Annual Report for the FY 2019-20
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Annual Report 2019-20 Contents 1 3 Financial Statements Corporate Overview 99-288 02-05 Standalone Statutory Auditors’ Report DHFL Portfolio Standalone Financial Statements Message from the Administrator Consolidated Statutory Auditors’ Report DHFL Network Consolidated Financial Statements 2 Statutory Reports 06-98 Board’s Report (Report of Advisory Committee Chaired by the Administrator) Management Discussion & Analysis Report on Corporate Governance Business Responsibility Report Disclaimer on forward looking statements In this Annual Report, we have disclosed forward-looking information to enable investors to compre- hend our prospects and take investment decisions. This report and other statements - written and oral - that we periodically make, contain forward-looking statements that set out anticipated results based on the management’s plans and assumptions. We have tried, wherever possible, to identify such statements by using words, such as ‘anticipate’, ‘estimate’, ‘expects’, ‘projects’, ‘intends’, ‘plans’, ‘believes’, and words of similar substance in connection with discussion on future performance. We cannot guarantee that these forward-looking statements will be realized, although we believe we have been prudent in our assumptions. The achievement of results is subject to risks, uncertain- ties and even inaccurate assumptions. Should known or unknown risks or uncertainties materialize, or should underlying assumptions prove inaccurate, actual results could vary materially from those anticipated, estimated or projected. Readers should keep this in mind. We undertake no obligation or liability to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. View this annual report online https://www.dhfl.com/investors/annual-reports/ 01 Dewan Housing Finance Corporation Limited DHFL Portfolio Self-Construction Loan Pradhan Mantri Awas Yojana Housing Loan Loans for Purchase of New Property Extension and Improvement Loan Expanding Reach Our pan India network coupled with localized outreach strategy, enables us to virtually reach out to our customers right at their doorsteps. Our distribution network - one of the largest in the industry is focused on semi-urban and tier II and III towns, thereby facilitating value-led growth for our customers and stakeholders. Competitive Edge Our growth over the past 36 years has been facilitated by our competitive strengths, enabling us to develop and sustain a leading position in the affordable housing finance segment in India. Empowered and Strategic and Specialised Products Engaged Talent Visionary Leadership catering to the LMI Segment COMPETITIVE EDGE Centralized Strong Underwriting Focussed Tier II Processes and Skills enabling and Tier III Systems Quicker Loans Market Approach 02 I Annual Report 2019-20 1 2 3 CORPORATE STATUTORY FINANCIAL Dewan Housing Finance Corporation Limited OVERVIEW REPORTS STATEMENTS DHFL Portfolio Message from the Administrator (Appointed under Insolvency & Bankruptcy Code, 2016) Self-Construction Loan Dear Stakeholders, Furthermore, the Company was also having its own historical I am writing this to you while we are in the midst of a global shortcomings, which are reflected in this year’s financial performance pandemic and my sympathies are with each one of us who is as the Company reported net loss of ` 13,612.32 crore for the affected and I sincerely wish for the good health and safety of all financial year 2019-20 and Company’s Gross Income for the Pradhan Mantri Awas Yojana of us. financial year 2019-20 dropped by 27.59% to ` 9,343.12 crore. I take this opportunity to present the 36th Annual Report and Adapting to the New Normal financial statements of Dewan Housing Finance Corporation This pandemic has presented several challenges to the Company, Limited (DHFL/ the Company) for the financial year ended March however, we have used this as an opportunity to solve problems in Housing Loan 31, 2020. the most unique manner such as conducting virtual meetings of the Loans for Purchase of New Property Committee of Creditors and Advisory Committee, digitalisation of Reviewing the year gone by... collections process and continuous communication with investors The first two-quarters of the Company’s attention was to arrive at for data sharing and discussions. a resolution through an Inter Creditor Agreement. However, Extension and considering concerns mentioned in the order dated November To ensure the safety of all the employees without compromising on Improvement Loan 20, 2019, Reserve Bank of India (“RBI”) superseded the board the operations, the Company adapted by implementing alternate under the powers vested on it via Section 45-IE of the RBI Act, technology, Work from Home (WFH) enablement, and other Expanding Reach 1934 and I was appointed as the Administrator of your Company functional and connectivity support for all the employees. Our pan India network coupled with localized outreach strategy, enables us to virtually reach out to our customers right at their and was further mandated with timely resolution underInsolvency doorsteps. Our distribution network - one of the largest in the industry is focused on semi-urban and tier II and III towns, thereby and Bankruptcy Code, 2016 (IBC). Wayforward facilitating value-led growth for our customers and stakeholders. During these unprecedented times, it shall remain our continuous Competitive Edge As DHFL became the first financial service providerto undergo a endeavour to restore normalcy in operations while we move towards Our growth over the past 36 years has been facilitated by our competitive strengths, enabling us to develop and sustain a Corporate Insolvency Resolution Process (“CIRP”), it was a very critical juncture of the CIRP as we invite resolution plans from leading position in the affordable housing finance segment in India. required of me to lead the way to ensure the Company is run as the Prospective Resolution Applicants. a going concern. In this task, I was assisted by a three-member Advisory Committee appointed by the RBI to ensure oversight I would like to use this opportunity to thank all our customers who and guidance in various aspects of operations.Despite several continue to show faith in the company, the employees who are challenges arising out of being a first such instance, legacy working tirelessly to keep the company operational, the lenders who Empowered and Strategic and Specialised Products issues within the Company and it’s vast scale of operations, the have supported and co-operated in the entire process, the inves- Engaged Talent Visionary Leadership catering to the LMI Segment Company achieved all major CIRP milestones within the tors who remain optimistic, the prospective resolution applicants for timeframe stipulated by the IBC and was able to attract several showing interest in the company and lastly my fellow members of interests from Prospective Resolution Applicants. Advisory Committee for guiding me in every step of the process. During the CIRP, i.e. post my appointment, several steps were Regards, taken to ensure that the Company is compliant to the regulatory R Subramaniakumar COMPETITIVE framework and is able to operate as a going concern. A specific Administrator focus was kept on strengthening the Company’s corporate EDGE governance, improving risk management framework, and drastically reduce the Company’s operating cost through a drive of austerity. With the effort and contribution of every employee, your Company is now a better governed and efficient corporation. Financial performance The NBFC sector has been one of theworst affected sectors with liquidity issues in the past 2 years and while it was in the process Centralized Strong Underwriting Focussed Tier II of recovering from these bruises, the pandemic has aggravated Processes and Skills enabling and Tier III Systems Quicker Loans Market Approach the problems. 02 I Annual Report 2019-20 08 I Annual Report 2018 -19 03 Dewan Housing Finance Corporation Limited DHFL Network 08 15 22 20 07 23 19 02 16 03 09 06 12 21 04 14 THANE 13 MUMBAI 18 Registered Office 05 01 Corporate Office 10 National Office 24 Disbursement Hub 17 11 The numbers on the map indicate the serial numbers in the chart on page no. 05. For details of the complete postal addresses of all the centres, branches and offices forming part of the DHFL network, please log on to www.dhfl.com. Map not to scale. For illustrative purposes only. 04 I Annual Report 2019-20 1 2 3 CORPORATE STATUTORY FINANCIAL OVERVIEW REPORTS STATEMENTS Sl. State Zonal/Regional/ Branch Micro Registered/ Disbursement Total No. Representative Branch Corporate/ Hub office/CPU National office 1 Andhra Pradesh 0 9 8 0 0 17 2 Assam 0 1 0 0 0 1 3 Bihar 0 1 0 0 0 1 4 Chhattisgarh 0 1 1 0 0 2 5 Goa 0 1 0 0 0 1 6 Gujarat 1 11 12 0 0 14 7 Haryana 1 9 2 0 0 12 8 Himachal Pradesh 0 0 2 0 0 2 9 Jharkhand 0 2 1 0 0 3 10 Karnataka 1 17 14 0 0 32 11 Kerala 1 6 9 0 0 16 12 Madhya Pradesh 1 9 7 0 0 17 13 Maharashtra 3 45 16 3 4 71 14 Odisha 0 2 0 0 0 2 15 Punjab 0 7 5 0 0 12 16 Rajasthan 1 9 6 0 0 16 17 Tamil Nadu 1 18 18 0 0 37 18 Telangana 2 9 2 0 0 13 19 Uttar Pradesh 2 15 4 0 0 21 20 Uttarakhand 0 3 0 0 0 3 21 West Bengal 1 4 2 0 0 7 22 Chandigarh 1 1 0 0 0 2 23 New Delhi 1 1 0 0 0 2 24 Puduchery 0 1 0 0 0 1 London 1 0 0 0 0 1 Dubai 1 0 0 0 0 1 Total 19 182 99 3 4 307 Registered Office: Corporate Office: National Office: Warden House, 2nd Floor, TCG Financial Center, 10th Floor, HDIL Towers, Ground & Sixth Floor, Sir P.