Indiabulls Housing Finance Ltd
Directors Reports
Dear Shareholders,
Your Directors have pleasure in presenting the Fourteenth Annual Report together with
the audited statement of accounts of the Company for the financial year ended March 31,
2019.
Financial Highlights (Standalone)
The financial highlights of the Company, for the financial year ended March 31, 2019,
are as under:
|
|
Amount (in Rs.) |
| Particulars |
Year ended March 31,2019 (IndAS) |
Year ended March 31, 2018 (GAAP) |
| Profit before Depreciation, amortization and impairment expense |
51,845,880,202 |
46,170,515,557 |
| Less: Depreciation, amortization and impairment expense |
369,706,561 |
269,656,957 |
| Profit before Tax |
51,476,173,641 |
45,900,858,600 |
| Less: Total Tax expense |
14,183,591,242 |
10,235,618,503 |
| Profit for the Year |
37,292,582,400 |
35,665,240,097 |
| Add: brought forward balance |
4,427,956,184 |
4,721,910,742 |
| Amount available for appropriation |
41,720,538,584 |
40,387,150,839 |
| Appropriations: |
|
|
| Interim Dividend paid on Equity Shares (Rs. 40.00 Per Share (Previous Year Rs. 41.00
Per Share)) |
17,073,875,120 |
17,442,036,536 |
| Corporate Dividend Tax on Interim Dividend paid on Equity Shares |
3,509,585,307 |
3,550,788,237 |
| Transferred to Reserve III (Reserve U/s 36(1)(viii), Considered as eligible transfer
to Special Reserve U/s29C of the National Housing Bank Act, 1987) |
3,870,000,000 |
4,400,000,000 |
| Transferred to Reserve I (Special Reserve U/s 29C of the National Housing Bank Act,
1987) |
3,588,516,480 |
2,733,048,019 |
| Transferred to Additional Reserve (U/s 29C of theNational Housing Bank Act, 1987) |
3,000,000,000 |
1,500,000,000 |
| Transferred to General Reserve |
2,100,000,000 |
2,200,000,000 |
| Transferred to Debenture Redemption Reserve |
3,322,257,094 |
3,322,257,094 |
| Balance of Profit Carried Forward |
5,256,304,583 |
5,239,020,953 |
KEY FINANCIAL HIGHLIGHTS: FY18-19 (Consolidated)
| Particulars |
FY 18-19 |
FY 17-18 |
|
(IndAS) |
(GAAP) |
| Total Revenues (' Crores) |
17,027.0 |
14,640.4 |
| NII (T Crores) |
7,301.5 |
6,986.5 |
| PAT (Rs. Crores) |
4,090.5 |
3,847.4 |
| EPS (' |
95.83 |
90.51 |
| CRAR% (Standalone) |
26.49 |
20.68 |
FINANCIAL AND OPERATIONAL HIGHLIGHTS
Business Update
• In FY 2018-19, the Company closed the year with a balance sheet size of Rs.
130,104 Crores and total loan assets of Rs. 120,525 Crores.
• Total sold down loan assets stood at Rs. 28,227 Crores at the end of FY 2018-19.
During the year, the Company sold down loan assets amounting to Rs. 22,347 Crores which is
more than the cumulative sell-down of loan assets during the previous 4 years.
• The Profit after Tax of the Company for the Financial Year 2018-19 stood at Rs.
4,091 Crores as compared to Rs. 3,895 Crores for the year 2017-18.
• During the year the Company's rating were re-affirmed at the highest long-term
credit rating of AAA by all four leading rating agencies in India including CRISIL, an
S&P Global Company and ICRA, a Moody's Investors Service Company.
Liquidity Management
• In the second half of the year, the NBFC/HFC sector faced a liquidity crisis
following the default by IL&FS.
• Historically, as a prudent liquidity strategy, the Company has always maintained
adequate cash and liquid investments to to suffice near- to mid-term debt repayment.
• Since September 2018, through the liquidity crisis the Company has maintained
cash in excess of Rs. 20,000 crores every month. Moreover, the Company has sold down Rs.
22,347 Crores of loans during the year 2018-19, which provided the Company an additional
source of liquidity to the Company.
• In line with the Company's liquidity framework, the Company had cash and liquid
investments of Rs. 31,165 Crores as at March 31, 2019. The Company's reliance on
short-term commercial papers was also down to under 5% of its funding. The Company's
liabilities have elongated, and ample liquidity has ensured a fully- matched granular ALM
with significant surplus liquidity at the end of all granular periods.
• The Company is among the least leveraged Company among its peers with Net
Gearing as at March 31, 2019 being at 4.0x.
• Through the year, the Company expanded its lender base and by the end of FY
2018-19, the Company has 658 strong relationships: 21 PSU banks, 26 Private and Foreign
banks and 611 Mutual Funds, Provident Funds, Pension Funds, Insurance Companies and
others.
Stable Asset Quality
• Gross non-performing loans as at March 31, 2019 amounted to Rs. 1,061 Crores.
This is equivalent to 0.88% of the portfolio.
• Net non-performing loans as at March 31, 2019 amounted to Rs. 833 Crores. This
is equivalent to 0.69% of the portfolio.
• An experienced underwriting team and the in-house sourcing and collection teams
ensure control over loan sourcing, credit appraisal and portfolio quality.
Bank Borrowings
As on March 31, 2019, the Company's outstanding bank loans stood at Rs. 46,100 Crores
vis-a-vis Rs. 41,698 Crores as on March 31, 2018. The Company's bank borrowings continue
to enjoy a rating of AAA, signifying the highest degree of safety regarding timely
servicing of financial obligations. AAA rated instruments carry lowest credit risk.
Debentures and Securities
Debentures and securities form 51% of the Company's funding as at the end of the fiscal
year. The Company has brought down its 3-month Commercial Papers outstanding to less than
5% of its funding.
As at March 31, 2019, the Company's consolidated outstanding borrowings from debentures
and securities stood at Rs. 54,069 Crores vis-a-vis Rs. 65,610 Crores as at March 31,
2018. The Company's secured NCDs have been listed on the Wholesale Debt Market segment of
NSE / BSE and have been assigned AAA rating from CRISIL, ICRA, CARE and Brickwork Ratings.
As at March 31, 2019, the Company's outstanding subordinated debt and perpetual debt
stood at Rs. 4,472 Crores and Rs. 100 Crores respectively. The debt is subordinate to
present and future senior indebtedness of the Company and has been assigned the AAA rating
by CRISIL, ICRA, CARE and Brickwork Ratings. Based on the balance term to maturity, as at
March 31, 2019, Rs. 4,548 Crores of the book value of subordinated and perpetual debt is
considered as Tier II under the guidelines issued by the Reserve Bank of India (RBI) and
National Housing Bank (NHB) for the purpose of capital adequacy computation.
There are no NCDs which have not been claimed by the investors or not paid by the
Company after the date on which the NCD became due for redemption.
Merger with Lakshmi Vilas Bank
• During the current financial year, the Board of Directors of the Company
approved the merger of the Company and its wholly owned Subsidiary, Indiabulls Commercial
Credit Limited with Lakshmi Vilas Bank.
• Merging with a bank will give the Company access to low cost deposits and a
stable liabilities base. The merged entity will also have a wider suite of products and
will be able to target a wider customer base.
• Approval for the merger has been received from the Competition Commission of
India (CCI)
• The merger is subject to approvals from various other regulatory and statutory
bodies: Reserve Bank of India (RBI), National Housing Bank (NHB), Securities Exchange
Board of India (SEBI), and National Company Law Tribunal (NCLT).
Regulatory Guidelines / Amendments
National Housing Bank (NHB) is the regulator for housing finance companies. Also, the
Company has to comply with Reserve Bank of India norms. In accordance with this, the
Company is in compliance with all regulations pertaining to Accounting Standards,
Prudential norms for asset classification, income recognition, provisioning, capital
adequacy and credit ratings.
Risk Management Framework
As a housing finance company, the Company is exposed to various risks like credit risk,
market risk (interest rate and currency risk), liquidity risk and operational risk
(technology, employee, transaction and reputation risk). To identify and mitigate these
risks the Company has an effective Risk Management Control Framework that has been
developed encompassing all the above areas.
The Company has a Risk Management Committee (RMC) is in place that comprises of its
directors and members of its senior management team, who have rich experience in the
industry in various domains. The RMC met multiple times during the year and kept an active
watch on the emergent risks the Company was exposed to. The Company has a robust mechanism
to ensure an ongoing review of systems, policies, processes and procedures to contain and
mitigate risk that arise from time to time. The Company has a process in place for
conducting audits of various processes to ensure 100% adherence. The Company also has a
system for evaluating Grievance Redressal Mechanism and undertaking complete Root Cause
Analysis (RCA) to ensure recurring grievances are avoided in future leading to improved
customer service standards. Continuous evaluation of existing controls and requisite
improvement/ strengthening based on the assessment is carried out to contain these risks.
The Company encourages sound risk management culture within the organization.
Codes and Standards
The Company adheres to the Fair Practices Code (FPC) recommended by the regulator, the
National Housing Bank (NHB) as well as the RBI, to promote good and fair practices by
setting minimum standards in dealing with customers. The NHB has also issued comprehensive
Know Your Customer (KYC) Guidelines and Anti Money Laundering Standards in the context of
recommendations made by the Financial Action Task Force on Anti Money Laundering
Standards.
Cross Selling and Distribution of Financial Products and Services
State-of-the-art Customer Care set up helps speedy resolution of customer queries and
to promptly attend to any loan requirements. Survey calling, where feedback is taken from
existing and new customers, also helps in continuous process improvement and in the
generation of new leads.
The Company has also been expanding its reach by opening new branches. Continuing
digitization of workflow has integrated different stages of loan application enabling
quicker but more thorough underwriting.
Training and Human Resource Management
During the year, Indiabulls Housing Finance Ltd. was recognized as one amongst India's
Best Workplaces, by the prestigious Great Places to Work Institute. It is considered as
the gold standard for defining great workplaces across business, academia and government
organizations. It is the world's largest and most respected study of workplace excellence
and people management practices. Through this, the Company has gained actionable insights
and recommendations that will enable it to create and sustain a great workplace. Learning
and Development is encouraged by way of training. The trainings focus on a variety of
aspects ranging from operational efficiency, customer satisfaction, credit risk analysis,
etc. The trainings have been conducted for 8,676 employees covering various aspects such
as customer relationship management, credit risk analysis, operational efficiency, fraud
prevention and others.
ADOPTION OF INDIAN ACCOUNTING STANDARDS (IND AS)
The Ministry of Corporate Affairs vide its press release dated January 18, 2016 had
issued directions for implementation of Ind AS for the accounting period beginning April
1, 2018 along with comparatives for the period beginning April 1, 2017. NHB vide its
circular dated April 16, 2018 and June 14, 2018 had directed HFCs to comply with Ind AS as
stated above.
Accordingly, the standalone and the consolidated financial statements for the financial
year ended March 31, 2019, forming part of this annual report, have been prepared in
accordance with Ind AS specified under the Companies Act, 2013 and other relevant
provisions. The adoption of Ind AS has resulted in significant changes in the financial
statements, details of which are provided in the notes to accounts.
DIVIDEND
The Company has consistently worked towards shareholders wealth maximization. With
regard to this, the Company has declared four interim dividends amounting to Rs. 40 per
share on share of face value Rs. 2 each (Rs. 10/- each) for the year 201819 and total
outflow amounting to Rs. 2,058.35 Crores (inclusive of Corporate Dividend Tax).
The Board of Directors of the Company, had, in its meeting held on April 24, 2019,
declared an interim dividend of Rs. 10/- per share of face value of Rs. 2/- each, for the
Financial Year 2019-20.
During the year, the unclaimed dividend of Rs. 4,242,815/- pertaining to the Financial
Year 2010-11 and 2011-12, got transferred to Investor Education and Protection Fund after
giving due notice to the members.
Further, the Company has transferred 3,165 equity shares pertaining to the Financial
Year 2010-11 and 2011-12 in respect of which dividend has not been received or claimed for
seven consecutive years to Demat Account of IEPF Authority, in respect of which,
individual notice had also been sent to concerned Shareholders.
Those members who have not so far claimed their dividend for the subsequent financial
years are also advised to claim it from the Company or Karvy Fintech Private Limited.
Further, in compliance with the requirements, in terms of the notification issued by the
Ministry of Corporate Affairs (MCA) regarding the “Investor Education and Protection
Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016” (“the
Rules”) which have come into force from September 7, 2016 and The Investor Education
and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Amendment Rules,
2017 and the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer
and Refund) Second Amendment Rules, 2017 which have been notified by MCA on February 28,
2017 and October 13, 2017 respectively (“the Amended Rules”), the Company has
till date transferred 14,676 equity shares in respect of which dividend has not been
received or claimed for seven consecutive years from the Financial Year 200809 onwards to
Demat Account of IEPF Authority, in respect of which, individual notice had also been sent
to concerned Shareholders.
Further pursuant to the requirements of SEBI Circular no. SEBI/ LAD-NRO/GN/2016-17/008
dated July 8, 2016, the Dividend Distribution Policy of the Company is available on the
website of the Company i.e. www.indiabullshomeloans.com.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the financial year 2018-19, the following individuals have been appointed as
Additional Directors on the Board of the Company:
(a) Mr. Subhash Sheoratan Mundra (DIN: 00979731), (ExDeputy Governor of Reserve Bank of
India), as an Independent Director of the Company, for a period of three years w.e.f.
August 18, 2018; and
(b) Mr. Satish Chand Mathur (DIN: 03641285), (Ex-DGP of Maharashtra) as an Independent
Director of the Company, for a period of three years w.e.f. March 8, 2019.
During the financial year 2018-19, the members of the Company in its 13th
Annual General Meeting held on September 19, 2018 had approved the appointment of Mr.
Subhash Sheoratan Mundra (DIN: 00979731), (Ex-Deputy Governor of Reserve Bank of India),
as an Independent Director of the Company, for a period of three years w.e.f. August 18,
2018.
Mr. Satish Chand Mathur, being Additional Directors, hold office as such upto the date
of ensuing Annual General Meeting. Keeping in view of his leadership and guidance skills,
the Board recommends his appointment as Independent Director, for a period of three years
w.e.f. March 8, 2019, not liable to retire by rotation, at the ensuing Annual General
Meeting of the Company.
In accordance with the provisions of Section 152 of the Companies Act, 2013 (Act) and
in terms of the Memorandum and Articles of Association of the Company, Mr. Sachin
Chaudhary (DIN: 02016992), Whole-time Director of the Company, retire by rotation at the
ensuing Annual General Meeting of the Company and being eligible offer himself for
reappointment.
During the financial year 2018-19, Mrs. Manjari Ashok Kacker (DIN: 06945359), a
Non-executive Director, who, in view of her other commitments, had opted not to propose
her candidature for re-appointment as Director of the Company at last Annual General
Meeting, ceased to be Director of the Company w.e.f. September 19, 2018. Also, pursuant to
the applicable provisions of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 (hereinafter referred to as “SEBI (LODR) Regulations, 2015”),
and in compliance with the applicable SEBI (Listing Obligations and Disclosure
Requirements) (Amendment) Regulations, 2018, which came into force w.e.f. 1st April 2019,
regarding age limit to 75 years for Independent Directors, Justice Bisheshwar Prasad Singh
(Retd.) (DIN: 06949954) and Brig. Labh Singh Sitara (Retd.) (DIN: 01724648), independent
director(s) of the Company, having attained the age of over 75 years, have resigned from
the directorship of the Company w.e.f. March 31, 2019. The Board places on record its
appreciation for the contribution made by them during their tenure on the Board of the
Company.
All the present Independent Directors of the Company have given declaration that they
meet the criteria of Independence laid down under Section 149(6) of the Companies Act,
2013 and in Regulation 16(a)(b) of SEBI (LODR) Regulations, 2015. The brief resume of the
Directors proposed to be appointed/ reappointed, nature of their expertise in specific
functional areas, terms of appointment and names of companies in which they hold
directorships and memberships/ chairmanships of Board Committees, are provided in the
Notice convening the 14th Annual General Meeting of the Company.
SHARE CAPITAL / ESOP SCHEMES
The paid up equity share capital of the Company as on March 31, 2019, was Rs.
854,806,678 comprising of 427,403,339 equity shares of Rs. 2/- each. Subsequently, from
April 1, 2019 till date, the Company had allotted 170,752 equity shares of face value Rs.
2/- each against exercise of equivalent number of stock options under various ESOP Schemes
of the Company. As a result the paid up equity share capital of the Company stands
increased to Rs. 855,148,182 comprising of 427,574,091 equity shares of Rs. 2/- each.
Presently, stock options granted to the employees operate under the schemes namely;
“IBHFL-IBFSL Employees Stock Option Plan - 2006”, “IBHFL-IBFSL Employees
Stock Option Plan II - 2006”, “IBHFL-IBFSL Employees Stock Option - 2008”
and “Indiabulls Housing Finance Limited Employees Stock Option Scheme-2013”.
Under “Indiabulls Housing Finance Limited Employees Stock Option Scheme-2013”,
during the year under review, an aggregate of 10,000,000 Stock Options at an exercise
price of Rs. 702 per option had been granted to certain eligible employees. The exercise
price was determined in accordance with the pricing formula approved by the members i.e.
at the latest available closing price of the equity share on the NSE, prior to the date of
the meetings of the Compensation Committee at which these options were granted. The
options granted as aforesaid are exercisable over a period of five years from the date of
their respective vesting and none of the options granted as aforesaid have vested during
the year and consequently, no options have been exercised. There has been no material
variation in the terms of the options granted under any of these schemes and all the
schemes are in compliance with the SEBI (Share Based Employee Benefits) Regulations, 2014.
The disclosures required to be made under Securities and Exchange Board of India (Share
Based Employee Benefits) Regulation, 2014 and the Companies Act, 2013 read with Rule 12 of
the Companies (Share Capital and Debentures) Rules, 2014, in respect of all existing ESOP
Schemes of the Company have been placed on the website of the Company https://www . indiabullshomeloans.com/.
NON-CONVERTIBLE DEBENTURES (NCDs)
(a) Issuance of Secured and Unsecured NCDs, by way of Private Placement basis
During the FY 2018-19, the Company has successfully raised, by way of private
placement, Rs. 8,752.40 Crores of Secured NCDs having a face value of Rs. 1,000,000 each
and Rs. 1,000 Crores of Secured NCDs, with paid-up value aggregating Rs. 1 Crores (i.e.
Initial Subscription Amount of Rs. 1,000 paid-up per Secured NCDs). The Balance
subscription amount of Rs. 999 Crores is payable on 21st February, 2020. The
said NCDs are listed on WDM segment of BSE Limited (BSE) and National Stock Exchange of
India Limited (NSE).
(b) Issuance of Secured Euro Medium Term Note Programme
During the current Financial Year, i.e. on May 28, 2019, the Company has successfully
raised, Notes for an aggregate nominal amount of US$ 350 million under the updated Secured
Euro Medium Term Note Programme of the Company, through the relevant common depositary.
The said Notes are listed on Singapore Exchange Securities Trading Limited, Singapore.
(c) Details of NCDs which have not been claimed by the Investors
There are no NCDs which have not been claimed by the Investors or not paid by the
Company after the date on which these NCDs become due for redemption.
PUBLIC DEPOSITS
During the year under review, the Company has not accepted any deposits from the
public, falling within the ambit of Chapter V of the Companies Act, 2013 and the Companies
(Acceptance of Deposits) Rules, 2014.
LISTING WITH STOCK EXCHANGES
The Equity Shares (ISIN INE148I01020) of the Company, continue to remain listed at BSE
Limited (BSE) and National Stock Exchange of India Limited (NSE). The listing fees payable
to both the exchanges for the financial year 2018-19 have been paid. The GDRs issued by
the Company continue to remain listed on Luxembourg Stock Exchange. The Secured Synthetic
INR Notes are listed on Singapore Stock Exchange (SGX-ST). The NCDs issued under public
issue and on Private Placement basis are listed on Debt/WDM segment of NSE and BSE.
INFORMATION PURSUANT TO SECTION 134 AND SECTION 197 OF THE COMPANIES ACT, 2013 READ
WITH THE RELEVANT RULES AND SEBI (LODR) REGULATIONS, 2015
The information required to be disclosed pursuant to Section 134 and Section 197 of the
Companies Act, 2013 read with the relevant rules (to the extent applicable) and SEBI
(LODR) Regulations, 2015, not elsewhere mentioned in this Report, are given in
“Annexure A” forming part of this Report.
AUDITORS
(a) Statutory Auditors
M/s. S.R. Batliboi & Co. LLP, Chartered Accountants (ICAI Registration No.:
301003E/E300005) (an Indian Firm of Ernst & Young), were appointed as the Statutory
Auditors of the Company at the Twelfth Annual General Meeting of the Company held on 8th
September, 2017, for a period of five years i.e. until the conclusion of the Seventeenth
Annual General Meeting of the Company.
The Notes to the Accounts referred to in the Auditors Report are self - explanatory and
therefore do not call for any further explanation. No frauds have been reported by the
Auditors of the Company in terms of Section 143(12) of the Companies Act, 2013.
(b) Secretarial Auditors & Secretarial Audit Report
Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the
rules made thereunder, the Company has appointed M/s Neelam Gupta & Associates, a firm
of Company Secretaries in practice as its Secretarial Auditors, to conduct the secretarial
audit of the Company, for the FY 2018-19. The Company has provided all assistance,
facilities, documents, records and clarifications etc. to the Secretarial Auditors for
conducting their audit. The Report of Secretarial Auditors for the FY 2018-19, is annexed
as “Annexure 1” and forming part of this Report. The Report is self -
explanatory and therefore do not call for any further explanation.
The Secretarial Compliance Report as prescribed by SEBI is annexed as “Annexure
2” and forming part of this Report.
(c) Cost Records
The Company is not required to prepare and maintain cost records pursuant to Section
148(1) of the Companies Act, 2013.
CORPORATE SOCIAL RESPONSIBILITY
As part of its initiatives under “Corporate Social Responsibility (CSR)”, the
Company has undertaken projects in the areas of Health, Education, Sanitation, Rural
Development & Safe Drinking Water, Flora & Fauna , as per its CSR Policy
(available on your Company s website http://www.indiabullshomeloans. com/) and the details
are contained in the Annual Report on CSR Activities given in “Annexure 3”,
forming part of this Report. These projects are in accordance with Schedule VII of the
Companies Act, 2013 read with the relevant rules.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Pursuant to Regulation 34 of the SEBI (LODR) Regulations, 2015, Management's Discussion
and Analysis Report, for the year under review, is presented in a separate section forming
part of this Annual Report.
CORPORATE GOVERNANCE REPORT
Pursuant to Regulation 34 of the SEBI (LODR) Regulations, 2015, a separate section on
Corporate Governance Practices followed by the Company, together with a certificate from a
practicing Company Secretary confirming compliance, is presented in a separate section
forming part of this Annual Report.
BUSINESS RESPONSIBILITY REPORT
Pursuant to Regulation 34 of the SEBI (LODR) Regulations, 2015, a separate section on
Business Responsibility Report (BRR) is presented in a separate section forming part of
this Annual Report.
DIRECTORS' RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information and
explanations obtained by them, your Directors make the following statement in terms of
Section 134 of the Companies Act, 2013:
a) that in the preparation of the annual financial statements for the year ended March
31, 2019, the applicable accounting standards had been followed along with proper
explanation relating to material departures, if any;
b) that such accounting policies as mentioned in the Notes to the Financial Statements
have been selected and applied consistently and judgments and estimates have been made
that are reasonable and prudent so as to give a true and fair view of the state of affairs
of the Company, as at March 31, 2019 and the profit and loss of the Company for the year
ended on that date;
c) that proper and sufficient care has been taken for the maintenance of adequate
accounting records in accordance with the provisions of the Companies Act, 2013, for
safeguarding the assets of the Company and for preventing and detecting fraud and other
irregularities;
d) that the annual financial statements have been prepared on a going concern basis;
e) that proper internal financial controls were in place and that such financial
controls were adequate and were operating effectively; and
f) that systems to ensure compliance with the provisions of all applicable laws were in
place and were adequate and operating effectively.
GREEN INITIATIVES
The Company's Environmental Management System (EMS) focuses on assessing the
environmental cost of the Company's services and activities, and seeks to reduce or
eliminate the negative impact and increase their positive effects.
The ISO 14001:2015 specifies the requirements for EMS such that the negative
environmental impact is minimized and overall environmental performance improves. ISO
14001 is an systematic framework that checks adherence to environmental performance
standards and also seeks to continuously improve it.
Environmental sustainability is important to the Company and is one of the reasons
behind the Company's push to digitize its processes. Amongst its peers, the Company has
taken the lead in introducing an end-to-end online home loan application and fulfillment
platform, doing away with the traditional pen and paper process which also involved
physical transfer of loan application files. The ISO 14001:2015 certification helps the
Company document its process from an environmental perspective and importantly, gives it a
means to measure and minimize the environmental impact of its operations.
Electronic copies of the Annual Report for Financial year 201819 and Notice of the 14th
AGM are sent to all the members whose email addresses are registered with the Company /
Depository Participant(s). For members who have not registered their email addresses,
physical copies of the Annual Report for Financial year 2018-19 and Notice of the 14th
AGM are sent in the permitted mode.
The Company is providing e-voting facility to all members to enable them to cast their
votes electronically on all resolutions set forth in the Notice of the 14th
AGM. This is pursuant to section 108 of the Companies Act, 2013 and Rule 20 of the
Companies (Management and Administration) Rules, 2014 as substituted by Companies
(Management and Administration) Amendment Rules, 2015 and Regulation 44 of the SEBI (LODR)
Regulations, 2015. The instructions for remote e-voting are provided in the Notice of 14th
AGM.
The Company in providing the facility of one-way live webcast of proceedings of 14th
AGM. The instruction for proceedings of live webcast are provided in the Notice of 14th
AGM.
ACKNOWLEDGEMENT
Your Company has been able to operate efficiently because of the culture of
professionalism, creativity, integrity and continuous improvement in all functional areas
and the efficient utilization of all its resources for sustainable and profitable growth.
Your Directors wish to place on record their appreciation of the contributions made and
committed services rendered by the employees of the Company at various
levels. Your Directors also wish to express their gratitude for the continuous
assistance and support received from the investors, clients, bankers, regulatory and
government authorities, during the year.
|
For and on behalf of the |
|
|
Board of Directors |
|
|
Sd/- |
Sd/- |
| Date: July 25, 2019 |
Gagan Banga |
Ajit Kumar Mittal |
| Place: Mumbai |
Vice-Chairman, |
Executive Director |
|
Managing Director & CEO |
(DIN: 02698115) |
|
(DIN: 00010894) |
|
ANNEXURE FORMING PART OF THE DIRECTORS REPORT
EXTRACT OF ANNUAL RETURN
The details forming part of extract of Annual Return, as on the financial year ended
March 31, 2019, pursuant to Section 92(3) of the Companies Act, 2013, in form MGT-9, are
given in “Annexure 4” forming part of this Report. The annual return for the
financial year 2018-19 is uploaded on the website of the Company.
BOARD MEETINGS
During the FY 2018-19, 5 (Five) Board Meetings were convened and held. The details of
such meetings are given in Corporate Governance Report forming part of this Annual Report.
The intervening gap between these meetings was within the period prescribed under the
Companies Act, 2013. The notice and agenda including all material information and minimum
information required to be made available to the Board under Regulation 17 read with
Schedule II Part-A of the SEBI (LODR) Regulations, 2015, were circulated to all directors,
well within the prescribed time, before the meeting or placed at the meeting. During the
year, separate meeting of the Independent Directors was held on January 31, 2019, without
the attendance of Non- Independent Directors and the members of the Company Management.
BOARD EVALUATION
The Nomination and Remuneration Committee (NRC) of the Board reassessed the framework,
methodology and criteria for evaluating the performance of the Board as a whole, including
Board committee(s), as well as performance of each director(s)/Chairman and confirms that
the existing evaluation parameters are in compliance with the requirements as per SEBI
guidance note dated January 5, 2017 on Board evaluation. The existing parameters includes
effectiveness of the Board and its committees, decision making process, Directors/ members
participation, governance, independence, quality and content of agenda papers, team work,
frequency of meetings, discussions at meetings, corporate culture, contribution, role of
the Chairman and management of conflict of interest. Basis these parameters, the NRC had
reviewed at length the performance of each director individually and expressed
satisfaction on the process of evaluation and the performance of each Director. The
performance evaluation of the Board as a whole and its committees namely Audit Committee,
Nomination & Remuneration Committee and Stakeholders Relationship Committee as well as
the performance of each director individually, including the Chairman was carried out by
the entire Board of Directors. The performance evaluation of the Chairman, Vice-Chairman,
Executive Directors and Non-Executive Director was carried out by the Independent
Directors in their meeting held on January 31, 2019. The Directors expressed their
satisfaction with the evaluation process.
Also the Chairman of the Company, on a periodic basis, has had one-to-one discussion
with the directors for their views on the functioning of the Board and the Company,
including discussions on level of engagement and contribution, independence of judgment,
safeguarding the interest of the Company and its minority shareholders and implementation
of the suggestions offered by Directors either individually or collectively during
different board/committee meetings.
POLICY ON APPOINTMENT OF DIRECTORS & THEIR REMUNERATION
The Board has framed a policy for selection and appointment of Directors, Senior
Management and their remuneration. The Remuneration Policy is stated in the Corporate
Governance Report forming part of this Annual Report.
LOANS, GUARANTEES OR INVESTMENTS
During the FY 2018-19, in terms of the provisions of Section 186(1) of the Companies
Act, 2013, the Company did not make any investments through more than two layers of
investment companies. Further, the Company, being a housing finance company, loans given,
guarantees and security provided by it, were not covered under the provisions of Section
186(11) of the Companies Act, 2013. As regards investments made by the Company, the
details of the same are provided under note no. 10 in the financial statements of the
Company for the year ended March 31, 2019.
RELATED PARTY TRANSACTIONS
All the related party transactions, entered into by the Company, during the financial
year, were in its ordinary course of business and on an arm s length basis. There are no
materially significant related party transactions entered by the Company with its
Promoters, Key Management Personnel or other designated persons which may have potential
conflict with the interest of the Company at large. The Policy on materiality of Related
Party Transactions is available on the website of the Company
(http://www.indiabullshomeloans.com/). None of the transactions with related parties fall
under the scope of Section 188(1) of the Act and hence the information on transactions
with related parties pursuant to Section 134(3) (h) of the Act read with rule 8(2) of the
Companies (Accounts) Rules, 2014 required to be given in the prescribed form AOC 2 are not
applicable. Further, Policy for Dealing with Related Party Transactions is enclosed as
“Annexure 5” and is also available on the website of the Company (http://www.
indiabullshomeloans.com/).
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an elaborate system of internal controls commensurate with the size,
scale and complexity of its operations; it also covers areas like financial reporting,
fraud control, compliance with applicable laws and regulations etc. Regular internal
audits are conducted to check and to ensure that responsibilities are discharged
effectively. The Internal Audit Department monitors and evaluates the efficacy and
adequacy of internal control systems in the Company, its compliance with regulatory
directives, efficacy of its operating systems, adherence to the accounting procedures and
policies at all branch offices of the Company and its subsidiaries. Wherever required, the
internal audit efforts are supplemented by audits conducted by specialized
consultants/audit firms. Based on the report of the Internal Auditors, process owners
undertake corrective actions, in their respective areas and thereby strengthen the
controls.
MATERIAL CHANGES AND COMMITMENTS
Apart from the information provided/disclosures made elsewhere in the Directors' Report
including Annexures thereof, there are no material changes and commitments affecting the
financial position of the Company, occured between the end of the Financial year of the
Company i.e. March 31, 2019 till date of this Report.
Further, no significant and material orders were passed by the regulators or courts or
tribunals, impacting the going concern status and Company's operations in future.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The Company being a Housing Finance Company is not required to use much of energy and
technology absorption, however in compliance of Section 134(3) read with Rule - 8 of
Companies (Accounts) Rules, 2014, the necessary reporting with regard to conservation of
energy, technology absorption and foreign exchange earnings and outgo, is an under:
A. Conservation of Energy
The Company is ISO 14001:2015 certified for its Environmental Management Systems (EMS).
The Company's EMS measures the environmental costs of its services and activities, and
seeks to minimize the negative effects and improve the positive aspects.
Consumption of electricity and its efficient utilization is an important area of EMS
and the Company has taken many steps to reduce its carbon footprint on this front.
B. Technology Absorption
The Company is investing in cutting edge technologies to upgrade its infrastructure set
up and innovative technical solutions, thereby increasing customer delight & employee
efficiency. Next Generation Business Intelligence & analytics tool have been
implemented to ensure that while data continues to grow, decision makers gets answers
faster than ever for timely & critical level decision making. The Company has
implemented best of the breed applications to manage and automate its business processes
to achieve higher efficiency, data integrity and data security. It has helped it in
implementing best business practices and shorter time to market new schemes, products and
customer services. The Company has taken major initiatives for improved employee
experience, by implementing innovative solutions and empowering them by providing mobile
platform to manage their work while on the go.
The Company's investment in technology has improved customer services, reduced
operational cost and development of new business opportunities. No technology was imported
by the Company during the last three Financial years including FY 2018-19.
C. Foreign Exchange Earnings and Outgo
During the year under review, your Company had no foreign exchange earnings. Foreign
exchange outgo was Rs. 262.77 Crores. The details of earnings and outgo are shown in the
Note No. 37 (a) and 37 (b) respectively, of Notes to the Accounts, forming part of the
Standalone Financial Statements. Members are requested to refer to these Notes.
BUSINESS RISK MANAGEMENT
Pursuant to the applicable provisions of the Companies Act, 2013 and Regulation 21 of
the SEBI LODR Regulations, the Company has in place a Board constituted Risk Management
Committee. Details of the Committee and its terms of reference are set out in the
Corporate Governance Report forming part of this report.
The Company has a robust Business Risk Management framework to identify and evaluate
business risks and opportunities. This framework seeks to create transparency, minimize
adverse impact on its business objectives and enhance its competitive advantage. It
defines the risk management approach across the Company and its subsidiaries at various
levels including the documentation and reporting. At present, the Company has not
identified any element of risk which may threaten its existence.
PARTICULARS OF EMPLOYEES
Pursuant to the applicable provisions of the Companies Act, 2013 read with Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, disclosures on
Managerial Remuneration are provided in “Annexure 6” forming part of this
Report. In terms of the provisions of Section 136(1) of the Companies Act, 2013 read with
the said rules, the Directors Report is being sent to all the shareholders of the Company
excluding the annexure on the names and other particulars of employees, required in
accordance with Rule 5(2) of said rules, which is available for inspection by the members,
subject to their specific written request, in advance, to the Company Secretary. The
inspection is to be carried out at the Company's
Registered Office or at its Corporate Office, at Gurgaon, during business hours on
working days of the Company up to date of ensuing Annual General Meeting.
FAMILIARISATION PROGRAMME FOR NONEXECUTIVE DIRECTORS
Non-Executive Directors are familiarized with their roles, rights and responsibilities
in the Company as well as with the nature of industry and business model of the Company
through presentations about the Company's strategy, business model, product and service
offerings, customers & shareholders profile, financial details, human resources,
technology, facilities, internal controls and risk management, their roles, rights and
responsibilities in the Company. The Board is also periodically briefed on the various
changes, if any, in the regulations governing the conduct of non-executive directors
including independent directors. The details of the familiarization programmes have been
hosted on the website of the Company and can be accessed on the link: https://www.
indiabullshomeloans.com/.
SUBSIDIARY & ASSOCIATES COMPANIES
Pursuant to Section 129 of the Companies Act, 2013 and Indian Accounting Standard (IND
AS) - 110 on Consolidated Financial Statements, the Company has prepared its Consolidated
Financial Statement along with all its subsidiaries, in the same form and manner, as that
of the Company, which shall be laid before its ensuing 14th Annual General Meeting along
with its Standalone Financial Statement. The Consolidated Financial Statements of the
Company along with its subsidiaries, for the year ended March 31, 2019, form part of this
Annual Report.
For the performance and financial position of each of the subsidiaries of the Company,
included in its Consolidated Financial Statements, the Members are requested to refer to
Note No. (38) (b) of the Notes to the Accounts, of Consolidated Financial Statements of
the Company .
Further pursuant to the provisions of Section 136 of the Act, the financial statements
of the Company, consolidated financial statements along with relevant documents and
separate audited accounts in respect of subsidiaries, are also available on the website of
the Company. Shareholders may write to the Company for the annual financial statements and
detailed information on subsidiary companies. Further, the documents shall also be
available for inspection by the shareholders at the registered office of the Company.
NAMES OF THE COMPANIES WHICH HAVE BECOME OR CEASED TO BE SUBSIDIARIES OR ASSOCIATE
COMPANIES
During the period under review, Indiabulls Venture Capital Trustee Company Limited,
subsidiary company of the Company stands dissolved w.e.f. March 08, 2019.
COMMITTEES OF THE BOARD
The Company has following Board constituted committees which have been established as a
part of the best corporate governance practices and are in compliance with the
requirements of the relevant provisions of applicable laws and statutes.
a) Asset Liability Management Committee
b) Audit Committee
c) Bond Issue Committee
d) Compensation Committee
e) Corporate Social Responsibility Committee
f) Customer Grievance Committee
g) Investment Committee
h) Internal Complaint Committee
i) Management Committee
j) Nomination & Remuneration Committee
k) Risk Management Committee
l) Reorganization Committee
m) Stakeholders Relationship Committee
The details with respect to composition, powers, roles, terms of reference, etc. of
committees constituted under the Companies Act, 2013 and SEBI (LODR) Regulations, 2015 are
given in the Corporate Governance Report forming part of this Annual Report.
SECRETARIAL STANDARDS
The Board of Directors state that the Company has complied with the applicable
Secretarial Standards (SS-1 and SS-2) respectively relating to Meetings of the Board, its
Committees and the General Meetings as issued by the Institute of Company Secretaries of
India.
NUMBER OF CASES FILED, IF ANY, AND THEIR DISPOSAL UNDER SECTION 22 OF THE SEXUAL
HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has zero tolerance towards sexual harassment at the workplace and has
adopted a policy on prevention, prohibition and redressal of sexual 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. During the
financial year 2018-19, no cases of sexual harassment were reported.
The Company has complied with provisions relating to the constitution of Internal
Complaints Committee (ICC) under the Sexual Harassment of Women at Work place (Prevention,
Prohibition and Redressal) Act, 2013. The Internal Complaints Committee (ICC) has been set
up to redress complaints received, if any, regarding sexual harassment.
VIGIL MECHANISM
The Company is committed to adhere to the highest standards of ethical, moral and legal
conduct of its business operations. To maintain these standards, the Company has
implemented the Whistle Blower Policy (the Policy), to provide an avenue for employees to
report matters without the risk of subsequent victimization, discrimination or
disadvantage. The Policy applies to all employees working for the Company and its
subsidiaries. Pursuant to the Policy, the whistle blowers can raise concerns relating to
matters such as breach of Company's Code of Conduct, fraud, bribery, corruption, employee
misconduct, illegality, misappropriation of Company's funds / assets etc. A
whistle-blowing or reporting mechanism, as set out in the Policy, invites all employees to
act responsibly to uphold the reputation of the Company and its subsidiaries.
The Policy aims to ensure that serious concerns are properly raised and addressed and
are recognized as an enabling factor in administering good governance practices. The
details of the Whistle Blower Policy are available on the website of the Company
(http://www.indiabullshomeloans.com/).
|
For and on behalf of the Board of Directors |
|
|
Sd/- |
Sd/- |
| Date: July 25, 2019 |
Gagan Banga |
Ajit Kumar Mittal |
| Place: Mumbai |
Vice-Chairman, |
Executive Director |
|
Managing Director & CEO |
(DIN: 02698115) |
|
(DIN: 00010894) |
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