To the Members of Edelweiss Financial Services Limited
Your Directors hereby present the 26th Board's Report on the businessoperations and state of affairs of the Company together with the audited financialstatements for the year ended March 31 2021:
I Consolidated Financial Performance:
|Particulars ||2020-21 ||2019-20 |
|Total Income ||108488.50 ||96026.29 |
|Total Expenses ||107025.91 ||120592.81 |
|Profit/(Loss) before share in profit of associates and tax ||1462.59 ||(24566.52) |
|Share in (Loss) of associates ||(6.35) ||- |
|Profit/(Loss) before tax ||1456.24 ||(24566.52) |
|Tax expense ||(1082.96) ||(4128.80) |
|Net Profit/(Loss) for the year ||2539.20 ||(20437.72) |
|Other Comprehensive Income/(Loss) ||(17.97) ||4726.42 |
|Total Comprehensive Income/(Loss) ||2521.23 ||(15711.30) |
|Profit/(Loss) for the year attributable to the || || |
| Owners of the parent ||2653.36 ||(20452.45) |
| Non-controlling interests ||(114.16) ||14.73 |
|Other Comprehensive Income/(Loss) for the year attributable to the || || |
| Owners of the parent ||11.88 ||4241.54 |
| Non-controlling interests ||(29.85) ||484.88 |
|Total Comprehensive Income/(Loss) for the year attributable to the || || |
| Owners of the parent ||2665.24 ||(16210.91) |
| Non-controlling interests ||(144.01) ||499.61 |
|Earnings Per Share (`) (Face Value of Rs.1 each) || || |
|Basic ||2.98 ||(23.01) |
|Diluted ||2.97 ||(23.01) |
II. Standalone Financial Performance:
|Particulars ||2020-21 ||2019-20 |
|Total Income ||17218.73 ||2455.40 |
|Total Expenses ||10279.54 ||1659.93 |
|Profit before tax ||6939.19 ||795.47 |
|Tax expenses ||(222.93) ||(30.32) |
|Profit for the year ||7162.12 ||825.79 |
|Other Comprehensive Income/(Loss) ||9.54 ||(0.47) |
|Total Comprehensive Income ||7171.66 ||825.32 |
|Earnings Per Share (`) (Face Value of Rs.1 each) || || |
|Basic ||8.05 ||0.93 |
|Diluted ||8.01 ||0.92 |
During the year under review 1389075 Equity Shares of the face value of 1 each wereallotted on exercise of the Stock Options granted under various Employee Stock IncentivePlans of the Company.
Consequently as at March 31 2021 the total paid-up share capital of the Companystood at
935.80 million divided into 935798077 Equity Shares of Face Value of 1 each.
Except Employee Stock Options and Stock Appreciations Rights (SAR) the Company has notissued any sweat equity to the employees of the Company. The disclosures with regard tothe Employee Stock Options and SAR as required under the SEBI (Share Based EmployeeBenefits) Regulations2014 is available on the website of the Company at the link:www.edelweissfin.com.
During the year under review the Board declared an interim dividend of Rs.0.90 perEquity Share of the face value of Rs.1 each. The interim dividend was paid to the Membersof the Company during the month of April 2021.
The Board at its meeting held on June 11 2021 recommended a final dividend of Rs.0.55per Equity Share of the face value of Rs.1 each subject to the approval of Members at theforthcoming
Annual General Meeting (AGM).
Pursuant to Regulation 43A of the SEBI (Listing Obligations & DisclosureRequirements) Regulations 2015 (the Listing Regulations) the Dividend DistributionPolicyis provided as Annexure I to this Report and is available on the website of theCompany at the link: www.edelweissfin.com .
INFORMATION ON THE STATE OF AFFAIRS OF THE COMPANY
Information on the operational and financial performance amongst others including theimpact of COVID-19 is given in the Management
Discussion and Analysis Report forming part of this Report and is in accordance withthe Listing Regulations.
CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements are prepared in accordance with the CompaniesAct
2013 and Rules framed thereunder (the Act) and the applicable Accounting Standards andforms part of this Report.
SUBSIDIARIES & ASSOCIATES
During the year ended March 31 2021 the
Company sold its controlling stake in the wealth management business to PAGAC EcstasyPte. Ltd. with effect from March 26 2021. Consequently Edelweiss Securities LimitedEdelweiss Finance
& Investments Limited Edelweiss Broking
Limited Edelweiss Custodial Services Limited
ESL Securities Limited EdelweissSecurities(Hong
Kong) Private Limited Edelweiss Investment
Advisors Pte. Limited Edelweiss Financial Services Inc. Edelweiss Financial Services(UK) Limited and Edelweiss Securities (IFSC) Limited ceased to be the subsidiaries andbecame the associates of the Company.
During the year under review EFSL International
Limited was dissolved and ceased to be the subsidiary with effect from April 28 2020.EC
Global Limited (ECG) amalgamated with EC
International Limited with effect from September 1 2020 and consequently ECG ceased tobe the subsidiary of the Company.
On September 1 2020 Edel Land Limited (ELL) acquired Everest Securities & FinanceLimited
(Everest) thus Everest became the subsidiary of the Company. Further Everest mergedwith ELL with effect from May 26 2021. Edelweiss Finvest
Limited (EFL) was merged with Edel Finance
Company Limited with effect from April 9 2021 and consequently EFL ceased to be thesubsidiary of the Company. Lichen Metals Private Limited ceased to be the subsidiary ofECap Equities Limited and in turn of the Company with effect from March 31 2021.
Edelweiss Capital Services Limited was incorporated on February 12 2021 as thesubsidiary of the Company.
The salient features of the financial of each of the subsidiaries and the associates asrequired under the Act is provided in the financial statements in Form AOC-1. Thefinancial available on the website of the Company at the link: www.edelweissfin.com. AnyMember interested in obtaining a copy of financial statement of the subsidiaries may writeto the
Company Secretary at the Registered Officeof the Company.
During the year under review the Company issued Non-convertible Debentures (NCDs)through public issue which are listed on BSE
Limited. Your Company also raised money by issue of NCDs on private placement basis.
LOANS INVESTMENTS AND
Particulars of loans given investments made guarantees given and securities providedare reported in the financial statements.
RELATED PARTY TRANSACTIONS
All the Related Party Transactionsentered by the
Company are on arm's length and in the ordinary course of business. The Company has notentered into transactions with the Promoters Directors and Key Managerial Personnelwhich may have potential conflict of interest with the Company. In accordance with theprovisions of the Listing Company has formulated the Related Party TransactionsPolicywhich is available on the website of the Company at www.edelweissfin.com.
Particulars of related parties as prescribed in Section 188 of the Act is provided inthe financial statements in Form AOC-2. All the Related Party Transactions as requiredunder the applicable Accounting Standard are reported in the financialstatements.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
(i) Independent Directors
In accordance with the provisions of Section 149 of the Act the Independent Directorshave given a declaration that they meet the criteria of independence as provided in thesaid Section and also in terms of the Listing Regulations. In the opinion of the Boardthe Independent Directors are persons of integrity and possess relevant expertiseexperience and proficiency as per the Act.
(ii) ManagingDirectorandExecutive Directors
Mr. Rujan Panjwani (DIN: 00237366) was re-appointed as an
Company at the AGM held on September
28 2020 for a further period of 5 years effective from June 24 2021.
Pursuant to the recommendations of the Nomination andRemunerationCommittee the Boardhave re-appointed Mr. Rashesh
Shah as the Managing Director and
Mr. Venkatchalam Ramaswamy as an Executive Director for a further period of 5 yearswith effect from April 1 2022 subject to the approval of the Members at the forthcomingAGM.
(iii) Non-executive Directors
Ms. Anita M. George (DIN: 00441131) resigned as Director of the Company with effectfrom July 13 2020. The Board places on record its appreciation of the services renderedby Ms. George during her tenure as Director of the Company.
(iv) Retirement by rotation
Mr. Venkatchalam Ramaswamy (DIN: 00008509) and Mr. Himanshu Kaji (DIN: 00009438)retire by rotation at the forthcoming AGM and being eligible have offered themselves forre-appointment.
(v) Key Managerial Personnel (KMP)
Mr. S. Ranganathan tendered his resignation contracts or arrangements with the as theChief Financial Officer of the with effect from October 31 2020 and Mr. Sarju Simaria wasappointed as the Chief Financial Officer of the Company with effect from November 1 2020.Mr. B. Renganathan tendered his resignation as the Company Secretary of the Company witheffect from April 23 2021 and Mr. Tarun Khurana was appointed as the Company Secretary ofthe
Company with effect from April 23 2021.
Some of the KMPs of the Company are also the KMPs of the subsidiaries and drawremuneration from those subsidiaries.
NUMBER OF BOARD MEETINGS HELD
During the year ended March 31 2021 the Board met 6 times. The details of the Boardmeetings the attendance of the Directors at the meetings are provided in the CorporateGovernance Report which forms part of this Report.
The Company has formulated a Remuneration Directorofthe Policy pursuant to Section 178of the Act and the Listing Regulations.The Policy is provided as Annexure II to thisReport.
EVALUATION OF THE PERFORMANCE OF
A Board Evaluation Policy (the Policy) for evaluating the performance of the Board itsCommittees the Chairman the Managing Director the Executive Directors theNon-executive Directors and the Independent Directors has been adopted by the Company.
The Policy inter alia provides the criteria for performance evaluation such asBoard effectiveness quality of discussion contribution at the meetings business acumenstrategic thinking time commitment relationship with the stakeholders corporategovernance practices review of the terms of reference of the Committees the and thecontribution Board in discharging its functions etc.
A separate meeting of the Independent Directors was held wherein the performance of theNon-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 ListingRegulations and the Guidance Note issued by the Securities and Exchange Board of India inthis regard was discussed.
INTERNAL FINANCIAL CONTROLS AND RISK MANAGEMENT
The Company has in place adequate internal financial controls with reference tofinancial statements. The Company's internal control system is designed to ensureoperational efficiency protection and conservation resources accuracy and promptness infinancial reportingand compliance with the laws and regulations.The internal controlsystem is also supported by an internal audit process.
M/s. JHS & Associates LLP Chartered Accountants were appointed as InternalAuditors of your
Company for the financial year 2020-21.
Risk management is an integral part of the Company's business strategy that seeks tominimise adverse impact on business objectives and capitalise on opportunities. The RiskCommittee oversees the risk management framework of the Company through regular andproactive interventionby identifying risks and plans. Further details areformulatingmitigation provided in the Management Discussion and
Analysis Section forming part of this Report.
The Audit Committee comprises of the following Independent Directors: Mr. P. N.Venkatachalam (Chairman) Mr. Berjis Desai Mr. Biswamohan Mahapatra Mr. KunnasagaranChinniah.
Further details of the Audit Committee are provided in the Corporate Governance Reportforming part of this Report.
WHISTLE BLOWER POLICY/ VIGIL
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 safeguardsagainst the victimisation of the persons who use the vigil mechanism. The vigil mechanismis overseen by the Audit Committee.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
The Board has constituted a Corporate Social Responsibility (CSR) Committee inaccordance with the provisions of the Act. The CSR Committee comprises of: Mr.Venkatchalam
Executive Directors Mr. Himanshu Kaji Mr. Rujan Panjwani of Mr. P. N. VenkatachalamIndependent Director.
The Company has made contributions under CSR mainly through its philanthropic armEdelGive
Foundation a wholly owned subsidiary. The CSR Projects of the Company largely focuseson the broad areas such as sustainable livelihood quality education women empowermentetc.
The CSR Report on the activities undertaken during the year is provided as as Annexure
III to this Report. The CSR Policy is available on the website of the Company at thelink: www.edelweissfin.com .
At the 23rd AGM held on July 26 2018 the Members had appointed M/s. S. R. Batliboi& Co. LLP Chartered
Accountants (Firm Registration No. 301003E/ E300005) as the Auditors of the Companyfor a term of 5 years to hold office until the conclusion of the 28th AGM to be held inthe year 2023. The Auditors' Report on the financial statements for the year ended March31 2021 is unmodifiedand is annexed to the financial statements.
SECRETARIAL AUDIT REPORT
M/s. BNP & Associates Company Secretaries were appointed as the SecretarialAuditors to conduct the Secretarial Audit for the financial year ended March
Report of the Secretarial Auditors is provided as Annexure IV to this Report. TheSecretarial Audit Report does not contain any qualification reservation adverse remarksor 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 year ended March
31 2021 forms part of this Report. The Secretarial Audit Report does not contain anyreservation 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 pendingas on March 31 2021. The Company has complied with the provisions relating to theconstitution Internal Complaints Sexual Harassment of Women at Workplace Prohibition andRedressal) 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 havebeen taken for conservation of energy wherever possible. ii. The steps taken by theCompany for utilising alternate sources of energy: Though the operations of the Companyare not energy intensive the Company explores alternative sources of energy as and whenthe necessity arises.
iii. The capital investment on energy conservation equipments Nil
B. Technology absorption i. The efforts made towards technology absorption: usesthe information technology in its operations and has absorbed the technology required inthis regard. ii. The benefitsderived like product improvement cost reduction productdevelopment or import substitution: 31 2021. The
The Company has leveraged the technology to reach out to its customer in the difficulttimes of pandemic. iii. In case of imported technology
(imported during the last three years reckoned from the beginning of the financialyear):
(a) the details of technology imported: Not Applicable (b) the year of import: NotApplicable
(c) whether the technology has been fully absorbed: Not Applicable
(d) if not fully absorbed areas where absorption has not taken place and the reasonsthereof:
Not Applicable iv. The expenditure incurred on Research and Development: NotApplicable.
C. Foreign exchange earnings and outgo
During the year under review the Companythe earned foreign exchange of 550.16million (previous year: 196.90 million) and there was outgo of foreign exchange of 16.74million (previous year: 29.40 million).
There are no significant material changes and commitments affecting the financialposition of the Company that occured between the end of financial year and the date ofthis Report.
There has been no change in the nature of business of the Company.
There was no revision in the financial statements of the Company.
There was no application pending against the Company under the
Insolvency and Bankruptcy Code 2016. There was no instance of onetime settlement withany Bank/Financial Institution in respect of loan taken by the Company.
No significant or material orders were passed by the Regulators or Courts or Tribunalswhich impact the going concern status and Company's operations in future.
No fraud has been reported by the Auditors to the Audit Committee and the Board.
Disclosure pertaining to maintenance of cost records as specified under the Actis not applicable to the Company.
The Company has not issued equity shares with differential voting or otherwise.
The Company has not accepted any deposits covered under Chapter V of the Act.
The Company has complied with the applicable Secretarial Standards issued by theInstitute of Company Secretaries of India.
Pursuant to Sections 92 and 134 of the Act the Annual Return as at March 31 2021 inForm 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 andRemuneration of Managerial Personnel) Rules 2014 the particulars of the employees areset out in the annexure to this Report. In terms of the provisions of Section 136 of theAct 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 CompanySecretary at the Registered Office of the Company.
Further disclosures on managerial remuneration as required under Section 197 read withRule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014are provided as Annexure V to this Report.for the
Pursuant to the Listing Regulations the Report on Corporate Governance together withthe certificate issued by M/s. BNP & Associates
Company Secretaries on compliance with the conditionsof Corporate Governance asstipulated in the Listing Regulations forms of this Report.
A Business Responsibility Report pursuant to the
Listing Regulations is provided as Annexure VI to this Report.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134 of the Act the Directors confirm that: i) in the preparationofthe annual accounts the applicable accounting been followed; ii) such accounting policieshave been selected and applied them consistently and made judgments and estimates thatvoting rights asare reasonable and prudent so as to give a true and fair view of the stateof affairs of the Company as at March 31 2021 and the profits of the Company for thefinancial year ended on that date; iii) proper and sufficient care had been taken for themaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities; iv) the annual accounts have been prepared on a going concern basis;v) internal financialcontrols have been laid down and the same are adequate and wereoperating effectively; and vi) proper systems had been devised to ensure compliance withthe provisions of all applicable laws and that such systems were adequate andoperatingeffectively.
The Board acknowledges the valuable guidance and continued support extended by theSecurities and Exchange Board of India the Reserve Bank of India Stock ExchangesInsurance Regulatory and Development Authority of India Ministry of
Corporate Affairs other government authorities Banks and other stakeholders. YourDirectors would also like to take this opportunity to express theirappreciation efforts ofthe employees of the Company.
For and on behalf of the Board
Edelweiss Financial Services Limited
Chairman & Managing Director
Mumbai June 11 2021