Dear Members,
The Board of Directors of Aadhar Housing Finance Limited ("your Company"
or "the Company" or "Aadhar Housing") are pleased to present the
33rd (Thirty- third) Annual Report and the Audited Financial Statements
(Standalone and Consolidated) of your Company for the financial year ended 31st
March 2023 ("financial year under review"). Your Company is a Housing
Finance Company registered with National Housing Bank ("NHB") and
regulated & controlled by Reserve Bank of India ("RBI") and
supervised by NHB. Aadhar Housing is engaged in providing housing finance to lower income
segment of the society. Aadhar Housing is currently operating out of twenty states and
union territories of India with a branch network of over 479 offices covering 15,000+
locations.
1. Financial Performance of AHFL:
(Rs in crore)
Particulars |
31st March 31 2021 |
31st March 2022 |
31st March 2023 |
AUM |
13,327 |
14,778 |
17,223 |
Income |
1549.81 |
1,692.66 |
1,994.27 |
PAT |
339.97 |
444.65 |
544.58 |
Net Worth / Total Equity |
2692.54 |
3,145.39 |
3,695.57 |
CRAR |
44.08% |
45.41% |
42.73% |
CRAR - Tier I Capital |
42.63% |
44.20% |
41.66% |
CRAR - Tier II Capital |
1.45% |
1.21% |
1.07% |
Retail NPA (on retail AUM) |
1.07% |
1.45% |
1.16% |
ROE % |
13.49% |
15.23% |
15.92% |
About AHFL:
• The Company is focused on low income segment (ticket size less than Rs. 15
lakhs) with an AUM of Rs. 17,223 crore.
• Strong growth tailwinds in affordable housing due to low penetration combined
with low competition from banks and housing shortage in rural and urban areas.
• Low concentration risk due to wide geographical presence: Presence across 20
states and union territories with diversified exposure across locations; no single state
contributes to more than 15% of AHFL's AUM.
• 100% secured retail advances with average ticket size of Rs. 9.21 Lakhs, high
share of low risk salaried customers viz. 59% of loan book and moderate LTV ratios of
57.8% and majority of the mortgage portfolios are satisfying the Priority Sector Lending
criteria prescribed by RBI/NHB.
• One of the largest origination franchise with strong brand: 479 branches and
offices which cover 15000+ locations. Low concentration risk due to wide geographical
presence.
• 11400+ Aadhar Mitra's (including 500+ Mahila Aadhar Mitras) and Resident
Executives help in building out a low cost and wide distribution network.
• High asset quality: The Gross NPA on AUM stood at 1.16% for the year ended 31st
March 2023. Provision Coverage Ratio on NPA Assets (Stage 3B carrying value) at 35%.
• Strong liquidity: High liquid assets/cash & bank balances of Rs. 1,525
crores as at 31st March 2023 in addition to unutilized Banks' sanction lines.
2. Major Developments during the year
The Company has filed a Draft Red Herring Prospectus ("DRHP") with
Securities and Exchange Board of India ("SEBI") on 24th
January 2021 and addendum to the DRHP was filed on 5th April 2022. The proposed
Initial Public Offering ("IPO") is of Rs. 7,300 crores consisting of a
primary issue of Rs. 1,500 crores and an Offer for Sale of Rs. 5,800 crores by Promoter
Company, BCP Topco VII Pte. Ltd. The Company had received an observation letter dated 5th
May 2022 from SEBI which was valid for 1 year from the date of letter. However, recent
events in the domestic and international capital markets indicate uncertain global
economic outlook due to which the launch of the IPO and Offer for Sale by the Promoter
Company has been postponed.
3. Initiatives towards funding of Green Housing Projects
Your Company has tied up with International Finance Corporation ("IFC"),
a member of the World Bank Organization, to provide affordable green housing to the home
seekers in India. The project will help to improve access to environmentally efficient
housing for low- income borrowers who have little or no access to formal means of
borrowing. The aim is to create homes which are energy and cost efficient without
compromising on quality of life while creating a positive impact on the environment. The
tie up will help focus further on the affordable housing market to address a critical gap
in green housing in India.
The Company has undertaken a pilot project for the same in few geographies in the
country with a positive response to the initiative. Through this project the Company and
IFC aim to educate and help the underserved section of society benefit from environment
friendly and cost-efficient housing.
4. Management Discussion and Analysis Report
In accordance with the applicable provisions of the Master Direction issued by the
Reserve Bank of India for Housing Finance Companies, a detailed analysis of the Company's
performance is discussed in the Management Discussion and Analysis Report, which forms
part of this Annual Report.
5. Changes in the Directors and Key Managerial Personnel
Board of Directors ("the Board")
• The Members at the Extra Ordinary General Meeting of the Company held on 26th
May 2022, considered and approved the extension of term of office of Dr. Nivedita Haran
(DIN : 06441500) as an Independent Director, before the expiry of her term, for a further
period of two years from the date of 32nd Annual General Meeting held in
calendar year 2022, till the date of 34th Annual General Meeting of the Company
to be held in the calendar year 2024.
• Mr. O. P. Bhatt (DIN: 00548091) was re-appointed as Independent Director and
Non- Executive Chairman of the Company by the shareholders at the 32nd Annual
General Meeting of the Company held on 18th August 2022 for a second term of 3
years i.e. from 13th September 2022 to 12th September 2025.
• The 5 year term of Mr. Deo Shankar Tripathi (DIN:07153794) as Managing Director
and Chief Executive Officer of the Company expired on 4th December 2022. The
Members at the Extra Ordinary General Meeting of the Company held on 23rd March
2023, by way of special resolution approved his appointment as Executive Vice Chairman of
the Board w.e.f. 3rd January 2023 upto 26th December 2027.
• Mr. Rishi Anand (DIN:02303503), has been appointed as Managing Director and
Chief Executive Officer of the Company w.e.f. 3rd January 2023 upto 26th December
2027 by way of special resolution passed by the Members at the Extra Ordinary General
Meeting of the Company held on 23rd March 2023.
• Further, the Members at the Extra Ordinary General Meeting ofthe Company held on
23rd March 2023, also approved the appointment of Mr. Prateek Roongta
(DIN:00622797) as Non- Executive (Nominee) Director of the Company w.e.f. 20th
January, 2023, liable to retire by rotation.
• Pursuant to Section 152 of the Act, Mr. Mukesh Mehta (DIN: 08319159),
Non-Executive (Nominee) Director retires from the Board by rotation and being eligible,
offers himself for re-appointment at the ensuing 33rd Annual General Meeting of
the Company.
• The Nomination and Remuneration Committee of the Company and the Board of
Directors have recommended the re-appointment of Mr. Mukesh Mehta. A detailed profile of
the Director seeking re-appointment is provided in the Notice of the 33rd
Annual General Meeting of the Company.
Key Managerial Personnel
During the financial year under review, apart from the changes as mentioned above,
there were no changes in the Key Managerial Personnel of the Company.
6. Share Capital Structure:
Your Company's capital structure as at 31st March 2023 is given in the below
table:
Share Capital |
Amount in Rs crores |
Authorized Share Capital (50,00,00,000 Equity Shares of Rs. 10 each) |
500.00 |
Issued, Subscribed and Paid- up Share Capital (39,47,54,970 Equity
Shares of Rs. 10 each) |
394.75 |
Changes in Capital Structure and shareholding position:
There were no changes in the capital structure of your Company during the financial
year under review.
The 26,100 Bonus shares which were issued on 16th January 2021, and kept in
abeyance since the entitled shareholders have neither dematerialized their existing
shares, nor provided their demat account details to the Company, have been transferred to
the Unclaimed Suspense Account of the Company as on 31st March 2023. The
Company shall release the bonus shares on receipt of verified claims by the entitled
shareholders in their respective demat accounts.
Strong Parentage of the BCP Topco VII Pte. Ltd. (A Blackstone Group entity)
The Company enjoys a strong parentage of our Promoter Company and benefits from the
resources, relationships and expertise of Blackstone, one of the world's leading
investment firms. Blackstone's asset management businesses include investment vehicles
focused on real estate, private equity, public debt and equity, growth equity,
opportunistic, non-investment grade credit, real assets and secondary funds, all on a
global basis. Through its different investment businesses, as of 31st December
2022, Blackstone had total assets under management of US $975 billion. Currently, the
Board of Directors of the Company has 3 nominee directors from Promoter group.
The present shareholding pattern of the Company is as mentioned below :-
List of Shareholders & percentage of holding as on 31st March, 2023
Sr.
No. |
Name of Shareholders |
No. of Equity Shares held |
Percentage of shareholding |
1 |
BCP Topco VII Pte. Ltd. |
38,96,83,420 |
98.72% |
| 2 |
ICICI Bank Ltd. |
46,50,000 |
1.18% |
| 3 |
IEPF Authority |
1,13,150 |
0.03% |
| 4 |
Other Resident |
3,08,400 |
0.07% |
|
Shareholders* |
|
|
Total |
|
39,47,54,970 |
100.00% |
* Includes 26,100 bonus shares kept in abeyance in the Unclaimed Suspense Account of
the Company pertaining to shareholders who are holding shares in physical form and have
not yet provided their demat account details.
7. Financial Performance
7.1 Financial summary and highlights of the Company:
Your Company takes pleasure in presenting the standalone and consolidated reports on
the operational and business performance, along with the audited financial statements for
the financial year ended 31st March 2023.
Financial summary and highlights of the Company are given as following :
(Rs in crores)
|
Standalone |
Consolidated |
Particulars |
FY 2022-23 |
FY 2021-22 |
FY 2022-23 |
FY 2021-22 |
Total Income from Operations |
1,994.27 |
1,692.66 |
2,043.52 |
1,728.56 |
Less: |
|
|
|
|
Total Expenditures |
1,273.72 |
1,125.56 |
1,322.70 |
1,161.20 |
Profit before Taxes and Exceptional Item |
720.55 |
567.10 |
720.82 |
567.36 |
Exceptional Item |
25.00 |
- |
25.00 |
- |
Profit before Taxes |
695.55 |
567.10 |
695.82 |
567.36 |
Provision for Taxes |
150.97 |
122.45 |
151.06 |
122.51 |
Profit after Taxes |
544.58 |
444.65 |
544.76 |
444.85 |
Other comprehensive income |
(0.03) |
0.53 |
0.58 |
1.35 |
Total comprehensive income |
544.55 |
445.18 |
545.34 |
446.20 |
Appropriations: |
|
|
|
|
Transfer to Special Reserve under NHB Act |
109.00 |
89.04 |
109.00 |
89.04 |
Transfer to General Reserve |
54.50 |
43.50 |
54.50 |
43.50 |
Transfer to Debenture redemption reserve |
0.00 |
0.00 |
0.00 |
0.00 |
Proposed equity dividend |
0.00 |
0.00 |
0.00 |
0.00 |
Dividend distribution tax |
0.00 |
0.00 |
0.00 |
0.00 |
Retained Profits |
381.05 |
312.64 |
381.84 |
313.66 |
Balance at the beginning of the year |
743.46 |
430.82 |
744.76 |
431.10 |
Balance at the end of the year |
1,124.51 |
743.46 |
1,126.60 |
744.76 |
Earnings per share- Basic |
13.80 |
11.26 |
13.80 |
11.27 |
Earnings per share- Diluted |
13.38 |
10.92 |
13.39 |
10.93 |
Note: Consolidated financials include financials of wholly owned subsidiary Aadhar
Sales and Services Private Limited.
7.2 GNPA and ECL Provision (including additional provision):
a) GNPA
Particulars |
As at 31st March 2023 |
As at 31st March 2022 |
GNPA on AUM (%) |
1.16% |
1.46% |
GNPA on Retail AUM (%) |
1.16% |
1.45% |
GNPA on Own Book (%) |
1.17% |
1.52% |
GNPA on Retail Own Book(%) |
1.17% |
1.51% |
b) Your Company provides for Non-Performing Assets (NPAs) using the Expected Credit
Loss Model prescribed under Ind AS 109.
c) In November 2021, the RBI issued a Circular on asset recognition clarifying that
once a loan is classified as a NPA since it is more than 90 dpd, the same will remain a
NPA till all dues on the loan have been recovered.
d) Your Company's gross loan assets are Rs. 14,037.55 crores as at 31st
March 2023 (Rs. 12,132.15 crores as at 31st March 2022). Your Company is
carrying an impairment allowance of Rs. 186.10 crores as at 31st March 2023
(Rs. 171.81 crores as at 31st March 2022). ECL provision coverage ratio on
Stage 3B (NPA Assets) is 35% as at 31st March 2023 (32% as at 31st
March 2022).
e) The Company has based on current information available, estimated various scenario
analysis and applied management overlays based on the policy approved by the Board while
arriving at the provision for impairment of financial assets which the Management believes
is adequate. As at 31st March 2023, your Company is carrying a management
overlay provision and one time restructuring additional provision of Rs. 76.31 crores.
The provision under Expected Credit Loss Model is higher than Income Recognition and
Prudential Norms by Rs. 64.96 crores.
7.3 Financial Ratios:
(a) The main financial ratios of the Company are-
Particulars |
FY 2022-23 |
FY 2021-22 |
Earning per share (EPS) |
13.80 |
11.26 |
Capital to Risk Asset Ratio (CRAR) |
42.73% |
45.41% |
Net Debt Equity Ratio (DE Ratio) |
2.77 |
2.81 |
Net Owned Fund (NOF) |
3,474.17 crore |
3,105.01 crore |
8. Resource Mobilisation:
Your Company's Resource Planning Policy has been approved by the Board. The Company has
obtained approval for borrowings vide special resolution passed by shareholders at their
Annual General Meeting held on 18th August 2022 under Sections 42, 71,
180(1)(c) read with 180(1)(a) of the Act or other applicable provisions and has authorised
the Board of Directors / Management Committee to raise or borrow any sum or sums of money
(including non-fund based facilities) by way of loan(s) in rupee currency and/or foreign
currency from various borrowing sources up to an amount of Rs. 20,000 crores (Rupees
twenty thousand crores) or up to 12 times of Net Owned Fund (NOF) of the Company whichever
is lower, as per provisions of Master Direction - Non-Banking Financial Company - Housing
Finance Company (Reserve Bank) Directions, 2021 ("RBI Master Directions") and
other applicable Directions/ Notification/ Circulars/Guidelines issued by RBI/NHB.
Your Company uses a variety of funding sources to optimise funding costs, protect
interest margins and maintain a diverse funding portfolio. Your Company continued to keep
tight control over the cost of borrowings through negotiations with lenders and thus,
raised resources at competitive rates from its lenders while ensuring proper asset
liability match. Total borrowings as on 31st March 2023 was Rs. 12,153 crores,
as compared to Rs. 10,675 crores as at 31st March 2022
The borrowings comprised of 53.82% from banks, 24.70% from National Housing Bank,
21.46% from Non-Convertible Debentures ("NCD") and 0.03% from Public
deposits as at 31st March 2023. There has been no deviation in the utilisation
of issue proceeds of secured redeemable NCD from the objects as stated in the private
placement memorandum.
Your Company endeavors to gradually reduce its reliance on the borrowings from banks
and focus on capital market instruments and other funding avenues with lower funding costs
depending upon opportunities available in the market.
Another strategy adopted by the Company to keep a balanced ALM was to enter into
strategic partnership with banks that are keen on good-quality assets and assign
long-tenor receivables to them at mutually beneficial terms.
(b) Loans from Banks:
As at 31st March 2023, your Company had relationships with 22 banks. Your
Company continued to leverage on its long term relationships with these banks and raised
additional term loans from banks to the extent of Rs. 1,790 crores during the year at
competitive rates. Total outstanding borrowing from banks as at 31st March 2023
aggregated to Rs. 6,541 crores.
(c) Refinance from National Housing Bank:
The NHB Refinance department has sanctioned Refinance facility to the Company under
various schemes for a term ranging from 1 year to 15 years repayment tenure.
During the year, your Company has availed refinance facility of Rs. 1,195 crores from
NHB. As on 31st March 2023 the outstanding balance on NHB Refinance amounts to
Rs. 3,002 crores.
9. Borrowings through other Debt Instruments and Resource Mobilisation:
(i) Secured Redeemable Non-Convertible Debentures (NCDs)
As at 31st March 2023, your Company's outstanding Secured NCDs issued under
Initial Public Offer stood at 7,07,077 NCDs aggregating to Rs. 70.71 crore, held by 3,722
NCD holders. Your Company has duly paid the principal/interest amounts on due dates for
the NCDs public issue and has timely intimated the stock exchange/ debenture trustees.
During the financial year under review, your Company raised '917 crore by way of issue
of 28,520 Senior, Secured, Rated, Redeemable, NonConvertible Debenture on private
placement basis, as per the applicable provisions of relevant circulars issued by
Securities and Exchange Board of India. The Company has completed the allotment process
within the prescribed time-limit.
As at 31st March 2023, your Company's outstanding secured NCDs under private
placement were Rs. 2,478.90 crores at face value. The necessary disclosures for the listed
NCDs as per SEBI Operational Circular no. SEBI/HO/DDHS/P/CIR/2021/613 dated 10th
August 2021 ("SEBI Circular") has been disclosed to the Stock Exchange
and are available at the website of the Company. The Company has met the shortfall of the
previous financial year as per the SEBI Regulations, however, could not raise the required
percentage of current year's borrowings through issuance of NCDs, due to unfavorable
pricing for debt market as compared to bank borrowings. The SEBI vide its circular no.
SEBI/HO/DDHS/DDHS- RACPOD1/P/CIR/2023/049 dated 31st March, 2023 has extended
the contiguous block to three years (from the present requirement of two years) reckoned
from FY 2021-22 onwards. Accordingly, the Company plans to raise the NCDs in the FY 2024
to meet the said requirement as permitted by the SEBI Circular, subject to the market
conditions.
Further, as per Securities and Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulations, 2015, as amended, ("SEBI LODR Regulations")
and RBI Master Directions on NCDs issued on private placement basis, your Company has made
timely payment of NCDs interest and principal amount on the respective due dates and there
is no delay/ default in payment/ repayment
Details of unclaimed non-convertible debentures as on 31st March 2023:
(a) The total number of non- convertible debentures which have not been claimed by the
investors after the date on which the non-convertible debentures became due for redemption
- 60 NCDs
(b) The total amount in respect of such debentures remaining unclaimed beyond the date
mentioned at point a above - Rs. 60,000
(ii) Unsecured Subordinated Non-Convertible Debentures:
As at 31st March 2023, your Company's outstanding unsecured subordinated
debts were Rs. 66 crores at face value. The debt is subordinated to present and future
senior debt of your Company. Your Company has duly paid the interest amount due on the
aforesaid NCDs on time and reported the same to Stock Exchange and Debenture Trustees
without any delay/default.
(iii) Commercial Paper:
During the financial year under review, the Company has not raised funds through
commercial papers and there were no outstanding commercial papers as on 31st
March 2023.
(iv) Direct Assignment of Mortgage Pool Receivables:
Majority of the Company's loan book portfolio qualifies under the Priority Sector
Lending (PSL) mortgage loan portfolio, as per the notification issued by RBI from time to
time. During the financial year under review, the Company has assigned/ co-lent
receivables of its mortgage loan assets aggregating to Rs. 1,262 crores, being investors'
share. Total assigned pool outstanding as at 31st March 2023 was Rs. 3,282
crores.
(v) Security Coverage for the Borrowings:
The security details of the aforesaid secured borrowings made by the Company are
mentioned at Note No. 14 and 15 in the Notes to accounts forming part of the Audited
Financial statements for the year ended 31st March 2023 .
The Company has not provided any gold loans or do not provide loans against the
security of gold or other precious metals or ornaments during the financial year 2022-23.
(vi) Credit Ratings:
The Credit ratings for various Borrowings/FD of the Company are given herein below :
Name of the Rating Agency |
Rated Facility |
Rating as on 31st March 2022 |
Rating as on 31st March 2023 |
| CARE |
Long Term Bank Facilities |
CARE AA (stable) |
CARE AA (stable) |
| CARE |
Non-Convertible Debentures |
CARE AA (stable) |
CARE AA (stable) |
| CARE |
Subordinated Debt |
CARE AA- (stable) |
CARE AA (stable) |
| CARE |
Fixed Deposits |
- |
CARE AA (stable) |
| BRICKWORKS |
Non-Convertible Debentures |
BWR AA (stable) |
BWR AA (stable) |
| BRICKWORKS |
Subordinated Debt |
BWR AA (stable) |
BWR AA (stable) |
| CRISIL |
Commercial Paper |
CRISIL A1 + |
CRISIL A1 + |
| CRISIL |
Fixed Deposits |
FAA- (stable) |
- |
| ICRA |
Long Term Bank Facilities |
- |
ICRA AA (stable) |
| ICRA |
Non-Convertible Debentures |
- |
ICRA AA (stable) |
| ICRA |
Short Term Borrowings |
ICRA A1 + |
ICRA A1 + |
| INDIA RATINGS |
Non-Convertible Debentures |
- |
IND AA (stable) |
| INDIA RATINGS |
Short Term Issuer Rating |
IND A1 + |
- |
10. Investments:
As per Investment Policy of the Company, the Executive Committee is responsible for
approving investments in line with the policy and limits as set out by the Board. The
Investment Policy is reviewed and revised in line with the market conditions and business
requirements from time to time. The decision to buy and sell up to the approved limit is
delegated by the Board to the Investment Executive Committee consisting of Company's
senior executives. The investment function is carried out primarily to support the core
business of housing finance to ensure adequate levels of liquidity.
Your Company maintains sufficient liquidity for its business needs, repayment
obligations and also to meet any contingency funding requirements. As at 31st
March 2023, your Company had unencumbered liquidity buffers of Rs. 1,525 crores in highly
liquid assets. Further, surplus funds are also generated considering the time lag between
raising of resources and its deployment. Such surplus funds are generally parked with
highly liquid mutual funds and short-term deposits with banks. During the financial year
2022-23, your Company earned Rs. 31.73 crores by way of income from mutual funds &
other operations and Rs. 101.43 crores by way of interest on deposits placed with banks
and from bonds.
11. Asset Liability Management Committee ("ALCO"):
The Asset Liability Management Committee lays down policies and quantitative limits
that involve assessment of various types of risks and shifts in assets and liabilities to
manage such risks. The Company has duly implemented the NHB's Asset Liability Management ("ALM")
Guidelines applicable to Housing Finance Companies.
The Board of Directors of the Company has approved the ALM Policy & Framework and
reviewed the same from time to time. The ALCO Committee ensures that the liquidity and
interest-rate risks are contained within the limits laid down by the NHB. As at 31st
March 2023, your Company had a strong asset-liability position with positive gaps across
all the buckets.
12. Risk Management Framework and Monitoring:
Existence of every financial institution depends on how effectively it manages the
risks. Aadhar Housing recognizes that risk management is integral to sound business
practices and hence implemented enterprise-wide risk management framework. Effective risk
management leads to informed decision-making within the organization's risk appetite. In
this regard, risk management forms part of the continuous improvement process to mitigate
risks and maximize opportunities.
Risk Management is the culture, processes and structure that are directed towards
realizing potential opportunities whilst managing adverse effects. Aadhar Housing is
committed to manage its risk in a proactive manner and adopts a structured and disciplined
approach to risk management by developing and implementing risk management program.
Aadhar Housing's risk management was deepened across all management levels and
functional areas. Risk management roles were distributed across the Board of Directors,
Audit Committee and Risk Management Committee. Chief Risk Officer is responsible for
enterprise risk and review, analyse, monitor and report to Risk Management Committee and
Board of all significant risk areas.
Aadhar Housing has the Risk appetite framework approved by the Board of Directors which
covers various types of risk the organization is exposed to and also clearly defines the
boundaries for risk acceptance. There is a clear understanding of our desired risk
appetite. As a part of the process, the framework undergoes a change depending on the
changing external/internal environment. This ensures understanding and measuring the risk
the organization is/ would be facing. Further, Aadhar Housing has well defined reporting
mechanism to report the stressed Risk Appetite Parameters and escalation & reporting
mechanism to tackle it.
The Company recognises identification of risk as a very critical function in managing
and mitigating risk. The key pillars behind risk mitigation include:
- Regular Executive Risk Management Committee
- Robust policies & standards
- Use of fraud databases, screening documents and field visits to contain potential
frauds.
- Regular monitoring of key risk indicators
- Regular monitoring & testing of risk control matrix
- Risk Containment Unit (RCU) carried out real time screening of files, keeping track
of adverse trend in various locations and guidance to field team.
Key Risk & Its Mitigation Strategies
Type of Risk |
Mitigations |
Strategies |
Credit Risk: |
|
|
| Credit risk is the potential that a borrower or counterparty will fail to
meet its obligations in accordance with agreed terms. |
There are robust policies and processes for managing credit risk, mainly
through our: |
Maintaining healthy asset quality with optimal risk reward
considerations. |
|
• Appropriate risk diversification; |
|
|
• Thorough risk assessment at the credit appraisal stage; |
|
|
• Risk-based pricing and risk mitigation; |
|
|
• Continuous risk monitoring at the individual counterparty level as
well as portfolio level; |
|
|
• Avoidance of undesirable risks to the extent possible |
|
Operational Risk
Operational risk arises from inadequate or failed internal processes,
people and systems or from external events.
It includes risk of loss due to legal risk. |
Detailed Operational Risk Management framework and processes, internal
controls, information technology, key risk indicators and fraud monitoring mechanisms are
in place to manage operational risk |
Minimising operational losses through monitoring risk continuously, quick
actions and mitigation. |
Interest & Liquidity Risk
Company defines market risk as the risk of valuation loss or reduction
in expected earnings stemming from adverse fluctuations in interest rates and credit
spreads. Liquidity risk as the risk of incurring losses due to an inability to meet
payment obligations in a timely manner when they become due. |
Aadhar Housing's framework for liquidity and interest rate risk
management is spelled out in our Asset Liability- Management policy. Further, a robust
mechanism to comprehensively track cash flow mismatches under normal as well as stressed
conditions and critical ratios has been implemented. Further, Company has
Board Approved Investment and Resource Planning Policy to limit exposure and plan funding
accordingly. |
To maintain healthy liquidity in comparison to balance sheet size of the
Company to tide over any unforeseen stress scenario. Maintaining
competitive cost of funds |
Information Security Risk
Information technology/ security risk is the risk arising on account
of inadequacies or failure of technical infrastructure or IT systems which can have an
adverse impact on the availability, integrity, accessibility and security of the data and
the IT infrastructure. |
The Company has Board approved Information Security Policy & Cyber |
Facilitating growth via secure digital initiatives. |
|
Security Policy to manage the information security risk. |
- Sustaining operational effectiveness and efficiency. |
|
|
- Adapting and updating Cyber Defence framework to counter new-age
threats |
|
|
- Continuous information to raise security awareness for employees and
customers |
13. Internal Audit Control & Reporting:
The Company's Internal Audit department, is led by the Head - Internal Audit and
supported by team of qualified chartered accountants, experienced internal auditors and
functional experts. The Risk Based Internal Audit Policy and Risk Based Internal Audit
Plan are approved annually by Audit Committee. All the significant findings of internal
audit and action taken thereon are discussed in the Audit Committee of the Board. Periodic
branch audits, continuous concurrent audits and risk based process audits, information
systems and information security audits are part of internal audit annual plan. Company's
internal financial controls are reviewed for effectiveness and efficiency by the internal
audit.
14. Insurance Cover facilities:
Your Company has insured its various properties and facilities against the risk of
fire, theft and other perils, etc. and has also obtained/renewed Directors' and Officers'
Liability Insurance Policy, which covers the Company's Directors and Officers (employees
in managerial or supervisory position) against the risk of financial loss including the
expenses pertaining to defense cost and legal representation expenses arising in the
normal course of business.
Moreover, your Company has obtained the Fire & other Perils Policy for its assets,
the Protection against money in safe/ transit policy to cover 'money in safe and till
counter and money in transit' for the Company's branches and various offices.
Your Company also has in place a Mediclaim policy for its employees and their dependent
family members to cover against hospitalization including for COVID - 19 treatment, group
term life and group personal accident policies, which provides compensation in case of
accidents and hospitalization due to illness.
Your Company also has taken an insurance policy covering various cyber risks including
data protection.
15. Fixed Deposits ("FD") program:
Pursuant to the instructions issued by NHB as a condition for approval of the change in
control & management of the Company, the Company has stopped accepting any fresh or
renewal of deposits from public from May 2019. Your Company's FD programme is rated, CARE
AA (stable) by CARE Ratings Ltd. As on 31st March 2023, your Company's
outstanding FDs including accrued interest (excluding unclaimed matured deposit) amounted
to Rs. 3.16 crore. The Company is regular in payment of interest and maturity amount dues
to depositors without any delay or default. The Company has maintained SLR security
deposits with Government Bonds/Fixed Deposits more than the stipulated requirements by the
Regulators for repayment of these deposits as and when required by the depositors.
As per para 44 of RBI Master Directions, the details of Company's unclaimed matured
public deposit accounts of depositors, after the date on which the deposit became due for
repayment and the total amount due under such unclaimed/ unpaid accounts as on 31st
March 2023 are mentioned below :
a. Total 381 number of accounts of fixed deposits of the Company which have not been
claimed by the depositors after the date on which the deposit became due for repayment.
b. Total amount of Rs. 78,35,024 is due, under such accounts remaining unclaimed or
unpaid beyond the date referred to in clause (a) as aforesaid.
For the unclaimed deposits as mentioned above, the Company has taken the following
actions:-
i) Postal letters dispatched to FD holders, to intimate that, deposits are matured and
asking them to submit the FD certificate for repayment of the same through NEFT/RTGS mode.
ii) The Company also contacted the depositors or nominee or sourcing agent through our
local branches, requesting them to submit the FD certificates, duly discharged and get the
maturity payment.
The Company also sends SMS communications to depositors, prior to 14 days of maturity
and post maturity till the deposits are claimed for payment by the FD holder.
During the financial year under review, matured fixed deposit which was unclaimed for a
period of more than seven years amounting to Rs. 20,000 has been transferred to the
Investor Education and Protection Fund as per the provisions of the Act.
Also pursuant to para- 35 of RBI Master Directions, during the FY 2022-23, the Company
had duly submitted with NHB the Statement in Lieu of Advertisement (SILA) on 19th August
2022 which was approved by the Board. Further, since the Company is not accepting any
fresh deposits, there was no newspaper publication issued by the Company.
16. Unclaimed/ Unpaid Dividend & Deposits:
During the financial year under review, your Company has transferred unclaimed final
dividend of Rs. 64,890/- for the Financial Year 2014-15 on 24th August, 2022
and transferred on 29th November, 2022 fixed deposit of Rs. 20,000/- which was
unclaimed after the expiry of seven years from the date of declaration/date of maturity to
the Investor Education and Protection Fund ("IEPF"), established by the
Central Government. During the financial year under review, no shares were transferred by
the Company to IEPF. Your Company has duly complied with all applicable provisions of Act
and the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and
Refund) Rules, 2016 ("IEPF Rules") regarding Unclaimed/ Unpaid Dividend &
Deposits.
17. Reserve Bank of India ("RBI") Regulations/ Directions:
The Company is regulated by the RBI Master Directions, issued by Reserve Bank of India
vide circular no. RBI/2020- 21/73DOR.FIN.HFC.CC.No.120 /03.10.136/2020-21 dated 17th
February 2021 as amended from time to time and the same are duly complied with by the
Company.
Further, RBI has issued Scale Based Regulation (SBR): A Revised Regulatory Framework
for NBFCs vide circular no RBI/2021 -22/112 DOR.CRE.REC.No.60/03.10.001/2021- 22 dated 22nd
October 2021. As per the new regulatory structure your Company is classified as NBFC-
Middle layer (NBFC-ML) and consequent regulatory framework is applicable to the Company
with effect from 1st October 2022.
As per RBI circular No.- RBI/2022-23/24 Ref.No.DoS. CO.PPG./ SEC.01/11.01.005/2022-23
dated 11th April 2022, NBFCs shall put in place a Board approved policy on
compliance function on or before 1st April 2023 clearly spelling out its
compliance philosophy, expectations on compliance culture, structure and role of the
compliance function, the role of Chief Compliance Officer ("CCO"),
processes for identifying, assessing, monitoring, managing, and reporting on compliance
risk and the appointment of CCO should be made by 1st October 2023.
Accordingly, the compliance policy of the Company has been approved by the Board on 16th
March 2023 and shall be reviewed periodically. The Company is in the process of finalizing
the appointment of Chief Compliance Officer and the same shall be completed within the
regulatory timeline.
Your Company has adopted the policy on One-time restructuring and extended the benefits
to its customers in accordance with RBI's Resolution Framework 2.0.
Your Company has also adopted a Co- Lending Policy as per the Reserve Bank of India
circular no. RBI/2020-21/63 FIDD. CO.Plan.BC.No.8/04.09.01/2020-21 dated 5th
November 2020 to define framework for entering into Co-Lending Model arrangements with
banks/financial institutions as partners to improve the reach to customers. The policy has
been reviewed by the Board at its Meeting held on 12th August 2022.
All the Directors meet the fit and proper criteria stipulated under the RBI Master
Direction, as amended from time to time.
There have been no delays in filing the necessary disclosures, returns and necessary
forms with respect to Foreign Direct Investment for the financial year under review. No
fines/penalties have been levied by the RBI during the year 2022-23.
18. National Housing Bank Regulations:
Your Company is having a valid NHB License for carrying on business of Housing Finance
Company, bearing revised registration certificate No. 04.0168.18, dated 5th
April 2018 (being latest registration post change in name after merger was completed) and
further the Company has complied with the provisions of NHB Directions/ circulars, as
applicable. The circulars and the notifications issued by NHB are also placed before the
Audit Committee/ Board of Directors at regular intervals to update the Committee/ Board
members on the compliance of the same. Various inspection observations of NHB were
satisfactorily complied and resolved and reported to the Board.
As per the Master Circular- Returns to be submitted by Housing Finance Companies (HFCs)
and various Circulars/ Guidelines/ Notifications issued by NHB, the Company has duly
complied and submitted all the required monthly/ quarterly/ half yearly NHB reports/
returns, intimation of opening/ closing (shifting/relocation) of branches within
prescribed time-limit during the FY 2022-23.
The Company has also registered on the Centralised Reporting and Management Information
Systems (CRaMIS) portal of NHB and started filing the online returns on CRaMIS from
January 2023.
The Company being a financial institution is also registered for taking SARFAESI Action
under Securitisation and Reconstruction of Financial Assets and Enforcement of Security
Interest Act, 2002 ("SARFAESI Act") and the same has been notified by
NHB.
19. Capital Adequacy and Transfer to Special Reserve
As required under National Housing Bank/RBI Master Directions issued, the Company is
required to maintain a minimum capital adequacy of 15% on a stand-alone basis. The
following table sets out Company's Capital Adequacy Ratios as at 31st March
2023, 2022 and 2021:
|
As on March 31 |
Particulars |
2023 |
2022 |
2021 |
Capital
Adequacy
Ratio |
42.73% |
45.41% |
44.08% |
The Capital Adequacy Ratio (CAR) of your Company was at 42.73% as on 31st
March 2023, as compared to the regulatory requirement of 15%. In addition, the National
Housing Bank Act, 1987 also requires that your Company transfers minimum 20% of its annual
profits to a Special Reserve fund, which the Company has duly complied.
20. Principal Business Criteria for HFC's
"Housing Finance Company" shall mean a Company incorporated under the
Companies Act, 2013 that fulfils the following conditions:-
a. It is an NBFC whose financial assets, in the business of providing finance for
housing, constitute at least 60% of its total assets (netted off by intangible assets).
b. Out of the total assets (netted off by intangible assets), not less than 50% should
be by way of housing financing for individuals.
RBI vide its circular number RBI/2020-21/73/DOR.FIN. HFC.CC.No.120/03.10.136/2020-21
dated February 17, 2021 defined the principal business criteria for HFC's. The Company has
complied and is meeting the aforesaid principal business criteria for HFC.
Particulars |
As on March 31,2023 (Rs. In Lakhs) |
Total Assets |
16,61,315 |
Less : Intangible assets |
20,084 |
Net total assets |
16,41,231 |
Housing Finance |
10,47,535 |
Housing Finance for Individuals |
10,47,535 |
Percentage of housing finance to total assets (netted off intangible
assets) |
63.83% |
Percentage of individual housing finance to total assets (netted off
intangible assets) |
63.83% |
Percentage of individual housing finance to housing finance |
100.00% |
21. Pradhan Mantri Awas Yojana (PMAY) Scheme of NHB:
The Government of India took a major step under 'Housing for All scheme' to ensure that
people can own a house within their financial capability. Pradhan Mantri Awas Yojana
(PMAY) Urban was launched with a broad vision of providing 2 crores dwelling units to EWS,
LIG & MIG beneficiaries. The scheme was to be implemented in 22,115 statutory
towns/centres as on March, 2021. Under this scheme, Credit Linked Subsidy of Rs. 2.67
Lakhs is to be given to EWS/ LIG beneficiaries for a loan amount of Rs. 6 Lakhs &
above and Rs. 2.35 to Rs. 2.30 lakhs to MIG I & MIG II beneficiaries for purchase/
construction of houses of specified carpet area.
This PMAY scheme was implemented through 4 verticals:-
(a) Credit Linked Subsidy Schemes (CLSS) to beneficiaries through Banks/HFCs for loans
availed,
(b) Beneficiary lead construction,
(c) Affordable Housing in partnership and
(d) In Situ Slum development.
The PMAY Rural scheme aims to construct 2.95 crore houses in rural areas. These schemes
have created huge opportunities for the Company to provide housing loans to these
beneficiaries.
PMAY CLSS Subsidy claim and Disbursement Status as on 31st March 2023
Your Company has also executed MOU for availing benefits under various Schemes of PMAY/
CLSS schemes and Rural Subsidy Scheme with National Housing Bank. During the year 2022-23,
the Company has submitted from time to time the claim for subsidy to NHB under the PMAY
scheme.
(i) The total PMAY claim received in FY 2022-23 was Rs. 806.65 crores for 40,176 loans.
Total PMAY claim received till 31st March 2023 was Rs. 1,777.09 crores on
85,339 loans
(ii) The subsidies received during the year 2022-23 were credited to customer accounts
and the EMI was accordingly modified to that extent. In certain other cases, the subsidy
was refunded. The subsidy amount refunded was Rs. 65.16 crores on 3,468 accounts in FY 23.
Since inception till 31st March 2023, the subsidy amount refunded was Rs.
115.61 crores on 6,131 loan accounts.
Your Company has received a notification from NHB (NHB(ND)/GS/PMAY-CLSS/OUT/00201/2022)
on 19th
January 2022, stating PMAY CLSS EWS & LIG scheme is operational only till 31st
March 2022. Accordingly, no subsidy has been received by the Company during FY 2022-23.
22. Insurance Regulatory and Development Authority of India (IRDAI):
The Company is registered with IRDAI as Corporate Agent - Composite bearing
registration number CA0012 with renewed validity period -1st April 2022 to 31st
March 2025. The Company has Corporate Agency agreement executed with the insurer :
Pramerica Life Insurance Limited, Navi General Insurance Limited, Cholamandalam MS General
Insurance Company Limited and Bajaj Allianz General Insurance Company Limited.
During the FY 2022-23, the Company has complied with Insurance Regulatory and
Development Authority of India (Registration of Corporate Agents) Regulations, 2015 and
has duly filed/ submitted various returns, reports and intimations within the prescribed
time-limit. No penalties/ fine was levied by the regulator during the year 2022-23.
23. Trade Marks Registration for the Company:
Aadhar Housing owns a combination of trademarks to establish and protect our brands,
logos, and marketing designs. The Company has 12 trademarks registered with the Registrar
of Trademarks under the Trademarks Act. The Company is in the process of registering the
new Logo of the Company for Green Housing.
24. Fair Practice Code, KYC norms, Anti Money
Laundering standards and Policy for prevention, prohibition and Redressal of Sexual
Harassment:
The Company continued to ensure that Fair Practice Code, KYC Norms and Anti Money
Laundering (AML) Standards as per the guidelines issued by the NHB/RBI from time to time
are invariably adhered to and duly complied by the Company. The Company has put in place
Board approved robust Know Your Customer (KYC) & Anti Money Laundering (AML) Measures
Policy ("KYC & AML Policy) for compliance by the branches and the same is
reviewed by the Board periodically. The Internal Auditors conducted audit of the branches
to ensure adherence of these AML standards during the financial year under review. The
quarterly reporting under KYC and AML Policy has been submitted to NHB within the due
dates for intimation.
The Company has zero tolerance for sexual harassment at workplace and has adopted a
Policy on prevention, prohibition, and redressal ofsexual harassment at workplace in line
with the provisions of the Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013 and the Rules thereunder ("the POSH
Act"). The Company has also constituted an Internal Committee (IC) in compliance
with Section 4 of the POSH Act.
During the financial year under review, the details of complaints received on sexual
harassment are given below:
a. number of complaints filed during the financial year - 1
b. number of complaints disposed of during the financial year- 1
c. number of complaints pending as on end of the financial year.- Nil
The complaint received on sexual harassment has been investigated and addressed with
appropriate action as per the Policy.
25. Internal Financial Control Measures/System:
The Company's internal control system is designed to ensure operational efficiency,
protection and conservation of resources, accuracy and promptness in financial reporting
and compliance with laws and regulations. The internal control system is supported by an
Internal Audit department which is responsible for independently evaluating the adequacy
and effectiveness of all internal controls, risk management, governance systems and
processes and is manned by appropriately qualified personnel. The Internal Audit
department during the course of audit also ascertains the extent of adherence to
regulatory guidelines, legal requirements and operational processes and provides timely
feedback to the Management for corrective action. Internal Audit reports are discussed
with the management and all significant internal audit findings and action taken thereon
are discussed in the Audit Committee of the Board. Audit Committee of the Board reviews
the performance of the internal audit and the adequacy and effectiveness of the internal
control systems and compliance with regulatory guidelines.
26. Auditors
Statutory Auditors, their Report and Notes to Financial Statements
M/s. Walker Chandiok & Co LLP (Firm Registration No. 001076N/N500013) has been
appointed as the Statutory Auditors of the Company to hold the office for a period of
three consecutive years i.e. w.e.f. 21st January 2022 till the conclusion of
Annual General Meeting to be held for the financial year 2023-24 pursuant to RBI Circular
No. RBI/2021- 22/25 Ref.No.DoS.CO.ARG/SEC.01/08.91.001/2021 -
22 dated 27th April 2021 prescribing guidelines for Appointment of Statutory
Central Auditors (SCAs)/ Statutory Auditors (SAs) of Commercial Banks (excluding RRBs),
UCBs and NBFCs (including HFCs).
The Statutory Auditor's Report does not contain any qualifications, reservations,
adverse remarks or disclaimer. The Statutory Auditors have not reported any incident of
fraud to the Audit Committee or the Board of Directors under Section 143(12) of the Act
during the financial year under review.
Secretarial Audit and Secretarial Compliance Report:
The Board of Directors of the Company, had appointed M/s Roy Jacob & Co., Company
Secretaries, Mumbai, (Membership Number - FCS 9017 and Certificate of Practice Number
8220) as Secretarial Auditor, pursuant to section 204(1) of Act. The Secretarial audit
report in Form MR- 3 for financial year 2022-23 forms part of this Board's report.
There are no qualifications or adverse remarks in the Secretarial Audit Report for the
financial year 2022-23. Pursuant to Regulation 24A (2) of the SEBI LODR Regulations, the
Annual Secretarial Compliance Report for the financial year under review has been
submitted to the respective Stock Exchange and uploaded on the website of the Company at
https://aadharhousing.com/disclosures-
under-regulation-62-of-the-sebi-lodr-regulation-2015-
pdf/annual-secretarial-compliance-report.
Cost records and Auditors
The provisions of Cost Records and Cost Audit as prescribed under Section 148 of the
Act are not applicable to the Company.
Corporate Governance report and Compliance Certificate
The Corporate Governance report as stipulated under Schedule V Part C of the SEBI LODR
Regulations, forms part of this Annual Report.
The requisite certificate as required under Schedule V Part E of the SEBI LODR
Regulations, confirming compliance with the requirements of Corporate Governance received
from M/s Roy Jacob & Co., Company Secretaries, Mumbai is attached as Annexure 1 to
the Board's report.
In accordance with Part D of Schedule V of the SEBI LODR Regulations, declaration from
Managing Director & CEO of the Company has been received confirming that all the
Directors, Key Managerial Personnel and the Senior Managerial Personnel of the Company
have complied to the Code of Conduct for the financial year ended 31st March
2023 and is attached as Annexure 2 to this Report. The said code is hosted on the
website of the Company and can be accessed at web link: https://aadharhousing.
com/disclosures-under-regulation-62-of-the-sebi-lodr- regulation-201
5-pdf/code-of-conduct-of-the-board-of- directors-and-senior-management-personnel
27. Reporting on various Corporate Governance Regulations & Compliances under the
Act:
i) Annual Return as per section 134(3)(a):
During the year 2022-23, Annual General Meeting for the financial year 2021-22 was duly
held on 18th August 2022 and Annual Return was filed within prescribed time
limit.
As provided under section 92(3) and 134(3)(a) of the Act, Annual Returns of the Company
are placed on the website of the Company at https://aadharhousing.
com/disclosures-under-regulation-62-of-the-sebi- lodr-regulation-2015-pdf/annual-return.
ii) Number of meetings of the Board & Committees under section 134(3)(b):
During the year under review, the Board of Directors met periodically/as and when
required, to deliberate various issues, policy matters and take suitable decisions etc.
The details of Board of Directors and their Meetings and also various other Board level
Committee Meetings are furnished separately under the Corporate Governance Report, which
forms part of this Annual report.
iii) Directors' Responsibility Statement under section 134(3)(c):
As required by section 134(3)(c) read along with section 134(5) of the Act, the Board
of Directors state that:
a) in the preparation of the Annual Financial Statements for the financial year ended
31st March 2023, the applicable Accounting Standards had been followed and
there were no material departures from the same;
b) the Directors had 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 as at 31st March 2023 and of
the profit of the Company for that period;
c) the Directors had taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of this Act for safeguarding the
assets of the Company and for preventing and detecting fraud and other irregularities;
d) the Directors had prepared the Annual Financial Statements on a going concern basis;
e) the Directors, had laid down internal financial controls to be followed by the
Company and that such internal financial controls are adequate and were operating
effectively.
f) t he Directors had devised proper systems to ensure compliance with the provisions
of all applicable laws and that such systems were adequate and operating effectively.
iv) Details of Fraud Reporting to NHB & as per provisions of section 134 (3) (ca)
read with section 143 (12) of the Act:
a) There were no material fraud cases amounting to Rs. 1 crore or above, detected and
required to be reported during the FY 2022-23, as per the provisions of section 134 (3)
(ca) read with section 143 (12) of the Companies Act, 2013 to the regulatory authorities.
b) Frauds of value involved for Rs. 1 Lakh & above and frauds committed by
unscrupulous borrowers, detected, during the FY 2022-23- the Company has duly reported 27
fraud cases as per Circular(s)/ Guidelines, issued by National Housing Bank/ Reserve Bank
of India.
v) In terms of section 134(3)(d) of the Act, your Board states that, the
Independent Directors, have given a declaration under section 149(7) of the Act and
Regulation 25(8) of the SEBI LODR Regulations confirming that they continue to meet the
criteria of independence as prescribed under Section 149(6) of the Act and Regulation
16(1)(b) of the SEBI LODR Regulations.
vi) With regard to section 134(3)(e) of the Act, the Company has duly followed the
Nomination, Remuneration & Evaluation Policy (NRE Policy), which, inter alia, lays
down the approach to diversity of the Board, criteria for identifying the persons who are
qualified to be appointed as Directors, Key Managerial Personnel (KMP) & Top
Managerial Personnel of the Company, along with the criteria for determination of
remuneration thereof and evaluation of Board of Directors/Committees (including
Independent Directors) and KMPs/Top managerial personnel of the Company and includes other
matters, as prescribed under the provisions of Section 178 of the Act. Further pursuant to
provisions of RBI Master Directions, the Company has obtained Fit & Proper
declarations and Deed of Covenants and various other declarations duly signed by all the
Directors of the Company.
The aforesaid policy is available on the website of the Company, i.e.
https://aadharhousing.com/
vii) I n terms of section 134(3)(g) of the Act, Company has not made any Investment
through two or more layers of Investment Companies, pursuant to provisions of section
186(1) of the Act. Further, the Company being Housing Finance Company, all loans are in
the ordinary course of business and details of the same along with the investment made by
the Company are disclosed in Financial Statements and Notes of Accounts, thereto, which
forms part of this Annual Report.
viii) Particulars of transactions with related parties under section 134(3)(h) and
section 188:
The Transactions with related parties are entered as per the Related Party Transaction
Policy of the Company, pursuant to provisions of section 188 of the Act, read with the
rules made thereunder, after taking necessary approval of Shareholders & Board of
Directors.
A quarterly update is also given to the Audit committee and the Board of Directors on
the Related Party Transactions ("RPTs") undertaken by the Company for
their review and consideration and disclosures of RPTs is also submitted to BSE Ltd. on a
half-yearly basis and published on the Company's website at
https://aadharhousing.com/disclosures- under-regulation-62-of-the-sebi-lodr-regulation-
2015-pdf/financial-results.
Apart from payment of sitting fees and commission to Independent Directors, there is no
pecuniary relationship or transactions of the Independent/ Non-Executive Directors vis a
vis the Company. The details with respect to the related party transactions are mentioned
in the notes to the audited financial statements for the financial year ended 31st
March 2023.
There are no transactions to be reported as per Section 188 of the Act read with Rule
15 of Companies (Meetings of Board and its Powers) Rules, 2014 as amended from time to
time and hence the disclosure of material related party transaction as required in the
prescribed Form AOC - 2 is not applicable.
During the financial year under review, the Company has not given any loans and
advances in the nature of loans to its subsidiaries or associate(s) or to firms/companies
in which Directors are interested. Accordingly, the disclosure of particulars of loans/
advances, etc., as required to be furnished in the Annual Accounts of the Company pursuant
to Regulations 53 (f) read with paragraph A of Schedule V of the SEBI LODR Regulations is
not applicable to the Company. The Audit Committee on 3rd May 2023 has approved
the omnibus transaction limits for RPTs with related parties and Directors for the
financial year 2023-2024 as per the note/limits circulated to the Committee with
clarifications.
Pursuant to provisions of RBI Master Directions, a copy of Related Party Transaction
Policy of the Company, duly approved by the Board, is enclosed as Annexure 3 to
this report. It is also available on the website of the Company at link provided below:
https://aadharhousing.com/disclosures-under-regulation-62-of-the-sebi-lodr-regulation-2015-pdf/policy-on-dealing-with-related-party-transactions
ix) Meetings of the Board and its Committees:
Board
The Board of Directors of your Company meet at regular intervals to discuss and decide
on the Company's performance and strategies. During the financial year under review, the
Board met 8 (eight) times on 2nd May 2022, 16th May 2022, 12th
August 2022, 13th October 2022, 10th November 2022, 3rd
January 2023, 20th January 2023 and on 8th February 2023.
Further details on the Board, its Meetings, composition and attendance are provided in
the Corporate Governance Report, which forms part of this Annual Report.
Your Company has the following 10 (ten) Board- level Committees, which have been
established in compliance with the requirements of the business and relevant provisions of
applicable laws and statutes:
• Audit Committee
• Nomination and Remuneration Committee
• Corporate Social Responsibility Committee
• Stakeholders' Relationship Committee
• Risk Management Committee
• IT Strategy Committee
• Asset Liability Management Committee
• Investment Committee
• Management Committee
• IPO committee
More information on all of the above Committees including details of its Meetings,
composition and attendance are provided in the Corporate Governance Report, which forms
part of this Annual Report.
x) Transfer of profits to Reserves:-
In terms of section 134(3)(j) of the Act, Company has transferred Rs. 54.50 crores to
General Reserve and a sum of Rs. 109.00 crores to the Special Reserves under Section 29C
of National Housing Bank Act, 1987 and Section 36(1)(viii) of the Income Tax Act, 1961, in
addition to other provisions created during the financial year under review as per the
audited financials submitted to the Board.
xi) In order to conserve the resources for better growth opportunity, there was no
dividend recommended or declared during the financial year under review, which is in line
with the Dividend Distribution Policy of the Company. The policy is available on your
Company's website at https://aadharhousing.com/
investor-relations/sebi-regulations-disclosures
xii) Material changes and commitments, if any, affecting the financial position of the
Company which has occurred between the end of the financial year of the Company to which
the financial statements relate and the date of the report, in terms of Section 134(3) (l)
of the Act: - There are no material changes and commitments affecting the financial
position of the Company which have occurred between the end of the financial year of the
Company to which the financial statements relate and the date of the report.
xiii) Statement containing salient features of the financial statements of subsidiaries
:-
A report on the performance and financial position of the Company's Subsidiary as per
Section 129(3) of the Act read with the Companies (Accounts) Rules, 2014, in the
prescribed form AOC-1 is attached as Annexure 4 to the Board's Report.
xiv) Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and
Outgo in terms of Section 134(3)(m) of the Act read with Rule 8 of Companies (Accounts)
Rules, 2014:
? Conservation of Energy
Your Company is not engaged in any manufacturing activity and thus its operations are
not energy intensive. However, the Company always takes adequate measures to ensure
optimum utilization and maximum possible saving of energy. The Company has also
implemented process to install energy efficient devices in the branches such as ACs, LED
Light, VRF etc. which runs on very nominal energy with high impact. The initiatives taken
by the Company for green housing projects are mentioned at point 3 in this Board's report.
? Technology Upgradation
The latest Technology up-gradation measures adopted by the Company, had helped to
efficiently manage inter-connectivity and system based loan processing and accounting
facilities at various levels of the organisation and improve efficiency by deploying
lending and securitisation platform developed by M/s Tata Consultancy Service Ltd. This
platform offers integrated loan life-cycle management capabilities covering CRM, Digital
On- boarding, Loan Origination, Loan Management (Core Lending Solution), General Ledger,
GST Integration, Collection and Insight and Information (Reporting) modules. The Company
has implemented Customer Service mobile application in order to improve customer
satisfaction and offer service on mobile.
The foreign exchange earnings and outgo etc. and other provisions of reporting as per
the Act are given below as applicable to the Company during the year under review.
Particulars |
As at 31st March 2023 |
As at 31st March 2022 |
|
Amount (Rs in lakhs) |
Amount (Rs in lakhs) |
| Foreign Exchange earnings |
Nil |
Nil |
| Foreign Exchange outgo |
263 |
3 |
Total |
263 |
3 |
xv) Corporate Social Responsibility under Section - 134(3)(o):
The Corporate Social Responsibility ("CSR"), under section 135(1) of
the Act is applicable to the Company during the financial year under review. Your Company
has in place, Corporate Social Responsibility Policy, as per the provisions of the
Companies (Corporate Social Responsibility Policy) Rules, 2014 ("CSR Rules"),
which lays down the guidelines and mechanism for undertaking socially useful projects for
welfare and sustainable development of the community at large. According to the provisions
of the Act, the Corporate Social Responsibility Committee was formed by the Company. The
annual report on CSR activities is annexed separately to this report. The total amount of
CSR contribution and payment details are given in Annexure 5 to this Board's
Report. The Company has duly transferred the unspent amount relating to ongoing projects
to a special account called the Unspent Corporate Social Responsibility Account 2023, in
accordance with subsection (6) of the CSR Rules within 30 days from end of the financial
year 2022-23. The amount shall be spent by the Company in pursuance of its obligation
towards the Corporate Social Responsibility Policy within a period of three financial
years from the date of such transfer.
The CSR Policy is available on the website of the Company, i.e.
https://aadharhousing.com/customer- relations/ahfl-policies-codes.
xvi) Formal Annual Evaluation of the Board, its Committees and of individual directors
under section 134(3)(p) and rule 8(4) of the Companies (Accounts) Rules, 2014:
Pursuant to the provisions of the Act and its Rules, an annual evaluation of the
performance of the Board, its Committees and of individual Directors, were carried out
during the year. The details of evaluation process as carried out and the evaluation
criteria have been explained in the Corporate Governance Section, forming part of this
Annual Report. Also the Nomination and Remuneration Committee has evaluated the Directors/
KMPs at the time of their appointment.
xvii) Statement regarding opinion of the Board with regard to integrity, expertise and
experience (including the proficiency) of the independent directors appointed during the
year, in terms of rule 8 (5) (iii a) of Companies (Accounts) Rules, 2014 as amended :-
The Independent Directors are selected as per the applicable provisions of Act, read
with RBI Master Directions based upon the qualification, expertise, track record,
integrity and other "fit and proper" criteria and the Company obtains the
necessary information and declaration from the Directors. All the Independent Directors of
the Company have strong academic background and having long stint experience with renowned
Government and private organizations/corporates. The integrity/ expertise of the Directors
have been evaluated at the time of appointment and every year by the Board and NRC at
their respective meetings.
xviii) Secretarial Standards of Institute of Company Secretaries of India
Your Company is in compliance with the Secretarial Standards specified by the Institute
of Company Secretaries of India ("ICSI") on Meetings of the Board of
Directors (SS-1) and General Meetings (SS-2).
xix) Vigil Mechanism / Whistle Blower Policy:
I n terms of section 177(9) of the Act and Rule 7 of the Companies (Meetings of Board
and its Powers) Rules, 2014, the Board of Directors has put in place a Vigil Mechanism and
adopted a Whistle Blower Policy to provide for adequate safeguards against victimization
of employees and directors who may avail of the vigil mechanism/ whistle blower policy, by
directly sending mail to the Chairperson of the Audit Committee. The Company affirms that
no person was denied access to the Audit Committee.
These provisions are already circulated to the employees through the intra-net and the
same is also available at the website of the Company. Hence, the Company has complied with
the provisions of the Act and RBI/NHB Directions.
During the financial year under review, the Whistle Blower Policy has been reviewed by
the Board of Directors at their meeting held on 12th August 2022.
xx) Investments, loans and guarantees given by the Company:
Your Board further states that during the financial year under review, your Company did
not make any major investment in other companies, bodies corporate, provided loans and
given guarantees, etc. above the limits prescribed under sections 185, 186 and 187 of the
Act, read with Companies (Meetings of Board and its Powers) Rules, 2014, as applicable to
the Company. Details of Investments made, loans and guarantees given by the Company are
disclosed in the Financial Statements for financial year 2022-23.
xxi) Name of the Companies, which have become or ceased to become Subsidiary, Joint
Venture or Associate Company, during the year under review: NIL
xxii) Details of significant and material order, passed by the Regulators or Court or
Tribunals, impacting the going concern status and Company's operations in future : NIL
xxiii) Training & Development :
At Aadhar Housing, the employees are considered as the asset which gives our Company a
competitive edge in the markets in which we operate. Through various initiatives and
programs, the focus has always been to provide the employees - encouragement, motivation,
stimulus and make them feel as an integral part of the Company's vision and mission.
In addition to maintaining cordial relationships with the employees, continuous efforts
are being made to impart the relevant knowledge, quality skills and most importantly an
attitude to grow and maintain sustainable business.
During financial year 2022-23, the Company has conducted training on Functional skills,
Behavioral skills, Health & Well-Being, and Compliance related aspects of the
business. Total Training Man-days is 9,026 and 95% of total employees were covered.
A total of 52 types of programmes were conducted and 8074 attendees (including
employees of subsidiary and employees on contract basis) were trained using
Virtual/Classroom Mode.
PRAHAAR - Structured learning intervention for 50 Branch Managers, conducted to enhance
the effectiveness of Branch Managers. Prahaar revolves around 3M's that is Managing Self,
Managing People, and Managing Business.
Additionally, employees also completed Self-paced e-learning courses and functional
modules on our Aadhar Gurukul platform.
xxiv) Human Resources:
Human Resources are cornerstone of Company's growth and progress. The team of Aadhar
Housing has grown steadily from 2769 employees last year to 3663 employees during the
financial year under review.
Your Board would like to make a special mention that the Company has been certified as
a 'Great Place to Work' for the Fourth time in a row. Further, the
Company was awarded as one of the India's Top 40 best companies for Health and Wellness
in the survey by Great Places to Work.
Aadhar Housing also undertook a lot of initiatives to reach out to the needy segment.
Your Board would like to bring to your notice that the Company has pledged to contribute
to the socio-economic development of the society through its philanthropic approach. All
the initiatives that were steered were a combination of corporate social responsibility
and employee volunteering. With employees extending support to the elders and the orphans,
the Company undertook activities towards promoting preventive healthcare and sanitation
facilities, providing employment through enhancing vocational skills and prevention of
hunger by providing food.
xxv) Details of ESAR Scheme & ESOP Scheme implemented by the Company: a) Employees
Stock Appreciation Rights (ESAR) Scheme:
The ESAR scheme was approved in March, 2018 by the previous promoter group and the
first grant was approved by the Board w.e.f from 1st April 2018 amounting to
2,77,295.2 number of ESARs.
On 16th January 2021, the shareholders have approved the issue of bonus
shares in the ratio of 9:1 equity shares, effect of same has been given to outstanding
ESAR's as on 16th January 2021.
This ESAR scheme has been withdrawn with the approval of the Board effective from
March, 2020 and it has been replaced with the new ESOP Plan, 2020. Accordingly pending
grants of ESAR's have been cancelled.
b) Employee Stock Option Plan - 2020 ("ESOP Plan 2020"):
In order to reward performance and elicit long term commitment of the employees towards
the growth of the Company, the new ESOP Plan 2020 was introduced with the approval of
Board & Shareholders. Under the ESOP Plan 2020 duly approved by the Board, as on 31st
March 2023, total 1,01,98,847 number of ESOP's were granted and outstanding to the
identified & eligible existing employees including the Whole Time/ Executive/ Managing
Director(s) of the Company.
Based on the recommendations and approval of the Nomination and Remuneration Committee
and approval of the Board of Directors, Shareholders at their Extra-ordinary General
Meeting held on 23rd March 2022 approved the amendments to ESOP Plan 2020
pertaining to various clauses regarding the vesting period and alignment with Securities
and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations,
2021. At their Extra-Ordinary General Meeting held on 26th May 2022,
Shareholders approved further amendments to ESOP Plan 2020 aimed at relaxation of vesting
conditions to eligible employees as recommended by the Nomination and Remuneration
Committee and approved by the Board of Directors.
Details required as per Rule 12(9) of Companies (Share Capital and Debentures) Rules,
2014:
Details of ESOP's & ESAR's |
FY22-23 |
|
ESOP |
ESAR |
| (a) options granted; |
- |
- |
| (b) options vested; |
- |
- |
| (c) options exercised; |
- |
- |
| (d) the total number of shares arising as a result of exercise of
options; |
- |
- |
| (e) options lapsed; |
9,51,586 |
- |
| (f) the exercise price; |
90.805 |
29.17 |
| (g) variation in terms of options; |
- |
- |
| (h) money realised by exercise of options; |
- |
- |
| (i) total number of options in force; |
1,01,98,847 |
19,69,286.25 |
| (j) employee wise details of options granted to: |
- |
- |
| (i) Key Managerial Personnel; |
- |
- |
(ii) any other employee who receives a grant of options in any one
year of options amounting to five percent or more of total options granted during that
year; |
- |
- |
(iii) identified employees who were granted options, 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. |
- |
- |
xxvi) Buy-back of the Company's own shares
During the financial year under review, the Company did not make any buy back of any of
its shares or share equivalent/stock options during the year under review, hence the
provisions of section 68 of the Act, are not applicable.
xxvii) Particulars of employees in receipt of remuneration above the limits and other
applicable provisions of the Act
Pursuant to the various provisions of section 197 of the Act and Rule 5 of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the
particulars of employees, are maintained at the registered office, and shall be made
available to any shareholder on a specific request made by him in writing, pursuant to the
aforesaid provisions of Act and the rules made thereunder. None of the Directors receive
any commission or remuneration from holding or subsidiary of the Company.
28. Acknowledgement by the Management:
Your Board of Directors would like to place on record their sincere gratitude to the
Regulators, Reserve Bank of India, National Housing Bank, Registrar of Companies,
Securities and Exchange Board of India, Insurance Regulatory and Development Authority of
India, Ministry of Corporate Affairs, all Bankers to the Company, Central & State
government departments, Tax Authorities, Debenture
Trustees, Debenture holders, Registrars, other stakeholders, customers and all other
business associates for their continued support during the year under review. The
Directors would also like to thank the BSE Limited, National Securities Depository Limited
and Central Depository Services (India) Limited and the Credit Rating Agencies for their
support & co-operation.
Your Company and Management team also express their sincere gratitude to the Promoter,
Holding Company BCP Topco VII Pte. Ltd. and other entities of Blackstone Inc. for their
unstinted support & co-operation.
Your Directors wish to acclaim the hard work and commitment of the employees at all
levels who had contributed with all their might for improving the performance of the
Company year by year.
By the Order of & For and on behalf of the Board of Directors of
|
Aadhar Housing Finance Limited |
Sd/- |
Sd/- |
Mr. O.P. Bhatt |
Mr. Rishi Anand |
DIN:- 00548091 |
DIN:- 02303503 |
Independent Director & |
Managing Director & |
Non-Executive Chairman |
Chief Executive Officer |
Date : 16th May 2023 |
|
Place: Mumbai |
|
|