To,
The Shareholders,
SK Finance Limited
The Directors have pleasure in presenting the 31st
(Thirty-First) Annual Report on the business and operations of SK Finance Limited
(hereinafter referred as "the Company") together with the audited
financial statements for the Financial Year ended on 31st March, 2025.
FINANCIAL SUMMARY AND HIGHLIGHTS
The Company's financial performance for the year ended on 31st
March, 2025 is summarized below:
(Rs in lakhs)
Particulars |
2024-25 |
2023-24 |
Total Income |
2,38,637.77 |
1,79,794.91 |
Finance Cost |
97,130.69 |
74,734.23 |
Net Interest Income |
1,14,889.51 |
88,549.43 |
Total operating expenses |
69,154.02 |
53,185.20 |
Pre-impairment operating profit |
72,353.06 |
51,875.48 |
Impairment on financial instruments |
23,876.97 |
11,943.35 |
Profit before tax |
48,476.09 |
39,932.13 |
Tax expenses |
10,509.38 |
8,739.80 |
a. Current Tax |
9290.48 |
8,037.83 |
b. Earlier Year Taxes |
- |
- |
c. Deferred Tax |
1,218.90 |
701.97 |
Profit after tax |
37,966.71 |
31,192.33 |
Other comprehensive income/(expenses) |
(1,003.45) |
(102.29) |
Total comprehensive income after tax |
36,963.26 |
31,090.04 |
Appropriation |
|
|
a. Dividend |
- |
- |
b. Tax on Dividend |
- |
- |
c. Transfer to statutory reserve |
7,593.34 |
6,238.47 |
Earnings per share |
|
|
Basic |
28.36 |
25.00 |
Diluted |
28.15 |
24.70 |
KEY INDICATORS
Total income for the year increased by 32.73% to Rs
2,38,637.77/- Lakhs as compared to Rs 1,79,794.917- Lakhs in 2023-24.
Profit before tax for the year was Rs 48,476.09/- Lakhs as
compared to Rs 39,932.13/- Lakhs in 2023-24, showing a significant growth of 21.40%.
Profit after tax for the year was Rs 37,966.71 /- Lakhs as
compared to Rs 31,192.33/- Lakhs in 2023-24, showing a significant growth of 21.72%.
The detailed analysis of income and expenditure and financial ratios is
made in the "Management Discussions and Analysis Report" forming part of this
Annual Report.
STATE OF THE COMPANY'S AFFAIRS BUSINESS
DEVELOPMENTS
Disbursements
The Company offers, a wide range of commercial loans such as New and
Used Commercial vehicle (excluding M&HCV), Car Loan,Tractor Loan, Two-Wheeler Loan,
Micro, Small & Medium Enterprises (MSME) Loan and Others (Co-lending, Trade Advance
and Personal Loan). The product wise disbursement of the Company for Financial Year
2024-25 is summarized here below:
(Rs in lakhs)
Particulars |
2024-25 |
2023-24 |
Commercial vehicle loan |
310,751.75 |
301,591.25 |
Car Loan |
1,75,867.35 |
1,49,600.01 |
Tractor Loan |
95,164.96 |
85,302.77 |
Two wheeler loan |
1,738.88 |
18,646.01 |
MSME loans |
1,68,701.30 |
1,40,392.58 |
Others |
87,617.56 |
28,166.29 |
Total |
8,39,841.77 |
7,23,698.91 |
Assets Under Management (AUM)
During the Financial Year 2024-25, the Company crossed the total asset
size of Rs 15,41,939.917- Lakhs. The AUM of the Company stood at Rs 13,26,112.89/- Lakhs
as at 31st March, 2025 compared to Rs 10,47,609.08/- Lakhs as at 31st
March, 2024 registering a robust growth of 26.58% on Year on Year (YoY) basis.
Network Expansion (Branches)
The Company further expanded its geographical presence by reaching out
to semi urban/rural areas and increased its footprint by opening new branches and making
it more accessible to its customers. The Company strengthened its presence across the 12
states and union territories with a network of more than 648 branches by adding 69
branches during the year under review.
Capital Adequacy
Capital adequacy ratio ("CAR") as at 31st March,
2025 under Ind-AS stood at 29.51% which is well above the minimum regulatory norms for
non-deposit accepting NBFCs. Out of the above, Tier I capital adequacy ratio stood at
29.51% and Tier II capital adequacy ratio stood at 0% respectively.
OTHER MATERIAL EVENTS
The following material events which are covered in detailed in the
later section of this Board Report inter-alia are as mentioned below:
1. The Company has filed draft red herring prospectus dated May 1, 2024
("DRHP") with the Securities and Exchange Board of India ("SEBI"),
BSE Limited ("BSE") and the National Stock Exchange of India
Limited("NSE") for the Initial public offer of its equity shares of face value
of Rs1 each comprising a fresh issue of Equity Shares and an offer for sale of Equity
Shares by certain selling shareholders ("Offer"). The Company has received
In-Principal Approval from SEBI and both the stock exchanges i.e. NSE and BSE.
2. The Company has approved the new set of Articles of Association of
the Company.
3. The Company has approved revision in Employee Stock Option Plan 2018
("ESOP PLAN").
4. The Company has approved the change in the composition of the Board
of Directors.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
A detailed discussion on the following aspects is included in the "Management
Discussion and Analysis Report" in accordance with the applicable provisions of
the Master Direction - Reserve Bank of India (Non-Banking Financial Company Scale Based
Regulation) Directions, 2023 ("RBI Master Directions") and Securities and
Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations,
2015 ("SEBI LODR") annexed as Annexure-1:
a. Global and Indian Economy;
b. Industry structure and developments;
c. Opportunities and Threats;
d. Segment-wise or product-wise performance;
e. Outlook;
f. Risks and concerns;
g. Internal control systems and their adequacy;
h. Discussion on financial performance with respect to operational
performance;
i. Material developments in Human Resources / Industrial Relations
front, including number of people employed;
j. Details of significant changes in key financial ratios along with a
detailed explanation therefore;
k. Such other material aspects.
CHANGE IN THE NATURE OFTHE BUSINESS
During the year there was no change in the nature of business of the
Company.
However, your Company had amended object clause of its Memorandum of
Association ("MOA") to solicit and procure insurance business as Composite
Corporate Agent without any risk participation as per Insurance Regulatory and Development
Authority of India (IRDAI) guidelines as approved by the shareholders in the
Extra-ordinary General meeting dated 11th March, 2 024. Thereafter the Company
had received certificate of registration to act as a Corporate Agent (composite) under the
IRDAI (Registration of Corporate Agents) Regulations, 2015 on December 18, 2024.
Thereafter, The Company has started the business and operations of
Corporate Agent.
INITIAL PUBLIC OFFER
The Board of Directors and the shareholders of the Company by
resolutions passed on April 18,2024 and April 25, 2024 respectively, have approved,
subject to necessary approvals, Initial public offer of its equity shares of face value of
Rs1 each comprising a fresh issue of Equity Shares up to 5,000 million and an offer for
sale of Equity Shares by certain selling shareholders of up to 17,000 million
("Offer"). The Company has filed draft red herring prospectus dated May 1, 2024
("DRHP") with the Securities and Exchange Board of India ("SEBI'j, BSE
Limited ("BSE") and the National Stock Exchange of India
Limited("NSE").
The Company has received the In-principal approval from both the Stock
exchanges i.e. National Stock Exchange of India Limited & BSE Limited and SEBI.
MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL
POSITION OFTHE COMPANY WHICH HAVE OCCURRED IN BETWEEN THE END OF THE FINANCIAL YEAR OF THE
COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THIS REPORT There
were no material changes and commitments, affecting the financial position of the Company
which have occurred in between the end of the financial year of the Company to which the
financial statements relate and the date of this Report.
TRANSFER TO RESERVES
Since the Company is a Middle-Layer Non-Banking Financial Company
("NBFC") registered with Reserve Bank of India ("RBI"), therefore as
required under section 45-IC of the Reserve Bank of India Act, 1934 ("RBI Act"),
the Company has transferred a sum of Rs 7,593.34/- Lakhs to statutory reserves out of
profits.
Further, the Board of Directors does not propose to transfer any amount
to general reserves of the Company.
DIVIDEND
With a view to enhance the growth and business of the Company and in
order to deal with the uncertain economic environment, the board of directors aim to
retain the resources of the Company. Accordingly, they do not recommend any dividend for
the financial year ended on 31st March, 2025.
The company has put in place a dividend distribution policy and
observes compliance of the same. The policy is available on the website of the company at
https://www.skfin.in/investor/policies-codes
DEPOSITS
Being a non-deposit taking NBFC, the Company has not accepted any
deposits from the public within the meaning of the provisions of Master Direction -
Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions,
2016 and provisions of the Companies Act, 2013 ("the Act") are not
applicable on the Company. Further, the Company shall not accept deposits from public
without obtaining prior approval from the RBI.
RBI LICENSE & GUIDELINES
The RBI granted the Certificate of Registration to the Company vide
Registration No. B-10.00080, to commence the business of a Non-Banking Financial
Institution without accepting deposits. The Company is categorized as Non-Banking
Financial Company - Middle Layer (NBFC-ML), and has complied with and continued to comply
with RBI Master Directions and other applicable regulations issued by the RBI from time to
time, to the extent applicable. The Company is majorly operating in two verticals, vehicle
financing and financing for Micro, Small and Medium Enterprises ("MSME").
CAPITAL STRUCTURE
During the year, following changes took place in the Share Capital
structure of the Company:
Authorized Share Capital
There has been no change in the Authorized Capital Structure of the
Company during the year under review.
As at March 31,202 5, the authorized share capital of the Company was
Rs 30,00,00,000/- (Rupees Thirty Crore only) consisting of 30,00,00,000 (Thirty Crore)
equity shares of face value of Rs 1 (Rupees One only) each.
Issued, Subscribed and Paid-up Share
Capital:
During the year, the following changes were effected in the issued,
subscribed and paid-up share capital of the Company
Issue of fully paid up Bonus Equity Shares:
Based onshareholder'sapproval dated 11th March, 2024,
the Board has approved the resolution for allotment of Bonus shares on 08th
April, 2024.
Issue of Equity Shares under Employee Stock
Option Plan (ESOP):
During the year, 2,57,140 (Two Lakh Fifty-Seven Thousand One Flundred
and Forty) equity shares of the face value of Rs 1/- (Rupees One only) each were allotted
to the eligible employees upon the exercise of the stock options by the eligible employees
with due approvals from the Nomination and Remuneration Co m m i ttee (" N
RC").
Post the allotment of equity shares as mentioned aforesaid, the issued,
subscribed and paid-up equity share capital of the company as on 31st March,
2025 stood at 13,40,02,204/- (Rupees Thirteen Crore Forty Lakhs Two Thousand Two Flundred
and Four only) consisting of 13,40,02,204(Thirteen Crore Forty Lakhs Two Thousand Two
Flundred and Four) equity shares of Rs 1/- (Rupees One only) each. The new equity shares
issued ranked pari-passu with the existing equity shares of the Company.
No Equity Shares were issued with differential rights as to dividend,
voting or otherwise.
CAPITAL ADEQUACY
Capital adequacy as at March 31, 2025 under Ind-AS stood at 29.51%
which is well above the minimum regulatory norms for non-deposit accepting NBFCs.
EMPLOYEE STOCK OPTIONS (ESOP)
The Company had formulated and implemented Employee Stock Option Plan
2018 ("Plan"/"Scheme") approved by the shareholders on 11th
September, 2018, as amended from time to time. The Board of Directors and/or the NRC being
the administrator(s) under the Plan, inter-alia, administers and monitors the Plan in
accordance with the provisions of the Act and rules made thereunder. During the year under
review, 21,600 options were granted to eligible employees under the Plan. The details of
the Options under the scheme are summarized below:
Details |
Tranche-1 |
Tranche-2 |
Tranche-3 |
Tranche-4 |
Options granted |
16,33,000 |
2,06,000 |
25,87,400 |
22,10,100 |
Options vested |
16,33,000 |
1,91,000 |
10,62,400 |
- |
Options exercised |
14,18,968 |
1,00,500 |
2,55,640 |
- |
Total number of shares arising as a result of
exercise of option |
14,18,968 |
1,00,500 |
2,55,640 |
- |
Options lapsed |
2,08,280 |
48,000 |
5,59,052 |
10,000 |
Variation in terms of options |
The shareholders approved the
revision in the SK Finance Limited Employee Stock Option Plan 2018 in the Extraordinary
General meeting held on 25th April, 2024 to comply with the regulatory
requirements in terms of the Securities and Exchange Board of India (Share Based Employee
Benefits and Sweat Equity) Regulations, 2021 and to increase the ESOP pool. |
Exercise price (in Rs) |
62.34 |
149.07 |
300 |
576.72 |
Money realized by exercise of options (in Rs) |
8,84,58,465.12 |
1,49,81,535 |
7,66,92,000 |
- |
Total number of options in force as at 31st
March, 2025 |
5,752 |
57,500 |
17,69,708 |
22,00,100 |
Employee-wise details of options granted to:
a) Key Managerial Personnel:
Sr. No. |
Name of Key Managerial Personnel as at
31st March, 2025 |
Tranche-1 |
Tranche -II |
Tranche - III |
Tranche-IV |
|
|
Granted |
Exercised |
Granted |
Exercised |
Granted |
Exercised |
Granted |
Exercised |
1. |
Mr. Atul Arora, Chief Financial Officer
(CFO) |
3,50,000 |
3,50,000 |
" |
" |
1,40,000 |
" |
3,80,000 |
" |
2. |
Ms. Anagha Bangur, Company Secretary &
Compliance Officer |
12,000 |
12,000 |
|
|
16,000 |
|
20,000 |
|
b) Any other employee who received a grant of Options in any one year
of Options amounting to five percent or more of Options granted during that year: The
following employees have received grant of options amounting to five percent or more of
Options granted during that year:
1. Sameer Arora, 2. Ritesh Sharma, 3. Pratit Vijayvargiya, 4. Cirish
Dangayach, 5. Nripendra, Singh, 6. Rohit Srivastava, 7. Anshul Jain, 8. Joydeep Mitra, 9.
Shyam Singh Chandel, 10. Kunal Solanki, 11. Rohit Bhatt, 12. Yogesh Sethi, 13. Munish
Dayal
c) Identified employees who were granted Options, during any one year,
equal to or exceeding
one percent of the issued capital (excluding outstanding warrants and
conversions) of the Company at the time of grant: None
BORROWINGS (RESOURCE MIX)
The Company has diversified funding sources from Public Sector Banks,
Private Sector Banks, Foreign Bank, Financial Institutions including foreign institutions,
Mutual Funds, etc. During the year under review, the Company continued with its diverse
methods of sourcing funds in addition to regular borrowings like Secured Debentures, Term
Loans,
Commercial Papers, External commercial Borrowing etc., and has also
maintained prudential Asset Liability Match throughout the year. The Company sourced
long-term debentures and loans from banks and other institutions in line with
Company's Resource Planning Policy.
The overall borrowing limit of the Company has been increased to Rs
18,000 crores by special resolution by the shareholders through Postal Ballot on 07th
December, 2024.
Private Placement of Non-Convertible Debentures:
During the year under review, your Company has issued Non-Convertible
Debentures ("NCDs") and raised an amount aggregating to Rs 1,60,000/- (Rupees
One Lakh Sixty Thousand) Lakhs on a private placement basis, in various tranches and the
NCDs are listed on the debt market segment of BSE Limited.
As specified in the respective offer documents, the funds raised from
NCDs were utilised for various financing activities, onward lending, to repay existing
debts, working capital and general corporate purposes of the Company. Details of the
end-use of funds were furnished to the Stock Exchange on a quarterly basis.
The briefdetailsof NCDs issued on a private placement basis during
theyear 2024-25 is mentioned as under:
s. No |
ISIN |
Date of Issue |
Date of Allotment |
Secured/ Unsecured |
Coupon Rate |
Listed/ Unlisted |
No. of Debentures |
Maturity date |
Issue Price (in Rs) |
Amount (In Lakh) |
1 |
INE124N07689 |
15/03/2024 |
02/04/2024 |
Secured |
9.25% p.a. |
Listed |
28,000 |
02/04/2026 |
1,00,000/- |
28,000 |
2 |
INE124N07697 |
11/04/2024 |
09/05/2024 |
Secured |
9.25% p.a. |
Listed |
35,000 |
09/05/2027 |
1,00,000/- |
35,000 |
3 |
INE124N07705 |
25/05/2024 |
03/06/2024 |
Secured |
9.25% p.a. |
Listed |
5,000 |
03/06/2026 |
1,00,000/- |
5,000 |
4 |
INE124N07713 |
11/06/2024 |
19/06/2024 |
Secured |
9.25% p.a. |
Listed |
10,000 |
19/09/2027 |
1,00,000/- |
10,000 |
5 |
INE124N07721 |
03/08/2024 |
14/08/2024 |
Secured |
9.25% p.a. |
Listed |
22,000 |
14/08/2026 |
1,00,000/- |
22,000 |
6 |
INE124N07697 (Re-issuance) |
14/08/2024 |
23/08/2024 |
Secured |
9.25% p.a. |
Listed |
2,500 |
09/05/2027 |
1,00,000/- |
2,500 |
7 |
INE124N07739 |
14/09/2024 |
10/10/2024 |
Secured |
9.25% p.a. |
Listed |
25,000 |
10/10/2027 |
1,00,000/- |
25,000 |
8 |
INE124N07747 |
20/12/2024 |
02/01/2025 |
Secured |
9.25% p.a. |
Listed |
12,500 |
02/01/2028 |
1,00,000/- |
12,500 |
9 |
INE124N07754 |
07/01/2025 |
15/01/2025 |
Secured |
9.25% p.a. |
Listed |
20,000 |
15/07/2027 |
1,00,000/- |
20,000 |
Total |
|
|
|
1,60,000 |
|
|
1,60,000 |
|
|
|
The Company has been regular in making payments of principal and
interest on all the NCDs issued by the Company on a private placement basis. There are no
NCDs which have not been claimed by investors or not paid by the Company after the date on
which the NCDs became due for redemption. The assets of the Company which are available
byway of security are sufficient to discharge the claims of the debt security holders as
and when they become due.
Securitization/Assignment:
During the year, the Company assigned/securitized its loan portfolio
having principle value ofRs 3,48,172.707- Lakhs of which Rs 2,30,331.98/- Lakhs were
securitized through issue of Pass Through Certificates in tranches and Rs 1,17,840.72/-
Lakhs was assigned /securitized in Direct Assignment mode in 11 tranches.
Bank Borrowings:
During the year, the Company has raised fresh Secured Loans of Rs
3,33,750.00/- Lakhs from Banks and Financial Institutions.
External commercial Borrowing:
During the year, the Company had availed total External Commercial
Borrowing (ECBs) of US$ 100 Million from Asian Development Bank for financing prospective
borrower as per the ECB guidelines issued by RBI from time to time. Out of same US$ 60
Million was raised in FY 24-25. The maturity of the borrowing is sixty (60) months after
the Disbursement Date of each Tranche of Loan.
Commercial Papers:
As at 31st March, 2025, the Company has outstanding
Commercial Paper (CPs). The brief details of the CPs issued during theyear are tabled
below:
S. No |
ISIN |
Date of Allotment |
Listed/ Unlisted |
No. of Units |
Tenor |
Maturity date |
Issue Price (In Rs) |
Amount (In Lakh) |
1 |
INE124N14107 |
31/12/2024 |
Listed |
1,200 |
127 days |
07/05/2025 |
5,00,000/- |
6,000 |
2 |
INE124N14107 (Re-issuance) |
10/01/2025 |
Listed |
500 |
117 days |
07/05/2025 |
5,00,000/- |
2,500 |
The Company has observed compliance with the Operational Circular for
issue and listing of Non-Convertible Securities, Securitized Debt Instruments, Security
Receipts, Municipal Debt Securities and Commercial Paper issued by SEBI and the Fixed
Income Money Market and Derivatives Association of India (FIMMDA) guidelines in all its CP
issuances.
The above-mentioned Commercial Papers were listed on BSE Limited.
CREDIT RATINGS
The Company's financial discipline and prudence is reflected in
the credit ratings ascribed by rating agencies. During the year under review, the Company
reported the following changes in the credit ratings.
Type of Instrument |
Name of Credit Rating |
Date of Credit Rating |
Rating assigned |
Previous rating assigned |
(i) Non-convertible debentures |
CARE Ratings Limited |
09th January, 2025 |
- |
CARE AA-/Stable |
|
CRISIL Ratings Limited |
28th June, 2024 |
CRISIL AA-/Stable |
CRISIL A+/Positive |
|
ICRA limited |
08th January, 2025 |
ICRA Ltd AA-/Stable |
ICRA Ltd AA-/Stable |
|
India Ratings & Research Private Limited |
20th September, 2024 |
India Rating and Research AA-/Stable |
India Rating and Research AA-/Stable |
(ii) Market Linked debentures |
CARE Ratings Limited |
09th January, 2025 |
CARE PP-MLD AA-/ Stable |
CARE PP-MLD AA-/ Stable |
|
CRISIL Ratings Limited |
28th June, 2024 |
CRISIL PPMLDAA-/ Stable |
CRISIL PPMLD A+/ Positive |
|
Acuite Ratings & Research Limited. |
" |
" |
Acuite Rating and Research PPMLD AA-/Stable |
(iii) Loan facility |
CARE Ratings Limited |
09th January, 2025 |
CARE AA-/Stable |
CARE AA-/Stable |
|
India Ratings & Research Private Limited |
20th September, 2024 |
India Rating and Research AA-/Stable |
India Rating and Research AA-/Stable |
(iv) Commercial paper |
India Ratings & Research Private Limited |
20th September, 2024 |
India Rating and Research A1 + |
India Rating and Research A1 + |
All of the above ratings indicate a high degree of safety with regard
to timely payment of interest and principal. The company has placed on its website all
credit ratings obtained for all its outstanding instruments and has intimated the revision
in the ratings to the stock exchange.
INVESTOR EDUCATION AND PROTECTION FUND
Pursuantto Sections 124and 125oftheAct read with the Investor Education
and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016
("IEPF Rules"), dividend, if not claimed for a period of 7 years from the date
of transfer to Unpaid Dividend Account of the Company, shall be transferred to the
Investor Education and Protection Fund ("IEPF"). TheCompany hasa board approved
Policyforclaiming unclaimed interest or principal on Non-Convertible Securities in
pursuance to the Regulation 61A
(2) of Securities and Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulations, 2015, as amended from time to time, read with
Circular SEBl/HO/DDHS/DDHS-RAC-l/P/ CIR/2023/176 issued on 08th November,
2023(as amended from time to time).
The Company issued Compulsory Convertible preference shares (CCPS) in
the year 2012 which were converted into the equity shares of the company on 27th
March, 2017. During the year under review, the company has transferred dividend of Rs
1,199/- (Rupees One Thousand One Hundred and Ninety Nine only) remaining unclaimed on the
aforesaid CCPS relating to the financial year 2016-17 to IEPF and necessary filings were
made to the relevant authorities. The details of the same are provided on the website of
the company at https://www.skfin.in/ other-disclosure.
Further, there are no amount lying in the unclaimed dividend account.
The company has appointed Ms. Anagha Bangur, Company Secretary &
Compliance Officer of the company as the "Nodal Officer" of the company for the
purpose of the IEPF Rules.
DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)
The Board of Directors of the Company has an optimum combination of
Executive and Non- Executive Directors in adherence to the applicable provisions of the
Companies Act, 2013 and SEBI LODR. As on March 31, 2025, the Board comprised of Eight
Directors, which comprises of two Executive (Managing Director & Whole-Time Director),
Six Non-Executive Directors out of which Four are Independent directors and two are
Nominee Directors including two women directors.
During the year, the following changes took place in the Directors and
KMPs' of the Company:
Resignation
During the year under review, there was no cessation or resignation of
Directors from the Board.
Appointment/Re-appointment
1. The Board of Directors based on the recommendation of NRC approved
the appointment of Ms. Nanda Sameer Dave (DIN: 08673208), as an Additional Director
(Non-Executive and Independent) on the Board of the Company in their meeting held on 14th
March, 2024.
The Shareholders of the Company in their Extra-Ordinary General Meeting
held on 25th April, 2024 approved the appointment of Ms. Nanda Sameer Dave as
an Independent Director on the Board of the Company for the tenure of 5 years effective
from 14th March, 2024 to 13th March, 2029 considering her
qualification, expertise, track record, integrity and other evaluation criteria and found
her fit and proper to appoint herasan independent director of the Company.
2. The Board of Directors based on the recommendation from NRC approved
the appointment of Mr. Mukul Mathur (DIN: 10025806), as an Additional Director
(Non-Executive and Independent) on the Board of the Company in their meeting held on 29th
March, 2024.
The Shareholders of the Company in their Extra-Ordinary General Meeting
held on 25th April, 2024 approved the appointment of Mr. Mukul Mathur as an
Independent Director on the Board of the Company for the tenure of 5 years effective from
29th March, 2024 to 28th March, 2029 considering his qualification,
expertise, track record, integrity and other evaluation criteria and found him fit and
proper to appoint him as an independent director of the Company.
The company has received all the requisite declarations from the
aforesaid directors of the Company as prescribed in the Act, SEBI LODR, RBI Master
Directions and enabling provisions of any other regulatory authority as applicable.
Retirement by Rotation
In accordance with the provisions of Section 152(6) of the Act read
with the rules made thereunder and in terms of Articles of Association of the Company, Ms.
Debanshi Basu (DIN: 07135074), Nominee Director got retired by rotation at the 30th
Annual General Meeting (ACM) of the Company held on 07th August, 2024 and was
re-appointed by the Shareholders of the company.
Further, Mr. Yash Setia (DIN: 09831391),
Whole-Time Director of the Company shall retire by rotation at the
ensuing ACM and being eligible for reappointment, offers himself for re-appointment.
Key Managerial Personnel (KMP)
Pursuant to the provisions of Section 203 of the Act read with rule 8
of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, SEBI
LODR and RBI Master Directions, the following are the whole time key managerial personnel
of the company as on 31st March, 2025.
a) Mr. Rajendra KumarSetia, Managing Director and Chief Executive
Officer (CEO)
b) Mr. Yash Setia, Whole time Director
c) Mr. Atul Arora, Chief Financial Officer
d) Ms. Anagha Bangur, Company Secretary and Compliance Officer
Therewasnochangein Key Managerial Personnel took place during the year
under review.
Independent Directors
The Independent Directors have submitted the requisite declarations
under Section 149(7) of the Act and Regulation 25(8) of the SEBI LODR confirming that they
meet the criteria of independence as stipulated under the provisions of Section 149(6) of
the Act, Regulation 16 (1) (b) of SEBI LODR and are not aware of any circumstance or
situation which exists or may be reasonably anticipated that could impair or impact their
ability to discharge their duties with an objective independent judgment and without any
external influence.
Further, the Board after taking these declarations on record and after
undertaking due assessment of the veracity of the same, concluded that the Independent
Directors are persons of integrity and possess the relevant proficiency, expertise and
experience to qualify as Independent Directors of the Company and are Independent of the
Management of the Company. The Independent Directors have also complied with the Code for
Independent Directors as prescribed in Schedule IV of the Act.
Pursuant to Schedule IV to the Act and theSEBI LODR, The independent
directors met on March 19, 2025 without the presence of non-independent directors and
members of the management and all the independent directors were present at such meeting.
In terms of Section 150 of the Act read with Rule 6 of the Companies
(Appointment and Qualification of Directors) Rules, 2014, as amended, the names of all the
Independent Directors of the Company have been included in the Independent Director's
databank maintained by the Indian Institute of Corporate Affairs (MCA). Further, all the
Independent Directors of the Company are exempted from appearing for the Online
Proficiency Exam except Mr. Mukul Mathur, who has appeared and passed the Online
Proficiency Exam.
DIRECTORS & OFFICERS LIABILITY INSURANCE
The Directors and Officers (D&O) insurance is liability insurance
which covers or protects Directors of the Company from claims which may arise from
decisions and actions taken while serving their duty. The Company has taken Directors
& Officers Liability Insura nee for Board of Directors including Independent Directors
and members of Senior Management for such quantum and risks as determined by the Board.
CODE OF CONDUCT FOR DIRECTORS AND SENIOR MANAGEMENT PERSONNEL
The Company has adopted a Code of Conduct for its Directors and Senior
Management Personnel including a code of conduct for Independent Directors which suitably
incorporates the duties of Independent Directors as laid down in Schedule IV of the Act
and SEBI LODR. The said Codes can be accessed on the Company's website at
https://www.skfin.in/ investor/policies-codes
In terms of the SEBI LODR, all Directors and Senior Management
Personnel have affirmed compliance with their respective codes as at 31st
March, 2025. The Managing Director and Chief Executive Officer has also confirmed and
certified the same, which forms part of Report on Corporate Governance.
FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
Pursuant to the Regulation 25 of SEBI LODR, the Company has put in
place a Familiarisation Programme to familiarise the Independent Directors about the
Company and their roles, rights and responsibilities in the Company. Also, in terms of
Schedule IV of the Companies Act, 2013, read with the rules made thereunder, the
Independent Directors shall undertake appropriate induction and regularly update and
refresh their skills, knowledge and familiarity with the Company.
The Company conducts programs/ presentations, periodically at regular
intervals, to familiarise the Independent Directors with the strategies, operations and
functions of the Company.
Further, on an ongoing basis as a part of the agenda of meetings of the
Board/ Committee(s), presentations are regularly made to the Independent Directors on
various matters inter alia covering the Company's businesses and financial
operations, strategies, risk management framework, regulatory updates and other relevant
matters. These presentations enable one-on-one interaction between the Independent
Directors and the senior management of the Company/ internal auditor/chief compliance
officer/ chief risk officer of the Company.
The details of the Familiarisation Programme during the Financial Year
2024-25 is explained in the Corporate Governance Report and the same is also available on
the website of the Company https:// www.skfin.in/investor/policies-codes.
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION AND OTHER
DETAILS
Pursuant to the provisions of Section 134(3)(e) of the Act, the
Company's Nomination, Remuneration and Compensation Policy (NRC Policy) on
director's appointment and remuneration including criteria for determining
qualifications, positive attributes, independence of a director and other matters provided
under Section 178(3) of the Act is available on the website of the Company
https://www.skfin.in/ investor/policies-codes.
The NRC Policyfor Directors, Key Managerial Personnel and Senior
Management Personnel is aligned to the philosophy on the commitment of fostering a culture
of leadership with trust. The policy aims to ensure that the level and composition of the
remuneration of the Directors, Key Managerial Personnel and Senior Management Personnel is
reasonable and sufficient to attract, retain and motivate them to successfully run the
Company.
The Board of Directors during the year under review has reviewed and
approved the revision in the NRC Policy on 28th May, 2024, owing to the RBI
Master Directions and RBI Circular vide letter no. DOR.COV. REC.No.2 9/18.10.002/2 022-2 3
on Guidelines on Compensation of Key Managerial Personnel (KMP) and Senior Management in
NBFCs dated 29th April, 2022.
Further, the Company has also adopted a Policy on Fit and Proper
Criteria for Board of Directors' for ascertaining the Fit and Proper'
criteria to be obtained at the time of appointment of directors and on a continuing basis,
pursuant to the Master Direction - Reserve Bank of India (Non-Banking Financial
Company-Scale Based Regulation) Directions, 2023. All the Directors of the Company have
confirmed that they satisfy the fit and proper' criteria as prescribed under
the RBI Master Direction.
PERFORMANCE EVALUATION
The Board, the Committees of the Board and independent directors
continuously strive for efficient functioning of Board and its Committees and better
corporate governance practices. Accordingly, pursuant to the provisions of Section 149(8)
read with Schedule IV, Section 178(2), Section 134 of the Act, and Regulation 17 of SEBI
LODR, the NRC in its meeting held on 3rd May, 2023 has laid down the criteria
for the performance evaluation of Board, its committees and individual directors after
taking into consideration the guidance note issued by the Institute of Company Secretaries
of India (ICSI) and Securities and Exchange Board of India (SEBI).
In addition, pursuant to the Schedule IV of the Act and SEBI (LODR),
the Independent directors in their meeting held on March 19, 2025 reviewed the performance
of non-independent directors, Board of Directors as a whole and chairperson of the listed
entity taking into account the views of executive directors and non-executive directors.
Feedback was sought by way of well-defined structured online
questionnaire forms covering various aspects of the Board's functioning and the
evaluation was carried out based on responses received from the Directors. The Board also
considered the evaluation results as collated by the NRC while conducting the evaluation
and expressed their satisfaction with the evaluation process. The evaluation process
endorsed cohesiveness amongst directors, smooth communication between the Board and the
management and the openness of the management in sharing the information with the Board
and placing various proposals for the Board's consideration and approval.
The evaluation process, manner and performance criteria for Independent
Directors in which the evaluation has been carried out is explained in detail in the
"Report on Corporate Governance" forming part of this report.
EMPLOYEE REMUNERATION
Pursuant to Section 2(52) of the Act read with Rule 2 A of the
Companies (Specification of Definitions Details) Rules, 2014, public companies which have
not listed their equity shares on a recognized stock exchange but have listed their
non-convertible debt securities issued on private placement basis in terms of Securities
and Exchange Board of India (Issue and Listing of Non-Convertible Securities) Regulations,
2021, shall not be considered as listed company in terms of the Act. Hence, provisions of
section 197(12) of the Act read with rules 5 of Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 are not applicable on the company.
BOARD MEETINGS
The calendar of the Board Meetings is circulated to the Directors in
advance to enable them to plan their schedule for effective participation at the meetings.
Additional Board Meetings are convened by giving appropriate notices to address
company's specific needs. The Board meets at regular intervals to discuss and decide
on significant strategic, financial, operational and compliance matters.
The Board of Directors met 10 times during the year under review i.e.
on 18th April 2024, 30th April 2024, 14th June 2024, 28th
May 2024, 15th July 2024, 14th August 2024, 26th
September 2024, 24th October 2024, 29th January 2025 and 19th
March 2025.
Frequency and quorum at these meetings and the intervening gap between
any two meetings were in conformity with the provisions of the Act, SEBI LODR and
Secretarial Standards issued by The Institute of Company Secretaries of India (ICSI).
COMMITTEES OF THE BOARD
The Committees of the Board focus on certain specific areas and make
informed decisions in line with the delegated authority. As on 31st March,
2025, the Board has 12 Committees, namely:
Audit Committee
Risk Management Committee
IT Strategy Committee
Nomination and Remuneration Committee
Corporate Social Responsibility Committee
Stakeholder Relationship Committee
Investment Committee
Executive Committee
Product Approval Committee
Customer Service Committee
IPO Committee
Wilful Defaulters-ReviewCommittee
Further, the Board has also formed sub-committees of the management in
order to facilitate quick decision making and encourage delegation of authority.
Presently, there are 6 sub-committees, namely:
Asset Liability Management Committee
IT Steering Committee
Risk Management Committee of Executives
Internal Complaint Committee
Information Security Committee
Wilful Defaulter-Identification Committee
During the year under review, all recommendations made by the
committees were accepted by the Board of Directors.
Details of Board Committees along with their composition, name of
members, chairperson, change in Composition during the year, terms of reference, meetings
held during theyearand attendance thereat are provided in Report on Corporate
Governance' forming part of the Annual Report.
INTERNAL FINANCIAL CONTROL SYSTEMS AND AUDIT
The Company's internal financial control system is designed to
ensure operational efficiency, compliance with laws and regulations and accuracy and
promptness in financial reporting. Review of the internal financial controls of the
Company is undertaken annually which covers testing of process, assessing the risk where a
material weakness exists, and testing and evaluating the operating effectiveness of
internal control based on the assessed risk, review of key business processes for updating
risk control matrices, etc. Moreover, the Company continuously upgrades its systems and
undertakes review of policies, Standard Operating Procedure (SOP), guidelines, manuals and
authority matrix and the Company has documented internal audit and control system for all
layers compliances of the Company.
The internal financial control is supplemented by extensive internal
audits, regular reviews by the management and standard policies and guidelines to ensure
reliability of financial and all other records to prepare financial statements, its
reporting and other data. The Audit Committee of the Board reviews internal audit reports
given along with management responses. The Audit Committee also monitors
the implemented suggestions. The statutory auditors of the Company have
also certified on the existence and operating effectiveness of the internal financial
controls relating to financial statements as at 31st March, 2025. The details
of the Internal Financial Controls and issues related thereto have been explained in the "Management
Discussion and Analysis Report", forming part of this Annual Report.
AUDITORS
Statutory Auditors
The Board of directors, based on the recommendation of the Audit
Committee, at their meeting held on July 15, 2024 appointed M/s. Deloitte Haskins and
Sells, Chartered Accountants (Firm Registration No. 117365W) as Statutory Auditors of the
Company, in terms of the RBI guidelines, to hold office for a continuous period of three
years until the conclusion of 33rd Annual General Meeting of the Company to be
held in the FY 2027-28, for carrying out the audit of the financial statements of the
Company. The said appointment was also approved by the shareholders in its meeting held on
7th August, 2024.
M/s. Deloitte Haskins and Sells, Chartered Accountants have given their
confirmation to the effect that they are eligible and have not been disqualified in any
manner from continuing as Statutory Auditors of the Company.
Further, the Auditors' Report "with an unmodified
opinion", given by the Statutory Auditors on the Financial Statements of the Company
for FY 2024-25, is disclosed in the Financial Statements of the Company. There has been no
qualification, reservation, adverse remark or disclaimer given by the Statutory Auditors
in their Report for the year under review.
No instance of fraud in terms of the provisions of section 143(12) of
the Act have been reported by the Statutory Auditors in their report for the FY 2024-25.
The Reserve Bank of India, through its circular dated 27th
April, 2021, issued Guidelines for Appointment of Statutory Auditors (the
Guidelines'/'circular'), mandating NBFCs (including HFCs) with an
asset size of Rs 15,000 crore and above to appoint minimum two audit firms as joint
auditors for a continuous period of three years. Further, the Guidelines also specifies
that an auditor who has completed a period of three years (counted as one tenure) as on
the date of the circular shall not be eligible for re-appointment in the same entity for
six years (two tenures) after completion of one tenure of three years.
In line with the RBI requirements, the Board of Directors, based on the
recommendation of the Audit Committee, at their meeting held on 28th May, 2025,
have approved and recommended the appointment M/s A. BAFNA & CO, Chartered Accountants
(Firm Regn. No. - 003660C), as Joint Statutory Auditors for a period of three years from
the ensuing 31st Annual General Meeting till the conclusion of the 34th
Annual General Meeting to be held in the calendar year 2028 to the shareholders of the
company. The Profile and other details of the proposed Joint statutory Auditors forms part
of the Annual General Meeting notice.
M/s A. BAFNA & CO, Chartered Accountants have furnished a
certificate of their eligibility as per Section 141 of the Act and have provided their
consent for appointment as Statutory Auditors of the Company.
Secretarial Auditor
Pursuant to the provisions of section 204 of the Act read with the
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and
Regulation 24A of SEBI (LODR), the board of directors had appointed M/s V.M. &
Associates, Company Secretaries (Firm Registration No P1984RJ039200) to conduct
secretarial audit of the company for the financial year ended 2024-25 in their meeting
held on 28th May, 2024. The Secretarial Audit Report in Form MR-3 is annexed to
this report as Annexure-3. Your Directors are pleased to inform that there were no
qualifications, reservation or adverse remark or disclaimer in the audit report for the
financial year 2024-25.
Pursuant to Regulation 24A(2) of SEBI LODR, a report on secretarial
compliance for Financial Year ended 31st March, 2025 has been issued by M/s
V.M. & Associates, Company Secretaries (Firm Registration No P1984RJ039200). The said
report is also available on the website of the Company at https://www.skfin.in/investor/
stock-exchanae.
Further, the Board of Director has approved the re-appointment of M/s
V. M. & Associates, Company Secretaries as Secretarial Auditors of the Company to
carry out secretarial audit of the Company for the financial year 2025-26 in their Board
meeting held on 28th May, 2025.
REPORTING OF FRAUDS BY AUDITORS
During the period under review, the auditors of the Company did not
report, under section 143(12) of the Act, any instances of fraud committed against the
Company by its officers or employees, the details of which would need to be mentioned in
the Board's Report.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
Pursuant to Section 186(1 l)(a) of the Act read with Rule 11(2) of the
Companies (Meetings of Board and its Powers) Rules, 2014, the loan made, guarantee given
or security provided in the ordinary course of business by a NBFC registered with RBI are
exempt from the applicability of the provisions of Section 186 of the Act. As such, the
particulars of loans and guarantees have not been disclosed in this Report
As regards to investments made by the Company, the details have been
provided in notes to the financial statements of the Company for the year ended 31st
March, 2025 (Refer Note No. 9).
RELATED PARTY TRANSACTIONS
Pursuant to the provisions of the Act, Regulation 23 of SEBI LODR and
as required under the RBI Master Directions, the Board based on the recommendation of its
Audit Committee, adopted a Policy on Materiality on Related Party Transactions and on
Dealing with Related Party Transactions and the said policy is available on the website of
the Company at https:// www.skfin.in/investor/policies-codes.
All the related party transactions that were entered during the
financial year were in the ordinary course of business and on an arm's length basis.
There were no materially significant transactions made by the company with the related
parties either individually or taken together with the previous transactions which may
have a potential conflict with the interest of the companyat large. All the related party
transactions are placed before the Audit Committee and subsequently before the Board of
Directors for approval and review on quarterly basis. Transactions with related parties,
as per the requirements of Ind-AS, are disclosed in the Notes to Accounts annexed to the
financial statements (Refer Note No. 38)
Pursuant to the provisions of Section 134(3)(h) read with Rule 8(2) of
the Companies (Accounts) Rules, 2014, there are no transactions were entered by the
Company during the year which required to be reported. Accordingly, the disclosure of
Related Party Transactions in Form AOC-2 is not applicable on the company.
VIGIL MECHANISM/WHISTLE BLOWER POLICY
Pursuant to Section 177(9) and 177(10) of the Act and Regulation
4(2)(d)(iv) and Regulation 22 of the SEBI LODR, the Company has in place a whistle blower
policy/vigil mechanism to provide a formal mechanism to the Directors and employees to
report their concerns about unethical behaviour, actual or suspected fraud or violation of
the Company's Code of Conduct. A whistle blowing or reporting mechanism, as set out
in the Policy, invites all Directors and employees to act responsibly to uphold the
reputation of the Company. The Policy aims to ensure that serious concerns are properly
raised and addressed and are recognized as an enabling factor in administering good
governance practices.
ThisVigil Mechanism oftheCompanyisoverseen bythe Audit Committee and
provides adequate safeguard against victimization of employees and also provides direct
access to the Chairman of the Audit Committee in exceptional circumstances. The whistle
blower complaints are reviewed by the Audit Committee on a yearly basis. The Vigil
Mechanism/Whistle Blower policy is available on the website of the Company at
https://www.skfin.in/investor/policies-codes.
During the year, Six (6) whistle blower event was reported and which
was resolved by taking necessary action. Thus, the mechanism is functioning well. None of
the personnel have been denied access to the Chairperson of Audit Committee.
ANTI-BRIBERY AND ANTI-CORRUPTION POLICY
The Company has a Board approved Anti-Bribery and Anti-Corruption
Policy ("Policy") which serves as a guide for all employees, directors and
associated persons for ensuring compliance with applicable anti-bribery and
anti-corruption laws, rules and regulations.
The Company follows a zero-tolerance approach' towards
bribery and corruption and is committed to act professionally, fairly and with integrity
in all its business dealings and relationships. The Company a Iso conducts training for
employees to make them aware of the corrupt practices and mandatorily compliance of Code
of Conduct of the Company. The said policy is disclosed on the website of the Company at
https:// www.skfin.in/policies.
Brief details of Anti-Bribery complaints during the year is mentioned
as follows:
S.No. |
Particulars |
Status |
1 |
Number of complaints received during the year |
29 |
2 |
Number of complaints disposed-off during the
year |
29 |
3 |
Number of cases pending for more than 90 days |
Nil |
4 |
Number of workshops or awareness programme
carried out |
225 |
5 |
Nature of action taken by the Company |
Separation of services, Suspension without
pay, Advisory & Warning |
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND
FOREIGN EXCHANGE EARNINGS AND OUTGO
A. Conservation of Energy:
i. The steps taken or impact on conservation of energy:
The operations of the Company, being a financial service do not require
intensive consumption of electricity. However, the Company is taking all possible measures
to conserve energy. Several environment friendly measures were adopted by the Company as
prescribed below.
ii. The steps taken by the Company for utilizing alternate sources of
energy:
The Company has installed energy efficient LEDs lighting
fixtures in all newly opened branches during the Financial Year.
Discontinued the use of paper towels at the registered office,
conserving approx. 12 lakh paper sheets annually and reducing carbon emission by around 32
tC02e.
Generated and consumed 76,505 KWh of Solar power during the
financial year, avoiding approx. 54.78 tC02e of emissions.
Implemented administrative controls to ensure all unused lights
and appliances are switched off at work hours.
Rolled out energy audits at the registered officeand all
branches, promoting awareness, establishing efficient systems and reduction in energy
consumption and wastage.
Formed an ESC Council to lead sustainability efforts, with
dedicated housekeeping staff trained to optimize energy usage.
Replaced plastic bottles at the registered office with steel
alternatives to reduce plastic waste and enhance employee health.
The Company has updated its Environmental and Social (E&S)
policy to include:
Workplace health and safety, recycling and climate change.
Stakeholder engagement and additional clauses referring to
Supplier Code of Conduct (COC), sustainable sourcing and supply chains, Indigenous
community impact, Land acquisition & involuntary resettlement.
Updated the HR policy with clauses on workplace protection,
security, social justice & employee well-being.
Creating environmental awareness by way of distributing the
information in electronic /digital form;
Reduction in water and energy consumption and recycling of waste
paper generation at various locations; and
Education and awareness programs for employees.
iii. The Capital investment on energy conservation equipment:
As per the business activities carried out by your Company, this year
the Company has installed Motion sensors for saving the energy at large at its registered
office as capital investment on energy conservation equipment.
B. Technology Absorption:
i. The efforts made towards technology absorption:
The Company has improved operational process and patron overall
journey, and has launched cognitive chatbot platform for self-service with the regional
level support to manage customer accounts 24X7 which results in reducing customer queries.
Along with effective communication with customers, the Company's integrated WhatsApp
chatboat provides instant updates on their queries resulting in reducing the waiting time
of the agents.
ii. The benefit derived like product improvement, cost reduction,
product development or import substitution:
The Company uses the enhanced information technology in business
operations which results in quicker loan turnaround time, reduction in transaction costs
and digitized the collection processes.
iii. In Case of imported technology (imported during the last three
years reckoned from the beginning of the financial year):
a) The details of technology
imported: Not Applicable
b) The year of import: Not Applicable
c) Whether the technology has been fully absorbed: Not Applicable
d) If not fully absorbed, areas where absorption has not taken place,
and the reason thereof: Not Applicable
iv. The expenditure incurred on Research and Development: Not
Applicable
C. Foreign exchange earnings and Outgo:
The details of foreign exchange earnings and foreign exchange
expenditures are as below:
(Amount in Lakh)
s. No. |
Particulars |
FY 2024-25 |
FY 2023-24 |
1 |
Foreign exchange earnings |
NIL |
NIL |
2 |
Foreign exchange expenditures |
6,557.24 |
4,477.21 |
RISK MANAGEMENT
Pursuanttothe provisions of the RBI Master Directions, SEBI LODR and
the Act, your Company has adopted a Risk Management policy which ensure sustainable
business growth with stability and minimize unfavorable impact on the business objectives,
develop stakeholder value, undertake businesses that are well understood and within
acceptable risk appetite and develop a strong risk culture across the Company. Further,
this Policy seeks to sustain and enhance long-term competitive advantage for the Company
and enable the Company to proactively manage uncertainty and changes in the internal and
external environment to limit negative impacts and capitalize on opportunities. The Risk
Management policy is available on the website of the Company at
https://www.skfin.in/invest.or/policies-codes.
Your Company is exposed to various risks that are an inherent part of
any financial service business which inter alia include the following:
a) Credit Risk: Credit risk framework is defined by credit policies
and product policies that set out the principles and control requirements under which
credit is extended to customers in various business verticals. The policies and standards
cover all stages of the credit cycle, including origination, credit approval,
documentation, administration, monitoring and recovery. The Company has laid down limits
and caps on various aspects to control the magnitude of credit risk. Regular and timely
risk reporting with adequate control mechanism is prevalent across the organisation. Loan
administration and monitoring is carried out through portfolio profiling, early warning
framework and other credit risk activities around asset quality trends and concentration.
The credit culture of the Company mandates that lending is based on credit analysis, with
full understanding of the purpose of the loan and is commensurate to customer's
financials and ability to repay from business operations.
b) Market & Liquidity Risk: Market risks framework reviews and
monitor the risks arising from movement in interest rates and exchange rates. It ensures
adherence to the RBI guidelines and Policy framework on Liquidity Risk Management Policy
as well monitors and ensures adherence to the tolerance limit as approved by the Board. It
a Iso develops a contingency funding plan in case of exigencies. It establish the
principles for Market & Liquidity Risk Stress Testing in the system.
c) Operational Risk: Operational Risk has been defined by the RBI
as the risk of loss due to inadequate or failed internal processes, people, system or
external events, including legal risk but excluding strategic and reputational risks and
it is inherent in all banking/ financial products, activities, processes and systems. This
is managed through a Board-approved Operational Risk Management Policy, structured around
the Three Lines of Defence: business unit (first line), an independent Operational Risk
Management Department (ORMD) (second line), and Internal Audit (third line). These units
collaborate to manage, monitor, and mitigate operational risks effectively. The ORMD
implements the framework, overseen by the Operational Risk Management Department, which
reports to the Risk Management Committee of Executive (RMCE). Outsourcing Risks, being
vital part of operational risk, are managed under an Outsourcing Risk Policy, ensuring
due-diligence, oversight and compliance with RBI guidelines. The Company has a
comprehensive Business Continuity Management (BCM) plan in place with policies, and
procedures meticulously designed to align with regulatory guidelines. The ORMD is tasked
with coordinating with various Units to identify the critical business functions and
processes across the Company, for which effective Business Continuity Plan
("BCP") needs to be planned for.
d) Foreign Exchange Risk: defined as the risk that a Company may
suffer losses as a result of adverse exchange rate movements during a period in which it
has an open position, either spot or forward, or a combination of the two, in an
individual foreign currency. Companies are also exposed to interest rate risk, which
arises from the maturity mismatch of foreign currency positions. Even in cases where spot
and forward positions in individuals currencies are balanced, the maturity pattern of
forward transactions may produce mismatches. As a result, Companies may suffer losses as a
result of changes in permia/ discounts of the currencies concerned.
e) Compliance Risk:
Compliance risk has been defined asthe risk of legal or regulatory
sanctions, material financial loss, failure to protect customer information or loss to
reputation a Company may suffer as a result of its failure to comply with laws,
regulations, rules, policies related self-regulatory organization standards, and codes of
conduct as applicable
f) Information Technology and Information/ Cyber Security Risk: I
nformation Tech nology a nd Information/Cyber Security Risk defines as the business risk
associated with the use, ownership, operation, involvement, influence and adoption of IT
within an enterprise. Your Company is committed towards creating an environment of
increased risk awareness at all levels. It aims to constantly upgrade the security
measures to ensure avoidance and mitigation of various risks. Your Company has policies
and procedures in place to measure, assess, monitor, and manage these risks systematically
across all its portfolios and also implemented required security technology to mitigate
identified risks.
The Board has formed a Risk Management Committee to identify the risks
impacting the business, formulate strategies/ policies aimed at risk mitigation as part of
risk management. The Risk Management Committee (RMC), functions in line with the RBI
Master Directions and SEBI LODR. The Board of Directors has also constituted Risk
Management Committee of Executives and Asset Liability Management Committee ("ALCO
Committee") to provide the support functions to the Risk Management Committee of
Board in the day to day affairs of the company.
The details of the Risk Management Framework and issues related thereto
have been explained in the "Management Discussion and Analysis Report" forming
part of this Annual Report.
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
The Company's Corporate Social Responsibility (CSR')
initiatives are aligned with the mission of transforming rural lives and hence focus on
areas such as health and wellness, sanitation and hygiene, education including education
through Cinema on Wheels and vocational skill development, women empowerment, animal
welfare, promoting sports for underprivileged children, environmental conservation,
Fitness Programs, Autism Care Centre & Supporting Hospitals, Traffic Road Safety
programs and Art and Culture.
During the year, the Company has, in consonance with the CSR policy of
the Company, undertaken a number of initiatives that contribute to the society at large.
The company has in place, a duly constituted CSR Committee for fulfilling the corporate
social responsibility objectives of the Company. The details on CSR Activities undertaken
by the Company for the Financial Year 2024-25, as prescribed under Companies (Corporate
Social Responsibility Policy) Rules, 2014, is provided in the "Annual Report on CSR
Activities" annexed as Annexure - 4
The Company's CSR Projects are compliant with the CSR mandate as
specified under Section 135 read with Schedule VII of the Act along with the Companies
(Corporate Social Responsibility Policy) Rules, 2014 ("CSR Rules"), as amended
from time to time and in line with notifications issued by the Ministry of Corporate
Affairs ("MCA"), from time to time.
The Corporate Social Responsibility Policy has been hosted on the
website of the Company at https:// www.skfin.in/investor/policies-codes.
REGULATORY & STATUTORY COMPLIANCE
The company has strong control to ensure adherence with all the
applicable laws and regulations.
SECRETARIAL STANDARDS
Secretarial Standards are formal guidelines that establish standard
procedure and structure for undertaking specific tasks and actions within an organization.
These standards are in addition to the provisions of the Companies Act, 2013 and not in
substitution to the original legal requirements. Pursuant to section 118(10) of the
Companies Act, 2013, every Company shall observe Secretarial Standards with respect to
general and board meetings specified.
The company has implemented proper systems to ensure compliance with
the all applicable Secretarial Standards issued by the Institute of Company Secretaries of
India (ICSI) and have complied with the same.
INTERNAL CONTROL SYSTEM AND INTERNAL AUDIT
The Company has designed a robust and comprehensive internal control
system across all major processes to ensure efficient operations, compliance with laws and
reliability of financial reporting. Internal Audit is conducted by an in-house Head of
Internal Audit. The internal audit is undertaken based on a robust internal audit charter
and a risk-based internal audit policy, outlining the audit purpose, role, structure,
authority and responsibilities of the Internal Audit Department. The Risk Based Internal
Audit framework supports the system, which evaluates the effectiveness of internal
controls, risk management and governance processes to provide independent assurance to the
Board of Directors and Audit Committee of the Board. The Risk Based Internal Audit
framework
is appropriate for the business's size, scale and complexity and
the risk based internal audit plan is developed based on the risk profile of its
activities. The Audit Committee of the Board approves the risk based internal audit plan
annually and regularly reviews the Head of Internal Audit observations, performance
status, providing guidance as needed.
ANNUAL RETURN
Pursuant to the provisions of Section 134(3)(a) and Section 92(3) of
the Act, read with Rule 11 and 12 of the Companies (Management and Administration) Rules,
2014, the Annual Return of the Company is available on the website of the Company at
https:// www.s kf i n. i n /i n vesto r/i n vesto r-se rvi ces
COST RECORDS
The Central Government has not prescribed the maintenance of cost
records under sub section (1) of section 148 of the Act for any of the services rendered
by the Company. Accordingly, the maintenance of cost records is not applicable on the
company.
CORPORATE GOVERNANCE
The company recognizes its role as a corporate citizen and endeavors to
adopt the best practices and the highest standards of Corporate Governance through
emphasizing on transparency and disclosures in and around the company. The Company is
committed in carrying out its activities on ethical stances and providing accountability
to its customers, government and others. The company believes in balancing the interests
of its stakeholders such as shareholders, management, customers, suppliers, government,
etc. The report on corporate governance forms integral part of this Annual Report.
The Company is a High Value Debt Listed Entity ("HVDLE")
pursuant to the provisions of the SEBI LODR. Accordingly, Regulation 16 to Regulation 27
of the SEBI LODR in respect of Corporate Governance is applicable to the Company with
effect from 07th September, 2021 on a "comply or explain basis" until
31st March, 2025 and on a mandatory basis thereafter. In accordance with the
same the company has complied with all the provision of Regulation 16 to Regulation 27 of
SEBI LODR and RBI Master Direction during the year.
A "Report on Corporate Governance" together with a
certificate from the practicing company secretaries M/s V. M. & Associates, Company
Secretaries regarding compliance of conditions of corporate governance as per the relevant
provisions of the SEBI LODR is attached and forms part of this Annual Report. The report
contains the details as required to be provided on the composition and category of
directors, number
of meetings of the board, composition of the various committees, annual
board evaluation, remuneration policy, criteria for board nomination and senior management
appointment, whistle blower policy/ vigil mechanism, disclosure of relationships between
directors inter-se, general body meetings and other disclosures etc.
COMPLIANCE CERTIFICATE
As required in terms of Regulation 17(8) of the SEBI LODR, the Chief
Financial Officer and the Managing Director & CEO of the Company have submitted a
compliance certificate to the board as specified in Part B of Schedule II of the SEBI LODR
regarding the Financial Statements and Internal Controls relating to financial reporting
for the year ended on 31st March, 2025. The said Certificate is attached as
Annexure-2 and forms part of this Report.
DISCLOSURES PURSUANT TO THE SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE
(PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The company has always believed in safety of Women in and around the
organization, to achieve the same the company has in place a policy for Prevention of
Sexual Harassment describing the procedure for the Redressal of complaints pertaining to
sexual harassment in line with the requirements of the Sexual Harassment of Women at the
Workplace (Prevention, Prohibition & Redressal) Act, 2013 ("POSH Act") and
rules made thereunder.
During the year, the company has conducted various workshops and
sessions in relation to the awareness of the POSH Act amongst the employees.
An Internal Complaints Committee (ICC) has been set up in accordance
with the POSH Act to redress complaints in relation to sexual harassment and all employees
of the company are covered under this policy. During the FY2024-25, the Company had
received 4 (Four) complaints on sexual harassment under the Sexual Harassment of Women at
the Workplace (Prevention, Prohibition and Redressal) Act, 2013, which were duly
investigated and resolved.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR
COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND THE COMPANY'S OPERATIONS
IN FUTURE There were no significant and material orders passed by the Regulators or
Courts or Tribunals that would impact the going concern status of the
Company and its future operations during the FY 2024-25.
INSOLVENCY AND BANKRUPTCY CODE, 2016
No application or any proceeding has been filed against the Company
under the Insolvency and Bankruptcy Code, 2016 (IBC Code') during the
FY2024-25.
SUBSIDIARIES, JOINT VENTURES, ASSOCIATE COMPANIES
During the year under review and as on the date of this Report, your
Company had no subsidiary, joint venture or associate company. Also, the Company did not
become a part of anyjoint venture during theyear.
OTHER DISCLOSURES
Other disclosures with respect to Board's Report as required under
the Act read with the Rules notified thereunder and the SEBI LODR are either NIL or Not
Applicable.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Act, the Board of Directors, to the
best of their knowledge and belief, confirm that:
i. in the preparation of the annual accounts, the applicable accounting
standards had been followed along with proper explanation relating to material departures;
ii. the Directors had selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable and prudent so as
to give a true and fair view of the state of affairs of the company as at 31st
March, 2025 and of the profit of the company for that period;
iii. the Directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the provisions of this Act
for safeguarding the assets of the company and for preventing and detecting fraud and
other irregularities;
iv. the Directors had prepared the annual accounts on a going concern
basis;
v. the Directors had laid down internal financial controls to be
followed by the company and that such internal financial controls are adequate and were
operating effectively; and
FI
vi. the Directors had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were adequate and operating
effectively.
ACKNOWLEDGEMENT
Your Directors place on record their sincere appreciation for the
assistance and guidance provided by the Reserve Bank of India, the Ministry of Corporate
Affairs, the Securities and Exchange Board of India, government and other regulatory
Authorities.
Your Directors also gratefully acknowledge all stakeholders of the
Company viz. customers, members, dealers, vendors, banks, financial institutions, trustees
for debenture holders and other business partners for the excellent support received from
them during the year.
Finally, our employees, who are instrumental in helping the Company
scale new heights, year after year, their commitment and contribution is deeply
acknowledged. Your Directors look forward to your continuing support.
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For and on behalf of the Board of
Directors For SK Finance Limited |
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Rajendra Kumar Setia Managing Director
and Chief Executive Officer DIN: 00957374 |
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Yash Setia Whole Time Director DIN:
09831391 |
Place: Jaipur Date: May 28, 2025 Regd.
Address: C 1-2, New Market, Khasa Kothi, Jaipur - 302001 (Rajasthan) Website: www.skfin.in
Email: inforaskfin.in |
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