Dear Stakeholders,
Your Directors present to you their Twenty-Seventh Annual Report along with IND AS audited financial statements of the Company for the Financial Year ended 31st March 2022.
FINANCIAL PERFORMANCE:
(INR In Cr.)
INTERPRETATION:
The past year has seen a disruption of the economy owing to the COVID 19 pandemic. The AUM of the company has increased by 27%, from Rs. 4,863 Crs to Rs. 6,187 Crs which was mainly contributed by growth in Housing Finance portfolio by 127%, Unsecured business loans by 81% and small ticket LAP by 61%. We have also grown our securitization partnerships during the year with other banks and NBFCs. The portfolio of loans has grown by 25% over last year to INR 5,761 Crores. Total revenue for your Company has grown from INR. 697.72 Crs. in FY21 to INR 883.64 Crs this year. Similarly, Net Interest Income (NII) grew by 34% from INR. 353.44 Crs. in FY21 to INR 474.24 Crs this year.
Operating expenses (including Impairment provision) grew from INR. 322.96 Crs. in FY21 to INR 396.78 Crs this year, and the Cost to Income ratio decreased Y-o-Y from 62.91% in FY21 to 58.38% this year.
The Net Profit for the year ended 31st March 2022 increased by 68% to Rs 103.46 Crs from Rs 61.70 Crs for the year ended 31st March 2021. The Return on Average Assets for the year ended 31st March 2022 was 1.72% as against 1.29% for the year ended 31st March 2021, an improvement by 34% The Net worth as at 31st March 2022 was Rs 1153.52 Crs as against Rs 834.73 Crs as at 31st March 2021, an increase of 38% As at 31st March 2022, aggregate borrowings of your Company stood at INR 5,017 Crs. as compared to INR 4,328 Crs as at 31st March 2021.
NETWORK EXPANSION:
Your Company expanded its geographical presence by reaching out to different locations and increased its footprint by opening new branches and making it more accessible to its customers. With the opening of 156 branches in FY 21-22, the network has now increased to 516 branches as on
March 31, 2022 across various states for different products as follows:
OUTLOOK:
We have presence covering 15 states and union territories across India with a strong presence in southern and western geographies. Our wider presence across these states gives us the ability to meet the demand from these markets and customer categories. We intend to continue to focus on increasing our total number of customers and in-turn the AUMs.
We have done an investment in technology and plan to continue to invest in technology and digitization and to ensure our information technology systems continue to help us with across several functions, including loan origination, credit underwriting, risk management, collections, customer service and retention. We believe that such investments will help improve recoveries and reduce our operating expenses, cost of customer acquisition and credit costs over time.
Our strategies going ahead are listed below,
- Focus on performance of our large branch network and extracting operating leverage
- Continue to invest in technology and digitization initiatives
- Continue to deliver consistent and one of the industry leading return matrices building on past performance
DIVIDEND:
In view of the planned business growth, your Directors deem it proper to preserve the resources of the Company for its activities and therefore, do not propose any dividend for the financial year ended 31 March, 2022.
AMOUNT PROPOSED TO BE CARRIED TO RESERVES:
Your Board of Directors have proposed a transfer of INR. 20.69 crores to the Statutory Reserve maintained under Section 45IC of the RBI Act, 1934 and transfer of INR. 2 crores to Capital Redemption Reserve.
ASSET-LIABILITY MANAGEMENT:
Your Company follows a well-defined Asset Liability Management system, driven by Asset Liability Committee (ALCO), to monitor efficiently and pursue appropriate policy initiatives.
Liquidity positions are examined regularly across the specified time- buckets to assess and manage mismatches. The ALM policy and practices of your Company are in line with the regulatory guidelines; designed to protect against liquidity as well as interest rate risk challenges and to optimize cost of funds at all times to fund growth requirements.
STATE OF COMPANY'S AFFAIRS:
Changes in Capital Structure: Authorized, Issued and Paid up Share Capital of the Company
Authorized Share Capital of the Company:
The Authorized Share Capital of the Company is Rs. 1000,00,00,000/- (Rupees One thousand crores only) consisting of 99,00,00,000 (Ninety nine crores) equity shares of Rs.10/- each and 10,000,000 0.01% non-cumulative redeemable preference shares of face value Rs.10 each.
Paid-up Share Capital of the Company:
The Paid up share capital of the Company as on March 31, 2021 was INR 289,92,34,250/- divided into 28,99,23,425 equity shares of INR 10 each and INR. 9,459,460/- divided into 4,729,730 0.01% Optionally Convertible Redeemable Preference Shares (OCRPS) of face value of INR. 10 each out of which INR. 2 was the paid up.
• Rights issue
The Board of Directors in its meeting on June 29, 2021 allotted 2,85,71,450 equity shares of face value of Rs.10/- each at a premium of Rs.60/- each aggregating to Rs. 200,00,01,500/- on Rights basis.
• Employee Stock Option
During the year under review, 2,93,000 ESOP's were issued pursuant to the Fedbank Financial Services Limited Employee Stock Option Plan 2018 as amended.
• Optionally Convertible Redeemable Preference Shares (OCRPS)
The Board of Directors in its meeting held on February 14, 2022 approved redemption of 20,00,000 0.01% Optionally Convertible Redeemable Preference Shares (OCRPS) at face value of Rs.10/- and at a premium of Rs. 32.10/- each and 27,29,730 OCRPS were converted into equity shares at face value of Rs.10/- and premium of Rs. 32.10/-each.
Consequently, as at 31st March, 2022, the Issued, Subscribed and Paid up share capital of the Company stood at INR. 321,51,76,050/- divided into 32,15,17,605 Equity shares of face value of INR 10 each.
Finance - Debentures
During the year under review, the Company has not issued fresh Non-convertible Debentures. The details of existing Non-convertible Debentures on private placement basis are mentioned below:
DEBENTURE TRUSTEES:
The details of Debenture Trustee are mentioned below: IDBI Trusteeship Services Limited
Asian Building, Ground Floor, 17, R. Kamani Marg, Ballard Estate, Mumbai – 400 001 Email: compliance@idbitrustee.com Tel no.: 02240807000
EMPLOYEE STOCK OPTION SCHEME:
With a view to appraise, motivate and reward the Employees for their past association and performance, your Company had formulated and implemented Fedbank Financial Services Limited-Employees Stock Option Plan 2018 (ESOP 2018) in accordance with the provisions of Companies Act, 2013 (the Act). The Nomination and Remuneration Committee of the Board, inter alia, administers and monitors the ESOP Plan in accordance with the applicable provisions of the Act. The Company in its Extra Ordinary general meeting("EGM") held on February 14, 2022 has amended the Employee Stock Option Plan, 2018 (ESOP, 2018) to meet the regulatory requirements in terms of The Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 in the said EGM.
Disclosures pertaining to ESOP Plan in terms of Rule 12(9) of the Companies (Share Capital and Debentures) Rules, 2014 are detailed below:
Detail of Stock options as on date i.e. 31st March 2022:
8. variation of terms of options;
9. Money realized by exercise of options- Rs. 1,02,52,010 10. Total number of options in force;- 81,03,351
(i) Stock options held by Key Management Personnel (KMP) as on March 31, 2022
(ii) any other employee who receives a grant of options in any one year of option amounting to five percent or more of options granted during that year.- Nil (iii) identified employees who were granted option, during any one year, equal to or exceeding one percent of the issued capital (excluding outstanding warrants and conversions) of the company at the time of grant;- Nil
Further Company has not made any bonus issue during the year. The Company has not issued shares with differential voting rights and sweat equity shares.
Board of Directors: i) Composition:
Your Company's Board consists of Six Directors as follows:
• Mr. Balakrishnan Krishnamurthy (DIN: 00034031), Chairman & Independent Director
• Mr. Anil Kothuri (DIN: 00177945), MD & CEO
• Mr. Shyam Srinivasan (DIN: 02274773), Non Executive Director
• Mrs. Gauri Rushabh Shah (DIN: 06625227), Independent Director
• Mr. Maninder Juneja (DIN: 02680016), Nominee Director
• Mr. Ashutosh Khajuria (DIN: 05154975), Nominee Director
ii) No. of Meetings held during the year:
During the FY 2021-22, your Board of Directors met 14 times and the gap between any two meetings was less than one hundred and twenty days.
The dates on which the meetings were held are 20th April, 2021, 12th May, 2021, 15th July, 2021, 15th September, 2021, 20th October, 2021, 13th November, 2021, 22nd November, 2021, 11th January, 2022, 21st January, 2022, 07th February, 2022, 11th February, 2022, 14th February, 2022, 18th February, 2022 and 28th March, 2022. iii) Attendance record of each Director and other details for FY 2021-22:
The names and categories of the Directors on the Board, their attendance at Board Meetings held during the year are given hereunder.
Based on the confirmations received, none of the Directors are disqualified for appointment under Section 164(2) of the Companies Act, 2013.
Audit Committee: i) Composition:
The Audit Committee of the Board consists of three Members as follows:
• Mrs. Gauri Rushabh Shah (DIN: 06625227)—Chairperson
• Mr. Balakrishnan Krishnamurthy (DIN: 00034031)- Member
• Mr. Ashutosh Khajuria (DIN: 05154975)- Member
The constitution of the Committee is in compliance with the regulatory requirements.
The Committee members are financially literate and have the necessary accounting and relevant financial technical management experience. During the year, all the recommendations of the Audit Committee were accepted by the Board.
Terms of reference and role of the audit committee includes the matters specified under the Companies Act 2013. Broad terms of reference includes the following:
1. To oversee the financial reporting process;
2. to review financial results and related information and disclosure of its financial information to ensure that its financial statements are correct, sufficient and credible;
3. to approve or modify any related party transactions, to review internal financial controls and risk management system,
4. to review and evaluate with the management performance of statutory and internal auditors, effectiveness of audit process and adequacy of the internal control systems;
5. to review and monitor the statutory auditor's independence and performance, and effectiveness of audit process;
6. approval of payment to statutory auditors for any other services rendered by the statutory auditors of the Company;
7. Reviewing, with the management, the annual financial statements and auditor's report thereon before submission to the Board for approval, with particular reference to: (i) Matters required to be included in the Director's Responsibility Statement to be included in the Board's report in terms of clause (c) of sub-section 3 of Section 134 of the Companies Act as amended from time to time; (ii) Changes, if any, in accounting policies and practices and reasons for the same; (iii) Major accounting entries involving estimates based on the exercise of judgment by management; (iv) Significant adjustments made in the financial statements arising out of audit findings; (v) Compliance with listing and other legal requirements relating to financial statements; (vi) Disclosure of any related party transactions; and (vii) Modified opinion(s) in the draft audit report.
8. Reviewing, with the management, the quarterly, half-yearly before submission to the Board for approval;
9. Reviewing, with the management, the statement of uses/ application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilised for purposes other than those stated in the offer document/ prospectus/ notice and the report submitted by the monitoring agency monitoring the utilisation of proceeds of a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter. This also includes monitoring the use/application of the funds raised through the proposed initial public offer by the Company;
10. Approval or any subsequent modifications of transactions of the Company with related parties and omnibus approval for subject to the conditions as may be prescribed, by the independent directors who are members of the Audit Committee;
11. Scrutinising of inter-corporate loans and investments;
12. Valuation of undertakings or assets of the Company, wherever it is necessary;
13. Evaluation of internal financial controls and risk management systems;
14. Establishing a vigil mechanism for directors and employees to report their genuine concerns or grievances
15. Reviewing the adequacy of internal audit function if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit;
16. Discussing with internal auditors on any significant findings and follow up thereon;
17. Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board;
18. Discussing with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern;
19. Looking into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non payment of declared dividends) and creditors; 20. Reviewing the functioning of the whistle blower mechanism;
21. Approving the appointment of the chief financial officer or any other person heading the finance function or discharging that function after assessing the qualifications, experience and background, etc. of the candidate; and
22. Carrying out any other function as may be decided by the Board and/or specified/provided under the Companies Act, the SEBI Listing Regulations or by any other regulatory authority.
23. Reviewing the utilization of loans and/ or advances from/investment by the holding company in any subsidiary exceeding rupees 100 crore or 10% of the asset size of the subsidiary, whichever is lower including existing loans / advances / investments existing as per applicable law.
24. Considering and commenting on rationale, cost-benefits and impact of schemes involving merger, demerger, amalgamation etc., on the Company and its shareholders.
25. To ensure that an Information System Audit of the internal systems and processes is conducted at least once in two years to assess operational risks faced by the Company
During the FY 2021-2022, the Audit Committee of the Board met 11 times on 12th May, 2021, 15th July, 2021, 20th October, 2021, 13th November, 2021, 22nd November, 2021, 11th January 2022, 21st January, 2022, 07th February, 2022, 14th February, 2022, 18th February, 2022 and 28th March, 2022.
iii) Attendance record of Audit Committee for FY 2021-22:
The names, designation and categories of the Members of the Audit Committee, their attendance at the Meetings held during the year are given hereunder.
Nomination & Remuneration Committee: i) Composition:
The Nomination & Remuneration Committee of the Board consists of Four Members as follows:
• Mrs. Gauri Rushabh Shah (DIN: 06625227) - Chairperson
• Mr. Shyam Srinivasan (DIN: 02274773)- Member
• Mr. Maninder Singh Juneja (DIN: 02680016) - Member
Terms of reference of the Nomination & Remuneration Committee includes the matters specified under the Companies Act 2013. Broad terms of reference includes the following:
1. To formulate the Nomination and Remuneration policy,
2. Identifying persons who qualify to become directors and ensure their fit and proper status, scrutinize the fit and proper declarations made and who may be appointed in senior management in accordance with the criteria laid down, and recommending to the Board their appointment and removal,
3. Carrying out evaluations of every director's performance and ensuring the fit and proper status of proposed and existing directors and recommending to the Board a policy, relating to the remuneration of the directors, key managerial personnel, senior management and other employee as may deem fit;
4. To set criteria for determining qualifications, positive attributes and independence of a director,
5. To formulate criteria for evaluation of performance of the independent directors and the Board.
6. To evaluate for every appointment of an independent director, the balance of skills, knowledge and experience on the Board and on the basis of such evaluation, prepare a description of the role and capabilities required of an independent director. The person recommended to the Board for appointment as an independent director shall have the capabilities identified in such description.
For the purpose of identifying suitable candidates, the Committee may: (i) use the services of an external agencies, if required;
(ii) consider candidates from a wide range of backgrounds, having due regard to diversity; and (iii) consider the time commitments of the candidates.
7. Determining whether to extend or continue the term of appointment of the independent director, on the basis of the report of performance evaluation of independent directors;
8. Devising a policy on Board diversity;
9. Analysing, monitoring and reviewing various human resource and compensation matters;
10. Performing such functions as are required to be performed by the compensation committee under the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, as amended;
11. Framing suitable policies and systems to ensure that there is no violation, by an employee of any applicable laws in India or overseas, including: (i) the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, as amended; or (ii) the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to the Securities Market) Regulations, 2003, as amended.
12. Performing such other activities as may be delegated by the Board and/or specified/provided under the Companies Act, the SEBI Listing Regulations or by any other regulatory authority; and 13. Recommend to the Board, all remuneration, in whatever form, payable to senior management
During the FY 2021-2022, the Nomination & Remuneration Committee of the Board met 3 times on 20th April, 2021, 13th December, 2021 and 28th March 2022.
iii) Attendance record of Nomination & Remuneration Committee for FY 2021-22:
The names, designation and categories of the Members of the Nomination & Remuneration Committee, their attendance at the Meetings held during the year are given hereunder.
iv) Policy on Directors, KMPs & Other Employees Appointment & Remuneration including Criteria as per Section 178 of the Companies Act 2013:
The Nomination & Remuneration policy of your Company is to ensure an appropriate mix of executive and independent directors; so as to maintain the independence of the Board, and separate its functions of governance and management.
As on March 31, 2022, the Board comprised of 6 members.
The Nomination and Remuneration Policy of the Company reflects a good focus on enhancing value and attracting and retaining quality staff members with requisite knowledge and excellence - both as Executive and Non-Executive Directors or KMP / Senior Management for achieving overall objectives of the Company. Pursuant to the provisions of the Companies Act, 2013, a Policy on Appointment & Remuneration of Directors, Key Managerial Personnel, Senior Management and other employees has been formulated; including criteria for determining qualifications, positive attributes, independence of a Director and other matters as required under the said Act. The Nomination and Remuneration Committee also takes into account the fit and proper criteria for appointment of directors as stipulated by Reserve Bank of India.
The detailed Nomination and Remuneration Policy of the Company is placed on the website of the Company: https://www.fedfina.com/ corporate-governance/
Corporate Social Responsibility (CSR) Committee:
In accordance with the provisions of Section 135 of the Companies Act, 2013 (the Act), the Board of Directors of the Company have constituted the Corporate Social Responsibility (CSR) Committee.
i) Composition:
The CSR Committee of the Board consists of Three Members as follows:
• Mrs. Gauri Rushabh Shah (DIN: 06625227)- Chairperson
• Mr. Anil Kothuri (DIN: 00177945)- Member
Terms of reference of the CSR Committee includes the matters specified under the Companies Act 2013. Broad terms of reference includes:
1. to formulate and recommend to the Board a Corporate Social Responsibility ("CSR") Policy which shall indicate the activities to be undertaken by the Company in areas or subject specified in Schedule VII of the Companies Act 2013;
2. to recommend the amount of expenditure to be incurred on the CSR Activities in line with the Schedule VII of the Companies Act, 2013;
3. to monitor CSR policy of the Company from time to time;
4. to institute a transparent monitoring mechanism for implementation of the CSR activities or projects or programs of the Company;
5. To perform such other duties and functions as the Board may require the CSR committee to undertake to promote the CSR activities of the Company or as may be required under applicable laws
During the FY 2021-2022, the CSR Committee of the Board met once on 12th May, 2021.
iii) Attendance record of Corporate Social Responsibility Committee for FY 2021-22:
The names, designation and categories of the Members of the Corporate Social Responsibility Committee, their attendance at the Meetings held during the year are given hereunder.
iv) CSR Activities & Its Reporting:
The Company's CSR Activities are guided and monitored by its CSR committee. The CSR policy of the Company provides a broad set of guidelines including intervention areas. The Company believes that CSR is a way of creating shared value and contributing to social and environmental good. Further Annual Report on Corporate Social Responsibility (CSR) Activities pursuant to clause (o) of sub-section (3) of section 134 of the Act and Rule 9 of the Companies (Corporate Social Responsibility) Rules, 2014 is set out in Annexure-I.
Risk Management Committee: i) Composition:
Present Risk Management Committee of the Board consists of Eight Members as follows:
• Mr. Balakrishnan Krishnamurthy (DIN: 00034031)—Chairman
• Mr. Maninder Singh Juneja (DIN: 02680016)- Member
• Ms. Gauri Rushabh Shah- Member
• Mr. Anil Kothuri- Member
• Mr. Shardul Kadam- Member
• Mr. C.V. Ganesh- Member
• Mr. K. Siddharth- Member
The re-constitution of the Committee is in compliance with the regulatory requirements. Broad terms of reference of the Committee includes the following:
1. To formulate and approve Company's Risk Management Policy and procedures which shall include: a) a framework for identification of internal and external risks specifically faced by the listed entity, in particular including financial, operational, sectoral, sustainability (particularly, ESG related risks), information, cyber security risks or any other risk as may be determined by the Committee. b) measures for risk mitigation including systems and processes for internal control of identified risks. c) business continuity plan.
2. To ensure and monitor appropriate methodology, processes and systems are in place to monitor and evaluate risks associated with the business of the Company;
3. To monitor and oversee implementation of the risk management policy, including evaluating the adequacy of risk management systems;
4. To periodically review the risk management policy, at least once in two years, including by considering the changing industry dynamics and evolving complexity;
5. To review portfolio and its delinquency at a product level and NPA Management
6. To evaluate the overall risks faced by the Company.
7. To monitor and evaluate liquidity risk faced by the Company.
8. To ensure adherence to liquidity risk management policies and procedure
9. To consider and review the Liquidity Risk Analysis and Monitoring measures.
10. To keep the board of directors informed about the nature and content of its discussions, recommendations and actions to be taken;
11. To recommend to the Board for the appointment of the Chief Risk Officer on such terms as may be approved by the Board.
12. To carry out such other functions as may be specified by the Board from time to time or specified/provided the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, each as amended and/ or by any other regulatory authority.
During the FY 2021-2022, the Risk Management Committee of the Board met three times on 12th May, 2021, 13th November, 2021 and 21st January, 2022.
iii) Attendance record of Risk Management Committee for FY 2021-22:
Names, designations and categories of the Directors on the Risk Management Committee, their attendance at the Meeting held during the year are given below.
IT Strategy Committee: i) Composition:
Present IT Strategy Committee of the Board consists of Four Members as follows:
• Ms. Gauri Rushabh Shah (DIN: 06625227) - Chairperson
• Mr. Anil Kothuri- Member (DIN : 00177945) - Member
• Mr. Krishnaswamy Siddharth- Member
• Mr. Dhrumil Dalal - Member
• Mr. Dinesh Singh - Member
During the year under review, The Board of Directors of the Company vide its Board Meeting held on 13th November, 2021 appointed Mr. Dhrumil Dalal, CTO/CIO of the Company and Mr. Dinesh Singh, IT- Head as Members of the Committee. Further the re-constitution of the Committee is in compliance with the regulatory requirements.
Broad terms of reference of the Committee includes: to formulate, approve and implement various IT polices as required by the regulators of the Company.
During the FY 2021-2022, the IT Strategy Committee of the Board met two times on 12th May, 2021 and 13th November, 2021.
iii) Attendance record of IT Strategy Committee for FY 2021-22:
Names, designations and categories of the Directors on the IT Strategy Committee, their attendance at the Meeting held during the year are given below.
Stakeholders Relationship Committee:
The Stakeholders' Relationship Committee was constituted by our Board at their meeting held on January 11, 2022. The scope and functions of the Stakeholder Relationship Committee are in accordance with Section 178 of the Companies Act, 2013 and the SEBI Listing Regulations.
Broad terms of reference of the Committee includes:
1. To consider and resolve the grievances of the security holders of the Company including complaints related to transfer/transmission of shares/securities, non-receipt of annual report, non-receipt of declared dividends, issue of new/duplicate certificates, general meetings etc. and assisting with quarterly reporting of such complaints;
2. To review measures taken for effective exercise of voting rights by shareholders;
3. Giving effect to all transfer/transmission of shares and debentures, dematerialisation of shares and re-materialisation of shares, split and issue of duplicate/consolidated share certificates, compliance with all the requirements related to shares, debentures and other securities from time to time;
4. To review adherence to the service standards adopted by the Company in respect of various services being rendered by the Registrar & Share Transfer Agent;
5. To review the various measures and initiatives taken by the Company for reducing the quantum of unclaimed dividends and ensuring timely receipt of dividend warrants/annual reports/statutory notices by the shareholders of the Company: and
6. Carrying out such other functions as may be specified by the Board from time to time or specified/provided under the Companies Act, 2013 or the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, each as amended or by any other regulatory authority.
Present Stakeholders Relationship Committee of the Board consists of three members as follows:
• Mr. Balakrishnan Krishnamurthy (DIN: 00034031) - Member
• Ms. Gauri Rushabh Shah (DIN: 06625227) - Member
There were no meetings held during the year under review.
Capital Raising Committee:
The Capital Raising Committee of the Board consists of five members as follows:
• Mr. Balakrishnan Krishnamurthy (DIN: 00034031)- Chairman
• Mr. Ashutosh Khajuria (DIN: 05154975) - Member
1. to decide, in consultation with various advisors, various terms and conditions of the Offer, including size, timing, listing jurisdictions and securities to be offered in the Offer, and to make any amendments, modifications, variations or alterations thereto; 2. to consider and invite existing holders of securities of the Company to offer their securities for sale through the Offer and take all steps in connection with such offer for sale; 3. to appoint and enter into arrangements with various advisors or intermediaries to the Offer and to negotiate and finalise the terms of their appointment; 4. to make applications to, seek clarifications and obtain approvals from, if necessary, from various statutory or governmental authorities in connection with the Offer and accept on behalf of the Board such conditions and modifications as may be prescribed or imposed by any of them while granting such approvals, permissions and sanctions as may be required and wherever necessary; 5. to do all such deeds and acts as may be required to dematerialize the securities of the Company and to sign and/or modify, as the case may be, agreements and/or such other documents as may be required in connection thereof;
6. to authorise and approve the incurring of expenditure and payment of fees and expenses in connection with the Offer.
7. to finalize, settle, approve, adopt and file in consultation with the book running lead manager (BRLM) where applicable, the draft red herring prospectus, the red herring prospectus, the prospectus, the preliminary and final international wrap and any amendments, supplements, notices, addenda or corrigenda thereto, and take all such actions as may be necessary for the submission and filing of these documents including incorporating such alterations/corrections/ modifications as may be required by SEBI, RoC or any other relevant governmental and statutory authorities or in accordance with applicable laws;
8. to appoint and enter into and terminate arrangements with the BRLM(s), underwriters to the Offer, syndicate members to the Offer, brokers to the Offer, escrow collection bankers to the Offer, refund bankers to the Offer, registrars, legal advisors, auditors, and any other agencies or persons or intermediaries to the Offer and to negotiate, finalise and amend the terms of their appointment, including but not limited to the execution of the mandate letter with the BRLM(s) and negotiation, finalization, execution and, if required, amendment of the offer agreement with the BRLM(s);
9. to negotiate, finalise and settle and to execute and deliver or arrange the delivery of the draft red herring prospectus, the red herring prospectus, the prospectus, offer agreement, syndicate agreement, underwriting agreement, share escrow agreement, cash escrow agreement, agreements with the registrar to the offer and all other documents, deeds, agreements and instruments whatsoever with the registrar to the Offer, legal advisors, auditors, stock exchange(s), BRLM(s) and any other agencies/intermediaries in connection with the Offer with the power to authorise one or more officers of the Company to execute all or any of the aforesaid documents or any amendments thereto as may be required or desirable in relation to the Offer;
10. To seek, if required, the consent and/or waiver of the lenders of the Company, customers, parties with whom the Company has entered into various commercial and other agreements, all concerned government and regulatory authorities in India or outside India, and any other consents and/or waivers that may be required in relation to the Offer or any actions connected therewith;
11. to open and operate bank accounts in terms of the escrow agreement and to authorize one or more officers of the Company to execute all documents/deeds as may be necessary in this regard; 12. to open and operate bank accounts of the Company in terms of Section 40(3) of the Companies Act, 2013, as amended, and to authorize one or more officers of the Company to execute all documents/deeds as may be necessary in this regard;
13. to accept and appropriate the proceeds of the Offer in accordance with the applicable laws;
14. to approve code of conduct as may be considered necessary by the Capital Raising Committee or as required under applicable laws, regulations or guidelines for the Board, officers of the Company and other employees of the Company;
15. to approve the implementation of any corporate governance requirements that may be considered necessary by the Board or the Capital Raising Committee or as may be required under the applicable laws or the SEBI Listing Regulations and listing agreements to be entered into by the Company with the relevant stock exchanges, to the extent allowed under law;
16. To issue receipts/allotment letters/confirmation of allotment notes either in physical or electronic mode representing the underlying Equity Shares in the capital of the Company with such features and attributes as may be required and to provide for the tradability and free transferability thereof as per market practices and regulations, including listing on one or more stock exchange(s), with power to authorize one or more officers of the Company to sign all or any of the afore stated documents;
17. To authorize and approve notices, advertisements in relation to the Offer in consultation with the relevant intermediaries appointed for the Offer;
18. to do all such acts, deeds, matters and things and execute all such other documents, etc., as may be deemed necessary or desirable for such purpose, including without limitation, to finalise the basis of allocation and to allot the shares to the successful allottees as permissible in law, issue of allotment letters/confirmation of allotment notes, share certificates in accordance with the relevant rules, in consultation with the BRLM(s);
19. to make applications for listing of the Equity Shares in one or more stock exchange(s) for listing of the Equity Shares and to execute and to deliver or arrange the delivery of necessary documentation to the concerned stock exchange(s) in connection with obtaining such listing including without limitation, entering into listing agreements and affixing the common seal of the Company where necessary;
20. to settle all questions, difficulties or doubts that may arise in regard to the Offer, including such issues or allotment, terms of the utilisation of the IPO proceeds and matters incidental thereto as it may deem fit;
21. to submit undertaking/certificates or provide clarifications to the SEBI, Registrar of Companies, and the relevant stock exchange(s) where the Equity Shares are to be listed;
22. to negotiate, finalize, settle, execute and deliver any and all other documents or instruments and to do or cause to be done any and all acts or things as the Capital Raising Committee may deem necessary, appropriate or advisable in order to carry out the purposes and intent of this resolution or in connection with the Offer and any documents or instruments so executed and delivered or acts and things done or caused to be done by the said Capital Raising Committee shall be conclusive evidence of the authority of the said Capital Raising Committee in so doing;
23. To delegate any of its powers set out under 1 to 22 hereinabove, as may be deemed necessary and permissible under applicable laws to the officials of the Company;
24. To approve suitable policies on insider trading, whistle-blowing, risk management, and any other policies as may be required under the SEBI Listing Regulations or any other applicable laws; 25. deciding, negotiating and finalizing the pricing and all other related matters regarding the Pre-IPO Placement, including the execution of the relevant documents with the investors in consultation with the BRLM(s) and in accordance with applicable laws;
26. Taking on record the approval of the Selling Shareholders for offering their Equity Shares in the Offer for Sale;
27. To withdraw the draft red herring prospectus or the red herring prospectus or to decide not to proceed with the Offer at any stage in accordance with applicable laws and in consultation with the BRLM(s);
28. To appoint, in consultation with the BRLM(s), the registrar and other intermediaries to the Offer, in accordance with the provisions of theSEBI regulations and other Applicable Laws including legal counsels, banks or agencies concerned and entering into any agreements or other instruments for such purpose, to remunerate all such intermediaries/agencies including the payments of commissions, brokerages, etc. and to terminate any agreements or arrangements with such intermediaries/ agents.
29. To fix date and time to convene the general meetings of the Shareholders of the Company as and when required.
During the FY 2021-2022, the Capital Raising Committee of the Board met eleven (11) times on 11th August, 2021, 20th August, 2021, 24th August, 2021, 25th August, 2021, 26th August, 2021, 27th August, 2021, 21st September, 2021, 24th September, 2021, 22nd November, 2021, 13th December, 2021 and 17th February, 2022.
iii) Attendance record of Capital Raising Committee for FY 2021-22:
Names, designations and categories of the Directors on the Capital Raising Committee, their attendance at the Meeting held during the year are given below.
POST MEETING MECHANISM:
The important decisions taken at the Board/Board Committee Meetings are communicated to the concerned department/division.
DIRECTORS AND KEY MANAGERIAL PERSONNEL:
In accordance with the provisions of section 152(6) of the Act and the Articles of Association of the Company, Mr. Anil Kothuri, Managing Director& CEO (DIN: 00177945) is proposed to retire by rotation at the forthcoming Annual General Meeting (AGM), and being eligible, offers himself for re-appointment. Necessary resolution for this purpose is being proposed in the Notice of the ensuing Annual General Meeting for approval by the members.
There were no changes in the composition of the Board of Directors and Key Managerial Personnel of the Company during the year under review.
SEPARATE MEETING OF THE INDEPENDENT DIRECTORS:
During the year under review, the Independent Directors met once on 28th March, 2022. The said Meeting was conducted without the presence of the Non-Executive Non-Independent Directors or the members of the management.
DECLARATION FROM INDEPENDENT DIRECTORS:
Both the Independent Directors have given declarations that they meet the criteria of independence laid down under Section 149 of the Companies Act, 2013 and complied with the Code for Independent Directors prescribed in Schedule IV to the Act.
As on 31st March, 2022, the following Non-Executive Directors are Independent in terms of Section 149(6) of the Companies Act, 2013:-
1. Mr. Balakrishnan Krishnamurthy (DIN: 00034031)
2. Mrs. Gauri Rushabh Shah (DIN:06625227)
In the opinion of the Board, the Independent Directors are persons with integrity, expertise and experience in the relevant functional areas. Requirements of online proficiency self-assessment test in terms of Rule 6(4) of The Companies (Appointment and Qualifications of Directors) Rules, 2014 has been fulfilled by the Independent Directors.
THE CHANGE IN THE NATURE OF BUSINESS, IF ANY:
There was no change in the nature of business of the Company during the financial year ended 31st March, 2022.
BOARD EVALUATION:
Pursuant to the provisions of the Companies Act, 2013, evaluation of the performance of individual Directors (including the Chairman of the Board) were conducted on parameters such as level of engagement and contribution and independence of judgment - thereby safeguarding the interests of the Company. Evaluation sheet in form of questionnaire were circulated for undertaking performance evaluation.
The performance evaluation of the Independent Directors were carried out by the entire Board, excluding the director being evaluated. The performance evaluation of the Chairman, the Non-Independent Directors and Board as a whole were carried out by the Independent Directors. The Board also carried out annual performance evaluation of the working of its Committees.
Your Company has received undertaking and declaration from each Director on fit and proper criteria in terms of the provisions of RBI Master Directions. The Board of Directors has confirmed that all existing Directors are fit and proper to continue to hold the appointment as Directors on the Board, as reviewed and recommended by the Nomination and Remuneration Committee on fit and proper criteria under RBI Master Directions. The Directors have expressed their satisfaction with the evaluation process. The Board opined that the Board Committees' composition, structure, processes and working procedures are well laid down and that the Board Committees members have adequate expertise drawn from diverse functions, industries and business and bring specific competencies relevant to the Company's business and operations.
SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES:
The Company does not have any subsidiary, joint venture or associate Company.
HUMAN RESOURCE – TALENT POOL – PERFORMANCE MANAGEMENT:
Fedfina has always prided itself in being a people first organization. Our concentration revolves around continuous growth, culture and a learning experience.
Our evolved digitized onboarding assisted us in seamless joining for new joiners in different geographies where we have expanded our foot prints.
Our employee strength has grown 34% from the previous year.
Keeping in mind the delivery of our plan in these volatile and dynamic environment we continue to tap and nurture our internal talent pool and enable them in all means which could help them become future ready in these times of dynamic and volatile environment. In line with this, we introduced the 2nd batch of "Leadership Excellence and Acceleration Program" (LEAP) which aims at development of identified High Potential Employees through focused interventions and thus help build a talent pipeline.
In continuation to our endeavor to promote Gender Diversity at workplace, we launched
Restart with Fedfina- To help women with career breaks; restart their career.
Employee Benevolent Fund ("EBF") was introduced last year as part of our commitment to People. EBF aims at providing financial support to employees in times of unusual need.
We bagged the Great Place to Work certification for 3rd year in a row. Ranked 16th in Best Places to Work in India 2021 Employee Choice Awards by Ambition Box.
PARTICULARS OF EMPLOYEES:
The provisions specified in section 197 of the Companies Act 2013 read with Rule 5(2) and rule 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are not applicable to us.
CAPITAL ADEQUACY:
Your Company's capital adequacy ratio stood at 23.04% as on March 31, 2022 which is well above the threshold limit of 15% prescribed by the Reserve Bank of India. Tier-I Capital ratio alone stood at a healthy 17.10%.
CREDIT RATING:
PUBLIC DEPOSITS:
Your Company is Non- Deposit taking Systematically Important NBFC and has not accepted public deposits during the year under review in terms of Chapter-V of the Companies Act, 2013.
RISK MANAGEMENT POLICY:
Your Company has a Board-approved Risk Management Policy that lays down the overall framework for identifying, assessing, measuring and monitoring various elements of risk involved in the businesses and for formulation of procedures and systems for mitigating such risks. The main objective of this policy is to ensure sustainable and prudent business growth. The function is supervised by a Board constituted Risk Committee which reviews the asset quality and portfolio composition on a regular basis. Any product policy programs are duly approved by this Committee.
Your Company has adopted and laid down operating procedures and guidelines to mitigate operational and fraud risks in its business lines. Your Company continues to invest in people, processes, training and technology; so as to strengthen its overall Risk Management Framework.
AUDITORS:
1. STATUTORY AUDITORS & THEIR REPORT
M/s BSR & Co. LLP, Chartered Accountants (Firm Registration No. 101248W / W- 100022) were appointed as Statutory Auditors of your Company at the Twenty sixth Annual General Meeting (AGM) held on September 24, 2021 for a tenure of three years till the conclusion of the Twenty ninth Annual General Meeting to be held for the year 2024.The Audit Report submitted by M/s BSR & Co. LLP, Chartered Accountants, for FY 2021- 2022 does not contain any qualification, reservation or adverse remark.
2. SECRETARIAL AUDITORS & THEIR REPORT
M/s. DM Associates Company Secretaries LLP were appointed as the Secretarial Auditors to conduct the Secretarial Audit for the financial year ended March 31, 2022. The Report of the secretarial auditors in the prescribed Form MR-3 is set out in Annexure-II to this Report. The Secretarial Audit Report does not contain any qualifications, reservation or adverse remark.
COMPLIANCE WITH THE PROVISIONS OF SECRETARIAL STANDARD - 1 AND SECRETARIAL STANDARD – 2:
The Directors have devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively.
The applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to ‘Meetings of the Board of Directors' and ‘General Meetings', respectively, have been duly complied by your Company.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
Your Company believes that strong internal control system and processes play a critical role in the health of the Company. Your Company has instituted adequate internal control systems commensurate with the nature of its business & size of operations. Your Company's well-defined organizational structure, documented policy guidelines, defined authority matrix and internal controls ensure efficiency of operations, compliance with internal policies and applicable laws and regulations as well as protection of resources. The internal control system is supplemented by internal audits, regular reviews by the management and standard policies and guidelines which ensure reliability of financial and all other records. Your Company's Internal Audit department performed regular reviews of business processes to assess the effectiveness & adequacy of the internal control systems, compliance with policies and procedures. All significant audit observations of the internal auditors and follow up actions were duly reported and discussed at the Audit Committee.
INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY:
During the year, your Company had engaged a firm of Chartered Accountants to evaluate the internal financial control framework and to test its effectiveness.
Based on the testing conducted by the firm, the Company has laid down adequate internal financial controls commensurate with the nature and size of its business operations which is adequate and operating efficiently and effectively and no material weaknesses exist.
The deficiencies reported to the Management do not constitute material weaknesses.
Your Company has a process in place to continuously monitor internal controls and identify deficiencies, if any, and implement new and/or improved controls to limit any adverse effects on the Company's operations.
The said evaluation and testing was carried out in line with the general guidelines of the Institute of Chartered Accountants of India.
RELATED PARTY TRANSACTIONS:
All related party transactions are placed before the Audit Committee and the Board on quarterly basis. Transaction with related parties, as per the requirements of Accounting Standards, are disclosed in the notes to accounts annexed to the financial statements. All the related party transactions that were entered into during the financial year were on arm's length basis and in ordinary course of business. Particulars of contracts or arrangements with related parties referred to in sub-section (1) of section 188 in the prescribed form are provided in the form AOC-2 in accordance with the rule 8 (2) of the Companies (Accounts), 2014 Rules. Form AOC-2 is set out in Annexure-III.
FRAUD REPORTING:
Pursuant to the Board approved ‘Fraud Risk Management and Fraud Investigation Policy' of the Company, information relating to all frauds of INR. 1 Lakh and above are reported promptly to the Board and quarterly reviews are placed before the Board for their information.
During the year under review, Twenty Eight (28) instances of fraud total amounting to INR.1051.79 lakhs were detected and the same has been timely reported to the Audit Committee/ Board as well as to the Reserve Bank of India (RBI). Subsequently INR. 32.10lakhs was recovered by the Company.
Pursuant to the provisions of the Companies Act, 2013, no fraud was reported by the Auditors of the Company to the Audit Committee during the year under review.
MAJOR EVENTS DURING THE YEAR AND MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY AND THE DATE OF THE REPORT:
The Company at its Extra-ordinary General Meeting("EGM") held on February 14, 2022 has passed special resolution approving the fresh issue of
Equity Shares through Initial Public Offer (IPO) upto Rs. 1,000 crores.
The Company has filed a draft red herring prospectus dated February 18, 2022 with SEBI on February 19, 2022 for proposed IPO for a fresh issue of upto Rs. 900 crores and Offer for Sale of upto 45,714,286 equity shares. The Company has received in-principle approvals from National Stock Exchange of India Limited and BSE Limited on draft offer document filed by the Company on May 6, 2022. Further, the final observation letter from SEBI on the draft red herring prospectus filed by the Company was received on May 13, 2022. The Company at its EGM held on February 14, 2022 has also passed special resolution for adoption of amended the Employee Stock Option Plan, 2018 (ESOP, 2018) to meet the regulatory requirements in terms of The Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013:
Pursuant to Section 186(11) of the Companies Act,2013 ("the Act"), the provisions of Section 186(4) of the Act requiring disclosure in the Financial Statements of the full particulars of the loans made and guarantees given or securities provided by a Non-Banking Financial Company in the ordinary course of its business and the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient of the loan or guarantee or security are exempted from disclosure in the Annual Report.
Further, pursuant to the provisions of Section 186 (4) of the Act, the details of investments made by the Company are given in the Notes to the Financial Statements.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS:
There are no significant and material orders passed by the regulators or courts or tribunals that would impact the going concern status of the Company and its future operations.
DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT 2013 READ WITH RULES:
The Company has an Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. Your Company is in compliance with the constitution of Internal Complaints Committee (ICC) to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. The following is a summary of sexual harassment complaints received and dealt with during the year 2021-22:
• No. of complaints received: Nil
• No. of complaints disposed of: Not Applicable.
RBI GUIDELINES:
The Reserve Bank of India (RBI) granted the Certificate of Registration to the Company in August 2010 vide Registration No. N-16.00187, to commence the business of a non-banking financial institution without accepting public deposits. Your Company has complied with and continues to comply with all the applicable regulations and directions of the RBI. Details of auctions conducted during the year under review are set out below:
Note: No entity within the Company's group including any holding or associate Company or any related party had participated in any of the above auctions.
VIGIL MECHANISM:
As per the provisions of Section 177(9) of the Companies Act, 2013, the Company is required to establish an effective Vigil Mechanism for Directors and employees to report genuine concerns. The Company as part of this has in place a Board approved "Policy on Vigil Mechanism" to deal with the instances of fraud and mismanagement, if any. The said policy is available on the website of your Company at https://www.fedfina.com This Vigil mechanism of the Company is overseen by the Audit Committee and provides adequate safeguard against victimisation of employees and also provide direct access to the Chairman of the Audit Committee in exceptional circumstances.
Your Company affirms that no personnel has been denied access to the Audit Committee.
No complaints were received by the Company during the year under review.
ANNUAL RETURN:
Pursuant to section 92 (1) of the Companies Act 2013, the Annual Return for the year 2021 – 22 is also uploaded on the website of the Company (https://www.fedfina.com)
PARTICULARS OF ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE INFLOW/OUTFLOW, ETC.:
The requirements of disclosure with regard to Conservation of Energy and technology absorption in terms of Section 134 of the Companies Act, 2013, read with the Companies (Accounts) Rules 2014, are not applicable to the Company; as it does not own any manufacturing facility.
However, the Company makes all efforts towards conservation of energy, protection of environment and ensuring safety as follows:
1) Installation of LED (Light emitting diode) in branches / offices.
2) Creating environmental education / awareness for employees through electronic / digital form on ways & means conserve electricity & other natural resources.
3) Minimizing Air Condition usage
4) Shutting of lights when not in use.
Further, the Company has been integrating and using new age technology into our entire operations focussed towards customer experience and enhancing productivity. Our projects are aimed at improving business processes, increasing consumer uptake, driving efficiency, and providing the good experience for our stakeholders.
We have adopted IT projects that have assisted us in managing and monitoring risks, efficiently targeting customers, and providing a consistent experience to all of our clients.
A few IT initiatives undertaken are given below: ? Multi- lingual customer portal ? System driven risk monitoring engines ? Collaboration tool for internal stakeholders ? State of the art surveillance tools ? NLP driven customer service
? Integrated lead, loan origination and loan / Portfolio management systems ? Secular growth across Social media
The Company has been employing Information technology as a key differentiator when comparing itself with its competitors. Several awards and recognition stands testimony to our technology investments. We are always in the lookout for utilization of information technology to achieve excellence and provide differentiation to all stakeholders - internally and externally.
No foreign exchange was earned or spent in terms of actual inflows or outflows during the year under review.
DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to Section 134 of the Companies Act, 2013, the Directors confirm that:
I. in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; II. such accounting policies have been selected and applied consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2022 and the profits of the Company for the financial year ended on that date;
III. proper and sufficient care had been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
IV. the annual accounts have been prepared on going concern basis; and
V. proper systems had been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
ACKNOWLEDGEMENT:
Your Directors would like to place on record, their gratitude for the cooperation and guidance received from all the statutory bodies, especially the RBI. The Directors also thank the shareholders, clients, vendors, investors, banks and other stakeholders in placing their faith in the Company and contributing to its growth.
EMPLOYEES RELATIONSHIP:
The employees at all grades of the Company have extended their whole-hearted cooperation to the Company for the smooth conduct of the affairs of the Company and the employee relations of the Company have been cordial. Your Directors wish to place on record their deep sense of appreciation for all the employees whose commitment, cooperation, active participation, dedication and professionalism has made the organization's significant growth possible.
CAUTIONARY NOTE:
Certain statements in this Report may be forward-looking and are stated as may be required by applicable laws and regulations. Actual results may vary from those expressed or implied, depending upon economic conditions, Government policies and other incidental/related factors.
Fedbank Financial Services Limited is proposing, subject to receipt of requisite approvals, market conditions and other considerations, to make an initial public offer of its equity shares and has filed a draft red herring prospectus ("DRHP") with the Securities and Exchange Board of India
("SEBI"). The DRHP is available on the website of the SEBI at www.sebi.gov.in as well as on the websites of the book running lead managers, ICICI Securities Limited, IIFL Securities Limited, JM Financial Limited and Equirus Capital Private Limited, at www.icicisecurities.com, www.iiflcap. com, www.jmfl.com and www.equirus.com respectively, and the websites of the stock exchange(s) at www.nseindia.com and www.bseindia.com, respectively. Any potential investor should note that investment in equity shares involves a high degree of risk and for details relating to such risk, see "Risk Factors" of the RHP, when available. Potential investors should not rely on the DRHP for any investment decision.