Dear Shareholders,
Your Directors have pleasure in presenting the Twenty-Sixth Annual
Report on the business and operations of the Company together with the audited financial
statements, prepared under Ind-AS, for the financial year ended March 31, 2023.
OPERATIONS REVIEW
Effective October 1, 2015 post demerger of Financing Undertaking into
IDFC FIRST Bank Limited (earlier known as IDFC Bank) ("IDFC FIRST Bank" or
"the Bank"), IDFC Limited ("IDFC" or "the Company") is
operating as an NBFC - Investment Company mainly holding investment in IDFC Financial
Holding Company Limited ("IDFC FHCL") which is a non-operative financial holding
company. IDFC FHCL in turn holds investments in IDFC FIRST Bank Limited. IDFC has minimal
business operations and its main focus is to simplify corporate structure and unlock value
for shareholders. During the year, Balance Sheet size increased from Rs. 9,416.45 crore as
on March 31, 2022 to Rs. 9,570.64 crore as on March 31, 2023. Profit after tax and other
comprehensive income was higher at Rs. 2,029.00 crore for FY23 as compared to Rs. 53.88
crore in FY22. Net worth of the Company increased from Rs. 9,391.06 crore as on March 31,
2022 to Rs. 9,518.64 crore as on March 31, 2023. During the year, the Company transferred
Rs. 405.83 crore to Special Reserve u/s 45-IC of Reserve Bank of India ("RBI")
Act, 1934. Details of business overview and outlook of the Company and its subsidiaries
are appearing in the chapter Management Discussion and Analysis which forms part of this
report.
DIVIDEND
The Board of Directors at its meeting held on February 01, 2023
declared a special dividend of Rs.11/- per share. The same was paid on February 23, 2023.
The Board also at its meeting held on April 06, 2022 declared an interim dividend of Re.
1/- per share. The same was paid to the Shareholders on May 02, 2022. The Board has not
recommended any final dividend for FY 23.
DIVIDEND DISTRIBUTION POLICY
In accordance with the Regulation 43A of SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 ("SEBI LODR Regulations"), IDFC had
formulated a Dividend Distribution Policy. The policy was adopted to set out the
parameters and circumstances that will be considered by the Board in determining the
distribution of dividend to its Shareholders and / or retaining profits earned by the
Company. The said policy is hosted on the website of the Company and can be viewed at
http://www.idfclimited. com/investor_ relations/corporate_ governance_policies.htm.
SUBSIDIARY COMPANIES
The Company has one domestic direct subsidiary & three associate
companies as on March 31, 2023 which are given in Table 1.
CORPORATE SIMPLIFICATION DURING THE YEAR
Sale of IDFC Asset Management Company Limited (IDFC AMC) and IDFC AMC
Trustee Company Limited (IDFC AMC Trustee)
The Board of Directors of IDFC and the Board of Directors of IDFC FHCL
at their respective meetings held on April 06, 2022, had inter alia considered binding
bids received in connection with divestment of IDFC AMC along with IDFC AMC Trustee and
had approved sale of the entire shareholding of IDFC AMC and IDFC AMC Trustee held by IDFC
FHCL to a consortium comprising of Bandhan Financial Holding Limited, Lathe Investment
Pte. Ltd. (affiliate of GIC), Tangerine Investments Limited and Infinity Partners
(affiliates of ChrysCapital). On July 07, 2022, the Shareholders of IDFC through postal
ballot had approved the divestment/ sale/ disposal of the IDFC AMC (material subsidiary of
IDFC) and IDFC AMC Trustee.
The aforesaid transaction was completed on January 31, 2023 after
receipt of all necessary regulatory approvals and completion of mutually agreed closing
related actions. On sale of IDFC AMC & IDFC AMC Trustee, IDFC FHCL (a wholly owned
subsidiary of IDFC Limited) received sale consideration of Rs. 4,490.50 crore. The sale
proceeds of Rs. 4,490.50 crore were utilised to:
(a) pay income tax of approx.: Rs. 350.00 crore;
(b) subscribe to preferencial offer made by IDFC FIRST Bank @ Rs. 58.18
per share to take our holding in IDFC FIRST Bank from 36.4% to 39.99%, Rs. 2,200.00 crore;
(c) pay dividend to IDFC's Shareholders Rs. 1,760.00 crore.
As a result of the sale, IDFC AMC and IDFC AMC Trustee ceased to be a
part of IDFC Group Companies with immediate effect. Subsequently, on April 19, 2023 name
has been changed from IDFC Asset Management Company Limited to Bandhan AMC Limited and
IDFC AMC Trustee Company Limited to Bandhand Mutual Fund Trustee Limited.
MERGER OF THREE WHOLLY OWNED SUBSIDIARIES
In order to simplify corporate structure and to bring synergy, the
Board of Directors ('the Board') of IDFC at its meeting held on November 09, 2021 had
inter alia considered and approved the Scheme of Amalgamation of IDFC Alternatives Limited
(the Transferor Company 1), IDFC Trustee Company Limited (Transferor Company 2) and IDFC
Projects Limited (Transferor Company 3) (wholly owned subsidiary Companies) into IDFC
(Transferee Company) subject to regulatory approvals from various authorities, as
applicable. The Registrar of Companies, Chennai upon receipt of the proposed scheme and
Form CAA-9 has intimated the Transferor Company 1, the Transferor Company 2, the
Transferor Company 3, and the Transferee Company that it has no observations/suggestions
to the Scheme of Amalgamation vide letter dated February 01, 2022. On February 06, 2022,
the Shareholders of IDFC through postal ballot had approved the aforesaid Scheme of
Amalgamation. The Official Liquidator attached to the Madras High Court has intimated the
Transferor Company 1, the Transferor Company 2 and the Transferor Company 3 that it has no
observations/suggestions to the Scheme of Amalgamation vide letter dated March 24, 2022.
The aforesaid scheme was approved and sanctioned by the Hon'ble
National Company Law Tribunal, Chennai bench vide Order dated November 22, 2022 ('NCLT
Order'). The captioned Scheme of Amalgamation has become operative from December 09, 2022
('Effective Date').
As on March 31, 2023, IDFC Alternatives Limited, IDFC Trustee Company
Limited and IDFC Projects Limited ceased to exist.
IDFC FOUNDATION
On October 28, 2022, IDFC had entered in to "Deed of
Donation" for Donation of entire equity stake held in IDFC Foundation by IDFC to
Upajeevan Sangathan Foundation (a "Not for profit" organisation within the
meaning of section 8 of the Companies Act, 2013). With divestment of IDFC Foundation,
Delhi Integrated Multi - Modal Transit System Limited (DIMTS) and
Infrastructure Development Corporation (Karnataka) Limited (iDeCK), both these two joint
venture entities have also been divested. As on March 31, 2023, IDFC Foundation ceased to
be subsidiary company of IDFC.
PROPOSED MERGER OF IDFC, IDFC FHCL AND IDFC FIRST BANK
The Boards of IDFC, IDFC FHCL and IDFC FIRST Bank at their respecting
meetings held on December 30, 2021 have accorded in-principle approval to merge IDFC and
IDFC FHCL with IDFC FIRST Bank. The Board of directors of IDFC and IDFC FHCL at their
respective meetings held on March 18, 2023 approved:
(a) Appointment of SSPA & CO., Chartered Accountants as registered
valuer for recommendation of fair share exchange ratio
(b) Appointment of Axis Capital Limited for issuance of fairness
opinion on the share exchange ratio
(c) Appointment of Cyril Amarchand Mangaldas - Law Firm for conducting
due diligence, drafting and finalizing scheme of amalgamation and filing regulatory
applications.
O1 SUBSIDIARY / ASSOCIATE COMPANIES
| SR. NO. NAME OF THE SUBSIDIARY / ASSOCIATES |
DIRECT / INDIRECT SUBSIDIARY / ASSOCIATES |
% OF SHAREHOLDING |
| Domestic Subsidiary |
|
|
| i. IDFC Financial Holding Company Limited ("IDFC
FHCL") |
Direct |
100% |
| Associates |
|
|
| i. IDFC FIRST Bank Limited |
Indirect through IDFC FHCL |
39.99% |
| ; ii. IDFC FIRST Bharat Limited |
Indirect through IDFC FIRST Bank |
39.99% |
| iii. Jetpur Somnath Tollways Private Limited |
Indirect through IDFC Limited |
26% |
Based on recommendations and report of the Audit Committee and the
Independent Directors' Committee, the Board of Directors of IDFC and IDFC FHCL, at their
respective meetings held on July 3, 2023, have Inter alia, approved a composite Scheme of
Amalgamation, ("the Scheme") which inter alia envisages the amalgamation
of: (i) IDFC FHCL into and with IDFC; and (ii) IDFC into IDFC FIRST Bank, and their
respective shareholders, under Sections 230 to 232 of the Act and other applicable laws
including the rules and regulations ("Proposed Transaction"). The Scheme
is subject to the receipt of requisite approvals from: (i) the Reserve Bank of India ("RBI"),
(ii) Securities and Exchange Board of India ("SEBI"),
(iii) Pension Fund Regulatory and Development Authority, (iv)
Competition Commission of India ("CCI"), (v) National Company Law
Tribunal, (vi) BSE Limited and the National Stock Exchange of India Limited (collectively,
the "Stock Exchanges"), and (vii) other statutory and regulatory
authorities, and the respective Shareholders, under applicable law.
The share exchange ratio for the amalgamation of IDFC with and into
IDFC FIRST Bank shall be 155 equity shares (credited as fully paid up) of face value of
Rs. 10/- (Indian Rupees Ten) each of IDFC FIRST Bank for every 100 fully paid-up equity
shares of face value of Rs. 10/- (Indian Rupees Ten) of IDFC.
As per the Scheme, (i) "Appointed date 1" means close of
business hours on the day immediately preceding the Effective Date for the merger of IDFC
FHCL into and with IDFC, and (ii) "Appointed Date 2" means opening of business
hours on the Effective Date for merger of IDFC into IDFC FIRST Bank. The Scheme shall be
operative from the Effective Date (as defined in the Scheme).
CONSOLIDATED FINANCIAL STATEMENTS
The Board of Directors of IDFC reviews the affairs of its subsidiary
companies regularly. In accordance with the provisions of Section 129(3) of the Companies
Act, 2013 ("the act"), the Company has prepared Consolidated Financial
Statements including requisite details of the subsidiary. Further, a statement containing
the salient features of performance and financial positions of all the subsidiary
companies / associates/ joint ventures in the format AOC-I is appended as Annexure 1.
In accordance with Section 136 of the Act, the Audited Financial
Statements together with the Consolidated Financial Statements and related information of
the Company and audited accounts of each subsidiary company are available on the website
of the Company: www. idfclimited.com. Detailed analysis of the performance of IDFC and its
businesses, including initiatives in the areas of Risk Management, Human Resources, have
been presented in the section on Management Discussion & Analysis which forms part of
this Annual Report.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
IDFC had 7 employees as on March 31, 2023. In terms of the provisions
of Section 197(12) of the Act, read with Rules 5(2) and 5(3) of the Companies (Appointment
and Remuneration of Managerial Personnel) Rules, 2014, as amended from time to time, a
statement showing the names and other particulars of the employees drawing remuneration in
excess of the limits set out in the said rules is provided in this Annual Report. Having
regard to the provisions of the first proviso to Section 136(1) of the Act, the Annual
Report excluding the aforesaid information is being sent to the Shareholders of the
Company. The said information is available for inspection at the Registered Office and
Corporate Office of the Company during working hours and any Member interested in
obtaining such information may write to the Company Secretary and the same will be
furnished on request. Disclosure pertaining to remuneration & other details as
required under section 197(12) of the Act, read with Rule 5(1) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended from time
to time, are appended as Annexure 2.
SHARE CAPITAL UPDATE
During the year, the Company issued and allotted 35,48,494 equity
shares to eligible employees of IDFC on exercise of options granted under Employee Stock
Option Scheme 2016 ("IDFC ESOS -2016"). As on March 31, 2023, the total paid up
capital of IDFC was 1,59,99,84,436 equity shares of Rs. 10/- each.
MANAGEMENT DISCUSSION ANALYSIS AND REPORT ON CORPORATE GOVERNANCE
In compliance with Regulation 34 of SEBI LODR Regulations, separate
detailed chapters on Management Discussion & Analysis, Report on Corporate Governance
and Additional Shareholder Information forms part of this Annual Report.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
As per Regulation 34(2)(f) of SEBI LODR Regulations and Notifications
issued from time to time, a separate report called Business Responsibility and
Sustainability Report ("BRSR") describing the initiatives taken by IDFC from an
environmental, social and governance perspective which forms part of this Annual Report
and also hosted on the website of the Company i.e. www.idfclimited.com.
PUBLIC DEPOSITS
During FY23, your Company has not accepted any deposits from the public
within the meaning of the provisions of the Non-Banking Financial Companies Acceptance of
Public Deposits (Reserve Bank) Directions, 1998 or under Chapter V of the Act.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
Post demerger of financing undertaking into IDFC Bank w.e.f. October 1,
2015,
IDFC is registered with RBI as NBFC - Investment Company. Being an
investment company, the provisions of Section 186 of the Act are not applicable to IDFC.
Hence, the requisite details of loans, guarantees and investments are not given.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
IDFC has put in place a Whistle Blower Policy, which includes reporting
to the Management instances of unethical behaviour, actual or suspected fraud or violation
of the Company's Code of Conduct. The Audit Committee directly oversees the Vigil
Mechanism. The provisions of the policy are also in line with the provisions of Section
177 (9) & (10) of the Act. The details of Whistle Blower Policy / Vigil Mechanism are
posted on the website of the Company: www.idfclimited.com. There were no instances
reported during the year.
FOREIGN EXCHANGE
There were no foreign exchange earnings or expenditure during the year
under review.
PARTICULARS REGARDING CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION
Since the Company does not carry out any manufacturing activity, the
particulars regarding conservation of energy, technology absorption and other particulars
as required by Section 134(3) (m) of the Act read with the Companies (Accounts) Rules,
2014 are not applicable to IDFC.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
The Board of IDFC at its Meeting held on August 14, 2019 had appointed
Ms. Ritu Anand (DIN: 05154174) as an Additional Director in the category of Independent
Director ("ID") w.e.f. August 16, 2019. At the 22nd AGM held on September 30,
2019, the Shareholders of the Company had approved her appointment as an ID for a period
of three (3) consecutive years w.e.f. August 16, 2019 till August 15, 2022. Accordingly,
Ms. Ritu Anand had completed her term of 3 (three) consecutive years at the close of
business hours on August 15, 2022 and hence, ceased to be an ID of the IDFC. The Board
places on record its sincere appreciation for the valuable contribution by her.
The Nomination and Remuneration Committee and the Board of Directors of
IDFC, at their respective meetings held on August 24, 2022 accepted the resignation of Mr.
Mahendra N Shah as the Company Secretary and Compliance Officer of IDFC at the close of
business hours on August 24, 2022. The Board also approved an appointment of Mr. Mahendra
N Shah (DIN: 00124629) as the Managing Director-Designate of the Company with immediate
effect.
Further, based on recommendation of Nomination and Remuneration
Committee, the Board of Directors of the Company appointed Ms. Shivangi Mistry as the
Company Secretary and Compliance Officer of the Company w.e.f. August 25, 2022 as
designated Key Managerial Personnel in place of Mr. Mahendra N Shah.
Mr. Sunil Kakar was appointed as the Managing Director & Chief
Executive Officer ("MD & CEO") of IDFC in the capacity of Key Managerial
Personnel for a period of 3 years with effect from July 16, 2017 At the 20th AGM of the
Company held on July 28, 2017, the Shareholders of the Company appointed Mr. Sunil Kakar
(DIN: 03055561), as the MD & CEO, designated Key Managerial Personnel of the Company
for a period of three (3) years w.e.f. July 16, 2017. Based on the recommendation of the
Nomination and Remuneration Committee, the Board of Directors of the Company, at its
meeting held on June 25, 2020 approved the re-appointment of Mr. Sunil Kakar as the MD
& CEO of IDFC from July 16, 2020 till September 30, 2022 subject to approval of the
Shareholders. The Shareholders of the Company vide a special resolution passed at its 23rd
AGM held on September 25, 2020, re-appointed Mr. Sunil Kakar (DIN: 03055561) as the MD
& CEO of IDFC w.e.f. July 16, 2020 till September 30, 2022. The term of Mr. Sunil
Kakar as the MD & CEO of the Company ended at the close of business hours on September
30, 2022. The Board places on record its sincere appreciation for the valuable
contribution by him.
The Shareholders of the Company, at its 25th AGM held on September 27,
2022, approved appointment of Mr. Mahendra N Shah (DIN: 00124629) as the Managing Director
with effect from October 01, 2022 till September 30, 2023. Accordingly, Mr. Mahendra N
Shah was designated as the Managing Director in the capacity of Key Managerial Personnel
of the Company with effect from October 01, 2022.
The current term of Mr. Mahendra N Shah will expire on September 30,
2023.
The Shareholders of the Company, at its 23rd AGM held on September 25,
2020, appointed Mr. Ajay Sondhi (DIN: 01657614) as Non-executive Independent Director for
a period of 3 (three) consecutive years, from w.e.f. November 08, 2019. The Nomination and
Remuneration Committee of the Company, at its meeting held on November 07, 2022,
recommended the re-appointment of Mr. Ajay Sondhi as ID w.e.f. November 08, 2022 till
conclusion of the 26th AGM of the Company to be held for FY23. Based on the recommendation
of the Nomination and Remuneration Committee, the Board of Directors of the Company at its
meeting held on November 11, 2022 approved and proposed to Members, the re-appointment of
Mr. Ajay Sondhi as ID w.e.f. November 08, 2022 till conclusion of the 26th AGM of the
Company to be held for FY 23. The Shareholders of the Company through Postal Ballot dated
February 07, 2023, approved the re-appointment of Mr. Ajay Sondhi as ID w.e.f. November
08, 2022 till conclusion of the 26th AGM of the Company to be held for FY 23.
In accordance with the provisions of Section 152 of the Act, Mr.
Mahendra N Shah (DIN: 00124629) would retire by rotation at the ensuing AGM and being
eligible, offers himself for re-appointment.
Based on recommendation of Nomination and Remuneration Committee, the
Board of Directors of the Company, at its meeting held on July 17, 2023, reappointed Mr.
Mahendra N. Shah (DIN: 00124629) as the Managing Director w.e.f. October 01, 2023 till
September 30, 2024 subject to approval of the Shareholders of the Company.
Further, based on recommendation of Nomination and Remuneration
Committee and Audit Committee, the Board of Directors of the Company at its meeting held
on July 17, 2023, appointed Mr. Bipin Gemani (DIN: 07816126) as the Whole Time Director
and Chief Financial Officer w.e.f. July 17, 2023 till Septemeber 30, 2024 subject to
approval of the Shareholder of the Company.
Approval of the Shareholders is sought for re-appointment of Mr.
Mahendra N. Shah and appointment of Mr. Bipin Gemani at the ensuing AGM.
FRAMEWORK FOR APPOINTMENT OF DIRECTORS
The Company has in place a framework for Board Diversity, Fit &
Proper Criteria and Succession Planning for appointment of Directors on the Board of the
Company.
DECLARATION OF INDEPENDENCE
The Company has received a declaration from all IDs that they meet the
criteria of independence specified under Section 149 of the Act, read with Rule 5 of the
Companies (Appointment and Qualification of Directors) Rules, 2014 and Regulation 16(1)(b)
of SEBI LODR Regulations for holding the position of ID and that they shall abide by the
"Code for Independent Directors" as per Schedule IV of the Act. Pursuant to
IICA, Companies (Accounts) Amendments Rules, 2019 Companies (Creation and Maintenance of
Databank of Independent Directors) Rules, 2019 and Companies (Appointment and
Qualification of Directors) Fifth Amendment Rules, 2019 dated 22nd October, 2019, all IDs
on the Board of the Company completed registration on Data Bank.
SPECIAL BUSINESS
The Board of Directors recommends the following items under special
business for approval of the Shareholders at the ensuing AGM:
i. Re-appointment of Mr. Mahendra N Shah as the Managing Director.
ii. Payment of the remuneration to Mr. Mahendra N Shah as the Managing
Director.
iii. Appointment of Mr. Bipin Gemani as the Whole Time Director and
Chief Financial Officer.
iv. Payment of Remuneration to
Mr. Bipin Gemani as the Whole Time Director and Chief Financial
Officer.
SHAREHOLDERS' UPDATE BOARD AND ITS COMMITTEES
During the year, 12 Board Meetings and 5 Audit Committee Meetings were
held. The Audit Committee was reconstituted on August 24, 2022. The Committee is chaired
by Mr. Anil Singhvi (DIN: 00239589) and has Mr. Ajay Sondhi (DIN: 01657614) and Ms. Anita
Belani (DIN: 01532511) as its Members.
All the recommendations made by the Audit Committee during the year
were accepted by the Board. The details of the constitution and meetings of the Board,
Audit Committee and other Committees held during the year are provided in the Corporate
Governance Report, which forms part of this Annual Report.
BOARD EVALUATION
Pursuant to SEBI LODR Regulations and the Act, the process indicating
the manner in which formal annual evaluation of the Chairman, Directors, Board as a whole
and Board level committee is given in the Corporate Governance Report, which forms part of
this Annual Report.
NOMINATION & REMUNERATION COMMITTEE/ REMUNERATION POLICY
The Company has a policy in place for identification of independence,
qualifications and positive attributes of Directors. IDFC has put in place a Remuneration
Policy for the Directors, Key Managerial Personnel, Senior Management and Other Employees.
The remuneration of the Executive Director and KMPs are recommended by NRC to the Board
for its approval.
AUDITORS
STATUTORY AUDITORS
At the 24th AGM of the Company held on September 22, 2021, the
Shareholders had approved the appointment of KKC & Associates LLP (previously, Khimji
Kunverji & Co LLP), Chartered Accountants, (FRN 105146W/W-100621) as the Statutory
Auditors for a period of 3 years to hold office from the conclusion of the 24th AGM till
the conclusion of the 27th AGM of the Company. KKC has confirmed that they are not
disqualified from continuing as Statutory Auditors of the Company for FY 24.
COST AUDIT
In terms of the Section 148 of the Companies Act, 2013 read with Rule 8
of the Companies (Accounts) Rules, 2014, the Company is not required to undertake cost
audit.
SECRETARIAL AUDIT
Pursuant to the provisions of Section 204 of the Act and Rule 9 of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company
had appointed Bhandari & Associate, Company Secretaries to undertake the Secretarial
Audit of the Company for FY23. The Secretarial Audit Report is appended as Annexure 3.
There are no qualifications or observations or adverse remarks made by
the Statutory Auditors in their report. Flowever, qualifications / observations / adverse
remark made by Secretarial Auditors are mentioned on page no. 20.
COMPLIANCE WITH SECRETARIAL STANDARDS
Pursuant to the Secretarial Standard-1 issued by the Institute of
Company Secretaries of India pertaining to Board of Directors, the Company confirms that
all applicable Secretarial Standards have been duly complied with during the period under
review.
INTERNAL CONTROL SYSTEMS
The Company has in place, adequate systems of Internal Control to
ensure compliance with policies and procedures.
It is being constantly assessed and strengthened with new / revised
standard operating procedures and tighter Information Technology controls. Internal Audit
of the Company is regularly carried out. The Audit Reports of Internal Auditors i.e. M/s
Grant Thornton India LLP ("GT") along with their recommendations and
implementation contained therein are regularly reviewed by the Audit Committee.
GT verified the key Internal Financial Control by reviewing key
controls impacting financial reporting and overall risk management procedures of the
Company and found the same satisfactory. Subsequently, it was placed before the Audit
Committee of the Company.
RISK MANAGEMENT POLICY
IDFC as a group, has a robust risk management practice that enables it
to book, manage and mitigate risks in all its businesses. The Company has a comprehensive
Enterprise Risk Management framework which has been adopted across all entities in the
group and covers all three types of risks—credit, market and operational risks. The
Board through its Risk Management & IT Strategy Committee monitors and reviews risk
management of the group on a regular basis. The details of Risk Management Framework are
provided in Management Discussion and Analysis.
MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION OF THE
COMPANY
There are no material changes and commitments, affecting the financial
position of IDFC which has occurred between the end of FY23 and the date of this Board's
report.
INSTANCES OF FRAUD REPORTED BY THE AUDITORS
There have been no instances of fraud reported by the Auditors under
Section 143(12) of the Act.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS / COURTS /
TRIBUNALS
During the year under review, the Scheme of Amalgamation of IDFC
Alternatives Limited (the Transferor Company 1), IDFC Trustee Company Limited (the
Transferor Company 2) and IDFC Projects Limited (the Transferor Company 3) (wholly owned
subsidiary Companies) into IDFC
Limited (Transferee Company) was approved and sanctioned by the Hon'ble
National Company Law Tribunal, Chennai bench vide Order dated November 22, 2022 ('NCLT
Order'). Apart from above there were no significant and material orders passed by the
Regulators / Courts/ Tribunals.
PROCEEDINGS UNDER INSOLVENCY AND BANKRUPTCY
During the year under review, the Company has not made any application
nor any proceeding pending against the Company under the Insolvency and Bankruptcy Code,
2016.
ANTI SEXUAL HARASSMENT POLICY
The Company has in place the policy on Anti Sexual Harassment. The
Company undertakes ongoing trainings to create awareness on this policy. There were no
instances of Sexual Harassment that were reported during the period under review. The
Company has constituted an Internal Complaints Committee for redressal of complaints and
to prevent sexual harassment.
DIRECTORS' RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the
information and explanations obtained by them, your Directors make the following
statements in terms of Section 134(3)(c) of the Act:
^ In that in the preparation of the annual financial statements for the
year ended March 31, 2023, the applicable accounting standards have been followed along
with proper explanation relating to material departures, if any;
^ In that such accounting policies have been selected and applied
consistently and judgement and estimates have been made 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,
2023 and of the Profit of the Company for the year ended on that date;
^ In that proper and sufficient care has 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;
^ In that the annual financial statements have been prepared on a going
concern basis;
^ In that proper internal financial controls were in place and that the
financial controls were adequate and were operating effectively;
^ In that systems to ensure compliance with the provisions of all
applicable laws were in place and were adequate and operating effectively.
GREEN INITIATIVE
In accordance with the 'Green Initiative', the Company has been sending
the Annual Report / Notice of AGM in electronic mode to those Shareholders whose e-mail
Ids are registered with the Company and / or the Depository Participants. Your Directors
are thankful to the Shareholders for their active participation in this Green Initiative.
ANNUAL RETURN
The Annual Return of the Company has been placed on the website of the
Company www.idfclimited.com in compliance with the provisions of section 134(3)(a) read
with section 92(3) and the Rules made thereunder.
CORPORATE SOCIAL RESPONSIBILITY
The Corporate Social Responsibility ("CSR") was
re-constituted on October 17, 2022. Mr. Anil Singhvi was inducted as the Member of the CSR
Committee w.e.f. October 17, 2022. The CSR Committee consists of three Directors:
i. Dr. Jaimini Bhagwati (DIN: 07274047), Chairman
ii. Mr. Ajay Sondhi (DIN: 01657614), Member
iii. Mr. Anil Singhvi (DIN: 00239589), Member
The disclosure of contents of the Corporate Social Responsibility
Policy of the Company as prescribed in the Companies (Corporate Social Responsibility
Policy) Rules, 2014 forms part of the Board's Report and appended as Annexure 4.
RELATED PARTY TRANSACTIONS
The Company has in place the policy on Related Party Transactions and
the same has been uploaded on the website of the Company i.e. www.idfclimited.com. In all
related party transactions that were entered into during the financial year, an endeavor
was made consistently that they were on an arm's length basis and were in the ordinary
course of business. IDFC has always been committed to good corporate governance practices,
including matters relating to Related Party Transactions. Since all related party
transactions entered into by the Company were in the ordinary course of business and were
on an arm's length basis, Form AOC-2 is not applicable to the Company. No Material Related
Party Transactions, i.e. transactions exceeding 10% of the annual consolidated turnover of
the Company as per the last audited financial statements, were entered during the year by
your Company.
EMPLOYEE STOCK OPTION SCHEME
Pursuant to the resolution passed by the Members through Postal Ballot
dated June 25, 2016, IDFC introduced IDFC Employee Stock Option Scheme, 2016 ("IDFC
ESOS 2016") to enable the employees of IDFC and its subsidiaries to participate in
the future growth and financial success of the Company. The Scheme is in compliance with
the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021.
The Company determines the fair value of options using the black
scholes model which considers the exercise price, the term of the option, share price at
grant date, expected price volatility, dividend yield and risk-free interest rate for the
term of the option. The fair value so determined is charged to profit & loss account
as employee benefit expense over the vesting period of the grant.
Disclosures as required under the SEBI (Share Based Employee Benefits
and Sweat Equity) Regulations, 2021, have been hosted on the Company's website:
www.idfclimited.com which forms part of this Annual Report.
ACKNOWLEDGEMENTS
We are grateful to the Government of India, State Governments, RBI,
SEBI, Stock Exchanges, various Ministries and other domestic and overseas regulatory
bodies for their continuous collaboration and support. We would like to thank all our
Shareholders, Banks for their co-operation and assistance during the year under review.
We would like to express our deep sense of appreciation for the hard
work and efforts put in by the employees at all levels of the Group.
FOR AND ON BEHALF OF THE BOARD ANIL SINGHVI
Independent Non-Executive Chairman Mumbai July 17, 2023