AavasFINANCIERS LTD SAPNE A A P KE, S A AT H HAMAARA Ref. No. AAVAS/SEC/2021-22 7337 Date: July 19. 2021 To, To, The National Stock Exchange of India BSE Limited Limited Dept, of Corporate Services The Listing Department Phiroze Jeejeebhoy Towers, Exchange Plaza, Dalai Street, Fort, Bandra Kurla Complex, Mumbai - 400001 Mumbai - 400051 Scrip Symbol: AAVAS Scrip Code: 541988 Dear Sir /Madam, Sub: Annual Report for the Financial Year 2020-21 and Notice of the Annual General Meeting. We wish to inform you that Eleventh Annual General Meeting ("AGM") of the Members of Aavas Financiers Limited ("Company") will be held on Tuesday, August 10, 2021 at 3:30 P.M. through Video Conferencing ("VC") / Other Audio Visual Means ("OAVM") to transact the business as listed in the Notice of AGM. In this regard, please find attached herewith Annual Report of the Company for Financial Year 2020-21 along with the Notice of AGM. The Notice of AGM and Annual Report for FY 2020-21 are also made available on the website of the Company at the link: https://www.aavas.in/investor-relations/annual- reports. The Company shall commence the dispatch of the Notice of AGM and the Annual Report for FY 2020-21 to the Members by electronic means from today i.e. July 19, 2021, Monday. You are required to take the same on record. Enclosed a/a AAVAS FINANCIERS LIMITED (Formerly known as "Au HOUSING FINANCE LIMITED") An ISO 9001: 2015 Certified Company I CIN NO.: L65922R)2011PLC034297 Regd. & Corp. Office: 201-202, 2nd Floor, Southend Square, Mansarovar Industrial Area, laipur-302020 Tel: +91 141 661 8888 I E-Mail: [email protected], Website: www.aavas.in 10TENACITY AAVAS AT 10: ENHANCING SUSTAINABILITY THROUGH TRUST AND TECHNOLOGY AAVAS FINANCIERS LIMITED I ANNUAL REPORT 2020-21 CONTENTS 02 Corporate snapshot 10 Our report card 12 Strategic overview 14 A story of trust and technology 18 Operational review Forward-looking statement 22 Sustainability Report, 2020-21 27 Glimpses of Corporate Social This document contains statements Responsibility, 2020-21 about expected future events and financial and operating results of 28 Integrated value creation at Aavas Financiers Limited, which Aavas are forward-looking. By their 40 Our employee capital nature, forward-looking statements 42 Our technology capital require the Company to make assumptions and are subject to 44 Risk management inherent risks and uncertainties. 46 Credit Profile Management There is a significant risk that 47 Supply Chain Management the assumptions, predictions and 48 Marketing other forward-looking statements The theme of this report will not prove to be accurate. 49 Our awards and recognition, Readers are cautioned not to 2020-21 This is the third annual report of Aavas place undue reliance on forward- Financiers Limited following its initial 50 Glimpses of Ten years looking statements as a number of public offer in 2018. celebration, 2020-21 factors could cause assumptions, 52 Profile of Board of Directors The company has selected to focus actual future results and events and Management Team on how the various shock absorbers to differ materially from those that it invested in across the ten years 58 Corporate information expressed in the forward- of its existence helped resist sectorial looking statements. Accordingly, 60 Management discussion and headwinds and grow in a sustainable this document is subject to the analysis manner. disclaimer and qualified in its 69 Statutory reports Aavas’ forward-looking investments in entirety by the assumptions, 141 Financial statements customer engagement and technology qualifications and risk factors 278 Notice helped to create a platform that should referred to in the Management translate into sustainable growth across Discussion and Analysis of the the coming years. annual report. ‘Despite the challenges in the sector during the last decade, the company was able to survive in a dynamic environment and now possesses a foundation to sustain its fast-paced growth journey across the foreseeable future.’ Sushil Kumar Agarwal Managing Director and Chief Executive Officer CORPORATE SNAPSHOT Aavas Financiers has completed a 10decade in serving customers. The decade has been marked by a complement of customer obsession, customer service, customer delight and customer retention. 02 | Aavas Financiers Limited Corporate Overview Statutory Reports Financial Statements Vision Professional leadership Differentiated Model Enriching lives of people by The management team is led by Aavas selected to serve enabling them to achieve qualified and experienced visionaries, the needs of housing who are supported by competent finance customers in the their dream of owning a professionals. Aavas is chaired by Mr. low and middle income segments of home: SAPNE AAPKE, SAATH Sandeep Tandon, an industry expert sub-urban and rural India, contrary to HAMAARA with more than 21 years of experience the industry preference of servicing in the technology industry; Mr. Sushil customers in metro cities and urban Kumar Agarwal is Managing Director clusters. and Chief Executive Officer possessing Mission Aavas could have addressed large, more than 20 years of experience visible and conventionally credit To empower and upgrade lives in retail financial services, business worthy loan seekers instead the of low and middle income development, financial management; company chose to focus on customers customers by providing them Mr. Ghanshyam Rawat is Co-Founder excluded from the country’s formal accessible home loans and and Chief Financial Officer with banking system on account of their more than 25 years of setting pioneering benchmarks inadequate documents for income experience in the retail in unserved and underserved validation. markets. financial services and other sectors. Values Create customer delight with Human capital focus on ease and speed. Performance Aavas comprises of dedicated Aavas reported yet another year Blend traditional ethics with and qualified professionals of growth in 2020-21. Revenues modern outlook to create like Chartered Accountants, strengthened 22%, while profit an environment of trust and Civil engineers, Lawyers, after tax increased 16%. The transparency. IT professionals, Company company’s net interest margin Secretaries and MBAs was 7.71% and gross non- Be responsive, professional qualified from reputed performing assets of 0.98% as and ethical in our approach business schools, enhancing a on March 31, 2021. towards customers. culture of knowledge-driven outperformance. The Company Nurture employees to perform comprised 5679 employees as passionately with a sense of on March 31, 2021. ownership. 50.08 Promoter and Promoter Group holding, March 31, 2021 (%) Journey Geographic footprint 19,000 (Approx.) Market Capitalization, Incorporated as AU Housing Aavas launched its first branch at Jaipur March 31, 2021 (H crore) Finance Private Limited on in 2012. Across the decade thereafter, 23rd February, 2011, the Company Aavas has grown to 280 branches in was registered with National Housing the States of Rajasthan, Maharashtra, Bank as a housing finance company. Gujarat, Madhya Pradesh, Haryana, 5,679 It was converted into a public limited Uttar Pradesh, Chhattisgarh, Delhi, Team size, March 31, 2021 company in 2013 and was renamed as Punjab, Uttarakhand and Himachal Aavas Financiers Limited in 2017. Aavas Pradesh (as on March 31, 2021), adding Financiers Limited has been listed on 30 branches during the year under Bombay Stock Exchange Limited and review. National Stock Exchange since October 2018. Annual Report 2020-21 | 03 Aavas has grown in every year of its existence. 04 | Aavas Financiers Limited Corporate Overview Statutory Reports Financial Statements Total revenue (H crore) Net total income (H crore) Profit after tax (H crore) 289.5 1105.3 249.1 640.9 542.1 710.9 175.9 903.1 450.7 494.4 297.5 93.1 FY18 FY19 FY20 FY21 FY18 FY19 FY20 FY21 FY18 FY19 FY20 FY21 What it means What it means What it means This indicates the ability of the Company to At Aavas, we strengthen our net total Ensures that adequate profit is available leverage its distribution network and grow income through superior underwriting and for reinvestment, sustaining the Company’s revenues. collection capabilities. We able to raise growth engine. funds from our domestic and international Result lending partners at competitive rate and Result Despite COVID disruptions, aggregate focus on providing customers with a risk- The Company’s net profit grew 16% in FY disbursements were H2,656.85 crore in FY adjusted interest rate. 2020-21. 2020-21 due to a widening customer base and geographic footprint, strengthening Result revenues. The Company’s net total income grew by 18% in 2020-21. Operating cost to average total Return on Assets (RoA) (%) Return on Equity (RoE) (%) assets (%) 3.75 3.64 12.91 4.86 12.66 3.49 11.64 10.33 3.81 2.82 3.38 3.01 FY18 FY19 FY20 FY21 FY18 FY19 FY20 FY21 FY18 FY19 FY20 FY21 What it means What it means What it means At Aavas, we focus on the moderation This indicates the profitability of the The Company’s growing RoE validates of our cost-to-income ratio by leveraging Company proportionate to its total assets. its ability to reward stakeholders. On economies-of-scale, increasing productivity A higher RoA reflects on a higher asset the back of sustained growth, improved and enhancing the use of technology. efficiency. spread and consistent profitability, the Company’s return on equity is likely to Result Result grow sustainably. The Company’s operating cost to average The Company’s