Edelweiss Financial Services Ltd

To the Members of Edelweiss Financial Services Limited,

Your Directors hereby present the 29^th Board's Report on the business, operations and state of affairs of the Company together with the audited financial statements for the financial year ended March 31, 2024: -

I. Consolidated Financial Performance:

( in million)

II. Standalone Financial Performance:

( in million)

SHARE CAPITAL

During the year under review, 5,09,750 Equity Shares of the face value of 1 each were allotted on exercise of the Stock Options/ SARs granted under Edelweiss Employee Stock Incentive Plan, 2011 and Edelweiss Employee Stock Appreciation Rights Plan, 2019.

Consequently, as at March 31, 2024, the total paid-up share capital of the Company stood at 943.79 million divided into 94,37,85,026 Equity Shares of the face value of 1 each.

Except Employee Stock Options and Stock Appreciations Rights (SAR), the Company has not issued any sweat equity to the employees of the Company. The disclosures with regard to the Employee Stock Options and SAR as required under the Securities and Exchange Board of India (SEBI) (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 is available on the website of the Company at www.edelweissfin.com.

DIVIDEND

The Board of Directors at its Meeting held on May 14, 2024, have recommended a dividend of 1.50 per Equity Share of the face value of 1 each, subject to the approval of Members at the forthcoming Annual General Meeting (AGM) and shall be subject to deduction of income tax at source.

Pursuant to Regulation 43A of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 (the Listing Regulations), the Dividend Distribution Policy is provided as Annexure I to this Report and is available on the website of the Company at www.edelweissfin.com.

INFORMATION ON THE STATE OF AFFAIRS OF THE COMPANY

Information on the operational and financial performance of the Company is given in the Management Discussion and Analysis Report, forming part of this Report, and is in accordance with the Listing Regulations.

FINANCIAL STATEMENTS

The financial statements (both standalone and consolidated) are prepared in accordance with the Companies Act, 2013 and the Rules framed thereunder (the Act) and the applicable Accounting Standards and forms part of this Report.

The Auditors' Report issued by M/s. Nangia & Co. LLP, Chartered Accountants, the Auditors of the Company on the financial statements for the year ended March 31, 2024 is unmodified and is annexed to the financial statements.

SUBSIDIARIES

During the year ended March 31, 2024, Nuvama Investment Advisors LLC ceased to be the subsidiary of the Company. The salient features of the financial statements of each of the subsidiaries as required under the Act is provided in the financial statements in Form AOC-1. The financial statements of the subsidiaries are available on the website of the Company at www.edelweissfin.com. Any Member interested in obtaining a copy of financial statements of the subsidiaries may write to the Company Secretary.

SCHEME OF ARRANGEMENT

The Board at its Meeting held on May 13, 2022 approved the Scheme of Arrangement between the Company and Nuvama Wealth Management Limited (formerly known as Edelweiss Securities Limited) {Nuvama/Resulting Company} and their respective shareholders and creditors (the Scheme) under Sections 230 to 232 read with Section 102 and other applicable provisions of the Act. The NCLT vide its Order dated April 27, 2023, approved the Scheme. The Scheme became effective from May 18, 2023. As per the provisions of the Scheme, the Effective Date is also the Appointed Date. Pursuant to the Scheme, the Demerged Undertaking of the Company has been demerged and vested into the Resulting Company on a going concern basis.

As per the provisions of the Scheme, Nuvama has allotted the equity shares to those equity shareholders of the Company whose names were appearing in the Register of Members/Beneficial Owners of the Company on June 2, 2023, being the Record Date fixed in this behalf. The Equity Shares of Nuvama listed on BSE Limited and National Stock Exchange of India Limited on September 26, 2023.

FINANCE

During the year under review, the Company issued Non-convertible Debentures (NCDs) through public issuance which are listed on BSE Limited.

LOANS, INVESTMENTS AND GUARANTEES

Particulars of loans given, investments made, guarantees given and securities provided are reported in the financial statements, forming part of this Annual Report.

RELATED PARTY TRANSACTIONS

All the Related Party Transactions entered by the Company during the year ended March 31, 2024, were at arm's length and in the ordinary course of business. The Company has not entered into transactions with the Promoters, Directors and Key Managerial Personnel, which may have potential conflict of interest with the Company and its subsidiaries.

In accordance with the provisions of the Listing Regulations, the Company has formulated the Related Party Transactions Policy, which is available on the website of the Company at www.edelweissfin.com.

Particulars of contracts or arrangements with the related parties as prescribed in Section 188 of the Act is provided in the financial statements in Form AOC-2. All the Related Party Transactions as required under the applicable Accounting Standards are reported in the financial statements.

(i) Independent Directors

In accordance with the provisions of Section 149 of the Act and the Listing Regulations, the Independent have given a declaration that they meet the criteria of independence as provided in the said Section and in the Listing Regulations.

The second term of appointment of Mr. Biswamohan Mahapatra (DIN: 06990345), an Independent Director, ended at the conclusion of the 28th AGM of the Company held on September 26, 2023. The Board placed on record its sincere appreciation for the services rendered by Mr. Mahapatra during his tenure as an Independent Director of the Company.

Pursuant to the recommendations of the Nomination and Remuneration Committee, the Board has, subject to the approval of the Members, appointed Mr. C. Balagopal (DIN: 00430938) as an Independent Director of the Company for a term of 5 years with effect from August 2, 2024.

The necessary Resolution for the appointment of Mr. C. Balagopal is placed for the approval of the Members at the forthcoming AGM.

In the opinion of the Board, the Independent Directors are persons of integrity and possess relevant expertise, experience and proficiency.

(ii) Executive Directors

Mr . Himanshu Kaji (DIN: 00009438), who was subject to retirement by rotation at the28 th AGM, although eligible did not seek re-appointment. Accordingly, Mr. Kaji ceased to be a Director at the conclusion of the 28th AGM held on September 26, 2023.

The Board placed on record its sincere appreciation of the services rendered by Mr. Kaji during his tenure as an Executive Director and Key Managerial Personnel of the Company.

(iii) Retirement by rotation

Mr . Venkatchalam Ramaswamy (DIN: 00008509) retires by rotation at the ensuing AGM and, being eligible, has offered himself for re-appointment.

NUMBER OF BOARD MEETINGS HELD

During the year ended March 31, 2024, the Board met 5 times. The details of the Board Meetings and the attendance of the Directors at the Meetings are provided in the Corporate Governance Report, which forms part of this Report.

REMUNERATION POLICY

The Company has formulated a Remuneration Policy pursuant to Section 178 of the Act and the Listing Regulations. The Policy is provided as Annexure II to this Report.

EVALUATION OF THE PERFORMANCE OF THE BOARD

A Board Evaluation Policy (the Policy) for evaluating the performance of the Board, its Committees, the Chairman, the Managing Director, the Executive Directors, the Non-executive Directors and the Independent Directors has been adopted by the Company.

The Policy inter alia provides the criteria for performance evaluation such as Board effectiveness, quality of discussion, contribution at the Meetings, business acumen, strategic thinking, time commitment, relationship with the stakeholders, corporate governance practices, review of the terms of reference of the Committees and the contribution of the Committees to the Board in discharging its functions, etc.

A separate Meeting of the Independent Directors was held wherein the annual performance of the Non-Independent Directors, performance of the Board as a whole (including the Committees) and also that of the Chairman, in terms of the provisions of the Act, the Listing Regulations and the Guidance Note issued by SEBI in this regard was discussed.

INTERNAL FINANCIAL CONTROLS AND RISK MANAGEMENT

The Company has in place adequate internal financial controls with reference to financial statements. The Company's internal control system is designed to ensure operational efficiency, protection and conservation of resources, accuracy and promptness in financial reporting and compliance with the laws and regulations. The internal control system is also supported by an internal audit process.

M/s. JHS & Associates LLP, Chartered Accountants, were appointed as Internal Auditors of your Company for the financial year ended March 31, 2024.

Risk management is an integral part of the Company's business strategy that seeks to minimise adverse impact on business objectives and capitalize on opportunities. The Risk Committee oversees the risk management framework of the Company through regular and proactive intervention by identifying risks and formulating mitigation plans. Further details are provided in the Management Discussion and Analysis Section forming part of this Report.

AUDIT COMMITTEE

The Audit Committee comprises of the following Independent Directors of the Company:

Further details of the Audit Committee are provided in the Corporate Governance Report which forms part of this Report.

WHISTLE BLOWER POLICY/ VIGIL MECHANISM

The Company has adopted a Whistle Blower Policy to report genuine concerns/grievances. The Policy is available on the website of the Company at www.edelweissfin.com.

The Policy provides for adequate safeguards against the victimisation of the persons who use the vigil mechanism. The vigil mechanism is overseen by the Audit Committee.

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

The Board has constituted the Corporate Social Responsibility (CSR) Committee in accordance with the provisions of the Act. The CSR Committee comprises of: -

The Company has made contributions under CSR mainly through its philanthropic arm EdelGive Foundation, a wholly owned subsidiary. The CSR Projects of the Company largely focuses on the broad areas such as sustainable livelihood, quality education, women empowerment, climate action, reducing inequality, promotion of sports and various sectors as covered under Schedule VII of the Act.

CSR REPORT

The CSR Report on the activities undertaken during the year is provided as Annexure III to this Report. The CSR Policy is available on the website of the Company at www.edelweissfin.com.

AUDITORS

At the 28th AGM of the Company held on September 26, 2023, the Members had appointed M/s. Nangia & Co. LLP (Firm Registration Number 002391C/N500069), as the Auditors of the Company, for a term of 5 years to hold the office until the conclusion of the 33rd AGM to be held in the year 2028.

SECRETARIAL AUDIT REPORT

M/s. BNP & Associates, Company Secretaries, were appointed as the Secretarial Auditors to conduct the Secretarial Audit for the financial year ended March 31, 2024. The Report of the Secretarial Auditors is unmodified and provided as Annexure IV to this Report.

As required under the Listing Regulations, the Secretarial Audit Report of Edelweiss Life Insurance Company Limited (ELIC), the Material Unlisted Subsidiary of the Company, for the financial year ended March 31, 2024, forms part of this Report. The Secretarial Audit Report of ELIC is unmodified.

PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

The Company has a Policy on Prevention of Sexual Harassment of Women at Workplace. No cases were reported during the year under review. There were no complaints pending as on March 31, 2024. The Company has complied with the provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

A. Conservation of energy

i) The steps taken or impact on conservation of energy The operations of the Company are not energy intensive. However, adequate measures have been taken for conservation of energy wherever possible.

ii) The steps taken by the Company for utilizing alternate sources of energy Though the operations of the Company are not energy intensive, the Company explores alternative sources of energy, as and when the necessity arises.

iii) The capital investment on energy conservation equipments Nil

B. Technology absorption

i) The efforts made towards technology absorption The Company extensively uses the information technology in its operations and has absorbed the technology required in this regard.

ii) The benefits derived like product improvement, cost reduction, product development or import substitution The Company has leveraged the technology to optimise cost reduction and product development.

iii) In case of imported technology (imported during the last three years reckoned from the beginning of the financial year):

(a) the details of technology imported: Not Applicable

(b) the year of import: Not Applicable

(c) whether the technology has been fully absorbed: Not Applicable

(d) if not fully absorbed, areas where absorption has not taken place, and the reasons thereof: Not Applicable

iv) the expenditure incurred on Research and Development Not Applicable.

C. Foreign exchange earnings and outgo

During the year under review, the Company earned foreign exchange of 42.60 million (previous year: 33.16 million) and there was outgo of foreign exchange of 24.75 million (previous year: 84.88 million).

OTHER DISCLOSURES

i) There are no significant material changes and commitments affecting the financial position of the Company that between the end of financial year and the date of this Report.

ii) There has been no change in the nature of business of the Company.

iii) There was no revision in the financial statements of the Company.

iv) There was no application made or proceeding pending against the Company under the Insolvency and Bankruptcy Code, 2016. There was no instance of one-time settlement with any Bank/Financial Institution in respect of loan taken by the Company.

v) No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future.

vi) No fraud has been reported by the Auditors to the Audit Committee and the Board.

vii) Disclosure pertaining to maintenance of cost records as specified under the Act is not applicable to the Company.

viii) The Company has not issued equity shares with differential voting rights as to dividend, voting or otherwise.

ix) The Company has not accepted any deposits covered under Chapter V of the Act.

x) The Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

ANNUAL RETURN

Pursuant to Sections 92 and 134 of the Act, the Annual Return as at March 31, 2024 in Form MGT-7, is available on the website of the Company at www.edelweissfin.com.

DISCLOSURE UNDER SECTION 197 OF THE ACT

In accordance with the provisions of Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the particulars of the employees are set out in the Annexure to this Report. In terms of the provisions of Section 136 of the Act, the Report is being sent to the Members of the Company excluding the Annexure. Any Member interested in obtaining a copy of the annexure may write to the Company Secretary.

Further, disclosure on managerial remuneration as required under Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided as Annexure V to this Report.

CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of Corporate Governance and adheres to the Corporate Governance requirements set out by SEBI. The Company has implemented several best governance practices.

Pursuant to the Listing Regulations, the Report on Corporate Governance together with the certificate issued by M/s. BNP & Associates, Company Secretaries, on compliance with the conditions of Corporate Governance during the financial year ended March 31, 2024 is provided in Annexure VI and forms part of this Report.

BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORT

The Business Responsibility & Sustainability Report for the financial year ended March 31, 2024, pursuant to the Listing Regulations is provided in Annexure VII and forms part of this Report.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134 of the Act, the Directors confirm that:

i) in the preparation of the annual accounts, the applicable Accounting Standards have been followed;

ii) such accounting policies have been selected and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2024 and the profits of the Company for the financial year ended on that date;

iii) proper and sufficient care had been taken for the maintenance of 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; and

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

ACKNOWLEDGEMENTS

The Board acknowledges the valuable guidance and continued support extended by the Securities and Exchange Board of India, the Reserve Bank of India, Stock Exchanges, Insurance Regulatory and Development Authority of India, Ministry of Corporate Affairs, other government authorities, Banks and other stakeholders. Your Directors would also like to take this opportunity to express their appreciation for the dedicated efforts of the employees of the Company.

For and on behalf of the Board

Edelweiss Financial Services Limited