Dear Shareholders,
Your Directors have the pleasure in presenting the 17th Annual Report on the business
and operations along with the audited standalone and consolidated financial statements
& the Auditors' Report of the Company, for the financial year ended March 31, 2023.
FINANCIAL RESULTS
The standalone and consolidated financial statements for the financial year ended March
31, 2023, forming part of this Annual Report, have been prepared in accordance with the
Companies Act, 2013 (the "Act") and the Securities and Exchange Board of India
(Listing Obligations and Disclosure Requirements) Regulations, 2015 (the ‘SEBI
Listing Regulations').
The summary of the Company's audited financial results for the year ended March 31,
2023, is depicted below:
|
Standalone |
Consolidated |
Particulars |
FY23 |
FY22 |
FY23 |
FY22 |
| Revenue from operations |
40,085.44 |
42,554.94 |
40,085.44 |
43,103.51 |
| Other Income |
7,320.92 |
5,232.81 |
7,324.74 |
5,336.67 |
Total Revenue |
47,406.36 |
47,787.75 |
47,410.18 |
48,440.18 |
| Less: Total Expenditure |
8,540.45 |
7,827.09 |
8,553.22 |
8,658.24 |
Profit before share of profit of associates, exceptional items and tax |
38,865.91 |
39,960.66 |
38,856.96 |
39,781.94 |
| Share in profit of associate |
- |
- |
1,325.58 |
144.27 |
| Profit before tax and exceptional items |
38,865.91 |
39,960.66 |
40,182.54 |
39,926.21 |
Exceptional items (Profit on loss of control of subsidiary) |
- |
- |
- |
597.77 |
| Profit before tax |
38,865.91 |
39,960.66 |
40,182.54 |
40,523.98 |
| Less: Provision for Tax |
9,596.16 |
9,709.44 |
9,593.91 |
9,660.40 |
Profit after tax (A) |
29,269.75 |
30,251.22 |
30,588.63 |
30,863.58 |
Other comprehensive income for the year, net of income tax (B) |
11.13 |
11.25 |
11.13 |
9.45 |
Total comprehensive income for the year (A+B) |
29,280.88 |
30,262.47 |
30,599.76 |
30,873.03 |
Profit for the year attributable to: |
|
|
|
|
| Shareholders of the Company |
29,269.75 |
30,251.22 |
30,588.63 |
30,925.55 |
| Non-controlling interests |
- |
- |
- |
(61.97) |
Earnings per equity share [face value 1 per share] |
|
|
|
|
| Basic () |
3.27 |
3.38 |
3.42 |
3.45 |
| Diluted () |
3.27 |
3.38 |
3.42 |
3.45 |
THE COMPANY'S PERFORMANCE DURING THE FINANCIAL YEAR 2023
ON STANDALONE BASIS
Your Company's standalone revenue was 47,406.36 lakh against 47,787.75 lakh in the
previous year. Profit before tax stood at 38,865.91 lakh in FY23 against 39,960.66 lakh in
FY22; profit after tax for FY23 was 29,269.75 lakh compared to 30,251.22 lakh in the
previous year.
CONSOLIDATED REVENUES
The Consolidated Financial Statements of the Company, its subsidiary and associates are
prepared in accordance with the Act and applicable Indian Accounting Standards ("Ind
AS") along with all relevant documents and the Auditors' Report form part of this
Annual Report. The Consolidated Financial Statements presented by the Company include the
financial results of its subsidiary Company i.e., International Carbon Exchange Private
Limited ("ICX") and its associate Company i.e., Indian Gas Exchange Limited
("IGX").
ICX was incorporated as a wholly-owned subsidiary of Indian Energy Exchange Limited on
December 27, 2022. Accordingly, the corresponding financial results for the year ended
March 31, 2023, as contained in the consolidated annual financial results comprise ICX
figures for the period from December 27, 2022, to March 31, 2023, only. As on March 31,
2023, IGX stands as the associate Company of IEX and as on the date of this annual report
IEX holds 47.28% stake in IGX.
The Company's consolidated revenue is 47,410.18 lakh in FY23 in comparison with
48,440.18 lakh in FY22. The Company's profit after tax for FY23 was 30,588.63 lakh
compared to 30,863.58 lakh in the previous year. Highlights of the Company's performance
are discussed in detail in the Management Discussion and Analysis Report
("MDAR"), included in Annual Report as required under the SEBI Listing
Regulations.
MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report ("MDAR") for the year under
review, as stipulated under the SEBI Listing Regulations, is presented in a separate
section, forming part of this report.
Certain Statements in the said report may be forward-looking. Many factors may affect
the actual results, which could be different from what the Directors envisage in terms of
future performance and outlook.
DIVIDEND DISTRIBUTION POLICY
Pursuant to Regulation 43A of SEBI Listing Regulations, your Company has a well-defined
Dividend Distribution Policy that balances the dual objectives of rewarding shareholders
through dividends whilst also ensuring the availability of sufficient funds for the growth
of the Company. The policy is available on the website of the Company and can be accessed
through the following web link: https://www.iexindia.com/pdf/Dividend%20Distribution%20
Policy.pdf
DIVIDEND
In terms of the Dividend Distribution Policy of the Company and considering the Buyback
conducted by the Company during FY23, your Directors are pleased to recommend a Final
Dividend of 1/- per equity share having a face value of 1 each for the year ended March
31, 2023, which is 100% of the total paid-up share capital of the Company.
The Final Dividend, subject to the approval of Members at the ensuing 17th Annual
General Meeting of the Company, will be paid within the time period stipulated under the
Companies Act, 2013, subject to deduction of tax at source. The total outflow on account
of the proposed final dividend will be approximately 8,916.93 Lakh.
TRANSFER TO RESERVES
There is no amount proposed to be transferred to the Reserves. However, during the year
a Capital Redemption Reserve (CRR) Account was created in which an amount equivalent to
the nominal value of the shares bought back under the Buyback i.e. 69.77 lakh were
transferred.
SHARE CAPITAL & BUYBACK OF EQUITY SHARES
Authorised Share Capital
As on March 31, 2023, there was no change in the authorised share capital of the
Company and it stood at 100 Crore, consisting of 100 Crore equity shares of 1 each.
Paid-up Share Capital
Post extinguishment of 69,76,798 equity shares bought under the Buyback, the paid-up
equity share capital of the Company stood at 8,916.93 lakh consisting of 89,16,92,735
equity shares of 1 each as on March 31, 2023. The equity shares of the Company are listed
on BSE Limited and National Stock Exchange of India Limited.
Buyback
The Board of Directors of the Company at its meeting held on November 25, 2022 and the
shareholders by way of a special resolution passed through postal ballot on December 30,
2022, accorded its approval for the Company to buy back its equity shares from the open
market through the stock exchanges for a total amount not exceeding 9,800 lakh (Maximum
buy back size) at a price not exceeding 200 per equity share (Maximum buy back price). The
Buyback process commenced on January 11, 2023 and closed on March 16, 2023. In accordance
with the above, the Company has bought back 69,76,798 equity shares at an average price of
140.45 per equity share pursuant to the buyback offer by utilizing a sum of 9,798.96 lakh
which represents 99.99% of the Maximum Buyback Size. The Company has completed the process
of extinguishment of the entire 69,76,798 equity shares bought back under the Buyback
Process. The Company has, neither issued any equity shares with differential voting rights
nor any shares (including sweat equity shares) to any of its employees under any scheme
except the shares issued under the IEX ESOP Scheme 2010 & IEX RSU Scheme 2019 as
disclosed on the website of the Company pursuant to the SEBI (Share Based Employee
Benefits and Sweat Equity) Regulations, 2021.
EMPLOYEE STOCK OPTION PLAN (ESOP) AND RESTRICTED STOCK UNIT (RSU) SCHEME
IEX Employees Stock Option Plan 2010 ("IEX ESOP Scheme 2010")
Your Company has IEX ESOP Scheme 2010, to motivate and instil a sense of ownership
among its employees. The Company's ESOP scheme is administered through a Trust route,
which acts as per instructions of the Nomination and Remuneration Committee of the
Company. The details of the IEX ESOP Scheme 2010, including terms of reference, and the
requirement specified under Regulation 14 of the SEBI (Share Based Employee Benefits and
Sweat Equity) Regulations, 2021, are available on the Company's website, at
https://www.iexindia.com/pdf/07082023Disclosure%20
Pursuant%20to%20SEBI%20(SBEB%20&%20SE)%20
Regulations,%202021ESOP%20&%20RSU%20FY22-23.pdf
Indian Energy Exchange Limited Restricted Stock Unit Scheme 2019 ("IEX RSU SCHEME
2019")
Your Company has ‘Indian Energy Exchange Limited Restricted Stock Unit Scheme
2019' with a view to attract and retain key talents working in the capacity of senior
management with the Company, by way of rewarding their performance and motivating them to
contribute to the overall corporate growth and profitability. The Scheme is administered
directly by the Nomination and Remuneration Committee ("NRC") of the Company.
The details of the IEX RSU Scheme 2019, including terms of reference, and the requirement
specified under Regulation 14 of the SEBI (Share Based Employee Benefits and Sweat Equity)
Regulations, 2021, are available on the Company's website, at
https://www.iexindia.com/pdf/07082023Disclosure%20
Pursuant%20to%20SEBI%20(SBEB%20&%20SE)%20
Regulations,%202021ESOP%20&%20RSU%20FY22-23.pdf
The details of the IEX ESOP Scheme 2010 and IEX RSU Scheme 2019 form part of the Notes
to accounts of the financial statements in this Annual Report.
Further, the Company has obtained a certificate from the Secretarial Auditors of the
Company certifying that the IEX ESOP Scheme 2010 and IEX RSU Scheme 2019 have been
implemented in accordance with the SEBI (Share Based Employee Benefits and Sweat Equity)
Regulations, 2021 and in accordance with the resolution passed by the members. The
certificate will be placed at the ensuing Annual General Meeting for inspection by the
members of the Company.
CORPORATE SOCIAL RESPONSIBILITY & SUSTAINABILITY
In compliance with the requirements of Section 135 of the Act read with the Companies
(Corporate Social Responsibility) Rules, 2014, as amended, the Company has in place a
Corporate Social Responsibility (CSR) Committee which works as per the applicable
provisions and such other matters as prescribed by the Board from time to time.
During the year, the Board of Directors expanded the role of the CSR Committee to
include sustainability-related activities and accordingly, the CSR committee was renamed
as Corporate Social Responsibility
& Sustainability Committee (CSR & Sustainability Committee). The Committee,
inter alia, reviews and monitors the CSR as well as Sustainability initiatives of the
Company.
The Company also has in place a ‘Corporate Social Responsibility Policy' (CSR
Policy) in line with Section 135 read with the CSR Rules and Schedule VII of the Act.
During the year, the Company has undertaken CSR activities through implementation agencies
in the area of Protection of National Heritage, Art, & Culture etc. These CSR
activities were in accordance with the CSR Policy of the Company and Schedule VII of the
Act. The Company has identified the following focus areas for CSR engagement:
National Heritage, Art and Culture: Contributing to protection of national
heritage, art and culture.
Health and Development: Supporting socioeconomic development of underprivileged
communities through improved access to livelihoods, sanitation, water, healthcare and
education.
Renewable Energy: Promoting renewable energy by creating opportunities for
access and awareness.
Women Empowerment: Endeavouring to integrate the cause of women empowerment
while designing the projects.
Disaster Response: Contributing to relief and rehabilitation measures in
disaster-affected parts of country.
The composition of the CSR & Sustainability Committee, CSR Policy and CSR
initiatives of the Company are placed on the Company's website at www.iexindia.com and the
Annual CSR Compliance Report pursuant to Section 135 of the Companies Act, 2013 is
appended as Annexure 1 to this report.
HUMAN RESOURCE DEVELOPMENT
At IEX, we keep employees at the core of everything that we do. Our employees are our
strength and key differentiators. We ensure strong bond with our employees, our highly
committed and engaged employees continuously deliver growth for the organization, by
creating value for the customers. Our culture is founded on our core values of
"Excellence, Customer Centricity, Integrity, Respect & Trust, and Teamwork".
We are committed and focused on fostering a strong learning culture in the organization
by continuously investing in competence and leadership development of the employees
through enhancement of functional/ technical and behavioural /soft skills. For Mid &
Senior Level employees, we conducted leadership programs like Emerging Leaders, Leadership
Excellence through Awareness and Practice (LEAP). For other employees across the
organization programs like Public Policy Economics, Prevention of Sexual Harassment at
Workplace (POSH), Information Security, KVM Oracle and other skill based training were
conducted. Our strategy is a combination of developing internal talent and hiring best of
talent externally. The objective is to create complimentary skills in both domain and
external/sector experience.
We believe in open and transparent work culture that places adequate emphasis on
employee experience, feedback, and suggestions. We have regular employee engagement
activities including interactions with the leaders of the organization through various
forums. Forums such as weekly and monthly meeting, quarterly All Hands Meet, skip level
meetings, and departmental meetings provide opportunities for employee interaction with
the management. Our employees are engaged through various engagement activities conducted
in person as well as through inhouse digital platforms.
We are delighted to feature as a Great Place to Work (GPTW) in mid-size organization
for the period of Jan'23 ~ Jan'24. This recognition encourages us to move forward on our
journey towards creating a harmonious environment for our workforce at IEX.
TECHNOLOGY ABSORPTION
Since the inception in the year 2008, the Indian Energy Exchange has believed in
Technology innovation as a key differentiating factor and has adopted the best-in-class
technology, and it continues to be so even today. Our technology vision is to architect
next-generation technology and digital enterprise solutions that enable us to shape
development of competitive, transparent, and robust energy markets in the country.
Innovation, and strong technology backbone have indeed enabled us build continued trust
with our robust ecosystem of almost 7,000+ participants including 100+ distribution
utilities, 500+ generators, 1500+ renewable participants and 4600+ open access consumers
as well as provide them with the best-in-class seamless customer centric services. We
continually invest efforts and resources in technology to elevate its ease, 24*7
availability, reliability, security and provide the best-in-class experience. We have
endeavoured to advance technology architecture both Exchange as well Enterprise levels.
Over the years, we have successfully transitioned from monolithic auction software to a
more modular service-based architecture connected through open Application Programming
Interface (API) connecting Exchange trading system with Members and National Load Dispatch
Centre (NLDC) in an efficient manner. Additionally, we also transitioned to more agile
technology architecture having incorporated tools like Jira, and CI/CD pipelines that
allow us to adapt to the changes very swiftly. The technological transition has been aptly
supported with cultural transformation, including implementation of a comprehensive
training program on new technologies for the Exchange Technology team. Similarly,
implementation of Mixed-Integer Linear Programming (MILP) based Exchange technology
matching algorithm, at par with the global best solutions, has enabled us to introduce
complex bids to support our market participants in meeting their requirements in a
dynamically evolving renewable-centric scenario. Also, in addition to API based
integration between the Clearing and Settlement System and SAP system going live in the
current year, we have carried out various improvements (including Document Management
System, etc.) to the SAP system, to make it more effective and beneficial.
Our relentless focus on customer centricity coupled with the best-in-class technology,
a focused and dedicated team, and tech partnerships with local and global companies,
indeed sets us apart. We started the year enhancing Customer experience by commencement of
web-based platform, to provide digital registration, data insights and analytics to our
customers offering greater efficiency in their exchange-based procurement. Post multiple
feedback from our customers we also provided seamless bidding experience and minimizing
manual interventions through Application Programming Interface (API) for the Real Time
Market. We also undertook system integration with our Clearing Banks has been enabling
faster financial transactions with our customers. Going forward, we plan to adopt API
based solutions for all market segments as well as adopt new technologies such as Robotic
Process Automation (RPA) to eliminate human dependency in market operation processes.
To ensure high availability and 100% uptime, IEX trading system has three layers of
redundancy on the network layer to allow for more flexible communication with NLDC. The
exchange system is built on a virtualized environment with hardware redundancy at the
machine level for high availability, and further redundancy built into the software even
at the task level. Backup systems are also at hand to automatically take over in a matter
of seconds in the case of a failure in any of the RTM processes. Our systems are built
with an auto-healing concept based on extensive monitoring which ensures that in case of
failure, the system recognizes the problem and automatically triggers a fallback process
with minimal manual intervention, thus minimizing downtime. To enhance and ensure data
security, several controls are being taken in IEX to prevent unauthorized access to
application servers, computers, databases, and websites.
Through implementation of leading-edge security technologies like Endpoint Security,
Email Security, Multi-tier Gateway level security, Backup security, Secure Access Control
etc. IEX has covered all the major security aspects to protect the digital footprint. Data
Security Policy & Crisis Management Plan are being re-formulated in IEX which
highlights Identify Sensitive Data, Strong and Multi factor authentication procedures,
Secure & Regular data backup and restoration, Information security audits, Secure
hardware and software configurations, Regular Scanning for Vulnerabilities, Managing
Patches and upgrades, Strong Monitoring & Alerting mechanism through SOC, Response to
Incidents, Acceptable Usage, Awareness & Training program etc.
With so many Technology innovations in FY23, we are now set to take the next leap. We
plan to enhance our API footprint and integrate with many more customers. We will invest
even more on Web Based Platform and provide Financial Reconciliation and even Bidding on
our Platform. We continue to invest in Security and will enhance our monitoring with
state-of-the-art security solutions. With new products like Long Duration Contract and
technology enhancements we strive to stay ahead and fulfil our technology vision of
creating a customer centric energy marketplace through efficient and state of the art
Technology Solutions.
SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES
Your Company has one subsidiary (wholly owned) and one Associate Company, as on March
31, 2023 and does not have any Joint Venture. Further, no Company ceased to be Subsidiary
or Associate or Joint Venture of the Company, during the financial year under review.
International Carbon Exchange Private Limited - Wholly Owned Subsidiary
During the year under review, International Carbon Exchange Private Limited
("ICX"), a wholly owned subsidiary of the Company, was incorporated on December
27, 2022, with the intent to explore business opportunities in the voluntary Carbon
Market. ICX will enable participants to buy and sell voluntary carbon credits at
competitive prices through its transparent & reliable platform and facilitate the
reduction of global GHG emission by 45% by 2030 to get on track to limit global warming to
1.5 degrees. ICX was incorporated with an authorized capital of 10 Crores divided into 1
Crore equity shares of the face value of 10 (Rupees Ten Only) each and subscribed and
paid-up equity share capital of 5 Crores divided into 50 lakh equity shares of face value
of 10 (Rupees Ten Only) each.
Indian Gas Exchange Limited – Associate Company
As on March 31, 2023, Indian Gas Exchange Limited (‘IGX') was the Associate
Company of your Company. The Company holds 47.28% of equity share capital in IGX as on
March 31, 2023 and on the date of this Report.
IGX is India's first automated national level Gas Exchange which works towards
promoting and sustaining an efficient and robust Gas market and to foster gas trading in
the country. The exchange features multiple buyers and sellers to trade in spot and
forward contracts at designated physical hubs. IGX is a neutral and transparent
marketplace where both buyers and sellers trade Gas as the underlying commodity. IGX
enables efficient and competitive discovery of gas prices and one of its most important
objectives is also to maintain market integrity. The Consolidated Financial Statements of
the Company and its Subsidiary/Associate are prepared in accordance with the applicable
accounting standards, issued by the Institute of Chartered Accountants of India, and forms
part of this Annual Report. Pursuant to the provisions of Section 129(3) of the Companies
Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, a statement containing
the salient features of the financial statements of ICX & IGX in Form AOC-1 is
attached to this Report as Annexure 2.
RELATED PARTY TRANSACTIONS
All related party transactions during the FY23 were at arm's length basis, in the
ordinary course of business and were in compliance with the applicable provisions of the
Act and SEBI Listing Regulations and the Company's Policy on Related Party Transactions.
All these transactions were reviewed and approved by the Audit Committee/ the Board of
Directors of the Company.
The Company had not entered into any contract/ arrangement/ transaction with related
parties which could be considered material, or which may have potential conflict with the
interest of the Company, hence there is no information to be provided as required under
section 134(3)(h) of the Companies Act 2013 read with Rule 8(2) of the Companies
(Accounts) Rules, 2014. Accordingly, a nil disclosure of Related Party Transactions is
annexed with this Report in Form AOC-2 as Annexure 3.
All the Related Party Transactions are placed before the Audit Committee for its review
and approval on a quarterly basis. All Related Party Transactions are subject to an
independent review by the Statutory and Secretarial Auditors of the Company to establish
compliance with the requirements of Related Party Transactions under the Act and SEBI
Listing Regulations. Members may refer to Note No. 46 of the Standalone financial
statement which sets out related party disclosures pursuant to Ind AS.
Your Company has formulated a policy on materiality of related party transactions and
dealing with related party transactions which has been amended from time to time to comply
with the necessary amendments of various enactments of law. The Policy is available on the
website of the Company and can be accessed through the following web link:
https://www.iexindia.com/pdf/IEXPOLICYON MATERIALITYANDDEALINGWITHRELATEDPARTY
TRANSACTIONS.pdf
The Policy intends to ensure that proper approval, reporting and disclosure processes
are in place for all transactions between the Company and related parties. This Policy
specifically deals with the review and approval of Material Related Party Transactions
keeping in mind the potential or actual conflicts of interest that may arise because of
entering into these transactions.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Your Company has a well-diversified Board comprising of Directors having skills,
competencies and expertise in the areas of Finance, Strategy Planning & Policy
Development, Information Technology, Governance, Risk and Compliance etc. to ensure
effective corporate governance and sustained commercial success of the Company.
The Nomination and Remuneration Committee (‘NRC') is responsible for developing
competency requirements for the Board based on the industry and strategy of the Company.
The Board composition analysis reflects in-depth understanding of the Company, including
its strategies, operations, financial condition and compliance requirements.
The Board has also identified the core skills, expertise and competencies of the Board
of Directors required in the context of the businesses and sectors applicable to the
Company which are mapped with each of the Directors on the Board. The same is disclosed in
the Corporate Governance Report forming part of the Annual Report.
As on March 31, 2023, the Board comprised 6 (Six) Directors, out of which 3 (Three)
were Non-Executive Independent Directors including 1 (One) Woman Independent Director, 2
(Two) Non-Executive Non-Independent Directors and 1 (One) Executive Director. During the
year under review, the Non-Executive Directors (NEDs) of the Company had no pecuniary
relationship or transactions with the Company, other than sitting fees and reimbursement
of expenses incurred by them, if applicable, for the purpose of attending Board/Committee
meetings of the Company.
A. Changes in Directors
The Board of Directors at its meeting held on April 27, 2022, approved the appointment
of Mr. Rajeev Gupta (DIN: 00241501) as an Additional Director designated as Independent
Director of the Company for a period of five years with effect from April 27, 2022,
subject to the approval of the shareholders.
The shareholders' approval was sought through a postal ballot (e-voting) and as per the
voting result outcome of the postal ballot, the appointment of Mr. Rajeev Gupta was not
approved by the shareholders. Accordingly, Mr. Rajeev Gupta ceased to be the Director of
the Company with effect from July 17, 2022. Further, the term of Ms. Sudha Pillai &
Mr. Tejpreet Singh Chopra, Independent Directors of the Company, is expiring on April 25,
2024 & March 04, 2024, respectively, which would result a vacancy in the office of
Independent Director(s) and the resulting vacancy needs to be filled by the Company not
later than the date such office is vacated as per the amended provisions of the SEBI
Listing Regulations. Accordingly, post completion of FY23, the Board of Directors based on
the recommendations of the Nomination and Remuneration Committee and subject to the
approval of the Members, approved:
Re-appointmentofMs.SudhaPillai(DIN02263950) as an Independent Director of the Company,
not liable to retire by rotation, for a further period of five years commencing from April
26, 2024 to April 25, 2029 (both days inclusive);
Re-appointment of Mr. Tejpreet Singh Chopra (DIN 00317683) as an Independent Director
of the Company, not liable to retire by rotation, for a further period of five years
commencing from March 05, 2024 to March 04, 2029 (both days inclusive); Necessary
resolutions for the above-mentioned appointments are included in the Notice convening the
ensuing AGM and details of the proposed reappointments are disclosed in the explanatory
statement of the Notice.
B. Directors liable to retire by rotation
In accordance with the provisions of the Companies Act, 2013 and the Articles of
Association of the Company, Mr. Amit Garg (DIN 06385718), Non-Executive Non-Independent
Director of the Company will be retiring by rotation at the ensuing Annual General Meeting
(AGM) and being eligible offers himself for re-appointment. Necessary resolutions for the
re-appointment of aforesaid Director have been included in the Notice convening the
ensuing AGM and details of the proposed re-appointment are disclosed in the explanatory
statement of the Notice.
C. Change in KMP's
During the year under review, there were no changes in the KMP's of the Company.
The Key Managerial Personnel of the Company as on March 31, 2023, are Mr. Satyanarayan
Goel, Chairman
& Managing Director and Mr. Vineet Harlalka, Chief Financial Officer, Company
Secretary and Compliance Officer.
D. Declaration by Independent Directors
As on March 31, 2023, Ms. Sudha Pillai, Prof. Kayyalathu Thomas Chacko, Mr. Tejpreet
Singh Chopra were the Independent Directors on the Board of your Company in terms of
Section 149 of the Act and Regulation 16 of the SEBI Listing Regulations. The Company has
received declarations from all the Independent Directors confirming that they meet the
criteria of independence as prescribed under Section 149(6) of the Act read with the
Schedules and Rules made thereunder, SEBI Listing Regulations and the CERC (Power Market)
Regulations, 2021.
In terms of Regulation 25(8) of the SEBI Listing
Regulations, they have confirmed that they are not aware of any circumstances or
situation which exists or may be reasonably anticipated that could impair or impact their
ability to discharge their duties with an objective independent judgement and without any
external influence. All Independent Directors have affirmed compliance to the code of
conduct for independent directors as prescribed in Schedule IV of the Companies Act, 2013
and the Code of Conduct for Directors and Senior management personnel formulated by the
Company. A declaration on compliance with Rule 6(3) of the Companies (Appointment and
Qualification of Directors) Rules, 2014, along with a Notification dated October 22, 2019,
issued by the Ministry of Corporate Affairs (MCA), regarding the requirement relating to
enrolment in the Data Bank for Independent Directors, has been received from all the
Independent Directors, along with declaration made under Section 149(6) of the Act.
The Board of Directors of the Company has taken on record the declarations and
confirmations submitted by the Independent Directors and based upon the declarations
received from them, the Board of Directors have confirmed that the Independent Directors
meet the criteria of independence as specified in the Act including the Schedules and
Rules made thereunder and the SEBI Listing Regulations and are independent of the
management.
E. Meetings of Board
The Board met 6 (Six) times during the year under review. The details of board meetings
and the attendance of the Directors are provided in the Corporate Governance Report, which
forms part of this Annual Report. The intervening gap between the two consecutive Board
meetings did not exceed the period prescribed by the Act, SEBI Listing Regulations and
Secretarial Standard on Board Meetings (SS-1) issued by the Institute of Company
Secretaries of India ("ICSI"), as amended from time to time.
F. Committees of the Board
During the year under review, with an objective of further strengthening the governance
standards so as to match with globally accepted better practices, the Board had
reconstituted certain existing Committees and amended the terms of reference of certain
Committees. Details of various Committees constituted by the Board, including the
Committees mandated pursuant to the applicable provisions of the Act and SEBI Listing
Regulations, are given in the Corporate Governance Report, which forms part of this Annual
Report.
G. Independent Directors' Meeting
The Independent Directors met on December 16, 2022, without the attendance of
Non-Independent Directors and members of the Management. The Independent Directors
reviewed the performance of Non-Independent Directors and the Board as a whole, the
performance of the Chairman of the Company, considering the views of Executive Directors
and Non-Executive Directors and assessed the quality, quantity and timeliness of flow of
information between the Company Management and the Board that is necessary for the Board
to perform its duties effectively and reasonably.
H. Statement on Annual Evaluation made by the Board of Directors
Your Company believes that the process of performance evaluation at the Board level is
essential to its Board engagement and effectiveness. The Performance Evaluation Policy of
the Company is duly approved by the Board and Nomination and Remuneration Committee of the
Company. In line with the Performance Evaluation Policy of the Company, Annual Performance
Evaluation was carried out for all the Board Members, for the Board and its Committees
with a specific focus on the performance and effective functioning of the Board and its
Committee.
Pursuant to the provisions of the Companies Act, 2013, the SEBI Listing Regulations and
the Guidance Note on Board Evaluation issued by SEBI in January 2017, a structured
questionnaire was prepared and reviewed by the Nomination and Remuneration Committee (NRC)
after taking into consideration the various aspects of the Board's functioning, the
composition of the Board and its Committees, culture, execution and performance of
specific duties, obligations and governance.
The performance of the Board was evaluated by the Board after seeking inputs from all
the Directors on the basis of criteria such as the board composition and structure,
effectiveness of board processes, information and functioning, etc. The performance of the
Committees was evaluated by the Board after seeking inputs from all the Directors on the
basis of criteria such as the composition of committees, terms of reference of the
committee, the effectiveness of committee meetings, etc. The above criteria were broadly
based on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board
of India on January 05, 2017.
The Nomination and Remuneration Committee (NRC) reviewed the performance of individual
directors on the basis of criteria such as the contribution of the individual director to
the Board and Committee meetings like preparedness on the issues to be discussed,
meaningful and constructive contribution and inputs in meetings, etc.
In a subsequent Board meeting, the performance of the Board, its committees, and
individual Directors was also discussed. Performance evaluation of Independent Directors
was done by the entire Board, excluding the Independent Director being evaluated. A
statement indicating the manner in which formal annual evaluation of the Directors, the
Board and Board Committees has been made and the criteria for the same is set out in Annexure
4 to this Annual Report.
In a separate meeting of Independent Directors, the performance of Non-Independent
Directors, the Board as a whole and the Chairman & Managing Director of the Company
was evaluated, taking into account the views of the Non-Executive Directors and Executive
Director.
I. Policy on Board Diversity and Director Attributes and Remuneration Policy for
Directors, Key Managerial Personnel and Other Employees
In terms of the provisions of Section 178(3) of the Act and Regulation 19 read with
Part D of Schedule II of the SEBI Listing Regulations, the NRC is responsible for
formulating the criteria for determining qualifications, positive attributes and
independence of a Director. The NRC is also responsible for recommending to the Board, a
policy relating to the remuneration of the Directors, Key Managerial Personnel and other
employees and devising a policy on diversity of the Board. In line with this requirement,
the Board has adopted the Policy to Promote Diversity on the Board of Directors, which is
provided in Annexure 5 to this Report and the Nomination and Remuneration Policy
for Directors, Key Managerial Personnel and other employees of the Company, which is
reproduced in Annexure 6 to this Annual Report.
The details of the Policy are made available on the Company's website at
https://www.iexindia.com/Polices. aspx?id=c0umpHYt5Sg%3d&mid=Gy9kTd80D98%3d.
J. Particulars of Key Managerial Personnel and Employee Remuneration
The disclosures required under Section 197(12) of the Companies Act, 2013 read with
Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014 is attached as Annexure 7 and forms an integral part of this report. Further,
a statement showing the names and other particulars of employees drawing remuneration in
excess of the limits as set out in the Rule 5(2) and 5(3) of the aforesaid rules, is
maintained and 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. None of the employees listed in the
said information is related to any Director of the Company.
The aforesaid information is available for inspection by the members. Any member
interested in obtaining a copy thereof, may write to the Company Secretary at
compliance@iexindia.com.
DIRECTORS' RESPONSIBILITY STATEMENT
Based on the framework of internal financial controls and compliance systems
established and maintained by the Company, the work performed by the internal, statutory
and secretarial auditors and external consultants, including the audit of internal
financial controls over financial reporting by the Statutory Auditors and the reviews
performed by management and the relevant board committees, including the Audit Committee,
the Board is of the opinion that the Company's internal financial controls were adequate
and effective during FY23.
Pursuant to Section 134 (5) of the Companies Act, 2013, the Directors to the best of
their knowledge and belief, state that: i. In the preparation of the Annual Accounts, the
applicable Accounting Standards have been followed along with proper explanation relating
to material departure, if any; ii. They have selected appropriate 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 the financial year 2023; iii. They
have taken proper and sufficient care for the maintenance of adequate accounting records
in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets
of the Company and for preventing and detecting fraud and other irregularities; iv. They
have prepared the Annual Accounts on a going concern basis; v. They have laid down proper
Internal Financial Controls to be followed by the Company and that such Internal Financial
Controls are adequate and are operating effectively; and vi. Proper systems have been
devised to ensure compliance with the provisions of all applicable laws and that such
systems were adequate and operating effectively.
REPORTING OF FRAUD BY AUDITORS
During the year, under section 143(12) of the Act, neither the Internal Auditors,
Statutory Auditors nor Secretarial Auditors have reported to the Audit Committee or the
Board of the Company any fraud by its officers or employees and therefore no details are
required to be disclosed under Section 134(3) (ca) of the Act.
INTERNAL FINANCIAL CONTROL & ITS ADEQUACY
AsperSection134(5)(e)oftheAct,theDirectorshavean overall responsibility for ensuring
that the Company has implemented robust system and framework of Internal Financial
Controls. Accordingly, the Company has a well-established internal control framework
including proper delegation of authority, policies and procedures, defined various
internal controls, risk based internal audits, risk management framework and whistle
blower mechanism, which is designed to continuously assess the adequacy, effectiveness and
efficiency of financial and operational controls. The management is committed to ensure an
effective internal control environment, commensurate with the size and complexity of the
business, which provides an assurance on compliance with internal policies, applicable
laws, regulations and protection of resources and assets.
The entity level policies include anti-fraud policies (like code of conduct, conflict
of interest, confidentiality and whistle blower policy) and other polices (like
organization structure, HR policy, IT security policy and business continuity and disaster
recovery plan). The Company has also defined Standard Operating Procedures (SOP) for each
of its processes.
The Audit Committee of the Company periodically reviews and recommends the unaudited
quarterly financial statements and also the annual audited financial statements of your
Company to the Board for approval.
The Company maintains appropriate policies, procedures and systems to ensure orderly
and efficient conduct of its business, including adherence to Company's policies,
monitoring procedures, to ensure that all assets are safeguarded against loss from
unauthorized use or disposition, prevention and detection of frauds and errors accuracy
and completeness of accounting records, and the timely preparation of reliable financial
information. The Internal control system is improved and modified on an on-going basis to
meet the changes in business conditions, accounting and statutory requirements. The
external and internal auditors review the effectiveness and efficiency of these systems
and procedures on regular basis to ensure that all the assets of the Company are protected
against any loss and that the financial and operational information is accurate and
complete in all respects. The Audits are conducted on an ongoing basis and significant
deviations, if any are brought to the notice of the Audit Committee following which
corrective action is recommended for implementation. All these measures facilitate timely
detection of any deviations /irregularities and early remedial steps.
During the year, the defined controls were tested and no observation on reportable
material weakness in design and effectiveness was found.
During the year no fraud has been reported by the Auditors to the Audit Committee or
the Board of the Company.
In addition to the above, the Independent Directors frequently hold meetings with the
statutory auditors to discuss various matters pertaining to the financial health and
reporting of the Company. These meetings serve as an opportunity for the Independent
Directors to gain insights into the auditing process, evaluate the effectiveness of
internal controls, and assess the accuracy and reliability of financial statements.
FOREIGN EXCHANGE EARNING AND OUTGO
The particulars of Foreign Exchange Earnings and outgo during the year under review are
furnished hereunder:
| Foreign Exchange Earning |
Nil |
| Foreign Exchange Outgo |
239.89 lakh |
RISK MANAGEMENT
Risk Management is one of the critical elements of operating in the exchange business.
For your Company, Risk Management is an integral and important aspect of Corporate
Governance. Your Company believes that a robust Risk Management ensures adequate controls
and monitoring mechanisms for a smooth and efficient functioning of the business. Your
Company being a power exchange has adequate risk management systems and procedures
operating within the organization. The Company has a Risk Assessment and Management
Committee headed by an Independent Director which reviews the risk management framework
and process of the organization on half yearly basis as per Regulation 26 of the Central
Electricity Regulatory Commission (Power Market) Regulations, 2021, and submits its report
to the CERC. In addition, your Company has also devised and implemented a comprehensive
‘Risk Management Policy' which provides for identification, assessment and control of
risks that the Company would face in the normal course of business and mitigation measures
associated with them. The Management identifies and controls risks through a properly
defined framework in terms of the aforesaid policy. Under the said policy and in
compliance with the SEBI Listing Regulations, the Board has an ‘Enterprise Risk
Management Committee' (‘ERMC') to review and analyse various internal and external
risks including activities related to cyber security and monitor risk mitigation steps to
counter these risks. The composition, detailed terms of reference of the ERMC and
attendance at its meetings are provided in the Corporate Governance Report forming part of
this Annual Report.
In addition to above, the Audit Committee of the Board has additional oversight in the
area of financial risks and controls. Major risk identified by the business and functions
are systematically addressed through mitigating actions on a continuous basis.
The Company's ERM Framework includes a Chief Risk Officer (CRO) who is accountable for
the effective implementation of the risk management framework within the organization, as
well as reporting all significant risks to the Risk Committees to ensure complete
transparency. For more details, please refer Management Discussion and Analysis section
forming part of this Report.
WHISTLE BLOWER & ANTI-FRAUD POLICY
Your Company believes in the conduct of its business affairs in a fair and transparent
manner by adopting the highest standards of professionalism, honesty, integrity, ethical
behaviour and prudent commercial practices and is committed to comply with all applicable
laws, rules and regulations. Your Company has established a robust Vigil Mechanism for
reporting of concerns through the Whistle Blower & Anti-Fraud Policy of the Company,
which is in compliance with the provisions of Section 177 of the Act, read with Rule 7 of
the Companies (Meetings of Board and its Powers) Rules, 2014 and SEBI Listing Regulations.
The Policy provides for: a mechanism wherein the Directors and the Employees can report
their genuine concerns about the unethical behaviour, actual or suspected fraud or
violation of the Company's Code of conduct.
adequate safeguards against victimization of persons who use this Mechanism; and direct
access to the Chairperson of the Audit Committee of the Board of Directors of the Company.
The Whistle Blower & Anti-fraud Policy is uploaded on the website of the Company
and can be accessed through the following web link:
https://www.iexindia.com/pdf/Whistle%20Blower%20 Anti%20Fraud%20Policy.pdf
Your Company hereby affirms that no person has been denied access to the Chairman of
the Audit Committee and no complaints were received during the year.
CONSERVATION OF ENERGY
Though the operations of your Company are not energy intensive, your Company has taken,
inter alia, following measures to reduce energy consumption:
Regular and preventive maintenance for Company's heating, venting and air conditioning
(HVAC) equipment's and systems.
Encouraging employees to suggest innovative ideas to cut down the energy costs.
Switched from conventional lighting systems to using energy-efficient lightning in
office.
Selecting and designing offices to facilitate maximum natural light utilisation.
Use of energy efficient computer systems and procuring energy-efficient equipment's.
Use of cloud based virtual servers to increase energy efficiency and data security.
As an on-going process, your Company continuously evaluates new technologies and
techniques to make infrastructure more energy efficient.
PARTICULARS OF LOANS, GUARANTEE OR INVESTMENT
During the FY23, your Company has not given any loans, guarantees or provided any
security to any Body Corporate as specified under Section 186 of the Companies Act, 2013.
All the Investments of your Company are in Bank FDs, Tax Free Bonds, Debt based liquid
and liquid plus terms products, Fixed Maturity Products (FMPs), Arbitrage Mutual Fund
schemes, Commercial Papers (CPs), Market Linked Debentures (MLDs) and InvITs units only,
the details of which are provided in Note No. 6 & 10 to Standalone Financial Statement
for the year ended March 31, 2023.
Further, during the FY23, the Company has incorporated International Carbon Exchange
Private Limited (‘ICX'), a wholly owned subsidiary, and invested 5 Crores towards
subscription of 50 lakh equity shares of face value of 10/- each of ICX. Also, your
Company's investment in Indian Gas Exchange Limited (IGX), Associate Company, as on March
31, 2023, is 35,46,00,000/- (Rupees Thirty-Five Crore Forty-Six Lakh).
Furthermore, to make optimum utilization of funds available with the Company, to
achieve long term strategic and business objectives, and also enable the Company to take
hold of any other business propositions/opportunities that may arise in the foreseeable
future, the Board of Directors of the Company in its meeting held on July 27, 2023, has
approved and recommended the enhancement in investment limits under Section 186 of the
Companies Act, 2013. Necessary resolutions for approval of proposed enhancements along
with the Explanatory statement are included in the Notice convening the ensuing AGM.
STATUTORY AUDITORS
M/s B S R & Associates LLP, Chartered Accountants, (Firm Registration No.
116231W/W-100024), the Statutory Auditors of the Company were appointed at the 13th Annual
General Meeting of the Company to hold office for a term of 5 (five) consecutive years
until the conclusion of the 18th Annual General Meeting of the Company. Pursuant to
Section 141 of the Act, the Auditors have represented that they are not disqualified and
continue to be eligible to act as the Auditor of the Company.
AUDITORS' REPORT
The standalone and the consolidated financial statements of the Company have been
prepared in accordance with Indian Accounting Standards (Ind AS) notified under Section
133 of the Act.
The Auditors' Report for the financial year 2023 does not contain any qualifications,
reservations or adverse remarks or disclaimers. The Auditors' Report is enclosed with the
financial statements in this Report. The Statutory Auditors were present at the last AGM.
SECRETARIAL AUDITORS
Pursuant to the provisions of Section 204 of the Act, read with the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board, based on
the recommendation of the Audit Committee, appointed Mohd. Nazim Khan, Designated Partner
of M/s MNK and Associates LLP, Company Secretaries, New Delhi, as Secretarial Auditor of
the Company to conduct the audit of the secretarial records for the financial year ending
March 31, 2023. The Secretarial Audit report for the financial year March 31, 2023, in Form
No. MR-3 is annexed as Annexure 8 to this Report. The Secretarial Audit Report
confirms that the Company has complied with the provisions of the Act, Rules, Regulations,
and Guidelines and that there were no deviations or non-compliance. The Secretarial Audit
report does not contain any qualification, reservation, or adverse remark.
SECRETARIAL STANDARD DISCLOSURE
During the year, the Company has complied with the provisions of applicable Secretarial
Standards issued by the Institute of Company Secretaries of India (ICSI).
ANNUAL RETURN
Pursuant to Section 134(3)(a) of the Act, the draft annual return for FY23 prepared in
accordance with Section 92(3) of the Act is made available on the website of the Company
and can be accessed using the link: https://www.iexindia.com/AGMEGMnotice.
aspx?id=%2fVFcZM3gBsg%3d&mid=IT8b%2bZM5cBA%3d
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT (BRSR)
Your Company realizes the power of being transparent and accountable as an
organization, which in turn, helps in maintaining the trust that stakeholders have placed
in us. IEX considers disclosure practice as a strong tool to communicate strategic
developments, business performance and the overall value generated for various stakeholder
groups over a period of time. Keeping up with evolving disclosure patterns, your Company
transitioned from Business Responsibility Report (BRR) to Business Responsibility
& Sustainability Report (BRSR) for FY23, as per the SEBI mandated framework, which
discloses both the quantitative and qualitative data with respect to the financial and
non-financial aspects of the business. The Business Responsibility and Sustainability
Report prepared in accordance with the guidelines issued by the SEBI forms part of this
Annual Report.
CORPORATE GOVERNANCE
Your Company is committed to maintaining the highest standards of Corporate Governance
and adheres to the Corporate Governance requirements set out by the Securities and
Exchange Board of India ("SEBI").
Pursuant to Corporate Governance guidelines, as laid out in the SEBI Listing
Regulations a separate section titled ‘Corporate Governance' has been included in
this Report, as Annexure 9.
All Board members and Senior Management Personnel have affirmed in writing their
compliance with and adherence to the code of conduct adopted by the Company for FY23. The
CMD declaration in accordance with Para D of Schedule V to the SEBI Listing Regulations,
certifying compliance to the above, is annexed to this report as
Annexure 10.
A certificate as per Regulation 33 read with Regulation 17 of the SEBI Listing
Regulations, jointly signed by the CMD and the Chief Financial Officer of the Company
certifying the financial statements for the financial year ended March 31, 2023, is
annexed to this report as Annexure 10.
Further, a certificate from Agarwal S. & Associates, Practicing Company
Secretaries, on compliance with corporate governance norms under the SEBI Listing
Regulations forms part of this Report as Annexure 11.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT
WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company is committed to promoting a work environment that ensures every employee is
treated with dignity, respect and provided equitable treatment regardless of gender, race,
social class, disability, or economic status. We priortize providing a safe and conducive
work environment for our employees and associates. In compliance with the provisions of
the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act,
2013, the Company has in place a policy on prevention, prohibition, and redressal of
sexual harassment of women at workplace.
An Internal Complaints Committee has been set up to redress complaints received
regarding sexual harassment. All employees (permanent, contractual, temporary, trainees)
are covered under this policy. During the period under review, the Company organised
workshops and awareness programs at regular intervals to generate awareness about the
policy, reporting mechanism and prevention of sexual harassment at the workplace and
acquaint all employees with the provisions of the Act.
During the FY23, the Company has not received any complaint pertaining to sexual
harassment and hence no compliant is outstanding as on March 31, 2023. The Company has
filed an Annual Report with the concerned Authority in the matter.
RESEARCH AND DEVELOPMENT
Your Company is not directly involved in any Research and Development activities and
hence no expenditure on research and development has been incurred.
FIXED DEPOSITS
Your Company has not invited or accepted any fixed deposits under Section 73 of the Act
during the year and as such, no amount on account of principal or interest related thereto
was outstanding as on the date of the Balance Sheet i.e., March 31, 2023.
MATERIAL AND SIGNIFICANT ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNAL
During the FY23, there were no material and significant orders passed by the Regulators
or Courts or Tribunal.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There are no material changes and commitments, affecting the financial position of the
Company, which have occurred between the end of the financial year of the Company to which
the financial statements relate and the date of this Report.
MAINTENANCE OF COST RECORDS
The provision of Section 148 of the Companies Act, 2013 and Companies (Cost Records and
Audit) Rules, 2014 (as amended from time to time) is not applicable on the Company.
OTHER INFORMATION
i. Proceeding under Insolvency and Bankruptcy Code, 2016 ("IBC Code"): The
Company has neither made any application nor any proceeding is pending under the IBC Code
during FY23. ii. The Company has not made any one-time settlement during the FY23 with
Banks or Financial Institution.
ACKNOWLEDGMENT
We would like to place on record our sincere gratitude to the Ministry of Power,
Central Electricity Regulatory Commission (CERC) Members, State Electricity Regulatory
Commissions (SERCs) Members, Central Electricity Authority (CEA), National Load Despatch
Centre (NLDC), Regional Load Despatch Centers (RLDCs), State Load Despatch Centers
(SLDCs), Stock Exchanges and its members, Financial Institutions, Shareholders, Bankers,
Depositories, Registrar and Transfer Agents (RTA), and Business Associates for their
continued support during the year.
We also wish to place on record our deep appreciation for the contribution made by our
employees at all levels. Our consistent growth was made possible by their dedicated
services, hard work, cooperation and firm commitment to the goals & vision of the
Company. We look forward to continued support of all these partners in the future.
|
For and on behalf of the Board of Directors |
|
Indian Energy Exchange Limited |
|
Sd/- |
|
Satyanarayan Goel |
| Place: Noida |
Chairman & Managing Director |
| Date: 27 July 2023 |
DIN: 02294069 |
|