Dear Members,
The Board of Directors (the "Board") are pleased to present the Twenty-Ninth
Annual Report of IIFL Finance Limited (the "Company") together with the Audited
Financial Statements for the Financial Year ended March 31, 2024. The Company is
registered with the Reserve Bank of India ("RBI") as a Non-Deposit Taking
Systematically Important ("NDSI") Non-Banking Financial Company in Middle Layer
("NBFC-ML") under RBI's Scale Based Regulatory Framework for NBFCs ("RBI
SBR Direction").
1. FINANCIAL RESULTS
A summary of the financial performance of your Company and its subsidiaries, for the
Financial Year ended March 31,
2024, is as under:
(Rs. in Crore)
Name of the Company |
Revenue |
Profit After Tax |
IIFL Finance Limited |
4,604.43 |
584.78 |
IIFL Home Finance Limited ("HFC")* |
3,121.02 |
1,016.55 |
IIFL Samasta Finance Limited ("Samasta") |
2,733.10 |
503.04 |
IIFL Open Fintech Private Limited ("IIFL Open") |
1.01 |
1.79 |
* includes IIHFL Sales Limited, step down subsidiary of HFC.
Your Company's Consolidated and Standalone financial performance during Financial Year
2023-24, as compared with that of the previous Financial Year 2022-23, is summarized
below:
Particulars |
Consolidated |
Standalone |
|
FY 2023-24 |
FY 2022-23 |
FY 2023-24 |
FY 2022-23 |
| Gross total income |
10,490.47 |
8,447.30 |
4,649.43 |
4,088.69 |
| Profit before Finance Cost, depreciation, share of loss of Joint Venture,
exceptional items and taxation |
6,635.64 |
5,487.13 |
2,582.09 |
2,623.45 |
| Finance Cost |
3,882.91 |
3,222.02 |
1,717.21 |
1,455.96 |
| Depreciation |
180.82 |
152.59 |
134.90 |
124.77 |
| Profit before share of loss of Joint Venture, exceptional items and tax |
2,571.91 |
2,112.52 |
729.98 |
1,042.72 |
| Share of loss from Joint Venture |
- |
- |
- |
- |
| Profit before exceptional items and tax |
2,571.91 |
2,112.52 |
729.98 |
1,042.72 |
| Exceptional items |
- |
- |
- |
- |
| Profit before tax |
2,571.91 |
2,112.52 |
729.98 |
1,042.72 |
| Taxation |
|
|
|
|
| - Current tax |
610.57 |
362.70 |
188.91 |
117.53 |
| Deferred tax |
(10.48) |
144.68 |
(41.45) |
119.70 |
| Short or (excess) provision for income tax relating to previous years |
(2.40) |
(2.41) |
(2.26) |
- |
| Net profit for the year |
1,974.22 |
1,607.55 |
584.78 |
805.49 |
| Other Comprehensive Income / (loss) |
(17.30) |
32.19 |
(7.94) |
20.82 |
| Total Comprehensive Income |
1,956.92 |
1,639.74 |
576.84 |
826.31 |
| Total Comprehensive Income before Non Controlling interest |
1,956.92 |
1,639.74 |
- |
|
Attributable to: |
|
|
|
|
| Owners of the Company |
1,747.77 |
1,534.01 |
- |
- |
| Non-controlling interests |
209.15 |
105.73 |
- |
|
Less: Appropriations |
|
|
|
|
| Dividend |
(182.24) |
(173.63) |
(152.59) |
(152.09) |
| Transfer to/ from Other Reserves |
(422.59) |
(344.61) |
(116.96) |
(161.11) |
| Change in Minority |
(0.22) |
(287.07) |
- |
- |
| Add: Balance brought forward from the previous year |
3,024.86 |
2,297.68 |
1,379.31 |
866.20 |
Balance to be carried forward |
4,167.58 |
3,024.86 |
1,686.60 |
1,379.31 |
Note: Previous period's figures have been regrouped/rearranged wherever necessary.
Transfer to Reserve
Under Section 45-IC (1) of RBI Act, 1934, Non-Banking Financial Companies
("NBFCs") are required to transfer a sum not less than 20% of its net profit
every year to reserve fund before declaration of any dividend. Accordingly, during the
year under review, your Company transferred the below mentioned amount to Special Reserves
under Section 45-IC (1) of the said Act, 1934, and to the General Reserve out of the
Retained Earnings.
(Rs. in Crore)
Particulars |
Consolidated |
Standalone |
|
FY 2023-24 |
FY 2023-24 |
| Special Reserve during the year (Pursuant to Section 45-IC (1) of the
Reserve Bank of India Act, 1934) |
217.19 |
116.96 |
| Special Reserve during the year (Pursuant to Section 29C (1) of National
Housing Bank Act, 1987) |
205.40 |
- |
| General Reserve during the year |
(0.45) |
(0.45) |
2. REVIEW OF BUSINESS AND OPERATIONS AND STATE OF AFFAIRS OF YOUR COMPANY AND OUTLOOK
Details of business, operations and state of affairs of your Company is provided in the
Management Discussion and Analysis Report. Refer pages 184-200 of the Report.
3. MACROECONOMIC OVERVIEW
Details on macroeconomic overview of your Company is provided in the Management
Discussion and Analysis Report. Refer pages 184-200 of the Report.
4. DIVIDEND
During the year under review, the Board declared and paid an interim dividend of Rs. 4
per equity share (200%) (i.e. 2 times of the Face Value of Rs. 2 per equity share) in
accordance with the Dividend Distribution Policy of the Company. This led to an outgo of
Rs. 152.59 Crore (including tax deducted at source). The Board recommend that the said
interim dividend be considered as final.
In terms of the provisions of Regulation 43A of the Securities and Exchange Board of
India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing
Regulations"), the Board has adopted a Dividend Distribution Policy which is annexed
as "Annexure I" to this Report and is available on the website of your
Company at https://storage. googleapis.com/iifl-finance-storage/files/2022-07/
Dividend_distribution_policy_27072022.pdf
5. TRANSFER TO INVESTOR EDUCATION AND
PROTECTION FUND ("IEPF")
In accordance with the applicable provisions of the Companies Act, 2013 (the
"Act") read with Investor Education and Protection Fund Authority (Accounting,
Audit, Transfer and Refund) Rules, 2016 ("IEPF Rules"), all unclaimed/unpaid
dividends/interest and principal amount on Non-Convertible Debentures ("NCDs")
are required to be transferred by the Company to IEPF Authority within a period of thirty
(30) days of expiry of seven (7) years.
During the year under review, your Company has transferred Rs. 16,59,371 on March 06,
2024 being the unclaimed dividend amount, pertaining to interim dividend declared for the
FY 2016-
17 and has also transferred the unclaimed interest and principal amount on NCDs of
Rs. 70,46,859, to the IEPF.
The shares on which dividend has not been claimed by the Members for seven (7)
consecutive years shall be transferred to demat account of the IEPF Authority within
thirty (30) days of expiry of the said period. Accordingly, various steps are being taken
on an ongoing basis to reach out to the Members, through email and other means, whose
shares are due to be transferred to IEPF. In addition, your Company also published the
notice in the leading newspapers in English and Regional Language having wide circulation
to inform them about the said transfer to IEPF.
During the year under review, your Company has transferred 2,354 equity shares as per
Corporate Action letters dated March 30, 2024, and April 09, 2024 to IEPF Authority in
accordance with the above provisions.
In compliance with the SEBI Circular No. SEBI/ HO/DDHS/DDHS-RAC-1/P/ CIR/2023/176 dated
November 08, 2023, for dealing with unclaimed amounts in respect of listed Non-Convertible
Securities and manner of claiming such amounts by investors, the Company has formulated a
procedural framework for dealing with unclaimed interest and redemption amounts lying with
the Company having listed Non-Convertible Securities and manner of claiming such amounts
by the investors. The Company has also formulated a policy specifying the process to be
followed by investors for claiming their unclaimed amounts and the same is available on
the website of the Company at https://storage.googleapis.com/iifl- finance-storage/files/2024-03/IEPF_Policy.pdf.
6. KEY INITIATIVES/DEVELOPMENTS
a. Public Issue of Non-Convertible Debentures
During the year under review, your Company raised through Public Issue of Secured,
Redeemable NCDs an amount aggregating to Rs. 452.09 Crore. These NCDs are listed and
traded on the National Stock Exchange of India Limited ("NSE") and BSE Limited
("BSE").
Additionally, during the year under review, Samasta raised through Public Issue of
Secured, Redeemable NCDs an amount aggregating to Rs. 512 Crore. These NCDs are listed and
traded on BSE.
b. Issuance of Non-Convertible Debentures on a Private Placement basis
During the year under review, your Company raised through Private Placement of NCDs an
amount aggregating to Rs. 660 Crore. These NCDs are listed and traded on NSE. Out of the
said NCDs, your Company has raised an amount aggregating to Rs. 500 Crore from Fairfax
Group.
Additionally, during the year under review, HFC raised Rs. 1,140 Crore through Private
Placement of Redeemable NCDs which includes Rs. 820 Crore raised from the International
Finance Corporation ("IFC"), a private sector arm of the World Bank Group, and
Samasta raised Rs. 547 Crore through Private Placement of Redeemable NCDs. The said
Privately Placed NCDs issued by HFC are listed and traded on NSE except for the NCDs
allotted to IFC; while NCDs issued by Samasta are listed and traded on BSE.
c. Bank Refinance
During the year under review, National Bank for Agriculture and Rural Development
("NABARD") refinanced Rs. 500 Crore to your Company, under the refinance
facility.
Additionally, HFC had availed Rs. 2,500 Crore of refinance facility from National
Housing Bank ("NHB") under various refinance schemes, while Small Industries
Development Bank of India ("SIDBI"), NABARD and Micro Units Developments &
Refinance Agency Limited ("MUDRA") refinanced Rs. 300 Crore, Rs. 350 Crore and
Rs. 150 Crore, respectively, to Samasta.
d. Funds raised by way of other Borrowings
During the year under review, your Company raised Rs. 5,419 Crore through term loans
from various banks. Additionally, HFC and Samasta raised Rs. 2,893 Crore and Rs. 4,516
Crore respectively, through term loans from various banks and financial institutions.
e. Additional investment in Samasta
During the year under review, your Company invested in the rights issue of equity
shares of Samasta for an amount of Rs. 199.99 Crore in November 2023. After the aforesaid
investment, your Company's holding in Samasta stood at 99.56% as on March 31, 2024.
f. Fully repaid maiden dollar bonds
Your Company which is one of India's largest retail-focused NBFC raised US$400 Million
through MTN programme during February 2020 and your Company fully repaid its maiden dollar
bonds due in April 2023 along with interest. This is a demonstration of strong treasury
management capabilities and financial strength of your Company. This has also established
a strong track record of your Company in international bond market.
g. Secured US$225 Million in long-term funding through ECB route
During the year under review, your Company secured US$225 Million in long-term funding
through External Commercial Borrowing ("ECB") route from Foreign and Domestic
Banks namely, the Hongkong and Shanghai Banking Corporation Limited - (Gift City), Union
Bank of India (Sydney), Bank of Baroda - (Gift City) and Mizuho Bank (Singapore).
The Japanese Yen ("JPY") equivalent US$50 Million, secured by your Company
from Mizuho Bank is an inaugural JPY denominated facility for your Company. The funds were
raised at a fairly competitive pricing over Tokyo Overnight Average Rate
("TONAR").
h. Fund raising by the way of Right Issue
During the year under review, your Company proposed to raise funds for amount not
exceeding Rs. 1,500 Crore by way of issue of equity shares on a rights basis ("Rights
Issue") from its existing eligible shareholders as on the record date, in accordance
with applicable provisions of the Act, Securities and Exchange Board of India (Issue of
Capital and Disclosure Requirements) Regulations, 2018, as amended from time to time and
other applicable laws.
Further to the decision, after close of the financial year, your Company made an
allotment of 4,23,94,270 fully paid-up equity shares of face value of Rs. 2 each of the
Company on May 17, 2024, for cash at a price of Rs. 300 per equity share (including a
premium of Rs. 298 per equity share) for an amount aggregating to Rs. 1,271.83 Crore
(oversubscribed by 1.35 times) on a rights basis to the eligible equity shareholders of
the Company.
i. Awards and Recognitions
During the year under review, following awards and accolades were conferred by
reputable organizations:
• Your Company received the Economic Times ‘Iconic Brand' recognition;
• Your Company received ‘Excellence in Governance-2024 Award' at the Nation
Wide Award by Business Mint;
• Your Company received ‘Best NBFC of the Year Award' at NBFC Leadership
Awards 2023;
• Your Company received award for ‘Best Customer Experience Strategy' at NBFC
Leadership Awards 2023;
• Samasta received ‘Best Microfinance Company of the Year Award' at NBFC
Leadership Awards 2023;
• Your Company received award for ‘Best Financial Inclusion Initiative' at
the National Awards for Excellence;
• Your Company received ‘Best Gold Loan Company of the Year Award' at NBFC
Leadership Awards 2023;
• Your Company received ‘Marketing Campaign of the Year Award' for
‘Sapna Aapka Loan Humaara' campaign at NBFC Leadership Awards 2023;
• IIFL Fintech Fund received ‘Best Early-Stage Fintech Fund of the Year
Award' at National Awards for Excellence;
• India Infoline Foundation ("IIFL Foundation") received
‘Outstanding Contribution to the Cause of Education Award' at National CSR Leadership
Awards;
• Mrs. Madhu Jain, Director, IIFL Foundation received ‘Social Innovation
Entrepreneur Award' at National CSR Leadership Awards;
• Mrs. Madhu Jain, Director, IIFL Foundation was listed among ‘Asia's 100
Women Power Leaders 2023' by White Page ;
• Best Early-Stage Fintech Fund of the Year
- IIFL Fintech Fund at National Awards for Excellence;
• Mrs. Madhu Jain was recognized as the ‘Most Iconic Women Personality' of
the Year at Atal Achievement Awards; and
• Your Company has received the award for building cash flow and GST data- based
unsecured business loan products for MSMEs at SamvAAd - an account aggregator community
event along with FinBox and Finvu (Cookiejar Technologies). The event was hosted by
Sahamati - driving Open Finance with Account Aggregator.
7. CORPORATE SOCIAL RESPONSIBILITY ("CSR")
INITIATIVES
The CSR Committee of the Board has formulated and recommended to the Board a CSR Policy
indicating the CSR activities which can be undertaken by your Company. The Board approved
the CSR Policy which is available on the website of the Company at https://storage.googleapis.com/iifl-finance-storage/
files/2023-07/CSR%20policy_IIFL%20Finance.pdf
IIFL group has set-up IIFL Foundation, a Section 8 Company incorporated under the Act
which acts as the principal arm to undertake CSR initiatives on behalf of your Company and
its subsidiaries. IIFL Foundation through its CSR initiatives addresses 5 thematic areas
– Health, Education and Environment, Livelihood & Poverty Alleviation,
collectively – HELP.
As per Rule 4(2) of the Companies (Corporate Social Responsibility Policy) Rules, 2014,
IIFL Foundation has registered itself with the Central Government by filing the e-Form
CSR-1 with the Registrar of Companies.
IIFL Foundation has identified focus areas for CSR initiatives which includes:
• Building foundational literacy and numeracy among females from marginalized
communities of Rajasthan, through flagship programme ‘Sakhiyon ki Baadi', which has
an overall reach across 5 districts with 460 learning centres
• Development of Digital Library for students at Rajkumari Ratnavati Girls' School
in Jaisalmer, Rajasthan, with a donation of 50 Android tablets
• Infrastructure development and academic support to Maa Bari Centres at Rajasthan
• Construction of an Assembly Hall at Government Senior Secondary School, Madar,
Udaipur
• An exploratory trip for 22 Members of Panchayati Raj Institutions (Sarpanchs)
from Rajasthan, to Mawlynnong village in Meghalaya
• Maintenance of a public place – Garden, at Mumbai, Maharashtra
• Support to a Primary School in Kandivali, Mumbai, for education of children from
financially weaker group residing in slums
• Digital Shaala programme in 25 Government Schools having installed 50 smart TVs
upgraded with educational content
• A unique mentoring programme for skill building of native artisans from
Rajasthan in Home Decor space
• Renewal of license (content) of Smart Boards at 9 Government schools in
Rajasthan, valid for period of 3 years
• Installed an Interactive Flat Panel (IFP) learning system at Vidya Niketan
School, Rajsamand, Rajasthan
• Skill development programme in Hospitality Training (Chef Trade) and Market
related Retail Associate Training curated specifically for youths residing at Kupwara
(Aspirational) district in Kashmir, with support of Indian Army
• Homestay Host Training, a skill development programme for youths at Tezu,
Arunachal Pradesh, with support of the National Cadet Corp (NCC) - India, under the
Ministry of Defence
• Development of mobile application and a year- long training programme for
capacity building of 50 NGOs from Maharashtra
• Support for Education and Nutrition of boys at Shelter Home in Mumbai,
Maharashtra
• Smart Shala programme to promote Academic Learning of Teachers and Students at
Government schools in Jodhpur, Bikaner & Jaipur
• Initiative for improving learning and mental well- being outcomes for young
children and caregivers through community radio in Jhunjhunu district of Rajasthan
• A programme in Banking & Finance, offering skill based training to youths
belonging to the lower income households in Mumbai
• Donated Non-stress Test machines to Department of Obstetrics and Gynecology at
KEM Hospital, Parel, Mumbai, Maharashtra
• Medical Camp at Barsana, District Mathura in Uttar Pradesh, offering free of
cost Cataract Operations, Dental Checkups, Treatments and Surgeries
• Medical Camp at Pandharpur, District Solapur in Maharashtra, offering free of
cost treatment to thousands of pilgrims visiting in month of July 2023
• Construction of an Assembly Hall at Govt. Senior Secondary School, Parsad,
District – Udaipur, Rajasthan
• Initiated an English Language Lab and Computer Lab at 3 Government schools in
Rajsamand District, Rajasthan, to improve learning outcomes of the students
• Donated classroom furniture to Mahatma Gandhi Government School, Sisarwada,
Pali, Rajasthan
• Donated 50 bicycles to girl students at Zilla Parishad School, Dahanu, Palghar,
to promote enrollment and retention of girls at the school
• Support for Higher Education of children of commercial sex workers at Mumbai,
Maharashtra
• Appointment of Academic mentor at 2 Government schools in Udaipur district of
Rajasthan
During the year under review, your Company deployed 2% of its average net profits of
the preceding three financial years (computed as per the relevant provisions of the Act)
on CSR projects, utilizing the required amount on various social development activities.
The details thereof are mentioned in the CSR Annual Report, attached as "Annexure
II" to this report. Refer pages 127-130 of this Report.
Further, during the year under review, impact assessment was not applicable to the
Company. However, an impact assessment of the Sakhiyon ki Baadi programme was conducted by
IIFL Foundation through an independent agency using the OECD-DAC and SRoI Methodology.
8. SHARE CAPITAL
During the year under review, the total paid up equity share capital of the Company
increased from Rs. 76,08,60,778 to Rs. 76,30,96,870 pursuant to allotment of 11,18,046
equity shares of Rs. 2 each under Employee Stock Option Scheme(s) of the Company to
eligible employees and the said equity shares rank pari passu with the existing equity
shares.
The movement of share capital is as under:
(in Rs.)
Particulars |
No. of equity shares allotted |
Cumulative outstanding share capital (no. of equity shares with face
value of Rs. 2 each) |
Share Capital at the beginning of the year |
- |
76,08,60,778 |
Allotment of shares to employees on May 27, 2023 pursuant to exercise
of options granted under IIFL Finance Employee Stock Option Plan 2008 and IIFL Finance
Employee Stock Option Plan 2020 - Merger Scheme |
1,39,051 |
76,11,38,880 |
Allotment of shares to employees on July 27, 2023 pursuant to exercise
of options granted under IIFL Finance Employee Stock Option Plan 2008 and IIFL Finance
Employee Stock Option Plan 2020 - Merger Scheme |
2,94,401 |
76,17,27,682 |
Allotment of shares to employees on September 18, 2023 pursuant to
exercise of options granted under IIFL Finance Employee Stock Option Plan 2008 and IIFL
Finance Employee Stock Option Plan 2020 - Merger Scheme |
2,71,488 |
76,22,70,658 |
Allotment of shares to employees on November 10, 2023 pursuant to
exercise of options granted under IIFL Finance Employee Stock Option Plan 2008 and IIFL
Finance Employee Stock Option Plan 2020 - Merger Scheme |
1,85,986 |
76,26,42,630 |
Allotment of shares to employees on January 09, 2024 pursuant to
exercise of options granted under IIFL Finance Employee Stock Option Plan 2008 and IIFL
Finance Employee Stock Option Plan 2020 - Merger Scheme |
1,61,790 |
76,29,66,210 |
Allotment of shares to employees on March 06, 2024 pursuant to
exercise of options granted under IIFL Finance Employee Stock Option Plan 2008 and IIFL
Finance Employee Stock Option Plan 2020 - Merger Scheme |
65,330 |
76,30,96,870 |
Further, post closure of the financial year, 60,383 equity shares were allotted to
employees on April 30, 2024 pursuant to exercise of options granted under IIFL Finance
Employee Stock Option Plan 2008 and IIFL Finance Employee Stock Option Plan 2020 - Merger
Scheme. Further, your Company has allotted 4,23,94,270 equity shares on Rights basis on
May 17, 2024 to the eligible shareholders. Pursuant to the aforesaid allotments, the
paid-up equity share capital of your Company stands increased to Rs. 84,80,06,176.
9. SECURITIZATION/ASSIGNMENT OF LOAN PORTFOLIO
During the year under review, your Company (consolidated) as an originator, has
undertaken securitization transactions of total book value of loan assets amounting to Rs.
333.33 Crore and Direct Assignment transactions of total book value of loan assets
amounting to Rs. 15,655.06 Crore.
10. FINANCIAL LIQUIDITY
The Consolidated cash and cash equivalent of your Company as on March 31, 2024, stood
at Rs. 2,469.87 Crore vis-?-vis Rs. 3,632.13 Crore in the previous year. Your Company's
working capital management is robust and involves a well-organized process which
facilitates continuous monitoring and control over receivables, inventories and other
parameters.
11. INTERNAL CONTROL SYSTEMS Internal audit and its adequacy:
The scope and authority of the internal audit function is well defined, and to maintain
independence and objectivity in its functions, the internal audit function reports
directly to the Audit Committee of the Board. At the beginning of each financial year, an
annual Risk- Based Internal Audit ("RBIA") plan is rolled out post approval by
the Audit Committee of the Board. The audit plan aims to evaluate the efficacy and
adequacy of the internal control system(s) and compliance(s) thereof, robustness of
internal processes, policies and accounting procedures, compliance with laws and
regulations. The internal audit function, consisting of professionally qualified
accountants, engineers, fraud risk and information technology specialists, is adequately
skilled and resourced to deliver audit assurances at highest levels. Based on the reports
of the internal audit function, process owners undertake corrective action in their
respective areas. Significant audit observations and corrective actions thereon are
presented to the Audit Committee of the Board.
Internal Controls over Financial Reporting:
Your Board is of the opinion that internal financial controls with reference to the
financial statements were tested and reported adequate and operating effectively. The
internal financial controls are commensurate with the size, scale and complexity of
operations. The controls were tested during the year and no reportable material weaknesses
either in their design or operations were observed. Your Company has put in place robust
policies and procedures, which inter alia, ensure integrity in conducting its business,
safeguarding of its assets, timely preparation of reliable financial information, accuracy
and completeness in maintaining accounting records, prevention and detection of frauds and
errors.
12. EMPLOYEES STOCK OPTION SCHEMES:
Your Company has in force the following Schemes:
(a) IIFL Finance Employee Stock Option Plan 2008 ("ESOP Scheme 2008")
(b) IIFL Finance Employee Stock Option Plan 2020 –Merger Scheme ("ESOP Scheme
2020")
During the year under review, your Company granted 35,00,000 stock options to the
employees under the ESOP Scheme 2008.
Further, during the year under review 2,31,402 stock options granted under ESOP Scheme
2008 got lapsed and the same were added back to the pool, which can be used for further
grant; and 40,731 granted under ESOP Scheme 2020 got lapsed and the same are not available
for further grant.
The aggregate number of stock options outstanding as on March 31, 2024, stands at
40,80,321 stock options under ESOP Scheme 2008 and 16,71,891 stock options under ESOP
Scheme 2020.
The ESOP Scheme of your Company was amended by the Board of Directors of your Company
at its meeting held on April 26, 2023, to align the same with the amendments made under
the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat
Equity) Regulations, 2021 ("SBEBSE Regulations"). Accordingly, approval of the
Members to amend ESOP Scheme 2008 in terms of the SBEBSE Regulations was received in the
28th Annual General Meeting ("AGM") of your Company held on July 31, 2023.
A certificate from the Secretarial Auditor of your Company confirming that the IIFL
Finance Employee Stock Option Plan 2008 ("ESOP Scheme 2008") and IIFL Finance
Employee Stock Option Plan 2020 - Merger Scheme ("ESOP Scheme 2020") has been
implemented in accordance with the applicable Regulations will be available for inspection
by Members through electronic means. Members can request the same by sending an email to shareholders@iifl.com
till the AGM.
The relevant disclosures pursuant to Rule 12(9) of the Companies (Share Capital and
Debentures) Rules, 2014 and Regulation 14 of the SBEBSE Regulations are uploaded on the
website of the Company i.e. www.iifl.com and the same would be available for
inspection by Members through electronic means.
The relevant disclosures in terms of Ind AS 102, relating to share based payment, forms
part of note no. 40 of the Standalone Financial Statements and note no. 40 of the
Consolidated Financial Statements of the Company.
13. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
Details of loans given, investments made, guarantees given and security provided, if
any, are covered under the provisions of Section 186 of the Act and are given in the Note
no. 8, 9 and 39 of the Standalone Financial Statements.
14. SUBSIDIARY COMPANIES
As on March 31, 2024, your Company has three (3) subsidiaries, one (1) step down
subsidiary as below.
• IIFL Home Finance Limited, Subsidiary Company
• IIFL Samasta Finance Limited, Subsidiary Company
• IIFL Open Fintech Private Limited, Subsidiary Company
• IIHFL Sales Limited, Step-down Subsidiary Company
The Company does not have any Associate(s)/Joint Venture(s).
Pursuant to Regulation 16 of the Listing Regulations, HFC and Samasta are the Material
Subsidiaries of the Company for FY 2023-24 and shall continue to be the Material
Subsidiaries of your Company during FY 2024-25 for compliance with Listing Regulations. In
accordance with the terms of Regulation 24(1) of the Listing Regulations, Mr. Arun Kumar
Purwar, an Independent Director on the Board of your Company till March 31, 2024, also
served as an Independent Director on the Board of HFC till March 31, 2024 and was
succeeded by Mr. Ramakrishnan Subramanian who was appointed as an Additional Independent
Director on the Board of HFC w.e.f. April 01, 2024.
Further, Mr. Nihar Niranjan Jambusaria, an Independent Director on the Board of your
Company, also serves as an Independent Director on the Board of Samasta w.e.f. April 24,
2024. The Policy on Determining Material Subsidiary is available on the Company's website
at https://storage.googleapis.com/iifl-finance-storage/ files/2023-09/Policy_on_determining_Material_
Subsidiary_04092023.pdf. Pursuant to the Act, read with applicable Rules framed
thereunder, the Listing Regulations and applicable Ind AS, the Board at their Meeting held
on June 15, 2024, approved the Audited Standalone Financial Statements of your Company for
the financial year ended March 31, 2024 and the Audited Consolidated Financial Statements
of your Company and its subsidiaries, for the financial year ended March 31, 2024. In
accordance with Section 129 of the Act, the said Audited Financial Statements form part of
this Report. The Company's Financial Statements including the accounts of its subsidiaries
which forms part of this Report has been prepared in accordance with the Act and Ind AS
110.
A report on the performance and financial position of each of the subsidiaries of your
Company, as per the Act is provided in the prescribed Form AOC-1 as an Annexure to the
Consolidated Financial Statements and hence not repeated here for the sake of brevity.
The Audited Financial Statements of the subsidiaries of your Company for the financial
year ended March 31, 2024, are available on the website of the Company at www.iifl.com.
The Members may download the aforesaid documents from the Company's website or may write
to the Company for obtaining a copy of the same. Further, the aforesaid documents shall
also be available for inspection by the Members at the registered office/corporate office
of the Company, during business hours on working days and through electronic mode. Members
can also request the same by sending an email to shareholders@iifl.com till the
AGM.
15. CAPITAL ADEQUACY
As on March 31 2024, the Capital to Risk Assets Ratio ("CRAR") of your
Company was 18.85% which is well above the minimum requirement of 15% CRAR prescribed by
the RBI.
Out of the above, Tier I capital adequacy ratio stood at 12.56% and Tier II capital
adequacy ratio stood at 6.29% respectively.
16. ANTI- BRIBERY AND ANTI-CORRUPTION POLICY
Your Company has an Anti-Bribery and Anti-Corruption Policy ("Policy") on
combating bribery and corruption and to conduct Company's business in an honest and
ethical manner. Your Company takes a zero-tolerance approach to bribery, corruption and
other forms of unlawful payment (including gifts, hospitality, etc.) and are committed to
act professionally, fairly and with integrity in all our dealings wherever we operate.
Your Company is also committed towards implementing and enforcing effective systems to
counter bribery and corruption. The Policy prohibits offering, promising, giving or
authorizing others to give anything in excess of a certain value, either directly or
indirectly, to any person or entity, thereby setting out Company's standards on bribery
and other forms of unlawful payments.
The policy provides information and guiding principles to prevent any activity or
conduct relating to bribery, facilitation payments or corruption and to guide employees to
act professionally, fairly and with utmost integrity in all their business dealings and
relationships, wherever they operate.
The Policy requires that the Company do not engage in bribery or corruption in any form
and explicitly mentions that the Company will not pay or procure payment of a bribe or
unlawful fee to encourage the performance of a task or one which is intended or likely to
compromise the integrity of another. The Company will not accept any payment, gift or
inducement from a third party which is intended to compromise Company's integrity.
The Company has designated Chief Anti Corruption Officer wherein any person can report
the cases of Anti-Bribery and Anti-Corruption at anticorruption@ iifl.com.
The Policy is also available on the Company's website at https://www.iifl.com/finance/anti-
corruption-policy.
17. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
In accordance with Regulation 34(2)(f) of the Listing Regulations, the Business
Responsibility and Sustainability Report ("BRSR") is attached as part of the
this Report. Refer pages 201-243 of the Report. Further, pursuant to SEBI Circular No.
SEBI/HO/CFD/ CFD-SEC-2/P/CIR/2023/122 dated July 12, 2023, the reasonable assurance of the
BRSR Core and ESG disclosures for the value chain are not applicable to the Company for FY
2023-24.
18. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
In accordance with Regulation 34 of the Listing Regulations and RBI SBR Directions, the
Management Discussion and Analysis Report is attached as part of this Report. Refer pages
184-200 of the Report.
19. DIRECTORS AND KEY MANAGERIAL PERSONNEL
The Board of Directors of the Company are eminent persons of proven competence and
integrity. Besides experience, strong financial acumen, strategic astuteness and
leadership qualities, they have a significant degree of commitment to the Company and
devote adequate time to meetings. In terms of requirement of the Listing Regulations, the
Board has identified core skills, expertise and competencies required in the context of
the Company's business for effective functioning, which are detailed in the Corporate
Governance Report. The Board meets at regular intervals to discuss and decide on Company/
business policy and strategy, apart from other Board matters. The Board exhibits strong
operational oversight with regular business presentations of meetings. The Board is of the
opinion that the Independent Directors of the Company have the required integrity,
expertise, experience and proficiency.
Appointment and Cessation of Directors and Key Managerial Personnel
On recommendation of Nomination and Remuneration Committee ("NRC"), the Board
had appointed Directors and Key Managerial Personnels. Further, the Board had taken note
of the resignation/cessation of Directors and Key Managerial Personnels.
a. Appointment:
Mr. T S Ramakrishnan (DIN: 09515616) was appointed as an Additional Non-Executive
Nominee Director of the Company w.e.f. October 26, 2023 and the same was regularized by
the way of resolution passed through postal ballot on December 05, 2023.
Mr. Bijou Kurien (DIN: 01802995) and Mr. Nihar Niranjan Jambusaria (DIN: 01808733) were
appointed as an Additional (Independent) Directors of the Company w.e.f. March 13, 2024
and the same was regularized by the way of resolution passed through postal ballot on June
10, 2024.
Mr. Arun Kumar Purwar (DIN: 00026383) was appointed as the Chairperson and Additional
Non-Executive Director of the Company w.e.f April 01, 2024 and the same was regularized by
the way of resolution passed through postal ballot on June 10, 2024.
Post the closure of financial year, Mr. Gopalakrishnan Soundarajan (DIN: 05242795) was
appointed as an Additional Non-Executive Non-Independent Director w.e.f May 11, 2024 and
the same was regularized by the way of resolution passed through postal ballot on June 10,
2024.
Ms. Rupal Jain was appointed as the Company Secretary & Compliance Officer and as a
Key Managerial Personnel ("KMP") of the Company w.e.f. July 01, 2023.
Ms. Mauli Agarwal was appointed as the Company Secretary & Compliance Officer and
as a KMP of the Company w.e.f. March 13, 2024.
b. Completion of Term and Retire by Rotation:
Mr. Arun Kumar Purwar (DIN: 00026383), Chairperson and Independent Director of the
Company and Mr. Nilesh Shivji Vikamsey (DIN: 00031213) Independent Director of the
Company, completed their second consecutive five-year term of directorship as Independent
Director of the Company w.e.f. March 31, 2024, pursuant to the provisions of the Act, and
Listing Regulations. The Board placed on record it's appreciation for their valuable
contribution made by them as member of the Board.
Mr. Vijay Kumar Chopra (DIN: 02103940) completed his first term as an Independent
Director of the Company on May 20, 2024, and consequently ceased to be an Independent
Director of the Company w.e.f. May 20, 2024.
In terms of Section 152 of the Act read with Article 157 of the Articles of Association
of the Company, Mr. Nirmal Jain (DIN: 00010535), is liable to retire by rotation at the
ensuing AGM and being eligible has offered himself for re-appointment. The Board of
Directors at its meeting held on June 15, 2024, approved and recommended the same for the
approval of the Members at the ensuing AGM of the Company.
c. Cessation:
Post the closure of financial year, Mr. Chandran Ratnaswami (DIN: 00109215) resigned
from the position of Non-Executive Director of the Company w.e.f. May 10, 2024, close of
business hours, pursuant to attaining the age of 75 years on May 11, 2024.
Ms. Sneha Patwardhan and Ms. Rupal Jain resigned from the position of Company Secretary
& Compliance Officer and as a KMP of the Company w.e.f. July 01, 2023 and March 13,
2024, respectively. The Board placed on record its appreciation for their valuable
contributions during their tenure and wished them the very best in their future endeavors.
20. MEETING OF DIRECTORS & COMMITTEES AND BOARD EFFECTIVENESS
• Board of Directors:
During the year under review, the Board of Directors met twelve (12) times to discuss
and approve various matters including financials, appointment of auditor, declaration of
dividend, review of audit reports and other Board matters. For further details, please
refer to the report on Corporate Governance forming part to this Report.
• Committees of the Board:
During the year under review, in accordance with the applicable provisions of the Act,
Listing Regulations and RBI SBR Directions, the Board of Directors constituted the
following Committees:
• Audit Committee
• Nomination and Remuneration Committee
• Corporate Social Responsibility Committee ("CSR Committee")
• Stakeholders Relationship Committee
• Risk Management Committee
• Asset Liability Management Committee
• IT Strategy Committee
The Board of Directors have set up various committees, delegated powers and assigned
roles and responsibilities with well documented terms of reference for each committee. All
the Committees are chaired by an Independent Director except Asset Liability Management
Committee which is chaired by Mr. R Venkataraman, Joint Managing Director pursuant to RBI
circular dated November 04, 2019 on Liquidity Risk Management Framework for Non-Banking
Financial Companies and Core Investment Companies.
The Chairperson of respective Committees report to the Chairperson of the Board who is
a Non-Executive Director and apprise the Board about the key highlights and decisions
taken by the Committees.
The details inter alia including the composition, terms of reference and meetings held
during the year under review of the aforesaid Committees are provided in the Corporate
Governance Report, which forms part of this Report.
Besides the aforesaid Committees, the Board of Directors of the Company have
constituted Committees comprising of Senior Management Personnel for day-to-day operations
of the Company viz. Finance Committee, Group Credit Committee, Credit Committee,
Environment Social and Governance Committee, to name a few.
• Board Effectiveness
• Familiarization Program for the Independent Directors:
Details of the Familiarization Programme are provided in the Corporate Governance
Report forming part of this Report and are also available on the website of the Company at
https://storage.googleapis. com/iifl-finance-storage/files/2024-05/ F
amiliar iz ation_Pr ogr amme_of _ ID_13052024.pdf
• Board Evaluation and Outcome
The evaluation process, manner and performance criteria for Independent Directors in
which the evaluation has been carried out is explained in the Corporate Governance Report
forming part of this Report.
• Declaration by Independent Directors
Your Company has received necessary declarations from each Independent Director of the
Company, pursuant to the provisions of section 149(7) of the Act and Regulation 25(8) of
the Listing Regulations, stating that they meet the criteria of independence laid down in
Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations.
The above declarations were placed before the Board and in the opinion of the Board,
all the Independent Directors fulfil the conditions specified under the Act and the
Listing Regulations and are Independent to the Management and that there has been no
change in the circumstances or situation, which exist or may be reasonably anticipated,
that could impair or impact the ability to discharge their duties with an objective of
independent judgment and without any external influence.
All the Independent Directors of the Company have registered themselves on the
Independent Directors' Databank mandated by the Indian Institute of Corporate Affairs as
per the requirements of Rule 6 of the Companies(Appointment and Qualifications of
Directors) Rules, 2014.
• Fit and Proper Criteria & Code of Conduct
Your Company has received undertaking and declaration from each Director on fit and
proper criteria in terms of the provisions of RBI SBR Directions. The Board of Directors
have confirmed that all existing Directors are fit and proper to continue to hold the
appointment as Directors on the Board, as reviewed and recommended by the Nomination and
Remuneration Committee on fit and proper criteria under RBI SBR Directions.
All the Directors of the Company have affirmed compliance with the Code of Conduct of
the Company. The Declaration of the same is provided in the Corporate Governance Report
which forms part of this Report.
• Board Diversity
Your Company recognizes and embraces the importance of a diverse Board in its success.
Your Company believes that a truly diverse Board will leverage difference in thought,
perspective, knowledge, skills, regional and industry experience, cultural and
geographical backgrounds, age, ethnicity, race, gender that will help us retain our
competitive advantage. The Policy adopted by the Board sets out its approach to diversity.
The Policy is available on the website of the Company at
https://storage.googleapis.com/iifl- finance-storage/files/2022-07/Board_ Diversity_Policy_27072022.pdf
• Remuneration Policy and criteria for selection of candidates for appointment of
Directors
Your Company has in place policy for remuneration of Directors and Key Managerial
Personnel along with a well-defined criteria for the selection of candidates for
appointment on the said positions, duly approved by the Board of Directors.
The Nomination and Remuneration Policy is also available on the website of the Company
at
https://storage.googleapis.com/ iifl-finance-storage/files/2024-04/ Nomination_and_Remuneration_
Policy_26042024.pdf
• Succession Planning
Your Company has in place a succession planning framework for Directors and Key
Managerial Personnel to address anticipated, as well as unscheduled changes in leadership
for continuity and smooth functioning of the Company.
21. RISK MANAGEMENT
Your Company has a well-defined comprehensive Enterprise Risk Management
("ERM") Framework in place and a robust organizational structure to identify,
assess, measure and monitor risks and strengthen controls to mitigate risks. Your Company
has established procedures to periodically place before the Risk Management Committee and
the Board of Directors, the risk assessment and minimization procedures being followed by
the Company and steps taken by it to mitigate these risks. ERM has been adopted by the
Company which uses defined Key Risk Indicators based on quantitative and qualitative
factors. A two-dimensional quantitative Heat Map has been implemented, which enables the
Management to have a comprehensive view of various identified risk areas based on their
probability and impact. Your Company have initiated adequate Risk training and awareness
programmes. The composition, terms of reference and powers of the Risk Management
Committee are in conformity with the requirements of Regulation 21 of the Listing
Regulations and RBI SBR Direction and the same has been provided in the Corporate
Governance Report. The Risk Management Committee is authorized to monitor and review
overall risk management plan including liquidity risk and is also empowered, inter alia,
to review and recommend to the Board the modifications to the Risk Management Policy. The
ERM Policy is approved by the Board of Directors and inter alia, includes identification
of risks, including strategic, financial, credit, market, liquidity, security, compliance,
fraud, reputation, technology, cyber, outsourcing, people/conduct, collection, ESG,
business which in the opinion of the Board may threaten the existence of your Company.
22. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
Your Company has put in place a Policy for Related Party Transactions ("RPT
Policy"), as amended from time to time. The Policy provides for identification of
Related Party Transactions ("RPT"), necessary approvals from the Audit
Committee/Board/Members, reporting and disclosure requirements in compliance with the
provisions of the Act and Listing Regulations. The said Policy can be accessed on the
website of the Company at
https://storage.googleapis.com/iifl-finance- storage/files/2022-07/Policy_on_Related_Party_
Transactions_27072022.pdf
All contracts or arrangements executed by your Company during the year under review
with related parties were on arm's length basis and in the ordinary course of business.
Hence, the disclosure of RPTs as required under Section 134(3)(h) of the Act, 2013 in Form
AOC-2 is not applicable to your Company.
All such RPTs were placed before the Audit Committee/Board/Members for their approval,
wherever applicable. The Audit Committee reviews all RPTs on a quarterly basis.
You may refer to note no.44 of the Standalone Financial Statements and note no. 42 of
the Consolidated Financial Statements respectively, which contain related party
disclosures.
Your Company has obtained the Member's approval on Material RPTs in the last AGM held
on July 31, 2023 for financial year 2023-24.
Considering your Company being an NBFC-ML and its nature of business and operations,
your Company will continue entering into various RPTs in the ordinary course of business
and accordingly your Company has sought approval from Members for Material RPTs and
details of the same are available in the Notice convening the AGM of the Company.
23. ANNUAL RETURN
Pursuant to Section 92(3) of the Act and the Rules framed thereunder, as amended from
time to time, the Annual Return of the Company for the financial year ended March 31, 2024
in the prescribed Form MGT-7 is available on the website of the Company i.e.www.iifl.
com.
24. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
The material changes and commitments affecting the financial position of your Company,
which had occurred between the end of the Financial Year of your Company to which the
financial statements relate and the date of this Report are mentioned in point no. 6(h)
and 37 of this report.
25. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on energy conservation, technology absorption and foreign exchange
earnings and outgo stipulated under Section 134(3)(m) of the Act read with Rule 8 of the
Companies (Accounts) Rules, 2014, are provided in "Annexure – III" to
this Report. Refer pages 131-133 of this Report.
26. WHISTLE BLOWER POLICY/VIGIL MECHANISM
Pursuant to Section 177(9) of the Act read with Rule 7 of the Companies (Meetings of
Board and its Powers) Rules, 2014 and Regulation 22 of the Listing Regulations, your
Company has adopted a Whistle Blower Policy/Vigil Mechanism and has established the
necessary vigil mechanism for Directors and Employees of the Company to report genuine
concerns about unethical behaviour, actual or suspected fraud or violation of the
Company's Code of Conduct or Ethics Policy. The Company has disclosed the policy on the
website of the Company at https://storage. googleapis.com/iifl-finance-storage/files/2021-03/
IIFL_WhistleBlower_VigilancePolicy_2020.pdf
27. CREDIT RATING
Your Company's financial discipline and prudence is reflected in the strong credit
ratings prescribed by rating agencies. The following credit ratings were assigned to your
Company as on March 31, 2024.
Rating Agency |
Product |
Rating as on March 31, 2024 |
Rating as on March 31, 2023 |
| CARE |
Non-Convertible Debentures |
CARE AA (RWD) |
CARE AA / Stable |
|
Long Term Bank Facilities |
CARE AA (RWD) |
CARE AA / Stable |
|
Subordinate Debt |
CARE AA (RWD) |
CARE AA / Stable |
| ICRA Limited |
Non-Convertible Debentures |
[ICRA] AA; placed on Rating Watch with Negative Implications |
[ICRA]AA (Stable) |
|
Commercial Paper |
[ICRA] A1+ |
[ICRA]A1+ |
|
Subordinate Debt |
[ICRA] AA; placed on Rating Watch with Negative Implications |
[ICRA]AA (Stable) |
|
Long Term Bank Lines |
[ICRA] AA; placed on Rating Watch with Negative Implications |
[ICRA]AA (Stable) |
|
Long Term Principle Protected Equity Linked Debenture |
PP-MLD [ICRA] AA; placed on Rating Watch with Negative Implications |
PP-MLD[ICRA] AA (Stable) |
|
Long Term Principle Protected Market Linked Debenture |
PP-MLD [ICRA] AA; placed on Rating Watch with Negative Implications |
PP-MLD[ICRA] AA (Stable) |
|
Commercial Paper (IPO financing) |
[ICRA] A1+ |
[ICRA]A1+ |
| CRISIL Limited |
Non-Convertible Debentures |
CRISIL AA/ Watch Developing |
CRISIL AA/Stable |
|
Subordinate Debt |
Withdrawn |
CRISIL AA/Stable |
|
Long Term Principal Protected Market Linked Debentures |
CRISIL PPMLD AA/ Watch Developing |
CRISIL PP-MLD AAr/Stable |
|
Commercial Paper (IPO financing) |
CRISIL A1+ |
CRISIL A1+ |
|
Commercial Paper |
CRISIL A1+ |
CRISIL A1+ |
|
Total Bank Loan Facilities Rated (Long Term Rating) |
CRISIL AA/ Watch Developing |
CRISIL AA/Stable |
| Brickwork Ratings |
Non-Convertible Debentures (Public Issue) |
BWR AA+/Rating Watch with Negative Implications |
BWR AA+ Negative |
|
Non-Convertible Debentures |
BWR AA+/Rating Watch with Negative Implications |
BWR AA+ Negative |
|
Secured Non-Convertible Debentures |
Withdrawn |
BWR AA+ Negative |
| Moody's |
Corporate Family Rating (CFR) |
Withdrawn |
B2 / Stable |
|
Long term foreign and local-currency senior secured ratings to US$ 1
Billion Medium Term Note (MTN) program. |
Withdrawn |
B2 / Stable |
| Fitch |
Senior secured notes issued under US$ 1 Billion Medium Term Note (MTN)
Programme |
Withdrawn |
B+ / Stable |
|
Senior secured notes issued under US$ 400 Million bond |
Withdrawn |
B+ / Stable |
| India Rating |
NCDs |
IND AA/ Rating Watch with Negative Implications |
N.A. |
|
Perpetual Debt (tier 1 instrument) |
IND AA/ Rating Watch with Negative Implications |
N.A. |
28. PREVENTION OF SEXUAL HARASSMENT
Your Company recognizes its responsibility and continues to provide a safe working
environment for women, free from sexual harassment and discrimination. In Compliance with
the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act,
2013, your Company has put in place a Policy on prevention of Sexual Harassment of Women
at workplace and has duly constituted an Internal Complaints Committee under the same.
The Company also provides for mandatory online training on prevention of sexual
harassment for every new joinee, as well as all employees on an annual basis.
The details of complaints received during the year 2023-24 pursuant to the Sexual
Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 are
provided in the Corporate Governance Report.
29. PARTICULARS OF EMPLOYEES
Disclosures pertaining to remuneration and other details as required under Section
197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 are provided in "Annexure –IV" to
this report. Refer pages 134-135 of this Report.
Further, a statement showing the names and other particulars of the employees drawing
remuneration in excess of the limits as set out in the Rule 5(2) and other details as
mentioned in Rule 5(3) of the aforesaid Rules, forms part of this report. However, in
terms of first proviso to Section 136(1) of the Act, the Annual Report and Accounts are
being sent to the Members and others entitled thereto, excluding the aforesaid
information.
The said information is available for inspection by the Members and any Member
interested in obtaining a copy thereof, may write to the Company at shareholders@iifl.com.
Your Company has Mr. Nirmal Jain and Mr. R Venkataraman serving as Managing Director
and Joint Managing Director, respectively. As per their terms of appointment, Mr. Nirmal
Jain, does not draw any commission or remuneration from any subsidiary company. Further,
Mr. R. Venkataraman served as the Managing Director of IIFL Securities Limited, another
group company, and his entire remuneration for FY 2023–24 was paid by IIFL Securities
Limited. He does not draw any commission or remuneration from any subsidiary company.
Hence, no disclosure as required under Section 197(14) of the Act has been made.
30. STATUTORY AUDITORS
Pursuant to the RBI Circular No. RBI/2021-22/25 Ref. No. DoS. CO.
ARG/SEC.01/08.91.001/2021-22 dated April 27, 2021 ("RBI Guidelines"), the
statutory audit of the entities with asset size of Rs. 15,000 Crore and above, as at the
end of previous year, should be conducted under joint audit of a minimum of two audit
firms. Accordingly, based on recommendation of the Audit Committee and approval of the
Board of Directors at their respective meetings held on July 27, 2021, the appointment of
M/s. Chhajed & Doshi, Chartered Accountants (Firm Registration Number 101794W) as the
Joint Statutory Auditor was recommeded for approval of the Members of the Company.
Subsequently, the Members at the Extra Ordinary General Meeting of the Company held on
September 30, 2021, approved the appointment of M/s. Chhajed & Doshi as the Joint
Statutory Auditor for a continuous period of three (3) years with effect from FY 2021-22
till and including FY 2023-24.
Further, pursuant to the completion of the term of M/s. V Sankar Aiyar & Co,
Chartered Accountants, the Board of Directors of the Company at their meeting held on
April 26, 2023, based on the recommendation of the Audit Committee, recommended the
appointment of M/s. Sharp & Tannan Associates, Chartered Accountant (Firm Registration
Number 109983W) as the Joint Statutory Auditor of the Company. Subsequently, the Members
at the AGM held on July 31, 2023 approved the said appointment of M/s. Sharp & Tannan
Associates for a period of 3 (three) years i.e from the conclusion of the 28th AGM held on
July 31, 2023, till the conclusion of the 31st AGM to be held in the year 2026.
M/s. Chhajed & Doshi and M/s. Sharp & Tannan Associates have also confirmed
that they hold a valid peer review certificate as prescribed under Listing Regulations.
The Joint Statutory Auditors have confirmed that they continue to satisfy the eligibility
norms and independence criteria as prescribed by RBI guidelines and the Act.
Further, pursuant to the completion of the term of M/s. Chhajed & Doshi, Chartered
Accountants, the Board of Directors at its meeting held on June 15, 2024, based on the
recommendation of the Audit Committee, recommended the appointment of M/s. G. M. Kapadia
& Co., Chartered Accountant (Firm Registration Number:104767W) as the Joint Statutory
Auditor of the Company for the approval of the Members at the ensuing AGM for a period of
3 (three) years i.e. from the conclusion of the ensuing 29th AGM till the conclusion of
the 32nd AGM to be held in the year 2027 at such remuneration plus out of pocket expenses
and applicable taxes, as may be mutually agreed between the Board and the Auditor.
Appropriate resolution seeking Members' approval for the appointment of M/s. G. M.
Kapadia & Co., Chartered Accountant as the Joint Statutory Auditor of the Company is
appearing in the Notice convening the ensuing AGM of the Company.
The Audit for FY 2023-24 was conducted by M/s. Chhajed & Doshi and M/s. Sharp &
Tannan Associates, Joint Statutory Auditors of the Company and that there are no
qualifications, reservations, adverse remarks or disclaimers made by the Joint Statutory
Auditors in their Audit Report. The Notes to the financial statements referred in the
Auditors Report are self-explanatory and therefore do not call for any comments under
Section 134 of the Act. The Joint Statutory Auditors' Report is enclosed with the
financial statements in this Report.
31. SECRETARIAL AUDIT
The Board of Directors appointed M/s. Nilesh Shah & Associates, Practicing Company
Secretaries to conduct Secretarial Audit of the Company for FY 2023-24. The Secretarial
Auditor had conducted the audit and their report was placed before the Board. The report
of the Secretarial Auditor is annexed herewith as "Annexure – V" to
this report. Refer pages 136-139 of this Report. There are no qualifications or
observations in the Report.
Pursuant to Regulation 24A of the Listing Regulations, a listed company is required to
annex a secretarial audit report of its material unlisted subsidiary to its Directors
Report. The Secretarial Audit Reports of the material subsidiaries of the Company i.e. HFC
and Samasta for FY 2023-24 is annexed herewith as "Annexure – VI" &
"Annexure- VII" respectively. Refer pages 140-148 of this Report.
32. REPORTING OF FRAUDS BY AUDITORS
During the year under review, the Joint Statutory Auditors and the Secretarial Auditor
have not reported any instances of frauds committed in the Company by its Officers or
Employees to the Audit Committee under Section 143(12) of the Act, details of which needs
to be mentioned in this Report.
33. RBI DIRECTIONS
Our Company endeavours to adhere fully to the directions, circulars, notifications, and
guidelines issued by the RBI applicable to NBFC-MLs, as specified under the RBI Master
Direction – Reserve Bank of India (Non-Banking Financial Company
– Scale Based Regulation) Directions, 2023. The management and the Board has taken
serious note of the deviations identified in the RBI Order, and since taken the corrective
action to ensure complete compliance in letter and spirit with RBI's regulations. The
Company has strengthened its systems, processes, MIS, compliance and management teams to
prevent recurrence of such lapses and ensure fool- proof continuous compliance.
The Company has systems in place to ensure compliance with the applicable provisions of
the Foreign Exchange Management Act, 1999, and its amendments.
• Scale Based Regulation
The Scale Based Regulations ("SBR") were notified by the Reserve Bank of
India ("RBI") vide its circular dated October 22, 2021, effective from October
01, 2022. Pursuant to the Scale Based Regulations, the RBI has classified your Company as
NBFC in Middle Layer ("ML"). Your Company has ensured full compliance with
various requirements prescribed under RBI SBR Direction for NBFC-ML within the specified
timelines including adopting policy for enhanced regulatory framework, Internal Capital
Adequacy Assessment Process Policy (ICAAP), complying with large exposure norms, setting
limits for sensitive sector exposure, etc.
• Chief Compliance Officer
In compliance with RBI SBR Direction, the Board has appointed a Chief Compliance
Officer to oversee the compliances as applicable to your Company and has also adopted a
Compliance Policy in compliance with RBI SBR Direction.
• Internal Ombudsman
Your Company has appointed an Internal Ombudsman ("IO") in compliance with
the Master Direction - Reserve Bank of India (Internal Ombudsman for Regulated Entities)
Directions, 2023 issued on December 29, 2023. A Report on number of complaints escalated
to IO and status of disposal of such complaints during the period under review is being
placed before the Board for its review in compliance with the aforesaid RBI Directions.
34. CORPORATE GOVERNANCE
Your Company is committed to maintaining the highest standards of Corporate Governance
and adhering to the Corporate Governance requirements set out by the Securities and
Exchange Board of India. We have been implementing best Corporate Governance practices as
recognized globally.
The report on Corporate Governance, as stipulated under the Listing Regulations and the
RBI SBR Direction, forms an integral part of this report. The requisite certificate from
M/s. Nilesh Shah & Associates, Practicing Company Secretaries, certifying compliance
with the conditions of Corporate Governance as stipulated in Regulations 17 to 27, clauses
(b) to (i) and (t) of sub-regulation (2) of Regulation 46 and Para C, D and E of Schedule
V of the Listing Regulations forms part of this Report.
Our Company complies with all RBI-prescribed norms, including the Fair Practices Code,
Anti Money Laundering, and Know Your Customer Guidelines.
35. COMPLIANCE WITH THE SECRETARIAL STANDARDS
The Board affirms that your Company has complied with the applicable and mandatory
Secretarial Standards, as amended from time to time, issued by the Institute of Company
Secretaries of India.
36. DEPOSITS
During the period under review, your Company did not accept/renew any deposits within
the meaning of Section 73 of the Act and the Rules made thereunder and RBI SBR Direction.
37. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR
TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE
An inspection of our Company was carried out by the RBI based on our financial position
as of March 31, 2023. The RBI identified several material supervisory concerns in our gold
loan portfolio, including:
• Significant disbursals of loan amounts in cash far exceeding the statutory
limit.
• Non-adherence to the standard auction process.
• Significant deviations in assaying and certifying the purity and net weight of
gold at both the time of loan sanction and auction upon default and consequent breaches in
the Loan-to-Value ratio.
• Lack of transparency in charges levied on customer accounts.
Following a press release and order dated March 04, 2024, the RBI directed our Company
to immediately cease and desist from sanctioning or disbursing gold loans, as well as from
assigning, securitising, or selling any of its gold loans. These supervisory restrictions
will be reviewed upon completion of a special audit to be instituted by the RBI and will
be lifted after rectification by the Company of the special audit findings and the
findings of RBI Inspection, to the satisfaction of RBI. Meanwhile, the Company can
continue servicing its existing gold loan portfolio through usual collection and recovery
processes. The Special Audit commenced on April 23, 2024, and since then been concluded.
The above mentioned does not affect the going concern status of the Company, as we
continue to operate in other business areas and maintain a valid NBFC license.
38. DISCLOSURE REQUIREMENT BY LARGE CORPORATES
As per SEBI Circular dated October 19, 2023, your Company was identified as Large
Corporate in the previous financial year and thus it had to raise minimum 25% of its
qualified borrowings by way of issuance of debt securities in the subsequent financial
years. Accordingly, it has raised Rs. 1,112.09 Crore by way of issuance of debt
instruments in the Capital Market out of the total long term borrowings of Rs. 7,339.44
Crore during FY 2023-24. As Capital Market condition was muted for raising long term debt
securities during FY 2023-24, your Company was unable to raise the required long term debt
securities.
Your Company shall positively comply with the said requirements in the subsequent
financial years.
39. DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 134(5) of the Act and to the best of their
knowledge and belief and according to the information and explanation obtained by your
Directors, your Directors hereby confirm that:
a) in the preparation of the annual accounts, the applicable Indian Accounting
Standards had been followed and there were no material departures;
b) 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 at the end of the Financial Year and of
the profit of the Company for that year;
c) the Directors had taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of the Act for safeguarding the
assets of the Company and for preventing and detecting fraud and other irregularities;
d) the Directors had prepared the annual accounts on a going concern basis;
e) 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
f) 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.
40. GENERAL
Your Directors state that during FY 2023-24:
(i) the Company has not issued equity shares with differential rights as to dividend,
voting or otherwise;
(ii) the Company has not issued any sweat equity shares during the year;
(iii) the Central Government has not prescribed the maintenance of cost records for any
of the products of the Company under sub-section (1) of Section 148 of the Act and the
Rules framed there under;
(iv) there is no change in nature of business of the Company during the year;
(v) the Company has not defaulted in repayment of loans from banks and financial
institutions;
(vi) there were no delays or defaults in payment of interest/principal of any of its
debt securities;
(vii) the Company had not made any application under the Insolvency and Bankruptcy
Code, 2016 (the "Code"). As at March 31, 2024, no applications have been filed
or are pending under the Code. No proceeding is pending against the Company under the
Code.
(viii) there was no instance of one-time settlement with any bank or financial
institution.
(ix) the details of Debenture Trustees of the Company are as follows:
Particulars |
Catalyst Trusteeship Limited |
IDBI Trusteeship Services Limited* |
Vardhman Trusteeship Private Limited |
Address |
GDA House, First Floor, Plot No. 85 S. No. 94 & 95, Bhusari Colony
(right), Kothrud, Pune– 411038 |
Asian Building, Ground Floor, 17, R. Kamani Marg, Ballard Estate, Mumbai-
400001 |
The Capital, 412A, Bandra Kurla Complex, Bandra East, Mumbai 400051 |
Contact Details |
+912249220555 |
+912240807001 |
+912240140832 |
Email |
complianceCTL-Mumbai@ ctltrustee.com |
itsl@idbitrustee.com |
Corporate@vardhmantrustee. com |
Website |
www.catalysttrustee.com |
www.idbitrustee.com |
www.vardhmantrustee.com |
* All ISINs under IDBI Trusteeship Services Limited matured during the FY 2023-24.
41. APPRECIATION
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, Stock
Exchanges, Depositories, Registrar and Share Transfer Agent, and Other Statutory Bodies
for their assistance, cooperation and encouragement and continued support extended to the
Company.
Your Directors also gratefully acknowledge all stakeholders of the Company viz.
customers, Members, investors, dealers, vendors, bankers and other business partners for
the excellent support received from them during the year. Our employees are instrumental
in helping the Company scale new heights, year after year. Their commitment and
contribution is deeply acknowledged. Your involvement as Members is also greatly valued.
Your Directors look forward to your continuing support.
For and on behalf of the Board
Arun Kumar Purwar
Chairperson & Non-Executive Director
(DIN: 00026383)
Place: Mumbai
Date: June 15, 2024
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