To,
The Shareholders,
Aavas Financiers Limited
The Board of Directors of your Company (The Board) takes great pleasure in
presenting before you the 14th Annual Report on the Operational and Financial
performance of Aavas Financiers Limited (the Company or Aavas)
along with the Audited Standalone and Consolidated Financial Statements for the Financial
Year ended March 31, 2024.
BACKGROUND
As a prominent affordable Housing Finance Company in India, your Company serves the
requirements of customers within the low and middle-income segments, particularly in
semi-urban and rural areas, focusing on underserved and unreached markets.
Aavas primarily offers Home Loans, Home Construction Loans, Loan against Property, Home
Improvement Loans and MSME Business Loans. Pursuant to Scale Based Regulation issued by
Reserve Bank of India (RBI), vide circular dated October 22, 2021 as amended
from time to time, your Company falls under the category of Middle Layer Non-Banking
Financial Company (NBFC-ML).
FINANCIAL PERFORMANCE
During the Financial Year under review, your Company has demonstrated substantial
growth and maintained consistent performance.
The Standalone financial performance for the Financial Year ended March 31, 2024 and a
comparison with the previous year is summarized below:
(H in crore)
Particulars |
For the Year ended March 31, 2024 |
For the Year ended March 31, 2023 |
A Total Income |
2,020.30 |
1,610.15 |
Less: |
|
|
Total Expenditure before Depreciation & Amortization and provision
Impairment on financial instruments |
(1,33,3.71) (24.47) |
(1,020.01) (12.42) |
Depreciation & Amortization |
(32.03) |
(23.72) |
B Total Expenses |
(1,395.35) |
(1,061.15) |
C Profit Before Tax (A-B) |
624.45 |
548.99 |
D Less: Provision for Taxations (Net of Deferred Tax) |
(133.76) |
(113.92) |
E Profit After Tax (C-D) |
490.69 |
430.07 |
F Add: Other Comprehensive Income (Net of Tax) |
0.15 |
(1.79) |
G Total Comprehensive Income (E+F) |
490.85 |
428.28 |
Transfer to Statutory Reserve |
93.17 |
35.66 |
The Standalone and the Consolidated Financial Statements for the Financial Year ended
March 31, 2024, forming part of this Annual Report, have been prepared in accordance with
Ind AS notified under Section 133 of the Companies Act, 2013 (the Act) and
other relevant provisions of the Act.
The key financial performance indicators for the Financial Year under review are as
follows:
? Total Income, Profit Before Tax, Profit After Tax of your Company:
? Total income for the Financial Year 2023-24 increased to Rs.2,020.30 crore as
compared to Rs.1,610.15 crore in the previous year.
? During the year, the Company has earned a Profit Before Tax of Rs.624.45 crore as
compared to Rs.548.99 crore in the previous year and the Profit After Tax during the year
was Rs.490.69 crore as compared toRs.430.07 crore in the previous year, recording an
increase of 14%.
? The Assets under Management (AUM) of your Company stood at Rs.17,312.65 crore
(including assignment of Rs.3,722.72 crore) as at March 31, 2024 as against Rs.14,166.66
crore (including assignment of Rs.2,757.23 crore) in the previous Financial Year, with a
growth of 22%.
Furthermore, during Financial Year under review, there was no alterations/changes in
the core operations or activities or nature of business of the Company.
DIVIDEND
The Board, recognizing the capital-intensive nature of the Company, has deemed it
prudent to retain earnings for the Financial Year under review to reinvest in the
business. This strategic decision is anticipated to drive further growth and enhance
shareholders value. Consequently, no dividend has been recommended for the Financial Year
ended March 31, 2024.
In terms of Regulation 43A of the Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations, 2015, (SEBI LODR Regulations,
2015) and Master Direction - Non-Banking Financial Company - Housing Finance Company
(Reserve
Bank) Directions, 2021 (RBI Master Directions') the Board of Directors of the
Company formulated and adopted the Dividend Distribution Policy. The Policy is available
on the website of the Company at link https://www.aavas.in/img/
pdf/dividend-distribution-policy.pdf. and forms part of this Report as Annexure-5'.
SHARE CAPITAL/ CAPITAL STRUCTURE AND DEBENTURES
Authorized Capital
There was no change in the Authorized Capital of the Company during the Financial Year
under review. The Authorized Capital of the Company is Rs.85,00,00,000/- (Rupees eighty
five crore only) divided into 8,50,00,000 (Eight crore fifty lakh) Equity Shares of
Rs.10/-(Rupees ten only) each.
Issued, Subscribed & Paid up Capital
The issued, subscribed and paid up Capital of the Company as on March 31, 2024 stood at
Rs.79,13,97,050 (Rupees seventy nine crore thirteen lakh ninety seven thousand and fifty
only) consisting of 7,91,39,705 (Seven crore ninety one lakh thirty nine thousand seven
hundred and five) Equity Shares of Rs.10/- (Rupees ten only) each. During the Financial
Year under review, the paid-up Equity Share Capital of the Company has increased on
account of allotment of 82,831 Equity Shares of Rs.10/- (Rupees ten only) each pursuant to
the exercise of equity stock options by the eligible employees of the Company under
Employee Stock Option Plans (ESOPs) of the Company.
The shares of the Company are actively traded on NSE and BSE and have not been
suspended from trading.
Details of Secured Debt Securities as on March 31, 2024: (Rs in crore)
Sr. No ISIN |
Date of allotment |
Outstanding amount |
Listed/Unlisted |
Stock Exchange |
1 INF.216P07167 |
16 09 2019 |
34 5.00 |
Unlisted |
- |
2 INF.216P07175 |
30 03 2020 |
273.4 8 |
Unlisted |
- |
3 INF.216P07209 |
31 12 2020 |
35.00 |
|
|
4 INE216P07217 |
26-11-2021 |
99.00 |
Listed |
BSE Limited |
5 INE216P07225 |
25-03-2022 |
60.00 |
6 INE216P07233 |
20-07-2023 |
135.00 |
|
|
TRANSFER TO SPECIAL RESERVE (UNDER SECTION 29C OF THE NATIONAL HOUSING BANK
(NHB) ACT, 1987)
Your Company has transferred Rs.98.17 crore, i.e., 20% of the net profits to Statutory
Reserves during the Financial Year under review as required under the provisions of
Section 29C of the NHB Act, 1987.
REVIEW OF OPERATIONS
In the domain of housing finance activities within the vibrant landscape of India, your
esteemed Company stands stable, its mission is to be deeply entrenched in meeting the
rapidly growing demands for housing loans. With unwavering dedication, we have charted a
path of continuous expansion, covering diverse regions with strategic foresight. As of
March 31, 2024, our footprint extended gracefully across 13 states, embracing 367 branches
that serve as beacons of financial empowerment.
In contrast to many others in our industry who focus on big cities, we have chosen a
different route with a meaningful goal. We serve in the sub-urban and rural areas of
India, where people with lower to middle incomes aspire to own homes the most. In these
areas, surrounded by green fields and growing communities, we feel a strong sense of
purpose to help people improve their lives by owning homes.
Our mission is simple: To empower and upgrade the lives of low and middle-income
customers by providing them accessible home loans and setting pioneering benchmarks in
unserved and underserved markets.
The details with respect to operating and financial performance of your Company has
been covered in the
Management Discussion and Analysis Report (MDAR), which forms part of this Annual
Report.
Through out the Financial Year under review, your Company demonstrated a strong and
resilient performance, as evidenced by the following financial summary:
Income & Profits
Total Income grew by 25% to Rs.2020.30 crore for the Financial Year ended March 31,
2024 as compared to Rs.1,610.15 crore for the previous Financial Year. Profit Before Tax
(PBT) was 14% higher at Rs.624.45 crore as compared to Rs.548.99 crore for the previous
Financial Year.
Profit after Tax (PAT) was 14% higher at Rs.490.69 crore as compared to Rs.430.07 crore
for the previous Financial Year.
Sanctions
During the Financial Year under review, your Company has sanctioned housing loans for
Rs.5,670.66 crore as compared to Rs.5,168.83 crore in the previous Financial Year, with an
annual growth of 10%. The cumulative loan sanctions since the inception of your Company
stood at Rs.29,060.72 crore as at March 31, 2024. Your Company has not granted any loan
against the collateral of Gold Jewellery and loan against Shares.
Disbursements
During the Financial Year under review, your Company disbursed housing loans for
Rs.5,582.23 crore as compared to Rs.5,024.54 crore in the previous Financial Year
registering an annual growth of 11%. The cumulative loan disbursement since inception as
at March 31, 2024 was Rs.27,963.78 crore.
Assets under Management (AUM)
The AUM of your Company stood at Rs.17,312.65 crore (including assignment of
Rs.3,722.72 crore) as at March 31, 2024 as against Rs.14,166.66 crore (including
assignment of Rs.2,757.23 crore) in the previous Financial Year, with a growth of 22%. As
of March 31, 2024, the average size of loan sanctioned was Rs.9.3 lakh and average tenure
was 198.1 months in the AUM (on origination basis).
Strong Capital and Liquidity Position
The Company's total Capital Adequacy stood at 43.98% (previous Financial Year 46.96%)
which is far above the minimum required level of 15% as per the provisions of the RBI
Master Directions showing strong position of the Company.
The Company's Liquidity Coverage Ratio (LCR) stood comfortably at 106.14% as of March
31, 2024, against a regulatory requirement of 70%.
Non-Performing Assets (NPA)
Your Company is in adherence to the provisions of Indian Accounting Standards
(Ind AS) with respect to the computation of Stage-3 Assets (NPA). Your
Company's assets have been classified based on expected performance. Exposure at Default
(EAD) is the total amount outstanding including accrued interest as on the reporting date.
Using a pro-active collection and recovery management system powered by analytics and
technology, the GNPA and NNPA as of March 31, 2024 stood at 0.94% and 0.67% respectively
(against 0.92% and 0.68% respectively in the previous Financial Year).
CREDIT RATING
During the Financial Year under review, the Company has sustained the long-term bank
facility credit ratings of AA; Stable, which has been reaffirmed by both CARE Ratings and
ICRA Limited. Outlook on both ratings is Stable. The Company's short term bank and
Commercial Paper facility rated as A1+ has been reaffirmed, by CRISIL.
For more details on credit ratings, kindly refer Corporate Governance Report forming
part of this report or visit to website of the Company at link https://www.aavas.in/
investor-relations/credit-rating.
REGULATORY & STATUTORY COMPLIANCES
T he Company has complied with all the guidelines, circulars, notifications and
directions issued by our Regulators which includes but not limited to RBI, NHB, MCA, SEBI,
IRDAI, BSE and NSE from time to time. The Company also places before the Board of
Directors at regular intervals all such circulars and notifications to keep the Board
informed and report on actions initiated on the same. The Company also complies with the
provisions of the Companies Act, 2013, Secretarial Standards issued by Institute of
Company Secretaries of India (ICSI) and as notified by Ministry of Corporate
Affairs, Master Direction - NonBanking Financial Company - Housing Finance Company
(Reserve Bank) Directions, 2021 (RBI Master Directions'), SEBI (Listing Obligations
and Disclosure Requirements) Regulations 2015 (SEBI LODR Regulations, 2015),
SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021, Income Tax Act
1961 and all other applicable statutory requirements.
Scale Based Regulation (SBR): A Revised Regulatory Framework for NBFCs
The Reserve Bank of India in 2021 issued Scale Based Regulation (SBR) a revised
regulatory framework for NBFC's which is applicable to your Company being a NBFC
HFC-category falling under middle layer.
With respect to above, the RBI has issued various circulars/ guidelines which were
required to be implemented in the Financial Year 2023-24 i.e. Guidelines for appointment
of Chief Compliance Officer, Guidelines on Compensation of Key Managerial Personnel and
Senior Management, which were duly implemented by the Company including formation of
policies, implementing procedures and to review their outcome on periodic basis.
Further, the RBI had issued Master Direction on Information Technology Governance,
Risk, Controls and Assurance Practices dated November 07, 2023 effective from April 01,
2024. The Company has duly implemented and adopted the directions ensuring its compliance.
DEPOSITS
As a Non-deposit taking (NBFC-HFC) Housing Finance Company, your Company has not
solicited, accepted or renewed any fixed deposits from the public, as defined in Chapter V
of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014.
Therefore, the disclosure in terms of RBI Master Directions is not required.
AWARDS AND RECOGNITION
? Recognized as the Best BFSI Brand 2024 at The Economic Times Best Brands Conclave -
ET Edge.
? Silver Award for Excellence in BRSR - MID Cap (Service Sector) at 3rd
ICAI Sustainability Reporting Awards 2022-23.
? ASSOCHAM-Excellence in Self-built Green Housing Initiative Award.
RESOURCE MOBILIZATION
Your Company has in place a borrowing policy framework to cater its borrowings needs.
The objective of the policy is to diversify the liability portfolio of the Company and to
reduce risk of overdependence on any particular lender and instrument. The Company has
diverse set of lenders/ investors that includes Public Sector Bank, Private Sector Bank,
National Housing Bank, recognized Multilateral Institution and other financial
institutions.
Your Company has vide Special Resolution passed on July 19, 2023, under Section 180 (1)
(c) of the Companies Act, 2013, authorized the Board of Directors to borrow money upon
such terms and conditions as the Board may think fit in excess of the aggregate of paid up
share capital and free reserves of the Company up to an amount of H23,000 crore (Rupees
twenty three thousand crore only) and the total amount so borrowed shall remain within the
limits as prescribed by RBI.
The Weighted Average Borrowing Cost as at March 31, 2024 was 8.07% (including
Securitization/Assignment) as against 7.61% as at the end of the previous Financial Year.
As at March 31, 2024, your Company's sources of funding were primarily in the form of Long
Term Loans from Banks and Financial Institutions (47%), followed by Securitization/Direct
assignment (24%), NHB Refinance (20%), Debt capital market (9%).
Your Company has a comfortable liquidity position as on March 31, 2024 with H1,797.82
crore (including FD's). Further, the Liquidity Coverage Ratio (LCR') for the
Financial Year ended March 31, 2024 was 106.14% as against the regulatory requirement of
70%.
Term Loans from Banks and Financial Institutions
The Company, during the Financial Year, received aggregate fresh loan sanctions
amounting to Rs.2,825 crore and has availed loans aggregating to Rs.3,275.49 crore. The
outstanding term loan from Banks and Financial Institutions as at March 31, 2024 were
Rs.7,317.01 crore (excluding PTC & CC) with an average tenure of 9.65 years.
Securitization/Assignment of Loan Portfolio
Your Company has actively tapped Securitization/Direct Assignment market, which has
enabled it to create liquidity, diversify liability profile and minimizing asset liability
mismatches.
During the year under review, your Company received purchase consideration of
Rs.1,242.96 crore from assets assigned under transfer of loan portfolio transactions and
raised Rs.390.16 crore through Securitization of loan receivables.
The transfer of loan portfolio transactions were carried out in line with RBI
guidelines and these assets were derecognized in the books of the Company.
Refinance from National Housing Bank (NHB)
Your Company has received fresh sanction of refinance assistance of Rs.1,000 crore
under the NHB refinance scheme. Your Company availed funds of Rs.1,032 crore under various
Refinance Schemes such as for Affordable Housing Fund, Regular Refinance Scheme and
Special Refinance Facility.
Total outstanding refinance as at March 31, 2024 stood at Rs.3,041.58 crore.
Refinance from SIDBI
During the year under review, your Company received aggregate fresh loan sanction
amounting to T300 crore and has availed loans aggregating to T50 crore. The outstanding
refinance from SIDBI as on March 31, 2024 stood at T49.9 crore with an average tenure of 7
years.
Non-Convertible Debentures (NCDs)
Your Company has raised long term funding through issuance of debt securities not only
to the domestic Financial institution (FI) but also to Multilateral/ Development Financial
Institutions (DFI) and Scheduled Commercial Bank (SCB) in India. During the year under
review, your Company has raised Rs.150 crore through issuance of debt securities and as on
March 31, 2024, the Company's outstanding NCDs stood at H945 crore [FI - 10 % ; DFI - 66 %
and SCB- 24 %] as compared to Rs.1,017 crore [FI - 12 % ; DFI - 67 % and SCB- 21 %] as on
March 31, 2023.
Your Company has not issued any Commercial Paper & Short Term Instrument during the
Financial Year 202324 and as on March 31, 2024, the Company's Commercial Paper outstanding
is NIL.
Rupee Denominated External Commercial Borrowing
As on March 31, 2024, the outstanding balance of Rupee Denominated External Commercial
Bond stood at H458.19 crore (including outstanding balance of social masala bond of
H358.38 crore).
Further, the interest on Non-Convertible Debentures and Masala Bonds issued on private
placement basis were paid by the Company on their respective due dates and there was no
instance of interest amount not claimed by the investors or not paid by the Company.
Your Company, being listed HFC is exempted from the requirement of creating Debenture
Redemption Reserve (DRR) on privately placed debentures. Therefore, your Company has not
created DRR. Further the requirement to invest or deposit a sum of not less than 15% of
the amount of debentures which are maturing during the Financial Year ending on March 31
of the next year as provided under Rule 18 of the Companies (Share Capital and Debentures)
Rules, 2014 has been done away for listed Companies vide notification of Ministry of
Corporate Affairs (MCA') dated June 05, 2020.
One time explanation for fund raising by Large Corporate
The Company lends loans with average tenure of 15 years at origination and after
considering prepayment average tenure of loans comes to around 8 years. Given the rating
of the Company at AA/Stable, majority of investor in Debt Capital Markets are willing to
invest only up to 3 years only. Since other source of funding are comparatively larger
tenure with competitive price which helped us in managing our ALM, the 25% requirement of
borrowing through debt securities could not be achieved. However, Company is keen to raise
long term funds through Debt Securities.
Further, in compliance with SEBI circular SEBI/HO/ DDHS/DDHS-RACPOD1 /P/CIR/2023/172
dated October 19, 2023, in the event if the Company is identified as a Large Corporate for
Financial Year 2025, the requirement of mandatory qualified borrowing will be endeavor to
be met in a contiguous block of three years that is FY 2025, FY 2026 and FY 2027.
DISCLOSURE UNDER CHAPTER XI- GUIDELINES ON PRIVATE PLACEMENT OF NON-CONVERTIBLE
DEBENTURES (NCDS) OF RBI MASTER DIRECTIONS
(i) The total number of NCDs which have not been claimed by the Investors or not paid
by the Company after the date on which the non-convertible debentures became due for
redemption: Nil
(ii) The total amount in respect of such debentures remaining unclaimed or unpaid
beyond the date referred to in Paragraph (i) as aforesaid: Nil
Further, the Company has in place policy for claiming unclaimed interest, dividend and
redemption amount on NCS pursuant to SEBI circular dated November 08, 2023 and is
available on the website of the Company at https:// www.aavas.in/codes-and-policies.
TRUSTEE TO SECURITIES HOLDERS
In compliance to the requirements of Securities and Exchange Board of India (Issue and
Listing of NonConvertible Securities) Regulation 2021, the Company has appointed IDBI
Trusteeship Services Limited as Debenture Trustee to protect the interest of the debenture
holders of the Company.
The details of Debenture Trustee are available on the Company's website at
https://www.aavas.in/details-of- debenture-trustee-rta-and-grievance. Further the details
of Debenture Trustee is also provided at corporate information of this Annual Report.
BRANCH BUILD-UP
A branch is a regional component of a broader Company, each branch is working towards
unified goal of ensuring business thrives. The Company by expansion of new branches
increase profits and reach new customers, which enhances Company's operating domain across
India. As on March 31, 2024, Company is operating in 13 states, with a network of 367
branches , consisting of Rajasthan, Maharashtra, Gujarat, Madhya Pradesh, Haryana, Uttar
Pradesh, Chhattisgarh, Delhi, Punjab, Uttarakhand, Himachal Pradesh, Karnataka and Odisha.
The Company added 21 new branches during the FY 2023-24.
Your Company has its Registered Office in Jaipur, Raj asthan and its branch network as
on March 31, 2024 vis-a-vis the previous Financial Year is detailed hereunder:
State |
Branches (As on March 31, 2024) |
Branches (As on March 31, 2023) |
Rajasthan |
108 |
102 |
Madhya Pradesh |
51 |
49 |
Maharashtra |
49 |
48 |
Gujarat |
4 5 |
44 |
Uttar Pradesh |
32 |
27 |
Karnataka |
26 |
24 |
Haryana |
18 |
17 |
Uttarakhand |
9 |
9 |
Chhattisgarh |
9 |
9 |
Odisha |
6 |
6 |
Delhi |
5 |
4 |
Himachal Pradesh |
4 |
4 |
Punjab |
5 |
3 |
Total number of branches |
367 |
346 |
BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
Your Company's Board of Directors has put integrity at the forefront of all the
decisions, which is the foundation of our governance.
The Board of Directors of the Company is a panel of Members having diverse set of
abilities, demonstrated experience, personal integrity ethics and Governance expertise. In
addition to skills, directors possess certain qualities that make them effective leaders
and stewards of the organization.
In accordance with Section 149 of the Companies Act, 2013, Regulation 17 of SEBI LODR
Regulations, 2015 and Scale Based Regulation issued by RBI as amended from time to time,
your Company has optimum mix of Executive, Non-Executive and Independent Directors.
The Board of Directors of the Company plays a crucial role in overseeing how the
management serves the short and long-term interests of stakeholders. This belief is
reflected in Aavas governance practices, under which the Company strives to maintain an
effective, informed and independent Board.
The Members of the Company's Board of Directors are eminent persons of proven
competence and integrity. NonExecutive Directors, including Independent Directors, play a
critical role in imparting value to the Board processes by bringing an independent
judgment in the areas of strategy, performance, resource management, financial reporting
and the overall standard of Company's conducts etc.
The Board of Directors have identified Technical skills, Industry experience,
competencies, special knowledge and practical experience, as required in the context of
the NBFCs and Housing Finance Company's to function effectively and efficiently e.g.
Accounting & Finance, Legal & Compliance, Strategic Development & Execution
and Governance Board Role.
The Board of the Company comprises of 9 (Nine) Directors, comprising 3 (Three)
Independent Directors (including 2 (Two) Women Directors), 5 (Five) Non-Executive Nominee
Directors and 1 (One) Executive Director-Managing Director & Chief Executive Officer
as on March 31, 2024, who build strong foundation in business principles and leadership.
The Composition of Board of Directors of the Company is as follows:
Name of the Director |
Designation |
DIN |
Mr. Sandeep Tandon |
Chairperson and Independent Director |
00054553 |
Mr. Sachinderpalsingh .Jitendrasingh Blunder |
Managing Director and Chief Executive Officer |
03697657 |
Mrs. Kalpana Kaushik Mazumdar |
Independent Director |
01.374130 |
Mrs. Soumya Rajan |
Independent Director |
03579199 |
Mr. Ramachandra Kasargod Kamath |
Non-Executive Nominee Director |
01715073 |
Mr. Vivek Vig |
Non-Executive Nominee Director |
01117413 |
Mr. Nishant Sharma |
Promoter Nominee Director |
03117012 |
Mr. Manas Tandon |
Promoter Nominee Director |
05254602 |
Mr. Kartikeya Dhruv Kaji* |
Promoter Nominee Director |
07641723 |
Mr. Rahul Mehta** |
Promoter Nominee Director |
09435275 |
*Mr. Kartikeya Dhruv Kaji resigned from the Board of the Company w.e.f May 21, 2024.
**Mr. Rahul Mehta was appointed as a Non-Executive, Additional Director (Promoter
Nominee Director on behalf of Lake District Holdings Limited) by the Board w.e.f May 21,
2024.
Pursuant to the provisions of Section 2(51) and 203 of the Act, read with the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended from time to
time the following are the Key Managerial Personnel of the Company:
Name |
Designation |
Mr. Sachinderpalsingh Jitendrasingh Bhinder |
Managing Director and Chief Executive Officer |
Mr. Ghanshyam Rawat |
President and Chief Financial Officer |
Mr. Ashutosh Atre |
President and Chief Risk Officer* |
Mr. Sharad Pathak |
Company Secretary and Chief Compliance Officer** |
*re-appointed as Chief Risk Officer for a period of 5 years w.e.f. August 01, 2023.
**appointed as Chief Compliance Officer for a period of 3 years w.e.f. October 01, 2023
pursuant to RBI Notification No. DoS.CO.PPG. SEC.01/11.01.005/2022- 23 dated April 11,
2022 on Compliance Function and Role of Chief Compliance Officer (CCO).
APPOINTMENT & RESIGNATION OF DIRECTORS AND KMP
During the year under review and upto the date of this report, the following changes
took place in the composition of the Board:
Appointment/ Reappointments |
Appointment: |
|
During the Financial Year under review, the shareholders at its 13th
AGM held on July 19, 2023, approved the appointment of Mr. Sachinderpalsingh Jitendrasingh
Bhinder (DIN: 03697657) as Director and as Managing Director and CEO of the Company with
effect from May 03, 2023. |
|
Proposed Appointment: |
|
The Board of Directors in its meeting held on April 25, 2024 on
the Recommendation of NRC Committee has proposed to the Shareholders for Re-appointment of
Mrs. Soumya Rajan (DIN: 03579199) as an Independent Director of the Company for a second
term of 5 years w.e.f. August 29, 2024. |
|
The Board of Directors on the basis of recommendation of the NRC
Committee through its resolution passed by way of circulation on May 21, 2024 has
appointed Mr. Rahul Mehta (DIN: 09485275) as a Non-Executive Additional Director (Promoter
Nominee Director on behalf of Lake District Holdings Limited) of the Company. |
|
Appropriate resolutions seeking Shareholders approval for above
appointments forms part of the Notice convening the 14th Annual General Meeting
of your Company. |
Resignation or Retirement |
Mr. Sushil Kumar Agarwal resigned from the post of Managing
Director of the Company w.e.f. May 03, 2023. |
|
Mr. Kartikeya Dhruv Kaji resigned from the post of Promoter
Nominee Director of the Company w.e.f. May 21, 2024. |
Directors Retiring by Rotation |
Pursuant to the provisions of Section 152 of the Act, Mr. Kartikeya
Dhruv Kaji, Promoter Nominee Director and Mr. Vivek Vig, Non Executive Nominee Director of
the Company, retired and being eligible, were re-appointed with the approval of Members at
the 13th AGM held on July 19, 2023. |
|
Further, in accordance with the provisions of the Act, Mr. Manas Tandon,
Promoter Nominee Director and Mr. Nishant Sharma, Promoter Nominee Director of the Company
are liable to retire by rotation at the ensuing 14th AGM of the Company. They
are eligible and have offered themselves for re-appointment. |
|
Appropriate resolutions seeking Shareholders approval for above
appointments forms part of the Notice convening the 14th Annual General Meeting
of your Company. |
Appointments/ Resignations of the Key Managerial Personnel (KMP) |
During the year under review, no KMP were appointed or resigned except
MD whose details are covered above. |
DECLARATION BY INDEPENDENT DIRECTOR
Independent Directors are expected to play a significant role at the Board level and
are the change agents of corporate governance. In accordance with the provisions of the
Section 149(6) of the Act and Regulation 16(l)(b) & 25 of SEBI LODR Regulations, 2015,
the Independent Directors have confirmed that they satisfy the criteria prescribed for
Independent Directors.
In the opinion of the Board the Independent Directors fulfill the aforesaid criteria
and possess requisite integrity, qualifications, proficiency, experience, expertise and
are independent of the management.
The names of all the Independent Directors of the Company have been included in the
Independent Director's databank maintained by Indian Institute of Corporate Affairs
(IICA). The Company has obtained declaration of independence from all the
Independent Directors of the Company. None of the Directors have any pecuniary
relationship or transactions with the Company.
CERTIFICATE OF NON- DISQUALIFICATION OF DIRECTORS
All the Directors have confirmed that they are not disqualified from being appointed as
Directors in terms of Section 164 of the Act, and are not debarred from holding
the office of Director by virtue of any SEBI order or any other such authority. None of
the Directors of the Company are related to each other.
Your Company has obtained a certificate from a Company Secretary in practice confirming
that none of the Directors on the Board of the Company have been debarred or disqualified
from being appointed or continuing as Directors of companies by Securities Exchange Board
of India (SEBI)/Ministry of Corporate Affairs (MCA) or any such
statutory authority. The same forms part of this Annual Report as Annexure-1'.
DISCLOSURE UNDER SECTION 197(14) OF THE COMPANIES ACT, 2013
The Managing Director and CEO of the Company has not received any commission from its
subsidiary Company.
BOARD MEETINGS
The Company holds at least four Board Meetings in a year, one in each quarter and the
dates of the Board Meetings are finalized well in advance after seeking concurrence of all
the Directors. All the decisions and urgent matters approved by way of circular
resolutions are placed and noted at the subsequent Board Meeting.
During the Financial Year under review, 5 (five) Board Meetings were conveyed and held.
All other details of the meetings attended by each Director are detailed in Corporate
Governance Report and hence, not repeated here to avoid duplication in the report.
PERFORMANCE EVALUATION OF THE BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS
Board Evaluation is a key means by which board can recognize and correct corporate
governance problems and add real value to their organizations. A properly conducted Board
Evaluation can contribute significantly to performance improvements on organizational
board and individual member level.
The Board of Directors has carried out an annual evaluation of its own performance,
Board Committees and individual Directors pursuant to the provisions of the Act and SEBI
(LODR) Regulations, 2015 and as per the criteria defined in the said act and regulations.
Pursuant to applicable provisions of the Act and the SEBI (LODR) Regulations, 2015, the
Board, in consultation with its Nomination and Remuneration Committee, has formulated a
framework containing, inter-alia, the criteria for performance evaluation of the entire
Board of the Company, its Committees and individual Directors, including Independent
Directors. The framework is monitored,
reviewed and updated by the Board, in consultation with the Nomination and Remuneration
Committee, based on need and new compliance requirements.
The evaluation process is carried out through a platform called Goveva
which is a web based platform, to ease the process of Board Evaluation, to increase the
efficiency and to automate report generation.
The details of evaluation process of the Board, its Committees and individual
Directors, including Independent Directors have been provided under the Corporate
Governance Report, which forms part of this Report.
SEPARATE INDEPENDENT DIRECTORS' MEETINGS
During the Financial Year under review, a separate meeting of Independent Directors was
held on March 26, 2024 without the attendance of Non-Independent Directors and the
Management of the Company. The Independent Directors inter alia overlooks and discuss the
issues arising out of the Committee Meetings and Board discussion including the quality,
quantity and timely flow of information between the Company Management and the Board that
is necessary for the Board to efficiently perform its obligations.
FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS
Familiarization Programme has been designed considering the specific needs of
contemporary Corporate Governance and the expected obligations of Independent Directors in
view of the onerous responsibility as prescribed under the Regulation 25(7) of the SEBI
LODR Regulations, 2015.
The Program also aims to offer a conceptual framework based upon current expectations,
which require the Independent Directors to adhere to a code and standard of ethics and
integrity for fulfillment of their responsibilities in a professional and faithful manner
to promote confidence of the investment community. Purpose of this program is to enlighten
the Independent Directors with their Rights and Obligations and aware them about the
regulatory environment and the business model in which Company is running its operations.
The Board is also periodically updated on the various changes, if any, in the
regulations governing the conduct of Non-Executive Directors including Independent
Directors.
The details of the Familiarization Programme has been hosted on the website of the
Company and can be accessed through following link: https://www.aavas.in/img/pdf/ det ails
- of-f am iliarizat ion-programme-imp art ed-to - independent-directors.pdf.
POLICY ON DIRECTOR'S APPOINTMENT, REMUNERATION & OTHER DETAILS
With an ambition to become one of the preferred financiers and to outperform its
competitors and to remain in front in delivering best financial solutions, the Company has
in place Policy on Nominations and Remuneration for Directors, Key Managerial Personnel
and Senior Management Personnel to align the aspirations of human resources consistent
with the goals of the Company.
T he Policy on Nominations and Remuneration for Directors, Key Managerial Personnel and
Senior Management Personnel of the Company is in line with the Section 178 of the Act,
provisions of Regulation 19 of SEBI (LODR) Regulations, 2015 and Guidelines on
Compensation of Key Managerial Personnel and Senior Management in NBFCs issued by Reserve
Bank of India (RBI) vide circular dated RBI/2022-23/36 DOR.GOV.REC.No.29/18.10.002/2022-
23 on April 29, 2022 ("RBI Guidelines), as amended from time to time.
The Policy is available on the website of the Company and can be accessed at
https://www.aavas.in/codes-and- policies and all the details of remuneration paid to the
Directors is mentioned in Annual Return in form MGT-7, available on Company's website and
can be accessed at https://www.aavas.in/investor-relations/annual-reports.
BOARD COMMITTEES
The Company has the following Nine (9) Board level Committees, which have been
constituted in compliance with the requirements of the business and relevant provisions of
applicable laws and statutes:
1. Audit Committee (AC)
2. Nomination & Remuneration Committee (NRC)
3. Stakeholders Relationship Committee (SRC)
4. Corporate Social Responsibility & Environment Social Governance Committee (CSR
& ESG)
5. Risk Management Committee (RMC)
6. Asset Liability Management Committee (ALCO)
7. Information Technology (IT) Strategy Committee
8. Customer Service & Grievance Redressal Committee (CS&GR)
9. Executive Committee (EC)
During the Financial Year under review, the Board accepted all recommendations made by
the above Committees.
The details with respect to the composition, terms of reference, number of Meetings
held, etc. of these Committees are given in the Report on Corporate Governance, which
forms part of this Annual Report as Annexure-2'.
EMPLOYEE STOCK OPTION PLAN (ESOP)
Employee Stock Options act as a tool for attracting and retaining high-quality
employees. Although motivation, employee retention and awarding hard work are the key
benefits, which ESOP brings to Company, there are several other significant advantages
too. It also provides employees with a sense of belonging because it gives them a real
stake in their firm's growth trajectory.
ESOP 2016
Pursuant to the approval accorded by the Shareholders on February 23, 2017 the Company
has approved and adopted Employee Stock Option Plan for Employees-2016 (ESOP-
2016-I).
During the Financial Year under review, the Company made grant aggregating to 4,500
options on February 01, 2024 under ESOP-2016-I (d).
Performance Stock Option Plan (PSOP-2023)
The Company believes that equity based compensation schemes/plans are an effective tool
to reward the talent working with the Company for delivering long-term sustainable
performance and creation of stakeholder value. With a view to drive long term performance,
retain talent and attract new talent, the Company formulated and implemented Aavas
Financiers Limited - Performance Stock Option Plan- 2023' (PSOP-2023) as
a key component in its reward structure to the eligible employees of the Company. The
PSOP-2023 was approved by the Shareholders through postal ballot on November 06, 2023.
During the Financial Year under review, the Company made grant aggregating to 71,044
options on December 12, 2023 under the PSOP-2023.
Following are the existing ESOP plans of the Company:
Sr. No. Particulars |
ESOP 2016 I |
ESOP 2019 |
ESOP 2020 |
ESOP 2021 |
ESOP 2022 |
PSOP-2023 |
a Date of Shareholders' approval |
The Plan was approved by the Shareholders of the
Company by a Special Resolution passed on February 23, 2017. |
The Plan was approved by the Shareholders of the
Company by a Special Resolution passed on August 01, 2019. |
The Plan was approved by the Shareholders of the
Company by a Special Resolution passed on July 22, 2020. |
The Plan was approved by the Shareholders of the
Company by a Special Resolution passed on August 10, 2021. |
The Plan was approved by the Shareholders of the
Company by a Special Resolution passed on July 21, 2022. |
The plan was approved by the Shareholders of the
Company by a Special Resolution passed on November 06, 2023. |
b Authorization The schemes empower the Board and Nomination & Remuneration
Committee to execute the scheme.
c Variation During the Financial Year under review, there have been no changes in the
schemes.
(if any)
It is confirmed that all the ESOP Schemes/plan of the Company are in compliance with
the provisions of SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021
(SEBI SBEB and Sweat Equity Regulations') as amended from time to time.
The Nomination & Remuneration Committee administers and monitors the ESOP
Schemes/plan in compliance with the Act, SEBI SBEB and Sweat Equity Regulations and SEBI
(LODR) Regulations, 2015.
The Secretarial Auditors of the Company has given a Certificate, confirming that the
above ESOP Schemes/ plan have been implemented in accordance with the SEBI SBEB and Sweat
Equity Regulations as amended from time to time and will be available for the inspection
of the Members of the Company.
The applicable disclosures as stipulated under Regulation 14 of SEBI (Share Based
Employee Benefits) Regulations, 2014 with regard to Employees Stock Option Plan of the
Company are available on the website of the Company at
https://www.aavas.in/investor-relations/annual-reports.
AUDIT & AUDITORS
Statutory Auditors and Auditors' Report
In terms of provisions of Section 139 of the Companies Act 2013, read with the
Companies (Audit and Auditors) Rules, 2014, M/s Walker Chandiok & Co LLP, Chartered
Accountants (Firm's Registration No. 001076N/N500013) were appointed as Statutory Auditors
of the Company for a period of 3 (three) consecutive years and their existing term
shall come to an end till the conclusion of the ensuing 14th Annual General
Meeting (AGM) of the Company. The Audit Committee and the Board of Directors of the
Company placed on record its appreciation for the services rendered by M/s Walker Chandiok
& Co LLP, Chartered Accountants as the Statutory Auditors.
The Audit Report given by the Statutory Auditors on the financial statements of the
Company is part of this Integrated Annual Report. There has been no qualification,
reservation, adverse remark or disclaimer given by the Auditors in their Report. Further,
during the year under review, the Auditors have not reported any fraud under Section
143(12) of the Companies Act, 2013.
Pursuant to the Reserve Bank of India Circular RBI/2021-
22/25Ref.No.DoS.CO.ARG/SEC.01/08.91.001/2021-22 dated April 27, 2021, Guidelines for
Appointment of Statutory Central Auditors (SCAs)/Statutory Auditors (SAs), (RBI
Guidelines) the Company having assets size of H15,000 Crore and above, as at the end
of previous year the statutory audit should be conducted under joint audit of a minimum of
two audit firms.
With respect to above, as the Company have crossed the threshold of H15,000 Crore asset
size as at March 31, 2024, accordingly the Statutory Audit of the Company shall be
conducted under joint audit of a minimum of two audit firms.
Pursuant to section 139 of the Act, read with the Companies (Audit and Auditors) Rules,
2014, RBI Guidelines for appointment of Statutory Auditor(s), the Board of Directors
based on the recommendation of Audit Committee, has recommended, the appointment of
M/s. M S K A & Associates Chartered Accountants (FRN: 105047W) and M/s. Borkar &
Muzumdar, Chartered Accountants (FRN: 101569W) as the Joint Statutory Auditors of the
Company for a period of 3 (three) years effective from the conclusion of 14th
AGM until the conclusion of 17th AGM subject to approval of the Shareholders of
the Company at the ensuing AGM.
The Company has received consent and eligibility certificates from the above audit
firms under applicable rules and laws that they are not disqualified and are eligible to
hold the office as Auditors of the Company, if appointed.
Secretarial Auditors and Secretarial Audit Report
M/s. Chandrasekaran Associates, Practicing Company Secretaries (Firm Registration No.
P1988DE002500), have carried out Secretarial Audit of the Company for the Financial Year
2023-24.
The Secretarial Audit Report forms part of this Integrated Annual Report attached as
Annexure-3' and the remarks therein were noted by the Board and do not call
for any further comments.
Furthermore, M/s. Chandrasekaran Associates, Practicing Company Secretaries has issued
an Annual Secretarial Compliance Report for the Financial Year 2023-2024 in Compliance
with Regulation 24A of SEBI (LODR) Regulation, 2015 which forms part of this report as
Annexure-4' and is also submitted to Stock Exchanges.
In terms of Section 204 of the Act, read with the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014, the Audit Committee recommended and the
Board has re-appointed M/s Chandrasekaran Associates, Practicing Company Secretaries as
the Secretarial Auditors of the Company to conduct Secretarial Audit for the Financial
Year 2024-25.
INFORMATION SYSTEM AUDIT (IS AUDIT)
The landscape around information systems has been changing, therefore an IS audit focus
on the governance and management aspects of technology and cybersecurity as much as it
does on specific focus areas of the audit.
The Company has in place an Information Systems Audit Policy which is cognizant of
business imperatives and align with the aspirations of the organization, including being
agile and innovative and adopting technologies at a rapid pace. Our Head of Internal Audit
(HIA) is accountable to the Audit Committee and Management in providing assurance on the
adequacy and effectiveness of the Company's risk management, control and governance of
information system processes used for controlling its activities and
managing its significant risks and also report material frauds and their investigations
and corrective actions.
INTERNAL AUDIT & INTERNAL FINANCIAL CONTROL AND ITS ADEQUACY
The Reserve Bank of India has stipulated that all deposit taking and non-deposit taking
NBFC-HFCs are mandated to have a Risk Based Internal Audit Framework in place by June 30,
2022. The Company being a Non-deposit taking NBFC-HFC, the circular of RBIA becomes
applicable accordingly, the Company has put in place RBIA framework within the timeline
and has developed an in-house team and appointed a Head of Internal Audit (HIA) to conduct
audit of functional areas and operations of the Company.
The Internal Audit department is headed by the HIA who reports directly to the Audit
Committee of the Board. The primary responsibility of the HIA is to effectively manage the
Internal Audit department and to ensure that it adds value to the entity and its
objectives. The RBIA framework effectively ensures that internal audit coverage is
commensurate with the nature of complexity of business operations on an ongoing basis. HIA
ensures compliance with the internal audit principles and standards and the independence
of the Internal Audit department, its audit staff and its performance against key
performance indicators.
The Audit Committee reviews and evaluates adequacy and effectiveness of the Company's
internal control environment and monitors the implementation of audit recommendations.
The Company's internal financial control is a process designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of
financial statements in accordance with generally accepted accounting principles. The
Company's internal financial control includes those policies and procedures that pertains
to maintenance of records, provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements and provide reasonable assurance
regarding prevention or timely detection of unauthorized acquisition, use or disposition
of the Company's assets that could have a material effect on the financial statements.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS
There were no significant or material orders passed by the regulators or courts or
tribunals against the Company during the Financial Year 2023-2024.
However, BSE Limited (BSE) vide their e-mail dated November 30, 2023 have levied fine
of H10,000 excluding
GST on the Company for the delayed compliance with Regulation 60(2) of SEBI (LODR)
Regulations, 2015 i.e. Delay in submission of the intimation of Record Date and there is
no material impact on the financials, operations or other activities of the Company due to
imposition of such fine and the Company has duly paid the fine to BSE.
MATERIAL CHANGES/ EVENTS AND COMMITMENTS, IF ANY
There are no material changes and commitments affecting the financial position of the
Company, which have occurred after March 31, 2024 till the date of this report except as
mentioned below:
Aavas Finserv Limited, wholly owned subsidiary (subsidiary) of the Company
had initiated the voluntary liquidation and accordingly the control of subsidiary has been
transferred to official liquidator. As on the date of this report the status of subsidiary
is under the process of voluntary liquidation.
Further, there has been no change in the nature of business of your Company.
MAINTENANCE OF COST RECORDS
The Company being a NBFC-HFC is not required to maintain cost records as per
sub-section (1) of Section 148 of the Companies Act 2013.
INFORMATION TECHNOLOGY
Your Company has always been at the forefront of Technology adoption, and effectively
leveraging technology solutions to enhance productivity of the teams and provide superior
experience to our customers.
The Company is in the process of building a robust and scalable technology architecture
as per the charted transformation roadmap to make the Company future ready. Your Company
has made significant progress in this roadmap.
T he Company has already adopted a modern and innovative cloud based application stack
for loan origination and customer service using Salesforce and Mulesoft platforms which
provide 360-degree visibility for the entire customer life cycle. The financial systems
have been upgraded to ORACLE Fusion ERP Applications. Further, the Loan Management System
is also in the process of upgradation with ORACLE Flexcube Core banking application and
the project is in a very advance stage of completion.
By utilising multiple India stack based fintech integrations and advance analytics
capabilities, we have significantly
optimised our processes to bring in efficiency and agility at all levels.
The Company has upgraded the information security systems with modern and robust
security solutions in the areas of endpoint security, cloud security and data leakage
prevention solution. The Company will continue to build resilience by adopting latest
technology tools, solutions, policies and procedures in line with evolving regulations and
market trend.
HUMAN RESOURCE
Your Company has always believed its employees as its greatest asset and in pursuit of
excellence, we continue to uphold our commitment to nurture and empower them. As we
reflect on the past Financial Year, 2023, it is evident that our success is intrinsically
linked to the quality and competence of our human capital.
Building upon the foundation laid in the preceding years, Aavas introduced strategic
initiatives aimed at enhancing the well-being and professional growth of our employees.
Notably among these initiatives are our efforts to support holistic well-being of our
female employees and development of senior leadership team. During last Financial Year the
Company has also come up with performance-based equity scheme to foster the culture of
performance and ownership.
The Company continues to invest in a technology-driven HR department workflow and
leverage the same to create seamless employee experience. These initiatives, along with
our ongoing efforts to strengthen a progressive HR culture, underscore our commitment to
provide a conducive and performance driven organisational environment for employee
enrichment. The Company's permanent employee count stood at 6,075 as of March 31, 2024.
Looking ahead, your Company remain steadfast to create a better workplace and explore
innovative ways to further elevate employee engagement at Aavas. Together, we will
continue to strive for excellence, drive sustainable growth, and create value for all
stakeholders.
RISK MANAGEMENT FRAMEWORK
Your Company takes risk management seriously by having a dedicated sub-committee of
executives and Risk Management Committee of the Board to oversee it. This not only aligns
with Regulation 21 of SEBI (LODR) Regulations, 2015 but also ensures compliance with RBI
guidelines. Having such a committee helps establish a robust risk culture and governance
framework within the company, ultimately contributing to its overall sustainability and
success.
The Risk Management Committee meets, at least twice a year and as needed by the Board
or Chairperson. This ensures ongoing oversight of the Company's risk landscape. By
ensuring appropriate methodologies, processes and systems are in place, the Committee
plays a crucial role in monitoring and evaluating risks associated with the business.
Additionally, overseeing the implementation of the risk management policy and evaluating
the adequacy of risk management systems reflects a proactive approach to risk management
within the Company.
T he Company has comprehensive risk management policies in place, including a
Board-approved Risk Management Policy, IT Risk Management Policy and an Internal Capital
Adequacy Assessment Processes (ICAAP) policy, aligned with RBI guidelines.
The identification and monitoring of key risks such as Credit Risk, ALM Risk,
Concentration Risk, Interest Rate Risk, Reputation Risk, Cybersecurity Risk, Fraud Risk,
Business Risk, Exposure Risk, Competition Risk and Regulatory Risk are crucial for
maintaining the Company's stability and resilience. These risks are reported to the Risk
Management Committee on a quarterly basis ensuring transparency and proactive risk
management.
Moreover, the utilization of institutional intelligence for underwriting methodology,
executed by a qualified and experienced team, including Chartered Accountants, reflects a
robust approach to risk assessment in the Company. Additionally, having dedicated vendors
and professionally qualified in-house teams to address legal, technical, and operational
risks further enhances the Company's risk management capabilities.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY
Pursuant to the provisions of Section 177(9) and (10) of the Act and Regulation 22 of
the SEBI LODR, Regulations, 2015 the Company has formulated a Whistle Blower Policy for
vigil mechanism of Directors and employees to report to the management genuine concerns or
grievances about unethical behavior, actual or suspected fraud or violation of the
Company's Code of Conduct. The Company is committed to adhere to the highest standards of
ethical, moral and legal conduct of business operations. To maintain these standards, the
Company encourages its employees who have concerns about suspected misconduct to come
forward and express their concerns without fear of punishment or unfair treatment. The
mechanism provides a channel to the employees and Directors for adequate safeguards
against victimization of employees and Directors who use such mechanism and makes
provision
for direct access to the Chairperson of the Audit Committee in exceptional cases. The
identity of the Whistle Blower is kept confidential so that he/she shall not be subjected
to any discriminatory practice. None of the personnel of the Company has been denied
access to the Audit Committee. The whistle blower policy is placed on the website of the
Company and can be accessed at https://www.aavas.in/ img/pdf/Whistle-Blower-Policy.pdf.
DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION
& REDRESSAL) ACT, 2013
Sexual Harassment at workplace is an extension of violence in everyday life and is
discriminatory and exploitative, as it affects women's right to life and livelihood. Your
Company is committed to prevent and deter the commission of acts of sexual harassment
against women at workplace. The Company promotes and recognizes the right of women to
protect from sexual harassment and the right to work with dignity as enshrined under the
Constitution of India and the Convention on the Elimination of all Forms of Discrimination
Against Women (CEDAW). In terms of these commitments and the provisions of the Sexual
Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (the
POSH Act) and the rules made thereunder, the Company has formulated and
implemented a Policy for prevention of sexual harassment against women and redressal of
complaints thereto and has also constituted Internal Complaints Committee (ICC) under the
POSH Act. ICC has been set up to redress complaints received regarding sexual harassment.
All employees are covered under this policy. During the year, the Company conducted 326
workshops for employees creating awareness about POSH Act.
The details of complaints received and disposed during the Financial Year are provided
in Corporate Governance Report forming part of this Annual report.
CODE OF CONDUCT FOR PREVENTION OF INSIDER TRADING IN COMPANY'S SECURITIES
The Company has instituted a mechanism to avoid Insider Trading and abusive
self-dealing in the securities of the Company. In accordance with the Securities and
Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 (SEBI PIT
Regulations), the Company endeavors to preserve the confidentiality and prevent misuse of
unpublished price sensitive information (UPSI). The Company has formulated Code of
Conduct-Prevention of Insider Trading Policy with an objective to prevent misuse of any
UPSI and prohibit any insider trading activity, in order to protect the interest of the
Shareholders at large. Mr. Sharad Pathak, Company Secretary and Chief Compliance Officer
of the Company is authorized to act as Compliance Officer under the Code.
Further the Company has maintained a Structural Digital Database (SDD) pursuant to
provisions of regulations 3 (5) and (6) of Securities and Exchange Board of India
(Prohibition of Insider Trading) Regulations, 2015.
PARTICULARS OF HOLDING/SUBSIDIARY/ ASSOCIATE COMPANIES
Your Company do not have any Holding Company or Joint Ventures.
Lake District Holdings Limited holds substantial interest in the Company.
Your Company has one unlisted wholly owned subsidiary named Aavas Finserv
Limited' which is under Voluntary Liquidation as on March 31, 2024.
In pursuance of Provisions of Section 129(3) of the Act, Company has prepared
Consolidated Financial Statements of the Company, which forms part of this Annual Report.
Further, a Statement containing salient features of Financial Statement of the Subsidiary
in the prescribed format AOC-1 pursuant to Section 129(3) of the Act read with the
Companies (Accounts) Rules, 2014, is annexed as Annexure-6' to this Report.
In accordance with Section 136 (1) of the Act, the Annual Report of your Company
containing inter alia, Financial Statements including Consolidated Financial Statements,
has been placed on our website at https://www.aavas.in/ investor-relations/annual-reports.
Further, the Financial Statements of the subsidiary have also been placed on our website
at: https://www.aavas.in/investor-relations/ financial-subsidiary.
INVESTOR RELATIONS
Your Company always proactively engaged in strengthening investors trust through fully
embracing innovations and it is using technology wisely to sustain performance today, but
also leverages it for future growth. Your Company is always looking ahead and take on a
holistic perspective of the operating landscape.
Your Company has deeply embraced new digital technologies (mobile applications,
artificial intelligence (AI), Concept of Accounts Aggregator) to accelerate the launch of
services to accelerate growth for better investor engagement and to increase their trust
towards Company's operations.
In connection with the above, your Company has dedicated investor relation team, which
helps the Company to communicate with its investors through Information
session on Financial Results for institutional investors and analysts via telephone
conference, meetings with investors/ analysts and discussions between Fund Managers and
Management. Investor relation team participate in investor relations conferences each
quarter in an effort to foster better relationships with investors. Presentations given by
investors to fund managers, analysts and investors are posted on the Company website and
are also transmitted to stock exchanges. Each quarter, the audio and video recordings of
these meetings, along with their transcripts, are posted on the website at
https://www.aavas.in/ investor-relations/investor-intimation. Investor relation
conferences are a great way to interact with investors and foster better relationships.
PARTICULAR OF EMPLOYEE REMUNERATION AND RELATED DISCLOSURES
Disclosures with respect to the remuneration of Directors and employees as required
under Section 197(12) of the Act and Rule 5(1) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 (Rules) and in accordance with the
provisions of Rule 5(2) of the above mentioned rules, the names and particulars of the top
ten employees in terms of remuneration drawn have been appended as an Annexure 8'
to this Report.
In terms of the provisions of Section 136(1) of the Act, the Directors' Report
including the said annexure is being sent to all Shareholders of the Company.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Your Company is committed to integrate social and environmental concerns in their
business operations and believes that, it is our moral responsibility to give back to the
community, participate in philanthropic causes, and provide positive social value and
wealth to stakeholders.
As a part of Company's initiatives towards CSR, the Company has undertaken projects in
the areas of Rural & Community Development, Promoting Education, Healthcare,
Eradicating hunger, conservation, protection and amelioration of environment from over
exploitation of resources.
The CSR policy of the Company relates to the activities to be undertaken by the
Company, which is in accordance with the provisions of CSR under Section 135 of the Act
read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 and Schedule
VII of the Act.
The CSR Policy is hosted on Company's website and can be accessed at:
https://www.aavas.in/codes-and-policies and the annual report on CSR activities is
furnished at 'Annexure-9' which is attached to this report.
PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS
AND OUTGO
The particulars of energy conservation, technology absorption and foreign exchange
earnings and outgo in terms of Section 134(3)(m) of the Act read with Rule 8 of the
Companies (Accounts) Rules, 2014 is as follows:
Particular
A) Conservation of energy |
Remarks |
The Steps taken / impact on conservation of energy |
The Company has implemented several measures to promote
energy efficiency and sustainability. These include equipping all branches with
energy-saving IT equipment, power-saving lamps and high-end copier machines. |
|
In addition, the Company is committed in minimizing its
greenhouse gas (GHG) emissions by setting its GHG emission targets. The Corporate Office
of the Company has been certified LEED Gold, which is a prestigious green building
certification, indicating its commitment to sustainable practices. |
|
While the nature of the Company's business involves
limited resource consumption at the corporate level, the Company is dedicated to becoming
technically robust and moderating resource consumption. One major initiative in this
regard is the 'Gati' project, which aims to eliminate physical documentation until a loan
is sanctioned in the system. |
The Steps taken by the Company for utilizing alternate sources of
energy |
As the nature of business of the Company is providing
housing finance, the only key waste products are paper, plastic and e-waste. It is a
practice adopted by the Company to engage certified e-waste handlers for disposal of
e-waste. |
|
The Company spent H218.05 lakh from its total CSR budget
for the FY 2023-24 towards initiatives focused on raising awareness and education on
climate change, plantation, renewable energy, and green housing. These initiatives aim to
promote sustainability and address environmental challenges. |
|
Green Housing Program: The Company, in partnership
with the International Finance Corporation (IFC), has developed a unique idea called Green
Homes. As part of the Green Affordable Housing Program, the Company provides loans for the
construction of environment-friendly homes and supports its customers in building homes
that are both sustainable and affordable. |
|
The Company has implemented various initiative to reduce
Paper, Plastic and E-waste which includes: |
|
? The Company educate its employees through internal
mailer for not using Single use plastics. |
|
? Go Green Initiative: The Company also launched
Go Green Initiative' which represents a significant stride towards leveraging
cutting-edge technology to minimize paper usage within the loan processing workflow. |
The Capital investment on energy conservation equipment |
In view of the nature of the activities carried on by
your Company, there is no capital investment on energy conservation equipment. |
Particular |
Remarks |
B) Technology absorption |
|
The efforts made towards technology absorption |
FY 2023-24 has been a year of significant transformation for the
Company. We have successfully transitioned the entire Loan origination journey and
customer service processes to Salesforce cloud platform, enabling scalability and speed.
Massive training and change management drives were run to make the adoption happen at the
grass root level. |
|
Successfully implemented ORACLE Fusion ERP application to transform the
finance and procurement functions with strong reporting, controls and compliances. |
|
We have augmented the digital customer service channels with new
features and capabilities including GenAI chatbots. |
|
The end point security system has been upgraded to a leading managed
detection and response platform with 24/7 monitoring. We have adopted cloud applications
and services, implemented a robust secure internet gateway and also upgraded the data
leakage prevention system. |
|
|
The benefits derived like product improvement, cost
reduction, product development or import substitution |
Customer loan app adoption has increased from 62% to 71%, and more than
99% of service requests coming on the app are self-serviced. 37% increase
in Customer service through digital channels with a significant contribution from service
bots. |
|
Almost 100% of the property locations are geo-tagged. Further, 100% of
the Technical, Legal and Risk Assessment Processes have been digitized including the
vendors. |
|
We have successfully processed more than 1.6 lakhs loan application in
the new Loan origination system ("LOS") in the first full year of its launch. We
have integrated account aggregator system with our LOS. |
|
Almost 100% of vendor payments are now being processed digitally through
our Oracle ERP module and also all transactions are now being automatically reconciled
through the ORACLE ARCS system. |
In case of imported technology (imported during the last
three years reckoned from the beginning of the Financial Year) |
|
a). the details of |
i. Salesforce (for LOS and CRM) |
technology imported |
ii. Oracle Fusion system (for Financial System and reporting) |
|
iii. ORACLE Flexcube (for LMS) |
|
iv. Mulesoft (for Integration of systems) |
b). the year of import |
2022-23 |
c). whether the
technology has been fully absorbed |
Under implementation |
d). if not fully absorbed, areas where absorption has not
taken place, and the reasons thereof |
NA |
Particular |
Remarks |
The expenditure incurred on Research and Development |
NA |
(C) Foreign exchange earnings and Outgo |
During the Financial Year under review, your Company had
no foreign exchange earnings and the aggregate of the foreign exchange outgo during the
Financial Year under review was H4,372.62 Lakhs. The aforesaid details are shown in the
Note No. 39 of notes to the accounts, forming part of the Standalone Financial Statements.
The Members are requested to refer to this Note. |
ENVIRONMENT HEALTH AND SAFETY (EHS) PROTECTION
Your Company is committed to high Environmental and Social (ES) Standards in its
business and will continue to develop its investment decision-making processes and
procedures so as to reflect the requirements of Indian ES legislation, as well as relevant
international standards (specifically IFC Performance Standards) as applicable to our
housing finance and MSME business lines. The Company always ensures that healthy and safe
working environment is provided to all employees of the Company.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORTING
As per Regulation 34(2)(f) of SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 the top 1000 listed entities based on market capitalization, shall
attach a Business Responsibility and Sustainability Report (BRSR) with the
Annual report describing the initiatives taken by the listed entity from an environmental,
social and governance perspective.
Pursuant to the SEBI Circular SEBI/HO/CFD/CFD-SEC- 2/P/CIR/2023/122 dated July 12, 2023
related to BRSR Core -Framework for assurance, the top 150 listed entities (by market
capitalization) shall make disclosures as per the updated BRSR format, as part of their
Annual Report.
However, being a top 500 listed entity and adhering to good Corporate Governance the
Company has voluntarily submitted Business Responsibility and Sustainability Report (BRSR)
Core for the Financial Year 2023-24, in addition to publishing Annual BRSR as per the
latest Regulation.
This framework guides us to reinforce principles of ESG in all aspects of the Company's
business and focus its efforts on responsible products, improving efficiency, people power
and environmental consciousness aligned with the expectations stated in the Business
Responsibility and Sustainability Report (BRSR).
During the Year under review, recognizing the significance of ESG (Environmental,
Social, and Governance), the Company designated CSR Committee to oversee the
implementation of the Principles and Policies of Business Responsibility and
Sustainability Report and reconstituted its CSR Committee as the CSR & ESG Committee.
The Company has developed ESG Policy & set ESG targets to align with the growing
importance of ESG, showcasing its dedication to sustainability, risk management, and
longterm value creation for stakeholders.
The Business Responsibility and Sustainability Report in updated format describing the
initiatives taken by the Company from an environmental, social and governance perspective
along with Limited Assurance Statement from an Independent Auditor forms part of this
Annual Report as Annexure-11'.
ANNUAL RETURN
Pursuant to the provisions of Section 134(3) and Section 92(3) of the Act, read with
Rule 12(1) of the Companies (Management and Administration) Rules, 2014 the Annual Return
in form MGT-7 as on March 31, 2024 is available on the website of the Company and can be
accessed at https:// www.aavas.in/investor-relations/annual-reports.
ADDITIONAL DISCLOSURES UNDER COMPANIES (ACCOUNTS) RULES, 2014
a. The details of application made or any proceeding pending under the Insolvency and
Bankruptcy Code, 2016 (31 of 2016) during the year along with their status as at the end
of the Financial Year:
During the Financial Year under review, the Company neither filed any application nor
had any proceedings pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016),
therefore, it is not applicable to the Company.
b. The details of difference between amount of the valuation done at the time of
one-time settlement and the valuation done while taking loan from the Banks or Financial
Institutions along with the reasons thereto:
During the Financial Year under review, it is not applicable to the Company.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
Since the Company is an HFC, the disclosure regarding particulars of loans given,
guarantees given and security provided in the ordinary course of business is exempted
under the provisions of Section 186(11) of the Act.
However, the details of loans, guarantees, and investments made as required under the
provisions of Section 186 of the Act and the rules made thereunder are set out in the
Notes to the Standalone Financial Statements of the Company.
CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
In accordance with the provisions of Section 188 of the Act and rules made thereunder,
all related party transactions entered during Financial Year 2023-24 were on an arm's
length basis and in the ordinary course of business under the Act and were not material
under the SEBI LODR Regulations, 2015 the details of which are included in the notes
forming part of the Financial Statements.
T he details as required to be provided under Section 134(3) (h) of the Act are
disclosed in Form AOC-2 as Annexure-7' which forms part of this Report.
A list of all related party transactions is placed before the Audit Committee as well
as the Board. The Audit Committee has granted omnibus approval for related party
transactions as per the provisions of the Act and the SEBI LODR Regulations, 2015.
Further, as required by SEBI and RBI Master Directions, Policy on transactions
with Related Parties' is given as Annexure-10' to this Report and can be
accessed on the website of the Company at https://www.aavas.in/img/pdf/
Policy-on-Materiality-of-related-party-transactions-and-
on-dealing-with-related-party-transactions.pdf.
INTERNAL GUIDELINES ON CORPORATE GOVERNANCE
Your Company is committed towards achieving the highest standards of Corporate
Governance right from its establishment by staying true to its core values of Customer
first, transparency, fairness in action, accountability, integrity and equity in all its
engagements. The Company's Corporate Governance framework ensures that it makes timely and
appropriate disclosures and shares factual and accurate information to its stakeholders so
as to make an informed decision.
The Company has approved and adopted the Internal Guidelines on Corporate Governance.
The Internal Guidelines on Corporate Governance has been framed in accordance with the
Act, SEBI (LODR) Regulations, 2015, RBI Master Directions, 2021 and other applicable rules
and regulations.
The guideline is available on the website of the Company and can be accessed at
https://www.aavas.in/img/pdf/ internal-guidelines-on-corporate-governance.pdf.
DIRECTORS' RESPONSIBILITY STATEMENT
In accordance with the provisions of Section 134(3)(c) read with Section 134(5) of the
Act and based on the information provided by the Management, the Board of Directors report
that:
a) in the preparation of the annual accounts, the applicable accounting standards have
been followed along with proper explanation relating to material departures;
b) the Directors had selected such accounting policies and applied them consistently
and made judgments and estimates that are reasonable and prudent to give a true and fair
view of the state of affairs of the Company at the end of the Financial Year and of the
profit and loss of the Company for that period;
c) the Directors had taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of the Act for safeguarding the
assets of the Company and for preventing and detecting frauds and other irregularities;
d) the Directors had prepared the annual accounts on a going concern basis;
e) the Directors had laid down Internal Financial Controls to be followed by the
Company and that such Internal Financial Controls are adequate and were operating
effectively; and
f) the Directors had devised proper systems to ensure compliance with the provisions of
all applicable laws and that such systems were adequate and operating effectively.
BUSINESS OVERVIEW & FUTURE OUTLOOK
A detailed business review & future outlook of the Company is appended in the
Management Discussion and Analysis Section of the Annual Report.
ACKNOWLEDGEMENTS AND APPRECIATION
The Board of Directors extends their gratitude for the valuable guidance and support
received from all stakeholders of the Company, including the Reserve Bank of India,
National Housing Bank, Ministry of Corporate Affairs, Securities and Exchange Board of
India, Insurance Regulatory and Development Authority of India, Stock Exchanges i.e BSE
and NSE, and other regulatory authorities. They also acknowledge the support of bankers,
lenders, financial institutions, members, credit rating agencies, National Securities
Depository Limited, Central
Depository Services (India) Limited, NSE IFSC Limited and customers of the Company for
their continued trust and support.
The Directors wish to express their appreciation to Kedaara Capital and Partners Group
for their invaluable and ongoing support and guidance.
Additionally, the Directors commend the commitment demonstrated by all executives,
officers, staff and the Senior Management team of the Company, which contributed to the
excellent performance of the Company during the Financial Year.
For and on behalf of the Board of Directors AAVAS FINANCIERS LIMITED
Sachinderpalsingh Jitendrasingh Bhinder
Managing Director and CEO (DIN: 08697657)
Date: July 05, 2024 Place: Mumbai
Manas Tandon
Promoter Nominee Director (DIN: 05254602)
Date: July 05, 2024 Place: New York, USA
Registered and Corporate Office:
201-202, 2nd Floor, Southend Square,
Mansarover Industrial Area, Jaipur 302 020, Rajasthan, India CIN:L65922RJ2011PLC034297
E-mail: investorrelations@aavas.in | Website: www.aavas.in
Statutory Reports 99
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