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Company Information

Home » Market » Company Information

Religare Enterprises Ltd.

Aug 23
27.40 -0.20 ( -0.72 %)
 
VOLUME : 11121
Prev. Close 27.60
Open Price 26.25
TODAY'S LOW / HIGH
26.25
 
 
 
28.00
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Offer PRICE (Qty.) 0.00 (0)
52 WK LOW / HIGH
17.05
 
 
 
50.90
Aug 23
27.40 -0.80 ( -2.84 %)
 
VOLUME : 71988
Prev. Close 28.20
Open Price 28.40
TODAY'S LOW / HIGH
26.80
 
 
 
28.40
Bid PRICE (QTY.) 0.00 (0)
Offer PRICE (Qty.) 0.00 (0)
52 WK LOW / HIGH
16.90
 
 
 
50.80
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Market Cap. ( ₹ ) 594.42 Cr. P/BV 0.71 Book Value ( ₹ ) 38.40
52 Week High/Low ( ₹ ) 51/17 FV/ML 10/1 P/E(X) 0.00
Bookclosure 20/09/2018 TTM EPS ( ₹ ) 0.00 Div Yield (%) 0.00
DIRECTOR'S REPORT
You can view full text of the latest Director's Report for the company.
Year End :2018-03 

To,

The Members,

Religare Enterprises Limited

The Directors have pleasure in presenting this 34th Annual Report on the business and operations of the Company together with Audited Financial Statements for the financial year ended March 31,2018.

FINANCIAL RESULTS AND BUSINESS OPERATIONS

The highlights of standalone and consolidated financial results of the Company for the Financial Years 2017-18 and 2016-17 are as under:

PARTICULARS

STANDALONE

CONSOLIDATED

(Rs. in Crore)

(Rs. in Crore)

2017-18

2016-17

2017-18

2016-17

Total Income (Before Exceptional Items)

71.00

35.09

2,693.14

3,841.02

Total Expenditure

188.33

182.20

4,270.99

3,535.50

Profit / (Loss) Before Exceptional Items and Tax

(117.33)

(147.11)

(1,577.85)

305.52

Profit / (Loss) After Exceptional Items and Before Tax

(117.33)

(158.25)

(1,577.85)

(136.40)

Profit / (Loss) After Tax Before Minority Interest and Share in Associate

(110.18)

(159.24)

(1,350.42)

(123.36)

Adjustment: Share of (Profit) / Loss Transferred to Minority

-

-

157.92

(50.71)

Share of (Profit) / Loss in Associates (Net)

-

-

-

(0.20)

Profit / (Loss) After Tax and Minority Interest and Share in Associate

(110.18)

(159.24)

(1,192.50)

(174.27)

Exceptional Items, net oftax (including deferred tax)

-

(11.14)

-

(250.82)

Profit / (Loss) for the year before Exceptional Items

(110.18)

(148.10)

(1,192.50)

76.55

(i) Consolidated Results

We recorded a ‘Loss After Exceptional Items and Before Tax’ ofRs.1,577.85 crore, for Financial Year 2017-18 as compared to Loss After Exceptional Items and Before Tax’ ofRs.136.40 crore for Financial Year 2016-17. ‘Loss After Tax, Minority Interest and Share in Associates’ was Rs.1,192.50 crore for Financial Year 2017-18 as compared to ‘Loss After Tax, Minority Interest and Share in Associates’ of Rs.174.27 crore for Financial Year 2016-17. However, ‘Loss Before Exceptional Items’ was Rs.1,192.50 crore for Financial Year 2017-18 as compared to ‘Profit Before Exceptional Items’ of Rs.76.55 crore for Financial Year 2016-17. Reported basic earnings per share decreased to'(66.84) in Financial Year 2017-18 from'(9.79) in Financial Year 2016-17. The Company has incurred a loss on consolidated basis during the financial year under reporting due to onetime provision of Rs.1,017.85 crore taken by Religare Finvest Limited, subsidiary company on its corporate loan book.

(ii) Standalone Results

We recorded a ‘Loss After Exceptional Items and Before Tax’ ofRs.117.33 crore, for Financial Year 2017-18 as compared to Loss After Exceptional Items and Before Tax’ of Rs.158.25 crore, for Financial Year 2016-17. ‘Loss After Tax’ was Rs.110.18 crore for Financial Year 2017-18 as compared to ‘Loss After Tax’ ofRs.159.24 crore for Financial Year 2016-17. ‘Loss before Exceptional Items’wasRs.110.18 crore for Financial Year 2017-18 as compared to Loss before Exceptional Items ofRs.148.10 crore for Financial Year 2016-17. Reported basic earnings per share increased to '(6.19) in Financial Year 2017-18 from '(8.94) in Financial Year2016-17.

(iii) Operating Performance of Businesses

In the Lending business, our subsidiary Religare Finvest Limited (“RFL”), which is focused primarily on providing debt capital to the SME segment, had total loans and advances (net of repayments and assignments) of Rs.9,797 crore as at March 31, 2018 as againstRs.13,974 crore at the end of the earlier year. The book size has declined because fresh disbursements were significantly lower than the principal amounts of loans repaid. Further, RFL has been put on Corrective Action Plan by RBI vide its letter dated January 18, 2018 through which RFL has been prohibited from expansion of credit/investment portfolio other than investment in government securities. RFL is working towards resolving all issues and restoring normalcy in its business operations at the earliest. RFL closed the year with revenue of Rs.1,430 crore and Loss after Tax of Rs.1,103 crore. The loss was largely on account of provision of Rs.1,018 crore made against a sizable default in RFL’s corporate loan book, compounded by a reduction in RFL’s book size. RFL’s subsidiary, Religare Housing Development Finance Corporation Limited (“RHDFC”), which focuses on providing loans to the affordable housing segment, disbursed loans totaling Rs.186 crore, and the corresponding total loans outstanding as at March 31, 2018 stood at Rs.898 crore and has established a network of 30 branches as at March 31,2018.

Our Health Insurance business, Religare Health Insurance Company Limited (“RHICL”) crossed Rs.1,100 crore of Gross Written Premium during the Financial Year 2017-18, a growth of 53% over the previous financial year and reported a loss of Rs.16 crore during the financial year as against a profit ofRs.2 crore during the previous financial year. As at March 31, 2018, RHICL has established a pan-India distribution network of 74 offices and has 14 approved products spanning retail health, group health, excess of loss, maternity, travel insurance, personal accident and critical illness policies and various riders.

The Retail Broking business, which comprises of Religare Broking Limited (“RBL”), Religare Commodities Limited (“RCL”) and its subsidiaries, reported a consolidated revenue of Rs.379 Crores which is lower than the earlier year on a reported basis. Asubstantial portion of the decline was the effect of the Composite Scheme of Arrangement under which the erstwhile Religare Securities Limited broking entity was merged with the Company while the Broking business was demerged into RBL, and as such, the financial results for the year under review are not comparable with the earlier year. On an operating basis, the business was impacted by the financial challenges at the group-level. The broking business of RBL and RCL reported a Profit After Tax ofRs.12.63 crores in FY 2017-18, as against Profit After Tax ofRs.6.71 crore during the earlier year.

Furthermore, an exceptional provision of Rs.129 crore was made owing to default in advances given by Religare Comtrade Limited (“RCTL”), a subsidiary of RCL. Consequently, the subsidiary incurred a Loss after Tax of Rs.10.22 crore in FY 2017-18 on a reported basis, as against Profit After Tax ofRs.139.07 crore during the earlier year. The value of investment of RCL in RCTL is not impaired as the Company is supporting RCTL.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management’s Discussion and Analysis Report for the year under review detailing economic scenario and outlook, as stipulated under Schedule V of the SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015 (“SEBI LODR Regulations”) is presented in a separate section and forms integral part ofthis Report.

DIVIDEND AND RESERVES

In view of the losses in the Company, the Board of Directors has decided not to recommend any dividend for the financial year ended March 31, 2018. Since there were losses during the period and no dividend was declared, no amounts were transferred to reserves.

The Company had formulated and approved a Dividend Distribution Policy (“the Policy”) pursuant to the requirement under the SEBI (Listing Obligations and Disclosure Requirement) (Second Amendment) Regulations, 2016 in its meeting held on October 26, 2016. Details of the same have been uploaded on the website of the Company and can be accessed through the link i.e. http://www.reliaare.com/pdf/Rel Dividend PolicvNov2016.pdf

SUBSIDIARIES

As at March 31, 2018, your Company has 27 direct and indirect subsidiaries. During the year under review, there have been no material changes in the business of the subsidiaries except for Religare Finvest Limited which has been explained elsewhere in this report. In terms of Section 129(3) of the Companies Act, 2013 (“Act”), your Company has prepared a statement containing the salient features of the Financial Statements of our subsidiaries in the prescribed format AOC-1 which is attached to the Consolidated Financial Statements of the Company. The said statement contains a report on the performance and financial position of each of the subsidiaries and hence is not repeated here for the sake of brevity. Further, the details of major subsidiaries of the Company and their business operations during the year under review are covered in the Management’s Discussion and Analysis Report.

During the year under review, the following companies ceased to be subsidiaries of the Company:

1. Charterpace Limited

2. Religare Heal Fund Advisors LLP

3. Cerestra Advisors Private Limited

4. Religare Commodity DMCC

5. Religare Securities Limited*

6. Religare Commodity Broking Private Limited*

7. RGAM Investment Advisers Private Limited*

8. Religare Venture Capital Limited*

9. Religare Arts Investment Management Limited*

10. Religare Capital Finance Limited*

11. RGAMCapitallndiaLimited*

12. Religare Investment Advisors Limited*

13. Religare Support Services Limited*

14. Religare Arts Initiative Limited*

15. Religare Capital Markets (India) Limited*

*merged into the Company pursuant to the Composite Scheme of Arrangement

Subsequent to March 31, 2018, Argil Advisors LLP, a subsidiary of the Company, has been struck off from the register of Limited Liability Partnerships w.e.f. April 06, 2018 and accordingly ceased to be subsidiary of the Company.

Religare Finvest Limited

1. Settlement Agreement with Strategic Credit Capital Private Limited (“SCCPL”)

As disclosed in previous year Annual Report 2016-17, RFL has, in the Statement of Profit and Loss for the half year ended September 30, 2016, written off of entire Rs.5,199,151,636 due from SCCPL. Further, the loans given to Perpetual Credit Services Private Limited (“Perpetual”), (a group company of SCCPL) and loan purchased from Nishu Finlease Pvt Ltd. of Rs.2,737,568,540 were also written off.

Thereafter, in the financial year under reporting, RFL had entered into the Settlement Agreement with the counterparties pursuant to which the various cases against each other at various courts and tribunals were withdrawn on consent terms, however RFL retained its right to recover the amounts due from SCCPL and Perpetual. However, despite the settlement agreement, SCCPL has again filed suits against RFL at various forums. The matters are sub-judice as on date.

RFL is in the process of detailed diligence on these and connected transactions and is pursuing appropriate legal remedies to recover the amounts due to it and expect that there will not be any obligation on RFL out of these cases.

2. Fixed Deposits with Lakshmi Vilas Bank

RFL had made certain fixed deposits with Lakshmi Vilas Bank (“LVB”) in November 2016 and January 2017. LVB vide its letter dated 7th February 2018 had confirmed fixed deposits ofRs.79,144.77 Lakhs to the Company.

RFL received a letter dated February 9, 2018 from LVB purporting to allude to certain loans disbursed by LVB to third parties allegedly in consideration of security of the RFL’s Fixed Deposits (“FDs”) with LVB. By means of this letter, LVB also purported to call upon RFL to execute the security documentation in connection with the alleged loans.

Vide RFL’s letter dated February 16, 2018, LVB was expressly informed that not only RFL was not party to any loans that were allegedly sanctioned or granted by LVB to any third party, as also that no authorization, sanction or approval had ever been provided by RFL to LVB permitting the creation of any security or encumbrance of the FDs for any third party loans or borrowings. LVB was also forewarned that any attempt to subject the FDs to illegal encumbrance would not only be violative of RFL’s rights, but also constitute deliberate contempt by LVB of the Order dated January 5, 2018 passed by the Hon’ble Delhi High Court, a copy ofwhich was served on LVB vide Legal notice dated February 16, 2018.

While things stood thus, RFL came to be in receipt of a copy of the letter dated April 24, 2018 addressed by LVB to the statutory auditors of RFL that LVB had “closed the said deposits on 20.02.2018 to liquidate the loans availed” by third parties. This was contrary to the confirmation received by the Statutory Auditors in November 2017 via email confirming the fixed deposits.

RFL at no point in time, instructed, authorized or consented to the liquidation of the fixed deposits or the adjustment thereof against loans availed of by any third parties or the creation of any encumbrance on the fixed deposits, whether by way of a lien, security, charge or pledge in connection with the loans availed of by any third parties. RFL has filed a suit for recovery of the Fixed Deposit amounts aggregating Rs.79,144.77 lakhs appropriated by LVB before the Hon’ble Delhi High Court on May 31, 2018.

3 Corporate Loan Book

RFL has an exposure of Rs.203,670 Lakhs towards the Corporate Loan Book. Reserve Bank of India (“RBI”) has raised concerns in the past about the credit worthiness of the borrowers, credit appraisal and loan sanctioning mechanism followed by RFL in respect of this book.

In view of RBI concerns, the first step the new Board/management has taken immediately after taking charge was that it has reviewed the portfolio and the financial reports of the borrowers to determine the recoverability of the said loans. As a part of the recovery process, the management issued legal notices to the borrowers and has initiated corporate insolvency resolution process under Insolvency and Bankruptcy Code, 2016, against the said entities comprising the Corporate Loan Book.

RFL has also appointed a reputed law firm to undertake a detailed diligence on this loan book. Post submission of the report and the steps outlined for recovery, RFL intends to pursue all legal means for recovering the loans.

In the interim based on the security available, maturity dates of the loans, recovery steps instituted and the financial reports ofthe borrowers, the RFL, on a prudent basis, made a provision ofRs.101,285.00 Lakhs against this portfolio.

Religare Capital Markets Limited

As disclosed in previous yearAnnual Report 2016-17, the Company has taken its shareholders’ approval for Religare Capital Markets Limited (‘RCML’) capitalization through postal ballot on September 11, 2017, since it was a material related party transaction in terms of SEBI (LODR) Regulations, 2015, but no money has been infused in RCML pursuant to this approval by the Company till date.

Further, Axis Bank has filed an original application (“OA”) before the DRT-II for recovery of approx. Rs.313 Cr. under Standby Letter of Credit Facility (‘SBLC facility’) of US$72.5 million availed by Religare Capital Markets International (Mauritius) Limited (“RCMIML”), an indirect wholly owned subsidiary of REL through RCML which is inter alia secured by personal guarantees executed by Mr. Malvinder Mohan Singh and Mr. Shivinder Mohan Singh, hypothecation ofa capitalization agreement between RHC Holding Pvt Ltd and RCML as well as shares ofthe Company and Fortis Healthcare Limited owned by certain promoter group companies. The Company has not provided any guarantee or security in relation the facility. The Company has been made a party to the proceedings based on a Non-Disposal Undertaking in favour of Axis Bank. The DRT has passed an interim order dated 21.3.2018 directing that Mr. Malvinder Mohan Singh and Mr. Shivinder Mohan Singh (“Promoters”) to deposit Rs.313 Cr with the DRT within 3 days failing which inter alia certain assets of defendants shall stand attached. Such sums have not been deposited by the Promoters. REL has recently filed two applications for deletion of REL as a party and recall ofthe order dated 21.03.2018 against REL. Axis Bank has filed its replies to the two applications, pursuant to which, REL has filed rejoinders.

Religare Health Insurance Company Limited Arbitration proceedings in relation to the Health Insurance business

On April 9, 2017, your Company had entered into definitive agreements with a consortium of investors led by True North, an India based private equity fund (formerly known as India Value Fund Advisors) to divest its entire stake in its subsidiary, Religare Health Insurance Company Limited. On January 11, 2018, your Company entered into a supplemental agreement and deed of novation for increase in the consideration and extension of long-stop date, among other changes in certain terms and conditions of sale. Certain conditions precedent including regulatory and third party approvals were not received till the extended long-stop date triggering automatic termination of the agreement. In March 2018, certain parties of the buyer consortium filed a petition under Section 9 of the Arbitration and Conciliation Act, 1996, in the Delhi High Court seeking ad interim injunctive relief including towards extension of the Long Stop Date, and also invoked arbitration under the definitive agreement. The Hon’ble Delhi High Court, in May 2018, dismissed the petition seeking interim relief and directed the petitioners to proceed with arbitration. The arbitration tribunal has been constituted by LCIA. However, arbitration proceedings have not commenced since the parties have not placed a fee deposit with the LCIA yet.

MAJOR EVENTS

Issue of Warrants

On March 19, 2018, your Company approved issue of 175,559,960 convertible warrants at a price ofRs.52.20 each (“Warrant Issue Price”) on a preferential basis to various persons / entities entitling the subscribers to an equal number of equity shares, aggregating over Rs.916 crore (“Preferential Issue”). The Warrant Issue Price was later on revised to Rs.52.30 each due to revision of minimum allotment price of Warrants from Rs.52.18 each to Rs.52.28 each in terms of Chapter VII of the Securities Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009.

Subsequent to the end of the year under review, your Company allotted 111,497,914 warrants to 38 resident Indian subscribers and received Rs.145.78 crore as upfront payment which is equivalent to 25% of the total consideration as per the terms of the Preferential Issue.

Furthermore, six resident subscribers have exercised conversion option on 18,825,621 warrants by paying the balance 75% of the consideration, aggregating Rs.73.84 crore and have been allotted an equivalent number of equity shares in the Company. The Company had applied to the Department of Economic Affairs (“DoEA”), Ministry of Finance for approval of foreign investment in respect of 63,601,510 warrants intended to be subscribed to by two foreign investors. The said approval was not acceded to by the DoEA citing reasons of various investigations by multiple Government agencies / regulators. The Company is considering to re-submit the application to the DoEA in the matter.

Divestment of Cerestra Advisors Pvt. Ltd.

During the year under review, your Company divested its stake in Cerestra Advisors Pvt. Ltd. (“Cerestra Advisors”), part of the erstwhile Global Asset Management business. Cerestra Advisors is the fund manager to the Cerestra Edu Infra Fund, which invested in education infrastructure assets. The financial impact of the divestment is accounted for in the financial statements for year ended March 31,2018.

Composite Scheme of Arrangement

In order to simplify the Company’s corporate structure, the composite scheme of arrangement (“Scheme”) was filed by the Company with the Hon’ble National Company Law Tribunal (“NCLT”) on March 31, 2017. The Scheme was approved by the NCLT vide order dated December 08, 2017.

The Scheme was filed with the Registrar of the Companies, NCT of Delhi & Haryana (“ROC”) on December 29, 2017. Consequently, eleven (11) wholly owned subsidiaries, direct or indirect, of Religare Enterprises Limited namely, Religare Securities Limited (excluding broking business which was demerged into Religare Broking Limited, a wholly owned subsidiary of the Company), Religare Commodity Broking Private Limited, RGAM InvestmentAdvisers Private Limited, Religare Venture Capital Limited, Religare Arts Investment Management Limited, Religare Capital Finance Limited, RGAM Capital India Limited, Religare InvestmentAdvisors Limited, Religare Support Services Limited, ReligareArts Initiative Limited and Religare Capital Markets (India) Limited merged with/into Religare Enterprises Limited w.e.f. December 29, 2017. The Appointed Date of the Scheme was April 01, 2016.

The members are informed that Roto Power Private Limited (“RPPL”) filed a winding up petition no. 150/2016 against Religare Support Services Limited (“RSSL”), formerly known as (REL Infrafacilities Limited) on December 17, 2015 alleging recovery of Rs.72,05,937 (Rupees Seventy Two Lakhs Five Thousand Nine Hundred Thirty Seven Only) which RPPL claims to be due for payment for services provided by it under agreements/arrangement between the RPPL and RSSL. RSSL invoked arbitration against RPPL under a service provider agreement entered into between RPPL and RSSL for an aggregate claim amount of Rs.1.09 Cr. Pursuant to Scheme, RSSL merged into the Company. Clause 18 of the Scheme provides that on and from the April 1, 2016 being the Appointed Date, all suits, actions, claims and legal proceedings by or against the Transferor Companies pending and/or arising on or before the Effective Date being December 29, 2017 shall be continued and / or enforced as desired by the Transferee Company and on and from the Effective Date, shall be continued and / or enforced by or against the Transferee Company as effectually and in the same manner and to the same extent as if the same had been originally instituted and/or pending and/or arising by or against the Transferee Company. In view of the provisions of the scheme of arrangement, the winding up petition referred to above shall continue against the Company.

REGULATORY UPDATES

During the year under review, your Company was subject to various inspections / investigations by the Regulatory / Government authorities as under:

Reserve Bank of India ("RBI”)

RBI conducted an ad-hoc inspection of the Company under section 45N of the Reserve Bank of India Act, 1934 in the month of January 2018. Further, thereafter in the month of July 2018 an inspection was again carried out by the RBI for the records of the Company for the FY 2017-18. The Company is yet to receive the final reports of RBI on these inspections.

Securities and Exchange Board of India ("SEBI”)

The Company has received a Summons dated February 22, 2018 from the SEBI inter-alia requesting the Company’s cooperation in relation to an investigation in the matter of Company. SEBI has asked the Company to provide factual data and information pertaining to the Company, its associates and subsidiaries. The Summons is issued only for seeking information from the Company which is being provided and and there are no accusations or any observations made against the Company. SEBI has also appointed an external agency for carrying out the further investigation to which the Company is providing the requisite information.

Serious Fraud and Investigations Office (“SFIO”)

The Company has received a letter dated February 28, 2018 from the SFIO, Ministry of Corporate Affairs (“MCA”), Government of India, intimating the Company that the MCA has ordered an investigation into the affairs of the Company by the SFIO. The Letter is issued only for seeking information from the Company which is being provided and there are no accusations or any observations made against the Company or any other companies. Vide letter dated May 30, 2018, SFIO sought further information in the matter which has been provided by the Company.

EQUITY SHARE CAPITAL

Consequent to the Scheme getting effective on December 29, 2017 as stated above, the Authorized Share Capital of the Company was increased from Rs.350,00,00,000/- (Rupees Three Hundred and Fifty Crores only) divided into 25,00,00,000 (Twenty Five Crores) Equity Shares ofRs.10/- (Rupees Ten only) each and 10,00,00,000 (Ten Crores) Redeemable Preference Shares of Rs.10/- (Rupees Ten only) each to Rs.816,45,00,000/- (Rupees Eight Hundred Sixteen Crores Forty Five Lakhs only) divided into 65,44,50,000 (Sixty Five Crores Forty Four Lakhs and Fifty Thousand) Equity Shares ofRs.10/- (Rupees Ten only) each and 16,20,00,000 (Sixteen Crores Twenty Lakhs) Redeemable Preference Shares ofRs.10/- (Rupees Ten only) each.

During the year under review, the Company has allotted 120,750 equity shares under ESOP scheme 2006 on May 19, 2017. Post allotment the issued, subscribed and paid up equity share capital of the Company was increased from Rs.178,33,44,980/- (Rupees One Hundred Seventy Eight Crores Thirty Three Lakhs Forty Four Thousand Nine Hundred and Eighty only) to Rs.178,45,52,480/-(Rupees One Hundred Seventy Eight Crores Forty Five Lakhs Fifty Two Thousand Four Hundred and Eighty only).

The issued, subscribed and paid up equity share capital as on March 31, 2018 is Rs.178,45,52,480/-consisting of 17,84,55,248 (Seventeen Crores Eighty Four Lakhs Fifty Five Thousand Two Hundred and Forty Eight) equity shares ofRs.10/- (Rupees Ten only) each.

Subsequent to the end of Financial Year, on April 19, 2018, the Company has allotted 111,497,914 convertible warrants at a price of Rs.52.30 each on a preferential basis to various entities/persons entitling them to subscribe to an equivalent number of equity shares of face value ofRs.10/- each at a premium ofRs.42.30 per share as per provisions of Chapter VII of ICDR Regulations.

Thereafter, the Company allotted 38,24,091 equity shares on May 29,2018,4,54,556 equity shares on June 29,2018,127,46,974 equity shares on July 26, 2018 and 18,00,000 equity shares on July 30, 2018 upon the exercise of rights for conversion of warrants into equity shares by six warrant holders to whom warrants were allotted on April 19, 2018.

Consequently, the paid up equity share capital of the Company has been increased from Rs.178,45,52,480/- (Rupees One Hundred Seventy Eight Crores Forty Five Lakhs Fifty Two Thousand Four Hundred and Eighty only) to Rs.1,972,808,690/- (Rupees One Hundred and Ninety Seven Crores Twenty Eight Lakhs Eight Thousand Six Hundred and Ninety) comprising of 197,280,869 equity shares ofthe face value ofRs.10/- each .

During the financial year under reporting, no funds were raised by way of public issue, rights issue, preferential issue etc. by stating any object in the offer document or explanatory statement to the notice for the general meeting. Therefore, no explanation is required to be given in this report pursuant to Regulation 32(4) of SEBI LODR Regulations. However, the process of Preferential Issue of Convertible warrants by the Company was initiated during the financial year, the proceeds from which were received by the Company subsequent to the end of the financial year. The complete details of said issue are provided in the Major Events section of this report.

NON-CONVERTIBLE DEBENTURES

During the period under review, your Company made a scheduled redemption of 1,361 Non-Convertible Debentures of face value of Rs.1,000,000/- each on June 30, 2017, allotted under ISIN INE621H07017.

On August 28, 2017, the Company has allotted 300 Zero coupon Unsecured Unrated Unlisted Non-Convertible Redeemable Non-Convertible Debentures (“NCDs”) of face value ofRs.1,000,000/- each having 11% yield and maturity of 15 months on a private placement basis to one of its then existing wholly-owned subsidiary i.e. Religare Securities Limited (“RSL”). However, said NCDs got cancelled upon the merger of the said wholly owned subsidiary RSL into the Company pursuant to the Composite Scheme of Arrangement as explained elsewhere in this report.

Interest on all outstanding non-convertible debentures was duly paid on time. There are no outstanding non-convertible debentures as on date.

PUBLIC DEPOSITS

Your Company has neither invited nor accepted any deposits from public within the meaning of Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014 during the period under review.

ANNUAL RETURN

The Annual Return extract in Form No MGT 9 as required to be prepared in terms of Section 92(3) of the Act is being uploaded on website ofthe Company and can be accessed through the link http://www.reliaare.com/Annual-Returns.aspx

CAPITAL ADEQUACY

Your Company is registered with the Reserve Bank of India (“RBI”)1 as a Non-Deposit Taking Systemically Important Core Investment Company (“CIC-ND-SI”) vide Certificate No. N-14.03222 dated June 03, 2014. The Company primarily functions as an investment holding company with more than 90% of its total assets consisting of investments in shares of subsidiary companies/ joint venture companies.

As a CIC-ND-SI, the Company is required to -

a. maintain minimum Adjusted Net Worth of 30% of its aggregate risk weighted assets on balance sheet and risk adjusted value of off-balance sheet items as on the date of the last audited balance sheet as at the end of the financial year; and

b. restrict the outside liabilities up to 2.5 times of its Adjusted Net Worth as on the date of the last audited balance sheet as at the end ofthe financial year.

The Company is in compliance with the abovementioned requirements as at March 31, 2018.

RELIGARE EMPLOYEES STOCK OPTION SCHEMES - 2006, 2010 & 2012

Nomination and Remuneration Committee of the Board of Directors of the Company, inter alia, administers and monitors the Employees’ Stock Option Schemes of the Company in accordance with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (erstwhile Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999) (‘the SEBI Guidelines’). Details as required under the SEBI Guidelines, for Religare Employees Stock Option Scheme 2006, Religare Employees Stock Option Scheme 2010 and Religare Employees Stock Option Scheme 2012 have been uploaded on the website of the Company and can be accessed through the link http://www.reliaare.com/Emplovee-Stock-Qption-Schemes.aspx.

During the year under review, the Religare Enterprises Limited Employees Stock Option Scheme, 2006, which became effective on 15th November, 2006 was terminated w.e.f. June 29, 2017as per the terms of the said scheme.

There is no other material change in the ESOP schemes ofthe Company during the year.

Certificate from Auditors confirming that schemes have been implemented in accordance with the SEBI Regulations will be placed at the forthcoming Annual General Meeting of the Company for inspection by the members.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) ofthe Act and Regulations 16 SEBI LODR Regulations.

Following changes occurred in the directorships I key managerial positions (KMP) ofthe Company during the FY 2017-18:

Sr. No.

Name of Director / Key Managerial Personnel

Particulars of Change (Appointment / Resignation/Others)

Effective Date of change

1

Mr. Ravi Mehrotra

Resigned as Non-Executive Director

April 12, 2017

2

Mr. Monish Kant Dutt

Resigned as Nominee Director - International Finance Corporation

April 24, 2017

3

Mrs. Sangeeta Talwar

Resigned as Non-Executive Independent Director

July 28, 2017

4

Mr. Sunil Godhwani

Resigned as Whole Time Director of the Company

September 06, 2017

5

Mr. Virendra Kumar Madan

Resigned as Non-Executive Director

September 29, 2017

6

Mrs. Sabina Vaisoha

Appointed as Non-Executive Independent Director

October 04, 2017

7

Mr. Malvinder Mohan Singh

Stepped down as Non-Executive Chairman of the Company but continues as Non-Executive NonIndependent Director on the Board

November 14, 2017

Resigned as Non-Executive Director

February 14, 2018

8

Mr. Rashi Dhir

Resigned as Non-Executive Independent Director

November 14, 2017

9

Mr. Subramanian Lakshminarayanan

Appointed as Executive Chairman of the Company & designated as KMP

November 14, 2017

Ceased to be Executive Chairman and Director, pursuant to resignation

January 22, 2018

10

Mrs. Kishori Udeshi

Appointed as Non-Executive Independent Director

November 14, 2017

Ceased to be Non-Executive Independent Director, pursuant to resignation

January 22, 2018

11

Mr. Francis Daniel Lee

Appointed as Executive Director

November 17, 2017

Re-designated from Executive Director to NonExecutive Director

January 24, 2018

Resigned as Non-Executive Director

February 13, 2018

12

Mr. Avinash Chander Mahajan

Resigned as Non-Executive Independent Director

November 29, 2017

13

Mr. Ashok Mehta

Appointed as Non-Executive Independent Director

January 24, 2018

14

Mr. Krishnan Subramanian

Appointed as CFO and designated as KMP

November 14, 2017

Stepped down from position of CFO and elevated as Whole Time Director in capacity of Director-Finance

January 24, 2018

15

Mr. Harpal Singh

Resigned as Non-Executive Director

January 24, 2018

16

Mr. Tejpreet Singh Chopra

Resigned as Non-Executive Independent Director

January 30, 2018

17

Mr. Shivinder Mohan Singh

Resigned as Non-Executive Director and ViceChairman of the Company

February 14, 2018

18

Mr. Vikram Talwar

Appointed as Non-Executive Independent Director

February 17, 2018

19

Mr. P. Vijaya Bhaskar

Appointed as Non-Executive Independent Director

February 17, 2018

20

Mr. Maninder Singh

Resigned as Group CEO

November 14, 2017

21

Mr. Anil Saxena

Resigned as Group CFO

November 14, 2017

22

Mr. Mohit Maheshwari

Stepped down as Company Secretary and Compliance

Officer

November 14, 2017

23

Mrs. Reena Jayara

Appointed as Company Secretary and Compliance

Officer

November 17, 2017

Further, the Board of Directors in its meeting held on February 17, 2018 has also approved the following appointments subject to RBI approval and effective date of same will be the date on which RBI approves the appointment:

Sr. No.

Name of Director

Designation

1

Mr. Siddharth Mehta

Appointed as Non-Executive Non-Independent Director, subject to the approval of RBI

2

Mr. Ashok Mehta

Appointed as Whole-time Director and Interim CEO, subject to the approval of RBI

Following changes occurred in the directorships / key managerial positions (KMP) of the Company subsequent to the end of the financial year

Sr. No.

Name of Director

Particulars of Change (Appointment / Resignation/Others)

Effective Date of change

1

Mr. Ashok Mehta

Resigned as Independent Director & appointed as an Interim CEO (without being on the Board)

April 17, 2018

2

Mr. P. Vijaya Bhaskar

Ceased to be Independent Director of the Company due to sudden and sad demise

May 04,2018

3

Mrs. Vijayalakshmi Rajaram Iyer

Appointed as Non-Executive Independent Director

May 08, 2018

4

Mr. Deepak Ramchand Sabnani

Resigned as Non-Executive Independent Director

May 18, 2018

5

Mr. Malay Kumar Sinha

Appointed as Non-Executive Independent Director

May 28, 2018

6

Mr. Padam Narain Bahl

Resigned as Non-Executive Independent Director

June 04, 2018

7

Mr. Rama Krishna Shetty

Resigned as Non-Executive Independent Director

June 30, 2018

8

Mr. Ashok Mehta

Being Interim CEO, appointed as KMP in place of Mr. Krishnan Subramanian

May 16, 2018

9

Mr. Sushil Chandra Tripathi

Appointed as Non-Executive Independent Director

August 01, 2018

Mrs. Sabina Vaisoha, Mr. Vikram Talwar, Mrs. Vijayalakshmi Rajaram Iyer, Mr. Malay Kumar Sinha, Mr. Krishnan Subramanian and Mr. Sushil Chandra Tripathi hold office up to the date of the ensuing Annual General Meeting. The Company has received requisite notices in writing from member(s) of the Company proposing the candidature of Independent Directors of the Company and other Executive Director(s) of the Company.

Brief resume and other details relating to the directors, who are to be appointed/ re-appointed as stipulated under Regulation 36(3) of the SEBI LODR Regulations and Secretarial Standards issued by ICSI, are furnished in the Notice of Annual General Meeting forming part of the Annual Report.

BOARD EVALUATION

Pursuant to the provisions of the Act and SEBI LODR Regulations, the Board is required to carry out an annual performance evaluation of its own performance, the performance of the directors individually as well as the evaluation of the working of its Committees.

However, during the year under review there have been many changes in the composition of the Board of Directors of the Company so much so that the majority of the Directors on the Board at the time of carrying the evaluation exercise were newly appointed. The evaluation exercise for FY 2017-18 was initiated by the Company but same could not be completed as the Board decided that considering the short span of the current directors on the Board of the Company, they are not in a position to complete the evaluation exercise forfunctioning the Committees, Board as a whole and individual directors. Accordingly, the performance evaluation exercise was deferred which will be done in current year. The Board has also reviewed the current Board Evaluation Policy of the Company.

REMUNERATION POLICY

Remuneration Policy formed by the Board on the recommendation of the Nomination and Remuneration Committee is in place for selection and appointment of Directors, Key Managerial Personnel and their remuneration as well as policy on other employees’ remuneration. The Remuneration Policy is stated in the Corporate Governance Report. The relevant Policy(ies) have been uploaded on the website of the Company and can be accessed through the link http://www.reliaare.com/pdf/Directors Appointment and Remuneration Policv.pdf

BOARD/COMMITTEE COMPOSITION AND MEETINGS

A calendar of meetings is prepared and circulated in advance to the Directors. The details of composition of Board and Committee and their meetings held during the year are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Act and the SEBI LODR Regulations.

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

In compliance with Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company has established a Corporate Social Responsibility (CSR) Committee. The CSR Committee has formulated and recommended to the Board, a CSR Policy indicating the activities to be undertaken by the Company, which has been approved by the Board. The strategic intent was to adopt a unified cause across the Religare Group and hence the CSR policy and program to be supported was cascaded across all Group entities.

The belief and philosophy of the group is that being a responsible corporate citizen, it would strive to bring about overall positive impact in societies/local communities. The group has identified provision of healthcare assistance, and health and wellness related awareness relevant to the local underprivileged /marginalized communities as the areas offocus for CSR objectives.

Earlier, the group had engaged the Fortis Charitable Foundation (“FCF”) as its implementation partner to pursue and drive the identified agenda/programs. However, subsequent to the end ofthe financial year under review, the Board of Directors reviewed the engagement with FCF and decided to terminate the same. The Company will be looking for a new agency for undertaking the CSR activities of the group.

For the year ended March 31, 2018, the Company was not required to spend amount under CSRfor FY 2017-18 as prescribed under Section 135 of the Act.

Annual Report on CSR in the format prescribed in Companies (Corporate Social Responsibility) Rules, 2014 is attached as ‘Annexure A”.

AWARDS & RATINGS

The company and its subsidiaries have received the following awards and recognitions during the period under review -AWARDS

- Religare Health Insurance Co. Ltd. : ‘Bancassurance Leader ofthe Year’ - The Insurance India Summit & Awards 2018

- Religare Health Insurance Co. Ltd.: ‘Best Claims Service Provider of the Year’ - The Insurance India Summit & Awards 2018

- Religare Health Insurance Co. Ltd.: ‘Bronze Skoch Award’ in the Micro Insurance Category for ‘Grameen Swaasthya Suraksha’

- Religare Health Insurance Co. Ltd.: “India’s Most Preferred Travel Insurance Product’ for the Product - Explore ‘India’s Most Preferred Travel & Tourism Brands’

- Religare Broking Ltd. : ‘Pension Champion Trophy’ for achieving targets under the National Pension System (NPS) campaign (Non- Bank Category)

- Religare Securities Ltd. : ‘NSDL Star Performer Awards - 2017’ Top Performer in New Account Opened (Non- Bank Category)

- Religare Commodities Ltd. : ‘Krishi Pragati Award, 2017’ by NCDEX for Outstanding Contribution’ in NCDEX Agri

- Mr. Jayant Manglik, President- Retail Distribution, Religare Securities Ltd. : ‘Top Equity Personality of the Year Award’ - BSE COMMODITY EQUITY OUTLOOK (CEO) Weekend Awards 2017

- Religare Commodities Ltd. : ‘Skoch BSE Award - Order of Merit, 2017’ under the category Training and Innovation’

- Religare Finvest Ltd. : ‘Great Place to Work-Certified™’ by the Great Place to Work® Institute

- Religare Finvest Ltd. : ‘CIBIL Commercial Bureau Data Quality Award 2017’ underthe NBFC’ category

RATINGS

In July 2017, India Ratings & Research Private Limited (‘Ind-Ra’, a Fitch Group Company) revised the Long Term Issuer Rating and the rating for the Company’s secured redeemable non-convertible debentures to “IND A/Watch Negative”, while the rating for the Company’s short term debt was revised to “IND A”. Ind-Ra stated that the rating downgrade reflected revision in ratings of REL’s principal operating subsidiary, RFL. Further, the Company has voluntarily withdrawn the rating assigned to the Company’s Commercial Paper/Short Term Debt by ICRA Limited as there was no amount outstanding against the rated instrument.

In January 2018, Ind-Ra further downgraded the Long Term Issuer Rating to “IND BBB-/ Rating Watch Negative” for the Company. Ind-Ra attributed the downgrade to the downgrade in ratings of RFL.

Following the downgrade of the Company’s issuer rating, ratings for specific issuances of the Company were downgraded by Ind-Ra:

- The Company’s Rs.176 cr. secured redeemable non-convertible debentures: “IND BBB-/ Rating Watch Negative”.

- The Company’s Short Term Debt Facility/Commercial PaperofRs.50 cr.: “IND A3/ Rating Watch Negative”.

However, the Company has no outstanding NCDs as on March 31,2018or thereafter till the date of adoption of this report.

LISTING ON STOCK EXCHANGES

The Equity Shares ofthe Company are listed on National Stock Exchange of India Limited and BSE Limited. The annual listing fees for the year 2018-19 have been paid to both the Stock Exchanges.

STATUTORY DISCLOSURES

None of the Directors of your Company is disqualified as per provision of section 164(2) of the Act. The Directors of the Company have made necessary disclosures, as required under various provisions of the Act and the SEBI LODR Regulations.

CONSOLIDATED FINANCIAL STATEMENTS

As required underthe Regulation 34 of SEBI LODR Regulations and Section 129(3) of the Act, consolidated financial statements of the Company and its subsidiaries are attached to the Annual Report. The consolidated financial statements have been prepared in accordance with Accounting Standard 21, Accounting Standard 23 and Accounting Standard 27 issued by The Institute of Chartered Accountants of India. The audited consolidated financial statements together with Auditor’s Report forms part of the Annual Report.

In terms of the tripartite agreement between the Company, Religare Capital Markets Limited (“RCML”, a subsidiary of the Company) and RHC Holding Private Limited (“RHCPL”), severe long term restrictions have been imposed on RCML. The financial statements of RCML and its subsidiaries have been excluded from the consolidated financial statements of the Company w.e.f. October 01, 2011, in accordance with Para 11(b) ofAccounting Standard-21 - ‘Consolidated Financial Statements’ (“AS-21”), and the investment held by the Company in equity and preference share capital of RCML has been accounted for as long term investment in accordance with Accounting Standard-13 - ‘Accounting for Investments’ in compliance with Para 23 of AS-21.

Therefore, the Consolidated Financial Statements presented by your Company, pursuant to AS-21 includes financial information of all its subsidiaries, excluding RCML and RCML’s subsidiaries, have been duly audited by the Statutory Auditors and the same is published in your Company’s Annual Report.

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION

Even though operations of the Company are not energy intensive, the management has been highly conscious of the importance of conservation of energy and technology absorption at all operational levels and efforts are made in this direction on a continuous basis. In view of the nature of activities which are being carried on by the Company, the particulars as prescribed under Section 134(3)(m) of the Act read with rule 8 of the Companies (Accounts) Rules, 2014 regarding Conservation of Energy and Technology Absorption are not applicable to the Company and hence have not been provided.

FOREIGN EXCHANGE EARNINGS AND OUTGO

The Company has incurred expenditure of Rs.1.23 crore (previous year: Rs.0.24 crore) in foreign exchange and earned Nil (previous year: nil) in foreign exchange during the year under review on a standalone basis.

MAINTAINANCE OF COST RECORDS

The Company is in the financial services industry. In view of the nature of activities which are being carried on by the Company, the maintenance of cost records as specified by the Central Government under sub-section (1) of section 148 of the Act is not applicable on the Company and hence such accounts and records are not maintained.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

Amount of Rs.208,918/- lying unpaid in the Unpaid Dividend Account of the Company in respect of dividend declared in year 2010 and not claimed within seven years from the date of transfer to the Company’s Unpaid Dividend Account, which was due to be transferred to the fund on April 08, 2017, has been transferred to the Investor Education and Protection Fund, pursuant to Section 125 ofthe Act on April 21, 2017.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Act, the Board of Directors, to the best of their knowledge and ability, confirm that:

(a) in the preparation of the annual financial statements for the year ended March 31, 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures ;

(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 loss 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) they have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively; and

(f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

CORPORATE GOVERNANCE

The Company is committed to uphold the highest standards of Corporate Governance and adhere to the requirements set out by the Securities and Exchange Board of India.

The Company’s Board has taken various steps to enhance the corporate governance and compliance at group level which encompasses from change in top management including appointment of a new interim CEO and Group Compliance Head at REL level to re-organization of Boards of subsidiaries of the Company.

A detailed report on Corporate Governance along with the Certificate of M/s Sanjay Grover & Associates, Company Secretaries confirming compliance with conditions of Corporate Governance as stipulated in Part C of Schedule V of the SEBI LODR Regulations forms integral part of this Report.

The members may please note that for the financial year ended March 31, 2017 finalisation of annual audited accounts had taken more than anticipated time. Hence, the Company was not able to declare its audited financial results within the prescribed timelines under SEBI LODR Regulations. The Company declared its audited financial results on June 29, 2017.

Further, BSE & NSE vide their respective letters dated June 15,2017 had levied a fine ofRs.2,142,841 and Rs.1,863,345 respectively as on June 15,2017on the Company for non-compliance of Regulation 33 of SEBI LODR Regulations, 2015by not submitting its audited financial results within 60 days from end of financial year ended March 31,2017. The Company has paid the fines.

NSE further vide its letter dated October 06, 2017 raised the demand for balance fine of Rs.70,000 which was paid on October 13, 2017.

Members are also apprised that NSE & BSE vide their respective communications dated June 15, 2018 & June 18, 2018 respectively levied the fine ofRs.5,000/- and 5,900/- respectively for delayed submission offinancials for the period ended March 31, 2018 by one day. In view ofthe fact that the meeting ofthe Board of Directors to consider and approve the Audited Financial Results for the FY 2017-18 held on May 30, 2018 commenced at 10:30 a.m. on May 30, 2018 and ended at 2.30 a.m. on Thursday, May 31,2018, the Company has requested to waive off the fine imposed on the Company by condoning the marginal delay of approximately three hours in submission of the Audited Annual Financials. The Company is yet to receive any further communications from the exchanges in the matter.

The members may please also note that the Board of Directors of the Company had formulated and approved a Dividend Distribution Policy (“the Policy”) pursuant to the requirement under the SEBI (Listing Obligations and Disclosure Requirement) (Second Amendment) Regulations, 2016 in its meeting held on October 26, 2016. Same was uploaded on the website of the Company i.e. http://www.reliaare.com/pdf/Rel Dividend PolicvNov2016.pdf. However, Company inadvertently missed to make a reference of the Policy in its Annual Report for the year ended March 31, 2017. Accordingly, the Company is issuing a corrigendum to the Annual Report 2017 giving intimations to the shareholders about the placement ofthe Policy on the website of the Company.

AUDITORS

M/s S.S. Kothari Mehta & Co., Chartered Accountants, (Firm Registration No. 000756N), were appointed as statutory auditors of the Company by the shareholders at the 33rd Annual general Meeting of the Company (“AGM”) held on September 21,2017, to hold office for a period of five consecutive years commencing from the financial year 2017-18 i.e. from the conclusion of 33rd AGM until the conclusion of the 38th AGM of the Company to be held in the year 2022 (subject to the ratification of appointment ateveryAGM as perprovisions ofSection 139(1)ofthe Act).

However, in accordance with the Companies Amendment Act, 2017, enforced on May 07, 2018 by Ministry of Corporate Affairs, the appointment of Statutory Auditors is not required to be ratified at every Annual General Meeting.

AUDITORS’ REPORT

Management’s response on the Statutory Auditors’ Qualification I Comments on the Company’s standalone financial statements

a. Qualification in the report on internal financial controls regarding:

(i) material weakness in Internal Financial Control over Financial Reporting in the credit evaluation process in respect of Corporate Loans;

As a strategy the management has decided not to extend any further loans under Corporate Loan Book

(ii) Review of process of identification and updatation of documentation of Micro Small & Medium Enterprises as MSMED Act 2006 and Information Technology General Control;

Management has identified the gaps. The systems and processes have already been implemented to identify and categorize the vendors under MSMED Act 2006.

(iii) Strengthening of internal control process in respect of process of initiating payment accounting entries and closure of outstanding entries in Bank Reconciliation Statements:

Management has identified the gaps. The systems and processes are being implemented to mitigate the pendency of overdue open items, if any in Bank Reconciliation Statements.

Management’s response on the Statutory Auditors’ Qualification I Comments on the Company’s consolidated financial statements

a. Qualification pertaining to Lakshmi Vilas Bank adjusting the fixed deposits of Religare Finvest Ltd., subsidiary of the Company (RFL): RFL had made certain fixed deposits with Lakshmi Vilas Bank (“LVB”) in November 2016 and January 2017. LVB vide its letter dated 7th February 2018 had confirmed fixed deposits ofRs.79,144.77 Lakhs to RFL. RFL received a letter dated February 9, 2018 from LVB purporting to allude to certain loans disbursed by LVB to third parties allegedly in consideration of security of the RFL’s Fixed Deposits (“FDs”) with LVB. By means of this letter, LVB also purported to call upon RFL to execute the security documentation in connection with the alleged loans.

Vide RFL’s letter dated February 16, 2018, LVB was expressly informed that not only RFL was not party to any loans that were allegedly sanctioned or granted by LVB to any third party, as also that no authorization, sanction or approval had ever been provided by RFL to LVB permitting the creation of any security or encumbrance of the FDs for any third party loans or borrowings. LVB was also forewarned that any attempt to subject the FDs to illegal encumbrance would not only be violative of RFL’s rights, but also constitute deliberate contempt by LVB of the Order dated January 5, 2018 passed by the Hon’ble Delhi High Court, a copy ofwhich was served on LVB vide Legal notice dated February 16, 2018.

While things stood thus, RFL came to be in receipt of a copy of the letter dated April 24, 2018 addressed by LVB to the statutory auditors of RFL that LVB had “closed the said deposits on 20.02.2018 to liquidate the loans availed” by third parties. This was contrary to the confirmation received by the Statutory Auditors in November 2017 via email confirming the fixed deposits. RFL has now filed a suit for recovery of the Fixed Deposit amounts aggregating Rs.79,144.77 Lakhs appropriated by LVB before the Hon’ble Delhi High Court.

b. Qualification pertaining to Corporate Loan Book of Religare Finvest Ltd., subsidiary ofthe Company (RFL): RFL has an exposure of Rs.203,670 Lakhs towards the Corporate Loan Book. RBI has raised concerns in the past about the credit worthiness of the borrowers, credit appraisal and loan sanctioning mechanism followed by RFL in respect of this book. The management of RFL has reviewed the portfolio and the financial reports of the borrowers to determine the recoverability of the said loans.

As a part of the recovery process, RFL has already issued legal notices to the borrowers and has initiated corporate insolvency resolution process under Insolvency and Bankruptcy Code, 2016 against the said entities forming part of Corporate Loan Book of RFL. RFL has also appointed a law firm of repute to undertake a detailed diligence on this loan book. Post submission of the report and the steps outlined for recovery, RFL intends to pursue all legal means for recovering the loans.

In the interim based on the security available, maturity dates ofthe loans, recovery steps instituted and the financial reports ofthe borrowers, the RFL, on a prudent basis, made a provision ofRs.101,285.00 Lakhs against this portfolio.

c. Disclaimer of opinion in the report on internal financial controls pertaining to RFL

(i) Material weakness in Internal Financial Control over Financial Reporting in the Credit evaluation process in respect of Corporate Loan Book and loan against property & shares;

As a strategy RFL management has decided not to extend any further loans under Corporate Loan Book and loan against shares. Further, adequate controls exist for loans granted under Loans against property (SME-Secured Loans) and Loans against shares. As a matter of fact, during FY 2017-18, a total ofRs.94 Crores of SME secured loans were disbursed. No loan against shares was disbursed during FY 2017-18.

(ii) Updated documentation for Micro Small & Medium Enterprises as MSMED Act 2006 and control over Information Technology General Controls; RFL Management has identified the gaps. The systems and processes have already been implemented to identify and categorize the vendors under MSMED Act 2006.

(iii) Strengthening of internal control process in respect of regular updation of risk control matrix, comprehensiveness for coverage of all process: RFL management has identified material weaknesses in Internal Financial Control over Financial Reporting in respect of certain specific segments and steps have been taken to strengthen controls and design a robust evaluation process.

SECRETARIAL AUDITOR REPORT

As per provisions of Section 204 of the Act, the Board of Directors of the Company has appointed M/s P I & Associates as the Secretarial Auditor of the Company to conduct the Secretarial Audit. The Secretarial Audit Report for the financial year ended March 31, 2018, is annexed to this Report. Management comments on qualifications given by auditors in the report are as follows:

(a) Non-compliance with Secretarial Standards issued by The Institute of Company Secretaries of India: The Company has complied with Secretarial Standards except in few cases where draft and signed minutes were circulated to the Board members beyond prescribed timelines due to frequent changes at Board and management level during year under review. The management will take steps to ensure that same is not repeated in future.

(b) Non-disclosure of Dividend Distribution Policy in Annual Report 2016-17: The Company inadvertently missed to make a reference of the Policy in its Annual Report for the year ended March 31, 2017. Accordingly, the Company is issuing a corrigendum to the Annual Report 2017 giving intimations to the shareholders about the placement of the Policy on the website of the Company along with address.

(c) Delayed submission of audited financial results to Stock Exchanges for the quarter and year ended March 31, 2017 : For financial year ended March 31, 2017, finalisation of annual audited accounts has taken more than anticipated time. Hence, the Company was not able to declare its audited financial results within the prescribed timelines under SEBI Listing Regulations. The Company declared its audited financial results on June 29, 2017. Further, BSE & NSE vide their letter dated June 15, 2017 had levied a fine ofRs.2,142,841 and Rs.1,863,345 respectively as on June 15, 2017 on the Company for non-compliance of Regulation 33 of SEBI Listing Regulations, 2015 by not submitting its audited financial results within 60 days from end of financial year ended March 31, 2017. The Company has paid the fine. NSE further vide its letter dated October 06, 2017 raised the demand for balance fine ofRs.70,000 which was paid on October 13, 2017.

(d) Appointment of CFO : The office of CFO became vacant on January 24, 2018. The Company was required to appoint CFO within six months i.e. by July 23, 2018. The Company is actively searching for suitable candidate for office of CFO with vast and diversified rich experience in the financial services sector and shall appoint the same at the earliest to meet the statutory requirements of the Act.

PARTICULARS OF INVESTMENTS, LOANS AND GUARANTEES

The Company, being an NBFC, is exempted from the provisions of Section 186 [except sub-section (1)] ofthe Act. Accordingly, details of particulars of loans, guarantees or investments as required to be provided as per Section 134(3)(g) of the Act are not provided.

RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year were on an arm’s length basis and were in the ordinary course of business. There are no materially significant related party transactions entered by the Company with related parties which may have a potential conflict with the interest of the Company.

All Related Party Transactions are placed before the Audit Committee for approval as per the Related Party Transactions Policy of the Company as approved by the Board. The policy is also uploaded on the website of the Company & can be accessed through the link http://www.reliaare.com/pdf/ReliaareRPTPolicv Mav16.PDF

Since all related party transactions that were entered into during the financial year were on an arm’s length basis and were in the ordinary course of business and there was no material related party transaction entered by the Company during the year as per Related Party Transactions Policy, no details are required to be provided in Form AOC-2 prescribed under clause (h) of sub-section (3) ofsection 134 ofthe Act and Rule 8(2) ofthe Companies (Accounts) Rules, 2014.

The details of the transactions with related parties are provided in the notes to accompanying standalone financial statements.

RISK MANAGEMENT

The Board of Directors of the Company has constituted a Risk Management Committee, which is responsible for framing, implementing, monitoring and periodically review the effectiveness of the risk management plan and make appropriate changes as and when necessary. The details of the Committee are set out in the Corporate Governance Report forming part of the Board’s Report.

The Company / REL is not an operating company and therefore major risk lies with management and operation of its subsidiary / group companies. The Company being an investment holding company, has a comprehensive Risk Management framework and overarching Risk Management policy, which is adopted by each of the key subsidiaries while formulating their Risk Policy. Risk Management Policy is aimed at identification, evaluation, mitigation, monitoring and reporting of identifiable risks. Respective functional head and/or risk management department of subsidiaries are responsible for implementation of the Risk Management system and maintenance of record of risk and mitigation plan in Risk & Control Matrix (RCM), which is tested and updated periodically. Therefore, the risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting. The framework has different risk models which help in identification of risks and their classification in High, Medium and Low categories on the basis of likelihood, impact and velocity..

The subsidiary company’s Risk Management Committee authorized by the respective Board, or in its absence the respective Audit Committee, reviews the risk management policy and appropriateness of systems and controls in this regard and submits its report to the Risk Management Committee of your Company on periodical basis.

VIGIL MECHANISM/ WHISTLE BLOWER POLICY

The Company has a vigil mechanism named Whistle Blower Policy to deal with instance of unethical practices, fraud and mismanagement or gross misconduct by the employees of the Company, if any, that can lead to financial loss or reputational risk to the organization. The details ofthe Whistle Blower Policy are explained in the Corporate Governance Report and also posted on the website of the Company & can be accessed through the link http://www.reliaare.com/pdf/Reliaare Whistle Blower Policy 10072018.pdf

In order to further strengthen the vigil mechanism, the Company has been doing the following activities at the group level:

1. In order to ensure awareness among the employees of the organization, the policy is explained in detail as part of the employee induction for new employees , the details are mentioned on the HR portal/ intranet, the policy is periodically circulated to all employees through e-mail and Electronic Direct Mailers (EDMs) giving specific details and ‘call to action’ are regularly circulated

2. Drop boxes have been kept at all major locations for employees to drop their complaints in the boxes During the year, no complaint pertaining to the Company was received under the Whistle Blower mechanism.

INTERNAL FINANCIAL CONTROLS AND INTERNAL CONTROL SYSTEM

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit function is defined in the comprehensive agreement with the internal audit agency, which is reviewed and approved by the Audit Committee of the Company and its respective subsidiaries. The Company has appointed M/s KPMG as the Internal Auditor of the Company as approved by the Audit Committee. KPMG also assist the Company and its key subsidiaries in testing and reporting of Internal Financial Controls (IFC) on quarterly basis through an integrated system of internal audit and IFC testing. To maintain its objectivity and independence, the Internal Auditor agency directly reports to the Audit Committee.

The Internal Auditor evaluates the efficacy and adequacy of the internal control system and internal Financial Controls in the Company, its compliance with operating systems, accounting procedures, policies and regulatory requirements at all locations of the Company and its subsidiaries. Based on the integrated report of internal audit function and IFC, process owners undertake corrective action in their respective areas and thereby strengthen the internal controls. Significant audit observations and corrective actions thereon along with IFC dashboard are presented to the Audit Committee on periodical basis.

HUMAN RESOURCES

This year has been a challenging year for a few Businesses and they have gone through high volatility during the year that has reflected in the organization’s capacity to perform to its potential. However, as part of our transformational effort, there have been positive changes at the Religare Board and Management level with greater focus being brought on corporate governance, compliance and service standards. We are well set to rebuild the institution and establish a strong platform from where we can offerourvalued customers, an integrated suite offinancial services.

Employees are our vital and most valuable assets. Over this period, we have developed a strong culture of transparency through constant employee communication. In order to boosts the employee morale, the organization has recognized the commitment, loyalty and contribution of its internal stakeholders. Our employee partnership ethos reflects the Company’s longstanding business principles with the prime focus to identify, assess, groom and build leadership potential for future.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT THE WORK PLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Work Place (Prevention, Prohibition and Redressal) Act, 2013 and rules made thereunder. An Internal Complaints Committee (ICC) is in place as per the requirements ofthe said Act to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. No case has been reported during the year under review.

PARTICULARS OF EMPLOYEES

The details required under Section 197(12) of the Act read with Rule 5(1) & 5(2) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are annexed as “Annexure B” to this report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant or material orders passed by the Regulators/Courts which would impact the going concern status ofthe Company and its operations in future.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION

There are no material changes and commitments adversely affecting the financial position of the Company which have occurred between the end ofthe financial year of the Company to which the financial statement relate (i.e. March 31, 2018) and as of date of the report i.e. August 01, 2018.

ACKNOWLEDGEMENTS

Your Directors would like to express their sincere appreciation for the co-operation and assistance received from the Company’s Bankers, Regulatory Bodies, Stakeholders including Financial Institutions and other business associates who have extended their valuable sustained support and encouragement during the year under review.

Your Directors also wish to place on record their deep sense of gratitude and appreciation for the commitment displayed by all executives, officers and staff at all levels of the Company during the year under review. Your Directors would also like to thank all shareholders for their continued faith in the Company and look forward to your continued support in the future.

By order of the Board of Directors

Religare Enterprises Limited

Sd/- Sd/-

Place: Gurugram Krishnan Subramanian Malay Kumar Sinha

Date: August 01,2018 Director-Finance Director