To,
The Members,
The Directors have pleasure in presenting the 42nd Annual Report together with the Audited Accounts of the Company for the year ended March 31, 2024. The Company is registered with the Reserve Bank of India ("RBI") as a Systemically Important Non-Banking Financial Company ("NBFC") not taking public deposits (NBFC-ND-SI).
FINANCIAL HIGHLIGHTS (Rs. In Crores)
Appropriations
OPERATIONS
During the year under review, Company made a profit of Rs. 2923.68/- Crores as compared to a profit of Rs. 240.20/- Crores. The Management is very positive and looking forward for better performance in future. The Company remains confident of a sound growth trajectory in FY 2025.
Detailed information on the operations of the Company and details on the state of affairs of the Company are covered in the Management Discussion and Analysis Report.
During the year under review the Company had filed an application with the Hon'ble National Company Law Tribunal, Mumbai Bench ("NCLT") for approval of scheme of arrangement between Reliance Commercial Finance Limited ("RCFL") and the Company and their respective shareholders. NCLT vide its order dated May 10, 2024 has approved the scheme of arrangement and thereby the lending business of RCFL has been transferred to the Company with effect from the Appointed date i.e. October 01, 2023.
Further during the year under review Company has incorporated a wholly owned subsidiary viz. Authum Asset Management Company Private Limited on January 11, 2024 and has acquired 100% stake in Authum Real Estate Private Limited on February 21, 2024.
DIVIDEND & APPROPRIATIONS
The Board of Directors has decided not to recommend any dividend for the year ended March 31, 2024.
APPROPRIATIONS
Under section 45-IC(1) of Reserve Bank of India ('RBI') Act, 1934, non-banking financial companies ('NBFCs') are required to transfer a sum not less than 20% of its net profit every year to reserve fund before declaration of any dividend, if any. Accordingly, the Company has transferred a sum of Rs. 584.74/- Crores to its reserve fund. The closing balance of the reserves and surplus of the Company for F.Y. 2023-24, after all appropriation and adjustments was Rs. 10265.85/- Crores.
CHANGE IN SHARE CAPITAL
During the Financial year under review, the company has redeemed 2,12,42,000 7% Non-Cumulative Non-Convertible Redeemable Preference Shares of face value of Rs. 10/- each.
As on March 31, 2024, 100% of the total paid-up capital of the Company stands in the dematerialized form.
Further, the Company has not issued any equity capital during the year under review and has also not issued any shares with differential voting rights, nor granted any stock options or sweat equity.
NON-CONVERTIBLE REDEEMABLE PREFERENCE SHARES
As on March 31, 2024, the total outstanding Non-Convertible Redeemable Preference Shares (RPS) issued and allotted on private placement basis stands at Rs. 95.79 Crores divided into 1,91,58,000 Preference Shares of Face Value Rs. 10/- each.
PUBLIC DEPOSITS
The Company did not hold any public deposits at the beginning of the year nor has it accepted any Public Deposits during the year under review.
SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of the Company form part of the Annual Report. The annual accounts of the subsidiary companies and related detailed information are available on the website of the Company and the same may be obtained by writing to the Company Secretary at the registered e-mail ID of the Company i.e. info@authum.com.
Reliance Commercial Finance Limited ("RCFL") continues to be the wholly owned subsidiary of the Company.
Further during the year under review Company has incorporated a wholly owned subsidiary viz. Authum Asset Management Company Private Limited ("AAMCPL") on January 11, 2024 and has acquired 100% stake in Authum Real Estate Private Limited ("AREPL") on February 21, 2024. The consolidated financial results reftect the operations of RCFL, AAMCPL and AREPL.
The Company has adopted a Policy for determining Material Subsidiaries in terms of Regulation 16(1)(c) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations''). The Policy, as approved by the Board, is uploaded on the Company's website: https://www.authum.com/financial-info.html.
In terms of Regulation 16 (1) (c) of the SEBI Listing Regulations, RCFL, AAMCPL and AREPL are the wholly owned subsidiaries of the Company. Details of subsidiary company is provided in Form AOC-1 as Annexure I.
PARTICULARS OF LOANS GRANTED, GUARANTEE PROVIDED AND INVESTMENTS MADE PURSUANT TO THE PROVISIONS OF SECTION 186 OF THE COMPANIES ACT, 2013
The Company, being an NBFC registered with the RBI and engaged in the business of giving loans in ordinary course of its business, is exempt from complying with the provisions of section 186 of the Act with respect to loans, guarantees and investments. Accordingly, the Company is exempted from
complying with the requirements to disclose in the financial statement the full particulars of the loans given, investment made or guarantee given or security provided.
EXTRACT OF ANNUAL RETURN
A copy of the Annual Return as provided under section 92(3) of the Act, in the prescribed form, which will be filed with the Registrar of Companies/MCA, is hosted on the Company's website and can be accessed at www.authum.com.
RELATED PARTY TRANSACTIONS
In line with the requirements of the Companies Act 2013, Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the ‘Listing Regulations'), Master Direction - Reserve Bank of India (Non-Banking Financial Company – Scale Based Regulation) Directions, 2023, your Company has formulated a Policy on Related Party Transactions which is available on Company's website at www.authum.com. This Policy deals with the review and approval of related party transactions. The Board of Directors of the Company has approved the criteria for giving the omnibus approval by the Audit Committee within the overall framework of the Policy on Related Party Transactions.
Pursuant to Regulation 23 of the Listing Regulations, all related party transactions were placed before the Audit Committee on a quarterly basis for their review and approval.
Further, the Policy on materiality of Related Party Transactions is available on the website of the Company at www.authum.com.
Particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013 in the prescribed Form AOC-2, is appended as Annexure II to the Board's report.
DIVIDEND DISTRIBUTION POLICY
Pursuant to the provisions of regulation 43A of the Listing Regulations, the Company had formulated a dividend distribution policy, which sets out the parameters and circumstances to be considered by the Board in determining the distribution of dividend to its shareholders and/or retaining profit earned. The policy is annexed to this report as Annexure III and is also available on the website of the Company at https://www. authum.com/financial-info.html.
MEETINGS OF THE BOARD
During the year under review, 9 (Nine) Board Meetings were held. The details of the composition of the Board and its Committees and of the Meetings held and attendance of the Directors at such Meetings, are provided in the Corporate Governance Report. There have not been any instances during the year when recommendations of the Audit Committee were not accepted by the Board.
COMMITTEES OF THE BOARD
During the year under review, the Board has nine Committees viz. Audit Committee, Nomination & Remuneration Committee, Corporate Social Responsibility Committee, Stakeholders Relationship Committee, Investment Committee, Risk Management Committee, Corporate Governance Committee, Securities Allotment and Redemption Committee and Asset Liability Committee. A detailed note on the composition of the Board and its Committees and other related particulars are provided in the Corporate Governance Report forming part of this Annual Report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Appointment of Directors and Key Managerial Personnel
During the year under review and by way of approval of the shareholders of the Company vide postal ballot dated December 23, 2023, the Board has approved the appointment of Mr. Akash Suri (DIN: 09298275) as the Whole-time Director and Group Chief Executive Officer w.e.f. September 27, 2023 and Ms. Asha Agarwal (DIN: 09722160) as an Independent Director of the Company w.e.f. November 21, 2023 for the term of 5 years upto November 20, 2028, under the provisions of Section 161 of the Act.
All the directors of the Company have confirmed that they are not disqualified from being appointed as directors in terms of section 164 & 165 of the Companies Act, 2013.
FIT AND PROPER CRITERIA & CODE OF CONDUCT
All the Directors meet the fit and proper criteria stipulated by RBI. All the Directors and Senior Management of the Company have affirmed compliance with the Code of Conduct of the Company.
DECLARATIONFROMTHEINDEPENDENTDIRECTORS
The Independent Directors have submitted a declaration of independence, stating that they meet the criteria of independence provided under section 149(6) of the Act read with regulation 16 of the Listing Regulations, as amended. The Independent Directors have also confirmed compliance with the provisions of rule 6 of Companies (Appointment and Qualifications of Directors) Rules, 2014, as amended, relating to inclusion of their name in the databank of independent directors.
The Board took on record the declaration and confirmation submitted by the Independent Directors regarding them meeting the prescribed criteria of independence, after undertaking due assessment of the veracity of the same in terms of the requirements of regulation 25 of the Listing Regulations.
SEPARATE MEETING OF INDEPENDENT DIRECTORS
The Independent Directors of the Company met on January 22, 2024 in terms of Section 149(8) and Schedule – IV of Companies Act, 2013 and regulation 25(3) & (4) of Listing Regulations, without the attendance of Non-Independent Directors and members of management. They met to discuss the inter-alia amongst other items the following mandatory items viz., (a) to review the performance of non-independent directors and the Board as a whole; (b) to review the performance of the Chairperson of the company, taking into account the views of executive directors and non-executive directors; (c) to assess the quality, quantity and timeliness of ftow of information between the Company management and the Board that is necessary for the Board to effectively and reasonably perform their duties.
FAMILIARISATIONPROGRAMMEFORINDEPENDENT DIRECTORS (IDs)
In terms of Regulation 25(7) of the Listing Regulations and the Companies Act, 2013, the Company is required to conduct the Familiarization Programme for Independent Directors (IDs) to familiarize them about their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company, etc., through various initiatives. Directors are made aware of the significant news developments and highlights from various regulatory authorities viz. Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), Ministry of Corporate Affairs (MCA), etc.
The Directors are regularly apprised about their roles, rights and responsibilities in the Company from time to time as per the requirements of the Listing Regulations, with the Stock Exchanges and Companies Act, 2013 read together with the Rules and Schedules thereunder. The policy and details of familiarization programme imparted to the Independent Directors of the Company is available at www.authum.com.
PERFORMANCE EVALUATION
Pursuant to the provisions of Section 134(3), 149(8) and Schedule IV of the Companies Act, 2013 read with SEBI Listing Regulations, Annual Performance Evaluation of the Board, the Directors as well as Committees of the Board has been carried out. The performance evaluation of all the Directors and the Board as a whole was conducted based on the criteria and framework adopted by the Board, details of which are provided in the Corporate Governance Report. The properly defined and systematically structured questionnaire was prepared after having considered various aspects and benchmarks of the Board's functioning, composition of the Board and its Committees, performance of specific duties, obligations and governance.
DIRECTORS RESPONSIBILITY STATEMENT
Based on the framework of internal financial controls and compliance systems established and maintained by the Company, and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company's internal financial controls were adequate and effective during the financial year 2023-24.
Accordingly, pursuant to Section 134(3)(c) and 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:
1. in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
2. the Directors 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 profit of the Company for the year under review;
3. the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
4. the Annual Accounts for the year ended March 31, 2024, has been prepared on a going concern basis.
5. They have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively;
6. They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
INTERNAL CONTROL SYSTEM AND ITS ADEQUACY
The Company maintains appropriate systems of internal controls, including monitoring procedures, to ensure that all assets and investments are safeguarded against loss from unauthorized use or disposition. Company policies, guidelines and procedures provide for adequate checks and balances and are meant to ensure that all transactions are authorized, recorded and reported correctly.
The Auditor reviews the efficiency and effectiveness of these systems and procedures. The Internal Auditor submits his Report which is placed before the Audit Committee.
A combination of these systems enables your Company to maintain a robust design of controls and its operating effectiveness is ensured through periodical internal checks and audit.
CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY AND ITS REPORT
The Company recognizes the responsibilities towards society and strongly intends to contribute towards development of knowledge based economy.
In accordance with the requirements of the provisions of Section 135 of the Act, the Company has constituted a Corporate Social Responsibility ("CSR") Committee. The composition and terms of reference of the CSR Committee is provided in the Corporate Governance Report forming part of this Annual Report.
The Company has also formulated a CSR Policy which is available on the website of the Company at https://www. authum.com/financial-info.html. Further, the detailed CSR initiatives undertaken by the Company are available at https://www.authum.com/financial-info.html.
The CSR obligation of the Company for Financial Year 2023- 24 is Rs. 8,46,88,648/-. As on March 31, 2024, total amount spent on CSR activities by Company is Rs. 8,98,00,000/-.
As per section 135 of the Act read with Companies (Corporate Social Responsibility) Rules, 2014, as amended, the Company is required to transfer any unspent amount, pursuant to any ongoing project undertaken by the Company in pursuance of its Corporate Social Responsibility Policy, within a period of thirty days from the end of the financial year to a special account opened by the Company in that behalf for that financial year in any scheduled bank called Unspent Corporate Social Responsibility Account.
The Annual Report on the CSR activities undertaken by your Company during the year under review, as prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended, is set out in Annexure IV of this Report.
PARTICULARS OF EMPLOYEES, KEY MANAGERIAL PERSONNEL AND RELATED DISCLOSURES
In accordance with the provisions of Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement containing the disclosures pertaining to remuneration and other details as required under the Act and the above Rules are provided in the Annual Report.
The disclosures as specified under Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are appended to this Report as Annexure V. The information regarding employee remuneration as required pursuant to Rule 5(2) and Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is not provided as none of the employees are covered under the same.
Statement containing the particulars of top ten employees and the employees drawing remuneration in excess of limits prescribed under Section 197(12) of the Act read with Rule 5(2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is an annexure forming part of this Report. In terms of the proviso to Section 136(1) of the Act, the Report and Accounts are being sent to the Members excluding the aforesaid annexure. The said statement is available for inspection with the Company. Any Member interested in obtaining a copy of the same may write to the Company Secretary at info@ authum.com.
STATUTORY AUDITORS AND THEIR REPORT
M/s. H. R. Agarwal & Associates, Chartered Accountants (Firm Reg. No. 323029E) were appointed as Statutory Auditors of the Company from the conclusion of the 39th Annual General Meeting until the conclusion of the 44th Annual General Meeting to be held in the year 2026. However, as per the RBI Guidelines and Circular dated April 27, 2021 and as per the provisions of Section 139 of the Act, the tenure of the appointment of Statutory Auditors in NBFCs should be three years. Therefore, their tenure has been ratified and their appointment is till the conclusion of this Annual General Meeting. Further they have confirmed that they are not disqualified from continuing as Auditors of the Company. The Audit Report of M/s. H. R. Agarwal & Associates, Chartered Accountants (Firm Reg. No. 323029E) on the Financial Statements of the Company for the Financial Year 2023-24 is a part of the Annual Report.
There are no qualifications, reservations or adverse remarks or disclaimers made by M/s. H. R. Agarwal & Associates, Chartered Accountants, Statutory Auditors, in their report on the Company's financial statements for the year ended on March 31, 2024.
DETAILS OF FRAUDS REPORTED BY AUDITORS UNDER SUB-SECTION (12) OF SECTION 143 OF THE COMPANIES ACT 2013, OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT
During the year under review, the Statutory Auditor and Secretarial Auditor have not reported any instances of frauds committed in the Company by its Officers or Employees, to the Audit Committee under Section 143(12) of the Act details of which needs to be mentioned in this Report.
SECRETARIAL AUDITOR
Pursuant to the provisions of section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board has appointed Mr. Mayank Arora, partner of M/s. Mayank Arora & Co., Practicing Company Secretary (FCS No. 10378, CP No. 13609), to undertake secretarial audit of the Company.
A report from the secretarial auditor in the prescribed Form MR-3 is annexed to this Report as Annexure VI.
In addition to the above, the company has obtained Secretarial Compliance Report for the financial year ended March 31, 2024 from M/s. Mayank Arora & Co., Practicing Company Secretary in compliance with the Regulation 24A
of the Listing Regulations and the same has been submitted with stock exchanges.
MAINTENANCE OF COST RECORDS
Your Company is not required to maintain cost records as specified by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013 and accordingly such accounts and records have not been maintained by the Company.
SECRETARIAL STANDARDS OF ICSI
The Company has complied with the requirements prescribed under the Secretarial Standards on meetings of the Board of Directors (SS–1) and General Meetings (SS–2).
INTERNAL AUDITOR AND THEIR REPORT
The Board appointed M/s. L.K. Bohania & Co., Chartered Accountant, as Internal Auditors to conduct Internal Audit for the FY 2023-24. During the year under review, M/s. L.K. Bohania & Co, Internal Auditor's had submitted their Report for the FY 2023-24 to the Audit Committee for its review and necessary action.
At the beginning of each financial year, an audit plan is rolled out after approval of the Audit Committee. Pursuant to Risk Based Internal Audit Framework, internal audit is aligned in such a manner that assurance is provided to the Audit Committee and Board of Directors on quality and effectiveness of the internal controls and governance related systems and processes.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT (MDAR)
The Management Discussion and Analysis Report for the year under review, as stipulated under Regulation 34(2)(f) and other applicable regulation read with Schedule V of Listing Regulations is presented in a separate section and forms part of the Annual Report.
CORPORATE GOVERNANCE REPORT AND ITS COMPLIANCE CERTIFICATE
In compliance with the Regulation 34 read with Schedule 9 of the Listing Regulations, a detailed report on Corporate Governance forms an integral part of this Annual Report. A Certificate from the Practicing Company Secretary confirming compliance of the conditions of Corporate Governance as stipulated under the Listing Regulations is appended to the Corporate Governance Report.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT (‘BRSR')
Pursuant to amendment in SEBI Listing Regulations, top 1000 listed entities based on market capitalisation are required to submit a BRSR with effect from F.Y. 2024.
In accordance with Regulation 34(2)(f) of the Listing Regulations, the Business Responsibility and Sustainability Report has been annexed to this Report as Annexure VII which forms an integral part of this report.
DISCLOSURE ON NOMINATION AND REMUNERATION COMMITTEE AND NOMINATION AND REMUNERATION POLICY
The Nomination and Remuneration Committee as on March 31, 2024 comprises of the following:
Mr. Rahul Bagaria - Chairman and Non-Executive Independent Director, Mr. Vimal Ajmera – Non-Executive Independent Director and Mrs. Alpana Dangi – Non-Executive Non Independent Director as members of the Committee.
The Board has on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report.
RISK MANAGEMENT
The Company has adopted a Risk Management Policy in accordance with the provisions of the Act and Regulation 17(9) of the Listing Regulations. It establishes various levels of risks with its varying levels of probability, the likely impact on the business and its mitigation measures.
The Risk Management Committee as on March 31, 2024 comprises of the following:
Mr. Amit Dangi – Chairman and Executive Director, Mr. Sanjay Dangi – Non Executive Non Independent Director and Mr. Haridas Bhat - Non Executive Independent Director as members of the Committee.
The Audit committee facilitates the execution of Risk Management Practices in the Company, in the areas of risk identification, assessment, monitoring, mitigation and reporting.
WHISTLE BLOWER/VIGIL MECHANISM
The Company has formulated a codified Vigil Mechanism Policy incorporating the provisions relating to Vigil Mechanism in terms of Section 177 of the Companies Act, 2013 and Regulation 22 of the Listing Regulations, in order to encourage Directors and Employees of the Company to escalate to the level of the Audit Committee any issue of concerns impacting and compromising with the interest of the Company and its stakeholders in anyway. The Company is committed to adhere to highest possible standards of ethical, moral and legal business conduct and to open communication and to provide necessary safeguards for protection of employees from reprisals or victimization, for whistle blowing in good faith. The said Policy is available on the Company's website www.authum.com.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
(A) Conservation of Energy and Technology Absorption:
The Company has no activity relating to Conservation of Energy and Technology Absorption as stipulated in Rule 8(3) of Companies (Accounts) Rules, 2014.
(B) Foreign Exchange Earnings & Outgo
During the year under review, the Company did not have any Foreign Exchange Earnings or Outgo.
CEO & CFO CERTIFICATION
A Certificate of the CEO and CFO of the Company in terms of Regulation 17(8) of the Listing Regulations is annexed to this report.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has in place a Policy on Prevention of Sexual Harassment in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees are covered under this policy.
The following is a summary of sexual harassment complaints received and disposed off during the FY 2023- 24
? No. of complaints received: Nil
? No. of complaints disposed off: Nil
RBI COMPLIANCES
The Company is registered as a non-deposit accepting systemically important NBFC. The Company has complied with and continues to comply with all applicable laws, rules, circulars and regulations, including the RBI Directions.
During FY 2023-24, there were no frauds committed by the Company and no material frauds committed on the Company by its officers or employees.
OTHER DISCLOSURES AND INFORMATION
a) Significant and Material Orders passed by any Authorities
During the year under review, no significant and material orders were passed by any Authorities.
b) Material Changes and Commitments affecting financial position of the Company between the end of the financial year 2023-24 and the date of the report
The Hon'ble National Company Law Tribunal vide order dated May 10, 2024 has approved the scheme of demerger between Reliance Commercial Finance Limited ("RCFL") and Authum Investment & Infrastructure Limited and its shareholder. Accordingly, the lending & investment business of RCFL has been transferred to your Company with effect from the Appointed date i.e. October 01, 2023.
APPRECIATION
Your Company has been able to perform better with the continuous improvement in all functions and areas which coupled with an efficient utilization of the Company's resources led to sustainable and profitable growth of the Organization. Your Directors express their deep sense of appreciation and extend their sincere thanks to every employee and associates for their dedicated and sustained contribution and they look forward the continuance of the same in future.
ACKNOWLEDGEMENTS
The Directors would like to place on record their gratitude for the valuable guidance and support received from the Reserve Bank of India, the Securities and Exchange Board of India, the Registrar of Companies, and other government and regulatory agencies and to convey their appreciation to the Members, bankers, lenders, vendors and all other business associates for the continuous support given by them to the Company. The Directors also place on record their appreciation of all the employees of the Company for their commitment, commendable efforts, team work and professionalism.
For and on behalf of the Board of Director