Board’s Report Company...

40 | Company Information

Board of Directors

Rashesh ShahVenkat RamaswamyHimanshu Ka iRujan PanjwaniVidya ShahP. N. enkatachalamBerjis DesaiSanjiv MisraSunil MitraNavte S. NandraKunnasagaran ChinniahBiswamohan Mahapatra

Chief inancial cer

S. Ranganathan

Company Secretary

B. Renganathan

Statutory Auditors

B S R & Associates LLP

Registered ce

Edelweiss House, Off C.S.T. Road,Kalina, Mumbai - 400 098.CIN: L99999MH1995PLC094641Tel: 022 - 4009 4400 Fax: 022 - 4086 3759Email: [email protected]: www.edelweissfin.com

Registrar Share Transfer Agent

Link Intime India Pvt. Ltd.C-13, Pannalal Silk Mills Compound,L.B.S. Marg, Bhandup (West),Mumbai - 400 078.Tel: 022 - 2594 6970 Fax: 022 - 2594 6969Email: [email protected]

De enture Trustee

A IS Trustee Services LimitedAxis House, 2nd Floor,Wadia International Centre,Pandurang Budhkar Marg,Worli, Mumbai - 400 025.Tel: 91 22 2425 5225 5226Fax: 91 22 2425 4200Email: [email protected]: www.axistrustee.com

De enture Trustee

IDBI Trusteeship Services LimitedAsian Building, Ground Floor,17, R. Kamani Marg, Ballard Estate,Mumbai - 400 001, Maharashtra, India.Tel: 91 22 6631 1771 2 3Fax: 91 22 6631 1776Email: [email protected]: www.idbitrustee.co.in

SBICAP Trustee Company LimitedApee ay House, 6th Floor, 3, Dinshaw Wachha Road, Churchgate,Mumbai - 400 020.Tel: 91 22 4302 5530Fax: 91 22 4302 5500Email: [email protected]: www.sbicaptrustee.com

delweiss Presence

237 own offices across 122 citiesCovering 887,000 clients

MA R CITI SDomestic

Agra Ahmedabad Ajmer Allahabad Amritsar Aurangabad Bengaluru Bhavnagar Bhilai Bhopal Bhubaneswar Chandigarh Chennai Coimbatore Cu ack Dehradun Ghaziabad Gurgaon Guwahati Hyderabad Indore aipur alandhar amnagar amshedpur odhpur Kanpur Kochi Kolkata Kota

Bankers

Abu Dhabi Commercial Bank

Allahabad Bank Andhra Bank Axis Bank Bank of Baroda Bank of India Bank of Maharashtra

Canara Bank Central Bank of India

Citibank N.A. Corporation Bank Dena Bank DCB Bank Federal Bank HDFC Bank ICICI Bank IDBI Bank IndusInd Bank Karnataka Bank Karur ysya Bank Kotak Mahindra Bank

Lakshmi Vilas Bank National Housing Bank

Oriental Bank of Commerce

Punjab & Sind Bank

International

Canada Chad Dubai Hong Kong Mauritius

Company Information

Lucknow Ludhiana Madurai Mangalore Meerut Mumbai Mysore Nagpur Nashik Navi Mumbai New Delhi Noida Panaji Patiala Patna Pondicherry Pune Raipur Rajkot Ranchi Secunderabad Shimla Siliguri Surat Thiruvananthapuram Udaipur Vadodara api Varanasi Vijayawada isakhapatnam

Pun ab National Bank

Ratnakar Bank SIDBI South indian Bank

Standard Chartered Bank

State Bank of Bikaner & aipur

State Bank of Hyderabad

State Bank of India

State Bank of Patiala

State Bank of Travancore

Syndicate Bank Tamilnad Mercantile Bank

UCO Bank Union Bank of India

United Bank of India

Vijaya Bank Yes Bank

New York Nigeria Singapore Turkey

Edelweiss_AR_2016_Inside pages.indd 25 7/11/2016 7:44:03 PM

Board’s Report

To the Members of Edelweiss Financial Services Limited,

The Directors hereby present their 21st Annual Report on the business, operations and state of affairs of the Company together with the audited financial statement for the year ended March 31, 2016:

I A CIAL HI HLI HTS I Consolidated inancial Performance

(R in million)

2015-16 2014-15

Total Income 53,157.35 39,121.95

Total Expenditure 46,969.18 33,841.53

Profit before tax 6,188.17 5,280.42

Provision for tax 2,353.78 2,016.99

Profit a er tax 3,834.39 3,263.43

Add: Share of Minority Interest 309.44 23.70

Profit for the year a er Minority Interest 4,143.83 3,287.13

Add: Surplus brought forward from previous year 10,833.72 9,834.22

Add (Less): Effect of changes in Group’s interest 429.87 (2.76)

Add: Profit on buy back of shares 11.96 -

Add (Less): Ad ustment on account of depreciation net of tax - (20.31)

Profit available for appropriation: 15,419.38 13,098.28

Less: Appropriations

Interim Dividend on Equity Shares 1,019.26 630.98

Proposed Dividend on Equity Shares - 159.64

Dividend on Preference Shares 84.09 84.47

Transfer to Reserves 2,919.92 1,219.20

Dividend Distribution Tax 217.03 170.27

Surplus carried to the Balance Sheet 11,179.08 10,833.72

Earnings per equity share (Face alue – r1 -)

Basic (r) 5.01 4.09

Diluted (r) 4.85 3.88

Edelweiss Annual Report 2015-16 | 41

II Standalone inancial Performance of delweiss inancial Services Limited(R in million)

2015-16 2014-15

Total Income 3,383.41 2,481.60

Provision for tax 294.02 254.72

Profit a er tax 1,555.94 1,114.81

Add: Surplus brought forward from previous year 481.25 326.20

Less: Ad ustment on account of depreciation net of tax - 1.41

Profit available for appropriation 2,037.19 1,439.60

Interim Dividend 1,019.26 630.98

Proposed Dividend - 159.64

Transfer to Reserves - 111.48

Surplus carried to the Balance Sheet 982.61 481.25

Basic (R) 1.93 1.43

Diluted (R) 1.87 1.36

42 | Board’s Report

DIVID DDuring the year under review, interim dividends were paid twice - 1st of R1 per share and the 2nd of R0.25 per share on the face value of R1 per share. The total outlay on account of interim dividends (including Dividend Distribution Tax) was R1054.58 million.

ABRID D I A CIAL STAT M TS In terms of the provisions of Section 136 of the Companies Act, 2013, abridged financial statements as at March 31, 2016, and the Auditors’ Report on the abridged Financial Statement forms part of the Annual Report. Full version of the Annual Report will be available on the Company’s website: h t t p : e d e l w e i s s f i n . c o m H o m e A b o u t U s AnnualReports.aspx and will also be made available to the members of the Company on request.

I RMATI TH STAT A AIRS TH C MPA Y

Information on the operational and financial performance, among others, is given in the Management Discussion & Analysis Report which is annexed to this Report and is in accordance with the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.

SHAR CAPITAL During the year under review, 22,284,011 Equity Shares of r1 each were allo ed on exercise of the Options granted to the employees under various Employee Stock Option Schemes of the Company. Consequently, as at March 31, 2016, the paid-up share capital of the Company was R814 million divided into 814,036,630 equity shares of R1 each.

The disclosures with regard to the stock options as required under the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014, are provided on the Company’s website: h t t p : e d e l w e i s s f i n . c o m H o m e A b o u t U sAnnualReports.aspx.

I A Cour Company continued to borrow funds i n t e r a l i a by

issuing Commercial Papers and Secured Non-Convertible Debentures on a private placement basis.

The Company en oys high credit rating from the Rating Agencies. The credit ratings re ect the Company’s financial discipline and prudence.

SUBSIDIARI SDuring the year ended March 31, 2016, the following companies became the subsidiaries of your Company:

Edelweiss General Insurance Company Limited

Edelweiss Holdings Limited

EFSL International Limited

Edelweiss Financial Services (UK) Limited

Edelweiss Tarim Urunleri Anonim Sirketi

The performance and financial position of the subsidiaries and associates as required under the Companies Act, 2013 is provided in Annexure I to the consolidated financial statement. The financial statements of the subsidiary companies will be placed on the website of the Company, www.edelweissfin.com. Any member interested in obtaining a copy of financial statement of the subsidiaries may write to the Company Secretary, at the Registered Office of the Company.

Particulars of loans given, investments made, guarantees given and securities provided are disclosed in the financial statements.

R LAT D PARTY TRA SACTI SAll the Related Party Transactions entered by the Company are on arm’s length basis and in the ordinary course of business. All the Related Party Transactions as required under AS-18 are reported in the Notes to the financial statement.

In accordance with the provisions of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Company has formulated the Related Party Transactions Policy (the Policy). The Policy is uploaded on the Company’s website at the link: http: edelweissfin.com portals 0 documentsmiscellaneous RelatedPartyTransationsPolicy.pdf.

DIR CT RS A D Y MA A RIAL P RS L

i Independent Directors

During the year under review, Mr. Narendra haveri resigned as a Director of the Company with effect from May 20, 2015. The Board places on record its sincere appreciation for the services rendered by Mr. haveri during his tenure as a Director of the Company.

In accordance with the provisions of Section 149 of the Companies Act, 2013, the Independent Directors have given a declaration that they meet the criteria of independence as provided in the said Section and in terms of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.

ii Retirement y Rotation of the Directors

Mr. Himanshu Ka i retires by rotation at the forthcoming Annual General Meeting and, being eligible, offers himself for re-appointment.

II Standalone inancial Performance of delweiss inancial Services Limited(R in million)

2015-16 2014-15

Total Income 3,383.41 2,481.60

Provision for tax 294.02 254.72

Profit a er tax 1,555.94 1,114.81

Add: Surplus brought forward from previous year 481.25 326.20

Less: Ad ustment on account of depreciation net of tax - 1.41

Profit available for appropriation 2,037.19 1,439.60

Interim Dividend 1,019.26 630.98

Proposed Dividend - 159.64

Transfer to Reserves - 111.48

Surplus carried to the Balance Sheet 982.61 481.25

Basic (R) 1.93 1.43

Diluted (R) 1.87 1.36

DIVID DDuring the year under review, interim dividends were paid twice - 1st of R1 per share and the 2nd of R0.25 per share on the face value of R1 per share. The total outlay on account of interim dividends (including Dividend Distribution Tax) was R1054.58 million.

ABRID D I A CIAL STAT M TS In terms of the provisions of Section 136 of the Companies Act, 2013, abridged financial statements as at March 31, 2016, and the Auditors’ Report on the abridged Financial Statement forms part of the Annual Report. Full version of the Annual Report will be available on the Company’s website: h t t p : e d e l w e i s s f i n . c o m H o m e A b o u t U s AnnualReports.aspx and will also be made available to the members of the Company on request.

I RMATI TH STAT A AIRS TH C MPA Y

Information on the operational and financial performance, among others, is given in the Management Discussion & Analysis Report which is annexed to this Report and is in accordance with the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.

SHAR CAPITAL During the year under review, 22,284,011 Equity Shares of r1 each were allo ed on exercise of the Options granted to the employees under various Employee Stock Option Schemes of the Company. Consequently, as at March 31, 2016, the paid-up share capital of the Company was R814 million divided into 814,036,630 equity shares of R1 each.

The disclosures with regard to the stock options as required under the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014, are provided on the Company’s website: h t t p : e d e l w e i s s f i n . c o m H o m e A b o u t U sAnnualReports.aspx.

I A Cour Company continued to borrow funds i n t e r a l i a by

issuing Commercial Papers and Secured Non-Convertible Debentures on a private placement basis.

The Company en oys high credit rating from the Rating Agencies. The credit ratings re ect the Company’s financial discipline and prudence.

SUBSIDIARI SDuring the year ended March 31, 2016, the following companies became the subsidiaries of your Company:

Edelweiss General Insurance Company Limited

Edelweiss Holdings Limited

EFSL International Limited

Edelweiss Financial Services (UK) Limited

Edelweiss Tarim Urunleri Anonim Sirketi

The performance and financial position of the subsidiaries and associates as required under the Companies Act, 2013 is provided in Annexure I to the consolidated financial statement. The financial statements of the subsidiary companies will be placed on the website of the Company, www.edelweissfin.com. Any member interested in obtaining a copy of financial statement of the subsidiaries may write to the Company Secretary, at the Registered Office of the Company.

Particulars of loans given, investments made, guarantees given and securities provided are disclosed in the financial statements.

R LAT D PARTY TRA SACTI SAll the Related Party Transactions entered by the Company are on arm’s length basis and in the ordinary course of business. All the Related Party Transactions as required under AS-18 are reported in the Notes to the financial statement.

In accordance with the provisions of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Company has formulated the Related Party Transactions Policy (the Policy). The Policy is uploaded on the Company’s website at the link: http: edelweissfin.com portals 0 documentsmiscellaneous RelatedPartyTransationsPolicy.pdf.

DIR CT RS A D Y MA A RIAL P RS L

i Independent Directors

During the year under review, Mr. Narendra haveri resigned as a Director of the Company with effect from May 20, 2015. The Board places on record its sincere appreciation for the services rendered by Mr. haveri during his tenure as a Director of the Company.

In accordance with the provisions of Section 149 of the Companies Act, 2013, the Independent Directors have given a declaration that they meet the criteria of independence as provided in the said Section and in terms of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.

ii Retirement y Rotation of the Directors

Mr. Himanshu Ka i retires by rotation at the forthcoming Annual General Meeting and, being eligible, offers himself for re-appointment.

iii ey Managerial Personnel

There was no change in the KMPs during the year under review. The KMPs of the Company are also the KMPs of the subsidiaries and some draw remuneration from there also.

UMB R B ARD M TI S H LDDuring the year ended March 31, 2016, the Board met five times. The details of the Board meetings and the a endance of the Directors at the meetings are provided in the Corporate Governance Report, which forms part of this Annual Report.

R MU RATI P LICYThe Company has framed a Remuneration Policy pursuant to Section 178 of the Companies Act, 2013 and the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. The Policy is provided in Annexure II to this Report.

VALUATI TH P R RMA C TH B ARDThe Board has formulated an Evaluation Policy (the Policy) for evaluating the performance of the Board, its Commi ees, Chairman, Managing Director, Executive Directors, Independent Directors and Non-executive Directors. Based on the same, the performance was evaluated for the financial year ended March 31, 2016. A meeting of the Independent Directors was held during the year under review.

The Policy i n t e r a l i a provides the criteria for performance evaluation such as Board effectiveness, quality of discussion, contribution at the meetings, business acumen, strategic thinking, time commitment, relationship with the stakeholders, corporate governance practices, contribution of the Committees to the Board in discharging its functions, etc.

I T R AL I A CIAL C TR LSThe Company has in place adequate internal financial control with reference to financial statement.

DIR CT RS’ R SP SIBILITY STAT M TPursuant to Section 134 of the Companies Act, 2013 (the Act), the Board of Directors confirm that:

i. In the preparation of the annual accounts, the applicable accounting standards have been followed

ii. They have selected such accounting policies and applied them consistently and made udgments and estimates that are reasonable and prudent so

as to give a true and fair view of the state of affairs of the Company as at March 31, 2016 and of the profit of the Company for the financial year ended on that date

iii. Proper and sufficient care had been taken 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

iv. The annual accounts have been prepared on a going concern basis

v. Internal financial controls have been laid down and the same are adequate and were operating effectively

vi. They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

AUDIT C MMITT The Audit Commi ee of the Board of Directors of the Company comprises of the following members who are Independent Directors:

Mr. P. N. enkatachalam - Chairman

Mr. Ber is Desai

Mr. San iv Misra

Mr. Sunil Mitra

C RP RAT S CIAL R SP SIBILITY C MMITT In accordance with the provisions of Section 135 of the Companies Act, 2013 (the Act), the Board of Directors of the Company have constituted the Corporate Social Responsibility Committee (CSR Committee) comprising the following Directors as its members:

Mr. enkat Ramaswamy - Executive Director

Mr. Himanshu Ka i - Executive Director

Mr. Ru an Pan wani - Executive Director

Mr. P. N. enkatachalam - Independent Director

The terms of reference of the CSR Commi ee include the ma ers specified in Section 135 of the Act.

The CSR Policy of the Company is uploaded on the Company’s website at the link: h p: edelweissfin.comportals 0 documents miscellaneous CSRPolicy.pdf. Further details in this regard are provided in the Annexure III to this report.

AUDIT RSThe members of the Company at the 19th Annual General Meeting of the Company held on uly 25, 2014, had appointed B S R & Associates LLP, Chartered Accountants, as the Auditors of the Company till the conclusion of the 22nd Annual General Meeting of the Company to be held in the year 2017, sub ect to ratification of their appointment at every Annual General Meeting.

A resolution for the ratification of the appointment of B S R & Associates LLP as Auditors is being placed for the approval of the members at the forthcoming Annual General Meeting.

S CR TARIAL AUDIT The Board had appointed BNP & Associates, Practicing Company Secretaries, as the Secretarial Auditor, to conduct the secretarial audit for the financial year ended March 31, 2016. The Report of the Secretarial Auditor is provided as Annexure I to this Report.

S UAL HARASSM T M AT R PLACThe Company has a Policy on prevention of Sexual Harassment at Workplace. During the year under review, a case was reported under the Policy, which was outstanding as at March 31, 2016.

C S RVATI R Y, T CH L Y ABS RPTI A D

R I CHA AR I S UT

A Conservation of energy

i. The steps taken or impact on conservation of energy – The operations of your Company are not energy-intensive. However, adequate measures have been initiated for conservation of energy

ii. The steps taken by the Company for utilising alternate sources of energy – though the operations of the Company are not energy intensive, the Company shall explore alternative source of energy, as and when the necessity arises

iii. The capital investment on energy conservation equipments – Nil

B Technology a sorption

i. The efforts made towards technology absorption – The minimum technology required for the business has been absorbed

ii. The benefits derived like product improvement, cost reduction, product development or import substitution – Not Applicable

iii. In case of imported technology (imported during the last three years reckoned from the beginning of the financial year) – Not Applicable

(a) The details of technology imported

(b) The year of import

(c) Whether the technology has been fully absorbed

(d) If not fully absorbed, areas where absorption has not taken place, and the reasons thereof

iv. The expenditure incurred on Research and Development – Not Applicable

C oreign e change earnings and outgo

Foreign exchange earnings and outgo (including dividend) during the year under review were r174.60 million (previous year r128.26 million) and r39.47 million (previous year r30.41 million) respectively.

TH RS DISCL SUR SNo disclosure is required in respect of the details relating to the deposits covered under Chapter of the Companies Act, 2013 as the company has not accepted any deposits. There were no significant or material order passed by any regulator or court or tribunal which would impact the status of the Company as a going concern and the operations in future.

TRACT TH A UAL R TUR In accordance with the provisions of Section 92 of the Companies Act, 2013 and the Rules framed thereunder, the extract of the Annual Return in the prescribed Form MGT – 9 is provided in Annexure to this report.

RIS MA A M T The Risk Management Commi ee of the Board of Directors of the Company has framed and implemented a Risk Management Policy.

HISTL BL R P LICY VI IL M CHA ISMThe Company has a Whistle Blower Policy for the employee to report genuine concerns grievances. The Policy is uploaded on Company’s website at the link: h p: edelweissfin.com portals 0 documentsmiscellaneous WhistleBlowerPolicy.pdf. The Policy provides for the adequate safeguards against the victimisation of the employees who use the vigil mechanism. The vigil mechanism is overseen by the Audit Commi ee.