To,
The Shareholders,
AAVAS FINANCIERS LIMITED ("THE COMPANY")
The Board of Directors ("the Board") have pleasure in
presenting the 13th 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,
2023.
FINANCIAL PERFORMANCE
Your Company has witnessed growth and consistent performance during the
Financial Year under review. Your Company is a leading affordable Housing Finance Company
in India. The Company caters to the needs of customers belonging to low and middle income
segment in semi-urban and rural areas and primarily in the un-served and un-reached
markets. The standalone financial performance for the Financial Year ended March 31, 2023
and a comparison with the previous year is summarized below: ( H in crore)
Particulars |
For the Year ended March
31, 2023 |
For the Year ended March
31, 2022 |
A Total Income |
1,610.15 |
1,305.56 |
Less: |
|
|
- Total Expenditure before Depreciation & Amortization
and provision |
(1,020.01) |
(804.34) |
- Impairment on financial instruments |
(12.42) |
(22.61) |
- Depreciation & Amortization |
(28.72) |
(23.76) |
B Total Expenses |
(1,061.15) |
(850.70) |
C Profit Before Tax (A-B) |
548.99 |
454.86 |
D Less: Provision for Taxations (Net of Deferred Tax) |
(118.92) |
(98.06) |
E Profit After Tax (C-D) |
430.07 |
356.80 |
F Add: Other Comprehensive Income (Net of Tax) |
(1.79) |
0.71 |
G Total Comprehensive Income (E+F) |
428.28 |
357.51 |
Transfer to Statutory Reserve |
85.66 |
71.50 |
Your Company has made a positive impact on the lives of countless
customers in its 12 years of journey by providing housing finance to the customers and
enabling them to own a home. Our distribution has been further strengthened to 346
branches across 13 States.
The key financial performance indicators for the Financial Year are as
follows:
Total Income for the Financial Year 2022-23 increased to
H1,610.15 crore vis-?-vis H1,305.56 crore for the Financial Year 2021-22.
Profit Before Tax for the Financial Year 2022-23 increased to
H548.99 crore vis-?-vis H454.86 crore for the Financial Year 2021-22.
Profit After Tax for the Financial Year 2022-23 increased to
H430.07 crore vis-?-vis H356.80 crore for the Financial Year 2021-22.
The Assets Under Management (AUM) as at March 31, 2023 amounted
to H14,166.66 crore vis-?-vis H11,350.21 crore in the previous year; a year-on-year
growth of 25%.
Further, during the Financial Year under review, there was no change in
nature of business of the Company.
AAVAS 3.0 Building a Lasting Institution
Your Company started its journey as Au Housing Finance Private Limited
in 2011 as a subsidiary of Au Financiers India Limited (now AU small Finance Bank). It was
the first phase of the Company's journey where the proof of concept of affordable
housing model was being tested (Aavas 1.0). Your Company was renamed as Aavas Financiers
Limited in 2017 and since evolved into a standalone business under the ownership of
Kedaara Capital and Partners Group with a professional management team and experienced
Board that subsequently went public in 2018 (Aavas 2.0). Your Company is now continuing
its evolution and has embarked on the journey to become India's most trusted
affordable housing finance player led by people and technology and emerge victorious in a
highly competitive market, while maintaining the entrepreneurial spirit. The aim is to
leverage technology, digital and analytics to drive growth and operating leverage. The
Company's investments in technology is expected to help the business deliver
sustainable quality growth and superior customer experience (Aavas 3.0). The Company
continues to build India's most trusted affordable housing finance business with
proactive investments in people, processes and positions. The Company's investments
in futuristic technologies and analytics is expected to help the business deliver
sustainable growth and enriched customer outcomes.
Aavas 3.0 is driven by a combination of organic growth and desire to
attain scale. Aavas has established competence in customer acquisition and performance and
going ahead, intends to deepen market penetration by entering diverse markets and
segments.
DIVIDEND
Considering the capital intensive nature of the Company, your Directors
felt it prudent to retain the earnings for the Financial Year under review to be ploughed
back in business, which shall result in further augmentation of the Company's growth
and Shareholders' wealth. Accordingly, no dividend has been recommended for the
Financial Year ended March 31, 2023. In terms of Regulation 43A of the Securities and
Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations,
2015, (SEBI LODR Regulations') and Master Direction Non-Banking
Financial Company
Housing Finance Company (Reserve Bank) Directions, 2021
(RBI Master Directions') the Board of Directors of the Company (the
Board') formulated and adopted the Dividend Distribution Policy
(Policy'). The Policy is available on the website of the Company at
https://www.aavas.in/img/pdf/ dividend-distribution-policy.pdf and forms part of this
Report as Annexure-5'.
CAPITAL STRUCTURE
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 H85,00,00,000/-
(Rupees eighty five crore only) divided into 8,50,00,000 (Eight crore fifty lakh) Equity
Shares of H10/-(Rupees ten only) each.
Issued, Subscribed & Paid up Capital:
The issued, subscribed and paid up Capital of the Company as on March
31, 2023 stood at H79,05,68,740 (Rupees seventy nine crore five lakh sixty eight thousand
seven hundred and forty only) consisting of 7,90,56,874 (Seven crore ninety lakh fifty six
thousand eight hundred and seventy four) Equity Shares of H10/- (Rupees ten only) each.
During the Financial Year under review, the paid-up Equity Share
Capital of the Company has been increased on account of issuance and allotment of 1,20,423
Equity Shares of H10/-(Rupees ten only) each pursuant to the exercise of stock options by
the eligible employees of the Company under Employee Stock Option Plans (ESOPs) of the
Company.
SPECIAL RESERVE (UNDER SECTION 29C OF THE NHB ACT, 1987)
Your Company has transferred H85.66 crore i.e. 20% of net profits to
Statutory Reserves during the Financial Year under review as required under the provisions
of Section 29C of the NHB Act, 1987 read with Section 36 (1) (viii) of Income Tax Act,
1961.
REVIEW OF OPERATIONS
Your Company is engaged in carrying out the business of housing finance
activities in India. The Company's lending operations remained strong with the
growing demand for housing loans. Your Company adopted contiguous on-ground expansion
across regions; as of March 31, 2023, the Company conducted operations through 346
branches in 13 states. The Company chose to serve the growing needs of housing finance
customers in the low and middle income segments of sub-urban and rural India, going
contrary to the industry's preference to serve the customers in the metro cities and
urban regions of the country. 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.
During the Financial Year under review, your Company delivered a
resilient performance, which is reflected in the following financial snapshot.
Income & Profits
Total Income grew by 23% to H1,610.15 crore for the Financial Year
ended March 31, 2023 as compared to H1,305.56 crore for the previous Financial Year.
Profit Before Tax (PBT) was 21% higher at H548.99 crore as compared to H454.86 crore for
the previous Financial Year.
Profit After Tax (PAT) was 21% higher at H430.07 crore as compared to
H356.80 crore for the previous Financial Year.
Sanctions
During the Financial Year under review, your Company has sanctioned
housing loans for H5,168.83 crore as compared to H3,762.09 crore in the previous Financial
Year with an annual growth of 37%. The cumulative loan sanctions since inception of your
Company stood at H23,390.06 crore as at March 31, 2023. Your Company has not granted any
loan against the collateral of Gold Jewellery.
Disbursements
During the Financial Year under review, your Company disbursed housing
loans for H5,024.54 crore as compared to H3,602.24 crore in the previous Financial Year
registering an annual growth of 39%. The cumulative loan disbursement since inception as
at March 31, 2023 was H22,381.55 crore.
Assets Under Management (AUM)
The AUM of your Company stood at H14,166.66 crore (including assignment
of H2,757.23 crore) as at March 31, 2023 as against H11,350.21 crore (including assignment
of H2,343.78 crore) in the previous Financial Year, with a growth of 25%.
As of March 31, 2023, the average size of loan sanctioned was H8.90
lakh and average tenure was 198.2 months in the AUM (on origination basis).
Pradhan Mantri Awas Yojna (PMAY) Scheme
The Company has received subsidy under PMAY-CLSS worth H284.57 crore
towards 13,518 beneficiaries during the Financial Year and the same has been credited to
the respective customers' loan accounts.
Non-Performing Assets (NPA)
Your Company is in adherence to the provisions of Indian Accounting
Standards ("Ind AS") with respect to 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 supported by
analytical decision making and consistent engagement with the customers during the period,
the GNPA and NNPA as at March 31, 2023 were 0.92% and 0.68% respectively (against 0.99%
and 0.77% respectively in the previous Financial Year).
CAPITAL ADEQUACY RATIO
Your Company's Capital Adequacy Ratio as at March 31, 2023 was
46.96% (previous Financial Year 51.93%) 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.
CREDIT RATING
The Credit Rating represent the highest degree of safety regarding
timely servicing of financial obligations.
Your Company's financial prudence is reflected in the strong
credit rating assigned by rating agencies. The ratings also derive strength from adequate
risk management and control systems put in place by the Company, pristine asset quality
and strong corporate governance.
An upgrade in the credit rating signifies a significant improvement in
the creditworthiness of the Company. Considering the steady growth, strong profitability
and robust balance sheet, rating agencies upgraded the credit rating of the Company.
During the Financial Year under review, the long-term credit rating of the Company has
been upgraded from AA-/Positive to AA/Stable by both CARE Ratings and ICRA Limited.
Outlook on both ratings is Stable. The Short-term credit rating is reafirmed to A1+ by
ICRA, CARE and India Ratings.
For more details on credit ratings, kindly refer Corporate Governance
Report forming part of this report.
REGULATORY & STATUTORY COMPLIANCES
A crucial element in business and corporate management is compliance of
applicable statutory provisions and adherence of a business to regulations and laws.
Keeping that in view the Company has complied with all the guidelines, circular,
notification and directions issued by RBI and NHB 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 including the
Secretarial Standards issued by ICSI, SEBI LODR Regulations, 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.
The SBR framework encompasses different facets of regulation of NBFCs
covering capital requirements, governance standards, prudential regulation, etc., the RBI
decided to first issue an integrated regulatory framework for NBFCs under SBR providing a
holistic view of the SBR structure and set of fresh regulations being introduced in
respective timelines. With respect to above, the RBI has issued various circulars/
guidelines in the Financial Year 2021-22 and 2022-23, which were duly implemented by the
Company including formation of policies, implementing procedures and to review their
outcome on periodic basis.
DEPOSITS
Your Company being a non-deposit taking Housing Finance Company has
neither invited nor accepted nor renewed any fixed deposits from public within the meaning
of Chapter V of the Act read with the Companies (Acceptance of Deposits) Rules, 2014.
Therefore, the disclosure in terms of RBI Master Directions is not required.
AWARDS AND RECOGNITION
Felicitated by Hon'ble Union Minister of Finance and
Corporate Affairs, Smt. Nirmala Sitharaman for Best NBFC for the year 2020-21 in FE
India's Best Banks Awards.
Felicitated with the Economic Times Best BFSI Brands 2023.
Pioneer in Self Built Green Housing-80 EDGE Certified Green
Homes by Sintali, UK based certifier.
Head Office of the Company certified with LEED Gold
Certification.
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 lenders and instrument.
The Company has diverse set of lenders/investors that includes public sector bank, private
sector bank, National Housing Bank and other financial institutions.
Your Company has vide Special Resolution passed on July 21, 2022, 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
H17,000 crore (Rupees seventeen 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, 2023 was 7.61%
(including Securitization/ Assignment) as against 6.88% as at the end of the previous
Financial Year. As at March 31, 2023, your Company's sources of funding were
primarily in the form of Long Term Loans from Banks and Financial Institutions (45%),
followed by Securitization/Direct assignment (22%), NHB Refinance (20.8%), Debt capital
market (12.2%).
Your Company has a comfortable liquidity position as on March 31, 2023
with Rs. 1381.6 crore (including FD's). Further, the Liquidity Coverage Ratio
(LCR') for the Financial Year ended March 31, 2023 was 212.16% as against the
regulatory requirement of 60%.
Term Loans from Banks and Financial Institutions
The Company, during the Financial Year, received aggregate fresh loan
sanctions amounting to H3,200 crore and has availed loans aggregating to H2,765 crore. The
outstanding term loans from Banks and Financial Institutions as at March 31, 2023 were
H5,627.34 crore (excluding PTC and CC) with average tenure of 9.23 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 Financial Year under review, your Company received purchase
consideration of H954 crore from assets assigned in pool buyout transactions.
The pool buyout transactions were carried out in line with RBI
guidelines on Securitization of Standard Assets and securitized assets were de-recognized
in the books of the Company.
Refinance from National Housing Bank (NHB)
NHB continued to extend its support to your Company through refinance
assistance and during the Financial Year under review, your Company has received fresh
sanction of refinance assistance of H900 crore under the NHB refinance scheme. Your
Company availed funds of H1,044 crore under various Refinance Schemes such as for
Affordable Housing Fund,
Regular Refinance Scheme and Special Refinance Facility. Total
outstanding refinance at the end of the current Financial Year stood at H2,603 crore.
Non-Convertible Debentures (NCDs)
Details of Non-convertible debentures are as following:
I. Multilateral/Development Financial Institutions
As on March 31, 2023, the Company's outstanding NCDs stood at
H683.14 crore as compared to H878.9 crore as on March 31, 2022.
II. Domestic Financial Institutions
As on March 31, 2023, the Company's outstanding NCDs from Domestic
Financial Institutions stood at H123.9 crore (including subordinate debt of H24.9 crore)
as compared to H123.9 crore (including subordinate debt of H 24.9 crore) as on March 31,
2022.
III. Banks
As on March 31, 2023, the Company's outstanding NCDs from Banks
stood at H209.8 crore (including subordinate debt of H74.9 crore) as compared to H249.8
crore (including subordinate debt of H74.9 crore) as on March 31, 2022. Your Company has
not issued any Commercial Paper & Short Term Instrument during the Financial Year
2022-23 and as on March 31, 2023, the Company's Commercial Paper outstanding is NIL.
Further, the Company has not issued any NCD during the Financial Year
2022-23.
Rupee Denominated External Commercial Borrowing
As on March 31, 2023 the outstanding balance of Rupee Denominated
External Commercial Bond stood at H507.5 crore (including outstanding balance of social
masala bond of H357.9 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.
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
DEBENTURE TRUSTEE
The Company has appointed IDBI Trusteeship Services Limited as the
Debenture Trustee for the benefit of the debenture holders. The details of Debenture
Trustee are available on the Company's website i.e. https://www.aavas.in/
details-of-debenture-trustee-rta-and-grievance.
BRANCH EXPANSION
The Company reinforced its go-to-market by setting up branches across
India. The Company engaged in contiguous on ground expansion across regions. As of March
31, 2023, the Company conducted operations through 346 branches covering 13 states,
comprising Rajasthan, Maharashtra, Gujarat, Madhya Pradesh, Haryana, Uttar Pradesh,
Chhattisgarh, Delhi, Punjab, Uttarakhand, Himachal Pradesh, Karnataka and Odisha. The
Company added 32 branches in Financial Year 2022-23. Your Company has its Registered
Office in Jaipur, Rajasthan and its branch network as on March 31, 2023 vis-?-vis the
previous Financial Year is detailed hereunder:
State |
Branches |
Branches |
|
(As on March 31, 2023) |
(As on March 31, 2022) |
Rajasthan |
102 |
99 |
Maharashtra |
48 |
45 |
Madhya Pradesh |
49 |
45 |
Gujarat |
44 |
42 |
Uttar Pradesh |
27 |
24 |
Haryana |
17 |
17 |
Karnataka |
24 |
11 |
Uttarakhand |
9 |
9 |
Chhattisgarh |
9 |
8 |
Delhi |
4 |
4 |
Himachal Pradesh |
4 |
4 |
Odisha |
6 |
4 |
Punjab |
3 |
2 |
Total number of branches |
346 |
314 |
DIRECTORS AND KEY MANAGERIAL PERSONNEL
The composition of the Board is in accordance with Section 149 of the
Act and Regulation 17 of SEBI LODR Regulations with an appropriate combination 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. Non-Executive 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, the overall standard of Company's conducts etc.
The Board of the Company comprises of 9 (Nine) Directors, consisting of
3 (Three) Independent Directors (including 2 (Two) Women Directors), 5 (Five)
Non-Executive Nominee Directors and 1 (One) Executive Director-Managing Director as on
March 31, 2023 who bring in a wide range of skills and experience to the Board.
The composition of Board of the Company is as under:
Name of the Director |
Designation |
DIN |
Mr. Sandeep Tandon |
Chairperson and Independent Director |
00054553 |
Mr. Sushil Kumar Agarwal* |
Managing Director |
03154532 |
Mr. Sachinderpalsingh Jitendrasingh Bhinder** |
Managing Director and CEO |
08697657 |
Mrs. Kalpana Iyer |
Independent Director |
01874130 |
Mrs. Soumya Rajan |
Independent Director |
03579199 |
Mr. Ramachandra Kasargod Kamath |
Non-Executive Nominee Director |
01715073 |
Mr. Vivek Vig |
Non-Executive Nominee Director |
01117418 |
Mr. Nishant Sharma |
Promoter Nominee Director |
03117012 |
Mr. Manas Tandon |
Promoter Nominee Director |
05254602 |
Mr. Kartikeya Dhruv Kaji |
Promoter Nominee Director |
07641723 |
*Resigned w.e.f. May 03, 2023
** appointed as CEO w.e.f February 02, 2023 and Managing Director
w.e.f. May 03, 2023 (MD and CEO).
The Independent Directors have confirmed that they satisfy the criteria
prescribed for Independent Directors as stipulated in the provisions of the Section 149(6)
of the Act and Regulation 16(1)(b) & 25 of SEBI LODR Regulations. 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. None of the Directors of the Company are related to each other and have confirmed
that they are not disqualified from being appointed as Directors in terms of Section 164
of the Companies Act, 2013 and are not debarred from holding the office of Director by
virtue of any SEBI order or any other such authority. Your Company has also 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'.
APPOINTMENT & RESIGNATION OF DIRECTORS AND KMP
Appointment/ Reappointments |
Resignation or Retirement |
Directors Retiring by Rotation |
Appointments/Resignations of the Key
Managerial Personnel (KMP) |
During the Financial Year under
review, the shareholders at its 12th AGM held on July 21, 2022 approved the reappointment
of Mr. Sandeep Tandon, as the Independent Director of the Company with effect from July
27, 2022 till July 26, 2027. |
Mr. Sushil Kumar Agarwal resigned from
the post of Managing Director of the Company w.e.f. May 03, 2023. |
Pursuant to the provisions of Section
152 of the Act, Mr. Ramachandra Kasargod Kamath, Non-Executive Nominee Director and Mr.
Manas Tandon, Promoter Nominee Director of the Company, retired and being eligible, were
re-appointed with the approval of Members at the 12th AGM held on July 21, 2022. |
Mr. Sachinderpalsingh Jitendrasingh
Bhinder- Managing Director and CEO, Mr. Ghanshyam Rawat- President and Chief Financial
Officer, Mr. Sharad Pathak- Company Secretary and Compliance Officer and Mr. Ashutosh
Atre- President and Chief Risk Officer are the KMPs in terms of Section 2(51) of the Act. |
|
|
Further, in accordance with the
provisions of the Act, Mr. Kartikeya Dhruv Kaji, Nominee Director and Mr. Vivek Vig,
Nominee Director of the Company are liable to retire by rotation at the ensuing 13th AGM
of the Company. They are eligible and have offered themselves for re- appointment.
Resolutions for their reappointment are being proposed at the 13th AGM and their Profiles
are included in the Annexure to Notice of the 13th AGM. |
During the Financial Year under review the
Company has appointed Mr. Sachinderpalsingh Jitendrasingh Bhinder as CEO of the Company
w.e.f. February 02, 2023 and Managing Director w.e.f May 03, 2023 and Mr. Ashutosh Atre
President and Chief Risk Officer was appointed/designated as KMP of the Company with
effect from February 02, 2023. |
DISCLOSURE UNDER SECTION 197(14) OF THE ACT
The Managing Director and CEO of the Company has not received any
commission from the Company's subsidiary company.
BOARD MEETINGS
There were 4 (four) Board meetings held during the Financial Year
2022-23. The particulars of the meetings held and attendance of the Directors in the
meetings are detailed in the Corporate Governance Report, which is annexed as an integral
part of this Report.
The Notice and Agenda including all material information and minimum
information required to be made available to the Board under Regulation 17 read with
Schedule II Part-A of the SEBI LODR Regulations were circulated to all Directors, well
within the prescribed time, before the Meeting or placed at the Meeting.
BOARD EVALUATION
The Board Evaluation is the most effective way to ensure that the Board
understands its duties and to adopt effective corporate governance practices. 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
and as per the criteria defined in the said act and regulations.
The above criteria are broadly based on the Guidance Note on Board
Evaluation issued by the SEBI on January 5, 2017, requirements of Section 178 read with
Clause VII of Schedule IV of the Act and SEBI LODR Regulations.
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 Board and the Nomination and Remuneration Committee reviewed the
performance of individual Directors on the basis of criteria such as the contribution of
the individual Director to the Board and Committee meetings, leadership scale,
performance, value creation, governance & compliance.
MEETING OF INDEPENDENT DIRECTORS
During the Financial Year under review, a separate Meeting of the
Independent Directors was held on March 29, 2023 without the attendance of Non-Independent
Directors and the Management of the Company. The Independent Director had discussed and
reviewed the performance of the Non-Independent Directors and the Board as a whole, and
also assessed the quality, quantity and timeliness of flow of information between the
Management and the Board which is necessary for the Board to effectively and reasonably
perform its duties.
FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS
Pursuant to Regulation 25(7) of SEBI LODR Regulations, Schedule IV to
the Companies Act, 2013 (hereinafter referred as "Applicable laws"), the Company
conducts familiarization programme for the Independent Directors, to familiarize the
Independent Directors with their roles, rights, responsibilities in the Company, nature of
the industry in which the Company operates, business model of the Company, etc., through
various programmes.
The Board is also periodically briefed on the various changes, if any,
in the regulations governing the conduct of Non Executive Directors including
independent directors.
The details of the familiarization programmes have been hosted on the
website of the Company and can be accessed through following link:
https://www.aavas.in/img/pdf/details-of-familiarization-programme-imparted-to-independent-directors.pdf.
POLICY ON DIRECTOR'S APPOINTMENT, REMUNERATION & OTHER DETAILS
The Company has in place a Policy on Nomination &
Remuneration for Directors, Key Managerial Personnel (KMP) and Senior Management',
which, inter-alia, lays down the criteria for identifying the persons who are qualified to
be appointed as Directors and/or Senior Management Personnel of the Company, along with
the criteria for determination of remuneration of Directors, KMPs, Senior Management and
their evaluation and includes other matters, as prescribed under the provisions of Section
178 of the Companies Act, 2013 and Regulation 19 of SEBI LODR Regulations. Further, the
Compensation policy of the Company is in line with the compensation guidelines issued by
the Reserve Bank of India (RBI) pursuant to Scale Based Regulations.
The Remuneration paid to the Directors is in line with the Remuneration
Policy of the Company. Details of Remuneration paid to all the Directors during the
Financial Year 2022-23 is more particularly defined in Annual Return in form
MGT-7' as available on the website of the Company and can be accessed at
https://www.aavas.in/investor-relations/annual-reports. The Remuneration Policy is placed
on the website of the Company and can be accessed at
https://www.aavas.in/codes-and-policies.
COMMITTEES OF THE BOARD
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 Committee (CSR)
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, all recommendations made by
above Committees were accepted by the Board. 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 Report as Annexure-2'.
EMPLOYEE STOCK OPTION (ESOP) SCHEMES
Employee Stock Options have been recognised as an effective instrument
to attract talent and align the interest of employees with that of the Company, providing
an opportunity to the employees to share in the growth of the Company and to create long
term wealth in the hands of employees, thereby acting as a retention tool.
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 1,25,000 options on March 30, 2023 under ESOP-2016-I.
ESOP-2022
During the Financial Year under review, Equity Stock Option Plan
for Employees 2022' ("ESOP-2022") has been approved by Members in the 12th
AGM of the Company held on July 21, 2022.
The ESOP-2022 empowers the Board and Nomination & Remuneration
Committee to execute the scheme.
During the Financial Year under review, there have been no changes in
the scheme.
Sr. No. |
Particulars |
Equity Stock Equity Stock Option Plan for
Option Plan for Employees 2016-I Directors 2016-III |
ESOP 2019 |
ESOP 2020 |
ESOP 2021 |
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. |
b. |
Authorization |
The schemes empower the Board and Nomination
& Remuneration Committee to execute the scheme. |
c. |
Variation (if any) |
During the Financial Year under review, there
have been no changes in the schemes. |
|
|
After the closure of Financial Year 2022-23, the
Company has proposed before the Shareholders by way of postal ballot for repricing of the
following schemes: |
|
|
"Equity Stock Option Plan For
Employees 2020" ("ESOP-2020") |
|
|
"Equity Stock Option Plan For
Employees 2021" ("ESOP-2021") |
|
|
"Equity Stock Option Plan For
Employees 2022" ("ESOP-2022") |
All the ESOP plans 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 monitors the ESOP Schemes
in compliance with the Act, SEBI SBEB and Sweat Equity Regulations and SEBI LODR
Regulations. A Certificate from Secretarial Auditors of the Company, confirming that the
above ESOP Schemes have been implemented in accordance with the SEBI SBEB and Sweat Equity
Regulations as amended from time to time and are as per the resolutions passed by the
Members of the Company will be available for the inspection of the Members of the Company.
Disclosure on various plans, details of options granted, shares allotted upon exercise,
etc. as required under SEBI SBEB and Sweat Equity Regulations and Companies (Share Capital
and Debentures) Rules, 2014 is available on the Company's website at
https://www.aavas.in/investor-relations/annual-reports.
AUDITORS
Statutory Auditors and Auditors' Report
As per Section 139 of the Companies Act, 2013, read with the
Companies(AuditandAuditors)Rules,2014,theMembersofthe Company approved the appointment of
M/s Walker Chandiok & Co LLP, Chartered Accountants (Firm's Registration No.
001076N/N500013) as the Statutory Auditors of the Company for a period of 3 (three)
consecutive years to hold office with effect from December 02, 2021 until the conclusion
of the 14th AGM of the Company to be held in the calendar year 2024. The Company has
received certificate from the said auditors that they are not disqualified and are
eligible to hold the office as Auditors of the Company.
The Statutory Auditors have not made any adverse comments or given any
qualification, reservation or adverse remarks or disclaimer in their Audit Reports on the
Financial Statements both standalone and consolidated for the Financial Year 2022-23 and
the Reports are self-explanatory. The said Auditors'
Reports for the Financial Year ended March 31, 2023 on the Financial
Statements of the Company forms part of this Annual Report.
Further, the Statutory Auditors have not reported any fraud in terms of
Section 143(12) of the Act.
Secretarial Auditors and Secretarial Audit Report
In accordance with Section 204 of the Act and Rule 9 of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, M/s. Chandrasekaran
Associates, Practicing Company Secretaries (Firm Registration No: P1988DE002500) were
appointed as Secretarial Auditors to conduct the Secretarial Audit of the Company for the
Financial Year 2022-23. The Report of Secretarial Auditors in form MR-3 for the Financial
Year 2022-23 is annexed to this Report as Annexure-3'.
The Report of Secretarial Auditors is self-explanatory and there were
no observations or qualifications or adverse remarks in their Report.
In addition to the above and pursuant to regulation 24A of SEBI LODR
Regulations, a report on Annual Secretarial Compliance issued by M/s. Chandrasekaran
Associates, Practicing Company Secretaries for the Financial Year 2022-23 has been
submitted with the Stock Exchanges and forms part of this report as Annexure-4'.
There are no observations, or qualifications or adverse remarks in the report.
Information System Audit (IS Audit)
The objective of IS Audit is to provide an insight on the effectiveness
of controls that are in place to ensure confidentiality, integrity and availability of
System Application and Entity's IT infrastructure. IS Audit identify risks and
methods to mitigate risk arising out of System Application and IT infrastructure such as
server architecture, local and wide area networks, physical and information security,
telecommunications etc.
INTERNAL AUDIT & INTERNAL FINANCIAL CONTROL AND ITS ADEQUACY
The Reserve Bank of India has stipulated that all deposit taking and
non-deposit taking HFCs are mandated to have a RBIA framework in place by June 30, 2022.
The Company being a Non-Deposit taking 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. HIA ensures compliance with
the internal audit principles and standards and the entity's independence of the
Internal Audit department, its audit staff and its performance against key performance
indicators, annually to the Audit Committee and the Board. 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 over financial reporting is a process designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted
accounting principles. The Company's internal financial control over financial
reporting 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
During the year under review, there were no significant or material
orders passed by the regulators or courts or tribunals against the Company nor any
fine/penalty levied on the Company.
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, 2023 till the date of this
report.
However, after the closure of the Financial Year 2022-23 and before the
approval of this report, Mr. Sushil Kumar Agarwal resigned from the post of Managing
Director w.e.f. May 03, 2023 and Mr. Sachinderpalsingh Jitendrasingh Bhinder has been
appointed as the Managing Director and CEO of the Company w.e.f. May 03, 2023.
There has been no change in the nature of business of your Company.
MAINTENANCE OF COST RECORDS
The Company being a HFC is not required to maintain cost records as per
sub-section (1) of Section 148 of the Act.
INFORMATION TECHNOLOGY
The Company has always been at the forefront in the housing finance
industry in using technology to provide productivity tools to employees and field
associates and to provide an integrated journey to customers for a smooth loan disbursal
experience.
In the recent past, the Company charted out a roadmap for technology
led business transformation to make the Company ready for the next 10-year growth journey
based on the following 3 pillars enable sustainable growth with operating leverage,
enhance technology capabilities and create a superior customer experience. Your Company
has made significant progress along with the defined roadmap.
The Company wants to build a modern, innovative, and future-ready
digital ecosystem to provide a 360-degree view from transaction origination to reporting.
Technology is at the heart of the business transformation which is being driven at Aavas.
Loan Origination System has been upgraded with Salesforce and Loan Management and
Financial systems are being upgraded with ORACLE Flexcube Core banking and ORACLE Fusion
ERP Applications. Using these platforms, the entire customer journeys on web/app platforms
have been reimagined to create a best-in-class platform for loan disbursements. Using
multiple fintech integrations, processing of the loan applications has been speeded up and
cloud-based data and analytical infrastructure provide insights for further optimizations.
The Company has implemented robust cybersecurity measures and by working with IS Audit has
complied with all regulations, external and internal audits and continues to monitor and
update policies to remain compliant with evolving regulatory requirements.
HUMAN RESOURCE
The Company has always believed that its employees are its most valued
resource and has always ensured their all-round development. Your Company's success
depends largely upon the quality and competence of its human capital. Attracting and
retaining talented professionals is therefore a key element of the Company's strategy
and a significant source of competitive advantage. The Company invested in a
technology-driven HR department workflow, supported by a well renowned HRMS software
called People Strong.
Human Capital represents an aggregate statement of the competencies,
knowledge and experience of the employees. Aavas provides a work culture that encourages
creativity; it has a diverse workforce, which ensures integrated and sustainable growth.
The Company's HR culture is rooted in its ability to subvert
age-old norms in a bid to enhance competitiveness. The Company always takes decisions in
alignment with the professional and personal goals of employees, achieving an ideal
work-life balance and enhancing pride in association. The Company's permanent
employee count stood at 6,034 as of March 31, 2023.
RISK MANAGEMENT FRAMEWORK
Your Company has in place a Board constituted Risk Management Committee
as per the Regulation 21 of SEBI LODR Regulations and in compliance with the RBI
regulations and guidelines as amended from time to time which assists the Board to
establish a risk culture and risk governance framework in the Company. The details of the
Committee and its terms of reference are set out in the Corporate Governance Report
forming part of this Report.
The Risk Management Committee meets at least twice in the year and at
such other times as the Board or Chairperson of the Committee shall require. The Committee
ensure that appropriate methodology, processes and systems are in place to monitor and
evaluate risks associated with the business of the Company and monitor and oversee
implementation of the risk management policy, including evaluating the adequacy of risk
management systems.
The Company has in place a Board approved Risk Management Policy and a
Policy on Internal Capital Adequacy Assessment Process (ICAAP) pursuant to guidelines
issued by RBI. The key risks that Company is exposed to in the course of its business are
Credit Risk, ALM Risk, Concentration Risk, Interest Rate Risk, Legal Risk, Reputation
Risk, Technical Risk, Cybersecurity Risk, Fraud Risk, Regulatory Risk. These are measured
and reported to the Risk Management Committee on a quarterly basis.
The Company has developed an institutional intelligence for
underwriting methodology which is executed by qualified and experienced team hosting
majority of Chartered Accountants. Legal, technical and operations risks have vendors as
well as professionally qualified in-house team.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY
Pursuant to Section 177(9) and (10) of the Companies Act, 2013, and
Regulation 22 of the SEBI (Listing Obligations and Disclosure Requirement) Regulations,
2015 the Company has formulated a Whistle Blower Policy for vigil mechanism of Directors
and employees to report to the management about unethical behavior, fraud or violation of
Company's Code of Conduct. The mechanism provides 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. 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
The Company has in place a policy for prevention of sexual harassment
in line with the requirements of the Sexual Harassment of Women at the Workplace
(Prevention, Prohibition and Redressal) Act, 2013 (POSH Act). The Company has complied
with the provisions relating to constitution of 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 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 report.
CODE OF CONDUCT FOR PREVENTION OF INSIDER TRADING IN COMPANY'S
SECURITIES
In accordance with the Securities and Exchange Board of India
(Prohibition of Insider Trading) Regulations, 2015 as amended from time to time, the
Company has complied and formulated a Code of Conduct for Prevention of Insider Trading
Policy, which prohibits trading in shares of the Company by insiders while in possession
of unpublished price sensitive information in relation to the Company. The objective of
this Code is to protect the interest of Shareholders at large, to prevent misuse of any
price sensitive information and to prevent any insider trading activity by way of dealing
in securities of the Company by its Designated Persons. Mr. Sharad Pathak, Company
Secretary and 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 doesn't have any Holding Company or Joint Ventures.
The Shareholder having the substantial interest in the Company is Lake
District Holdings Limited.
As on March 31, 2023, your Company has one unlisted wholly owned
subsidiary named Aavas Finserv Limited'. The subsidiary Company has not started
any business operations as on the date of this Report.
Pursuant to the provisions of Section 129(3) of the Act, your 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 believes in leading from the front with emerging
best practices in Investor Relations and building a relationship of mutual understanding
and trust.
The Company communicates with its investors through meetings with
analysts and discussions between Fund Managers and Management. The Company also
participates at investor conferences from time to time. All interactions with
institutional investors, fund managers and analysts are based on generally available
information that is accessible to the public on a non-discriminatory basis. The
presentations made to analysts and fund managers are placed on the Company's website
and are also submitted to Stock Exchanges. The transcripts of such meetings as well as the
audio/video recordings are uploaded on the website.
Quarterly and Annual Earnings calls are scheduled through structured
conference calls/weblinks to keep various stakeholders informed about the past performance
and outlook of the industry, especially those having a bearing on the Company.
The investor relation section on Company's website at www.
aavas.in contains all important public domain information including Financial Results,
various policies framed/approved by the Board, presentations made to the analysts and
institutional investors, schedule and transcripts of earnings call with investors, matters
concerning the shareholders, details of the contact persons, etc.
PARTICULAR OF EMPLOYEE REMUNERATION
The statement containing particulars of employees as required under
Section 197 read with Rule 5(1) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 annexed as Annexure-8' to the
Directors' Report. In accordance with the provisions of Rule 5(2) of the
abovementioned rules, the names and particulars of the top ten employees in terms of
remuneration drawn are set out in the 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)
The Company's initiatives in society are focused on the
realisation of the twin goals of Stakeholders Value Enhancement and societal value
creation in a mutually reinforcing and synergistic manner. The Company is mindful of the
needs of the communities and strives to make a positive difference in the society. Your
Company's commitment to the society is sincere and longstanding.
The Vision of Company is to enhance value creation in the society and
in the community in which it operates, through its services, conduct and CSR initiatives,
to promote sustained growth for the society and community, in fulfillment of its role as a
socially responsible corporate, with environmental concern.
The Annual Report on CSR Activities, is annexed as Annexure-9 '
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 is provided as under in terms of Section 134(3)(m) of
the Act read with Rule 8 of the Companies (Accounts) Rules, 2014:
Particular |
Remarks |
A) Conservation of energy |
|
The Steps taken / impact on conservation of
energy |
As the nature of business of the Company is
providing housing finance, at a corporate level, consumption of resources is limited to
running the operations. The Company, however, is dedicated to becoming technically robust
and moderating resource consumption. |
|
Aavas is committed to continuous improvement
and has recently embarked on a digital-first initiative called Project Gati'.
Project Gati' is a major landmark in the digital transformation journey of the
Company where we aim for elimination of physical documentation until a loan is sanctioned
in the system. The project involves building a single platform to streamline the entire
loan origination and customer service journey, providing customers with a more seamless
experience. The new system will significantly reduce manual data entry, paper work,
project assessment time, thereby ensuring a seamless customer experience. |
|
The Company is endeavoring to minimize its GHG
emissions where feasible. The Head Office of the Company was certified with LEED Gold
Certificate in May 2022. |
Particular |
Remarks |
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 recognizes the importance of
being socially responsible and making a difference in lives of people. The Company
implements its CSR initiatives directly as well as through implementing agencies. |
|
The Company is providing loans for
construction of environment-friendly homes and supporting its customers in building homes
that are sustainable as well as affordable. |
|
Under Green Affordable Housing Program, the
Company has, in partnership with International Finance Corporation (IFC), a member of the
World Bank Group, conducted research on the feasibility for affordable green
homes' in India. Green Home Loans have added a sustainability dimension to our value
chain, making us pioneers in introducing concept of sustainable construction of self-built
homes in Indian Housing Finance space. |
|
Further, through its CSR initiatives, the
Company has undertaken various projects on environmental sustainability such as
reforestation (planted 8000+ trees), investment in clean energy (275 kWh solar power
plant) in the Financial Year 2022-23. |
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. |
B) Technology absorption |
|
the efforts made towards technology
absorption |
We are in the process of transforming the
company's technology ecosystem to a more scalable, robust, and agile architecture to
enable the organization to steer the next phase of growth journey. Significant
technological changes are taking place this year in loan origination, loan management and
financial applications in Aavas with the introduction of Salesforce, ORACLE Flexcube Core
Banking and ORACLE Fusion ERP applications. Using these technology platforms, we have
reimagined the entire onboarding journey on mobile and web for customers, employees and
service providers. We are using multiple fintech integrations to help underwriting and
speed up the processing of applications. We have moved our core infrastructure, data and
analytic platforms to leading cloud platforms for ensuring better scalability and
performance. To bring our employees up to speed with the rapid change in technologies, we
have implemented training programs across the company to ensure that they are equipped
with the necessary skills and knowledge. Through these efforts we can efficiently absorb
new technologies. |
the benefits derived like product improvement,
cost reduction, product development or import substitution |
62% of active loans customers have used our
app and more than 99% of service requests coming on the app are self-serviced. |
|
Overall at the company level more than 80% of
customer services are happening digitally. We have seen a significant surge in digital
collections and more than 95% of our loan collections and initial money deposits are
happening digitally. |
|
More than 75% of the part disbursals have
moved to digital channels and more than 70% of the leads are responded within 15 minutes
by Omni channel powered contact center. |
|
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. |
|
Further, we are seing a good traction in
sourcing of new customers through digital channels and more than 10% of the loan
disbursals are from the leads which are generated through the digital modes. We have
created a better integration of different functions during loan application processing and
this along with fintech integrations have speeded up the underwriting of the loan. |
Particular |
Remarks |
in case of imported technology (imported
during the last three years reckoned from the beginning of the Financial Year) |
|
a). the details of technology imported |
Salesforce has been adopted as the Loan
Origination System with Mulesoft for integrations. Loan Management and Financial systems
are being upgraded with ORACLE Flexcube Core Banking and ORACLE Fusion ERP Applications.
Fintech integrations with Karza, Signzy, Finbit, Perfios, SignDesk, ZipNach, Sas etc have
also been done. We are also in the process of integrating our account aggregator platform
with our loan underwriting system for faster assessment of cashflows We have already moved
our data and analytical infrastructure to the cloud for better scalability and
performance. |
b). the year of import |
2022-23 |
c). whether the technology has been fully
absorbed |
Aavas has made significant progress on the
technology transformation roadmap and our transformation projects are in the process of
executions. Hence full implementations and absorption will happen over next one to two
years. |
d). if not fully absorbed, areas where
absorption has not taken place, and the reasons thereof |
NA |
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 H4,794.54 Lakhs. The aforesaid details are
shown in the Note No. 38 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 LODR Regulations, the top 1000 (one
thousand) listed entities based on market capitalization, shall attach a Business
Responsibility Report with the Annual report describing the initiatives taken by the
listed entity from an environmental, social and governance perspective. Provided that the
requirement of submitting a Business Responsibility Report shall be discontinued after the
Financial Year 202122 and with effect from the Financial Year 202223, the top
one thousand listed entities based on market capitalization shall submit a Business
Responsibility and Sustainability Report.
Your Company, being a top thousand listed entity as per Market
Capitalization and adhering to good Corporate Governance and for the amelioration of the
society in which it operates the Business Responsibility and Sustainability Report (BRSR)
describing the initiatives taken by the Company from an environmental, social and
governance perspective, 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, 2023 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 made neither any
application nor any proceeding is 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
thereof.
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 2022-23 were
on arm's length basis and in the ordinary course of business under the Act and were
not material under the SEBI Listing Regulations, the details of which are included in the
notes forming part of the Financial Statements.
The details as required to be provided under Section 134(3)(Rs) 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.
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 Companies Act, 2013, SEBI LODR Regulations, 2015 (SEBI LODR,
Regulations), 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 devised proper
systems to ensure compliance with the provisions of all applicable laws and that such
systems were adequate and operating effectively; and f) 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.
BUSINESS OVERVIEW & FUTURE OUTLOOK
A detailed business review & future outlook of the Company is
appended in the Management Discussion and Analysis Section of Annual Report.
ACKNOWLEDGEMENTS AND APPRECIATION
The Board of Directors place on record their gratitude for valuable
guidance and the support to all Stakeholders of the Company including the Reserve Bank of
India, National Housing Bank, the Ministry of Corporate Affairs, Securities and Exchange
Board of India, Insurance Regulatory and Development Authority of India, Stock Exchanges
and other Regulatory Authorities, 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 support and trust.
Your Directors further take this opportunity to appreciate and convey
their thanks to the Kedaara Capital and Partners Group for their invaluable and continued
support and guidance. Your Directors also wish to place on record their appreciation for
the commitment displayed by all the executives, officers, staff and the Senior Management
team of the Company, in recording an excellent performance by the Company during the
Financial Year.
For and on behalf of the Board of Directors |
|
AAVAS FINANCIERS LIMITED |
|
Sachinderpalsingh Jitendrasingh Bhinder |
Manas Tandon |
Managing Director and CEO |
Promoter Nominee Director |
(DIN: 08697657) |
(DIN: 05254602) |
Date: May 03, 2023 |
|
Place: Mumbai |
|
Registered and Corporate Office: |
|
201-202, 2nd Floor, Southend Square, |
|
Mansarover Industrial Area, Jaipur 302 020, Rajasthan, India |
|
CIN: L65922RJ2011PLC034297 |
|
Tel: +91 141-4659239 |
|
E-mail: investorrelations@aavas.in | Website: www.aavas.in |
|
|