Dear Members,
Your Directors pleased to present the 14th Annual Report on the affairs
of your Company together with the audited financial statements for the financial year
ended March 31, 2023.
FINANCIAL HIGHLIGHTS
The key highlights of the audited standalone financial statements of
your Company for the financial year ended March 31, 2023 and comparison with the previous
financial year ended March 31, 2022 are summarized below:
Particulars |
For the year ended March 31,
2023 |
For the year ended March 31,
2022 |
Total income |
973.25 |
1,053.55 |
Total expenditure |
785.98 |
1,994.40 |
Profit/(loss) before taxation |
187.27 |
(940.85) |
Less: Provision for taxation |
|
|
- Current tax |
- |
- |
- Deferred tax asset |
- |
(171.66) |
Net profit/(loss) after taxes |
187.27 |
(769.19) |
Other comprehensive income,
net of tax |
0.76 |
0.47 |
Total comprehensive income |
188.03 |
(768.72) |
Transfer to statutory reserve
fund pursuant to Section 45-IC of the Reserve Bank of India Act, 1934 |
(37.45) |
- |
Appropriation towards dividend
and dividend distribution tax* |
- |
(58.50) |
Surplus in the statement of
profit and loss |
150.58 |
(827.22) |
Balance brought forward from
previous period |
(530.28) |
296.94 |
Balance carried to balance
sheet |
(379.70) |
(530.28) |
Earnings per share (Face Value
' 10/- each) |
|
|
Basic () |
13.76 |
(62.06) |
Diluted () |
13.76 |
(62.06) |
*includes dividend and dividend distribution tax aggregating to ' 58.50
crore towards interim dividend on compulsorily convertible preference shares
("CCPS") for the period from May 27, 2020 to May 26, 2021 paid on June 17, 2021
and final dividend for the period from May 27, 2021 to November 26, 2021 paid on November
26, 2021.
FINANCIAL PERFORMANCE AND COMPANY'S STATE OF AFFAIRS
The financial highlights tabulated above are based on the requirement
of the Reserve Bank of India ("RBI") Master Direction - Non-Banking Financial
Company - Systemically Important Non-Deposit taking Company and Deposit taking Company
(Reserve Bank) Directions, 2016, the circulars, directions, notifications issued by the
RBI from time to time ("RBI Directions") and provisions of the Companies Act,
2013 (the "Act") read with Rules made thereunder. For details of Reserves and
Surplus of the Company, please refer Note No. 21 of the audited standalone financial
statements of the Company for the financial year ended March 31, 2023.
Details on performance of your Company has also been covered in the
Management Discussion and Analysis Report which forms part of the Annual Report.
Conduct Review of commercial vehicles and SME
businesses
As set out in the May 6, 2022 disclosure, the Audit Committee had
initiated a separate review for undertaking a root cause analysis of deviations to
policies and gaps in the internal financial controls and systems (including control gaps /
control override and individuals involved) focusing on the Company's commercial vehicles
and SME businesses and had appointed an external law firm along with an external agency in
this regard ("Conduct Review"). The
final findings of this review were submitted to the Audit Committee.
The Company, under the guidance and supervision of the Audit Committee,
has completed its review of the findings thereon, and has taken necessary remedial and
accountability measures. Among others, the Company has initiated measures to strengthen
controls and improve the process and control environment of the Company including by way
of senior managerial level changes and appointments, improving entity level controls,
policy related changes, process improvements and technological enhancements. The Company
has also concluded that with respect to the findings in the Conduct Review Report, there
is no further reporting requirement under the Act.
DIVIDEND AND DIVIDEND DISTRIBUTION POLICY
In terms of the Dividend Distribution Policy of the Company, dividend
shall be declared / recommended on the equity shares of the Company, keeping in view the
Company's objective of meeting the long-term capital requirement for the business from
internal cash accruals and appropriately rewarding shareholders. Details of the Dividend
Distribution Policy have been provided in the Corporate Governance Report which is annexed
to and forms an integral part of this Board's Report and is also available on the website
of the Company at https://www.indostarcapital.com/inves tors-corner#investor-services.
In terms of the Dividend Distribution Policy of the Company and the
Guidelines issued by the Reserve Bank of India vide its circular no. RBI/2021-2022/59
DOR.ACC.REC.No.23/21.02.067/2021-22 dated June 24, 2021 on Declaration of dividends by
NBFCs which is effective from financial year ended March 31, 2022 and onwards, your
Company is not eligible to declare dividend for financial year 2022-23.
FINANCIAL STATEMENTS
The financial statements of the Company have been prepared in
accordance with the Indian Accounting Standards ("Ind AS") notified under
Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015
as amended from time to time.
In terms of Section 129 of the Act read with Rules framed thereunder,
audited consolidated financial statements of the Company and its subsidiaries shall be
laid before the ensuing Annual General Meeting of the Company along with the audited
standalone financial statements of the Company for the financial year ended March 31,
2023.
The audited standalone and consolidated financial statements together
with Auditor's Report(s) thereon along with the salient features of the financial
statements of the subsidiaries of the Company in the prescribed Form
AOC-1 forms part of the Annual Report and are also available on the website of the Company
at https://www.indostarcapital.com/invest ors-corner#investor-relations.
SUBSIDIARY COMPANIES & THEIR FINANCIAL PERFORMANCE
Your Company has 2 (two) wholly-owned subsidiaries namely, IndoStar
Home Finance Private Limited ("IHFPL") and IndoStar Asset Advisory Private
Limited ("IAAPL"). Your Company does not have any joint venture(s) / associate
company(ies) within the meaning of Section 2(6) of the Act.
During the year under review, there has been no change in the nature of
business of the subsidiary companies and there were no additions / deletions in the number
of subsidiaries of your Company.
The audited standalone financial statements of each of the subsidiaries
are available on the website of the Company at https://www.indostarcapital.com/
investors-corner. Members interested in obtaining a copy of the audited standalone
financial statements of the subsidiaries may write to the Company Secretary at the
Registered & Corporate Office of the Company or at
investor.relations@indostarcapital.com.
In terms of Regulation 16(1)(c) of the Securities and Exchange Board of
India (Listing Obligation and Disclosure Requirements) Regulations, 2015 ("Listing
Regulations") and Company's Policy for Determining Material Subsidiary, IHFPL
continues to be a material subsidiary of your Company. Further, in terms of explanation to
Regulation 24(1) of the Listing Regulations, the requirement of appointing an Independent
Director of the Company on the board of directors of IHFPL is currently not applicable.
The Audit Committee reviews the financial statements of subsidiaries of
the Company, the investments made by its subsidiaries and the statement of all significant
transactions and arrangements entered into by the subsidiaries, if any, in terms of the
Listing Regulations. The minutes of board meetings of the unlisted subsidiary companies
and detailed presentations on business performance of material subsidiary, are placed
before the Board.
IndoStar Home Finance Private Limited
("IHFPL")
IHFPL is registered with the National Housing Bank to carry on the
business as a housing finance institution without accepting public deposits and primarily
focuses on providing affordable home finance. IHFPL commenced business operations in mid
of 2017 and has built a quality and profitable portfolio of over ' 1,623 crore as on March
31, 2023. IHFPL operates in 10 states across India through various branches and
has an employee base of over 757 employees as on March 31, 2023.
During the year under review, the total income of IHFPL was ' 209.24
crore (previous year: ' 144.82 crore). The operations of IHFPL during the year under
review has resulted in profit after tax of ' 37.78 crore (previous year: ' 34.31 crore).
The other key performance indicators of IHFPL are: (a) Return on Assets: 2.6%; (b) Capital
to Risk Weighted Assets Ratio: 80.5%; (c) Debt-Equity Ratio: 1.57x; (d) Assets Under
Management: ' 1,623 crore which is 15% YoY growth; (e) Disbursements: ' 487 crore; (f)
Gross Stage 3 assets: 1.3%; and (g) Cash & cash equivalent including undrawn lines: '
206 crore.
IndoStar Asset Advisory Private Limited
("IAAPL")
IAAPL is enabled under its objects to carry on the business of
inter-alia advising, managing, providing investment advisory services, financial advisory
services, management and facilitation services. IAAPL acted as an investment manager to
IndoStar Credit Fund and IndoStar Recurring Return Credit Fund, both, Category II
Alternative Investment Funds registered with the Securities and Exchange Board of India
("SEBI") and has applied to SEBI for surrendering the registration of IndoStar
Credit Fund and IndoStar Recurring Return Credit Fund and the applications are under
process.
During the year under review, the total income of IAAPL was ' 0.16
crore (previous year: ' 0.03 crore) and the Profit after tax was ' 0.10 crore (previous
year: loss after tax was ' 0.04 crore).
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
In terms of the Listing Regulations and the RBI Directions, the
Management Discussion and Analysis Report for the year under review is presented in a
separate section forming part of the Annual Report.
SHARE CAPITAL
Issued, Subscribed and Paid-up Share Capital
As on March 31, 2023 and as on the date of this report, the issued,
subscribed and paid-up share capital of the Company stands at ' 1,36,07,92,950 divided
into 13,60,79,295 equity shares of ' 10 each.
Your Company has not issued any sweat equity shares or equity shares
with differential voting rights. None of the Directors on the Board of the Company as on
March 31, 2023, holds any instruments convertible into Equity Shares of the Company.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
At present, the Board of Directors of your Company comprises 8 (eight)
Directors of which 3 (three) are
Non-Executive Independent Directors, 4 (four) are Non-Executive
Non-Independent Directors and 1 (one) is an Executive Director. The Chairman of the Board
of Directors is a Non-Executive Independent Director. The Board composition is in
compliance with the requirements of the Act, the Listing Regulations and the RBI
Directions. Detailed composition of the Board of Directors of the Company has been
provided in the Corporate Governance Report which is annexed to and forms an integral part
of this Board's Report.
Appointment and Cessation:
All appointments of Directors are made in accordance with the relevant
provisions of the Act, the Listing Regulations, the RBI Directions and other laws, rules,
guidelines as may be applicable to the Company. The Nomination & Remuneration
Committee ("NRC") exercises due diligence inter-alia to ascertain the 'fit and
proper' person status of the person who is proposed to be appointed on the Board of
Directors of the Company, and if deemed fit, recommends their candidature to the Board of
Directors for consideration.
During the year under review, Mr. Deep Jaggi (DIN:09412860) resigned
from his position as Whole-Time Director & Chief Executive Officer with effect from
February 14, 2023, and in line with succession planning for the Company and considering
the knowledge, relevant expertise and experience of Mr. Karthikeyan Srinivasan in the
retail business and on recommendation of the Nomination & Remuneration Committee, the
Board of Directors of the Company at its meeting held on March 30, 2023 and the Members of
the Company by means of special resolution passed on April 30, 2023, vide Postal Ballot
conducted through remote voting mode, approved the appointment of Mr. Karthikeyan
Srinivasan (DIN: 10056556) as a Whole Time Director on the Board of Directors of the
Company designated as Chief Executive Officer, to hold office for a term of 5 (five)
consecutive years commencing from March 30, 2023 to March 29, 2028.
Director(s) Retiring by Rotation
In terms of Section 152(6) of the Act read with the Articles of
Association of the Company, Mr. Munish Dayal (DIN: 01683836) and Mr. Vibhor Kumar Talreja
(DIN: 08768297), shall retire by rotation and being eligible, have offered themselves for
re-appointment at the ensuing Annual General Meeting of the Company. Brief profiles of Mr.
Munish Dayal and Mr. Vibhor Kumar Talreja have been included in the notice convening the
ensuing Annual General Meeting.
Re-appointment of Independent Directors
The NRC after considering, (1) performance evaluation of Mr. Hemant
Kaul (DIN: 00551588) and Ms. Naina Krishna Murthy (DIN: 01216114) as a Member of the
Board/Committees, (2) their contribution in Board/ Committee deliberations during their
tenure as an
Independent Director and (3) their skills, background and experience,
recommended to the Board their re-appointment as Independent Director for a second term of
five years in terms of Section 149(10) of the Act. The Board unanimously endorsed the view
of the NRC and recommended to the Shareholders of the Company, the re-appointment of Mr.
Hemant Kaul and Ms. Naina Krishna Murthy as Independent Directors of the Company, not
liable to retire by rotation, to hold office for a second term of five years, effective
February 5, 2023 through February 4, 2028. On April 30, 2023, the Shareholders of the
Company, by way of a special resolution passed through Postal Ballot conducted through
remote e-voting mode, approved the re-appointment of Mr. Hemant Kaul and Ms. Naina Krishna
Murthy as Independent Directors of the Company for the above-mentioned tenure.
Resignation of Independent Director(s)
During the year under review, none of the Independent Director(s) on
the Board of Directors of the Company had resigned before the expiry of their respective
tenure(s).
Director(s) Declaration and Disclosures
Based on the declarations and confirmations received in terms of the
provisions of the Act, the Listing Regulations and the RBI Directions, none of the
Directors on the Board of your Company are disqualified from being appointed / continuing
as Directors.
A certificate from H Choudhary & Associates, Practicing Company
Secretary, confirming that none of the Directors on the Board of the Company as on March
31, 2023 have been debarred or disqualified from being appointed or continuing as Director
on the Board of the Company by the Securities and Exchange Board of India, the Ministry of
Corporate Affairs or any such statutory authority, forms part of the Governance Report
which is annexed to and forms an integral part of this Board's Report.
The Company has received the necessary declaration from each
Independent Director in accordance with Section 149(7) of the Act and Regulations 16(1)(b)
and 25(8) of the Listing Regulations, that he/she meets the criteria of independence as
laid out in Section 149(6) of the Act and Regulations 16(1)(b) of the SEBI Listing
Regulations. In the opinion of the Board, there has been no change in the circumstances
which may affect their status as Independent Directors of the Company and the Board is
satisfied of the integrity, expertise, and experience (including proficiency in terms of
Section 150(1) of the Act and applicable rules thereunder) of all Independent Directors on
the Board. Further, in terms of Section 150 read with Rule 6 of the Companies (Appointment
and Qualification of Directors) Rules, 2014, as amended, Independent Directors of the
Company have included their names
in the data bank of Independent Directors maintained with the Indian
Institute of Corporate Affairs.
Key Managerial Personnel ("KMP")
During the year under review, (i) Mr. Kapish Jain was appointed as
Chief Financial Officer of the Company with effect from May 27, 2022. Mr. Jain resigned
with effect from close of business hours on July 19, 2022; (ii) Mr. Vinodkumar Panicker
was appointed as Chief Financial Officer of the Company with effect from December 26,
2022; (iii) Mr. Deep Jaggi resigned from the office of Chief Executive Officer (CEO) of
the Company with effect from February 14, 2023; and (iv) Mr. Karthikeyan Srinivasan was
appointed as CEO of the Company with effect from February 14, 2023.
Subsequent to the year under review, Mr. Jitendra Bhati resigned as
Company Secretary and Compliance officer of the Company with effect from close of business
hours of April 17, 2023 and Ms. Shikha Jain was appointed as Company Secretary and
Compliance officer of the Company with effect from April 18, 2023.
Following are the KMPs of the Company as on date of this Board's
Report:
1. Mr. Karthikeyan Srinivasan Chief Executive Officer
2. Mr. Vinodkumar Panicker Chief Financial Officer
3. Ms. Shikha Jain
Company Secretary & Compliance Officer RBI DIRECTIONS
Your Company endeavors to comply with the direction(s), circular(s),
notification(s) and guideline(s) issued by the Reserve Bank of India as applicable to your
Company as a systemically important non-deposit taking non-banking financial company
("NBFC").
Your Company has complied with the provisions of the extant circulars,
regulations and guidelines related to foreign investment in India, with respect to the
downstream investments.
COMPLIANCE WITH SECRETARIAL STANDARDS
In terms of provisions of Section 118 of the Act, your Company is in
compliance with Secretarial Standards on Meetings of the Board of Directors and
Secretarial Standards on General Meeting issued by the Institute of Company Secretaries of
India.
DEPOSITS
Your Company has not accepted any public deposits during the year under
review and shall not accept any deposits from the public without obtaining prior approval
of the RBI. Further, your Company being an
NBFC, the disclosure requirements under Chapter V of the Act read with
Rule 8(5)(v) and 8(5)(vi) of the Companies (Accounts) Rules, 2014 are not applicable to
your Company.
RESOURCES AND LIQUIDITY
Your Company has diversified funding sources including public sector
banks, private sector banks, mutual funds, insurance companies and financial institutions.
Funds were raised through various modes including bank borrowings, issuance of
non-convertible debentures on private placement basis, issue of commercial paper and sale
/ assignment / securitisation of loan assets of the Company etc.
During the year under review, your Company has raised additional funds
from inter-alia, following sources (i) ' 2,255.00 crore as bank borrowings (outstanding as
on March 31, 2023: ' 2,588.51 crore); (ii) ' 900.00
crore through issuance of non-convertible debentures (outstanding as on
March 31, 2023: ' 1,108.87 crore); and (iii) ' 876.98 crore by securitization of loan
assets of the Company. Subsequent to year under review, the Company raised ' 300.00 crore
through issue of commercial paper (outstanding as on March 31, 2023: ' Nil). Funds raised
through private placement of debentures were utilized for the purpose mentioned in the
respective offer documents. Till the pending utilization of funds for stated purpose, the
funds were temporarily invested in mutual funds/Banks FDs/ maintained a balance in current
accounts.
Your Company continues to be adequately capitalized and is in
compliance with capital adequacy norms prescribed by the Reserve Bank of India. Your
Company has sufficient liquidity to satisfy its short-term and long-term liabilities.
CREDIT RATING(S)
Credit Ratings assigned to the Company as on March 31, 2023 is
summarized below:
Particulars / Rating Agencies |
Rating |
Remarks |
Long Term: |
|
|
Debt Programme |
|
|
CARE Ratings Limited |
CARE A+" |
Securities with this rating
are considered to have adequate degree of safety regarding timely servicing of financial
obligations. Such securities carry low credit risk. |
CRISIL Ratings Limited |
CRISIL AA-" |
Securities with this rating
are considered to have high degree of safety regarding timely servicing of financial
obligations. Such securities carry very low credit risk. |
Market Linked Debentures |
|
|
CARE Ratings Limited |
CARE PP- MLD A+" |
Securities with this rating
are considered to have adequate degree of safety regarding timely servicing of financial
obligations. Such securities carry low credit risk. |
Short Term Debt Programme /
Commercial Paper: |
|
|
CRISIL Ratings Limited |
CRISIL A1+" |
Securities with this rating
are considered to have very |
CARE Ratings Limited |
CARE A1+" |
strong degree of safety
regarding timely servicing of |
ICRA Limited |
[ICRA] A1+" |
financial obligations. Such
securities carry very lowest credit risk. |
During the year under review, CARE Ratings Limited revised the
long-term rating to "CARE A+"; re-affirmed short-term rating at "CARE
A1+" and it placed the rating under Rating Watch with Negative Implications. By the
end of the year, Care Rating Limited removed the Rating Watch with Negative Implications
and revised it to "Stable" outlook.
During the year under review, while CRISIL did not revise the long-term
or short term rating and retained them at CRISIL AA- and CRISIL A1+ respectively; it
placed the rating under Rating Watch with Negative Implications.
DEBT EQUITY RATIO
Your Company's Debt Equity ratio as on March 31, 2023 stood at 1.6x.
CAPITAL ADEQUACY RATIO
Your Company is well capitalised to provide adequate capital for its
continued growth. As on March 31, 2023, the Capital to Risk Assets Ratio
("CRAR") of your Company stood at 31.5%, well above the regulatory limit of 15%
as prescribed by the RBI for NBFCs.
NET OWNED FUNDS
The Net Owned Funds of your Company as on March 31, 2023 stood at '
1,865.64 crore.
COMPLIANCE WITH MINIMUM PUBLIC SHAREHOLDING
Subsequent to the year under review, Indostar Capital and Everstone
Capital Partners II LLC, members of the promoter and promoter group of the Company, have
sold the 1,93,40,000 equity shares of the Company
representing 14.21% of the total paid-up equity share capital through
offer for sale by way of stock exchange mechanism and the public shareholding in the
Company has now increased upto 25% and accordingly the Company is in compliance with the
minimum public shareholding norms with effect from May 5, 2023, as required under
Regulation 38 of the Listing Regulations.
SHIFTING OF REGISTERED OFFICE OF THE COMPANY
During the year under review, the Company shifted its registered office
from "One World Centre, 20th Floor, Tower 2A, Jupiter Mills Compound, Senapati Bapat
Marg, Mumbai - 400013" to "Unit No. 505, 5th Floor, Wing 2/E, Corporate Avenue,
Andheri - Ghatkopar Link Road, Chakala, Andheri (East), Mumbai - 400099 with effect from
December 30, 2022.
AUDITORS
Statutory Auditors & their Report
In terms of provisions of the Act, M/s. Deloitte Haskins & Sells
LLP, Chartered Accountants, having ICAI Firm Registration No. 117366W/W-100018, were
appointed as the Statutory Auditors of the Company at the 11th Annual General Meeting of
the Company held on September 24, 2020 for a term of five years to hold office till the
conclusion of the 16th Annual General Meeting of the Company.
In terms of the guidelines issued by RBI on April 27, 2021 for
appointment of statutory auditors for NBFCs, which was applicable from second half of
financial year 2021-22 inter-alia mandates tenure of statutory auditors to be for a
continuous period of a maximum of three years subject to satisfying the eligibility
criteria each year, the term of Statutory Auditors stands revised from 5 years to 3 years
i.e., to hold office till conclusion of 14th Annual General Meeting of the Company.
Accordingly, Deloitte Haskins & Sells LLP shall cease to hold office of Statutory
Auditors of the Company from the conclusion of the 14th Annual General Meeting of the
Company.
In terms of Section 139 of the Act read with rules made thereunder and
guidelines issued by RBI on April 27, 2021, the Audit Committee of the Board, after
assessing the qualifications and experience of M S K A & Associates, Chartered
Accountants, having ICAI Firm Registration No. 105047W recommended their appointment as
Statutory Auditors of the Company for a term of three years to the Board of Directors of
the Company. Upon recommendation of the Audit Committee, the Board of Directors has
approved appointment of M S K A & Associates, as Statutory Auditors of the Company to
hold office for a period of three years i.e. from the conclusion of the 14th Annual
General Meeting of the Company till
the conclusion of the 17th Annual General Meeting of the Company.
Your Directors recommend to the members of the Company the appointment
of M S K A & Associates, Chartered Accountants, as Statutory Auditors of the Company
to hold office for a term of three years
i.e. from the conclusion of the 14th Annual General Meeting of the
Company till the conclusion of the 17th Annual General Meeting of the Company.
M S K A & Associates, being eligible for appointment as Statutory
Auditors have consented and confirmed that their appointment, if made, shall be in
compliance with the requirements of Section 139 read with Section 141 of the Act read with
rules made thereunder and guidelines issued by RBI on April 27, 2021.
M/s. Deloitte Haskins & Sells LLP, Statutory Auditors of the
Company have, in their report(s) on the audited standalone and consolidated financial
statements of your Company for the financial year ended March 31, 2023 submitted following
qualifications:
Qualified Opinion
We have audited the accompanying standalone financial statements of
IndoStar Capital Finance Limited ("the Company"), which comprise the Balance
Sheet as at March 31, 2023, and the Statement of Profit and Loss (including Other
Comprehensive Income), the Statement of Cash Flows and the Statement of Changes in Equity
for the year then ended, and a summary of significant accounting policies and other
explanatory information.
In our opinion and to the best of our information and according to the
explanations given to us, except for the possible effects on the corresponding figures of
the matter described in the Basis for Qualified Opinion section of our report, the
aforesaid standalone financial statements give the information required by the Companies
Act, 2013 (the "Act") in the manner so required and give a true and fair view in
conformity with the Indian Accounting Standards prescribed under section 133 of the Act
read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind
AS") and other accounting principles generally accepted in India, of the state of
affairs of the Company as at March 31, 2023, and its profit, total comprehensive income,
its cash flows and the changes in equity for the year ended on that date.
Basis for Qualified Opinion
The Company had recorded a charge on account of impairment (net of
recoveries) of '115,077 lakh for the year ended March 31, 2022 (including '48,075 lakh
against loans for Commercial Vehicles ("CV"), '782 lakh against loans to Small
and Medium Enterprises
("SME"), '14,533 lakh against investment in Security
Receipts, '1,351 lakh against additional liability on financial guarantee contracts
consequent to impairment of the underlying loan assets and a loss of '57,764 lakh on write
off of loan assets during the previous year).
The Company had concluded that it was impracticable to determine the
prior period-specific effects, if any, of the charge to the Statement of Profit and Loss
on account of impairment allowance, loan assets written off and changes in fair value of
financial-guarantee contracts recorded during the year ended March 31, 2022 in respect of
certain account balances as explained by the Company in Note 41.2 of the Statement. As a
result, we were unable to determine whether any adjustments were required for prior
period(s) relating to the impairment recorded for the year ended March 31, 2022 and
consequently, adjustments to income from interest, fees and commission on the
corresponding assets and related disclosures.
Our opinion on the standalone financial statements for the year ended
March 31, 2022 was modified accordingly. Our opinion on the financial statements for the
year ended March 31, 2023 ("current period") is also modified because of the
possible effect of this matter on the comparability of the current period's figures and
the corresponding figures.
Comments in Report on Other Legal and Regulatory Requirements section
of the Audit Report
1(a) We have sought and except for the matter described in the Basis
for Qualified Opinion section above, obtained all the information and explanations which
to the best of our knowledge and belief were necessary for the purposes of our audit.
1(d) Except for the possible effects of this matter on the
comparability of the current year's figures and the corresponding figures of the previous
year, in our opinion, the aforesaid standalone financial statements comply with the Ind AS
specified under Section 133 of the Act.
Comments in Annexure B to the Auditors Report
(xvii) The Company has not incurred cash losses in the financial year
covered by our audit. Considering the standalone financial statements of the Company as at
and for the year ended March 31, 2022 (immediately preceding financial year), and the
matter of audit qualification as reported by us in Basis for Qualified Opinion section of
our Audit Report (dated August 5, 2022) on those financial statements, the effect of which
we are unable to determine, we are unable to state if the Company has
incurred cash losses during the immediately preceding financial year.
Directors' response to comments of the
Statutory Auditors in the Audit Report
With respect to the qualification of the Statutory Auditors, the
qualification pertains to comparability of the current year figures with that of previous
year as explained in note 41.2 of the Standalone financial statements. There is no impact
of the audit qualification on the figures for the current year i.e. year ended March 31,
2023.
As explained in note 41.2 of the financial statements, for the previous
year ended March 31, 2022, the Company had made incremental provision for expected credit
loss (ECL) allowances on account of certain deficiencies in the Company's internal
controls that were identified during period ended March 31, 2022. Considering that these
control deficiencies have since been remediated during the current year and the findings
of the Conduct Review have been adequately evaluated (refer note 41.1 of the Standalone
financial statements), no incremental provisioning is considered necessary during the year
ended March 31, 2023.
Although the possibility that the control deficiencies that were
identified during previous year could potentially have had an impact on the financial
statements for periods ending prior to April 1, 2021, the Company had concluded that it
was impracticable to determine the prior period - specific effects, if any, in respect of
the charge to the Statement of Profit and Loss for the previous year ended March 31, 2022
when it finalised its financial statements for the year ended March 31, 2022 because
significant judgements had been applied in determining the staging of the loan assets and
the related impairment allowance for events and conditions which existed as on March 31,
2022. The Company believes it is not practicable to apply the same judgement without
hindsight for the prior period(s).
Consequent to the above, in respect of such account balances, related
income and the related disclosures, the figures for the year ended March 31, 2023 may not
be strictly comparable with the figures for the year ended March 31, 2022.
Secretarial Auditors & their Report
In terms of Section 204 of the Act and Regulation 24A (1) of the
Listing Regulations, Secretarial Audit Report from M Siroya and Company, Practicing
Company Secretary in the prescribed format for the financial year ended March 31, 2023 is
enclosed herewith at Annexure I to this Board's Report.
M Siroya and Company, Practicing Company Secretary, in their report on
the secretarial audit of your Company for the financial year ended March 31, 2023 have
submitted following remarks/qualifications:
1. Non-maintenance of minimum public shareholding ("MPS") of
at least 25% as required pursuant to Rule 19(2) and 19A of the Securities Contract
(Regulations) Rules, 1957 read with Regulation 38 of the Listing Regulations;
2. Delay in submission of audited financial results (standalone and
consolidated) of the Company for the 4th quarter and financial year ended March 31, 2022
and other Company updates
3. Delay in disclosure of line items prescribed under Regulation 52(4)
along with the half yearly / annual financial results
4. Delay in disclosure of extent and nature of security created and
maintained with respect to secured listed NCDs in the financial statements;
5. Delay in submission of statement indicating the utilization of issue
proceeds/ material deviation in the use of proceeds of non-convertible debentures
6. There were several instances of delayed filings of requisite eForms
with the Registrar of Companies, viz, DIR-12, MGT-14, AOC-4 CFS, AOC 5, PAS 3 and CHG-1
etc.
7. There were instances of delayed filing of periodical returns
required to be filed with the Mumbai Regional Office of the Reserve Bank of India during
the year under review.
Director's Response to the
remarks/qualification in Secretarial Audit Report
Subsequent to the year under review, the Company has complied with the
provisions of the the minimum public shareholding norms with effect from May 5, 2023, as
required under Regulation 38 of the Listing Regulations.
With respect to the delay in submission of audited financial results
(standalone and consolidated) of the Company for the 4th quarter and financial year ended
March 31, 2022 and other Company updates, due to then ongoing conduct review by external
agency appointed by the Company and in order to disclose its impact in financial results
for the quarter and year ended March 31, 2022, there was delay in compliance with
submission of financial results (standalone and consolidated) of the Company for the 4th
quarter and financial year ended March 31, 2022 in terms of Regulation 33 and submission
of other disclosures required to be submitted along with financial results. Post the
completion of review by the external agency and confirmation by the statutory auditors on
the
same, the Company on August 5, 2022 adopted and submitted financial
results (standalone and consolidated) of the Company for the 4th quarter and financial
year ended March 31, 2022 in terms of Regulation 33 and submission of other disclosures
required to be submitted along with financial results.
With respect to the delays in other disclosures with stock exchanges,
the same was inadvertently delayed, however, the Company has since been working to put in
place adequate systems and automation tools to strengthen its governance and to ensure no
such instances were repeated in future. The Company would be more cautious and ensure
timely submission of return.
With respect to the delay in filing of forms with Ministry of Corporate
Affairs, the Company would like to submit that the delay was due to technical glitch on
website of MCA and despite the Company's continuous and rigorous efforts, the forms could
not be uploaded on time. As soon as the glitch was resolved, the Company filed all the
forms immediately.
The delay in filing of returns with Reserve Bank of India was due to
system errors while submitting the returns, The Company has since been working on
resolving those errors by improving its systems and also liasoning with officials of
Reserve Bank of India to ensure timely submissions of all returns.
In terms of Regulation 24 A(2) of the Listing Regulations, Annual
Secretarial Compliance Report with respect to all applicable compliances under regulations
and circulars / guidelines issued by the Securities and Exchange Board of India from M
Siroya and Company, Practicing Company Secretary in prescribed format for the financial
year ended March 31, 2023 has been submitted to the stock exchanges.
Secretarial Audit Report of Material Unlisted
Indian Subsidiary
In terms of Section 204 of the Act and Regulation 24A of the Listing
Regulations, Secretarial Audit Report for IndoStar Home Finance Private Limited, a
material subsidiary of the Company obtained from H Choudhary & Associates, Practicing
Company Secretary in the prescribed format for the financial year ended March 31, 2023 is
enclosed herewith at Annexure II to this Board's Report.
H Choudhary & Associates, Practicing Company Secretary, in their
report on the secretarial audit of IndoStar Home Finance Private Limited for the financial
year ended March 31, 2023 have not submitted any qualifications, reservations, adverse
remarks or disclaimers except with respect to appointment of woman director on the Board
of the Company.
During the year under review, the secretarial auditor of the Company
and IHFPL have not reported any instances of fraud in the Company and IHFPL committed by
officers or employees of the Company to the Audit Committee.
REPORT ON CORPORATE GOVERNANCE
The Corporate Governance Report for the year under review, including
disclosures as stipulated under Regulation 34 read with Schedule V of the Listing
Regulations and the RBI Directions is annexed to and forms an integral part of this
Board's Report.
A certificate from H Choudhary & Associates, Practicing Company
Secretary, confirming compliance with the conditions of Corporate Governance as prescribed
under the Listing Regulations is annexed to the Corporate Governance Report.
MEETINGS
The Board and Committees meet at regular intervals inter-alia to
discuss, review and consider various matters including business performance, strategies,
policies and regulatory updates and impact. During the year under review, the Board met 9
(nine) times and several meetings of Committees including the Audit Committee were held.
Details with respect to the meetings of the Board of Directors and Committees held during
the year under review, including attendance by Directors / Members at such meetings have
been provided in the Corporate Governance Report which is annexed to and forms an integral
part of this Board's Report.
BOARD COMMITTEES
The Board of Directors, in compliance with the requirements of various
laws applicable to the Company, as part of good corporate governance practices and for
operational convenience, has constituted several committees to deal with specific matters
and has delegated powers for different functional areas to different committees.
The Board of Directors has amongst others, constituted Audit Committee,
Credit Committee, Asset Liability Management Committee, Risk Management Committee,
Nomination & Remuneration Committee, Corporate Social Responsibility Committee,
Stakeholders Relationship Committee, Debenture Committee, Internal Complaints
Committee(s), Banking Committee, Investment Committee, Grievances Redressal Committee, ESG
Working Review Committee and Disciplinary Committee.
Details with respect to the composition, terms of reference, number of
meeting(s) held and attended by respective member(s), roles, powers and responsibilities
of the Committee(s) have been provided in the Corporate Governance Report which
is annexed to and forms an integral part of this Board's Report.
PERFORMANCE EVALUATION
In terms of the provisions of the Act and the Listing Regulations, the
Board of Directors adopted a Board Performance Evaluation Policy to set out a formal
mechanism for evaluating performance of the Board, that of its Committee(s) and individual
Directors including the Chairperson. Additionally, in order to outline detailed process
and criteria to be considered for performance evaluation, the Nomination &
Remuneration Committee has put in place the 'Performance Evaluation Process - Board,
Committees and Directors', which forms an integral part of the Board Performance
Evaluation Policy.
In terms of the requirement of Schedule IV of the Act and Regulation 25
of the Listing Regulations, a separate meeting of the Independent Directors was held on
March 22, 2023 to review the performance of the Non-Independent Directors including the
Chairman and the Board, as a collective entity.
Subsequent to the year under review, the Board of Directors evaluated
the performance of the Directors including Independent Directors, Committee(s) of the
Board and the Board as a collective entity, during the year under review.
A statement indicating the manner in which formal evaluation of the
performance of the Board, Committee(s) of the Board, individual Directors including the
Chairman during the year under review was carried out, is provided in the Corporate
Governance Report which is annexed to and forms an integral part of this Board's Report.
FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
In compliance with the requirements of the Listing Regulations, the
Company has adopted and put in place a Familiarisation Programme for Independent Directors
to familiarize Independent Directors inter-alia with the industry in which your Company
and its subsidiaries operate, the Company's business model and its operations in order to
give them an insight into the Company's business and its functioning. A formal letter of
appointment is given to Independent Directors at the time of their appointment which lays
down the fiduciary duties, roles and responsibilities of an Independent Director. The
terms and conditions of appointment of Independent Directors is available on the website
of the Company at https://www.indostarcapital.com/investors-corner #investor-services.
In terms of Regulation 46 of the Listing Regulations, the details of
familiarisation programmes imparted
to the Independent Directors during the year under review including
details of number of programmes and number of hours spent by each Independent Director are
available on the website of the Company at
https://www.indostarcapital.com/investors-corner #investor-services.
POLICY ON APPOINTMENT OF DIRECTORS AND SENIOR MANAGEMENT PERSONNEL
In terms of Section 178 (2) of the Act, the Listing Regulations and the
RBI Directions, the Board of Directors adopted a 'Policy on Selection Criteria / "Fit
& Proper" Person Criteria' inter-alia setting out parameters to be considered for
appointment of Directors and Senior Management Personnel of the Company.
Details of the Policy on Selection Criteria / "Fit &
Proper" Person Criteria have been provided in the Corporate Governance Report which
is annexed to and forms an integral part of this Board's Report and is also available on
the website of the Company at https://www.indostarcapital.com/investors-corner#i
nvestor-services.
REMUNERATION POLICY, DISCLOSURE OF REMUNERATION & PARTICULARS OF
EMPLOYEES Remuneration Policy
In terms of Section 178 of the Act and the Listing Regulations, the
Board of Directors adopted a Remuneration Policy inter-alia setting out the criteria for
determining remuneration of Executive Directors, Non-Executive Directors, Senior
Management and other employees of the Company.
Details of the Remuneration Policy have been provided in the Corporate
Governance Report which is annexed to and forms an integral part of this Board's Report.
The Remuneration Policy is also available on the website of the Company at
https://www.indostarcapital.com/ investors-corner#investor-services.
Employee Remuneration
In terms of Section 197 of the Act read with Rule 5 of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, the disclosures with
respect to the remuneration of Directors, Key Managerial Personnel and employees of the
Company have been provided at Annexure III to this Board's Report.
Statement containing details of employees as required in terms of
Section 197 of the Act read with Rule 5(2) and Rule 5(3) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014, is available for inspection at the
Registered & Corporate Office of the Company during working hours for a period of 21
days before the date of
the ensuing Annual General Meeting. A copy of the statement may be
obtained by shareholders by writing to the Company Secretary at the Registered &
Corporate Office of the Company or at investor. relations@indostarcapital.com.
The Board of Directors confirm that remuneration paid to the Directors
was as per the Remuneration Policy of the Company.
WHISTLE BLOWER POLICY / VIGIL MECHANISM
In terms of Section 177(9) and Section 177(10) of the Act and the
Listing Regulations, the Board of Directors adopted a Whistle Blower Policy / Vigil
Mechanism, inter-alia to provide a mechanism for Directors and employees of the Company to
approach the Audit Committee of the Company and to report genuine concerns related to the
Company. The Whistle Blower Policy / Vigil Mechanism provides for adequate safeguards
against victimization of Director(s) or employee(s) who report genuine concerns under the
mechanism.
Details of the Whistle Blower Policy / Vigil Mechanism have been
provided in the Corporate Governance Report which is annexed to and forms an integral part
of this Board's Report.
CORPORATE SOCIAL RESPONSIBILITY
In terms of Section 135 of the Act read with the Companies (Corporate
Social Responsibility Policy) Rules, 2014 ("CSR Rules"), the Board of Directors
have constituted a Corporate Social Responsibility (CSR) Committee and in light of your
Company's philosophy of being a responsible corporate citizen, the Board of Directors
adopted a CSR Policy which lays down the principles and mechanism for undertaking various
projects / programs as part of Company's CSR activities. During the year under review, the
Company was not required to spend any amount towards CSR activities as required under
Section 135 of the Act and hence, disclosure pursuant to Section 134(3)(o) of the Act is
not applicable to the Company.
Details of the composition of the CSR Committee and the CSR Policy have
been provided in the Corporate Governance Report which is annexed to and forms an integral
part of this Board's Report.
RISK MANAGEMENT FRAMEWORK
Your Company has in place a mechanism to identify, assess, monitor and
mitigate various risks associated with the business of the Company. Major risks identified
by the business and functions, if any, are systematically addressed through mitigating
actions on a continuing basis. The Board of Directors have adopted a Risk Management
Framework and Policy which inter-alia integrates various elements of risk management into
a unified enterprise-wide policy.
The Risk Management Committee of the Company has not identified any
elements of risk which in their opinion may threaten the existence of your Company.
Details of the risks and concerns relevant to the Company are discussed in detail in the
Management Discussion and Analysis Report which forms part of the Annual Report. As part
of the Portfolio Review Findings, certain deficiencies were identified with respect to the
Risk Management Framework and Policy during the year ended March 31, 2022. The Company
under the guidance of the Audit Committee and the Board have gone into depth on all the
matters and have remediated the issues by a combination of change in the policies and
processes and also by automating the processes and escalating the deviations on an
immediate basis. These have been checked for accuracy by the Auditors and the Assurance
team and are seen to be working well.
In terms of the RBI Directions and in order to further strengthen the
risk management framework, during the year under review, the Company appointed Chief Risk
Officer ("CRO") and adopted a policy on Independence of the CRO. In order to
ensure that the Company maintains high standards of risk management practices, the CRO
functions independently with no relationship with business verticals of the Company and
reports to the Risk Management Committee. The CRO is inter-alia entrusted with the
responsibility of identifying, measuring and mitigating risks which may affect the Company
and putting in place and monitoring the risk management policies and practices of the
Company.
Subsequent to the year under review, the Board of Directors through
resolution passed through circulation, on recommendation of Nomination & Remuneration
Committee and Risk Management Committee, appointed Mr. Nitin Gyanchandani as Chief Risk
Officer of the Company with effect from July 17, 2023 for the period of 5 years.
Details of the Risk Management Framework and Policy have been provided
in the Corporate Governance Report which is annexed to and forms an integral part of this
Board's Report.
INTERNAL CONTROL / INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR
ADEQUACY
Your Company's well-defined organizational structure, documented
policies, defined authority matrix and internal controls ensure efficiency of operations,
compliance with internal system / policies and applicable laws. The internal control
system / policies of your Company are supplemented with internal audits, regular reviews
by the management and checks by external auditors. The Audit Committee
and the Board of Directors monitor the internal controls system /
policies of your Company. The Risk Management Committee and the Audit Committee
periodically review various risks associated with the business of the Company along with
risk mitigants and ensure that they have an integrated view of risks faced by the Company.
The Board of Directors is of a view that your Company's internal control systems are
commensurate with the nature of its business, size and complexity of operations.
During the year under review, the Statutory Auditors have not reported
any instances of fraud in the Company committed by officers or employees of the Company to
the Audit Committee under Section 143(12) of the Act.
The Statutory Auditors have, in their report on Internal Financial
Control over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the
Act, have provided an Qualified Opinion as under.
Basis for Qualified Opinion
According to the information and explanations given to us and based on
our audit, the following material weakness has been identified in the Company's internal
financial controls with reference to standalone financial statements as at March 31, 2023:
The Company had concluded that it was impracticable to determine the
prior period-specific effects, if any, of the charge to the Statement of Profit and Loss
on account of impairment allowance, loan assets written off and changes in fair value of
financial-guarantee contracts recorded during the year ended March 31, 2022 in respect of
account balances identified and explained by the Company in Note 41.2 of the standalone
financial statements. As a result, we were unable to determine whether any adjustments
were required for prior period(s) relating to the impairment charge recorded for the year
ended March 31, 2022 and consequently, adjustments to income from interest, fees and
commission on the corresponding assets and related disclosures.
Because of the deficiency in financial closing and reporting process,
in respect of comparative information as aforesaid, we were unable to assess whether or
not the current year's figures are comparable to those of the previous year.
A material weakness' is a deficiency, or a combination of
deficiencies, in internal financial control with reference to standalone financial
statements, such that there is a reasonable possibility that a material misstatement of
the company's annual or interim financial statements will not be prevented or detected on
a timely basis.
Qualified Opinion:
In our opinion, to the best of our information and according to the
explanations given to us, except for the possible effects of the material weakness
described in the Basis for Qualified Opinion paragraph above on the achievement of the
objectives of the control criteria, the Company has maintained, in all material respects,
an adequate internal financial controls with reference to standalone financial statements
and such internal financial controls with reference to standalone financial statements
were operating effectively as at March 31, 2023, based on the criteria for internal
financial control with reference to standalone financial statements established by the
Company considering the essential components of internal control stated in the Guidance
Note on Audit of Internal Financial Controls Over Financial Reporting issued by the
Institute of Chartered Accountants of India.
We have considered the material weakness identified and reported above
in determining the nature, timing, and extent of audit tests applied in our audit of the
standalone Ind AS financial statements of the Company for the year ended March 31, 2023,
and the material weakness does not affect our opinion on the said standalone Ind AS
financial statements of the Company.
Directors' response to comments above of the Statutory Auditors in
the report on Internal Financial Control over Financial Reporting under Clause (i) of
Sub-section 3 of Section 143 of the Act:
With respect to the Qualified Opinion above, the qualification pertains
to comparability of the current year figures with that of previous year as explained in
note 41.2 of the Standalone financial statements. There is no impact of the audit
qualification on the figures for the current year i.e. year ended March 31, 2023. As
explained in note 41.2 of the Standalone financial statements for the current year the
figures for the year ended March 31, 2023 may not be strictly comparable with the figures
for the year ended March 31, 2022.
CEO & CFO CERTIFICATE
Compliance Certificate in terms of Regulation 17(8) of the Listing
Regulations on the audited financial statements and other matters prescribed therein,
submitted to the Board of Directors by the CEO and CFO of the Company, for financial year
ended March 31, 2023, is enclosed herewith at Annexure IV to this Board's Report.
BUSINESS RESPONSIBILITY AND
SUSTAINABILITY REPORT
In terms of Regulation 34(2)(f) of the Listing Regulations, the
Business Responsibility and Sustainability Report (BRSR) of your Company detailing
initiatives undertaken by the Company on environmental, social and governance front during
the
year under review, forms part of this Annual Report and has been
provided at Annexure V to this Board's Report and is also available on the website of the
Company at https://www.indostarcapital.com/inves tors-corner#investor-relations.
CONTRACTS / ARRANGEMENTS WITH RELATED PARTIES AND RELATED PARTY
TRANSACTION POLICY
In terms of the provisions of the Act, the Listing Regulations and the
RBI Directions, the Board of Directors adopted 'Related Party Transaction Policy' to
ensure obtaining of proper approvals and reporting of transactions with related parties.
In terms of Section 177 of the Act and Regulation 23 of the Listing
Regulations read with the Related Party Transaction Policy of the Company, transactions
with related parties were placed before the Audit Committee for its approval and omnibus
approval of the Audit Committee was obtained for related party transactions of repetitive
nature, within the limits prescribed by the Board of Directors. The Audit Committee is
periodically updated with respect to related party transactions executed under omnibus
approval. Further, as per the applicable provisions of the SEBI Listing Regulations,
necessary approvals of the members of the Company were also sought for the material
related party transactions proposed to be entered with the related parties.
Pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the
Companies (Accounts) Rules, 2014, the details of related party transaction entered under
Section 188(1) of the Act, in Form AOC-2 is enclosed herewith at Annexure VI to this
Board's Report.
Disclosure of the related party transactions as required under IndAS -
24 are reported in Note 32 of the audited standalone financial statements of the Company
for the financial year ended March 31, 2023.
Details of the Related Party Transaction Policy have been provided in
the Corporate Governance Report which is annexed to and forms an integral part of this
Board's Report.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
In terms of Section 186(11) of the Act read with Companies (Meetings of
Board and its Powers) Rules, 2014, the provisions of Section 186 in respect of loans made,
guarantees given or securities provided or any investment made by the Company are not
applicable to the Company.
Further, pursuant to the provisions of Section 186(4) of the Act, the
details of investments made
by the Company are given in the Notes to the financial statements.
ANNUAL RETURN
In terms of Section 134(3)(a) and Section 92(3) of the Act read with
the Companies (Management and Administration) Rules, 2014, the Annual Return as at
financial year ended March 31, 2023 in prescribed form No. MGT-7 is available on the
website of the Company at https://www.indostarcapital.com/investors-corner
#investor-services.
EMPLOYEE STOCK OPTION PLANS ("ESOP PLANS")
Your Company believes that its success and ability to achieve its
objectives is largely determined by the quality of its workforce and recognises that not
only good employment opportunities but also additional motivating mechanisms are needed to
incentivize employees and aligning their interest with the interest of the Company. In
recognition of the said objective, the Company adopted and implemented IndoStar ESOP Plan
2012 ("ESOP 2012"), IndoStar ESOP Plan 2016 ("ESOP 2016"), IndoStar
ESOP Plan 2016-II ("ESOP 2016-II"), IndoStar ESOP Plan 2017 ("ESOP
2017") and IndoStar ESOP Plan 2018 ("ESOP 2018") (collectively referred to
as "ESOP Plans") to attract, retain, motivate and incentivise employees of the
Company and its holding / subsidiary companies.
The ESOP Plans of the Company are implemented and administered by the
Nomination & Remuneration Committee.
The Board of Directors confirms that the ESOP Plans are in compliance
with the provisions of the Act and Securities and Exchange Board of India (Share Based
Employee Benefits and Sweat Equity) Regulations, 2021, as amended ("SBEB & SE
Regulations").
Disclosures in terms of Regulation 14 of the SBEB & SE Regulations
read with SEBI Circular No. CIR/ CFD/POLICY CELL/2/2015 dated June 16, 2015, are available
on the website of the Company at https://www.indostarcapital.com/investors-corner#i
nvestor-services.
DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION,
PROHIBITION & REDRESSAL) ACT, 2013
Your Company is committed to create an environment in which all
individuals are treated with respect and dignity and promote a gender sensitive and safe
work environment. Accordingly, the Board of Directors adopted a Care & Dignity Policy
and also constituted an Internal Complaints Committee, in compliance with the provisions
of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal)
Act, 2013.
Considering geographic diversification across the country and increase
in number of employees, the Board of Directors have constituted Regional Internal
Complaints Committees for North, West, East and South regions.
During the year under review, no complaints related to sexual
harassment were received by the Internal Complaints Committee and the Regional Internal
Complaints Committees.
GENERAL DISCLOSURE
During the year under review, there has been no change in the nature of
business of your Company.
No material changes and commitments affecting the financial position of
your Company have occurred between the end of year under review and date of this Board's
Report.
Your Company is not required to maintain cost records in terms of
Section 148(1) of the Act.
During the year under review, no orders have been passed against your
Company by any regulator(s) or court(s) or tribunal(s) which would impact the going
concern status and / or the future operations of your Company.
During the year under review, your Company, in the capacity of a
financial creditor, has not filed petitions before the National Company Law Tribunal under
the Insolvency and Bankruptcy Code, 2016 for recovery of outstanding loans against its
customers, being corporate debtors.
During the year under review, there has been no instance of one-time
settlement with any Bank(s) or Financial Institution(s).
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
Since your Company is engaged in financial services activities, its
operations are not energy intensive nor does it require adoption of specific technology
and hence information in terms of Section 134(3)(m) of the Act read with the Companies
(Accounts) Rules, 2014 is not provided in this Board's Report. Your Company is vigilant on
the need for conservation of energy.
During the year under review, your Company did not have any foreign
exchange earnings and incurred foreign currency expenditure of ' 0.23 crore (Previous year
foreign exchange expenditure: ' 0.23 crore).
DIRECTORS RESPONSIBILITY STATEMENT
To the best of our knowledge and belief and according to the
information and explanations obtained by
us, pursuant to the provisions of Section 134(3)(c) read with Section
134(5) of the Act, your Directors hereby confirm that:
a) in the preparation of the annual accounts for the year ended March
31, 2023, the applicable accounting standards have been followed and no material
departures have been made from the same;
b) they have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and prudent so as to
give a true and fair view of the state of affairs of the Company at the end of the
financial year and of the profits of the Company for that period;
c) they have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the Act for safeguarding
the assets of the Company and for preventing and detecting fraud and other irregularities;
d) they have prepared the annual accounts on a going concern basis;
e) except for the deficiencies identified in the comparability of
previous year figures with current year figures as explained in Note 41.2 of the financial
statements in the matters referenced in the Qualified Opinion made by the statutory
auditors of the Company on the Internal Financial Controls over Financial Reporting under
Clause (i)
of Sub-section 3 of Section 143 of the Companies Act, 2013, the
directors had laid down internal financial controls to be followed by the company and that
such internal financial controls are adequate and were operating effectively; and
f) they have devised proper systems to ensure compliance with the
provisions of all applicable laws and that such systems are required to be strengthened.
APPRECIATION AND ACKNOWLEDGEMENT
The Directors take this opportunity to express their appreciation to
all stakeholders of the Company including the Reserve Bank of India, the National Housing
Bank, the Ministry of Corporate Affairs, the Securities and Exchange Board of India, the
Government of India and other Regulatory Authorities, the BSE Limited, the National Stock
Exchange of India Limited, the Depositories, Bankers, Financial Institutions, Debenture
Trustee, Credit Rating Agencies, Members, Employees and Customers of the Company for their
continued support and trust.
By the Order of the Board of Directors
For IndoStar Capital Finance Limited
Bobby Parikh
Chairman
DIN:00019437
Place: Mumbai
Date: August 21, 2023