Note 18.1: As at March 31, 2024 : Secured, Redeemable Non-Convertible Debentures (NCDs) are secured by way of charge on identified receivables of the company, with an asset cover of at least 1 time.
As at March 31, 2023 : Secured, Redeemable Non-Convertible Debentures (NCDs) are secured by way of charge on identified receivables of the company, with an asset cover of at least 1 time.
The Company endeavours to diversify its borrowing mix by borrowing through Bank Loans, Commercial Paper, refinance from NHB & Non-Convertible Debenture (NCDs).
The Company was in preparedness for issuance of NCDs during FY 2023-2024. Considering the hike in interest rates during the year, the effective rate for borrowing through NCDs was substantially higher as compared to other sources of funding available to the Company and hence the Company has decided to defer NCD isuuance to the next Financial Year.
Note 18.2 Terms of repayment & rate of interest in case of Debt Securities.
Note 24.2 : Terms/ Rights attached to equity shares
The company has only one class of Equity shares having par value of ^ 10 each. Each holder of equity shares is entitled to one vote per share.
The holders of equity shares are entitled to dividends, if any, proposed by the Board of Directors and approved by Shareholders at the Annual General Meeting.
In the event of Liquidation of the company, the holders of equity shares will be entitled to receive any of the remaining assets of the company, after distribution of all preferential amounts.
However, no such preferential amounts exist currently. The distribution will be in proportion to the number of equity shares held by the shareholders.
Note 24.4 : The Company has forfeited 53,800 Equity Shares on which amount originally paid up is ^ 2,69,000
Note 24.5 : During the period of five years immediately preceding the Balance Sheet date, the Company has not issued any equity shares without payment being received in cash or by way of bonus shares or shares bought back.
Note 37 : Financial Instruments Note 37.1 : Capital Management
The Company’s objective, when managing Capital, is to safeguard the ability of the Company to continue as a going concern, maintain strong credit ratings and healthy capital ratios in order to support its business and to maximise shareholder’s value.
The capital of the Company comprises of Equity Share Capital, Share Premium, other equity reserves, a mix of debt securities and borrowings (other than debt securities). No changes have been made to the objectives, policies and processes from the previous year. However, they are under constant review by the Board.
The Management of the Company monitors the Regulatory capital by overviewing Debt Equity Ratio and makes use of the same for framing the business strategies.
Note 37.3 : Fair Value Measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal market at the measurement date under current market conditions (i.e., an exit price), regardless of whether that price is directly observable or estimated using a valuation technique.
The Company evaluates the significance of financial instruments and material accuracy of the valuations incorporated in the financial statements as they involve a high degree of judgment and estimation uncertainty in determining the carrying values of financial assets and liabilities at the balance sheet date. Fair value of financial instruments is determined using valuation techniques and estimates which, to the extent possible, use market observable inputs, but in some cases use non-market observable inputs. Changes in the observability of significant valuation inputs can materially affect the fair values of financial instruments. In determining the valuation of financial instruments, the Company makes judgments on the amounts reserved to cater for model and valuation risks, which cover both Level 2 and Level 3 instruments, and the significant valuation judgments in respect of Level 3 instruments.
Fair Value Hierarchy
In order to show how fair values have been derived, financial instruments are classified based on a hierarchy of valuation techniques, as explained below.
Assets and liabilities carried at fair value or for which fair values are disclosed have been classified into three levels according to the observability of the significant inputs used to determine the fair values. Changes in the observability of significant valuation inputs during the reporting period may result in a transfer of assets and liabilities within the fair value hierarchy. The Company recognises transfers between levels of the fair value hierarchy when there is a significant change in either its principal market or the level of observability of the inputs to the valuation techniques as at the end of the reporting period.
Level 1 : inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;
Level 2 : inputs are inputs, other than quoted prices included within level 1, that are observable for the asset or liability, either directly or indirectly; and
Level 3 : inputs are unobservable inputs for the asset or liability.
There were no transfers between Level 1, Level 2 and Level 3 during the year Valuation technique used to determine fair value Equity instruments
Equity instruments in non-listed entities are initially recognised at transaction price and re-measured (to the extent information is available) and valued on a case-by-case basis and classified as Level 3.
Valuation adjustments and other inputs and considerations
A one percentage point change in the unobservable inputs used in fair valuation of Level 3 financial assets does not have a significant impact in its value.
No valuation adjustments have been made to the prices/yields provided for valuation.
Financial Instruments not measured using Fair Value, i.e. measured using Amortized Cost/Cost
The following table is a comparison, by class, of the carrying amounts and fair values of the Company’s financial instruments that are not carried at fair value in the financial statements. This table does not include the fair value of non-financial assets and nonfinancial liabilities.
Below are the methodologies and assumptions used to determine fair values for the above financial instruments which are not recorded and measured at fair value in the Company’s financial statements. These fair values were calculated for disclosure purposes only.
Government Securities
Government debt securities are financial instruments issued by sovereign governments and include long term bonds with fixed rate interest payments. These instruments are generally highly liquid and traded in active markets resulting in a Level 1 classification. When active market prices are not available, the Company uses discounted cash flow models with observable market inputs of similar instruments and bond prices to estimate future index levels and extrapolating yields outside the range of active market trading, in which instances the Company classifies those securities as Level 2. The Company does not have Level 3 government securities where valuation inputs would be unobservable.
Investment in Subsidiary
In the opinion of the Company, in case of subsidiary, the carrying value approximates the fair value.
Other Financial Assets and Liabilities
With respect to Bank Balances and Cash and Cash Equivalents, Loans, Other Financial Assets, Trade Payables and Other Financial Liabilities, the carrying value approximates the fair value.
Note 38 : Financial Instruments
Note 38 A : Financial Risk Management
Introduction
The Company’s financial risk management is an integral part of how to plan and execute its business strategies. The Company’s financial risk management policy is set by the Board. While the Company is exposed to various types of risks, the most important among them are liquidity risk, interest rate risk, credit risk, regulatory risk and operational risk. The measurement, monitoring and management of risks remain a key focus area for the Company.
Risk Management Framework
In order to mitigate/transfer the risks, the Company has adopted a Risk Management Policy which provides a framework for identification, assessment, mitigation and reporting of risks.
Board level Risk Management Committee of the Company identifies, reviews and controls key risk areas, across the entire organization.
The role of the Risk Management Committee shall be:
1. review the risk management policies and system periodically and report to the Board.
2. ensure that the risk management system is established, implemented and maintained in accordance with this Policy.
3. assign the responsibilities to Chief Risk Officer of the Company in relation to risk identification and its management.
The Board shall be the ultimate Authority to approve the strategic plans and objectives for Risk Management and Risk Philosophy. The Company has exposure to following risks arising from the financial instruments:
Note 38.A.1 Credit Risk
Credit risk refers to risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. Credit risk arises primarily from financial assets such as loans, investments, balances with banks and other financials assets.
The Company manages and controls credit risk by setting limits on the amount of risk it is willing to accept for individual counterparties. The Company ensures effective monitoring of credit facilities through a portfolio quality review framework.
The Company monitors and manages credit risk on loans at an individual borrower level. The credit risk for individual borrowers is being managed at portfolio level for Housing Loans. The Company has a structured and standardized credit approval process, which includes a well-established procedure of comprehensive credit appraisal. The Risk Management Policy addresses the recognition, monitoring and reporting of the Credit risk.
Company’s customers for housing loans are primarily salaried and self-employed individuals. All retail loans are also subjected to risk based pricing wherein the individual cases are graded on a credit score linked to multiple parameters of appraisal.
The Company’s credit officers evaluate credit proposals, basis factors such as the borrower’s income & obligations, the loan-to-value ratio, Fixed obligation to income ratio and demographic parameters subject to regulatory guidelines.
Various process controls such as KYC Check, CERSAI database scrubbing, Credit Bureau Report analysis are undertaken prior to approval of a loan. In addition External agencies such as field investigation agencies facilitate a comprehensive due diligence process including visits to offices and homes, Panel Advocates confirmed that the title to the property to be mortgaged with GICHF are clear and marketable and free from all encumbrances, charges etc and Panel valuers are entrusted with the job of ascertaining the genuineness of market value of property as it is an important factor in determining the loan amount.
The loans are fully secured and have full recourse against the borrower. The Company has a equitable mortgage over the borrowers property. Wherever the state laws provide, the memorandum of deposit of title deeds are also registered.
Note 38.A.1 (I) Concentrations of credit risk
Concentrations arise when a number of counterparties are engaged in similar business activities, or activities in the same geographical region, or have similar economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions.
70% (Previous year 70%) of the Company’s loan outstanding is from borrower’s residing across 5 various states of India. The Company has taken a special contingency insurance policy to insured Borrower’s collateral security.
Note 38.A.1 (II) Credit Risk Grading of loans and loss allowances
For effective risk Management, the company monitors its portfolio, based on product, underlying security and credit risk characteristics. The credit quality review process aims to allow the Company to assess the potential loss as a result of the risks to which it is exposed and take corrective actions.
The Company applies general approach to provide for credit losses prescribed by Ind AS 109, which provides to recognise 12-months expected credit losses where credit risk has not increased significantly since initial recognition and to recognise lifetime expected credit losses for financial instruments for which there has been significant increase in credit risk since initial recognition, considering all reasonable present and forward looking information, including that of forward looking.
Additionally, the Company evaluates risk based on staging as defined below:
The company categorises loan assets into stages based on the Days Past Due status:
- Stage 1: [0-31 days Past Due] It represents exposures where there has not been a significant increase in credit risk since initial recognition and that were not credit impaired upon origination.
- Stage 2: [32-90 days Past Due] The Company collectively assesses ECL on exposures where there has been a significant increase in credit risk since initial recognition but are not credit impaired. For these exposures, the Company recognises as a collective provision, a lifetime ECL (i.e. reflecting the remaining lifetime of the financial asset)
- Stage 3: [More than 90 days Past Due] The Company identifies, both collectively and individually, ECL on those exposures that are assessed as credit impaired based on whether one or more events, that have a detrimental impact on the estimated future cash flows of that asset have occurred.
The Company follows ‘simplified approach’ for recognition of impairment loss allowance on Cash and Cash Equivalents, Bank Balances, Trade Receivables, and Other Financial Assets. The application of simplified approach does not require the Company to track changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition.
The Management of the Company expects no defaults in the above mentioned financial assets and insignificant history of defaults has been observed by the Management in the previous years on such Financial Assets. Hence no ECL has been recognised on the above mentioned Financial assets as at the reporting date except other financials assets.
Note 38.A.1 (IV) Collateral and other credit enhancements
The Company is in the business of extending secured loans backed by mortgage of property (residential or commercial). The Company assesses and monitors value of the collaterals periodically on the basis of the internal policy. In case required, the Company also requests for additional collateral(s).
The Company after exploring all the possible measures, initiates action under Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI) against the mortgaged properties as a last resort to recover.
Housing Loans include loans amounting to ^ 30,341 Lakh (Previous Year ^ 34,452 Lakh) against which the company has taken possession (including symbolic possession) of the property under Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and held such properties for disposal.
Note 38.A.2 Liquidity Risk
Liquidity risk is the risk resulting from an Organization’s inability to meet its obligations as they become due, because of difficulty in liquidating assets (market liquidity risk) or in obtaining adequate funding. The assessment includes analysis of sources and uses of funds, an understanding of the funding markets in which the entity operates and an assessment of the efficacy of a contingency funding plan for events that could arise. Measuring and managing liquidity needs are vital for effective operations of Housing Finance Company. The Company has also constituted Board Level Asset Liability Management (ALM) Committee which measures not only the liquidity positions of Company on on-going basis but also examines how liquidity requirements are likely to revive under different scenarios.
Maturities of Financial Liabilities
The Company’s financial liabilities into relevant maturity groupings based on their contractual maturities for essential for an understanding of the timing of the cash flows.
(a) Contractual maturities of lease liabilities are on undiscounted basis.
Note 38.A.3 Market risk
Market risk is the risk that the fair value of future cash flow of financial instruments will fluctuate due to changes in the market variables such as interest rates, foreign exchange rates, equity prices resulting in a loss to earnings and capital.
The Company’s exposure to market risk is primarily on account of interest rate risk, price risk and competitions risk. The Company do not have any exposure to foreign exchange rate.
Note 38.A.3 (I) Interest Rate Risk
Interest rate risk is the risk where changes in market interest rates might adversely affect the entity’s financial condition. The immediate impact of changes in interest rate is on the Net Interest Income (NII) i.e. Net Spread, which would be based on rising interest rate of borrowings and falling interest rate of loans.
The Company is also exposed to interest rate risk as it is into funding of Home Loans which are based on floating interest rates. The Company has Board Level Asset Liability Management (ALM) Committee which meets periodically to review the interest rate risk, asset profile and to identify short term liquidity gaps, if any and to take immediate corrective actions to bridge the same.
Note 38.A.3 (III) Competitions Risk
Competition Risk is the risk to the market share and profitability arising due to competition. It is present across all the businesses and across all the economic cycle with the intensity of competition risk varying due to several factors, like, barriers to entry, industry growth potential, degree of competition, etc.
The Company’s business environment is characterized by increased youth population, growing economy, increased urbanization, Government incentives, acceptability of credit in society and rise in nuclear families. Due to all these reasons, the Housing Finance industry has seen a higher growth rate than overall economy and several other industries since past several years. This has led to increase in competition and in turn increased pressure on the existing Companies to maintain/grow market share and profitability. In order to mitigate the risk arising due to competition, the Company has customer centric approach coupled with state of art infrastructure including IT interface.
Note 40 : Employee Benefits :-
In compliance with the Indian Accounting Standard on ‘Employee Benefits’ (Ind AS 19), following disclosures have been made : Defined Contribution Plan:
(i) Pension Scheme
The Company makes contribution to Employees’ Pension Scheme, 1995 for all employees and Employee State Insurance Scheme for all eligible employees. The Company has recognized ^ 28 Lakh (Previous year ^ 29 Lakh) for Employees’ Pension Scheme in the Statement of Profit and Loss. The contributions payable by the Company are at rates specified in the rules of the schemes.
(ii) Provident Fund
An amount of ^ 475 Lakh (Previous year ^ 480 Lakh) has been charged to Statement of Profit and Loss on account of this defined benefit scheme.
Defined Benefit Plans:
(i) Gratuity Plan
Gratuity is payable to all the members at the rate of 15 days salary for each completed year of Service.
The Indian Parliament has approved the Code on Social Security, 2020, which would impact the contributions by the Company towards Provident Fund and Gratuity. The effective date from which the changes are applicable is yet to be notified and the final rules are yet to be framed. The Company will carry out an evaluation of the impact and record the same in the standalone financial statements in the period in which the code becomes effective and related rules are published.
The sensitivity analysis have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.
The sensitivity analysis presented above may not be representative of the actual change in the Defined Benefit Obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.
Furthermore, in presenting the above sensitivity analysis, the present value of the Defined Benefit Obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same method as applied in calculating the Defined Benefit Obligation as recognised in the balance sheet.
There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.
Note 41 Commitments and Contingent Liabilities :
a) Commitments :
i) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) is ^ 235 lakh (Previous year ^ 312 lakh)
ii) As at the balance sheet date there were undrawn credit commitments of ^ 9,501 lakh & ^ 6,765 Lakh (Previous Year ^ 8,045 lakh & ^ Nil) representing the loan amounts sanctioned but partly un-disbursed and sanctioned but completely un-disbursed respectively.
b) Contingent Liabilities :
i) Contingent Liabilities : With respect to pending Income Tax disputes of ^ 212 lakh (Previous Year ^ 212 lakh). The Company has preferred appeal/s against the same and has made payments under protest.
ii) Bank Guarantees:
- ^ 150 lakh given in favour of Kotak Mahindra Life Insurance Company Ltd. in lieu of premium deposit for “Kotak Term Group Plan” Policy contract to avail Term Group Plan cover for borrowers. (Previous Year -^ 150 lakh).
- ^ 50 lakh given in favour of Aditya Birla Sun Life Insurance Company Ltd. in lieu of premium deposit for “Aditya Birla Sun Life Insurance Group Asset Assure Plan” policy contract to avail Credit Life Group Plan Cover for borrowers (Previous Year - ^ 50 lakh)
iii) Claim against the Company not acknowledged as debt:
Total 247 Cases (Previous Year 236 Cases) have been filed against the Company in various courts during earlier years, however, the amount is not ascertainable.
Note 43 Segment Reporting:
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (CODM). The CODM regularly monitors and reviews the operating result of the whole Company as one segment of “Financing”. Thus, as defined in Ind AS 108 “Operating Segments”, the Company’s entire business falls under this one operational segment.
Further, the Company operates in a single business segment ie. financing, which has similar risks and returns taking into account the organisational structure and the internal reporting systems. No revenue from transactions with a single external customer or counterparty amounted to 10% or more of the company’s total revenue in year ended March 31, 2024 or March 31, 2023. The Company operates in single geography i.e. India and therefore geographical information is not required to be disclosed separately.
Note: Due to the voluminous nature of transactions and sensitivity of the information, individual borrower wise details, in whose name the title deeds are held are not disclosed.
(ii) Details of benami property held
There are no proceedings which have been initiated or pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 and rules made thereunder.
(iii) Borrowing secured against current assets
The company has borrowings (including debt securities) from banks on the basis of security of book debts.
(iv) Wilful defaulter
The Company has not been declared as Wilful Defaulter by any Bank or Financial Institution or other Lender.
Note: LCR computation is based on Management estimation of future inflows and outflows and not subjected to audit by auditors.
(ix) Compliance with approved scheme(s) of arrangements
The Company has not entered into any scheme of arrangement
(x) Utilisation of borrowed funds and share premium
During the financial year ended March 31, 2024 and March 31, 2023, other than the transactions undertaken in the normal course of business and in accordance with extant regulatory guidelines as applicable.
(i) . No funds (which are material either individually or in the aggregate) have been advanced or loaned or invested (either
from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entity (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
(ii) . No funds (which are material either individually or in the aggregate) have been received by the Company from any
person or entity, including foreign entity (“Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
(xi) Undisclosed Income
The Company does not have any transactions not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961). Also, there are nil previously unrecorded income and related assets.
(xii) Details of crypto currency or virtual currency
The Company has not traded or invested in Crypto currency or Virtual Currency during the year ended March 31, 2024 and March 31, 2023.
Note 46 There are no loans transferred / acquired during the quarter and year ended March 31, 2024 and March 31, 2023 under the RBI Master direction on Transfer of Loan Exposure dated September 24, 2021.
** Refer Circular issued by Reserve Bank of India, no. RBI/2021-2022/125 DOR.STR.REC.68/21.04.048/2021-22 dated November 12, 2021.
* represents loan amounts sanctioned but un-disbursed.
In terms of the requirement as per RBI notification no. RBI/2019-20/170 DOR (NBFC).CC.PD.No.109/22.10.106/2019-20 dated March 13, 2020 on Implementation of Indian Accounting Standards, Housing Finance Companies (HFCs) are required to create an impairment reserve for any shortfall in impairment allowances under Ind AS 109 and Income Recognition, Asset Classification and Provisioning (IRACP) norms (including provision on standard assets). The impairment allowances under Ind AS 109 made by the company exceeds the total provision required under IRACP (including standard asset provisioning), as at March 31,2024 and March 31, 2023 and accordingly, no amount is required to be transferred to impairment reserve.
Note 48 Disclosure as required under RBI Circular No. RBI/2020-21/16 DOR.No.BP.BC/3/21.04.048/2020-21 dated August 6, 2020 in relation of the Resolution Framework for COVID-19-related Stress:
Note 49
Disclosure in terms of in accordance with Master Direction - Non-Banking Financial Company - Housing Finance Company (Reserve Bank) Directions, 2021 dated February 17, 2021 issued by the Reserve Bank of India read with RBI Circular No. RBI/DNBS/2016-17/49 Master Direction DNBS. PPD.01/66.15.001/2016-17 on Monitoring of frauds in NBFCs.
There were 98 cases (Previous Year 59 cases) of frauds reported during the year where amount involved was ^ 1,567 Lakh (Previous Year ^ 1,055 Lakh).
Note 50
Disclosures as per the Non-Banking Financial Company - Housing Finance Company (Reserve Bank) Directions, 2021: The following additional disclosures have been given in terms of the Notification RBI/2020-21/73 DOR.FIN.HFC.CC.No.120/03.10.136/2020-21 dated February 17, 2021.
The below mentioned notes have been prepared as per Indian Accounting Standards (Ind AS) notified under section 133 of the Companies Act, 2013 (“the Act”) read with Companies (Indian Accounting Standards) Rules, 2015 (“IND AS”).
Note 50.1. Public disclosure on liquidity risk in terms of Guidelines on Liquidity Risk Management Framework.
VI Institutional set-up for Liquidity Risk Management
The Board of Directors of the Company has an overall responsibility and oversight for the management of all the risks, including liquidity risk, to which the Company is exposed to in the course of conducting its business. The Board constituted Risk Management Committee (RMC) oversee the effective supervision, evaluation, monitoring and review of various aspects and types of risks, including liquidity risk, faced by the Company. Further, the Board constituted Asset Liability Committee (ALCO) acts as a strategic decision-making body for the asset-liability management of the Company from risk return perspective and within the risk appetite and guard-rails approved by the Board. The ALCO, which measures not only the liquidity positions of Company on on-going basis but also examines how liquidity requirements are likely to revive under different scenarios.
Note 51 Disclosures as per the Non-Banking Financial Company - Housing Finance Company (Reserve Bank) Directions, 2021: The following additional disclosures have been given in terms of the Notification RBI/2020-21/73 DOR.FIN.HFC.CC.No.120/03.10.136/2020-21 dated February 17, 2021 and Annex II referred in para 15A of the Master Direction - Non-banking Financial Company - Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016.
Qualitative Disclosure
Liquidity Coverage Ratio (LCR) aims to ensure that NBFC’s maintains an adequate level of unencumbered High Quality Liquidity Asset (HQLAs) that can be converted into cash to meet liquidity needs for a 30 calendar day time horizon under a significantly severe liquidity stress scenario.
HQLA comprises of unencumbered Bank Balances and Fixed Deposit, Cash in Hand, Liquid Investments after appropriate haircut. The Company maintains sufficient balance of Cash and Bank Balance and liquid Investments which can be easily liquidated in times of stress.
Liquidity Coverage Ratio results drive by inflow of next 30 days receivable on loans and advances and corresponding outflow over the next 30 days towards borrowings and other liabilities.
Note : 1) Unweighted values must be calculated as outstanding balances maturing or callable within 30 days (for inflows
and outflows).
2) Weighted values must be calculated after the application of respective haircuts (for HQLA) and stress factors on inflow and outflow.
Note 52: Other Disclosure as per the Non-Banking Financial Company - Housing Finance Company (Reserve Bank) Directions, 2021
c Details of financing of parent company products: The Company does not have any exposure in financing of parent company products.
d Details of Single Borrower Limit ( SGL) / Group Borrower Limit (GBL ) exceeded by the HFC : The Company has not lent / invested / lent and invested in any borrower / group of borrower in excess of limits prescribed by the RBI.
e Unsecured Advances: The Company has not given any unsecured advances against intangible securities such as rights, licenses, authority etc. as collateral security. Unsecured advances reflecting in Note 6 represent amounts where the property against which advances have been granted are subject to property fraud by the borrowers, which was detected post disbursement of such advances or diminution in value of property identified subsequently.
Note 52.2 Miscellaneous:
Details of registration obtained from other financial sector regulators: The Company was incorporated under the Companies Act, 1956 on December 12, 1989 and is governed by Companies Act, 2013. It is regulated by NHB/RBI and registered under section 29A of the NHB Act, 1987. Company obtained registration (Corporate Agency License) from Insurance Regulatory and Development Authority of India. Renewal of registration of the Company as LEI (Legal Entity Identifier) as required by RBI.
D There is no breach of covenant of loan availed or debt securities issued.
E Divergence in Asset Classification and Provisioning
In terms of the RBI circular no. DOR.ACC.REC. No.20/21.04.018/2022-23 dated April 19, 2022, NBFCs are required to disclose the divergences in asset classification and provisioning consequent to NHB’s (in case of HFCs) annual supervisory process in their notes to accounts to the financial statements, wherever either (a) the additional provisioning requirements assessed by NHB exceed 5% of the reported net profits before tax and impairment loss on financial instruments or (b) the additional gross NPAs identified by NHB exceed 5% of the published reported gross NPAs for the reference period, or both. Based on the conditions relating to applicable limits mentioned in RBI circular, no disclosure on divergence in asset classification and provisioning for NPAs is required with respect to NHB’s supervisory process for the year ended March 31, 2023.
Note 55 Risk Based Internal Audit
Disclosure in terms of RBI Circular No. DoS.CO.PPG./SEC/05/11.01.005/2020-21 dated February 03, 2021 on Risk-Based Internal Audit (RBIA)
In accordance with the aforesaid circular and Guidelines on Risk Based Internal Audit System for NBFC, the internal audit function shall not be outsourced, except in those cases where necessary expertise does not exist within the Audit Department. The Company has an in-house Internal Audit Department (IAD). However, due to scarcity of manpower and as suggested by the guidelines, the Company is hiring experts / consultants, where required, on a contractual basis to conduct internal audit of various branches, however the ownership of audit reports in all cases rest with regular functionaries of the internal audit function.
Note 56 The previous year figures have been reclassified / regrouped / restated to conform to current year’s classification. Amounts of current/previous year have been rounded off to nearest Rupees in lakh, wherever required.
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