To the Members of Edelweiss Financial Services Limited,
Your Directors hereby present the 28th Board's Report on the business,
operations and state of affairs of the Company together with the audited financial
statements for the financial year ended March 31,2023:-
FINANCIAL PERFORMANCE
I. Consolidated Financial Performance:
Particulars |
2022-23 |
2021-22 |
Total Income |
86,325.91 |
72,125.91 |
Total Expenses |
83,796.60 |
70,818.65 |
Profit before share in profit of associates and tax |
2,529.31 |
1,307.26 |
Share in profit of associates |
1,317.94 |
966.54 |
Profit before tax |
3,847.25 |
2,273.80 |
Tax expense |
(208.32) |
153.06 |
Net Profit for the year |
4,055.57 |
2,120.74 |
Other Comprehensive Income/(Loss) |
185.77 |
(1,194.37) |
Total Comprehensive Income |
4,241.34 |
926.37 |
Profit for the year attributable to the |
|
|
Owners of the parent |
3,441.63 |
1,887.84 |
Non-controlling interests |
613.94 |
232.90 |
Other Comprehensive Income/(Loss) for the year attributable to the |
|
|
Owners of the parent |
197.73 |
(732.84) |
Non-controlling interests |
(11.96) |
(461.53) |
Total Comprehensive Income/(Loss) for the year attributable to the |
|
|
Owners of the parent |
3,639.36 |
1,155.00 |
Non-controlling interests |
601.98 |
(228.63) |
Earnings Per Share ( ) (Face Value of (`) 1 each) |
|
|
Basic |
3.83 |
2.11 |
Diluted |
3.83 |
2.11 |
II. Standalone Financial Performance:
Particulars |
2022-23 |
2021-22 |
Total Income |
30,886.92 |
13,724.74 |
Total Expenses |
7,740.36 |
5,177.30 |
Profit before tax |
23,146.56 |
8,547.44 |
Tax expense |
(735.91) |
(786.14) |
Profit for the year |
23,882.47 |
9,333.58 |
Other Comprehensive Income/(Loss) |
0.33 |
(0.10) |
Total Comprehensive Income/(Loss) |
23,882.80 |
9,333.48 |
Earnings Per Share ( ) (Face Value of ( ) 1 each) |
|
|
Basic |
26.59 |
10.44 |
Diluted |
26.59 |
10.43 |
SHARE CAPITAL
During the year under review, 1,77,311 Equity Shares of the face value of ` 1 each were
allotted on exercise of the Stock Options granted under Edelweiss Employee Stock Incentive
Plan 2011 and Edelweiss Employee Stock Appreciation Rights Plan, 2019. Consequently, as at
March 31, 2023, the total paid-up share capital of the Company stood at ` 943.27 million
divided into 94,32,75,276 Equity Shares of the face value of ` 1 each. Except Employee
Stock Options and Stock Appreciations Rights (SAR), the Company has not issued any sweat
equity to the employees of the Company. The disclosures with regard to the Employee Stock
Options and SAR as required under the Securities and Exchange Board of India (SEBI) (Share
Based Employee Benefits and Sweat Equity) Regulations, 2021 is available on the website of
the Company at the link: www.edelweissfin.com .
DIVIDEND
During the year under review, the Board declared an interim dividend of ` 0.25 per
Equity Share of the face value of ` 1 each. The interim dividend was paid to the Members
of the Company during the month of April 2023. The Board at its meeting held on May 26,
2023, recommended afinaldividend of ` 1.25 per Equity Share of the face value of ` 1 each,
subject to the approval of Members at the forthcoming Annual General Meeting (AGM).
Pursuant to Regulation 43A of the SEBI (Listing Obligations & Disclosure Requirements)
Regulations, 2015 (the Listing Regulations), the Dividend Distribution Policy is provided
as Annexure I to this Report and is available on the website of the Company at the link:
www.edelweissfin.com .
INFORMATION ON THE STATE OF AFFAIRS OF THE COMPANY
Information on the operational and financial performance of the Company is given in the
Management Discussion and Analysis Report, forming part of this Report, and is in
accordance with the Listing Regulations.
FINANCIAL STATEMENTS
The financial statements (both standalone and consolidated) are prepared in accordance
with the Companies Act, 2013 and the Rules framed thereunder (the Act) and the applicable
Accounting Standards and forms part of this Report.
The Auditors' Report issued by M/s. S. R. Batliboi & Co. LLP, Chartered
Accountants, the Auditors of the Company on the financial statements for the year ended
March 31, 2023 is unmodified and is annexed to the financial statements.
SUBSIDIARIES AND ASSOCIATES
During the year ended March 31, 2023, EW Special Opportunities Advisors LLC was
dissolved and ceased to be the subsidiary of the Company. With effect from March 30, 2023,
Nuvama Wealth Management The salient features of the financial statements of each of the
subsidiaries as required under the Act is provided in the financial statements in Form
AOC-1. The financial statements of the subsidiaries are available on the website of the
Company at the link: www.edelweissfin.com . Any Member interested in obtaining a copy of
financial statements of the subsidiaries may write to the Company Secretary at the
Registered Office of the Company.
SCHEME OF ARRANGEMENT
The Board at its meeting held on May 13, 2022 approved the Scheme of Arrangement
between the Company and Nuvama Wealth Management Limited (formerly known as Edelweiss
Securities Limited) {Nuvama/Resulting Company} and their respective shareholders and
creditors (the Scheme) under Sections 230 to 232 read with Section 102 and other
applicable provisions of the Act. The Scheme provides for demerger, transfer and vesting
of the Demerged Undertaking (as defined Scheme) from the Company into the Resulting
Company on a going concern basis. Pursuant to an Order dated January 12, 2023, passed by
the Hon'ble National Company Law Tribunal, Mumbai Bench (NCLT), a meeting of the equity
shareholders of the Company was held on February 24, 2023 wherein the equity Shareholders
approved the Scheme. The NCLT vide its Order dated April 27, 2023 approved the Scheme. The
Scheme became effective from May 18, 2023. As per the provisions of the Scheme, the
Effective Date is also the Appointed Date.
As per the provisions of the Scheme, Nuvama has allotted the equity shares to those
equity shareholders of the Company whose names were appearing in the Register of
Members/Beneficial Owners of the Company on June 2, 2023, being the Record Date fixed in
this behalf. Nuvama has made an application for listing of its equity shares and is
awaiting the approval.
FINANCE
During the year under review, the Company issued Non-convertible Debentures (NCDs)
through public issuance which are listed on BSE Limited.
LOANS, INVESTMENTS AND GUARANTEES
Particulars of loans given, investments made, guarantees given and securities provided
are reported in the financial statements, forming part of this Annual Report.
RELATED PARTY TRANSACTIONS
All the Related Party Transactions entered by the Company are on arm's length and in
the ordinary course of business. The Company has not entered into transactions with the
Promoters, Directors and Key Managerial Personnel, which may have potential conflict of
interest with the Company and its subsidiaries. In accordance with the provisions of the
Listing Regulations, the Company has formulated the Related Party Transactions Policy,
which is available on the website of the Company at www.edelweissfin.com. Particulars of
contracts or arrangements with the related parties as prescribed in Section 188 of the Act
is provided in the financial statements in Form AOC-2. All the Related Party Transactions
as required under the applicable Accounting Standards are reported in the financial
statements.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
(i) Independent Directors
In accordance with the provisions of Section 149 of the Act and the Listing
Regulations, the Independent Directors have given a declaration that they meet the
criteria of independence as provided in the said Section and in the Listing
Regulations. In the opinion of the Board, the Independent Directors are persons of
integrity and possess relevant expertise, experience and proficiency. Pursuant to the
recommendations of the Nomination and Remuneration Committee, the Board has, subject to
the approval of the Members, appointed Mr. Shiva Kumar (DIN: 06590343) as an Independent
Director of the Company for a term of 5 years with effect from August 4, 2022. The Members
at the 27 th Annual General Meeting held on September 2, 2022, approved the appointment of
Mr. Kumar. The second term of appointment of Mr. P. N. Venkatachalam (DIN: 00499442), Mr.
Navtej S. Nandra (DIN: 02282617) and Mr. Kunnasagaran Chinniah (DIN: 01590108), the
Independent Directors, ended at the conclusion of the 27th Annual General Meeting of the
Company held on September 2, 2022.
The Board placed on record its sincere appreciation of the services rendered by Mr. P.
N. Venkatachalam, Mr. Navtej S. Nandra and Mr. Kunnasagaran Chinniah during their tenure
as Independent Directors of the Company.
(ii) Executive Directors
Mr. Rujan Panjwani, who was subject to retirement by rotation at the 27th Annual
General Meeting, did not sought re-appointment. Accordingly, Mr. Panjwani ceased to
be a Director at the conclusion of the 27th Annual General Meeting held on September 2,
2022.
Mr. Himanshu Kaji, retires by rotation at the ensuing Annual General Meeting, though
eligible, has not offeredhimself for re-appointment. It is proposed not to fill in the
vacancy to be caused by the retirement of Mr. Kaji. The Board placed on record its sincere
appreciation of the services rendered by Mr. Rujan Panjwani and Mr. Himanshu Kaji during
their tenure as Executive Directors of the Company.
NUMBER OF BOARD MEETINGS HELD
During the year ended March 31, 2023, the Board met 6 times. The details of the Board
meetings and the attendance of the Directors at the meetings are provided in the Corporate
Governance Report, which forms part of this Report.
REMUNERATION POLICY
The Company has formulated a Remuneration Policy pursuant to Section 178 of the Act and
the Listing Regulations. The Policy is provided as Annexure II to this Report.
EVALUATION OF THE PERFORMANCE OF THE BOARD
A Board Evaluation Policy (the Policy) for evaluating the performance of the Board, its
Committees, the Chairman, the Managing Director, the Executive Directors, the
Non-executive Directors and the Independent Directors has been adopted by the Company. The
Policy inter alia provides the criteria for performance evaluation such as Board
effectiveness, quality of discussion, contribution at the meetings, business acumen,
strategic thinking, time commitment, relationship with the stakeholders, corporate
governance practices, review of the terms of reference of the Committees and the
contribution of the Committees to the Board in discharging its functions, etc. A separate
meeting of the Independent Directors was held wherein the performance of the
Non-Independent Directors, performance of the Board as a whole (including the Committees)
and also that of the Chairman in terms of the provisions of the Act, the Listing
Regulations and the Guidance Note issued by the Securities and Exchange Board of India in
this regard was discussed.
INTERNAL FINANCIAL CONTROLS AND RISK MANAGEMENT
The Company has in place adequate internal financial controls with reference to
financial statements. The Company's internal control system is designed to ensure
operational efficiency, protection and in financial reporting and compliance with the laws
and regulations. The internal control system is also supported by an internal audit
process. M/s. JHS & Associates LLP, Chartered Accountants, were appointed as Internal
Auditors of your Company for the financial year ended March 31, 2023. Risk management is
an integral part of the Company's business strategy that seeks to minimise adverse impact
on business objectives and capitalise on opportunities. The Risk Committee oversees the
risk management framework of the Company through regular and proactive intervention by
identifying risks and formulating mitigation plans. Further details are provided in the
Management Discussion and Analysis Section forming part of this Report.
The Audit Committee comprises of the Independent Directors of the Company:
Mr. Shiva Kumar (Chairman) Mr. Biswamohan Mahapatra Mr. Ashok Kini Dr. Ashima Goyal.
Further details of the Audit Committee are provided in the Corporate Governance Report
which forms part of this Report.
WHISTLE BLOWER POLICY/ VIGIL MECHANISM
The Company has adopted a Whistle Blower Policy to report genuine concerns/grievances.
The Policy is available on the website of the Company at the link: www.edelweissfin.com.
The Policy provides for adequate safeguards against the victimisation of the persons who
use the vigil mechanism. The vigil mechanism is overseen by the Audit Committee.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
The Board has constituted the Corporate Social Responsibility (CSR) Committee in
accordance with the provisions of the Act. The CSR Committee comprises of:
Mr. Venkatchalam Ramaswamy (Chairman) |
Executive Directors |
Mr. Himanshu Kaji |
|
Mr. Shiva Kumar |
Independent Director |
Ms. Vidya Shah |
Non-executive Director. |
The Company has made contributions under CSR mainly through its philanthropic arm
EdelGive Foundation, a wholly owned subsidiary. The CSR Projects of the Company largely
focuses on the broad areas such as sustainable livelihood, quality education, women
empowerment, climate action, reducing inequality, promotion of sports, etc.
CSR REPORT
The CSR Report on the activities undertaken during the year is provided as Annexure III
to this Report. The CSR Policy is available on the website of the Company at the link:
www.edelweissfin.com.
In accordance with the provisions of Section 139 of the Companies Act, 2013 and the
Rules framed thereunder (the Act), M/s. S. R. Batliboi & Co. LLP, Chartered
Accountants (Firm Registration No. 301003E/ E300005), were appointed as the Auditors of
the Company at the 23rd Annual General Meeting (AGM) held on July 26, 2018. The term of
office of M/s. S. R. Batliboi & Co. LLP, as Statutory Auditors of the Company will
conclude from the close of the ensuing AGM of the Company.
The Board of Directors of the Company, based on the recommendations of the Audit
Committee, at its meeting held on August 4, 2023, had subject to the approval of the
Members, approved the appointment of M/s. Nangia & Co. LLP, Chartered Accountants,
(Firm Registration No. 002391C/N500069), as the Statutory Auditors of the Company to hold
office for the first term of five years from the conclusion of the ensuring AGM till the
conclusion of the 33 rd AGM to be held in the year 2028. M/s. Nangia & Co. LLP,
Chartered Accountants, have confirmed their eligibility and qualification required under
the Act and the Listing Regulations for holding the office as Auditors of the Company.
SECRETARIAL AUDIT REPORT
M/s. BNP & Associates, Company Secretaries, were appointed as the Secretarial
Auditors to conduct the Secretarial Audit for the financial year ended March 31, 2023. The
Report of the Secretarial Auditors is provided as Annexure IV to this Report. The
Secretarial Audit Report does not contain any qualification, reservation, adverse remarks
or disclaimer. As required under the Listing Regulations, the Secretarial Audit Report of
Edelweiss Tokio Life Insurance Company Limited, the Material Unlisted Subsidiary of the
Company, for the financial year ended March 31, 2023, forms part of this Report. The
Secretarial Audit Report does not contain any qualification, reservation, adverse remarks
or disclaimer.
PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
The Company has a Policy on Prevention of Sexual Harassment of Women at Workplace. No
cases were reported during the year under review. There were no complaints pending as on
March 31, 2023. The Company has complied with the provisions relating to the constitution
of Internal Complaints Committee under the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS/ OUTGO
A. Conservation of energy i) The steps taken or impact on conservation of energy
The operations of the Company are not energy intensive. However, adequate measures have
been taken for conservation of energy wherever possible. ii) The steps taken by the
Company for utilising alternate sources of energy Though the operations of the Company are
not energy intensive, the Company explores alternative sources of energy, as and when the
necessity arises. iii) The capital investment on energy conservation equipments Nil
B. Technology absorption i) The efforts made towards technology absorption The
Company extensively uses the information technology in its operations and has absorbed the
technology required in this regard. ii) The benefits derivedlike product improvement, cost
reduction, product development or import substitution The Company has leveraged the
technology to reach out to its customer in the difficult times of pandemic 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 reasons
thereof: Not Applicable iv) The expenditure incurred on Research and Development Not
Applicable.
C. Foreign exchange earnings and outgo
During the year under review, the Company earned foreign exchange of ` 33.16 million
(previous year: ` 56.75 million) and there was outgo of foreign exchange of ` 84.88
million (previous year: ` 19.48 million).
OTHER DISCLOSURES
i) There are no significant material changes and commitments affecting year and the
date of this Report except as mentioned under the heading Scheme of
betweentheendoffinancial Arrangement in this Report. ii) There has been no change in the
nature of business of the Company. iii) There was no revision in the financial statements
of the Company. iv) There was no application made or proceeding pending against the
Company under the Insolvency and Bankruptcy Code, 2016. There was no instance of onetime
settlement with any Bank/Financial Institution in respect of loan taken by the Company. v)
No significant material orders were passed by the Regulators or Courts or Tribunals which
impact the going concern or status and Company's operations in future. vi) No fraud has
been reported by the Auditors to the Audit Committee and the Board. vii) Disclosure
pertaining to maintenance of cost records as specified under the Act is not applicable to
the Company. viii) The Company has not issued equity shares with differential voting
rights as to dividend, voting or otherwise. ix) The Company has not accepted any deposits
covered under Chapter V of the Act. x) The Company has complied with the applicable
Secretarial Standards issued by the Institute of Company Secretaries of India.
ANNUAL RETURN
Pursuant to Sections 92 and 134 of the Act, the Annual Return as at March 31, 2023 in
Form MGT-7, is available on the website of the Company at the link: www.edelweissfin.com.
DISCLOSURE UNDER SECTION 197 OF THE ACT
In accordance with the provisions of Rule 5 of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014, the particulars of the employees are
set out in the Annexure to this Report. In terms of the provisions of Section 136 of the
Act, the Report is being sent to the Members of the Company excluding the annexure. Any
Member interested in obtaining a copy of the annexure may write to the Company Secretary
at the Registered Office of the Company. Further, disclosures on managerial remuneration
as required under Section 197 read with Rule 5 of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 are provided as Annexure V to this
Report.
CORPORATE GOVERNANCE
Pursuant to the Listing Regulations, the Report on Corporate Governance together with
the certificate issued by M/s. BNP & Associates, Company Secretaries, on compliance
with the conditions of Corporate Governance during the financial year ended March 31, 2023
is provided in Annexure VI and forms part of this Report.
BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORT
A Business Responsibility & Sustainability Report for the financial year ended
March 31, 2023, pursuant to the Listing Regulations is provided in Annexure VII and forms
part of this Report.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134 of the Act, the Directors confirm that: i) in the preparation
of the annual accounts, the applicable Accounting Standards have been followed; ii) such
accounting policies have been selected 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 affairsof the Company as at March 31, 2023 and the profits of the Company for the
financial year ended on that date; iii) proper and sufficient care had been taken for the
maintenance of provisions of the Act for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities; iv) the annual accounts have been
prepared on a going concern basis; v) internal financial controls have been laid down and
the same are adequate and were operating effectively; and vi) proper systems had been
devised to ensure compliance with the provisions of all applicable laws and that such
systems were adequate and operating effectively.
ACKNOWLEDGEMENTS
The Board acknowledges the valuable guidance and continued support extended by the
Securities and Exchange Board of India, the Reserve Bank of India, Stock Exchanges,
Insurance Regulatory and Development Authority of India, Ministry of Corporate Affairs,
other government authorities, Banks and other stakeholders. Your Directors would also like
to take this opportunity to express their appreciation for the dedicated efforts of the
employees of the Company.
|
For and on behalf of the Board |
|
Edelweiss Financial Services Limited |
|
Rashesh Shah |
|
Chairman & Managing Director |
|
DIN: 00008322 |
August 4, 2023 |
|