Financing the Home You Desire Is Now Just a Click Away
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HOME FINANCE ANNUAL REPORT 2020-21 FINANCING THE HOME YOU DESIRE IS NOW JUST A CLICK AWAY. Aditya Birla Housing Finance Ltd. (A part of Aditya Birla Capital Ltd.) Contents Management Discussion & Analysis 2 Board’s Report 10 Annexure 18 Independent Auditor's Report 44 Standalone Balance Sheet 52 Statement of Profit and Loss Account 53 Cash Flow Statement 54 Statement of Changes in Equity 56 Notes 57 Corporate Information BOARD OF DIRECTORS INFORMATION TECHNOLOGY DEBENTURES TRUSTEES Mr. Ajay Srinivasan (IT) STRATEGY COMMITTEE Vistra ITCL (India) Limited Non-Executive Director Mr. V. Chandrasekaran Plot C-22, G- Block, BKC Bandra (E), Mr. Rakesh Singh Mr. Netrapal Singh Mumbai – 400 052 Non-Executive Director Mr. Tushar Kotecha Tel: +91 22 2653 3333 Mrs. Anita Ramachandran Mr. Dharmendra Patro (Member w.e.f Independent Director May 30, 2020) REGISTRAR & SHARE Mr. V Chandrasekaran Mr. Ganesh Kotian TRANSFER AGENT Independent Director Mr. Krishna Iyer (Member w.e.f Linkintime India Private Limited May 30, 2020) C 101, 247 Park, L B S Marg, Vikhroli COMMITTEES OF THE BOARD Mr. Sudesh Puthran (Resigned w.e.f. West, Mumbai - 400 083 AUDIT July 01, 2020) Tel: +91 22 49186000 Mr. Aseem Joshi Fax: +91 22 49186060 Mr. Ajay Srinivasan Mr. Ashish Rane E-mail Id: [email protected] Mrs. Anita Ramachandran Mr. Debaprasad Das Mr. V Chandrasekaran Mr. Vaman Nene REGISTERED OFFICE NOMINATION AND REMUNERATION Mr. Gopakumar Panicker Indian Rayon Compound, Veraval - 362 266 Mr. Ajay Srinivasan KEY MANAGERIAL PERSONNEL Gujarat Mr. Rakesh Singh Mr. Netrapal Singh T: +91 2243567000 Mrs. Anita Ramachandran Chief Executive Officer F: +91 2243567266 Mr. V Chandrasekaran Mr. Tushar Kotecha CIN: U65922GJ2009PLC083779 CORPORATE SOCIAL Chief Financial Officer E: muthiah.ganapathy@ RESPONSIBILITY Mr. Muthiah Ganapathy adityabirlacapital.com Company Secretary W: www.adityabirlahousingfinance.com Mr. Ajay Srinivasan Mr. Rakesh Singh SENIOR MANAGEMENT CORPORATE OFFICE Mrs. Anita Ramachandran Mr. Ganesh Kotian One world Center, RISK MANAGEMENT Head Operations & Customer Service Tower-1, 18th Floor, Mr. Dharmendra Patro Jupiter Mill Compound, Mr. Ajay Srinivasan Chief Risk Officer 841, Senapati Bapat Marg, Mr. Rakesh Singh Elphinstone Road, Mr. V Chandrasekaran STATUTORY AUDITORS Mumbai - 400 013 ASSET- LIABILITY MANAGEMENT Deloitte Haskins & Sells LLP T: +91 22 4356 7000 Chartered Accountants F: +91 22 4356 7111 Mr. Rakesh Singh Mr. Netrapal Singh SECRETARIAL AUDITORS Mr. Tushar Kotecha BNP & Associates Mr. Dharmendra Patro (Member w.e.f Company Secretaries May 30, 2020) Mr. Anubhav Katare INTERNAL AUDITORS SECURITIES ALLOTMENT & Protiviti India Member Private Limited TRANSFER COMMITTEE Chartered Accountants Mr. Ajay Srinivasan Mr. Rakesh Singh Mr. Netrapal Singh Mr. Tushar Kotecha Mr. Muthiah Ganapathy Aditya Birla Housing Finance Limited | Annual Report 2020-21 Management Discussion & Analysis OVERVIEW OF GLOBAL ECONOMY Showing resilience, the agricultural GVA growth remained in The evolution and progress of the Covid 19 pandemic which positive territory at 3%+ Y-O-Y growth in all three quarters began in early 2020 and spread throughout the world was the while Industry sector clocked 2.7% Y-O-Y growth in Q3 after most important factor for the global and domestic economy declining 35.9% Y-O-Y in Q1. Within Industry, the manufacturing and markets throughout FY 2021. The early template to deal sector emerged from 35.9% Y-O-Y decline in Q1 to positive with the pandemic was the model of strict lockdowns and 1.5% growth in Q3. Following industry, the services sector also social distancing, which resulted in sharp collapse in growth, picked up with Q3 Y-O-Y decline of 1% as compared to 21.4% equity and commodity markets. Consequently, Bond yields fell decline in Q1. Equity markets reflected the sharp deterioration, sharply in both EMs and DMs and growth estimates were cut then improvement in growth prospects of the economy as to the lowest levels since the great depression. also the pattern in global equity markets, Interest rates and bond yields remained low for most of FY 21 before rising post Policy makers in both advanced and emerging economies the Union Budget. responded with aggressive monetary-fiscal stimulus packages. Total global pandemic-related fiscal actions as estimated by The fears of a prolonged economic recession were addressed IMF stands at an astoundingly high level of $16 trillion: $10 by the concerted monetary and fiscal steps taken by Reserve trillion consists of additional spending and foregone revenue Bank of India (RBI) & Government. and $6 trillion consists of government loans, guarantees and • To avert any shortage of liquidity in the hands of corporates capital injections. This was complemental by aggressive and and households, RBI commenced easy monetary policy. In synchronous policy actions by Central Banks, which took global March 2020, repo rate was slashed by 75 bps to 4.4% and interest rates to the lowest levels on record and ensured that later to 4.0% by May 2020. To incentivize banks to lend, despite the high fiscal push, borrowing costs remained low. the reverse repo rate which sets the floor of the liquidity The combination of aggressive policy actions, evolution of adjustment facility (LAF) corridor, was reduced by 90 basis medical response to deal with the pandemic and release of pent points from 4.9% to 4.0% in March 2020 and to 3.35% up demand resulted in rebound of the global economy. Across in May 2020. the world, sharp downgrades have been followed by healthy • The borrowers who were impacted by disruption in their upgrades in growth estimates. Bond yields have also rebounded cash flows were given relief by RBI’s measure which allowed in response to improved economic outlook and higher inflation lenders to grant moratoriums on loan repayments initially expectation. With progress in vaccinations across the world for 3 months, further extended for another 3 months till and significant part of stimulus still persisting, the outlook of 31st August 2020. Asset classification freeze for standard global economy in 2021 is better with IMF forecasting strong accounts was also implemented. growth in 50 years, aided by favourable base. • To reduce the financial stress on borrowers due to the Covid OVERVIEW OF INDIAN ECONOMY 19 pandemic, lending institutions were allowed to restructure In India also we had a similar story, with the economy and borrowers’ account which were standard as on 1st March markets being guided by the evolution of the pandemic and 2020 either through rescheduling of repayments, granting Government’s response to the same. Early in the pandemic, of moratorium or conversion of interest into credit facility. India’s response was of a strict nationwide lockdown beginning The existing scheme of restructuring for MSMEs was also mid-March 2020. The consequent demand collapse & supply extended till March 2021 under which existing standard side disruption led to highest ever Y-O-Y decline of 24.4%1 in loans as on 1st March 2020 could be restructured without a Q1FY21 GDP, with industrial sector Gross value added (GVA) downgrade in the asset classification. In September 2020, contracting by 35.9%, services by 21.4% and Agriculture GVA guidelines on sector specific key financial ratios were also growing at 3.3%. Several services such as trade, tourism, laid out for resolution of stressed industrial sectors. airlines, hospitality, construction among many others, were • To avoid freezing of debt markets and to lower the liquidity severely impacted. premium on debt securities, RBI announced Targeted Long GDP growth rebounded sharply, more than expected earlier, in term repo operations (TLTROs). In TLTRO 1.0, liquidity the following three quarters of the year as lockdown restrictions injected was to the tune of ₹1 Lakh Crore, in which banks were gradually eased and strong pent-up demand was unleashed, could access funds from RBI for 3 years at rates linked with Q2 and Q3 growth at -7.3% and 0.4% Y-O-Y. The recovery to repo rates. The Banks were required to invest 50% in post decline of Q2 was on the back of revival in Government primary market debt issuances and the remaining in the expenditure & Fixed investment and easing of the contraction secondary market. In TLTRO 2.0, ₹50,000 Crore of liquidity in private consumption. was infused, special dispensation was made for NBFCs, 50% of the funds were to be deployed by banks to buy securities 1 Real GDP at 2011-12 price; Source MOSPI issued by NBFCs/ MFIs. 2 STATUTORY REPORTS • Increase the limit under the marginal standing facility (MSF) by the pandemic led to slow down in the portfolio growth of from 2% to 3%. HFCs. However, with the gradual pick-up seen in the last two quarters most of the NBFCs/HFCs reached near pre-covid • Reduced the cash reserve ratio (CRR) of all banks by 100 levels in terms of disbursements. basis points to 3.0% till March 21. However, things were not all bleak – the government’s fiscal • ₹50,000 Crore Special Liquidity Facility for Mutual Funds stimulus measures to maintain liquidity and economic continuity to ease liquidity pressures on MF. helped. As part of the relief package, the Reserve Bank of • Refinance facilities of ₹30,000 Crore to NABARD for India announced ₹15,000 Crore funding to NHB to provide refinancing regional rural banks (RRBs), cooperative banks refinance to HFCs. and MFIs; ₹15,000 Crore to SIDBI for on-lending/refinancing; The Ministry of Housing also extended credit-linked subsidy and ₹15,000 Crore to National Housing Bank (NHB) for scheme for the middle-income group by one year – from April supporting Housing Finance Companies (HFCs). 2020 to March 2021. Additionally, RBI announced a six month • To aid Micro, Small and Medium Enterprises (MSMEs) sector, moratorium policy to reduce the impact of pandemic.