a lower time commitment from their side. Industry has evolved, where more frequent borrower meetings were once required to maintain discipline which no longer needed, and as borrowers have become more experienced with MFIs and credit bureaus. At present, 87% of AUM is on the monthly repayment, and it is consistently demonstrating superior collection efficiency and this will also have a positive long-term impact on the operating cost ratios and portfolio quality.

Your Company has strong Credit Ratings which upgraded to A (stable) rating from India Ratings and A- (stable) rating from ICRA reaffirmed during the year under review despite impact of Covid-19.


Considering your Company's growth, and future strategy and plans, your Directors consider it prudent to conserve resources and despite having sufficient distributable profits, do not recommend any dividend on equity shares for the financial year under review.


The operational highlights of your company are as follows:

Details Mar-19 Mar-20 Mar-21
No. of States 17 18 18
No. of Branches 899 979 982
No. of Districts 263 280 282
No. of Villages 72,326 78,936 78,949
No. of Employees 6,500 8,015 8,323
No. of Borrowers (in lakh) 24.03 25.07 23.73
Gross Disbursements (? in Cr) 4,915.70 7,722.17 6,099.00
Loan Portfolio (Rs in Cr) on Balance Sheet 4,194.52 5,070.36 7,028.02
Asset Under Management- AUM (' Cr) 4,269.24 6,660.72 7,735.78

• During FY 2020-21, the Company continued its operations in 17 states and 1 union territory (viz. Madhya Pradesh, Haryana, Andhra Pradesh, Telangana, Karnataka, Kerala, Maharashtra, Odisha, Goa, Chhattisgarh, Gujarat, Jharkhand, Uttar Pradesh, West Bengal, Rajasthan, Bihar, Tamil Nadu, and Pondicherry).

• During FY 2020-21, the number of borrowers dropped by 5.35% to 23.73 lakh borrowers from 25.07 lakh. The number of branches grew by 0.31% from 979 to 982 across the existing states.

• Disbursements dropped by 21% from Rs 7,722.17 Cr in FY 2019-20 to Rs 6,099 Cr for FY 2020-21 since no disbursements made in Q1 of FY 2020-21.

3.1 Securitization:

Your Company has used securitization to improve its asset and liability mix in line with extant guidelines of RBI on securitization. Gross Securitizations including Direct Assignment (DA) during the year to the tune of Rs 1,112 Cr has been done by issuing Pass-Through Certificates (PTCs) and transferring portfolio by way of DA. As of March 31,2021, the total Asset under management out of securitized portfolio is Rs 1,500.4 Cr (including DA of Rs 877.4 Cr).

3.2 Public Deposits:

Your Company is registered with Reserve Bank of India (RBI), as a non-deposit accepting NBFC under section 45-1A of the RBI Act, 1934, and reclassified as NBFC-MFI, effective from April 13, 2015. Your Directors hereby report that the Company has not accepted any public deposits during the year under review and it continues to be a non-deposit taking non-banking financial company in conformity with the guidelines of the RBI. As such no amount of principal and interest was outstanding during the year.

3.3 RBI Guidelines:

As on March 31, 2021, the Company is in compliance of the regulatory requirements of net owned funds ('NOF') and Capital to Risk Assets Ratio ('CRAR'), under section 45-IA of the Reserve Bank of India Act, 1934, to carry on the business of a non-banking financial institution ('NBFI'). Your Company's Capital Adequacy Ratio is as follows:

Capital Adequacy Ratio FY 2020-21 FY 2019-20
i) CRAR -Tier I Capital (%) 39.74 47.27
ii) CRAR - Tier II Capital (%) (0.54) 0.18
Capital to Risk Assets Ratio (CRAR) 39.20 47.44

3.4 Auction of gold jewellery for recovery of over dues of loans against them:

No Auctions were done during the FY 2020-21 of gold jewellery for recovery of overdues of loans against them.

3.5 Reserve Fund:

As per section 45IC of RBI Act 1934, the Company has transferred Rs 25.80 Cr in reserve fund i.e. aggregating 20% of its standalone net profit.

3.6 COVID-19 Pandemic:

Due to sudden spread of COVID-19 pandemic during February and March 2020, national lockdown was imposed by Government of India to protect the population from the pandemic and its further spread. Simultaneously, the Government and RBI announced several measures, which included loan moratorium for the borrowers across lenders. Your Company had provided moratorium to the borrowers based on borrower's request till August 31,2020. Now that COVID-19 second wave has again led to many states announcing lockdown, we took a decision to safeguard our employees and borrowers through necessary measures. RBI too extended the support by announcing resolution plan 2.0 for COVID impacted businesses by way of restructuring, additional credit lines, deferred payment etc. Your Company is in the process of extending such support to the borrowers in line with the Policy approved by the Board of Directors.

Despite Covid-19 pandemic, your Company has a strong funding access with adequate liquidity surplus of '1,135 Cr as on March 31, 2021, comfortably covering the fixed obligations during first quarter of FY 2021-22. Your Company continued to secure confidence from its lenders who were committed to provide funds. Your Company has been maintaining a higher liquidity position and there was no negative mismatch under any granular bucket as on March 31,2021. Your Company is in compliance with the RBI Circular on Liquidity Risk Management Framework for NonBanking Financial Companies and Core Investment Companies dated November 04, 2019.


The Issued and paid-up Equity Share Capital of the Company as on March 31,2021, stood at Rs 64,31,54,830 (Rupees Sixty- four crore thirty-one lakh fifty-four thousand and eight hundred thirty) consisting of 6,43,15,483 (Six crore forty-three lakh fifteen thousand four hundred eighty-three) Equity Shares of Rs 10/- each.

During the financial year under review, there was no change in Authorized Share Capital and Paid-up Equity Share Capital of the Company.

During the year under review, the Company has not issued shares with differential voting rights nor granted sweat equity. Further, the Company has also not provided any money for the purchase of its own shares by employees or for the benefit of employees.

Details of Secured Debt Securities as on March 31, 2021:

Sr. ISIN Date of Debenture Trust Deed Facility@ Type of charge created Sanctioned Amount (Rs in million) Outstanding @@ (Rs in million)
1 INE572J07109 November 30, 2018 NCD Exclusive 820.00 426.58
2 INE572J07117 June 19, 2020 NCD Exclusive 1,000.00 832.05
3 INE572J07125 September 08, 2020 NCD Exclusive 250.00 251.02
4 INE572J07133 September 18, 2020 NCD Exclusive 1,000.00 853.62
5 INE572J07141 September 24, 2020 NCD Exclusive 400.00 423.42
6 INE572J07158 September 29, 2020 NCD Exclusive 250.00 184.74
7 INE572J07224 October 28, 2020 NCD Exclusive 325.00 339.93
8 INE572J07216 November 12, 2020 NCD Exclusive 1,000.00 1,040.89
9 INE572J07166 November 12, 2020 MLD Exclusive 80.00 84.70
10 INE572J07174 November 12, 2020 MLD Exclusive 80.00 84.94
11 INE572J07182 November 12, 2020 MLD Exclusive 80.00 85.23
12 INE572J07240 November 17, 2020 MLD Exclusive 750.00 766.45
13 INE572J07232 November 18, 2020 NCD Exclusive 1,500.00 1,383.22
14 INE572J07257 November 24, 2020 MLD Exclusive 1,000.00 1,008.92
15 INE572J07265 November 26, 2020 NCD Exclusive 500.00 498.78
16 INE572J07273 December 16, 2020 MLD Exclusive 636.00 644.56
17 INE572J07281 December 23, 2020 NCD Exclusive 215.00 221.47
18 INE572J07299 December 29, 2020 MLD Exclusive 827.50 818.94
19 INE572J07307 January 20, 2021 NCD Exclusive 400.00 405.12
20 INE572J07190 January 25, 2021 MLD Exclusive 200.00 225.8
21 INE572J07208 January 25, 2021 MLD Exclusive 174.00 191.02
22 INE572J07315 February 25, 2021 NCD Exclusive 1,200.00 1,190.45
23 INE572J07323 February 09, 2021 NCD Exclusive 350.00 351.75
24 INE572J07331 March 16, 2021 MLD Exclusive 500.00 483.28
25 INE572J07356 March 31,2021 NCD Exclusive 200.00 198.20
26 INE572J07349 Total March 31,2021 NCD Exclusive 250.00 13,987.5 249.78 13,244.86

@NCD- "Non-convertible Debentures"; MLD -"Market Linked Debentures" @@Includes interest accrued and Ind AS adjustments


The Company has instituted Stock Option Plan, 2018 (the "ESOP Plan 2018"), Stock Option Scheme, 2018 ("the "ESOP Scheme 2018") and Stock Option Scheme, 2021 ("the "ESOP Scheme 2021") to attract, retain, motivate the personnel for positions of substantial responsibility and to provide additional incentive to the Management team, Directors and Employees of the Company and its Subsidiaries. The Members of the Company have passed the special resolution at their Meeting held on June 14, 2018, approved the ESOP Plan 2018 and ESOP Scheme 2018. ESOP Scheme 2021 was approved by the Members on March 26, 2021 by the special resolution passed through Postal Ballot.

Further pursuant to requirements of Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 ("SEBI SBEB Regulations") read with Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 [SEBI (LODR)], the Members of the Company ratified the "ESOP Plan 2018 and ESOP Scheme 2018" after the IPO of the Company in compliance with the provisions of the SEBI SBEB Regulations.

The Nomination and Remuneration Committee monitors the Plan in compliance with the Companies Act, 2013, the SEBI SBEB Regulations and related laws. The Company shall present a certificate received from its Auditors as per the SEBI SBEB Regulations for the inspection of the Members of the Company. The disclosures as required under the SEBI SBEB Regulations have been placed on the website of the Company at https://www.spandanaindia.com/investors/corporate_ governance.html.


6.1 Statutory Auditors:

As per Section 139 of the Companies Act, 2013 ('the Act'), read with the Companies (Audit and Auditors) Rules, 2014, the Members of the Company at the 15th AGM, held on August 03, 2018, has re-appointed S R Batliboi & Co. LLP (Firm Registration No. 301003E/E300005), Chartered Accountants, as the Statutory Auditors of the Company for a further period of 5 years i.e. to hold office from the conclusion of the 15th AGM till the conclusion of the 20th AGM of the Company. Pursuant to amendments in Section 139 of the Companies Act, 2013, the requirements to place the matter relating to such an appointment for ratification by members at every annual general meeting have been omitted with effect from May 07, 2018.

The Reports were given by S R Batliboi & Co. LLP Chartered Accountants on the Annual Audited Consolidated and Standalone Financial Statements of the Company for the FY 2020-21 are part of the Annual Report. The Auditor's Reports read along with the Notes on the Annual Audited Consolidated and Standalone Financial Statements are selfexplanatory and do not call for any further comments. There has been no qualification, reservation or adverse remark or disclaimer in their Reports.

During the FY 2020-21, the Auditors had not reported any matter under Section 143(12) of the Act, therefore no detail is required to be disclosed under Section 134(3)(ca) of the Act.

6.2 Secretarial Auditors:

Pursuant to the requirements of Section 204(1) of the Act read with Rule 9 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Regulation 24A of SEBI (LODR), M/s RPR & Associates, Practicing Company Secretaries, (CP No. 5360), were appointed as Secretarial Auditors of the Company for the FY 2020-21. The Secretarial Audit Report for the financial year ended March 31, 2021, is annexed to this report as "Annexure I". There has been no qualification, reservation or adverse remark or disclaimer in their Report. During the year 2021, the Secretarial Auditors had not reported any matter under Section 143 (12) of the Act, therefore no detail is required to be disclosed under Section 134 (3)(ca) of the Act.

During the year, your Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

6.3 Internal Auditors:

Your Company has its own internal audit team as per the Internal Audit Policy. Each branch is audited at least once in 3 months. Risk areas were identified every month and branches were audited more than once wherever there were triggers of risk. Branches are audited more frequently, at least once in a month where risk was perceived to be higher.

In terms of Section 138 of the Act and Companies (Accounts) Rules, 2014, the Board of Directors at its Meeting held on August 31,2020, upon recommendation of Audit Committee, had appointed BDO India LLP as Internal Auditors of the Company, for the FY 2020-21, for conducting the internal audit.

6.4 Cost Auditors:

The provisions of Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014 relating to Cost Audit and maintaining of cost audit records does not apply to the Company.


The Company has the following subsidiaries as on March 31,2021:

S. No. Name of the Company Particular Date of becoming Subsidiary
1. Caspian Financial Services Limited Wholly owned Subsidiary Company Since its Incorporation i.e., October 13, 2017
2. Criss Financial Holdings Limited Subsidiary Company December 27, 2018

The statement required to be provided with respect to subsidiaries, associate companies and joint ventures pursuant to the provisions of Section 129(3) of the Act and Rule 5 of the Companies (Accounts) Rules, 2014 in Form AOC - 1 is annexed herewith as "Annexure II".

The Audited Financial Statements, the Auditors Reports thereon and the Board's Reports for the year ended March 31, 2021, of the subsidiary companies, shall be available for inspection by the Members at its registered office, during business hours on all working days up to the date of the Annual General Meeting. A Member who is desirous of obtaining a copy of the accounts of the subsidiaries companies is requested to write to the Company.

During the financial year, none of the Company ceased to be the Company's subsidiaries, joint ventures, or associate companies.

Pursuant to Regulation 16(1)(c) of the SEBI (LODR), defines "material subsidiary" as a subsidiary whose income or net worth exceeds 20% of the consolidated income or net worth respectively, of the listed holding company and its subsidiaries at the end of the immediately preceding accounting year. Further, none of the subsidiaries mentioned hereinabove is a material subsidiary as per the thresholds laid down under the SEBI (LODR).

Pursuant to the provisions of section 136 of the Act as amended the standalone financial statements, consolidated financial statements of the Company and separate financial statements along with auditors reports thereon of each of the subsidiary is available on the website of the Company at https://www.spandanaindia.com/investors/financials.html.


The Consolidated Financial Statements of the Company prepared in accordance with relevant Indian Accounting Standards (IND-AS) viz. (include the relevant standards) forms part of this Annual Report.


Affairs of your Company are being managed by a professional Board comprising of eminent personalities having experience and expertise suited to guide the Company in the right direction. Present Directors of your Company are:

Mr. Deepak Calian Vaidya Chairman and Independent Non-Executive Director
Mr. Bharat Dhirajlal Shah Independent Non-Executive Director
Mr. Jagdish Capoor Independent Non-Executive Director
Ms. Abanti Mitra Independent Non Executive Director
Mrs. Padmaja Gangireddy Managing Director
Mr. Ramachandra Kasargod Kamath Nominee Director
Mr. Kartikeya Dhruv Kaji Nominee Director
Mr. Sunish Sharma Nominee Director
Mr. Amit Sobti Nominee Director
Mr. Darius Dinshaw Pandole* Nominee Director

*Resigned from the Board w.e.f. September 21,2020

12.1 Rotation of Directors:

In terms of the provisions of Section 152 of the Act Mr. Ramachandra Kasargod Kamath (DIN: 01715073) and Mr. Kartikeya Dhruv Kaji (DIN: 07641723), Nominee Directors of the Company, being longest in the office, retires at the ensuing Annual General Meeting and being eligible, offered themselves for re-appointment. The brief resume and other details of Mr. Ramachandra Kasargod Kamath and Mr. Kartikeya Dhruv Kaji as required under the Act and SEBI (LODR) for their re-appointment as Director are provided in the Notice of 18th Annual General Meeting of your Company.

12.2 Declaration by Independent Directors:

The Company has received a declaration from all the Independent Directors of the Company, confirming that they meet with the criteria of independence as prescribed under subsection (6) of section 149 of the Act.

12.3 Key Managerial Personnel of the Company:

During the year under review, Mr. Sudhesh Chandrasekar has resigned as the Chief Financial Officer of the Company w.e.f. June 05, 2020, Mr. Rakesh Jhinjharia has resigned as the Company Secretary of the Company w.e.f. June 05, 2020 and Mr. Satish Kottakota has been appointed as the Chief Financial Officer of the Company w.e.f. June 01,2020. Mr. Ramesh Periasamy has been appointed as the Company Secretary and Compliance Officer of the Company w.e.f. August 29, 2020. Mrs. Sharmila S has been appointed as the Chief Risk Officer of the Company w.e.f. December 28, 2020.


During the FY 2020-21, 6 (Six) Board Meetings were convened thorough Audio-Visual Electronic Communication Means (AVEC). The details related to Board Meetings are provided in Corporate Governance Report forming part of this Report. The intervening gap between the Board Meetings was within the period prescribed under the Act and SEBI (LODR). The notice and agenda including all material information and minimum information required to be made available to the Board under Regulation 17 read with Schedule II Part-A of the SEBI (LODR) were circulated to all Directors, well within the prescribed time, before the Meeting or presented before the Meeting.


Pursuant to the provisions of the Act the Board has carried out the annual evaluation of its own performance, its Committees, and Individual directors including Independent Directors ("Performance Evaluation"). It covers the areas relevant to the functioning as Independent Directors or other directors, member of Board, or Committees of the Board. A structured questionnaire was prepared, covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance.

The Directors have expressed their satisfaction with the evaluation process.


Pursuant to Regulation 17(5) of the SEBI (LODR), the Company has a Code of Conduct for its Directors and Senior Management including Non-Executive and Independent Directors to the extent of their role and responsibilities in the Company. The said code is available at the website of the Company at http://www.spandanaindia.com/investors/corporate_governance.html.

Further, in accordance with Schedule V(D) of the SEBI (LODR) declaration from Managing Director of the Company has been received confirming that all the Directors and the Senior Management Personnel of the Company have complied to the Code of Conduct for the Financial Year ended March 31,2021 as attached with this Report.


In terms of section 135 and Schedule VII of the Act read with rules made thereunder, the Board of Directors of your Company have constituted a CSR Committee. The current composition of the Committee is as follows;

Sl. No. Name Designation & Category
1. Mr. Ramachandra Kasargod Kamath Chairperson, Nominee Director
2. Mrs. Padmaja Gangireddy Member, Managing Director
3. Mrs. Abanti Mitra Member, Independent Non Executive Director
4. Mr. Sunish Sharma Member, Nominee Director
5. Mr. Deepak Calian Vaidya Member, Independent Non-Executive Director

The details of the Corporate Social Responsibility Policy adopted by the Company have been disclosed on the website of the Company at https://www.spandanaindia.com/pdfs/1.CSR%20Policy.pdf.

The Annual Report on CSR activities is annexed to this report as "Annexure III".


The details of Committees of the Board of Directors of Company are elaborated in the Report on Corporate Governance which forms a part of this Report.


In terms of Regulation 34(3) read with Schedule V of the SEBI (LODR), the detailed Report on Corporate Governance along with a certificate on Corporate Governance compliance received from Mr. Ravi Prasada Reddy, Practicing Company Secretary, Hyderabad forms integral part of this report.


The Management Discussion and Analysis Report as required under Schedule V of the SEBI (LODR) annexed to this report.


The Business Responsibility Report for the year under review is annexed to this report as "Annexure IV".


Pursuant to sub-section (3)(a) of Section 134 and sub-section (3) of Section 92 of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the copy of Annual Return as at March 31,2021 is available on the website of the Company at the link: http://www.spandanaindia.com/.


Pursuant to Rule 7(b)(ii) of the Companies (Share Capital and Debentures) Rules, 2014 ('Rules'), the Company is not required to create Debenture Redemption Reserve as the Debentures of the Company are privately placed.


Information required under Section 134(3)(m) of the Act read with Rule, 8 of the Companies (Accounts) Rules, 2014 for the financial year ended March 31,2021, are as follows:

20.1 Conservation of Energy:

Our operations are not energy-intensive. However, significant measures are taken to reduce energy consumption by using energy-efficient computers and electrical equipment. Further, the Company believes in the optimum utilization of alternative resources available to reduce usage and conserve energy. We are also promoting the use of renewable energy sources among clients in their households.

20.2 Research and Development (R&D):

Social research and development of new products and methodologies continue to be an ongoing process for the Company. This helps us to enhance the quality of service and borrower satisfaction through continuous innovation. The Company has been adapting various lending models within the limited scope of MFI norms and has successfully implemented a Fortnightly / Monthly lending product.

20.3 Technology absorption, adaptation, and innovation:

Technology is being used as a business enabler at Spandana. We are improving our processes and controls with higher technology development and adoption to get better operational efficiencies keeping scalability in high consideration. The Company has migrated to a browser-based application FinS which has the accounts, loans, insurance, and payroll modules integrated. FinS have enabled us to have the entire data in a single database and have real-time data available without any time lag. The collection efficiency of each branch is tracked daily. Credit bureau verification is integrated and the bureau check happens seamlessly. To avoid data manipulation at the branch level, applications login has been centralized. Moreover, a mobile platform has also been integrated for further optimizing our business processes and enhanced value creation for our clients. A back-office team with strength of more than 200 including data entry operators, team leads and managers processes the loan applications. Loan applications are sourced from mobile as well as from web platform. Applications are logged on FinS for bureau verification and processing of loans.

20.4 Foreign exchange earnings and outgo:

There are no Foreign exchange earnings and outgo during the financial year ended March 31,2021.


The ratio of the remuneration of each director to the median's employee's remuneration and other details in terms of Section 197(12) of the Act read with Rule 5(1) of the Companies (Companies Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this report. In terms of the provisions of Section 197 (12) of the Act read with Rules 5(2) and 5 (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names of the top ten employees in terms of remuneration drawn and names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules forms part of this Report.

Having regard to the provisions of the second proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to the Members of the Company. Any Member interested in obtaining such information may send their request to secretarial@spandanaindia.com.


There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future, therefore the disclosure under Rule 8 (5)(vii) of Companies (Accounts) Rules, 2014, is not applicable to the Company.


Your Company has established the Vigil Mechanism to encourage employees to report suspected legal violations, fraudulent or irregular conduct of an employee or business associate of the Company. Such incidents, if not reported would breach trust and endanger the Company's reputation. Through this mechanism, the Company provides a channel to the employees and Directors to report to the management about unethical behaviour, actual or suspected fraud or violation of the Codes of Conduct or legal or regulatory requirements incorrect or misrepresentation of any financial statements and reports, etc.

The Company also has a Fraud Reporting Policy to deal with instances of fraud and mismanagement, if any. This Policy ensures that strict confidentiality is maintained whilst dealing with concerns and also that no discrimination will be meted out to any person for a genuinely raised concern. A Committee has been constituted which looks into the complaints raised.


Your Company has set up an effective Investor Relations Program through which the Company on a regular basis keep all its investors updated on all the crucial information by disseminating the same on the Company's website. The Company also inform both the exchanges regarding earning calls, investor meets, press release on the financial results of the Company and such other matters having direct/indirect bearing on the Share Price of the Company, in compliance with the SEBI (LODR).


Your Company has a dedicated Borrower Grievance Cell to receive and handle the day to day borrower grievances. Further the details of the concerned persons are also mentioned on the website of the Company, and a toll free number is also displayed at every branch for the borrowers to lodge their complaints (if any), and the borrowers can also directly reach

out to the right persons for their grievance redressal. All the grievances of borrowers are dealt expeditiously, in a fair and transparent manner.


Your Company has duly formulated and adopted Code of Conduct for Prohibition of Insider Trading and Internal Procedure in accordance with SEBI (Prohibition of Insider Trading) Regulations, 2015, as amended. The objective of this Code is to regulate, monitor and report trading by its Designated Persons and Immediate Relatives of Designated Persons towards achieving and protecting the interest of Stakeholders at large.

The Code of Conduct for Insider Trading is available on the Company's website at https://www.spandanaindia.com/pdfs/Amended%20Insider%20Trading%20Code%20and%20Code%20of%20Fair%20DisclosureSSFLfinal.pdf?v=2.


Your Company has duly formulated and adopted Fair Practice Code (FPC) in compliance with the guidelines issued by RBI, to deliver quality services to borrowers by maintaining highest levels of transparency and integrity. It also aims to provide valuable information to Borrowers for making an informed decision.

The FPC (English Version) is available on the Company's website at https://www.spandanaindia.com/pdfs/fpcenglish.pdf.

The FPC (Hindi Version) is available on the Company's website at https://www.spandanaindia.com/pdfs/fpchindi.pdf.


The Board of Directors has constituted Risk Management Committee to identify, monitor and review all the elements of risk associated with the Company. The detail of Committee and its terms of reference are elaborated in the Report on Corporate Governance which forms a part of this Report.

The Company has duly approved and adopted Risk Management Policy, wherein risk management practices has integrated into governance and operations and has developed a strong risk culture within the Organization. Further, the risk management process is continuously reviewed, improved and adapted in the context of changing risk scenario and the agility of the risk management process is monitored and reviewed for its appropriateness in the changing risk landscape. The process of continuous evaluation of risks includes taking stock of the risk landscape on an event-driven basis. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis.


Your Company has formulated Dividend Policy in accordance with SEBI (LODR), for bringing transparency in the matter of declaration of dividend and to protect the interest of investors. The Dividend Policy is available on the website of the Company at https://www.spandanaindia.com/investors/corporategovernance.html.


Pursuant to the provisions of Sec 186 (11) of the Act disclosure requirement of particulars of loans given, investments made or guarantee given or securities provided is not applicable to the Company.


Your Company has formulated a policy on related party transactions and is available on Company's website at https:// www.spandanaindia.com/pdfs/7.RPT%20Policy.pdf.

This policy deals with the review and approval of related party transactions. The Board of Directors of the Company had approved the criteria for making the omnibus approval by the Audit Committee within the overall framework of the policy on related party transactions. Prior omnibus approval is obtained for related party transactions which are of repetitive nature and entered in the ordinary course of business and on an arm's length basis.

All related party transactions that were entered into during the financial year were on arm's length basis and were in the ordinary course of the business. There are no materially significant related party transactions made by the Company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the Company at large. All Related Party Transactions are placed before the Audit Committee for approval. The details of the related party transactions are disclosed as per Indian Accounting Standard (IND AS) - 24 and set out in note 33 to the Standalone financial statements forming part of this annual report.

Contracts / arrangements / transactions entered by the Company during the year under review with related parties under Section 188 of the Act were in ordinary course of business and on arm's length basis. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the provisions of Section 188 of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014, Regulation 23 of SEBI Listing Regulations and the Company's policy on related party transactions. Therefore, particulars of contracts/ arrangements with related parties under Section 188 of the Act in Form AOC-2 is not annexed with this report.


The Company has a sound Internal Control System, commensurate with the nature, size, scale and complexity of its operations which ensures that transactions are recorded, authorized and reported correctly. The Company has put in place policies and procedures for continuously monitoring and ensuring the orderly and efficient conduct of the business, including adherence to the Company's Policies, for safeguarding its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparations of reliable financial disclosures. The Audit Committee periodically reviews and evaluates the effectiveness of internal financial control system.


No material changes or commitments have occurred after the close of the year till the date of this Report except as mentioned herein above, which may affect the financial position of the Company.


To protect the Interest of the Debenture Holders of the Company, your company has appointed the Debenture Trustees named as:-

Catalyst Trusteeship Limited

Registered Office: GDA House, Plot No. 85, Bhusari Colony (Right), Paud Road, Pune-411038

Tel: +91 (020) 25280081/Fax: 91 (020) 25280275


IDBI Trusteeship Services Limited

Asian Building, Ground Floor,

17, R. Kamani Marg, Ballard Estate,Mumbai - 400 001.

(91) (22) 40807068

naresh.sachwani@idbitrustee.com www.idbitrustee.com


The Company has constituted an Internal Compliant Committee as required to be formed under Section 4 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules made thereunder which were notified on December 09, 2013.

The Company has zero tolerance towards sexual harassment at the workplace and has adopted a policy on prevention, prohibition and Redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made thereunder. During the FY 2020-21, there were no complaints received by the Committee.


To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Act

a) that in the preparation of the annual financial statements for the financial year ended March 31,2021; the applicable accounting standards had been followed along with proper explanation relating to material departures;

b) that such accounting policies as mentioned in Note no. 1 of the Notes to the Financial Statements have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31,2021 and of the profit of the Company for the year ended on that date;

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

d) that the annual financial statements for the financial year ended March 31, 2021 have been prepared on a going concern basis; and

e) that the proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

f) that the Directors, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.


During the year under review, your Company has obtained following credit ratings for bank facilities and debt instruments;

Instrument Rating agency Rating Action Rated Amount (Rs Cr)
Long term bank facilities ICRA [ICRA]A- (Stable) / Assigned 3,500.00
Long term bank facilities India Ratings [INDIA]A (Stable) / Assigned 500.00
Non-Convertible debentures ICRA [ICRA]A- (Stable) / Assigned 859.46
Non-Convertible debentures India Ratings [INDIA]A (Stable) / Assigned 250.00
Market Linked Debentures ICRA PP MLD[ICRA]A (Stable) / Assigned 400.00
Market Linked Debentures India Ratings IND PP MLD Aemr/Stable / Assigned 375.00


The Company has not revised Financial Statements as mentioned under section 131 of the Act.

During the year under review, the Company has complied with the provisions of the Foreign Exchange Management (NonDebt Instrument) Rules, 2019, read with RBI Master Direction - Foreign Investment in India issued vide notification no. RBI/ FED/2017-18/60 dated January 4, 2018 the Foreign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments) Regulations, 2019 and the Consolidated FDI Policy, as amended.


The Board expresses its deep sense of gratitude to the Government of India, Reserve Bank of India and other regulators for the valuable guidance and support the Company has received from them during the year. The Board would also like to express its sincere appreciation of the co-operation and assistance received from its stakeholders, Shareholders, Bankers and other Business Constituents during the year under review. The Board places on record its appreciation of the dedicated services and contributions made by its staff for the overall performance of the Company.

For and on behalf of the Board of Directors of Spandana Sphoorty Financial Limited

Padmaja Gangireddy Deepak Calian Vaidya
Managing Director Chairman
DIN: 00004842 DIN: 00337276
Date: May 22, 2021 Date: May 22, 2021
Place: Hyderabad Place: Mumbai