Indiabulls Housing Finance Ltd.-இன் இயக்குநர் அறிக்கை
Mar 31, 2023
Your Directors are pleased to present the Eighteenth Annual Report of Indiabulls Housing Finance Limited (hereinafter called as "the Company","IBH" or Indiabulls Housing) along with the audited statement of accounts for the financial year ended March 31, 2023.
During FY 2022-23, the global economic landscape continued to remain challenging. Economies and businesses worldwide had to negotiate the lingering effects of the COVID-19 pandemic, the conflict in Ukraine, inflationary pressures, and interest rate hikes.
India witnessed a gradual recovery from the economic disruptions caused by the COVID-19 pandemic, aided by various policy measures and reforms aimed at supporting the financial sector. The Reserve Bank of India (RBI) continued to maintain an accommodative monetary policy stance during this time, aiming to stimulate economic growth and enhance liquidity in the financial system.
For Indian NBFCs as well, FY 2022-23 was marked by a gradual recovery from the pandemic-induced disruptions. While challenges persisted in terms of asset quality and liquidity management, the government and regulators took proactive steps to support the sector and strengthen its resilience in the face of uncertainties.
Indiabulls Housing maintained strong focus on risk management, closely monitoring its loan portfolio and shoring up provisioning levels.
In the fiscal year 2022-23, Indiabulls Housing also focussed on expansion and consolidation of its asset-light business model. The Company also worked on strengthening and integrating operations, optimizing partnerships with lending institutions, standardizing procedures, and implementing measures to enhance risk management.
Financial Highlights (Standalone)
The financial highlights of the Company, for the financial year ended March 31, 2023, are as under:
|
[Amt. in K Cr] |
||
|
Particulars |
Year ended March 31, 2023 |
Year ended March 31, 2022 |
|
Profit before Depreciation, amortization and impairment expense |
1,188.46 |
1,030.30 |
|
Less: Depreciation, amortization and impairment expense Profit before Tax |
82.65 1,105.81 |
74.40 .......................................................955".90â |
|
Less: Total Tax expense |
286.64 |
.......................................................259779" |
|
Profit for the Year |
819.17 |
696.11 |
|
Add: brought forward balance# |
6.69 |
-25.20 |
|
Amount available for appropriation |
825.86 |
670.91 |
|
Appropriations: |
||
|
Transferred to Reserve I (Special Reserve U/s 29C of the National Housing Bank Act, 1987) |
163.83 |
139.22 |
|
Transferred to Additional Reserve (U/s 29C of theNational Housing Bank Act, 1987) |
610.00 |
525.00 |
|
Balance of Profit Carried Forward* |
52.03 |
6.69 |
#*without adjusting Other Comprehensive Income (OCI) on Remeasurement gain on defined benefit plan (net of tax) to retained earnings
|
KEY FINANCIAL HIGHLIGHTS: FY 22-23 (Consolidated) |
||
|
Particulars |
FY 22-23 (IndAS) |
FY 21-22 (IndAS) |
|
Total Revenues (^ Crores) |
8,725.8 |
8,993.9 |
|
NII (Total Income - Finance Cost) (^ Crores) |
3,089.3 |
2,752.3 |
|
PAT (^ Crores) |
1,129.7 |
1,177.7 |
|
EPS (^) |
25.19 |
26.42 |
|
CRAR% (Standalone) |
23.01 |
22.49 |
FINANCIAL AND OPERATIONAL HIGHLIGHTS (CONSOLIDATED)Business Update
⢠The Company closed FY 2022-23 with a balance sheet size of ^ 74,945 Crores and total loan assets of ^ 67,020 Crores.
⢠Loan book of the Company stood at R 54,276 Crores at the end of FY 2022-23.
⢠The Profit after Tax (PAT) for FY 2022-23, stood at ^ 1,130 Crores.
⢠The Company has fully operational and maturing co-lending partnerships with Central Bank of India, Yes Bank, Indian Overseas Bank, Bank of Baroda, Ratnakar Bank and Punjab & Sind Bank for home loans and with Ratnakar Bank, Central Bank of India, Canara Bank, Indian Bank, Indian Overseas Bank and Punjab & Sind Bank, for secured MSME loans.
Strong Capital and Liquidity Position
⢠The Company''s total Capital Adequacy [Standalone IBH] stood at 23.01% with a Tier 1 of 18.39% against regulatory requirement of 15% and 10% respectively.
⢠The Company''s Net Gearing was at 2.2x as at March 31, 2023.
⢠The Company''s Liquidity Coverage Ratio (LCR) stood comfortably at 108% as at March 31, 2023, against a regulatory requirement of 60%.
⢠At a consolidated level, the Company had a strong provisioning pool of R 1,184 Crores.
⢠At a consolidated level, gross non-performing loans as of March 31, 2023 amounted to ^ 1,918 Crores.
⢠At a consolidated level, net non-performing loans as at March 31, 2023 amounted to ^ 1,277 Crores.
During the year under review, there were no changes in the
nature of business of the Company.
Borrowings from Banks & Financial Institutions other than Debentures, Securities and ECBs
As on March 31, 2023, the Company''s outstanding borrowings other than debentures, securities and ECBs stood at R 16,818 Crores vis-a-vis ^ 22,124 Crores as on March 31, 2022.
Debentures and securities formed 36% of the Company''s borrowings as at the end of the fiscal year. There were no commercial papers outstanding as at the year end. As at March 31, 2023, the Company''s consolidated outstanding borrowings, from debentures and securities stood at R 23,234 Crores visa-vis ^ 28,291 Crores as at March 31, 2022. The Company''s secured NCDs have been listed on the Wholesale Debt Market segment of NSE/BSE and have been assigned ''AA'' rating from CRISIL, ICRA, and CARE, and ''AA '' rating from Brickwork. During FY 2022-23, the Company received a rating revision from Moody''s investor Service. The agency upgraded the Company''s rating outlook from ''Negative'' to ''Stable'' while reaffirming its Corporate Family Rating at ''B3''.
As at March 31, 2023, the Company''s outstanding subordinated debt and perpetual debt stood at ^ 4,297 Crores and ^ 100 Crores, respectively. The debt is subordinate to present and future senior indebtedness of the Company and has been assigned the AA rating by CRISIL, ICRA and CARE and AA by Brickwork Ratings, and Perpetual debt has been assigned ''AA-'' rating by CARE and ''AA'' from Brickwork. Based on the balance term to maturity, as at March 31, 2023, ^ 2,206 Crores of the book value of subordinated and perpetual debt is considered as Tier II, under the guidelines issue''s 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.
Regulatory Guidelines / Amendments
The Company has implemented / complied with the following new directions / notifications / circulars issued by the RBI:
⢠Scale Based Regulations: Classification in Upper Layer
The Reserve Bank of India, circular DOR.CRE.REC. No.60/03.10.001/2021-22 dated October 22, 2021 on
"Scale Based Regulation" issued a revised regulatory framework for NBFC''s which is applicable to the Company being a NBFC category falling under upper layer. The companies classified under NBFC-UL are required to implement a comprehensive scale based regulatory framework covering internal capital adequacy assessment process (ICAAP), complying with large exposure norms, setting limits for sensitive sector exposure, enhanced disclosure in annual report, core financial services etc.
The Company is in compliance with the applicable provisions and requirements of the RBI / HFC Directions and other directions / guidelines issued by RBI / NHB as applicable.
With the challenging macroeconomic conditions and uncertainties, there are heightened risks faced by the Company which can be inherent or market - related risks. There has been a continuous focus on identifying, measuring and mitigating risks by the Company. As a non-bank mortgage lender, 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). A key risk in the competitive home loans, and mortgage - backed funding in general, is losing customers that transfer out their loans for small gains in interest rates, this represents significant loss of opportunity to the Company given the long - term nature of mortgage loans.
To identify and mitigate all 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) in place that comprises of its Directors and Members of its Senior Management team, who have rich industry experience across 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''s Chief Risk Officer (CRO) oversees the process of identification, measurement and mitigation of risks. The CRO reports directly to the Board and meets them multiple times, and at least once in a quarter, to discuss the risks faced by the Company and policies to mitigate them.
The Company''s Credit Committee supports the RMC by identifying and mitigating credit risks to the Company by formulating policies on limits on large credit exposures, asset concentrations, standards for loan collateral, loan review mechanism, pricing of loans etc. The Credit Committee is also responsible to frame approach and policies for customer retention, especially those customers that seek to transfer their loans out during interest rate cycles when the Company''s interest rates may be misaligned higher than the best rates available from other lenders.
The Company has a robust mechanism to ensure an ongoing review of systems, policies, processes and procedures to contain and mitigate risks that arise from time to time. The Company also has a system for evaluating Grievance Redressal Mechanism and undertaking complete Root Cause Analysis (RCA) to ensure that the 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.
On June 11, 2021, the RBI extended the provisions of the risk
- based internal audit (RBIA) framework to HFCs, which were required to implement the framework by June 30, 2022. The RBIA framework is an audit methodology that links an organisations'' overall risk management framework and provides an assurance to the Board of Directors and the senior management on the quality and effectiveness of the organisation''s internal controls, risk management and governance-related systems and processes. The RBIA framework will further strengthen the Company''s overall risk management framework.
The Company adheres to the Fair Practices Code (FPC) recommended by the regulator, the Reserve Bank of India (RBI) as well as the National Housing Bank (NHB), to promote good and fair practices by setting minimum standards in dealing with customers. The RBI 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
One of the Company''s key areas of focus is generating fee-income by cross - selling and upselling various products to its customers. Leveraging on digital analytics and social media integration through its eHome Loans technology platform, the Company continues to stay engaged with its customers helping it better anticipate their needs, thus opening up cross - selling and resultant fee generation opportunities. The Company acts as an agent for multiple insurance companies and cross
- sells life insurance and general insurance products to its customers, earning a commission on the premiums paid by the customers. The Company''s insurance attachment rate is over 80%. The Company has also been successfully selling 2 - 3 different policies to its customers through its upselling efforts. Fee income represents a very important source of income for the Company and it continues to look at different avenues of generating and increasing its fee income.
IBH recognizes the importance of equipping its employees with the necessary skills, knowledge, and mindset to effectively carry out their assigned tasks. Learning and development initiatives are vital for the growth and success of its business.
It employs a diverse range of training workshops and employ suitable methodologies to ensure that the employees possess and enhance the skills required to excel in their work. The Company benefits from a dedicated and highly professional Learning & Development team, which operates as a subset of its Human Resources department. Their primary focus is to ensure that employees receive training in both functional and behavioral skills. The training programs it offers are designed based on identified needs, competency requirements, job-specific knowledge gaps, and desired skills and attitudes. This collaborative process involves the employee, department and branch heads, as well as the Human Resources department.
At IBH, we are committed to providing consistent career growth opportunities for all our employees. We understand the importance of supporting their professional development to foster a thriving workforce.
During the year, the employee training vertical of the human resources department conducted 34 online & offline training sessions for 5,316 employees. The trainings covered various aspects such as customer relationship management, credit risk analysis, operational efficiency, fraud prevention amongst others.
The Board has recommended a final dividend of R 1.25 per equity share translating to 62.5% on face value of R 2 each for the financial year ended March 31, 2023, subject to approval of members at the ensuing Annual General Meeting. The Company is emerging from a phase of consolidation over the last few years. As the Company gets back on the path of growth, the Board has resumed payment of dividends to shareholders. The Company is also very well capitalized with capital adequacy in excess of 23% on standalone basis and 31% on consolidated basis as at the end of March 2023. In the past, the Company has had a consistent dividend paying track record. As business has now stabilized and the Company gets back on the path of growth, subject to regulatory limits, the Company aims to resume consistent payment of dividends. It is the Company''s goal to deliver good returns to shareholders both on RoE and on dividends
During the year, the unclaimed dividend of R 0.59 Crores pertaining to the Financial Year 2015-16, got transferred to Investor Education and Protection Fund after giving due notice to the members.
Further, the Company has transferred 5,145 equity shares pertaining to the Financial Year 2014-15 and 2015-16 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 KFin Technologies Limited. Further, in compliance with the requirements, in terms of the notification issued by the Ministry of Corporate Affairs (MCA), the Company has till date transferred 28,120 equity shares in respect of which dividend has not been received or claimed for seven consecutive years from the Financial Year 2008-09 onwards to Demat Account of IEPF Authority, in respect of which, individual notice had also been sent to concerned Shareholders.
Further, pursuant to the applicable provisions of SEBI (LODR) Regulations, 2015, the Dividend Distribution Policy of the Company is available on the website of the Company i.e. https://www.indiabullshomeloans. com/uploads/downloads/ihfl-dividend-distribution-poli cy-0436865001502456462-0046016001552484803.pdf
DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the year under review:
1. Mr. B. C. Patnaik (DIN: 08384583), Managing Director, Life Insurance Corporation of India (LIC), was been appointed as LIC Nominee Director of the Company.
2. Mr. Ajit Kumar Mittal (DIN: 02698115) relinquished the office of Executive Director of the Company and re -designated as Non-Executive, Non Independent Director.
3. Mr. Ashwini Omprakash Kumar (DIN: 03341114) due to his health reasons relinquished the office of Deputy Managing Director of the Company w.e.f. December 31, 2022 and continued as Non-Executive, Non-Independent Director of the Company till March 31, 2023. Mr. Kumar further relinquished the office of Non-Executive, NonIndependent Director and ceased to be the Director of the Company w.e.f. March 31, 2023.
Further, during the financial year 2022-23, the Members of the Company in their Seventeenth Annual General Meeting ("AGM") held through Video Conferencing (VC) / Other AudioVisual Means (OAVM) on September 26, 2022 had approved:
a) The re-appointment of Mr. Gagan Banga (DIN: 00010894) as a Whole-Time Director & Key Managerial Personnel and designated as Vice - Chairman, Managing Director & CEO of the Company, for a further period of five years, with effect from March 19, 2023.
b) The re-appointment of Mr. Ashwini Omprakash Kumar (DIN: 03341114) as a Whole-Time Director & Key Managerial Personnel and designated as Deputy Managing Director of the Company, for a further period of five years, with effect from March 19, 2023.
In accordance with the provisions of Section 152 of the Companies Act, 2013 ("Act") and in terms of the Memorandum and Articles of Association (MOA) of the Company, Mr. Gagan Banga (DIN: 00010894), Whole-Time Director & Key Managerial Personnel and designated as Vice - Chairman, Managing Director & CEO, is liable to retire by rotation at the ensuing Annual General Meeting of the Company and being eligible, offer himself for reappointment.
Further during the current Financial Year 2023 - 24, effective from April 29, 2023, Mr. B. C. Patnaik (DIN: 08384583), relinquished the office of LIC Nominee Director of the Company pursuant to his appointment by the Appointments Committee of the Cabinet to the post of Whole Time Member (Life), Insurance Regulatory and Development Authority of India (IRDAI).
Further, with effect from July 28, 2023, Mr. Rajiv Gupta (DIN: 08532421) has been appointed as a LIC Nominee Director on the Board of the Company.
In terms of the applicable legal provisions, the existing tenure of three years of Mr. Achuthan Siddharth (DIN: 00016278), as an Independent Director has ended on July 02, 2023 and the Board in its Meeting held on May 22, 2023 on Nomination and Remuneration Committee recommendation has reappointed Mr. Siddharth for second term of 5 years effective from July 03, 2023 upto July 02, 2028. Keeping in view his vast experience, knowledge and managerial skills, the Nomination & Remuneration Committee and the Board of Directors of the Company has recommended his re-appointment as such, for a further period of five years w.e.f. July 03, 2023.
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 Act and under Regulation 16 (1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI (LODR) Regulations). 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 Eighteenth Annual General Meeting of the Company.
The Board is of the opinion that the Independent Directors of the Company possess requisite qualifications, experience and expertise and that they hold the highest standards of integrity.
The paid up equity share capital of the Company as on March 31, 2022 was ^ 937,143,008 comprising of 468,571,504 Equity
Shares of R 2/- each. During the year, the Company has made the following allotments:
i) On April 18, 2022 - the Company allotted 3,025,126 Equity
Shares on account of FCCBs Conversion, for a principal value of USD 10,000,000.
After considering the above allotment during the year, the paid up Equity Share Capital of the Company as on March 31, 2023 was ^ 943,193,260 comprises of 471,596,630 equity shares of R 2/- each. Further during the current financial year, the Company has not issued any Equity Shares as on the date of signing of this Annual Report. Furthermore, the Company has not issued any Equity Shares with Differential rights.
Mr. Sameer Gehlaut (Founder Promoter) along with Innus Infrastructure Private Limited and Sameer Gehlaut IBH Trust (Promoter Group Members) collectively referred as outgoing Promoters vide letter dated March 14, 2022 requested for their reclassification from Promoters and Promoter Group category to Public Category in terms of Regulation 31A of SEBI (LODR) Regulations.
The Board of Directors and Shareholders of the Company had approved the said request in their respective meetings held on March 15, 2022 and April 18, 2022.
On the basis of application made by the Company, BSE Limited and National Stock Exchange of India Limited vide their letters dated February 22, 2023 granted approval for the said reclassification. Accordingly, post reclassification erstwhile Promoters have been classified as Public Shareholders.
ESOP / SAR SCHEMES / SWEAT EQUITY
Presently, the stock options / stock appreciation rights granted to the Employees operate under different schemes, namely, IBHFL-IBFSL Employees Stock Option Scheme -2008, Indiabulls Housing Finance Limited Employees Stock Option Scheme - 2013, Indiabulls Housing Finance Limited Employees Stock Option Scheme - 2019 and Indiabulls Housing Finance Limited Employees Stock Option Scheme -2021 (hereinafter individually and/or collectively referred to as the "Scheme(s)").
During the year, there has been no variation in the terms of the options granted under any of the schemes and all the schemes are in compliance with SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (SBEB Regulations). The Company has obtained a certificate from secretarial auditors on the same.
During the year under review, Pragati Employee Welfare Trust (formerly Indiabulls Housing Finance Limited - Employees Welfare Trust), has not purchased any Equity Shares of the Company from the secondary market. Accordingly, at the end of the FY 2023, the Trust held 23,000,000 Equity Shares of the Company. No voting right has been exercised by the Trust in respect of such shares held by it.
During the FY 2022-23, no Sweat Equity Shares were issued by the Company.
The disclosures on ESOPs and SARs, as required under SBEB Regulations have been placed on the website of the Company.
During the year under review, on April 26, 2022, the Board constituted Committee of the Company under Indiabulls Housing Finance Limited Employees Stock Option Scheme -2013, granted 10,800,000 (One Crore Eight Lacs) stock options, out of the lapsed Stock Options, granted earlier, representing equal number of Equity Shares of face value of R 2/- each of the Company, to certain eligible Employees including Executive Directors of the Company and its Subsidiary Companies, at an exercise price of R 152.85 per Equity Share, being the latest available closing price of the Equity Share on the National Stock Exchange of India Limited, prior to the date of the above - mentioned meeting. The Stock Options so granted, shall vest within 1 year beginning from April 27, 2023 or thereafter, as may be decided by Nomination and Remuneration Committee of the Company. The options vested under each of the slabs, can be exercised within a period of five years from the relevant vesting dates.
Further, on July 19, 2022, the Board constituted Committee of the Company under Indiabulls Housing Finance Limited Employees Stock Option Scheme - 2013, granted 15,500,000 (One Crore Fifty Five Lacs) stock options, out of the lapsed Stock Options, granted earlier, representing equal number of Equity Shares of face value of R 2/- each of the Company, to certain eligible Employees including Executive Directors of the Company and its Subsidiary Companies, at an exercise price of R 96 per Equity Share, (against R 95.70 which was the latest available closing price of the Equity Share on the National Stock Exchange of India Limited, prior to the date of the above -mentioned meeting.
The stock options so granted, shall vest on July 20, 2023 or thereafter, as may be decided by the Board constituted Nomination and Remuneration Committee of the Company. The options vested under each of the slabs, can be exercised within a period of five years from the vesting date.
Further, on October 13, 2022, the Board constituted Committee of the Company under Indiabulls Housing Finance Limited Employees Stock Option Scheme - 2013, granted 64,00,000 (Sixty Four Lacs) stock options, out of the lapsed Stock Options, granted earlier, representing equal number of Equity Shares of face value of R 2/- each of the Company, to certain eligible Employees including Executive Directors of the Company and its Subsidiary Companies, at an exercise price of R 130 per Equity Share, against R 129.70 which was the latest available closing price of the Equity Share on the National Stock Exchange of India Limited, prior to the date of the above - mentioned meeting.
The stock options so granted, shall vest on October 14, 2023 or thereafter, as may be decided by the Board constituted Nomination and Remuneration Committee of the Company. The options vested under each of the slabs, can be exercised within a period of five years from the vesting date.
FUND RAISED DURING THE YEAR(a) Foreign Currency Convertible Bonds Issue
During the year, the Company has not issued any Foreign Currency Convertible Bonds.
However, the Company received USD 50 Million, as External Commercial Borrowings from State Bank of India, out of the sanctioned limit of USD 100 Million. Further, after the utilization of first USD 50 Million, as received, the remaining amount would be brought in for further utilisation.
NON-CONVERTIBLE DEBENTURES (NCDs)(a) Issuance of Secured NCDs, by way of Public Issue
During the FY 2022-23, the Company has successfully raised, by way of Public Issue, an aggregate amount of R 521.79 Crores via allotment of Secured NCDs having a face value of R 1,000 each, in the manner as stated below:
|
Tranche |
Date of allotment |
Amount raised |
|
I |
April 28, 2022 |
R 133.74 Crores |
|
II |
September 28, 2022 |
R 103.11 Crores |
|
III |
November 03, 2022 |
R 99.49 Crores |
|
IV |
December 28, 2022 |
R 93.80 Crores |
|
V |
March 23, 2023 |
R 91.65 Crores |
|
Total |
R 521.79 Crores |
These NCDs are listed on BSE Limited (BSE) and National Stock Exchange of India Limited (NSE).
Further, during the current Financial Year, the Company on July 27, 2023, by way of public issue, has successfully raised '' 101.3259 Crores via allotment of Secured NCDs having face value of '' 1000 each.
(b) 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 became due for redemption.
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.
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 2022-23 and 2023-24 have been paid.
The GDRs issued by the Company continue to remain listed on Luxembourg Stock Exchange ("LSE"). However, in view of the very low number of GDR''s being outstanding vis-a-vis very thin volume of trading in GDR''s, the Board of Directors in its Meeting held on March 21, 2023, approved voluntary delisting of 5,67,505 GDR''s (0.12% of its Paid-up capital) representing equal number of equity shares of Rs. 2/- each, from Luxembourg Stock Exchange, subject to compliance of all applicable requirements in this regard.
The Foreign Currency Convertible Bonds ("FCCBs") are listed on Singapore Exchange Securities Trading Limited ("SGX"). 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, not elsewhere mentioned in this Report, are given in "Annexure A" forming part of this Report.
AUDITORS(a) Statutory Auditors
In terms of the applicable RBI guidelines and on the basis of recommendation of the Audit Committee and Board of Directors, Messrs S.N. Dhawan & CO LLP, Chartered Accountants (Firm Registration No. 000050N/N500045 issued by The Institute of Chartered Accountants of India) (member firm of Mazars, an international audit, tax and advisory firm based in France) and Messrs Arora & Choudhary Associates, Chartered Accountants (Firm Registration No. 003870N issued by The Institute of Chartered Accountants of India) were appointed as the Joint Statutory Auditors by the Shareholders of the Company in their Extraordinary General Meeting held on November 15, 2021, for a period of 3 consecutive years, subject to them continuing to fulfil the applicable eligibility norms.
During the financial year 2022-23, the total remuneration paid by the Company (excluding Certification Fee plus applicable taxes and reimbursement of out of pocket expenses incurred by them in connection with the audit
of the accounts of the Company) to Messrs S.N. Dhawan & CO LLP and Messrs Arora & Chaudhary Associates was ^ 16,500,000 and ^ 6,600,000 respectively.
The Report of Joint Statutory Auditors for the FY 202223, forms part of this Report. The Joint Statutory Auditors Report does not contain any qualification, reservation or adverse remark.
The Notes to the Accounts referred to in the Joint Auditors Report are self - explanatory and therefore do not call for any further explanation. No frauds have been reported by the Joint Auditors of the Company in terms of Section 143(12) of the Companies Act, 2013.
The Joint Statutory Auditors have confirmed that they continue to satisfy the eligibility norms and independence criteria as prescribed by RBI Guidelines and the Companies Act, 2013.
(b) Secretarial Auditors & Secretarial Audit Report
Pursuant to the provisions of Section 204 of the Act 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 2022-23.
The Company has provided all assistance, facilities, documents, records and clarifications etc. to the Secretarial Auditors for the conduct of their audit. The Report of Secretarial Auditors for the FY 2022-23, is annexed as "Annexure 1", forming part of this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.
The Secretarial Compliance Report as prescribed by SEBI is annexed as "Annexure 2", forming part of this Report.
The Secretarial Audit Report of material subsidiary company namely, Indiabulls Commercial Credit Limited is annexed as "Annexure 3" forming part of this Report.
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 as per its CSR Policy (available on your Company''s website https://www.indiabullshomeloans.com/csr-policy and the details are contained in the Annual Report on CSR Activities given in "Annexure 4", 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, Management''s Discussion and Analysis Report, for the year under review, is presented in a separate section forming part of this Annual Report.
Pursuant to Regulation 34 of the SEBI (LODR) Regulations, 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 AND SUSTAINABILITY REPORT
Pursuant to Regulation 34 of the SEBI (LODR) Regulations, Business Responsibility and Sustainability Report (BR&SR) 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, 2023, 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, 2023 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.
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.
Mar 31, 2022
Your Directors are pleased to present the Seventeenth Annual Report of the Company along with the audited statement of accounts for the financial year ended March 31, 2022.
The first half of the financial year ended March 31, 2022 continued to be marred by the catastrophic economic and social effects of the COVID-19 pandemic, with the second wave, fueled by the deadly variant ''Delta'', wreaking havoc in India and the world over. Fortunately, quick vaccine approvals and expedited implementation of vaccination programmes helped contain the casualties and curtail the effect of the third wave of the pandemic in the second half of the year.
Favourable government and central bank policies helped the world economy bounce back from the lows of the second wave of pandemic. However, the global economic recovery started losing momentum in the second half of 2021, in the face of considerable uncertainty on account of the war in Europe leading to supply chain disruptions and bottlenecks, front-loaded monetary policy normalisation by central banks across advanced economies and emerging market economies in response to persistently high inflation and multiple waves of the COVID-19 pandemic.
Notwithstanding the challenges from inflationary pressures, external spillovers and geopolitical risks, the Indian economy remained on the path of recovery during the year.
For Indiabulls Housing, FY 2021-22 was a year of transition and growth.
The Company smoothly transitioned to its retail asset-light business model - establishing its intended co-lending partnerships and scaling up disbursals from the second half of the year. The Company also continued with its endeavor of maintaining a fortress balance sheet supported by strong capital position, healthy liquidity on balance sheet, adequate provisioning buffer and ensuring a well-matched ALM.
Financial Highlights (Standalone)
The financial highlights of the Company, for the financial year ended March 31, 2022, are as under:
|
Particulars |
Year ended March 31,2022 |
Year ended March 31,2021 |
|
(R in Crore) |
||
|
Profit before Depreciation, amortization and impairment expense |
1,030.30 |
1,482.99 |
|
Less: Depreciation, amortization and impairment expense |
74.40 |
90.82 |
|
Profit Before Tax |
955.90 |
1,392.17 |
|
Less: Total Tax expense |
259.79 |
333.71 |
|
Profit for the Year |
696.11 |
1,058.46 |
|
Add: Brought forward balance# |
-25.20 |
369.14 |
|
Amount available for appropriation |
670.91 |
1,427.60 |
|
Appropriations: |
||
|
Interim Dividend paid on Equity Shares (R Nil Per Share (Previous Year R 9.00/- Per Share)) |
- |
416.11 |
|
Transferred to Reserve I (Special Reserve U/s 29C of the National Housing Bank Act, 1987) |
139.22 |
211.69 |
|
Transferred to Additional Reserve (U/s 29C of the National Housing Bank Act, 1987) |
525.00 |
825.00 |
|
Balance of Profit Carried Forward1 |
6.69 |
-25.20 |
|
#1without adjusting Other Comprehensive Income (OCI) on Remeasurement gain on defined benefit plan (net of tax) to retained earnings |
||
|
KEY FINANCIAL HIGHLIGHTS: FY21-22 (Consolidated) |
||
|
Particulars |
FY 21-22 (IndAS) |
FY 20-21 (IndAS) |
|
Total Revenues (^ Crores) |
8,993.9 |
10,030.1 |
|
NII (Total Income - Finance Cost) (^ Crores) |
2,752.3 |
3,090.7 |
|
PAT (^ Crores) |
1,177.7 |
1,201.6 |
|
EPS (^) |
26.42 |
27.72 |
|
CRAR% (Standalone) |
22.49 |
22.84 |
FINANCIAL AND OPERATIONAL HIGHLIGHTS (CONSOLIDATED)Business Update
⢠The Company closed FY 2021-22 with a balance sheet size of ^ 81,973 Crores and total loan assets of ^ 72,211 Crores.
⢠Loan book of the Company stood at R 59,333 Crores at the end of FY 2021-22.
⢠The Profit after Tax (PAT) of the Company registered quarter-on-quarter growth for all four quarters of the fiscal year. For complete FY 2021-22, PAT for the Company stood at ^ 1,178 Crores.
⢠The Company has fully operational and maturing colending partnerships with Central Bank of India, Yes Bank, Indian Bank and Punjab & Sind Bank for home loans and with RBL Bank, Central Bank of India, Canara Bank and Punjab & Sind Bank for secured MSME loans.
⢠The Company''s Total Capital Adequacy [Standalone IBH] stood at 22.49% with a Tier 1 of 16.59% against regulatory requirement of 15% and 10% respectively. 1
management of ALM, whereby, it had repurchased R 4,340 Cr of its maturing bonds by May 2021 itself, thus utilizing its excess liquidity to minimize the lumpsum payment requirement.
⢠The Company also voluntarily created a reserve fund for repayment of its USD 350 Mn of Dollar bonds falling due in May 2022, wherein, the Company periodically transferred the total maturity proceeds of these bonds, in four tranches of 25% each, to a debt repayment trust, managed by IDBI Trustee, which was ultimately utilized towards scheduled redemption of these bonds.
⢠The Company will continue to undertake such proactive management of ALM by utilizing its strong capital position and comfortable levels of liquidity to provide comfort and confidence to its bond holders and further strengthen the Company''s credentials.
⢠At a consolidated level, the Company had a provisioning buffer of R 1,645 Crores on balance sheet, over 2x times of the regulatory requirement and equivalent to a healthy 2.8% of its loan book.
⢠At a consolidated level, gross non-performing loans as of March 31, 2022 amounted to ^ 2,318 Crores, equivalent to 3.21% of loan assets.
⢠At a consolidated level, net non-performing loans as at March 31, 2022 amounted to ^ 1,364 Crores, equivalent to 1.89% of loan assets.
During the year under review, there were no changes in the
nature of business of the Company.
Borrowings from Banks & Financial Institutions other than
Debentures, Securities and ECBs
As on March 31, 2022, the Company''s outstanding borrowings
other than debentures, securities and ECBs stood at R 22,124
Crores vis-a-vis ^ 26,644 Crores as on March 31, 2021.
Debentures and securities formed 46% of the Company''s borrowings as at the end of the fiscal year. There were no commercial papers outstanding as at the year end. As at March 31, 2022, the Company''s consolidated outstanding borrowings, from debentures and securities stood at R 28,291 Crores visa-vis '' 34,897 Crores as at March 31, 2021. The Company''s secured NCDs have been listed on the Wholesale Debt Market segment of NSE/BSE and have been assigned ''AA'' rating from CRISIL, ICRA and CARE; and ''AA '' by Brickwork Ratings. CRISIL, ICRA, Brickwork and Moody''s has revised the credit rating outlook from ''negative'' to ''stable'' which will enable the Company to raise funds at a lower cost.
As at March 31, 2022, the Company''s outstanding subordinated debt and perpetual debt stood at R 4,526 Crores and R 100 Crores respectively. The debt is subordinate to present and future senior indebtedness of the Company and has been assigned the AA rating by CRISIL, ICRA, CARE and AA by Brickwork Ratings. Based on the balance term to maturity, as at March 31, 2022, R 3,483 Crores of the book value of subordinated and perpetual debt is considered as Tier II, under the guidelines issues 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.
Regulatory Guidelines / Amendments
The Company has implemented / complied with the following new directions / notifications / circulars issued by the RBI:
⢠Guidelines on the appointment of Statutory Auditors (April 27, 2021).
⢠Amendment in Master Directions on KYC (May 10, 2021).
⢠Risk Based Internal Audit (June 11, 2021).
⢠Master Direction on (Transfer of Loan Exposure) Direction 2021 (September 24, 2021).
⢠Master Direction on (Securitization of Standard Assets) Direction 2021 (September 24, 2021).
Further, in line with Master Direction - Non - Banking Financial Company - Housing Finance Company (Reserve Bank) Directions, 2021 (RBI HFC Directions), the Company adopted the guidelines on maintenance of Liquidity Coverage Ratio with effect from December 1, 2021.
RBI has also issued, Scale Based Regulatory Framework for NBFCs dated October 22, 2021, which are applicable from October 01, 2022. This is an integrated framework with respect to capital requirements, governance standards and prudential regulations.
On November 12, 2021, RBI issued a notification on Prudential Norms on Income Recognition, Asset Classification and Provisioning (IRACP) pertaining to Advances, with the objective of harmonising regulatory guidelines for all lending institutions. RBI stipulated that borrower accounts be flagged as overdue as part of their day-end process for the due date. RBI also stipulated that NPA accounts can only be upgraded to standard provided all outstanding dues have been fully repaid. In February 2022, RBI provided time till September 30, 2022 for NBFCs to comply with the upgradation criteria.
The Company is in compliance with the applicable provisions and requirements of the RBI / HFC Directions and other directions / guidelines issued by RBI / NHB as applicable.
With the challenging macroeconomic conditions and uncertainties, there are heightened risks faced by the Company which can be inherent or market - related risks. There has been a continuous focus on identifying, measuring and mitigating risks by the Company. 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). A key risk in the competitive home loans, and mortgage - backed funding in general, is losing customers that transfer out their loans for small gains in interest rates, this represents significant loss of opportunity to the Company given the long - term nature of mortgage loans.
To identify and mitigate all 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) in place that comprises of its Directors and Members of its Senior Management team, who have rich industry experience across 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''s Chief Risk Officer (CRO) oversees the process of identification, measurement and mitigation of risks. The CRO reports directly to the Board and meets them multiple times, and at least once in a quarter, to discuss the risks faced by the Company and policies to mitigate them.
The Company''s Credit Committee supports the RMC by identifying and mitigating credit risks to the Company by formulating policies on limits on large credit exposures, asset concentrations, standards for loan collateral, loan review mechanism, pricing of loans etc. The credit committee is also responsible to frame approach and policies for customer retention, especially those customers that seek to transfer their loans out during interest rate cycles when the Company''s interest rates may be misaligned higher than the best rates available from other lenders.
The Company has a robust mechanism to ensure an ongoing review of systems, policies, processes and procedures to contain and mitigate risks that arise from time to time. 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
On June 11, 2021, the RBI extended the provisions of the risk
- based internal audit (RBIA) framework to HFCs, which were required to implement the framework by June 30, 2022. The RBIA framework is an audit methodology that links an organisations overall risk management framework and provides an assurance to the Board of Directors and the senior management on the quality and effectiveness of the organisation''s internal controls, risk management and governance-related systems and processes. The RBIA framework will further strengthen the Company''s overall risk management framework.
The Company adheres to the Fair Practices Code (FPC) recommended by the regulator, the Reserve Bank of India (RBI) as well as the National Housing Bank (NHB), to promote good and fair practices by setting minimum standards in dealing with customers. The RBI 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
One of the Company''s key areas of focus is generating fee-income by cross - selling and upselling various products to its customers. Leveraging on digital analytics and social media integration through its eHome Loans technology platform, the Company continues to stay engaged with its customers helping it better anticipate their needs, thus opening up cross - selling and resultant fee generation opportunities. The Company acts as an agent for multiple insurance companies and cross
- sells life insurance and general insurance products to its customers, earning a commission on the premiums paid by the customers. The Company''s insurance attachment rate is over 80%. The Company has also been successfully selling 2 - 3 different policies to its customers through its upselling efforts. Fee income represents a very important source of income for the Company and it continues to look at different avenues of generating and increasing its fee income.
At IBHFL, In order to ensure that our employees are equipped with the right kind of skills, knowledge and abilities to perform their assigned tasks, learning and development plays crucial role towards the growth and success of our business.
By opting and incorporating different types of training workshops and utilizing the most apt methodology to conduct, we ensure that employees possess and improve upon the skills required to excel at their work.
The organization is equipped with a dedicated highly professional set of team players c/a Learning & Development team as a sub set of Human Resource department, to ensure that employees are trained in functional and behavioral skills.
Training is based on the identified needs, competency or job specific knowledge gaps, skills and attitudes as identified jointly by the employee, department and branch heads and the human resources department.
The organization strives to provide steady career growth to all its employees.
Intermittent lockdowns and restrictions on movement during the second wave of COVID-19 pandemic required the employees to operate from their home for a couple of months during the financial year under consideration. This remote working culture required the use of technology to impart training to ensure that all round development of the employees continued unhindered.
During the year, the employee training vertical of the human resources department conducted 128 online & offline training sessions for 4,330 employees achieving 6,686 man hours of training. The trainings covered various aspects such as customer relationship management, credit risk analysis, operational efficiency, fraud prevention amongst others.
The Board of Directors of the Company, in its meeting held on May 19, 2021 has declared interim dividend R 9/- per equity share having face value R 2/- each for the FY 2020-21 and total outflow amounting to R 416.11 Crores. The Company had not declared any dividend for the FY 2021-22.
During the year, the unclaimed dividend of R 0.65 crore pertaining to the Financial Year 2013-14 and 2014-15, got transferred to Investor Education and Protection Fund after giving due notice to the members.
Further, the Company has transferred 3,100 equity shares pertaining to the Financial Year 2013-14 and 2014-15 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 KFin Technologies Limited. Further, in compliance with the requirements, in terms of the notification issued by the Ministry of Corporate Affairs (MCA), the Company has till date transferred 22,128 equity shares in respect of which dividend has not been received or claimed for seven consecutive years from the Financial Year 2008-09 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. https://www.indiabullshomeloans. com/uploads/downloads/ihfl-dividend-distribution-poli cy-0436865001502456462-0046016001552484803.pdf
DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the year under review, effective from March 14, 2022, Mr. Sameer Gehlaut has relinquished the office of Non -Executive Non - Independent Director of the Company. Also Mr. Shamsher Singh Ahlawat (DIN: 00017480) and Mr. Prem Prakash Mirdha (DIN: 01352748), Independent Directors ceased to be the Directors of the Company as their second term of five years came to an end on September 28, 2021.
Further, during the financial year 2021-22, the Members of the Company in their Sixteenth Annual General Meeting ("AGM") held through Video Conferencing (VC) / Other Audio-Visual Means (OAVM) on July 29, 2021 had approved:
a) the appointment of Mr. Dinabandhu Mohapatra (DIN: 07488705) former MD & CEO, Bank of India and former Executive Director of Canara Bank, as Non - Executive Independent Director of the Company, for a period of three years from November 23, 2020 upto November 22, 2023.
b) re-appointment Mr. Subhash Sheoratan Mundra (DIN: 00979731), formerly the Deputy Governor of Reserve Bank of India, presently holding the office of Non - Executive Chairman of the Company, as an Independent Director for another term of five years with effect from August 18, 2021 up to August 17, 2026.
c) re - appointment of Mr. Sachin Chaudhary (DIN: 02016992), as a Whole - Time Director and Key Managerial Personnel designated as Executive Director & Chief Operating Officer of the Company, for a further period of five years w.e.f. October 21, 2021.
In accordance with the provisions of Section 152 of the Companies Act, 2013 ("Act") and in terms of the Memorandum and Articles of Association (MOA) of the Company, Mr. Sachin Chaudhary (DIN: 02016992), Whole - Time Director of the
Company, is liable to retire by rotation at the ensuing Annual General Meeting of the Company and being eligible, offer himself for reappointment.
Further during the current Financial Year 2022-23, effective from April 26, 2022, Mr. B. C. Patnaik (DIN: 08384583), Managing Director, Life Insurance Corporation of India (LIC), has been appointed as LIC Nominee Director of the Company and Mr Ajit Kumar Mittal relinquished the office of Executive Director of the Company and re - designated as Non - Executive Non Independent Director.
In terms of the applicable legal provisions, the existing tenures of five years of Mr. Gagan Banga (DIN: 00010894), as a WholeTime Director & Key Managerial Personnel and designated as Vice - Chairman, Managing Director & CEO of the Company and Mr. Mr. Ashwini Omprakash Kumar (DIN: 03341114) as a WholeTime Director & Key Managerial Personnel and designated as Deputy Managing Director of the Company is coming to an end on March 18, 2023. The Company has grown significantly under the leadership and guidance of Mr. Gagan Banga and Mr. Ashwini Omprakash Kumar. Keeping in view their vast experience, knowledge and managerial skills, the Nomination & Remuneration Committee and the Board of Directors of the Company has recommended their re-appointment as such, for a further period of five years w.e.f. March 19, 2023.
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 Act and under Regulation 16 (1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI LODR). 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 Seventeenth Annual General Meeting of the Company.
The Board is of the opinion that the Independent Directors of the Company possess requisite qualifications, experience and expertise and that they hold the highest standards of integrity.
SHARE CAPITAL
The paid up equity share capital of the Company as on March 31, 2021 was ^ 937,143,008/- comprising of 462,571,504 equity shares of R 2/- each. During the year, the Company has made the following allotments:
i) On June 18, 2021 - the Company allotted 78,850 Equity Shares on account of Foreign Currency Convertible Bonds ("FCCBs") Conversion, for a principal value of USD 250,000.
ii) On December 20, 2021 - the Company allotted 3,103,976 Equity Shares on account of FCCBs Conversion, for a principal value of USD 10,250,000.
iii) On December 31, 2021 - the Company allotted 14,650 Equity Shares on account of ESOP exercise under the ''IHFL - IBFSL Employees Stock Option - 2008''
iv) On March 17, 2022 - the Company allotted 3,025,126 Equity Shares on account of FCCBs Conversion, for a principal value of USD 10,000,000.
After considering the above allotments during the year, the paid up Equity Share Capital of the Company as on March 31, 2022 was R 937,143,008 comprising of 468,571,504 Equity Shares of R 2/- each.
Subsequently, during the current financial year on April 18, 2022, the Company had allotted 30,25,126 equity shares of face value R 2/- each, upon conversion of FCCB, for a principal value of USD 10,000,000. As a result the paid-up equity share capital of the Company increased to R 943,193,260 comprises of 471,596,630 equity shares of R 2/- each. Further, Company has not issued any Equity Shares with Differential rights.
Mr. Sameer Gehlaut (Founder Promoter) along with Innus Infrastructure Private Limited and Sameer Gehlaut IBH Trust (Promoter Group Members) collectively referred as outgoing Promoters vide letter dated March 14, 2022 requested for their reclassification from Promoters and Promoter Group category to Public Category in terms of Regulation 31A of SEBI LODR.
The Boad of Directors and Shareholders of the Company had approved the said request in their respective meetings held on March 15, 2022 and April 18, 2022. The Company had filed applications to BSE Limited and National Stock Exchange of India Limited for reclassification of the ''Outgoing Promoters'' as ''Public'' under Regulation 31A of SEBI LODR, which are pending for approval.
ESOP / SAR SCHEMES / SWEAT EQUITY
Presently, the stock options / stock appreciation rights granted to the Employees operate under different schemes, namely, IBHFL-IBFSL Employees Stock Option Scheme - 2008, Indiabulls Housing Finance Limited Employees Stock Option Scheme - 2013, Indiabulls Housing Finance Limited Employees Stock Option Scheme - 2019 and Indiabulls Housing Finance Limited Employees Stock Option Scheme - 2021 (hereinafter individually and/or collectively referred to as the "Scheme(s)"). During the year, there has been no variation in the terms of the options granted under any of the schemes and all the schemes are in compliance with SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (SBEB Regulations). The Company has obtained a certificate from secretarial auditors on the same. During the year under review, Pragati Employee Welfare Trust (formerly Indiabulls Housing Finance Limited -Employees Welfare Trust), in terms of the shareholders'' approval of the Company, has purchased 6,000,000 Equity Shares of the
Company from the secondary market. Accordingly, at the end of the FY 2022, the Trust held 23,000,000 Equity Shares of the Company. No voting right has been exercised by the Trust in respect of such shares held by it. During the FY 2021-22, no Sweat Equity Shares were issued by the Company.
The disclosures on ESOPs and SARs, as required under SBEB Regulations have been placed on the website of the Company.
During the current FY, on April 26, 2022, the Board constituted Committee of the Company under Indiabulls Housing Finance Limited Employees Stock Option Scheme - 2013, granted 10,800,000 (One Crore Eight Lacs) stock options, out of the lapsed Stock Options, granted earlier, representing equal number of Equity Shares of face value of R 2/- each of the Company, to certain eligible Employees including Executive Directors of the Company and its Subsidiary Companies, at an exercise price of R 152.85 per Equity Share, being the latest available closing price of the Equity Share on the National Stock Exchange of India Limited, prior to the date of the above - mentioned meeting. The stock options so granted, shall vest within 3 years beginning from April 27, 2023, the first vesting date. The options vested under each of the slabs, can be exercised within a period of five years from the relevant vesting dates.
Further, on July 19, 2022, the Board constituted Committee of the Company under Indiabulls Housing Finance Limited Employees Stock Option Scheme - 2013, granted 15,500,000 (One Crore Fifty Five Lacs) stock options, out of the lapsed Stock Options, granted earlier, representing equal number of Equity Shares of face value of R 2/- each of the Company, to certain eligible Employees including Executive Directors of the Company and its Subsidiary Companies, at an exercise price of R 96 per Equity Share, (against R 95.70 which was the latest available closing price of the Equity Share on the National Stock Exchange of India Limited, prior to the date of the above - mentioned meeting. The stock options so granted, shall vest on July 20, 2023 or thereafter, as may be decided by the Board constituted Nomination and Remuneration Committee of the Company. The options vested under each of the slabs, can be exercised within a period of five years from the vesting date.
FUND RAISED DURING THE YEAR(a) FOREIGN CURRENCY CONVERTIBLE BONDS ISSUE
During the year, the Company has issued 4.50% Secured Foreign Currency Convertible Bonds due 2026 (''FCCBs'') of USD 165 Million at par, convertible into fully paid-up equity shares of face value of R 2/- each of the Company at an initial conversion price of R 243.05/- per equity share, on or after November 08, 2021 and up to the close of business hours on the 10th day before the Maturity Date, at the option of the FCCB holders. The Maturity Date of such FCCBs is September 28, 2026. FCCBs, which are not converted to Equity Shares during such specified period, will be redeemable on September 28, 2026.
NON-CONVERTIBLE DEBENTURES (NCDs)(a) Issuance of Secured and Unsecured NCDs, by way of Public Issue
During the FY 2021-22, the Company has successfully raised, by way of Public Issue, (a) R 792.28 Crores of Secured and Unsecured NCDs having a face value of R 1,000 each which were allotted on September 24, 2021, and (b) R 552.96 Crores of Secured NCDs having a face value of R 1,000 each which were allotted on January 6, 2022.
Further, during the current FY, the Company has successfully raised, by way of Public Issue, R 133.74 Crores of Secured NCDs having a face value of R 1,000 each, which were allotted on April 28, 2022.
These NCDs are listed on BSE Limited (BSE) and National Stock Exchange of India Limited (NSE)
(b) 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 became due for redemption.
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.
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 2021-22 and 202223 have been paid. The GDRs issued by the Company continue to remain listed on Luxembourg Stock Exchange ("LSE"). The Foreign Currency Convertible Bonds ("FCCBs") are listed on Singapore Exchange Securities Trading Limited ("SGX"). 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, not elsewhere mentioned in this Report, are given in "Annexure A" forming part of this Report.
AUDITORS(a) Statutory Auditors
During the year, the RBI had issued guidelines for the appointment of Statutory Auditors and relevant FAQs (RBI guidelines). Pursuant to the said RBI guidelines, Messrs
S. R. Batliboi & Co. LLP, Chartered Accountants, being ineligible to continue as the Statutory Auditors of the Company, tendered its resignation with effect from November 14, 2021. The Board placed on record its appreciation for the professional services rendered by Messrs S. R. Batliboi & Co. LLP during their association with the Company as its Statutory Auditors.
In terms of the said RBI guidelines and on the basis of recommendation of the Audit Committee and Board of Directors, the Shareholders of the Company in their Extraordinary General Meeting held on November 15, 2021, approved the appointment of Messrs S.N. Dhawan & CO LLP, Chartered Accountants (Firm Registration No. 000050N/N500045 issued by The Institute of Chartered Accountants of India) (member firm of Mazars, an international audit, tax and advisory firm based in France) and Messrs Arora & Choudhary Associates, Chartered Accountants (Firm Registration No. 003870N issued by The Institute of Chartered Accountants of India), as Joint Statutory Auditors of the Company, for a period of 3 consecutive years, subject to them continuing to fulfil the applicable eligibility norms.
During the financial year 2021-22, the total remuneration paid by the Company (excluding Certification Fee plus applicable taxes and reimbursement of out of pocket expenses incurred by them in connection with the audit of the accounts of the Company) to Messrs S.R. Batliboi & Co. LLP, Messrs S.N. Dhawan & CO LLP and Messrs Arora & Chaudhary Associates was R 1.075 crore, R 1.20 crore and R 0.60 crore, respectively.
The Report of Joint Statutory Auditors for the FY 202122, forms part of this Report. The Joint Statutory Auditors Report does not contain any qualification, reservation or adverse remark.
The Notes to the Accounts referred to in the Joint Auditors Report are self - explanatory and therefore do not call for any further explanation. No frauds have been reported by the Joint Auditors of the Company in terms of Section 143(12) of the companies Act, 2013.
The Joint Statutory Auditors have confirmed that they continue to satisfy the eligibility norms and independence criteria as prescribed by RBI guidelines and the Companies Act, 2013.
(b) Secretarial Auditors & Secretarial Audit Report
Pursuant to the provisions of Section 204 of the Act 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 financial year 2021-22. The Company has provided all
assistance, facilities, documents, records and clarifications etc. to the Secretarial Auditors for the conduct of their audit. The Report of Secretarial Auditors for the FY 202122, is annexed as "Annexure 1", forming part of this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.
The Secretarial Compliance Report as prescribed by SEBI is annexed as "Annexure 2", forming part of this Report.
The Secretarial Audit Report of material subsidiary company Indiabulls Commercial Credit Limited is annexed as "Annexure 3" forming part of this Report.
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 as per its CSR Policy (available on your Company''s website https://www.indiabullshomeloans.com/csr-policy) and the details are contained in the Annual Report on CSR Activities given in "Annexure 4", 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, Management''s Discussion and Analysis Report, for the year under review, is presented in a separate section forming part of this Annual Report.
Pursuant to Regulation 34 of the SEBI LODR, 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 AND SUSTAINABILITY REPORT
Pursuant to Regulation 34 of the SEBI LODR, Business Responsibility and Sustainability Report (BR&SR) 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, 2022, 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, 2022 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.
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.
The Company''s Net Gearing of 2.6x as at March 31, 2022 is one of the lowest amongst its peers.
Healthy Liquidity
⢠Company raised liquidity of R 24,497 Crores during the year, from various domestic and foreign banks and financial institutions as well as retail investors through NCD issues.
⢠The Company''s Liquidity Coverage Ratio (LCR) stood comfortably at 219% as at March 31, 2022, against a regulatory requirement of 50%
ALM Management
⢠During the year, the Company continued to deploy its excess liquidity to ensure that its ALM is optimally matched. The Company successfully repaid its bond repayments of R 6,576 Cr falling due in September 2021, through proactive
Mar 31, 2018
Dear Shareholders,
The Directors have pleasure in presenting the Thirteenth Annual Report together with the audited statement of accounts of the Company for the financial year ended March 31, 2018.
Financial Highlights
The financial highlights of the Company, for the financial year ended March 31, 2018, are as under -
Amount (in Rs.)
|
Particulars |
Year ended March 31, 2018 |
Year ended March 31, 2017 |
|
Profit before Depreciation and amortisation expense |
46,170,515,557 |
37,014,925,722 |
|
Less: Depreciation and amortisation expense |
269,656,957 |
207,100,504 |
|
Profit before Tax |
45,900,858,600 |
36,807,825,218 |
|
Less: Total Tax expense |
10,235,618,503 |
8,383,998,238 |
|
Profit for the Year |
35,665,240,097 |
28,423,826,980 |
|
Add: brought forward balance |
4,721,910,742 |
1,133,086,433 |
|
Add: Transitional Adjustment on account of Interest Rate Swaps |
- |
121,991,338 |
|
Amount available for appropriation |
40,387,150,839 |
29,678,904,751 |
|
Appropriations: |
||
|
Interim Dividend paid on Equity Shares (Rs.41.00 Per Share (Previous Year Rs.27.00 Per Share)) |
17,442,036,536 |
11,421,235,467 |
|
Corporate Dividend Tax on Interim Dividend paid on Equity Shares |
3,550,788,237 |
2,318,905,265 |
|
Transferred to Reserve III (Reserve U/s 36(1)(viii), Considered as eligible transfer to Special Reserve U/s 29C of the National Housing Bank Act, 1987) |
4,400,000,000 |
3,350,000,000 |
|
Transferred to Reserve I (Special Reserve U/s 29C of the National Housing Bank Act, 1987) |
2,733,048,019 |
2,334,765,396 |
|
Transferred to Additional Reserve (U/s 29C of the National Housing Bank Act, 1987) |
1,500,000,000 |
2,500,000,000 |
|
Transferred to General Reserve |
2,200,000,000 |
1,330,000,000 |
|
Transferred to Debenture Redemption Reserve |
3,322,257,094 |
1,702,087,881 |
|
Balance of Profit Carried Forward |
5,239,020,953 |
4,721,910,742 |
KEY FINANCIAL HIGHLIGHTS: FY17-18 (Consolidated)
|
Particulars |
FY 17-18 |
FY 16-17 |
|
Total Revenues (Rs. crore) |
14,640.4 |
11,701.7 |
|
NII (Rs. crore) |
5,785.3 |
4,767.6 |
|
PAT (Rs. crore) |
3,847.4 |
2,906.4 |
|
EPS © |
90.51 |
68.80 |
|
CRAR% (Standalone) |
18.61 |
18.28 |
FINANCIAL AND OPERATIONAL HIGHLIGHTS Rating Upgrades
- During the year the Companyâs rating was upgraded to the highest long-term credit rating of AAA by CRISIL, a Standard & Poorâs company and ICRA, a Moodyâs company.
- The Company now enjoys the highest long-term credit rating of AAA from all four leading credit rating agencies in India - CRISIL, ICRA, CARE and Brickwork Ratings.
Business Update
- In FY 2017-18, the Companyâs balance sheet size crossed Rs.1,30,000 crore to close the year at Rs.1,31,903 crore.
- The Company continues to be focused on mid-income affordable housing and propelled by the growth in this segment, the Companyâs total loan assets grew to Rs.1,22,578 crore, up 34.3% from Rs.91,301 crore as at the end of FY 2016-17.
- Total sold down loan assets stood at Rs.12,418 crore at the end of FY 2017-18. Sell down increases the Companyâs operational flexibility enabling efficient utilization of capital and is also RoE accretive.
- The Companyâs cost to income ratio declined to 12.5% for FY 2017-18 from 13.3% for the previous year. Increasing share of home loans through the online eHome Loan platform will further hasten the decline in cost to income ratio.
- During the year the Company sold about one-third of its holding in OakNorth Bank booking a profit of Rs.543 crore.
- The Profit after Tax of the company for the year 2017-18 stood at Rs.3,847 crore growing 32.4% over Rs.2,906 crore for the year 2016-17. The profit included one-off gains of Rs.543 crore from sale of stake in OakNorth Bank.
Indiabulls Digital Home Loans Platform and ISO Certifications
- The Company plans to launch a comprehensive âIndiabulls Digital Home Loan Platformâ in the second half of FY 2018-19. The platform aims to:
- Provide a single app for customers to apply for and manage their home loan
- Provide real time loan approvals by integrating with a credit scoring engine
- Bring developers and channel partners onto the platform to improve operational efficiency for all stakeholders
- Open up cross-sell opportunities through social media integration and big-data analytics
- Improve efficiency of self-employed underwriting through access to GST data
- The Digital Home Loans Platform aims to have the following definite operational impact:
- Vastly improved customer experience through reduced TAT and ease of access
- Enhanced productivity and operating efficiencies
- Share of self-employed segment maintained
- Increased customer engagement and touch points
- Reduced developer working capital cycles
- Enhanced DSA productivity and earning opportunities
- The above in turn will lead to specific financial outcomes:
- Long-term sustained loan book growth: 20% - 25%
- Sustained earnings growth: 20% - 25%
- Increased fee generation: 2% from present 1.6% of disbursals
- Reduced credit costs: <= 0.50% of loan assets
- Low cost-to-income ratio: < 8.0%
- Greater developer loyalty: 20% more loans/project
- The key customer facing departments and workflow process are ISO certified ensuring superior and standardized customer experience.
- ISO 10002:2014 - Customer care and complaint resolution
- ISO 9001:2015 - Lending Operations; credit underwriting; administration; human resources and Corporate Secretarial
- ISO 14001:2015 - Environmental management services
- ISO 27001:2015 - IT infrastructure operations, network operations, data centre, application development and maintenance
Stable Asset Quality
- Gross non-performing loans as at March 31, 2018 amounted to Rs.948 crore. This is equivalent to 0.77% of the portfolio.
- Net non-performing loans as at March 31, 2018 amounted to Rs.420 crore. This is equivalent to 0.34% of the portfolio.
- The Company has a prudent approach to creating loan provisions and carries total provisions across standard assets provision, sub-standard asset provisions and counter-cyclical provisions of Rs.1,758 crore.
- Total provision to gross NPAs was 185%.
- An experienced underwriting team and the in-house sourcing and collection teams ensure control over loan sourcing, credit appraisal and portfolio quality.
Strengthening Liability Profile
- During the year, the Company was upgraded to AAA by CRISIL, a Standard & Poorâs company and ICRA, a Moodyâs company. With these upgrade IBHFL has attained the highest long term credit rating of AAA from all four leading rating agencies in India. The highest AAA ratings enjoyed by the Company have reduced the cost of new borrowings, and has also enabled the Company to refinance the existing debt at lower rates.
- Total borrowings of the Company grew by 29% to Rs.1,10,257 crore at the end of FY 2017-18 from Rs.85,301 crore at the end of FY 2016-17.
- The Company has issued Rs.2,750 crore of Tier II Bonds which forms part of Tier II capital. During 2017-18, the Company issued Indiaâs first Social Affordable Housing Offshore (Masala) Bonds amounting to Rs.315 crore. A total of Rs.1,540 crore of Social Affordable Housing Bonds were issued in FY 18.
- In June 2018, the Company raised USD 240 Mn through the ECB route from a Syndicate of banks in Singapore, Korea, Japan and Taiwan. The Company was also able to refinance USD 250 Mn of existing ECBs.
- In keeping with IBHFLâs philosophy of maintaining adequate and healthy levels of liquidity, the Company had Rs.16,535 crore of liquid funds in the form of cash, cash equivalent and investment in liquid schemes of mutual funds.
- Through the year, the Company expanded its lender base and by the end of FY 2017-18 the Company has 507 strong relationships: 21 PSU banks, 22 Private and Foreign banks and 464 Mutual Funds, Provident Funds, Pension Funds, Insurance Companies and others.
Bank Borrowings
As on March 31, 2018, the Companyâs outstanding bank loans stood at Rs.41,711 crore vis-a-vis Rs.34,659 crore as on March 31, 2017. Bank borrowingsâ contribution to funding mix continued its downward trajectory with only 25% of total funding coming from bank term loans. The Companyâs 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
FY 2017-18 saw a marked shift in the Companyâs funding sources with debentures and securities contributing 61% of the Companyâs incremental funding for the fiscal year. This represents a source of stable, long term, regular, recurring and expanding source of funds.
As at March 31, 2018, the Companyâs consolidated outstanding borrowings from debentures and securities stood at Rs.65,619 crore vis-a-vis Rs.48,048 crore as at March 31, 2017. The Companyâs secured NCDs have been listed on the Wholesale Debt Market segment of NSE / BSE and have been assigned âAAAâ rating from ICRA, CARE and Brickwork Ratings and CRISIL.
As at March 31, 2018, the Companyâs outstanding subordinated debt and perpetual debt stood at Rs.4,571 crore and Rs.100 crore respectively. The debt is subordinate to present and future senior indebtedness of the Company and has been assigned the âAAAâ rating by ICRA, CARE and Brickwork Ratings and CRISIL. Based on the balance term to maturity, as at March 31, 2018, Rs.4,375.73 crore 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.
Regulatory Guidelines / Amendments
National housing Board (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.
IBHFL has a Risk Management Committee (RMC) 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. IBHFL 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
With the goal of serving maximum number of customers and maximizing customer satisfaction, the Company has witnessed a large increase in the number of branches across all regions. Moreover, the digitization of workflow integrates the different components of the loan application and underwriting process.
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.
Training and Human Resource Management
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 7,304 employees covering various aspects such as customer relationship management, credit risk analysis, operational efficiency, fraud prevention and others.
DIVIDEND
The Company has consistently worked towards shareholdersâ wealth maximization. With regard to this, the Company has declared four interim dividends amounting to Rs.41 per share on share of face value Rs.2 each (Rs.9/-, Rs.9/-, Rs.9/- and Rs.14/-) for the year 2017-18 and total outflow amounting to Rs.2,099.28 crore (inclusive of Corporate Dividend Tax).
The Board of Directors of the Company, had, in its meeting held on April 20, 2018, declared an interim dividend of Rs.10/per share of face value of Rs.2/- each, for the Financial Year 2018-19. Further, the Board of Directors of the Company, had, in its meeting held on August 2, 2018, declared second interim dividend of Rs.10/- per share of face value of Rs.2/- each, for the Financial Year 2018-19.
During the year, the unclaimed dividend pertaining to the Financial Year 2009-10 and 2010-11, got transferred to Investor Education and Protection Fund after giving due notice to the members. 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 Computershare Private Limited. Further, in compliance with the requirements, in terms of the notification issued by the Ministry of Corporate Affairs (MCA) regarding the âInvestor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016â (âthe Rulesâ) which have come into force from 7th September, 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 28th February, 2017 and 13th October, 2017 respectively (âthe Amended Rulesâ), the Company has transferred 11,511 equity shares in respect of which dividend has not been received or claimed for seven consecutive years from the Financial Year 2008-09 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-NR0/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
During the FY 2017-18, the Members of the Company at its 12th Annual General Meeting held on September 8, 2017, have reappointed Mr. Sameer Gehlaut (DIN: 00060783) as a Whole Time Director and Key Managerial Personnel, designated as Executive Chairman of the Company, Mr. Gagan Banga (DIN: 00010894) as a Whole-Time Director and Key Managerial Personnel, designated as Vice-Chairman, Managing Director & CEO of the Company, Mr. Ajit Kumar Mittal (DIN: 02698115) as a Whole-time Director and Key Managerial Personnel designated as Executive Director of the Company, and Mr. Ashwini Omprakash Kumar (DIN: 03341114) as a Whole-time Director and Key Managerial Personnel, designated as Deputy Managing Director of the Company, for a further period of five years, with effect from March 19, 2018 since their existing tenure came to an end on March 18, 2018.
The Members have also approved the appointment of Mr. Sachin Chaudhary (DIN: 02016992) as a Director and a Wholetime Director & Key Managerial Personnel of the Company, for a period of five years, with effect from October 21, 2016, since Mr. Sachin Chaudhary was appointed as an Additional Director and a Whole-Time Director and Key Managerial Personnel of the Company designated as its Executive Director w.e.f. October 21, 2016, for a period of five years as his appointment being as an Additional Director on the Board of the Company, was up to the date of 12th Annual General Meeting held on September 8, 2017.
To ensure continuity of guidance from Justice Gyan Sudha Misra (Retd. Justice Supreme Court of India) (DIN: 07577265) the existing Independent Director of the Company, the Board has recommended her re-appointment as Independent Director of the Company for another term of 5 years from September 29, 2018 up to September 28, 2023. Keeping in view, the vast experience and knowledge of Justice Misra, the Board is of the view that her appointment as Independent Director, on the Board, will be in the interest of the Company. Upon approval of the shareholders to her appointment as Independent Directors her appointment shall be formalized by issuing a letter of appointment to her, which shall be open for inspection by the members at the registered office of the Company, in terms of applicable provisions of the Act.
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. Gagan Banga (DIN: 00010894), Executive Director, designated as ViceChairman, Managing Director and CEO of the Company, retire by rotation at the ensuing Annual General Meeting of the Company and being eligible offer himself for reappointment.
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.
The present composition of the Board along with 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 Corporate Governance Report, forming part of this Annual Report and in the Notice convening the 13th Annual General Meeting of the Company.
SHARE CAPITAL / ESOP SCHEMES
The paid up equity share capital of the Company as on March 31, 2018, was Rs.853,071,572 comprising of 426,535,786 equity shares of Rs.2/- each. Subsequently, from April 1, 2018 till date, the Company had allotted 57,035 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.85,31,85,642 comprising of 42,65,92,821 equity shares of Rs.2/- each.
Presently, stock options granted to the employees operate under the schemes namely; âIBHFL-IBFSL Employees Stock Option Plan - 2006â, âIBHFL-IBFSL Employees Stock Option Plan II - 2006â, âIBHFL-IBFSL Employees Stock Option - 2008â and âIndiabulls Housing Finance Limited Employees Stock Option Scheme-2013â. Under âIndiabulls Housing Finance Limited Employees Stock Option Scheme-2013â, during the year under review, an aggregate of 10,600,000 Stock Options (10,500,000 Stock Options at an exercise price of Rs.1156.50 per option and 100,000 Stock Options at an exercise price ofRs.1200.40 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 as required under these regulations have been placed on the website of the Company https://www. indiabullshomeloans.com/.
RETAIL AND MASALA BOND (a) Issuance of INR 3,150,000,000 7.80 per cent. Secured Synthetic INR Notes due 2021 by the Company, listed on Singapore Exchange Securities Trading Limited
During the FY 2017-18, the Company has successfully raised INR 315 Cr by issue of Secured Rupee denominated Social Affordable Housing Masala Bonds bearing a coupon of 7.80% and having a tenor of 3 years. These bonds have been assured by KPMG and are listed on Singapore Stock Exchange (SGX-ST).
(b) Issuance of Secured and Unsecured NCDs, by way of Private Placement basis
During the FY 2017-18, the Company has successfully raised, by way of private placement, Rs.20,214.20 crore of Secured NCDs having a face value of Rs.10,00,000 each, Rs.500 crore of secured NCDs having a face value of Rs.10,00,000 each {paid-up value Rs.25 crore, i.e. Rs.50,000 per NCD paid-up(Initial Subscription Amount)} and Rs.2,500 crore Unsecured NCDs having a face value of Rs.1,00,000 each. The said NCDs are listed on WDM segment of BSE Limited (BSE) and National Stock Exchange of India Limited (NSE).
(c) Details of NCDs which have not been claimed by the Investors
There are nil 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 IPO and on Private Placement basis are listed on WDM segment of NSE and BSE.
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, subject to ratification of their appointment by the Members at every intervening Annual General Meeting, on such remuneration as may be mutually agreed upon between the Board of Directors of the Company and the Statutory Auditors. The Ministry of Corporate Affairs (MCA) vide its notification no. S.O. 1833(E) dated May 7, 2018 has done away with the requirement of getting the appointment of the Statutory Auditors ratified at every intervening Annual General Meeting. Accordingly, the Company has received a certificate from the Auditors to the effect that their continuation as such from the conclusion ofthis Annual General Meeting until the conclusion of Seventeenth Annual General Meeting is in accordance with the provisions of the Section 141(3)(g) of the Companies Act, 2013. The Board recommends the ratification of their appointment as Statutory Auditors of the Company till the conclusion of Seventeenth Annual General Meeting of the Company.
The Notes to the Accounts referred to in the Auditorsâ 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 2017-18. 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 2017-18, is annexed as âAnnexure 1â and forming part of this Report. The Report is self - explanatory and therefore do not call for any further explanation.
(c) Cost Records
The Company is not required to make and maintain cost records pursuant to Section 148(1) of the Companies Act, 2013.
CORPORATE SOCIAL RESPONSIBILITY
As part of its initiatives under âCorporate Social Responsibility (CSR)â, 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 Companyâs website http://www.indiabullshomeloans. com/) and the details are contained in the Annual Report on CSR Activities given in âAnnexure 2â, 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, Managementâs 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, 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 a separate section on Business Responsibility Report (BRR) is presented in a separate section forming part of this Annual Report.
DIRECTORSâ 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, 2018, 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, 2018 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.
INFORMATION PURSUANT TO SECTION 134 AND SECTION 197 OF THE COMPANIES ACT, 2013 READ WITH THE RELEVANT RULES AND SEBI LODR REGULATIONS
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, not elsewhere mentioned in this Report, are given in âAnnexure Aâ forming part of this Report.
GREEN INITIATIVES
The Companyâs Environmental Management System (EMS) focuses on assessing the environmental cost of the Companyâs 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 Companyâs 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 2018 and Notice of the 13th 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 2018 and Notice of the 13th 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 13th 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. The instructions for remote e-voting are provided in the Notice.
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: August 2, 2018 Gagan Banga Ajit Kumar Mittal
Place: Mumbai Vice-Chairman, Executive Director
Managing
Director &
CEO
(DIN: 00010894) (DIN: 02698115)
Mar 31, 2017
Dear Shareholders,
The Directors have pleasure in presenting the Twelfth Annual Report together with the audited statement of accounts of the Company for the financial year ended March 31, 2017.
Financial Results
The standalone financial highlights of the Company, for the financial year ended March 31, 2017, are as under -
Amount (in Rs.)
|
Particulars |
Year ended March 31, 2017 |
Year ended March 31, 2016 |
|
Profit before Depreciation and amortisation expense |
37,014,925,722 |
30,725,976,054 |
|
Less: Depreciation and amortisation expense |
207,100,504 |
193,714,873 |
|
Profit before Tax |
36,807,825,218 |
30,532,261,181 |
|
Less: Total Tax expense |
8,383,998,238 |
7,591,022,620 |
|
Profit for the Year |
28,423,826,980 |
22,941,238,561 |
|
Add: brought forward balance |
1,133,086,433 |
4,239,111,217 |
|
Add: Transitional Adjustment on account of Interest Rate Swaps |
121,991,338 |
- |
|
Amount available for appropriation |
29,678,904,751 |
27,180,349,778 |
|
Appropriations: |
||
|
Interim Dividend paid on Equity Shares (Rs.27.00 Per Share (Previous Year Rs.45.00 Per Share)) |
11,421,235,467 |
17,829,374,499 |
|
Corporate Dividend Tax on: |
||
|
Interim Dividend paid on Equity Shares |
2,318,905,265 |
3,629,641,133 |
|
Transferred to Reserve III (Reserve U/s 36(1) (viii), Considered as eligible transfer to Special Reserve U/s 29C of the National Housing Bank Act, 1987) |
3,350,000,000 |
2,620,000,000 |
|
Transferred to Reserve I (Special Reserve U/s 29C of the National Housing Bank Act, 1987) |
2,334,765,396 |
1,968,247,713 |
|
Transferred to Additional Reserve (U/s 29C of the National Housing Bank Act, 1987) |
2,500,000,000 |
- |
|
Transferred to General Reserve |
1,330,000,000 |
- |
|
Transferred to Debenture Redemption Reserve |
1,702,087,881 |
|
|
Balance of Profit Carried Forward |
4,721,910,742 |
1,133,086,433 |
KEY FINANCIAL HIGHLIGHTS: FY16-17 (Consolidated)
|
FY 16-17 |
FY 15-16 |
Growth (%) |
|
|
Total Revenues (Rs. Cr.) |
11,701.7 |
9,225.6 |
26.8 |
|
NII (Rs. Cr.) |
4,767.6 |
3,801.8 |
25.4 |
|
PAT (Rs. Cr.) |
2,906.4 |
2,344.7 |
24.0 |
|
EPS O |
69 |
60 |
15.0 |
FINANCIAL AND OPERATIONAL HIGHLIGHTS
Rating Upgrades
- In June 2017, the Companyâs credit rating was upgraded to the highest long-term rating of AAA by ICRA, the Indian arm of the leading international credit rating agency Moodyâs.
- The Company now enjoys the highest long-term credit rating of AAA from three rating agencies.
- During FY 2016-17, the subordinate-debt rating of Indiabulls Housing Finance Ltd. (IBHFL) also got upgraded to AAA by CARE Ratings.
Business Update
- In FY 2016-17, the Companyâs balance sheet size crossed the landmark Rs.1,00,000 Crore to close the year at Rs.1,03,705 Crore.
- The Company continues to be focused on mid-income affordable housing and propelled by the growth in this segment, the Companyâs total loan assets grew to Rs.91,301 Crore, up 33% from Rs.68,683 Crore as at the end of FY 2015-16.
- Total sold down loan assets stood at Rs.8,687 Crore at the end of FY 2016-17. Sell down increases the Companyâs operational flexibility enabling efficient utilization of capital, besides being RoE accretive.
- The Companyâs cost to income ratio declined to 13.3% for FY 2016-17 from 14.3% the previous year. Increasing share of home loans through the online eHome Loan platform will further hasten the decline in cost to income ratio.
Home Loans: Digitally Enabled Streamlined Loan Fulfillment
- In the first half of the year, the Company launched a global-first online end-to-end home loans fulfillment platform called eHome Loans.
- By the end of the financial year, eHome Loans was already contributing to 20% of home loan sourcing, driving the decline in cost to income ratio.
- Key customer facing departments and workflow process are ISO certified ensuring superior and standardized customer experience.
- ISO 10002:2014 - Customer care and complaint resolution
- ISO 9001:2015 - Loan operations; credit underwriting; administration; human resources
- ISO 14001:2015 â Environmental management services
- ISO 27001:2015 - IT infrastructure operations, network operations, application development and maintenance, and data centre
- The Company has a well-trained, in-house Direct Salesâ Team of over 3,000 employees to promptly attend to prospective customers.
- A multi-lingual customer care centre accessible by phone, chat, SMS or email addresses customer queries and complaints.
Stable Asset Quality
- Gross non-performing loans as at March 31, 2017 amounted to Rs.777.2 Cr. This is equivalent to 0.85% of the portfolio.
- Net non-performing loans as at March 31, 2017 amounted to Rs.328.6Cr. This is equivalent to 0.36% of the portfolio.
- The Company has a prudent approach to creating loan provisions and carries total provisions across standard assets provision and sub-standard asset provisions of Rs.1,149.1 Cr.
- Total provisions over gross NPAs was 148%.
- An experienced underwriting team and the in-house sourcing and collection teams ensure control over loan sourcing, credit appraisal and portfolio quality.
Strengthening Liability Profile
- Total borrowings of the Company grew by 40% to Rs.85,301 Crore at the end of FY 2016-17 from Rs.61,085 Crore at the end of FY 2015-16.
- In FY 2016-17, the Company tapped the foreign institutional market by issuing USD 200 Mn of rupee-denominated masala bonds.
- For the first time, the Company undertook public issue of bonds raising Rs.7,000 Crore in FY 2016-17.
- During the year, the Company raised USD 350 Mn through the ECB route.
- In keeping with IBHFLâs philosophy of maintaining adequate and healthy levels of liquidity, the Company had Rs.18,502 Crore of liquid funds in the form of cash, cash equivalent and investment in liquid schemes of mutual funds.
- Through the year, the Company expanded its lender base and by the end of FY 2016-17 the Company has 375 strong relationships: 26 PSU banks, 20 Private and Foreign banks and 329 Mutual Funds, Provident Funds, Pension Funds, Insurance Companies and others.
Bank Borrowings
As at March 31, 2017, the Companyâs outstanding bank loans stood at Rs.34,659 Crore vis-a-vis Rs.33,571 Crore as at March 31, 2016. Bank borrowingsâ contribution to funding mix continued its downward trajectory with only 37% of total funding coming from bank term loans. The Companyâs 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
FY 2016-17 saw a continuing shift in the Companyâs funding sources as bonds continued to be the cheapest source of funds. Accordingly, 87% of the incremental borrowings for the year were from debentures and securities. As at March 31, 2017, the Companyâs outstanding borrowings from debentures and securities stood at Rs.48,048 Crore vis-a-vis Rs.26,187 Crore as at March 31, 2016. The Companyâs secured NCDs have been listed on the Wholesale Debt Market segment of NSE / BSE and have been assigned AAA (stable) rating from ICRA, a Moodyâs investor Service Company, CARE and Brickwork Ratings.
As at March 31, 2017, the Companyâs outstanding subordinated debt and perpetual debt stood at Rs.1,763 Crore and Rs.100 Crore respectively. The debt is subordinate to present and future senior indebtedness of the Company and has been assigned the âAAAâ rating by CARE and Brickworks Ratings. Based on the balance term to maturity, as at March 31, 2017, Rs.1,907.1 Crore 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.
Regulatory Guidelines / Amendments
The Company is in compliance with all regulations pertaining to Accounting Standards, Prudential norms for asset classification, income recognition, provisioning, capital adequacy and credit rating.
Risk Management Framework
The Company has an effective Risk Management Framework in place to manage the risks faced in the course of its business. The Risk Management Framework encompasses all of the Companyâs activities paving a path towards the Company becoming a stable, scalable and sustainable business.
The Companyâs Risk Management Committee (RMC) comprises of its directors and members of its senior management team, who have several years of experience in the industry and have put in place preventive mechanisms to contain various risks. The RMC met multiple times during the year ending March 31, 2017 continuously monitoring emergent risks the Company was exposed to. The RMC put in place or enhanced the control measures to contain these risks. Systems, policies, processes and procedures are reviewed on an ongoing basis to contain and mitigate emergent risks.
Codes and Standards
The Company adheres to the Fair Practices Code (FPC) recommended by sector regulator, the National Housing Bank (NHB) as well as the RBI, put in place to promote good and fair practices by setting minimum standards in dealing with customers. The NHB also has 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
The FY 2016-17, saw the Company further increase its âSmart City Home Loansâ branch network, deepening reach into tier II and tier III towns and cities. A digitally enabled online workflow system helps the Company expand into these locations in a cost-effective manner. The online workflow system permits operation of lean branches where loan application files are compiled, scanned and digitally logged in. The file travels digitally and credit underwriting is centralized at regional hubs.
State-of-the-art Customer Care set up helps speedy resolution of customer queries and promptly attends to any loan requirements. Survey calling, where feedback is taken from existing and new customers, also helps in continuous process improvement and generation of new leads.
Training and Human Resource Management
Trainings for more than 5,000 employees were conducted in the last financial year covering various aspects such as sales excellence, leadership, usage of digital media, customer service, data analysis, credit risk analysis, etc. Majority of the employees attended multiple sessions based on their job profile. We have state of the art training facility at our Head Office at Gurugram, spread over 2300 sq. ft. and at our corporate office at Parel, Mumbai, spread over 11,000 sq.ft. where periodic training sessions are organized by the Training Department.
Dividend
In keeping with the Companyâs policy of rewarding its shareholders, the Board of Directors of the Company, had, for the year 2016-17, declared three interim dividends aggregating to Rs.27/- per share on shares of face value Rs.2/- each (Rs.9/- for each), with the total outflow of Rs.1,374.6 Cr (inclusive of Corporate Dividend Tax).
The Board of Directors of the Company, had in its meeting held on April 24, 2017 declared an interim dividend of Rs.9/per share of face value of Rs.2/- each, for the Financial Year 2017-18. Further, the Board of Directors of the Company, had, in its meeting held on July 24, 2017, declared second interim dividend of Rs.9/- per share of face value of Rs.2/- each, for the FY 2017-18.
During the year, the unclaimed dividend pertaining to the FY 2008-09, got transferred to Investor Education and Protection Fund after giving due notice to the members. Those members who have not so far claimed their dividend for the financial years subsequent to 2008-09, are also advised to claim it from the Company or Karvy Computershare Private Limited, the Registrar & Transfer Agent (RTA).
In compliance with requirements stipulated vide SEBI notification 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
To achieve the highest standards of Corporate Governance in its management, and to introduce a true sense of professionalism in the Board of the Company and to ensure continuity of guidance, during the FY 2016-17, the existing Independent Directors namely Justice Bisheshwar Prasad Singh (Retd. Justice Supreme Court of India) (DIN: 06949954), Brig Labh Singh Sitara (Ex-army official and Dhyanchand award winner sportsman) (DIN: 01724648), Mr. Shamsher Singh Ahlawat (DIN: 00017480) and Mr. Prem Prakash Mirdha (DIN: 01352748), were appointed as Independent Director w.e.f. September 29, 2016. Further, Justice Gyan Sudha Misra (Retd. Justice Supreme Court of India) (DIN: 07577265) was appointed as an Independent Director of the Company w.e.f. September 29, 2016. Further pursuant to authorization dated September 29, 2014, of the members of the Company, the two year term of Justice Surinder Singh Nijjar (Retd. Justice Supreme Court of India) (DIN: 06964806), as Independent Director of the Company, comes to an end effective on September 28, 2016. The Board places on record its appreciation for the contribution made by Justice Nijjar, during his tenure on the Board 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. Ajit Kumar Mittal (DIN: 02698115), Executive Director and Mr. Ashwini Omprakash Kumar (DIN: 03341114), Deputy Managing Director of the Company, retire by rotation at the ensuing Annual General Meeting of the Company and being eligible offer themselves for reappointment. Further, The existing tenure of Mr. Sameer Gehlaut (DIN: 00060783) as a Whole Time Director and Key Managerial Personnel, designated as Executive Chairman and other Whole-Time Directors and Key Managerial Personnel, namely, Mr. Gagan Banga (DIN: 00010894), designated as Vice-Chairman, Managing Director & CEO; Mr. Ajit Kumar Mittal (DIN: 02698115) designated as Executive Director; and Mr. Ashwini Omprakash Kumar (DIN: 03341114) designated as Deputy Managing Director, shall come to an end on March 18, 2018. The Company has grown significantly under the leadership and guidance of all its Whole-time Directors. Keeping in view, their vast experience, knowledge and managerial skills, the Nomination & Remuneration Committee has recommended to the Board, the re-appointment of Mr. Sameer Gehlaut, Mr. Gagan Banga, Mr. Ajit Kumar Mittal and Mr. Ashwini Omprakash Kumar, Whole-Time Directors and Key Managerial Personnel, as such, for a further period of five years w.e.f. March 19, 2018. Further, Mr. Sachin Chaudhary (DIN: 02016992) was appointed by the Board of Directors as an Additional Director designated as Whole-time Director and Key Managerial Personnel of the Company for a period of 5 years with effect from October 21, 2016. The appointment/re-appointment of all these Whole-time Director(s) is in compliance with the applicable provisions of the Companies Act, 2013 and requires the approval of the shareholders at ensuing Annual General meeting. The Board recommends appointment/ reappointment of all these Directors.
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. The present composition of the Board along with 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 12th Annual General Meeting of the Company.
SHARE CAPITAL / ESOP SCHEMES
The paid up equity share capital of the Company as on March 31, 2017, was Rs.847,712,080 comprising of 423,856,040 equity shares of Rs.2/- each. Subsequently, from April 1, 2017 till date, the Company had allotted 491,560 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 of which the paid up equity share capital of the Company stands increased to Rs.848,695,200 comprising of 424,347,600 equity shares of Rs.2/- each.
The disclosures required to be made in compliance with the applicable regulations are set out in the Annexure to this Report and have been placed on the website of the Company http://www.indiabullshomeloans.com.
NON-CONVERTIBLE DEBENTURES AND MASALA BOND
(a) Issuance of INR 13,300,000,000 8.567 per cent. Secured Synthetic INR Notes due 2019 by the Company, listed at Singapore Exchange Securities Trading Limited
During the FY 2016-17, the Company has successfully raised Rs.13,300 Million by issue of Secured Rupee denominated Masala Bonds bearing a coupon of 8.567% and having a tenor of 3 years and 1 month. These bonds are listed on Singapore Stock Exchange (SGX-ST).
(b) Issuance of Secured and Unsecured NCDs, by way of Public issue, having face value of Rs.1,000 each for an amount aggregating to Rs.70,000 million, listed at BSE and NSE
During the FY 2016-17, the Company has successfully raised Rs.70,000 million by way of public issue of Secured and Unsecured NCDs having a face value of Rs.1,000 each. The said NCDs are listed on BSE Limited (BSE) and National Stock Exchange of India Limited (NSE).
(c) Issuance of Secured and Unsecured NCDs, by way of Private Placement basis
During the FY 2016-17, the Company has successfully raised, by way of private placement, Rs.10,741.50 Crore of Secured NCDs having a face value of Rs.10,00,000 each, Rs.3,200 Crore of Secured NCDs having a face value of Rs.10,00,000 each {paid-up value Rs.1,600 Crore, i.e. Rs.5,00,000 per NCD paid-up (Initial Subscription Amount)} and Rs.609.70 Crore Unsecured NCDs having a face value of Rs.1,00,000 each. The said NCDs are listed on BSE Limited (BSE) and National Stock Exchange of India Limited (NSE).
(d) Details of NCDs which have not been claimed by the Investors
There are nil 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 2017-18 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 IPO and on Private Placement basis are listed on WDM segment of NSE and BSE.
AUDITORS
(a) Statutory Auditors
In compliance with the applicable provisions of the Companies Act, 2013, read with the Companies (Audit and Auditors) Rules, 2014, the existing term of M/s Deloitte Haskins & Sells LLP (Firm Regn. No. 117366W/ W-100018), Chartered Accountants, as the Statutory Auditors of the Company shall come to an end at the conclusion of the ensuing Annual General Meeting of the Company. The Board places on record its appreciation for the services rendered by M/s. Deloitte Haskins & Sells LLP as the Statutory Auditors of the Company.
The Board, on the recommendation of the Audit Committee, have recommended for the appointment of M/s S.R. Batliboi & Co. LLP, Chartered Accountants (ICAI Registration No.: 301003E/E300005), as the Statutory Auditors of the Company for a term of 5 years, subject to ratification of their appointment by the members at every intervening Annual General Meeting held after this Annual General Meeting. Consent and certificate under Section 139 of the Companies Act, 2013 have been obtained from M/s S.R. Batliboi & Co. LLP, Chartered Accountants, to the effect that their appointment, if made, shall be in accordance with the applicable provisions of the Act and the Rules issued thereunder. As required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, M/s S.R. Batliboi & Co. LLP, Chartered Accountants, has confirmed that they hold a valid certificate issued by the Peer Review Board of ICAI. The Notes to the Accounts referred to in the Auditorsâ Report are self - explanatory and therefore do not call for any further explanation.
(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 2016-17. 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 2016-17, is annexed as âAnnexure 1â and forming part of this Report. The Report is self - explanatory and therefore do not call for any further explanation.
CORPORATE SOCIAL RESPONSIBILITY
As part of its initiatives under âCorporate Social Responsibility (CSR)â, the Company has undertaken projects in the areas of Health, Education, Sanitation, Nutrition and Rural Development, as per its CSR Policy (available on your Companyâs website http://www.indiabullshomeloans.com/) and the details are contained in the Annual Report on CSR Activities given in âAnnexure 2â, 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, Managementâs 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 24 of the SEBI LODR Regulations, 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 mandates inclusion of the Business Responsibility Report (BRR) as part of the Annual Report for top 500 listed entities based on market capitalization. In compliance with this regulation, BRR is presented in a separate section forming part of this Annual Report.
DIRECTORSâ 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, 2017, 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, 2017 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.
INFORMATION PURSUANT TO SECTION 134 AND SECTION 197 OF THE COMPANIES ACT, 2013 READ WITH THE RELEVANT RULES AND SEBI LORD REGULATIONS
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, not elsewhere mentioned in this Report, are given in âAnnexure Aâ forming part of this Report.
GREEN INITIATIVES
The Companyâs Environmental Management System (EMS) focuses on assessing the environmental cost of the Companyâs 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 Companyâs 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 2017 and Notice of the 12th 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 2017 and Notice of the 12th 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 12th 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. The instructions for remote e-voting are provided in the Notice convening the 12th 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/-
Gagan Banga Ajit Kumar Mittal
Vice-Chairman, Executive Director
Managing Director
Date: July 24, 2017 & CEO
Place: Mumbai (DIN: 00010894) (DIN: 02698115
Mar 31, 2015
Dear Members,
The Directors have pleasure in presenting the Tenth Annual Report
together with the audited statement of accounts of the Company for the
financial year ended March 31, 2015
Financial Results
The financial highlights of the Company, for the financial year ended
March 31, 2015, are as under -
Amount (in Rs.)
Particulars Year ended Year ended
March 31, 2015 March 31, 2014
Profit before
Depreciation and
amortisation expense 25,511,744,125 19,084,400,506
Less: Depreciation and
amortisation expense 180,120,868 76,526,559
Profit before Tax 25,331,623,257 19,007,873,947
Less: Provision for Tax 5,549,349,492 3,907,892,095
Profit after Tax 19,782,273,765 15,099,981,852
Add: brought forward
balance 481,135,068 2,208,792,471
Less: Adjustment on
account of Depreciation
(Net of tax benefit) 36,536,103 -
Amount available for
appropriation 20,226,872,730 17,308,774,323
Appropriations:
Interim Dividend paid on
Equity Shares (Rs. 26.00
Per Share (Previous Year
Rs. 20.00 Per Share)) 9,104,090,057 6,650,135,713
Interim Dividend payable
on Equity Shares (Rs. Nil
Per Share (Previous Year
Rs. 9.00 Per Share)) - 3,006,381,987
Dividend for the previous
year on Equity Shares
issued after the year end
pursuant to ESOPs
Allotment 1,067,652 -
Corporate Dividend
Tax on:
- Interim Dividend paid
on Equity Shares 1,425,967,604 1,130,190,566
- Interim Dividend
payable on Equity Shares - 510,934,619
- Dividend for the previous
year on Equity Shares
issued after the year end
pursuant to ESOPs
Allotment 181,448 -
Transferred to General
Reserve - 1,510,000,000
Transferred to Reserve
U/s 36(1)(viii)(Considered
as eligible transfer to
Special Reserve U/s 29C
of the National Housing
Bank Act, 1987) 1,860,000,000 1,500,000,000
Transferred to Special
Reserve (U/s 29C of the
National Housing
Bank Act, 1987) 2,096,454,752 1,519,996,370
Transferred to Additional
Reserve (U/s 29C of the
National Housing
Bank Act, 1987) 1,500,000,000 1,000,000,000
Balance of Profit
Carried Forward 4,239,111,217 481,135,068
KEY FINANCIAL HIGHLIGHTS: FY14-15 (Consolidated)
FY 14-15 FY 13-14 Growth (%)
Total Revenues (Rs. Cr.) 7,270.4 5,904.8 23.1
NII (Rs. Cr.) 3,179.5 2,607.5 21.9
PAT (Rs. Cr.) 1,901.2 1,568.5 21.2
EPS (Rs.) 55 48 14.6
CRAR% (Standalone) 18.4 19.1
FINANCIAL AND OPERATIONAL HIGHLIGHTS
Rating Upgrades
* In the first half of the year IBHFL was upgraded by all the four
rating agencies that rate the company.
* IBHFL is rated AAA by CARE Ratings and Brickwork Ratings.
* IBHFL is rated AA by Crisil, a Standard & Poor's company, and ICRA,
an associate of Moody's Investor Service.
* In FY 2014-15, we also got a short term rating from India Ratings, a
Fitch group company, at the highest A1 level. We are thus rated by
all five rating agencies in India.
Asset Growth
* Assets continue to grow steadily on back of long-term, low-risk
mortgage loans. The total Assets under Management stood at Rs. 52,235
Crore, up 27% from Rs. 41,169 Crore.
* Outstanding securitized loan book was Rs. 6,195 Crore at the end of
FY 2014-15 (previous year Rs 5,724 Crore), on which a spread of 3.4%
p.a. is to be earned over the life of the loan.
Asset Composition
* 76% of the loan assets are mortgage loans.
* Home loans, which form the majority of incremental disbursals, are
disbursed at an average ticket size of Rs. 24 lacs and at average LTV
of 71% at origination.
* Loans against property are disbursed at an average ticket size of Rs.
68 lacs and at an average LTV of 49% at origination.
* The loan profiles of both the home loans and loans against property
are conservative. The loans are monthly amortizing, secured against
mortgage on the property financed and are given out at moderate LTV
levels.
* 82% of retail mortgage loans, consisting of the above home loans and
loans against property are sourced in- house.
Home Loans: Streamlined Loan Fulfillment
* In FY 2015, the ISO certification (ISO 9001:2008) awarded
to the Company's document management system was reaffirmed.
* The Company has a well-trained, in-house Direct Sales' Team of over
2000 people to promptly attend to prospective customers.
Improving Liability Profile
* In keeping with its stated strategy, the Company continues to
maintain healthy levels of liquidity with cash and bank balances and
current investments adding up to Rs. 9,631 Cr at the end of FY 14-15.
* During the FY 14-15 the company raised USD 200 mn through ECB,
drawing down the complete RBI approved limit.
* Funds raised through bonds constituted 31% of the Company's
incremental borrowings in FY 14-15.
* The Company has further reduced its reliance on short-term borrowings
from commercial paper to 7%.
Diversified Borrowing Program
* Amongst its lenders, the Company now counts 132 strong relationships:
26 PSU banks, 17 Private and Foreign banks and 89 Mutual Funds,
Provident Funds, Pension Funds, Insurance Companies and others.
Optimally Matched Balance Sheet
* The assets and liabilities have been optimally matched with no
mismatch till 5 years.
* The maturity profile reflects adjustments for prepayments and
renewals in accordance with the guidelines issued by National Housing
Bank.
Stable Asset Quality
* Gross non-performing loans as at March 31, 2015 amounted to Rs. 442.8
Cr. This is equivalent to 0.85% of the portfolio.
* Net non-performing loans as at March 31, 2015 amounted to Rs. 185.9
Cr. This is equivalent to 0.36% of the portfolio.
* The company has a prudent approach to creating loan provisions and
carries total provisions, across standard assets provision and
sub-standard asset provisions of Rs. 615.5 Cr. These total provisions
are Rs. 221 Cr above the regulatory requirements.
* The Company has been successful in maintaining stable, low levels of
NPA as low-risk mortgage portfolio increases the asset base, while
contributing very low incremental delinquencies.
* Moderate levels of LTV and emphasis on borrower cash flow stability
during loan appraisal have ensured that the credit quality in loans
against property portfolio also remains high.
* An experienced underwriting team and the in-house sourcing and
collection teams ensure control over loan sourcing, credit appraisal
and portfolio management.
Bank Borrowings
As at March 31,2015, the Company's outstanding bank loans stood at Rs.
28,138 crs (excluding the USD 200 mn of External Commercial Borrowing
(ECB) availed during the financial year from various financial
institutions) vis-a-vis Rs. 21,710 crs as at March 31, 2014. The
Company's bank borrowings continue to enjoy a rating of AAA, signifying
high degree of safety for timely servicing of debt obligations.
Non-Convertible Debentures (NCD) and Commercial Paper (CP)
As at March 31, 2015, the Company's outstanding secured NCDs stood at
Rs. 13,548 crs vis-a-vis Rs. 9,460 crs as at March 31, 2014. The
Company's secured NCDs have been listed on the Wholesale Debt Market
segment of NSE / BSE and have been assigned 'AAA' rating from both CARE
and Brickwork Ratings and 'AA ' from CRISIL.
As at March 31, 2015, the Company's outstanding subordinated debt and
perpetual debt stood at Rs. 980 and 100 Cr. The debt is subordinate to
present and future senior indebtedness of the Company and has been
assigned the 'AA ' and 'AAA' rating by CARE and Brickworks Ratings
respectively. Based on the balance term to maturity, as at March 31,
2015, Rs. 995.62 Cr 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.
The company's outstanding commercial paper stood at Rs. 3,207 crs as
at March 31,2015. The commercial paper program of the company enjoys a
rating of A1 signifying highest degree of safety for timely servicing
of debt obligations.
Regulatory Guidelines / Amendments
The Company has complied with directions from the RBI and the NHB
regarding Accounting Standards, Prudential norms for asset
classification, income recognition, provisioning, capital adequacy and
credit rating.
Risk Management Framework
The Company has a Risk Management Frame work that provides guidelines
and standard practices for risk assessment and mitigation. The Risk
Management Committee (RMC) of the Company comprises of members of its
senior management team, who have many years of experience in the
industry and have put in place preventive mechanisms to contain various
risks. The RMC met multiple times during the year ending 31 March 2015
and kept an active watch on the emergent risks the Company was exposed
to. The RMC put in place or enhanced the control measures to contain
these risks. 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.
Codes and Standards
The Fair Practices Code (FPC) recommended by sector regulator, the
National Housing Bank (NHB) as well as the RBI seek to promote good and
fair practices by setting minimum standards in dealing with customers
while doing lending business. 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.
Marketing and Distribution
The Company has taken a number of initiatives through the financial
year 2014-15 to enhance brand awareness and to reach out to a greater
number of customers. The company launched a 360 degree campaign
-'Celebrating the spirit of the Hardworking Indian' across mediums
including television, print and digital. The campaign was well received
by the potential customers and other stakeholders. Further to
capitalize on the ever growing utility of digital media and social
networking, the company enhanced its visibility and reach by
associating with digital partners, presence on websites, social media
and the use of email marketing. The company further participated in
more than 40 property/consumer expos along with organizing 'Aawas' the
Indiabulls budget property show.
Cross Selling and Distribution of Financial Products and Services
The financial year 2014-15, saw the Company further expanding its
branch network, and widen its reach on the community. The Company now
has 220 branches spread across 18 states. State of the art Customer
Care set up helps speedy resolution of customer queries and promptly
attends to any loan requirements. Survey calling, where feedback is
taken from existing and new customers also helps in continuous process
improvement and generation of new leads.
Training and Human Resource Management
The Company aims to build a team of dedicated employees who work with
passion and a sense of belonging and play a defining role in
accelerating the Company's growth.
Trainings for more than 4900 employees were conducted in the last
financial year covering various aspects such as sales excellence,
customer service, data analysis, credit risk analysis, etc. We have a
state of the art facility spread over 11,000 sq.ft. at our corporate
office at Parel, Mumbai, where periodic training sessions are organized
by the Training Department.
DIVIDEND
In keeping with the Company's policy of rewarding its shareholders, the
Board of Directors of the Company, had, for the year 2014-15, declared
three interim dividends aggregating to Rs. 26/- per share on shares of
face value Rs. 2/- each (Rs. 8/- for the quarter ended June 30, 2014,
Rs.9/- for the quarter ended September 30, 2014 and Rs.9/- for the
quarter ended December 31,2014), with the total outflow of Rs. 1,053.01
Cr (inclusive of Corporate Dividend Tax).
The Board of Directors of the Company, had, in its meeting held on
April 24, 2015, declared an interim dividend of Rs. 9/- per share of
face value of Rs. 2/- each, for the Financial Year 2015-16. Further,
the Board of Directors of the Company, had, in its meeting held on July
21, 2015, declared second interim dividend of Rs. 9/- per share of face
value of Rs. 2/- each, for the Financial Year 2015-16.
During the year, the unclaimed dividend pertaining to the financial
year ended March 31, 2008, got transferred to Investor Education and
Protection Fund after giving due notice to the members.
PROMOTERS DE-CLASSIFICATION
To impart greater focus and undivided accountability at the leadership
level and to rationalize operations of the diverse businesses of the
Indiabulls group, so as to put the Company firmly on the growth path,
the promoters, during the year under review, had mutually decided to
reorganize the management control of different group companies amongst
themselves. As part of the restructuring, Mr. Sameer Gehlaut, Chairman
of the Company and the entities promoted by him, namely, Orthia Land
Development Private Limited, Orthia Developers Private Limited, Cleta
Properties Private Limited, Cleta Buildtech Private Limited, Inuus
Infrastructure Private Limited and Inuus Land Development Private
Limited have continued as Promoters / Promoter Group / PACs with the
promoters of the Company.
Further, with effect from July 18, 2014, Mr. Rajiv Rattan and the
entities promoted by him, namely, Priapus Properties Private Limited,
Priapus Real Estate Private Limited, Priapus Developers Private
Limited, Priapus Constructions Private Limited and Mr. Saurabh Kumar
Mittal and the entities promoted by him, namely, Hespera Infrastructure
Private Limited, Hespera Properties Private Limited, Hespera Real
Estate Private Limited, Hespera Realty Private Limited and Hespera
Realcon Private Limited, have ceased to be the Promoters / Promoter
Group / PACs with the promoters of the Company.
DIRECTORS
To achieve the highest standards of Corporate Governance in its
management, and to introduce a true sense of professionalism in the
Board of the Company, during the financial year 2014-15, the Board of
Directors of the Company (Board) was re-constituted with the
appointments of Justice Bisheshwar Prasad Singh (Retd. Justice Supreme
Court of India), Justice Surinder Singh Nijjar (Retd. Justice Supreme
Court of India), Dr. Kamalesh Shailesh Chandra Chakrabarty (Retd Deputy
Governor RBI), Brig Labh Singh Sitara (Ex-army official and Dhyanchand
award winner sportsman) as Independent Directors of the Company and the
appointment of Mrs. Manjari Ashok Kacker (Ex-Member CBDT), as
Non-Executive Director of the Company and cessation of Mr. Rajiv Rattan
and Mr. Saurabh Kumar Mittal, Non-Executive Directors and of Mr. Karan
Singh Khera, Mr. Aishwarya Katoch and Mr. Joginder Singh Kataria,
Independent Directors. The Board has placed on record its appreciation
for the contributions made by these directors, during their respective
tenures of office.
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 Act and Clause 49 of the Listing Agreement.
In accordance with the provisions of the Companies Act, 2013 and in
terms of the Memorandum and Articles of Association of the Company, Mr.
Ajit Kumar Mittal (DIN: 02698115) and Mr. Ashwini Omprakash Kumar (DIN:
03341114), Directors of the Company, retire by rotation at the ensuing
Annual General Meeting of the Company and being eligible offer
themselves for reappointment. The Board recommends their
re-appointment.
The present composition of the Board along with the brief resume of the
Directors proposed to be appointed/ reappointed, nature of their
expertise in specific functional areas and names of companies in which
they hold directorships and memberships/chairmanships of Board
Committees, are provided in the Report on Corporate Governance forming
part of this Annual Report.
SHARE CAPITAL / ESOP SCHEMES
The paid up equity share capital of the Company as on March 31, 2015,
was Rs. 71,11,28,932 comprising of 35,55,64,466 equity shares of Rs.
2/- each. Subsequently, from April 1,2015 till date, the Company had
allotted 67,11,254 equity shares of face value Rs. 2/- each (a) against
conversion of 66,43,700 warrants (ISIN No.: INE148I13017)
and (b) exercise of 67,554 stock options under various ESOP Schemes of
the Company, as a result of which the paid up equity share capital of
the Company stands increased to Rs. 72,45,51,440 /- comprising of
36,22,75,720 equity shares of Rs. 2/- each.
During the year under review, the Company has granted its 1,05,00,000
stock options, under Indiabulls Housing Finance Limited ESOP - 2013, to
certain eligible employees, excluding the Promoter Director. The
disclosures required to be made under Securities and Exchange Board of
India (Employee Stock Option Scheme and Employee Stock Purchase Scheme)
Guidelines, 1999, in respect of all existing ESOP Schemes of the
Company are set out in the Annexure to this Report.
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 No.: INE148I01020) of the Company, continue to
remain listed at BSE Limited and National Stock Exchange of India
Limited. The listing fees payable to both the exchanges for the
financial year 2015-16 have been paid. The GDRs issued by the Company
continue to remain listed on Luxembourg Stock Exchange.
AUDITORS
(a) Statutory Auditors
M/s Deloitte Haskins & Sells LLP (Firm Regn. No. 117366W / W-100018),
the statutory auditors of the Company were appointed by the members in
their ninth Annual General Meeting, held on 11th August 2014, for a
period of three years i.e. until the conclusion of the twelfth Annual
General Meeting of the Company. The Company has received a certificate
from the Auditors to the effect that their continuation as such from
the conclusion of this Annual General Meeting until the conclusion of
eleventh annual general meeting is in accordance with the provisions of
the Section 141(3)(g) of the Companies Act, 2013. The Board recommends
the ratification of the appointment of M/s Deloitte Haskins & Sells
LLP, as statutory auditors of the Company till the conclusion of
eleventh 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.
(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
Jatin Gupta & Associates, a firm of Company Secretaries in practice as
its Secretarial Auditors, to conduct the secretarial audit of the
Company, for the Financial Year 2014-15. 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 Financial Year 2014-15, 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.
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, Nutrition and Rural Development, 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 2", 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 Clause 49 of the Listing Agreement with the Stock
Exchanges, 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 Clause 49 of the Listing Agreement with the Stock
Exchanges, 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.
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, 2015, 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
andjudgments 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, 2015 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; and
e) that proper internal financial controls were in place and that such
financial controls were adequate and were operating effectively.
f) that systems to ensure compliance with the provisions of all
applicable laws were in place and were adequate and operating
effectively.
INFORMATION PURSUANT TO SECTION 134 AND SECTION 197 OF THE COMPANIES
ACT, 2013 READ WITH THE RELEVANT RULES AND LISTING AGREEMENT
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 Listing Agreement, not elsewhere mentioned
in this Report, are given in "Annexure A" forming part of this Report.
GREEN INITIATIVES
Electronic copies of the Annual Report 2015 and Notice of the 10th 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
2015 and Notice of the 10th 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 10th 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 Clause 35B of the Listing
Agreement. The instructions for e-voting are provided in the Notice.
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
Date : 5th August, 2015 Sameer Gehlaut
Place: Mumbai Chairman
Mar 31, 2014
Dear Shareholders,
The Directors have pleasure in presenting the Ninth Annual Report
together with the audited statement of accounts of the Company for the
financial year ended March 31, 2014.
Financial Results
The financial highlights of the Company, for the financial year ended
March 31, 2014, are as under -
Amount (in Rs.)
Particulars Year ended Year ended
March 31, 2014 March 31, 2013
Profit before Depreciation
and amortisation expense 19,084,400,506 16,133,276,744
Less: Depreciation and
amortisation expense 76,526,559 92,110,194
Profit before Tax 19,007,873,947 16,041,166,550
Less: Provision for Tax 3,907,892,095 3,762,096,996
Profit after Tax 15,099,981,852 12,279,069,554
Add: brought forward balance 2,208,792,471 1,595,235,686
Add: Transfer from Indiabulls
Financial Services Limited
pursuant to Scheme of Arrangement  1,295,149,850
Amount available for
appropriation 17,308,774,323 15,169,455,090
Appropriations:
Interim Dividend paid on
Equity Shares (Rs. 20.00 Per
Share (Previous Year
Rs. 13.50 Per Share)) 6,650,135,713 4,215,019,939
Interim Dividend
payable on Equity Shares
(Rs. 9.00 Per Share (Previous
Year Rs. 6.50 Per Share)) 3,006,381,987 2,031,322,586
Dividend for the previous
year on Equity Shares issued
by the Erstwhile Holding Company
after the year end pursuant
to ESOPs Allotment  1,291,745
Corporate Dividend Tax on:
 Interim Dividend
paid on Equity Shares 1,130,190,566 683,781,610
 Interim Dividend payable
on Equity Shares 510,934,619 345,223,274
 Dividend for the previous
year on Equity Shares
issued by the
Erstwhile Holding Company
after the year end pursuant
to ESOPs Allotment  209,554
Transferred to General Reserve 1,510,000,000 1,228,000,000
Transferred to Special
Reserve (U/s 29C of the
National Housing Bank Act, 1987) 3,019,996,370 2,455,813,911
Transferred to Additional Reserve
(U/s 29C of the National
Housing Bank Act, 1987) 1,000,000,000 2,000,000,000
Balance of Profit
Carried Forward 481,135,068 2,208,792,471
KEY FINANCIAL HIGHLIGHTS: FY13-14 (Consolidated)
FY 12-13 FY 13-14 Growth (%)
Total Revenues (Rs. Crore.) 4,777.95 5,961.31 24.77%
NII (Rs. Crore.) 2,130.33 2,607.33 22.39%
PAT (Rs. Crore.) 1,266.06 1,568.54 23.89%
EPS (Rs.) 40.19 47.96 19.34%
CRAR% (Standalone) 18.47 19.14
BUSINESS UPDATE
- Return on Equity (RoE) has grown to 27.75%. RoE expected to increase
further with growth in business.
- 450% of interim dividend of Rs. 9 per share of face value Rs. 2/- has
been declared. With this, the total dividend for FY 2013-14 (including
interim dividend of Rs. 20/- already paid) is Rs. 29/- per share of
face value of Rs. 2/ - amounting to 1450%, total outflow of Rs.
1,129.76 Crore (inclusive of Corporate Dividend Tax).
FINANCIAL AND OPERATIONAL HIGHLIGHTS Asset Growth
- Assets continue to grow steadily on back of long-term, low-risk
mortgage loans. The total Assets under Management stood at Rs.
41,169.40 Crore, up 19.59% from Rs. 34,425.62 Crore.
- During the year, loans amounting to Rs. 4,171 Crore. were sold down.
- With the above sell down, outstanding securitized loan book was Rs.
5,724 Crore. at the end of FY 2013-14, on which a spread of 3.4% p.a.
is to be earned over the life of the loan.
Asset Composition
- Home loans, which form the majority of incremental disbursals, are
disbursed at an average ticket size of Rs. 24 lacs and at average LTV
of 70% at origination.
- Loans against property, which form the remainder of the retail
mortgage book, are disbursed at an average ticket size of Rs. 68 lacs
and at an average LTV of 49% at origination.
- The loan profiles of both the home loans and loans against property
are conservative. The loans are monthly amortizing, secured against
mortgage on the property financed and are given out at moderate LTV
levels.
- 76% of retail mortgage loans, consisting of the above home loans and
loans against property, are sourced in-house. With improving
productivity of in-house sourcing team, over 80% of these retail
mortgage loans will be sourced in-house in FY15.
Home Loans: Streamlined Loan Fulfillment
- In FY 2014, the ISO certification (ISO 9001:2008) awarded to the
Company''s document management system was reaffirmed.
- The Company continues to grow its branch network and now has 205
branches spread across the country.
- The Company has a well-trained, in-house Direct Sales'' Team of over
2,000 people to promptly attend to prospective customers.
Improving Liability Profile
- In keeping with its stated strategy, the Company continues to
maintain healthy levels of liquidity with cash and bank balances and
current investments adding up to Rs. 7,341.38 Crore at the end of FY
13- 14.
- Funds raised through bonds constituted 26% of the Company''s
incremental borrowings in FY 13-14.
- The Company has further reduced its reliance on short-term money to
8% of total borrowings.
Diversified Borrowing Program
- Amongst its lenders, the Company now counts 108 strong relationships:
26 PSU banks, 16 Private and Foreign banks and 66 Mutual Funds,
Provident Funds, Pension Funds, Insurance Companies and others.
Optimally Matched Balance Sheet
- The assets and liabilities have been optimally matched with no
mismatch till 5 years.
- The maturity profile reflects adjustments for prepayments and
renewals in accordance with the guidelines issued by National Housing
Bank.
Stable Asset Quality
- Gross non-performing loans as at March 31, 2014 amounted to Rs.
341.69 Crore. This is equivalent to 0.83% of the portfolio.
- Net non-performing loans as at March 31, 2014 amounted to Rs. 147.26
Crore. This is equivalent to 0.36% of the portfolio.
- The Company has been successful in maintaining stable, low levels of
NPA as low-risk mortgage portfolio increases the asset base, while
contributing very low incremental delinquencies.
- Moderate levels of LTV and emphasis on borrower cash flow stability
during loan appraisal have ensured that the credit quality in loans
against property portfolio also remains high.
- An experienced underwriting team and the in-house sourcing and
collection teams ensure control over loan sourcing, credit appraisal
and portfolio management.
Subordinated Debt
During the year, the Company raised Rs. 220.00 Crore through the issue
of long-term Unsecured Redeemable Non  Convertible Subordinated
Debentures. The Subordinated Debt was assigned a ''AA '' rating from
both, CARE and Brickworks Ratings.
As at March 31, 2014, the Company''s outstanding subordinated debt and
perpetual debt stood at Rs. 1,064.68 Crore. The debt is subordinate to
present and future senior indebtedness of the Company and has been
assigned the rating by CARE and Brickworks Ratings. Based on the
balance term to maturity, as at March 31, 2014, Rs. 1,008.64 Crore of
the book value of subordinated 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.
Non Convertible Debentures (NCD) During the year, the Company issued
NCD amounting to Rs. 3,703.3 Crore on a private placement basis. The
Company''s NCDs have been listed on the Wholesale Debt Market segment of
BSE and NSE and have been assigned AA rating from both CARE and
Brickwork Ratings and A1 from CRISIL. As at March 31, 2014, NCD
outstanding stood at Rs. 9,460.4 Crore. 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.
Loans from Banks during the year, the Company raised term loans
amounting to Rs. 8,735 Crore from commercial banks. The Company''s
long-term bank loan facilities continue to enjoy a rating of AA ,
signifying high degree of safety for timely servicing of debt
obligations and its short-term bank loan facilities continue to enjoy a
rating of A1 signifying highest degree of safety for timely servicing
of debt obligations.
Regulatory Guidelines / Amendments
The Company has complied with directions from the RBI and the NHB
regarding Accounting Standards, Prudential norms for asset
classification, income recognition, provisioning, capital adequacy and
credit rating.
Risk Management Framework
The Company has a Risk Management Framework that provides guidelines
and standard practices for risk assessment and mitigation. The Risk
Management Committee (RMC) of the Company comprises of members of its
senior management team, who have many years of experience in the
industry and have put in place preventive mechanisms to contain various
risks. The RMC met multiple times during the year ending 31 March 2014
and kept an active watch on the emergent risks the Company was exposed
to. The RMC put in place or enhanced the control measures to contain
these risks. 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.
Codes and Standards
The Fair Practices Code (FPC) recommended by sector regulator, the
National Housing Bank (NHB) as well as the RBI seek to promote good and
fair practices by setting minimum standards in dealing with customers
while doing lending business. 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.
Marketing and Distribution
The Company has taken a number of initiatives through the financial
year 2013-14 to reach out to a greater number of customers. To
capitalize on the ever growing utility of digital media and social
networking, the company launched its online campaign on relevant sites
and used email marketing to enhance its visibility and garner leads
from the digital space. The Company further expanded the inaugural
property show started last year, to organize 12 ''Aawas'' property shows
in tier I and II cities across the country. This was well appreciated
by many of the home buyers as it gave them a good platform to find
their dream home at an affordable price.
Cross Selling and Distribution of Financial Products and Services
The financial year 2013-14, saw the Company further expanding its
branch network, and widen its reach on the community. The Company now
has 205 branches spread across 20 states. State of the art Customer
Care set up helps speedy resolution of customer queries and promptly
attends to any loan requirements. Survey calling, where feedback is
taken from existing and new customers also helps in continuous process
improvement and generation of new leads.
Training and Human Resource Management
The Company aims to build a team of dedicated employees who work with
passion and a sense of belonging and play a defining role in
accelerating the Company''s growth. The Company has recruited laterally
from within the industry to bring on capable leaders.
Trainings for more than 2,500 employees were conducted in the last
financial year covering various aspects such as sales excellence,
customer service, data analysis, credit risk analysis, etc. We have a
state of the art facility spread over 25,000 sq.ft. at our corporate
office at Parel, Mumbai, where periodic training sessions are organized
by the Training Department.
INDIAN MORTGAGE MARKET
- Lower mortgage penetration, measured by mortgage to GDP ratio, stands
at 9% for India. This is quite low when compared with other developing
nations, with the same ratio for China at 20% and Malaysia at 29%. The
mortgage to GDP for some of the developed nations is close to 100%, all
of which points to the huge opportunity for growth in the Indian
mortgage market.
- The Indian mortgage industry at an inflection point and is estimated
to grow five-fold in next 10 years.
- This growth is driven by increasing urbanization, rising income
levels and break up of traditional joint family structures.
- This growth in demand and increasing competition between banks,
housing finance companies and non- banking financial companies for the
secured mortgage market has made financing readily available. This in-
turn acts as an enabler for the growth of the sector.
HOME LOAN SECTOR GROWTH
- The home loan industry is expected to grow at 18- 20% CAGR for the
next five years, on a large base of more than Rs. 8,60,000 Crore in
FY14.
- The Indian home loan market is characterized by low average LTVs of
65-70% and predominantly first-time home buyers. This implies
significant borrower equity and results in stability in the market.
- The expected growth in the home loan Industry gives opportunity for
the Company to sustain current mortgage business growth.
FACTORS DRIVING MORTGAGE DEMAND
- Rising disposable incomes and increasing affordability of mortgage
loans, with effective interest rate after tax benefits of only 7.02%,
have led to greater demand in the mortgage market.
- Urbanization in India is expected to increase, with 40% of the
population predicted to be living in urban areas by 2025. This will
create a huge demand for urban housing, indicating the growth potential
for mortgage market.
- Falling average age of house owners coupled with favorable
demographics, as 60% of the country''s population is below the age of
30, has driven the growth in the housing and housing finance market.
DIVIDEND
In keeping with the Company''s policy of rewarding its shareholders, the
Board of Directors of the Company, had, for the year 2013-14, declared
four interim dividends aggregating to Rs 29/- per share on shares of
face value Rs. 2/- each (Rs. 6/- per equity share on July 18, 2013, Rs.
7/ - per equity share on October 23, 2013, Rs. 7/ - per equity share on
January 22, 2014 and Rs. 9/- per equity share on shares of face value
Rs. 2/- each, on April 23, 2014). With this, the total dividend for FY
2013-14 is Rs. 29/- per share on face value of Rs. 2/- amounting to
1450%, total outflow of Rs. 1,129.76 Crore (inclusive of Corporate
Dividend Tax).
SIGNIFICANT DEVELOPMENT DURING THE YEAR
Listing of the securities, post-merger of Indiabulls Financial Services
Limited with the Company
312,511,167 Equity Shares and 27,500,000 warrants of the Company,
issued and allotted on March 25, 2013, to the holders of Equity Shares
and of listed warrants in Indiabulls Financial Services Limited
(IBFSL), respectively, in the ratio of 1:1 i.e. the Share Exchange
Ratio, fixed under the Scheme of Arrangement involving merger of IBFSL,
with the Company in terms of the provisions of Section 391 to 394 of
the Indian Companies Act, 1956 (the "Scheme"), got listed on BSE
Limited (BSE) and National Stock Exchange of India Limited (NSE) w.e.f.
July 23, 2013.
PUBLIC DEPOSITS
The Company has not accepted any deposits from the public during the
year under review.
SUBSIDIARIES
The statement pursuant to Section 212(1) (e) of the Companies Act, 1956
relating to subsidiary companies forms a part of the financial
statements.
In terms of the circular no.2/2011 dated February 8, 2011 issued by the
Ministry of Corporate Affairs for granting general permission for not
attaching certain prescribed documents including annual accounts of the
Subsidiaries to the Balance Sheet of the Holding Company, as required
to be attached in terms of Section 212 of the Companies Act, 1956, and
accordingly as approved by the Board of Directors in its meeting held
on April 23, 2014, copies of the Balance Sheet, Profit and Loss
Account, Reports of the Board of Directors and Auditors of the
subsidiaries of the Company as of March 31, 2014 have not been attached
with the Balance Sheet of the Company. These documents will be made
available upon request by any Member of the Company interested in
obtaining the same.
The annual accounts of the subsidiary companies are also kept for
inspection by any shareholders in the head office of the holding
company and of the subsidiary companies concerned. Further, in terms of
the said circular, information required to be disclosed in respect of
each of the subsidiary company, has been disclosed, in the notes to
accounts of the Consolidated Balance Sheet forming part of the Annual
Report. Further, pursuant to Accounting Standard AS-21 as notified by
the Companies (Accounting Standard) Rules 2006, as amended from time to
time, Consolidated Financial Statements presented by the Company
includes financial information of its subsidiaries.
DIRECTORS
The Board in recognition of the efforts and contributions of Mr. Gagan
Banga, CEO & MD of the Company in taking the company to remarkable
growth and progress under his stewardship, was pleased to elevate him
to the position of Vice Chairman and Managing Director of the Company.
In accordance with the provisions of Section 152 of the Companies Act,
2013 Mr. Gagan Banga (DIN: 00010894), as Vice Chairman and Managing
Director and Mr. Ajit Kumar Mittal (DIN: 02698115), Executive Director
of the company, retire by rotation at the ensuing Annual General
Meeting of the Company and being eligible offer themselves for
reappointment. The Board of Directors recommend their re-appointment.
The Board of Directors of the Company (the Board) has proposed the
appointment of Dr. Kamalesh Shailesh Chandra Chakrabarty (DIN 03543682)
and Mr. Rajender Mohan Malla (DIN 00136657), as Independent Directors
of the Company, for a period of 5 (five) years, effective from the date
of their appointment, as such by the Board. Keeping in view their vast
experience & knowledge, the Board is of the view that it will be in the
interest of the Company that both of them are appointed as Independent
Directors on its Board. Upon the approval of the shareholders to their
appointment, as Independent Directors, the appointment of Dr.
Chakrabarty & Mr. Malla, as such, shall be formalized by the Board by
issuing letters of appointment to them.
Brief resume of the Directors proposed to be appointed/ reappointed,
nature of their expertise in specific functional areas and names of
companies in which they hold directorships and
memberships/chairmanships of Board
Committees, as stipulated under Clause 49 of Listing Agreement with the
Stock Exchanges in India, are provided in the Report on Corporate
Governance forming part of the Annual Report.
CORPORATE SOCIAL RESPONSIBILITY
During the year, your directors have constituted the Corporate Social
Responsibility Committee comprising Mr. Joginder Singh Kataria as the
Chairman and Mr. Gagan Banga and Mr. Ashwini Omprakash Kumar as other
members.
The said Committee has been entrusted with the responsibility of
formulating and recommending to the Board, a Corporate Social
Responsibility Policy (CSR Policy) indicating the activities to be
undertaken by the Company, monitoring the implementation of the
framework of the CSR Policy and recommending the amount to be spent on
CSR activities.
INDIABULLS FOUNDATION
The objective of Indiabulls Foundation is to do meaningful work with
measureable output and maximum impact on the society. One of the first
initiatives of Indiabulls Foundation is to support the development of
rural districts. The Foundation has initiated pilot projects such as
Aatm Shakti and Anganwadi in Rajasthan and Maharashtra with an open and
a collaborative approach, which leverages the efforts of local
stakeholders for a robust and scalable structure.
Other projects initiated by the Foundation are granting of mobile
medical vans, rainwater harvesting, groundwater management, tree
plantation, IT projects for rural development, income generation
support for rural women, skills training for rural youth, conducting
eye camps for rural school children and in trying to be of support to
traditional artisans.
LISTING WITH STOCK EXCHANGES The Equity Shares and Warrants of the
Company, issued by it pursuant to and in terms of the Scheme, got
listed on BSE and NSE, on July 23, 2013 and continue to remain listed
thereafter. The listing fees payable to both the exchanges for the
financial year 2014-15 have been paid. The GDRs issued in lieu of IBFSL
GDRs, got listed on Luxembourg Stock Exchange on September 11, 2013 and
continue to remain listed thereafter.
CHANGE IN THE CAPITAL OF THE COMPANY
Subsequent to the financial year ended March 31, 2014, the Company had
allotted 285,231 equity shares of face value Rs. 2/- each (a) against
conversion of equivalent number of warrants (ISIN No.: INE148I13017)
and (b) exercise of stock options under various ESOP Schemes of the
Company, consequent to which the paid up equity share capital of the
Company increased from Rs. 668,084,886/- comprising of 334,042,443
equity shares of Rs. 2/- each to Rs. 668,655,348/- comprising of
334,327,674 equity shares of Rs. 2/- each.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management''s Discussion and Analysis Report for the year under review,
as stipulated under Clause 49 of the Listing Agreement with the Stock
Exchanges in India, is presented in a separate section forming part of
the Annual Report.
CORPORATE GOVERNANCE REPORT Pursuant to Clause 49 of the Listing
Agreement with the Stock Exchanges, a detailed report on Corporate
Governance is included in the Annual Report. A Practicing Company
Secretary''s Certificate certifying the Company''s compliance with the
requirements of Corporate Governance in relation to Clause 49 of the
Listing Agreement is attached with the Corporate Governance Report.
AUDITORS AND AUDITORS'' REPORT
M/s Deloitte Haskins & Sells LLP (Firm Regn. No. 117366W / W-100018),
Auditors of the Company will retire at the conclusion of the ensuing
Annual General Meeting and being eligible offer themselves for
reappointment. The Company has received a certificate from the Auditors
to the effect that their reappointment, if made would be in accordance
with Section 141(3)(g) of the Companies Act, 2013. The Board recommends
their re-appointment.
The Notes to the Accounts referred to in the Auditors'' Report are self
 explanatory and therefore do not call for any further explanation.
GREEN INITIATIVES
Electronic copies of the Annual Report 2014 and Notice of the 9th 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 2014 and Notice
of the 9th AGM are sent in the permitted mode. Members requiring
physical copies can send a request to the Company Secretary.
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. This is pursuant to section 108 of the Companies Act, 2013
and Rule 20 of the Companies (Management and Administration) Rules,
2014. The instructions for e-voting are provided in the Notice.
INFORMATION PURSUANT TO SECTION 217 OF THE COMPANIES ACT, 2013
The information required to be disclosed under Section 217(1)(e) of the
Companies Act, 1956, read with the Companies (Disclosure of Particulars
in the Report of the Board of Directors) Rules, 1988 (to the extent
applicable) and the provisions of Companies Act, 2013 (to the extent
applicable), with respect to conservation of Energy, Technology
Absorption and Foreign Exchange Earnings and Outgo, is given in the
Annexure and forms a part of this Report.
In terms of the provisions of Section 217(2A) of the Companies Act,
1956 read with the Companies (Particulars of Employees) Rules, 1975 as
amended, the names and other particulars of the employees in receipt of
remuneration equal to or in excess of the limits stipulated under the
said section, are required to be set out in a statement annexed to the
Directors'' Report. However, having regard to the provisions of Section
219(1)(b)(iv) of the said Act, the Annual Report excluding the
aforesaid information is being sent to all the Members of the Company
and others entitled thereto. Any member who is interested in obtaining
such particulars may write to the Company Secretary at the Registered
Office of the Company.
DIRECTORS'' RESPONSIBILITY STATEMENT
As required under Section 217(2AA) of the Companies Act, 1956 (to the
extent applicable) and the Companies Act, 2013 (to the extent notified)
your Directors confirm that:
1. In the preparation of the annual accounts, the applicable
accounting standards have been followed and that there are no material
departures from the same;
2. The Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company as at 31st March, 2014 and the profit of the Company for
the year ended on that date;
3. The Directors have taken proper and sufficient care for maintaining
of adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities; and
4. The Directors have prepared the Annual Accounts of the Company on a
''going concern'' basis.
ACKNOWLEDGEMENT
Your Directors wish to express their gratitude for the continuous
assistance and support received from the investors, clients, bankers,
regulatory and government authorities, during the year. Your Directors
also wish to place on record their deep sense of appreciation for the
contributions made and committed services rendered by the employees of
the Company at various levels, to the growth & success of the Company.
For and on behalf of the Board of Directors
Date : July 6, 2014 Sameer Gehlaut
Place: New Delhi Chairman
Mar 31, 2013
Dear Shareholders,
The Directors have pleasure in presenting the Eighth Annual Report
together with the audited statement of accounts of the Company for the
financial year ended March 31, 2013.
Financial Results
Post merger of Indiabulls Financial Services Limited with the Company,
in terms of the Court approved Scheme of Arrangement (Scheme), the
financial highlights of the Company, as a merged entity, for the
financial year ended March 31, 2013, are as under -
Amount (in Rs.)
Particulars Year ended Year ended
March 31, 2013 March 31, 2012*
Profit before Depreciation
and amortisation expense 16,133,276,744 3,463,212,503
Less: Depreciation and
amortisation expense 92,110,194 10,551,594
Profit before Tax 16,041,166,550 3,452,660,909
Less: Provision for Tax 3,762,096,996 952,787,551
Profit after Tax 12,279,069,554 2,499,873,358
Add: brought forward balance 1,595,235,686 1,575,337,000
Add: Transfer from Indiabulls
Financial Services Limited
pursuant to Scheme of Arrangement 1,295,149,850
Amount available
for appropriation 15,169,455,090 4,075,210,358
Appropriations:
Interim Dividend paid on
Equity Shares
(Rs. 13.50 Per Share) 4,215,019,939
Interim Dividend payable
on Equity Shares
(Rs. 6.50 Per Share) 2,031,322,586
Dividend for the previous
year on Equity Shares
issued by the Erstwhile
Holding Company after
the year end pursuant to
ESOPs Allotment 1,291,745
Corporate Dividend Tax on:
Interim Dividend paid
on Equity Shares 683,781,610
 Interim Dividend payable
on Equity Shares 345,223,274
 Dividend for the previous
year on Equity Shares
issued by the Erstwhile Holding
Company after the year end
pursuant to ESOPs
Allotment 209,554
Transferred to General Reserve 1,228,000,000
Transferred to Special Reserve
(U/s 29C of the National
Housing Bank Act, 1987) 2,455,813,911 499,974,672
Transferred to Additional
Reserve (U/s 29C of the
National
Housing Bank Act, 1987) 2,000,000,000 1,980,000,000
Balance of Profit
Carried Forward 2,208,792,471 1,595,235,686
*figures for the financial year ended March 31, 2012 are Pre-Scheme,
hence not comparable with the figures for the financial year ended
March 31, 2013
BUSINESS UPDATE & FINANCIAL AND OPERATIONAL HIGHLIGHTS
The Company, as an incorporated legal entity came into existence on May
10, 2005, under the Companies Act, 1956, having been registered on such
date with the Registrar of Companies, NCT of Delhi and Haryana vide
registration no. U65922DL2005PLC136029 and obtained the certificate
for commencement of business on January 10, 2006, to enable it to carry
on the business of housing finance, upon receipt of the license to do
so from the National Housing Bank. Indiabulls Financial Services
Limited (IBFSL), the erstwhile promoter of the Company, incorporated on
January 10, 2000 and since March 30, 2001, had already been
functioning, as a non banking finance company. The merger of IBFSL with
the Company, on a going concern basis, therefore ensured a continuity
of the Company''s business, since March 30, 2001.
BUSINESS UPDATE
- Return on Equity (RoE) has grown to 25.65%. The Company intends to
further improve RoE by maintaining a steady business growth.
- 325% interim dividend of Rs. 6.5/- per share of face value of Rs. 2/-
has been declared. With this, the total dividend for FY 2012-13
(including interim dividend of Rs. 13.5/- already paid) is Rs. 20/- per
share of face value of Rs. 2/- amounting to 1000%, total outflow of Rs.
727.5 Cr (inclusive of Corporate Dividend Tax).
FINANCIAL AND OPERATIONAL HIGHLIGHTS Asset Growth
- Assets continue to grow steadily on the back of long-term, low-risk
mortgage loans. The total Assets under Management stood at Rs. 34,425.6
Cr up 25.09% from Rs. 27,521.2 Cr as on March 31, 2012.
Asset Composition
- Home loans, which forms the majority of incremental disbursals, are
disbursed at an average ticket size of Rs. 24 lacs; average LTV of 65%
at origination, for an average term of about 13 years.
- Long-term, low-risk mortgage loans'' contribution remains steady at
72% of the total assets.
HOME LOANS: STREAMLINED LOAN FULFILMENT
- In FY 2013, the Company''s document management system''s ISO
certification (ISO 9001:2008) was reaffirmed.
- The Company continues to grow its branch network and now has 200
branches spread across the country.
- The Company has a well-trained, in-house Direct Sales'' Team of over
1,800 people to promptly attend to prospective customers.
IMPROVING LIABILITY PROFILE
- In keeping with its stated strategy, the Company continues to
maintain healthy levels of liquidity with cash and bank balances and
current investments adding up to Rs. 7,180.91 Cr at the end of FY
12-13.
- Funds raised through bonds constituted 51% of the Company''s
incremental borrowings in FY 12-13.
- The Company has further reduced its reliance on short-term money to
8% of total borrowings.
DIVERSIFIED BORROWING PROGRAMME
- Amongst its lenders, the Company now counts 94 strong relationships:
27 PSU banks, 15 Private and Foreign banks and 52 other Mutual Funds,
Provident Funds, Pension Funds and Insurance Companies.
IMPROVING COST-INCOME RATIO
- The Company continues to witness improving operational efficiency,
with the cost to income ratio further declining to 18%.
- Going forward the Company expects the Cost/ Income ratio to improve
further.
STABLE ASSET QUALITY
- Low Gross and Net NPA levels as low-risk mortgage portfolio increases
the asset base, while contributing very low incremental delinquencies.
- The total provision pool, including standard asset provisions, stood
at Rs. 461.28 Cr as on March 31, 2013, compared to Rs. 329.83 Cr on
March 31, 2012.
Sale of Loans
During the year, the Company, under the assignment agreement route sold
individual loans to different Banks / FIs.
As at 31st March, 2013, total loans outstanding in respect of loans
sold stood at Rs. 3,642.7 Cr.
The Company continues to service the loans sold under these
transactions and is entitled to the residual interest on the loan sold.
The residual income on the loans sold is being recognized over the life
of the underlying loans and not on an upfront basis. Issues through
which loans have been sold have been rated by external agencies and
carry a rating indicating a high degree of safety.
Loan Book
As at March 31, 2013, the Company is having the Assets under Management
(AUM) of Rs 34,425.6 Cr as against Rs 27,521.2 Cr in the previous year
and the loan book stood at Rs 30,782.9 Cr as against Rs 25,346.0 Cr in
the previous year.
Subordinated Debt
During the year, the Company raised Rs. 533.38 Cr through the issue of
long-term Unsecured Redeemable Non  Convertible Subordinated
Debentures. The Subordinated Debt was assigned a ''AA '' rating from
both, CARE and Brickworks Ratings.
As at March 31, 2013, the Company''s outstanding subordinated debt and
perpetual debt stood at Rs. 844.68 Cr. The debt is subordinate to
present and future senior indebtedness of the Company and has been
assigned the rating by CARE and Brickworks Ratings. Based on the
balance term to maturity, as at March 31, 2013, Rs. 816.68 Cr of the
book value of subordinated 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.
Non Convertible Debentures (NCD)
During the year, the Company issued NCD amounting to Rs. 3,552.1 Cr on
a private placement basis. The Company''s NCD issue have been listed on
the Wholesale Debt Market segment of the NSE and have been assigned a
AA rating from both CARE and Brickwork Ratings. As at March 31, 2013,
NCD outstanding stood at Rs. 8,561.1 Cr.
Loans from Banks during the year, the Company raised term loans
amounting to Rs. 10,720.0 Cr from commercial banks. The Company further
raised Rs. 200.0 crores from the banking sector as FCNR(B) loans. The
Company''s long-term bank loan facilities continue to enjoy a rating of
AA , signifying high degree of safety for timely servicing of debt
obligations and its short-term bank loan facilities continue to enjoy a
rating of A1 signifying highest degree of safety for timely servicing
of debt obligations.
Non Performing Loans
Gross non-performing loans as at March 31, 2013 amounted to Rs. 270.8
Cr. This is equivalent to 0.79% of the portfolio. The Company has been
successful in maintaining stable, low levels of NPA.
Regulatory Guidelines / Amendments
The Company has complied with directions from the RBI and the NHB
regarding Accounting Standards, Prudential norms for asset
classification, income recognition, provisioning, capital adequacy and
credit rating.
Risk Management Framework
The Company has risk management framework, which provides for the
mechanism for risk assessment and mitigation. The Risk Management
Committee (RMC) of the Company comprises of members of its senior
management. The RMC reviewed various risks associated with the business
of the Company, its root causes, efficacy of the measures taken to
mitigate the same. The RMC had met frequently during the year under
review. The Company also has a robust mechanism to ensure an ongoing
review of systems, policies, processes and procedures to adopt changes.
Codes and Standards
The Fair Practices Code (FPC) recommended by National Housing Bank
(NHB) as well as RBI seeks to promote good and fair practices by
setting minimum standards in dealing with customers while doing lending
business. NHB during the year issued the revised guidelines on few
codes like pre-payment policy, uniform rate of interest applicable to
similar risk profiles of customer etc. The Board reviewed and approved
the suitable amendments in existing FPC and put in place a mechanism to
monitor and review adherence to the modified FPC.
Marketing and Distribution
Focused marketing activities were conducted covering both Above the
Line (ATL) & Below the line (BTL) campaigns such as Print Ad''s.
Hoardings, FM Jingles, TV Ad''s (ATL) & Below the line activities
covering festive specific campaign at regional level, hosting of
service desk at corporate / builder''s end etc.
Indiabulls Housing Finance Limited (IBHFL) for the first time hosted a
Property Exhibition under the brand of Indiabulls Home Loans, called
"Awas 2012  A Budget Home Show" with the theme "25 lakh Mein Ghar  A
dream home". The event had participation from 24 reputed developers
from across Mumbai and Navi Mumbai. This was well appreciated by many
of the home buyers as it gave them a good platform to find their dream
home at an affordable price.
Cross Selling and Distribution of Financial Products and Services
State of the art Customer Care set up helps speedy resolution of
customer queries and takes care of any further loan requirements.
Survey calling has also been helping in continuous process improvement
& creating customer leads. In the last financial year more than 20
offices were opened which has increased our presence to 200 branches
spread across more than 20 states. All our offices are located in
localities where our target customer segments are present.
Training and Human Resource Management
We have hired 130 Chartered Accountants & Management graduates in last
year from esteemed colleges located across India. This talent pool is
creating a platform for delivering better & skilled services to our
customers. Trainings for more than 1900 employees were conducted in the
last financial year covering various aspects such as Sales excellence,
Customer Service, Team Building, Credit Risk, System and process, Train
the Trainer, etc. We have a state of art facility spread over 25,000
sq.ft. at our corporate office at Parel, Mumbai, wherein periodic
trainings sessions have been organized by the Training Department.
INDIAN MORTGAGE MARKET Mortgages % of GDP
- Lower mortgage penetration compared to Asian peers implies huge
opportunity for growth.
- Mortgage/GDP ratio is expected to improve to 12% by FY15.
HOME LOAN PORTFOLIO GROWTH
- Home loan industry to grow at 15.0% CAGR from FY13 to FY16 on a large
base of more than Rs. 711,000 Cr.
- Indian Home Loans'' market is characterized by low Average LTVs of
65-70% and predominantly first-time home buyers, implying significant
borrower equity and self-use.
- The expected growth in the home loan Industry gives opportunity for
the Company to sustain current mortgage business growth.
FACTORS DRIVING MORTGAGE DEMAND
- Tax incentives have lowered the effective interest rates of mortgages
for a home loan especially for sub-25 lakh category.
- Increase in the disposable income in tandem with the property prices
have kept the affordability at a moderate 5 times the annual income.
- Increasing urbanization and demographic evolutions will result in 40%
of Indian population residing in cities by 2025, up from current rate
of 31% as per industry reports.
- Urban housing shortage is expected to size to 31.9 million units by
2016 as per industry reports.
DIVIDEND
In keeping with the policy to reward its shareholders, the Board of
Directors of the erstwhile Indiabulls Financial Services Limited
(IBFSL), prior to its amalgamation with the Company, had, for the year
2012-13, declared two interim dividends aggregating to Rs 13.50 per
share on shares of face value Rs. 2/- each (Rs. 8/- per equity share on
October 22, 2012 and Rs. 5.50/- per equity share on January 22, 2013).
Post amalgamation of IBFSL with the Company, the Board of Directors of
the Company had, for the year 2012-13,declared the third interim
dividend of Rs 6.50/- per equity share on shares of face value Rs. 2/-
each, on April 23, 2013. Your Directors recommend that the payment of
the aforesaid interim dividends aggregating to Rs. 20/- per equity
share on shares of face value Rs. 2/- each for the year ended on March
31, 2013 be confirmed.
SIGNIFICANT DEVELOPMENT DURING THE YEAR Merger of Indiabulls Financial
Services Limited with the Company
The Board at its meeting held on April 27, 2012 had approved the Scheme
of Arrangement involving merger of Indiabulls Financial Services
Limited (IBFSL, the Holding Company) with the Company in terms of the
provisions of Section 391 to 394 of the Indian Companies Act, 1956 (the
"Scheme"). The appointed date of the proposed merger fixed under the
Scheme was April 1, 2012.
The Hon''ble High Court of Delhi, vide its Order dated December 12,
2012, received by the Company on February 8, 2013, approved the Scheme
(Order). In terms of the Court approved Scheme, with the filing of the
copy of the Order, on March 8, 2013 with the office of ROC, NCT of
Delhi & Haryana (the Effective Date), the Scheme came into effect and
IBFSL, as a going concern, stands amalgamated with IBHFL with effect
from the Appointed Date, being April 1, 2012. Subsequently IBFSL
shares & listed warrants got delisted from BSE and NSE w.e.f. March 19,
2013 and the Board of Directors of the Company, on March 25, 2013,
issued and allotted 312,511,167 Equity Shares and 27,500,000 warrants
of the Company to the holders of Equity Shares and of listed warrants
in IBFSL, respectively and 20,700,000 warrants to the holders of
unlisted warrants in IBFSL, in the ratio of 1:1 i.e. the Share Exchange
Ratio, fixed under the Scheme. The Company is in the process of getting
its shares & warrants (issued in lieu of listed equity and warrants of
IBFSL) listed with NSE & BSE, for which the necessary applications have
been filed with the Exchanges.
EMPLOYEES STOCK OPTIONS
In compliance with the terms of the Scheme of Arrangement, which came
into effect on March 8, 2013, the Company had adopted three Employee
Stock Option Schemes of erstwhile IBFSL for the benefit of IBFSL option
holders, who were granted options under the ESOP Schemes of IBFSL.
The Company had also launched ESOP Scheme titled as "IHFL ESOS -2013"
covering therein 39,000,000 stock options. However, no option has yet
been granted under the said scheme.
The disclosures required to be made in the Directors'' Report in respect
of the stock options covered under various employee stock option
schemes i.e. (i) IHFL- IBFSL Employees Stock Option Plan -2006 (ii)
IHFL- IBFSL Employees Stock Option Plan II-2006 and (iii) IHFL-IBFSL
Employees Stock Option Plan  2008 in force in the Company, in terms of
SEBI (Employee Stock Option Scheme and Stock Purchase Scheme)
Guidelines, 1999, are set out in the Annexure forming a part of this
report.
PUBLIC DEPOSITS
The Company has not accepted any deposits from the public during the
year under review.
SUBSIDIARIES
The statement pursuant to Section 212(1) (e) of the Companies Act, 1956
relating to subsidiary companies forms a part of the financial
statements.
In terms of the circular no.2/2011 dated February 8, 2011 issued by the
Ministry of Corporate Affairs for granting general permission for not
attaching certain prescribed documents including annual accounts of the
Subsidiaries to the Balance Sheet of the Holding Company, as required
to be attached in terms of Section 212 of the Companies Act, 1956, and
accordingly as approved by the Board of Directors in its meeting held
on April 23, 2013, copies of the Balance Sheet, Statement of Profit and
Loss, Reports of the Board of Directors and Auditors of the
subsidiaries of the Company as of March 31, 2013 have not been attached
with the Balance Sheet of the Company. These documents will be made
available upon request by any Member of the Company interested in
obtaining the same. The annual accounts of the subsidiary companies are
also kept for inspection by any shareholders at the head office of the
holding company and of the subsidiary companies concerned. Further, in
terms of the said circular, information required to be disclosed in
respect of each of the subsidiary company, has been disclosed, in the
notes to accounts of the Consolidated Balance Sheet forming part of the
Annual Report. Further, pursuant to Accounting Standard AS-21 as
notified by the Companies (Accounting Standard) Rules 2006, as amended
from time to time, Consolidated Financial Statements presented by the
Company includes financial information of its subsidiaries.
DIRECTORS
Upon the Scheme of Arrangement coming into effect, the Board was
reconstituted on March 19, 2013 and Mr. Sameer Gehlaut (DIN: 00060783),
Mr. Rajiv Rattan (DIN: 00010849), Mr. Saurabh Kumar Mittal (DIN:
01175382), Mr. Shamsher Singh Ahlawat (DIN: 00017480), Mr. Ram Kumar
Sheokand (DIN: 00183200), Mr. Aishwarya Katoch (DIN: 00557488), Mr.
Prem Prakash Mirdha (DIN: 01352748) and Mr.Joginder Singh Kataria (DIN:
05202673) were appointed as Additional Directors on the Board of the
Company and they hold office upto the date of the ensuing Annual
General Meeting. In terms of the provisions of Section 257 of the
Companies Act, 1956, members have proposed the candidatures of Mr.
Gehlaut, Mr. Rattan, Mr. Mittal, Mr. Ahlawat, Mr. Sheokand, Mr. Katoch,
Mr. Mirdha and Mr. Kataria for appointment as Directors of the Company.
Mr. Sachin Chaudhary (DIN: 02016992) and Mr. Ram Kumar (DIN: 00643837),
resigned from the Directorship of the Company on March 19, 2013. Your
Directors place on record their appreciation for the services rendered
by them during their tenure as directors on the Board of the Company.
In accordance with the provisions of Section 255 and 256 of the
Companies Act, 1956 and the Article 129 of the Articles of Association
of the Company, Mr. Ajit Kumar Mittal, (DIN: 02698115) and Mr. Ashwini
Omprakash Kumar, (DIN: 03341114) retire by rotation at the ensuing
Annual General Meeting of the Company and being eligible offer
themselves for re-appointment. Mr. Sameer Gehlaut, Mr. Rajiv Rattan and
Mr. Saurabh Kumar Mittal are being appointed as Directors, not liable
to retire by rotation.
Brief resume of the Directors sought to be reappointed / appointed,
nature of their expertise in specific functional areas and names of
companies in which they hold directorships and memberships/
chairmanships of Board Committees, as stipulated under Clause 49 of
Listing Agreement with the Stock Exchanges in India, are provided in
the Report on Corporate Governance forming part of the Annual Report.
LISTING WITH STOCK EXCHANGES
The Company is in the process of getting, its equity shares & warrants,
issued by it pursuant to and in terms of the Scheme, to the holders of
equity shares and listed warrants, listed with NSE & BSE. The necessary
applications in the matter have been filed with the Exchanges. The GDRs
to be issued in lieu of IBFSL GDRs, shall be listed on Luxembourg Stock
Exchange. The listing fees payable to BSE has been paid for the
financial year 2013-2014 and listing fees of NSE shall be paid at the
time of listing of its shares.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management''s Discussion and Analysis Report for the year under review,
as stipulated under clause 49 of the Listing Agreement with the Stock
Exchanges in India, is presented in a separate section forming part of
the Annual Report.
CORPORATE GOVERNANCE REPORT
Since the Equity Shares of the Company are not yet listed on the
Exchanges, there is no requirement of including Corporate Governance
Report pursuant to clause 49 of the Listing Agreement, in the Annual
Report. However, the Board of Directors has decided to include a
detailed report on Corporate Governance in the Annual Report, in view
of the Company''s imminent listing.
AUDITORS & AUDITORS'' REPORT
M/s Deloitte Haskins & Sells, Chartered Accountants (Regn. No.
117366W), Auditors of the Company will retire at the conclusion of the
ensuing Annual General Meeting and being eligible offer themselves for
reappointment. The Company has received a certificate from the Auditors
to the effect that their reappointment, if made, would be in accordance
with Section 224(1B) of the Companies Act, 1956. The Board recommends
their re-appointment.
The Notes to the Accounts referred to in the Auditors'' Report are self
 explanatory and therefore do not call for any further explanation.
INFORMATION PURSUANT TO SECTION 217 OF THE COMPANIES ACT, 1956
The information required to be disclosed under Section 217 (1) (e) of
the Companies Act, 1956, read with the Companies (Disclosure of
Particulars in the Report of the Board of Directors) Rules, 1988 with
respect to conservation of Energy, Technology Absorption and Foreign
Exchange Earnings and Outgo, is given in the Annexure and forms a part
of this Report.
In terms of the provisions of Section 217 (2A) of the Companies Act,
1956 read with the Companies (Particulars of Employees) Rules, 1975 as
amended, the names and other particulars of the employees in receipt of
remuneration equal to or in excess of the limits stipulated under the
said section, are required to be set out in a statement annexed to the
Directors'' Report. However, having regard to the provisions of Section
219(1)(b)(iv) of the said Act, the Annual Report excluding the
aforesaid information is being sent to all the Members of the Company
and others entitled thereto. Any member who is interested in obtaining
such particulars may write to the Company Secretary at the Registered
Office of the Company.
DIRECTORS'' RESPONSIBILITY STATEMENT
As required under Section 217 (2AA) of the Companies Act, 1956 your
Directors confirm that:
1. in the preparation of the annual accounts, the applicable
accounting standards have been followed and that there are no material
departures from the same;
2. the Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company as at 31st March, 2013 and the profit of the Company for
the year ended on that date;
3. the Directors have taken proper and sufficient care for maintaining
of adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities; and
4. the Directors have prepared the Annual Accounts of the Company on a
''going concern'' basis.
ACKNOWLEDGEMENT
Your Directors wish to express their gratitude for the continuous
assistance and support received from the investors, clients, bankers,
regulatory and government authorities, during the year. Your Directors
also wish to place on record their deep sense of appreciation for the
contributions made and committed services rendered by the employees of
the Company at various levels, to the growth & success of the Company.
For and on behalf of the Board of Directors
Date: June 5, 2013 Sameer Gehlaut
Place: New Delhi Chairman
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Indiabulls Housing Finance Ltd. குறித்த கூடுதல் தகவல்களை
-
Indiabulls Housing Finance Ltd. டூல்ஸ்
- பல்க் டீல்ஸ்
- பிளாக் டீல்ஸ்
-
Indiabulls Housing Finance Ltd. நிறுவன தகவல்கள்
- நிறுவன சுயவிவரம்
- நிறுவன வரலாறு
- நிர்வாக குழு
- மூலதன வடிவம்
- புராடெக்ட் மிக்ஸ்
- வங்கியாளர்/தணிக்கையாளர்/பதிவாளர்
-
நிறுவன வரலாறு
- உரிமை
- மும்பை பங்குச் சந்தையில் விலை வரலாறு
- என்எஸ்இ விலை வரலாறு
-
Indiabulls Housing Finance Ltd. முக்கிய நிதியில் விகிதங்கள்
- விகிதங்கள்
-
Indiabulls Housing Finance Ltd. முடிவுகள்
- காலாண்டு முடிவுகள்
- அரையாண்டு முடிவுகள்
- 9 மாத முடிவுகள்
- வருடாந்திர முடிவுகள்
-
Indiabulls Housing Finance Ltd. நிதியியல் தகவல்கள்
- தணிக்கை முடிவுகள்
- பணப்பாய்வு
- இருப்பு நிலைக்குறிப்பு
-
Indiabulls Housing Finance Ltd. அறிக்கை
- கணக்கியல் கோட்பாடுகள்
- தணிக்கையாளர்கள் அறிக்கை
- இயக்குநர்கள் அறிக்கை
- கணக்கு குறிப்புகள்
-
Indiabulls Housing Finance Ltd. கார்ப்பரேட் அறிவிப்புகள்
- புத்தக முடிவு
- ஈவுத்தொகை
- நிர்வாகக் குழுக் கூட்டங்கள்
