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AAVAS Financiers Ltd.

BSE: 541988 Sector: Financials
NSE: AAVAS ISIN Code: INE216P01012
BSE 00:00 | 24 Jun 1997.75 10.90






NSE 00:00 | 24 Jun 1998.00 11.70






OPEN 1983.70
52-Week high 3336.95
52-Week low 1838.70
P/E 44.21
Mkt Cap.(Rs cr) 15,774
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 1983.70
CLOSE 1986.85
52-Week high 3336.95
52-Week low 1838.70
P/E 44.21
Mkt Cap.(Rs cr) 15,774
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

AAVAS Financiers Ltd. (AAVAS) - Director Report

Company director report


The Shareholders


Your Directors are pleased to present the Tenth Annual Report on the operational andbusiness performance of the Company together with the Audited Financial Statements(Standalone and Consolidated) for the Financial Year ended March 31 2020.


The summarized financial performances for the Financial Year ended March 31 2020 areas under:

Particulars For the Year ended March 31 2020 For the Year ended March 31 2019
A Total Income 903.09 710.97
- Total Expenditure before Depreciation & Amortization and provision (566.14) (434.66)
- Impairment on financial instruments (15.34) (8.90)
- Depreciation & Amortization (19.56) (9.72)
B Total Expenses (601.04) (453.28)
C Profit Before Tax (A-B) 302.05 257.69
D Less: Provision for Taxations (Net of Deferred Tax) (52.93) (81.78)
E Profit After Tax (C-D) 249.12 175.91
F Add: Other Comprehensive Income (Net of Tax) (0.05) 0.23
G Total Comprehensive Income (E+F) 249.07 176.14
Transfer to Statutory Reserve 49.81 35.23

Your Company posted Total Income (Total Interest Income and Other Income) of H903.09crore and Total Comprehensive Income of H249.07 crore for the Financial Year ended March31 2020 as against H710.97 crore and H176.14 crore respectively for the previousFinancial Year.


The World Health Organization (WHO) on March 11 2020 declared the outbreak ofCoronavirus (COVID-19) as a global "pandemic". The declaration from WHO came ata time when COVID-19 cases rapidly increased across the world. The spread of virus hastriggered panic across the world and financial markets.

Like some of the other countries in the World the virus' impact led the Hon'ble PrimeMinister of India Shri Narendra Modi to announce a lockdown across the country from March25 2020 to restrict it from spreading further and to break the cycle of infection. As aresult the Country's economic activities came to a standstill.

The following measures were taken by the Company to mitigate the risk of COVID-19 toits business operations:

1. The Company invoked its ‘Business Continuity Plan' and ‘Risk ManagementFramework' quite early to minimize the impact on its employees and ensured that theCompany remains operational and that recovery time objectives are met.

2. The Company proactively framed and implemented ‘work from home policy' toensure that employees stay safe and business remains operational.

3. The Company ensured that its offices and branches are properly sanitized and clean.

4. All the guidelines issued by the Central and State Government authorities from timeto time are being strictly adhered to.

5. Pursuant to Notification no. RBI/2019-20/186 DOR. No.BP.BC.47/21.04.048/2019-20dated March 27 2020 issued by the Reserve Bank of India (RBI) in respect of COVID-19– Regulatory Package the Company has framed and implemented a ‘Policy onDeferment of PEMI/EMI (COVID-19)' which gave Company's borrowers an option to defer theirEMI's for three months.


Your Directors have considered reinvesting the profits into the business of the Companyin order to build a strong reserve base for the long-term growth of the Company.Accordingly no dividend has been recommended for the Financial Year ended March 31 2020.

Your Company has formulated Dividend Distribution Policy in accordance with Securitiesand Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 ("SEBI LODR Regulations") for bringing transparency in the matter ofdeclaration of dividend and to protect the interest of investors. The DividendDistribution Policy is available on the website of the Company at and forms part of this Report as"Annexure-5".


The issued and paid-up Equity Share Capital of the Company as on March 31 2020 stoodat H783226610 (Rupees Seventy eight crore thirty two lakh twenty six thousand sixhundred and ten) consisting of 78322661 (Seven crore eighty three lakh twenty twothousand six hundred and sixty one) Equity Shares of H10/- each as compared toH781079010 (Rupees Seventy eight crore ten lakh seventy nine thousand and ten)consisting of 78107901 (Seven crore eighty one lakh seven thousand nine hundred andone) Equity Shares of H10/- each in the previous year.

During the Financial Year under review the paid-up Equity Share Capital of the Companyhas been increased on account of issuance and allotment of 214760 Equity Shares of H10/-each pursuant to the exercise of stock options by the eligible employees of the Companyunder Employee Stock Option Plans (ESOPs) of the Company.


Your Company has transferred H49.81 crore i.e. 20% of net profits to Statutory Reservesduring the Financial Year under review as required under the provisions of Section 29C ofThe National Housing Bank Act 1987 read with Section 36 (1) (viii) of Income Tax Act1961.


Your Company is registered as a Housing Finance Company ("HFC") with NationalHousing Bank ("NHB") to carry out the housing finance activities in India.

In order to build a high-quality loan book your Company endeavors to adopt superiorunderwriting practices backed by robust monitoring and recovery mechanism. Your Company isalways committed towards improving efficiency in all its processes and service levels forits customers.

Your Company's main thrust continues to be the affordable housing segment with itsfocus on catering to the aspirations of low and middle-income Indian families who dream toown their homes. Your Company has been conducting its business as a housing financeinstitution enabling credit access to the low and middle income self-employed customers insemi-urban and rural areas in India. The majority of your Company's customers have limitedaccess to formal banking credit facilities.

The operating and financial performance of your Company has been covered in detail inthe Management Discussion and Analysis report ("MDA") which forms part of thisAnnual Report. During the Financial Year under review your Company has delivered yetanother year of resilient performance which is reflected in the following financialsnapshot:

Income & Profits

Total Income grew by 27.02% to H903.09 crore for the Financial Year ended March 312020 as compared to H710.97 crore for the previous Financial Year. Profit Before Tax (PBT)was 17.21% higher at H302.05 crore as compared to H257.69 crore for the previous FinancialYear.

The Total Comprehensive Income for the Financial Year 2019-20 has increased by 41.40%from H176.14 crore in the previous Financial Year to H249.07 crore in the currentFinancial Year.


During the Financial Year under review your Company sanctioned housing loans forH3034.00 crore as compared to H2710.82 crore in the previous Financial Year with anannual growth of 11.92%. The cumulative loan sanctions since inception of your Companystood at H11646.20 crore as at March 31 2020. Your Company has not granted any loanagainst the collateral of Gold Jewellery.


During the Financial Year under review your Company disbursed housing loans forH2930.39 crore as compared to H2672.35 crore in the previous Financial Year and recordeda growth of 9.66% in disbursements.

The cumulative loan disbursement since inception as at March 31 2020 was H11097.91crore.

Assets Under Management (AUM)

The AUM of your Company stood at H7796.09 crore (including assignment of H1739.64crore) as at March 31 2020 as against H5941.61 crore (including assignment of H1357.46crore) in the previous Financial Year with a growth of 31.21%. As of March 31 2020 theaverage loan sanctioned was H8.40 lakh and Average tenure was 185.32 months in the AUM (onorigination basis).

Affordable Housing

Over the last Financial Year your Company has developed an experienced trained andexclusive team for catering the Pradhan Mantri Awas Yojana (Urban)-PMAY-U product and tofocus on Economically Weaker Sections (EWS) and Low Income Group (LIG) segments and MidIncome Group (MIG) 1 and 2.

Your Company has signed Memorandum of Understanding (MOU) with Local Governmentauthorities of various State Governments for the Credit Linked Subsidy Scheme (CLSS) underthe PMAY for EWS LIG and MIG segments.

During the Financial Year the Company had provided CLSS Subsidy of H109.22 crore to5280 beneficiaries under the said Scheme.

Since the inception of the Scheme your Company has received CLSS subsidy of H152.17crore in respect of 7576 beneficiaries and same has been passed on to the customers.

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 beenclassified based on expected performance. Exposure at Default (EAD) is the total amountoutstanding including accrued interest as on the reporting date. Further in compliancewith Ind AS accounting framework Interest earned on NPA's is recognized net of expectedlosses if the present realisable value of the security is greater than the outstandingloan dues.

Using a pro-active collection and recovery management system supported by analyticaldecision making your Company was able to contain its gross NPAs at H28.41 crore (0.46% ofthe loan assets) as at March 31 2020. Your Company reviews the delinquency and loanportfolio on regular basis.

Your Company conforms to a defined policy with procedures to address delinquencies andcollections. As a result Gross NPA and Net NPA as at March 31 2020 were 0.46% and 0.34%respectively (against 0.47% and 0.37% respectively in the previous Financial Year).

Further the information on the Business overview and outlook and state of affairs ofyour Company have been discussed in detail in the MDA which forms part of this AnnualReport.


NHB vide its Notification No.NHB.HFC.DIR.22/MD&CEO/2019 dated June 17 2019 hasamended capital adequacy ratio for HFCs from 12% to 15% by March 2022.The capital adequacyratio of HFCs is to be increased to 13% by March 31 2020 14% by March 31 2021 and 15%by March 31 2022.

As required under NHB Directions your Company was required to maintain a minimumcapital adequacy of 13% on a standalone basis on March 31 2020.

Your Company's Capital Adequacy Ratio as at March 31 2020 was 55.86% (previousFinancial Year 67.77 %) which is far above the minimum required level of 13%.


The Members of the Company vide Special Resolution passed at Ninth Annual GeneralMeeting (AGM) held on August 01 2019 have approved the alteration of clause 16.11 (c) ofpart 1 of Articles of Association ("Articles") of the Company in order tofacilitate change in designation of Mr. Sushil Kumar Agarwal to Managing Director andChief Executive Officer ("MD and CEO") of the Company from Whole Time Directorand Chief Executive Officer ("WTD and CEO").


During the period under review your Company has neither invited nor accepted norrenewed any fixed deposits from public within the meaning of Chapter V of the CompaniesAct 2013 ("Act") read with the Companies (Acceptance of Deposits) Rules 2014.


• The Company has been included in MSCI India Domestic Small-cap index in thisFinancial Year.

• Your Company continued to enjoy following ISO certifications for its keycustomer facing departments and workflow processes from TUV Nord India reflecting thesuperior customer experience. i. ISO 9001:2015 for Lending process; e-disbursements andclient servicing including Grievance Redressal Mechanism and; ii. ISO 10002:2014 forcustomer satisfaction and complaint handling process.


During the Financial Year under review all credit ratings assigned to the Company havebeen reaffirmed by respective credit rating agencies.

The details of the same are mentioned below:-
Rating Agency Rating Type Nature of Borrowing External Credit Rating
CARE Long Term Rating Long Term Banking Facilities and Instrument-Subordinated Debt "CARE AA- / Stable"
Short Term Rating Commercial Paper "CARE A1+"
ICRA Long Term Rating Long Term Banking Facilities and Non-Convertible Debentures ("NCDs") "ICRA A+ / Positive"
Short Term Rating Commercial Paper "ICRA A1+"
CRISIL Long Term Rating Long Term Banking Facilities "CRISIL A+/ Stable"

The ratings continue to reflect your Company's healthy earning profile adequatecapitalization strong net worth base and steady improvement in its scale of operations.

Despite a lot of rating downgrades in the country during the Financial Year underreview reaffirmation of existing ratings are a positive reflection of the Company'scomfortable liquidity and resource profile and its leadership position in affordablehousing segment its experienced management team and strong brand equity in the regionalmarkets where it has presence. The ratings also derive strength from adequate riskmanagement & control systems put in place by the Company asset quality as well asgood growth opportunities in the affordable housing segment.


Your Company's overall borrowing is guided by a policy duly approved by the Board ofDirectors. Your Company has vide Special Resolution passed on August 01 2019 underSection 180 (1) (c) of the Act authorized the Board of Directors to borrow money uponsuch terms and conditions as the Board may think fit in excess of the aggregate of paid upshare capital and free reserves of the Company up to an amount of H10000 crore and thetotal amount so borrowed shall remain within the limits as prescribed by NHB.

Your Company manages its borrowing structure through prudent Asset-Liability Managementand takes various measures which include diversification of the funding sources tenureoptimization structured interest rates and prudent timing of borrowing to maintain itsborrowing cost at optimum level.

During the Financial Year under review your Company continued to diversify its fundingsources by exploring the Debt Capital Market through private placement of Secured NCDs toMultilateral/Development Financial Institutions NHB Refinance Securitization/Directassignment and banking products like Priority Sector/Non-Priority Sector Term loans CashCredit Facilities and Working Capital Demand loans. Your Company has also furtherdiversified its borrowing by adding Six (6) New Lenders/Financial Partners.

The weighted average borrowing cost as at March 31 2020 was 8.44% (includingSecuritization/ Assignment) as against 8.74% as at the end of the previous Financial Year.As at March 31 2020 your Company's sources of funding were primarily in the form of longTerm Loans from Banks and Financial Institutions (43.0%) followed bySecuritization/Direct assignment (24.9%) NHB Refinance (13.7%) NCDs issued toMultilateral/ Development Financial Institutions (13.2%) Masala Bond issued toMultilateral Institutions (2.9%) Subordinated Debts (1.4%) and NCDs issued DomesticFinancial Institutions (0.9%).

Term Loans from Banks and Financial Institutions

During the Financial Year under review your Company added 5 new lenders viz. SBI LifeInsurance Punjab National Bank Syndicate Bank Corporation Bank and Federal Bank underthis category. The Company during the year received aggregate fresh loan sanctionsamounting to H2775 crore and has availed loans aggregating to H1370 crore. The outstandingterm loan from Banks and Financial Institutions as at March 31 2020 were H2965.68 crore.Average Tenure of term loan raised during the Financial Year under review is 8.65 years.

Securitization/Assignment of Loan Portfolio

Your Company has actively tapped Securitization/Direct Assignment market which hasenabled it to create liquidity reduce the cost of funds and minimizing asset liabilitymismatches.

During the Financial Year under review your Company has received purchaseconsideration of H664.73 crore from assets assigned in pool buyout transactions.

The pool buyout transactions were carried out in line with RBI guidelines onSecuritization of Standard Assets and securitized assets have been de-recognized in thebooks of the Company.

Refinance from NHB

NHB continued to extend its support to your Company through refinance assistance andduring the Financial Year under review your Company has received fresh sanction ofrefinance assistance of H800 crore under the NHB refinance scheme to HFCs. Your Companyavailed funds of H200 crore from NHB under the Refinance Scheme for "AffordableHousing Fund" and "Regular Refinance Scheme" and outstanding refinance atthe end of the current Financial Year stood at H951.29 crore (previous year H897.21crore).

Your Company has availed funds of H80 crore under subsidized scheme of NHB (AffordableHousing Fund) and reduced the effective rate of interest for the eligible customers to7.68% fixed for next 7 years.

Non-Convertible Debentures ("NCDs")

During the previous Financial Year Your Company more focused towardsMultilateral/Development Financial Institutions like Asian Development Bank (ADB)International Finance Corporation (IFC) CDC Group and Life Insurance companies forraising long term funding funding instead of short tenure funding from Mutual Funds.

During the previous Financial Year The Company's fundings through the NCDs were asfollowing:

I. Multilateral/Development Financial Institutions

During the Financial Year under review your Company added ADB as new lender and raisedaggregate amount of H789.40 crore through the issue of Rated Secured

Unlisted Redeemable NCDs on private placement basis to IFC and ADB.

As on March 31 2020 the Company's outstanding NCDs stood at H909.86 crore as comparedto H128.80 crore as on March 31 2019.

II. Domestic Financial Institutions

Given the inherent risk and low tenure of funding from Mutual Funds your Company hasreduced the borrowing from Mutual Funds and did not raise any fresh funding from theseinstitutions during the Financial Year under review. As on March 31 2020 the Company'soutstanding NCDs from Domestic Financial Institutions stood at H59.92 crore as compared toH109.85 crore as on March 31 2019. Your Company's Debentures are listed on Wholesale DebtMarket segment of the BSE Ltd BSE).

As on March 31 2020 the Company's outstanding subordinated debt in the form of NCDsstood at H99.66 crore as compared to H99.58 crore as on March 31 2019.

Your Company has not issued any Commercial Paper & Short-Term Instrument during theFinancial Year 2019-20 and as on March 31 2020 the Company's Commercial Paperoutstanding is NIL.

Masala Bond issued to Multilateral/Development Financial Institutions

As on March 31 2020 your Company's outstanding balance of Masala Bond issued toMultilaterals stood at H198.68 crore.

Compliance of Securities and Exchange Board of India (SEBI) Circular on Fund raising byissuance of Debt Securities

Pursuant to SEBI Circular ‘SEBI/HO/DDHS/CIR/P/2018/144' dated November 26 2018 on‘Fund raising by issuance of Debt Securities by Large Entities' every LargeCorporate (LC) shall raise not less than 25% of its incremental borrowings during theFinancial Year subsequent to the Financial Year in which it is identified as a LC by wayof issuance of debt securities.

Your Company is considered as Large Corporate and has complied with the provision ofthis circular.

During the Financial Year under review the interest on Non-Convertible Debenturesissued on private placement basis were paid by the Company on their respective due datesand there were no instance of interest amount not claimed by the investors or not paid bythe Company.

Your Company being listed HFC is exempted from the requirement of creating DebentureRedemption Reserve (DRR) on privately placed debentures. Therefore DRR has not beencreated by your Company. However pursuant to the Companies (Share Capital and Debentures)Amendment Rules 2019 dated August 16 2019 the Company is required to invest or deposita sum of not less than 15% of the amount of debentures which are maturing during the yearending on March 31 of the next year in one or more methods as provided under Rule 18 ofthe Companies (Share Capital and Debentures) Rules 2014 from the Financial Year2020-2021.

Disclosure under HFCs issuance of NCDs on private placement basis (NHB) directions2014:

(i) The total number of NCDs which have not been claimed by the investors or not paidby the Company after the date on which the NCDs became due for redemption – Nil (ii)The total amount in respect of such Debentures remaining unclaimed or unpaid beyond thedate of such debentures become due for redemption : Nil

Debenture Trustees

Debenture Trust Agreement(s) were executed in favour of IDBI Trusteeship ServicesLimited and Catalyst Trusteeship Limited for NCDs issued by the Company on privateplacement basis.


Your Company has been successful in continuous expansion of its branch network with aview to support its disbursement growth deeper penetration in the states in which theCompany operates and enhancing customer reach. During the Financial Year under review theCompany has expanded its branch network to 10 states with 250 branches as of March 312020. Your Company now operates in the states of Rajasthan Maharashtra Gujarat MadhyaPradesh Haryana Chhattisgarh Delhi Uttar Pradesh Uttarakhand and Punjab.

Your Company has its Registered Office in Jaipur Rajasthan and its branch network ason March 31 2020 vis--vis the previous Financial Year is detailed hereunder:

State No. of Branches (As on March 31 2020) No. of Branches (As on March 31 2019)
Rajasthan 88 78
Maharashtra 42 38
Gujarat 37 32
Madhya Pradesh 36 32
Haryana 14 11
Chhattisgarh 5 5
Delhi 4 2
Uttar Pradesh 15 6
Uttarakhand 8 5
Punjab 1 1
Total number of branches 250 210


The Board of the Company comprises of Nine Directors consisting of three IndependentDirectors (including two Women Directors) five Non-Executive Nominee Directors and aManaging Director and CEO as on March 31 2020 who bring in a wide range of skills andexperience to the Board.

The Board of Directors of the Company are:-

Name of the Director Designation DIN
Mr. Sandeep Tandon Chairperson and Independent Director 00054553
Mr. Sushil Kumar Agarwal Managing Director and CEO 03154532
Mrs. Kalpana Iyer Independent Director 01874130
Mrs. Soumya Rajan Additional Director (Independent) 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

The Independent Directors have confirmed that they satisfy the criteria prescribed forIndependent Directors as stipulated in the provisions of the Section 149(6) of the Act andRegulation 16(1)(b) & 25 of SEBI LODR Regulations. The names of all the IndependentDirectors of the Company have been included in the Independent Director's databankmaintained by Indian Institute of Corporate Affairs (IICA). The Company has obtaineddeclaration of independence from all the Independent Directors of the Company. None of theDirectors have any pecuniary relationship or transactions with the Company. None of theDirectors of the Company are related to each other and have confirmed that they are notdisqualified from being appointed as Directors in terms of Section 164 of the Act and arenot debarred from holding the office of Director by virtue of any SEBI order or any othersuch authority. Your Company has also obtained a certificate from a Company Secretary inpractice confirming that none of the Directors on the Board of the Company have beendebarred or disqualified from being appointed or continuing as Directors of companies bySEBI/Ministry of Corporate Affairs (MCA) or any such statutory authority. The same formspart of this Annual Report as "Annexure-1" to the Directors' Report.

Appointment & Resignation of Directors

• Appointments

During the Financial Year under review the Board at its Meeting held on August 012019 appointed Mr. Sandeep Tandon Independent Director of the Company asChairperson of the Board with effect from August 01 2019 who shall hold office up to thedate of ensuing AGM as Chairperson of the Board.

The Board of the Company on the basis of recommendation of Nomination &Remuneration Committee appointed Mrs. Soumya Rajan as an Additional Director inthe capacity of Independent Director on the Board of the Company w.e.f. August 29 2019.Further Mrs. Soumya Rajan is proposed to be appointed as Independent Director of the

Company at the ensuing AGM for a term of five consecutive years commencing w.e.f.August 29 2019. Your Board believes that induction of Mrs. Rajan on the Board willsupport in broadening the overall expertise of the Board and will bring wide experienceparticularly in the areas of corporate governance and various laws. Her appointment asIndependent Director of the Company is placed before the Shareholders for considerationand approval.

• Resignation or retirement

Mr. Krishan Kant Rathi has ceased to be the Independent Director of the Company oncompletion of his term of 5 years on August 28 2019.

The Board places on record its deep appreciation and gratitude for the valuable supportand guidance provided by Mr. Krishan Kant Rathi to the Company and the Board as a wholeduring his entire term as an Independent Director of the Company.

During the year none of the Directors of the Company has resigned from the Board ofthe Company.

• Change in Designation

The Members of the Company at 9th AGM held on August 01 2019 had approved to changedesignation of Mr. Sushil Kumar Agarwal to MD and CEO of the Company from WTD andCEO with effect from May 03 2019 till the expiry of his current term i.e. upto January09 2024.

• Directors Retiring by Rotation

Pursuant to the provisions of Section 152 of the Act Mr. Ramachandra KasargodKamath and Mr. Vivek Vig Nominee Directors of the Company retired and being eligiblewere re-appointed with the approval of Members at the 09th AGM held on August 01 2019.

Further in accordance with the provisions of the Act Mr. Kartikeya Dhruv Kajiand Mr. Manas Tandon Promoter

Nominee Directors of the Company are liable to retire by rotation at the ensuing 10thAGM of the Company. They are eligible and have offered themselves for re-appointment.Resolutions for their reappointment are being proposed at the 10th AGM and their Profilesare included in the Notice of the 10th AGM.

Appointments/Resignations of the Key Managerial Personnel

Mr. Sushil Kumar Agarwal- MD and CEO Mr. Ghanshyam Rawat- Chief Financial Officer andMr. Sharad Pathak- Company Secretary and Compliance Officer are the Key ManagerialPersonnel in terms of Section 2(51) of the Act.

No Key Managerial Personnel (KMP) has been appointed or resigned from the Companyduring the Financial Year under review.

Disclosure under Section 197(14) of the Act

The MD and CEO of the Company has not received any commission from its holding orsubsidiary company.

Number of Board Meetings held during the Financial Year

During the Financial Year 2019-20 5 (Five) Board Meetings were convened and held. Thedetails related to the Board Meetings are appended in Corporate Governance Report formingpart of this Report.

The intervening gap between the Board Meetings was within the period prescribed underthe Act and SEBI LODR Regulations. The Notice and Agenda including all materialinformation and minimum information required to be made available to the Board underRegulation 17 read with Schedule II Part-A of the SEBI LODR Regulations were circulatedto all Directors well within the prescribed time before the Meeting or placed at theMeeting.

Performance Evaluation of the Board

Your Company is following the most effective way to ensure that Board Membersunderstand their duties and adopt good governance practices. In furtherance to this theDirectors of your Company commit to act in good faith to promote the objects of theCompany for the benefit of its Employees the Stakeholders including Shareholders theCommunity and for the protection of environment.

Your Company has defined a manner of evaluation as per the provisions of the Act SEBILODR Regulations and "Housing Finance Companies-Corporate Governance (NHB)Directions 2016" for the Evaluation of performance of the Board Committees of Board& Individual Directors.

The above manner is based on the Guidance Note on Board Evaluation issued by the SEBIon January 05 2017.

Further your Company is adhering to the Fit and Proper Criteria as laid down by NHB andalso has in place a Board approved Policy for ascertaining the same at the time ofappointment of Directors and on a continuing basis.

The Board carried out the evaluation of every Director's performance and its ownperformance as a whole Statutory Board Committees namely Audit Committee Nomination& Remuneration Committee Corporate Social Responsibility (CSR) CommitteeStakeholders Relationship Committee and Risk Management Committee and all the IndependentDirectors without the presence of the Director being evaluated. The Board expressed itssatisfaction on performance evaluation.

During the Financial Year under review separate Meeting of the Independent Directorswas held on May 02 2019 without the attendance of Non-Independent Directors and theManagement of the Company to review the performance of the Non- Independent Directors andthe Board as a whole after assessing the quality quantity and timeliness of flow ofinformation between the Management and the Board which is necessary for the Board toeffectively and reasonably perform its duties.

Major aspects of Board evaluation included who is to be evaluated process ofevaluation including laying down of objectives and criteria to be adopted for evaluationof different persons feedback to the persons being evaluated and action plan based on theresults. The manner in which the evaluation has been carried out has been explained in theReport on Corporate Governance forming part of this Report as "Annexure-2". Asrequired under the SEBI LODR Regulations a certificate from Mr. Manoj MaheshwariPracticing Company Secretary (Membership No. FCS 3355) partner of M/s V. M. &Associates Company Secretaries certifying that the Company has complied with theprovisions of Corporate Governance as stipulated by SEBI LODR Regulations has beenobtained. The said certificate forms part of the Directors' Report as"Annexure-3".

Company's Policy on Director's Appointment Remuneration & Evaluation

The Board on the recommendation of the Nomination & Remuneration Committee adopteda "Policy on Nominations & Remuneration for Directors Key Managerial ExecutivesSenior Management and Other Employees" which inter-alia lays down the criteria foridentifying the persons who are qualified to be appointed as Directors and/or SeniorManagement Personnel of the Company along with the criteria for determination ofremuneration of Directors KMPs Senior Management and other employees and theirevaluation and includes other matters as prescribed under the provisions of Section 178of the Act and SEBI LODR Regulations.

The "Policy on Nominations & Remuneration for Directors Key ManagerialExecutives Senior Management and Other

Employees" (Remuneration Policy) of the Company is placed on the website of theCompany. The Remuneration paid to the Directors is in line with the Remuneration Policy ofthe Company. The Nomination & Remuneration Policy can be accessed through thefollowing link Details of Remuneration paid toall the Directors during the Financial Year 2019-20 is more particularly defined inextract of Annual Return in form "MGT-9" attached to this report as"Annexure-9".


The Company has the following Nine (9) Board level Committees which have beenconstituted in compliance with the requirements of the business and relevant provisions ofapplicable laws and statutes:

1. Audit Committee

2. Nomination & Remuneration Committee (NRC)

3. Stakeholders Relationship Committee (SRC)

4. Corporate Social Responsibility (CSR) Committee

5. Risk Management Committee (RMC)

6. Asset Liability Management Committee (ALCO)

7. IT Strategy Committee

8. Executive Committee

9. Customer Service & Grievance Redressal (CS&GR) Committee During theFinancial Year under review all recommendations made by above Committees were accepted bythe Board. The details with respect to the composition terms of reference number ofMeetings held etc. of these Committees are given in the Report on Corporate Governancewhich forms part of this Report.


Your Company continues to comply with the guidelines issued by NHB from time to timeincluding but not limited to accounting guidelines prudential norms for assetclassification income recognition provisioning capital adequacy concentration ofcredit/investments credit rating Know Your Customer (KYC) guidelines Anti MoneyLaundering (AML) standards fair practices code Asset Liability Management (ALM) systemMost Important Terms & Conditions (MITC) Grievance Redressal Mechanism recovery ofdues real estate and capital market exposures norms. Further your Company has takensteps for effective management of operational risk including technology risk as outlinedin the Information Technology framework for HFCs. Your Company has also put a reportingsystem in place for recording frauds as stipulated in guidelines dated February 5 2019issued by NHB.

The recognition of income and impairment on financial instruments (Expected CreditLoss) has been made in the books as per the Ind AS.

Your Company's Capital Adequacy Ratio stood at 55.86% as against the minimumrequirement of 13% as on March 31 2020.

NHB has not passed any significant or adverse remarks in their inspection of theCompany carried out during the Financial Year. Further it has not levied any penalty onthe Company during the Financial Year.

Regulatory & Statutory Compliances

During the Financial Year under review the NHB has issued various notificationscirculars and guidelines to Housing Finance Companies.

The circulars and the notifications issued by NHB were also placed before the Board ofDirectors at regular intervals to update the Board Members and report on actions initiatedon the same and your Company has adhered to all the Circulars Notifications andGuidelines issued by NHB from time to time.

The Government of India has set up the Central Registry of Securitization AssetReconstruction and Security Interest of India (CERSAI) under Section 21 of theSecuritisation and Reconstruction of Financial Assets and Enforcement of Security InterestAct 2002 (SARFAESI Act 2002) to have a central database of all mortgages created bylending institutions. The object of this registry is to compile and maintain data relatingto all transactions secured by mortgages. Accordingly your Company is registered withCERSAI and has been submitting data in respect of its loans.

Your Company is also in compliance with the provisions of the Act including theSecretarial standards SEBI LODR Regulations and other applicable statutory requirements.

During the year no penalty was imposed on the Company by any regulators.



During the Financial Year under review "Equity Stock Option Plan for Employees2019" ("ESOP-2019") has been approved by Members in the 9th AGM of theCompany held on August 01 2019.

The ESOP-2019 empowers the Board and Nomination & Remuneration Committee to executethe scheme.

During the year there have been no changes in the scheme.


Your Company has instituted ESOP-2016 to attract and retain reward and motivate theManagement team Directors and Employees of the Company.

The Members of the Company have by passing a Special Resolution at their Meeting heldon February 23 2017 approved three plans (Collectively called "ESOP–2016")as following: i. Equity Stock Option Plan for Employees 2016 ("ESOP 2016-I") ii.Equity Stock Option Plan for Management Team 2016 ("ESOP 2016-II") iii. EquityStock Option Plan for Directors 2016 ("ESOP 2016-III") These three plans empowerthe Board and Nomination & Remuneration Committee to execute the said ESOP- 2016.During the year there have been no changes in the scheme. All the above stated ESOP plansare in compliance with the provisions of Securities and Exchange Board of India (ShareBased Employee Benefits) Regulations 2014 ("SEBI SBEB Regulations").

The Nomination & Remuneration Committee monitors the ESOP Schemes in compliancewith the Act SEBI SBEB Regulations and SEBI LODR Regulations. The Company shall makeavailable at the ensuing AGM a certificate received from its Auditors confirming that theabove ESOP Schemes have been implemented in accordance with the SEBI SBEB Regulations andare as per the Resolutions passed by the Members of the Company for the inspection of theMembers of the Company through the electronic mode. The disclosures as required under theSEBI SBEB Regulations have been placed on the website of the Company at


Statutory Auditors

M/s S.R. Batliboi & Associates LLP Chartered Accountants (Firm Registration No:101049W/E300004) Statutory Auditors of the Company were appointed by the Members of theCompany in the 7th AGM of the Company held on July 26 2017 to hold office as StatutoryAuditors from conclusion of the 7th AGM to the conclusion of 12th AGM of the Company to beheld in the Calendar Year 2022. As per the provisions of the NHB Notification No.NHB.HFC.CG-DIR.1/MD&CEO/2016 partner of the audit firm conducting the audit workneeds to be rotated after every three years.

The Members are requested to note that the MCA vide notification dated May 7 2018inter-alia notified an amendment to Section 139(1) of the Act whereby the requirement ofplacing appointment of the statutory auditors for ratification by the Members of theCompany at every AGM has been omitted. Accordingly the Board has not proposed anyratification for the appointment of Statutory Auditors in the forthcoming AGM. However theBoard has noted the confirmation received from M/s S.R. Batliboi & Associates LLPChartered Accountants to the effect that their appointment is in compliance of Sections139 and 141 of the Act and rules made thereunder.

Auditors' Report

The Statutory Auditors have not made any adverse comments or given any qualificationreservation or adverse remarks or disclaimer in their Audit Report on the FinancialStatements for Financial Year 2019-20 and the Report is self-explanatory Further theStatutory 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 andRemuneration of Managerial Personnel) Rules 2014 M/s V. M. & Associates CompanySecretaries (Firm Registration No: P1984RJ039200) were appointed as Secretarial Auditorsto conduct the Secretarial Audit of the Company for the Financial Year 2019-20. The Reportof Secretarial Auditors for the Financial Year 2019-20 is annexed to this Report as"Annexure-4".

The Report of Secretarial Auditors is self-explanatory and there were no observationsor qualifications or adverse remarks in their Report.

Further the Secretarial Auditors have not reported any fraud in terms of Section143(12) of the Act.


Your Company has an Internal Audit Department supported by Independent InternalAuditors who conduct comprehensive audit of functional areas and operations of the Companyto examine the adequacy of compliance with policies procedures statutory and regulatoryrequirements.

Significant audit observations and follow up actions thereon are reported to the AuditCommittee of the Board. The Audit Committee reviews and evaluates adequacy andeffectiveness of the Company's internal control environment and monitors theimplementation of audit recommendations.

The Internal Audit Department monitors and evaluates the efficacy and adequacy ofinternal control system in the Company its compliance with operating systems accountingprocedures and policies at all locations of the Company. Significant audit observationsand corrective actions thereon are presented to the Audit Committee at periodic intervals.

The Audit Committee and Board of Directors have approved a documented framework for theinternal financial control to be followed by the Company and such policies and proceduresadopted by the Company for ensuring the orderly and efficient conduct of its businessincluding adherence to Company's policies safeguarding of its assets prevention anddetection of frauds and errors accuracy and completeness of the accounting records andtimely preparation of reliable financial information and disclosures. The Audit Committeeperiodically reviews and evaluates the effectiveness of internal financial control system.


There were no material changes and commitments except the COVID-19 outbreak affectingthe financial position of your Company which had occurred between the end of the FinancialYear i.e. March 31 2020 and the date of the Directors' Report i.e. May 14 2020.

In the wake of COVID-19 outbreak Government of India decided lockdown across thecountry from March 25 2020 and shut down all the non-essential business activities tocontain the spread of COVID-19 in the Country.

Accordingly the Company complied with the Government guidelines and shut down itsbranches and business units across India with effect from March 25 2020 during the periodof lock down. Thereafter the Company partially opened its branches and resumed operationsin compliance with the directions of Government Authorities The Company is hopeful andconfident that the measures taken by the Government will help to contain the spread ofCOVID-19. There has been no change in the nature of business of your Company.

No significant or material orders have been passed by the Regulators or Courts orTribunals impacting the going concern status of the Company and / or the Company'soperations in future.


Being a HFC the Company is not required to maintain cost records as per sub-section(1) of Section 148 of the Act.


Your Company has implemented a fully equipped "Core Housing Finance SolutionsPlatform" which is a step towards aligning technology to the projected businessgrowth.

All branches of your Company and the corporate office are linked through a centralizeddata-base platform that enriches data management strengthens service delivery and servesthe customer(s) in an efficient manner which is an integral part of the controlmechanism.

New initiatives taken by your Company in Information Technology are as follows: a)Document Digitization b) Device Location Tracking c) Procurement of Energy Saving Green ITEquipment d) Refilling outsourced with High-end Copier Machine in High Print volumeBranches to reduce the Carbon Footprint.

The NHB had notified Information Technology Framework for HFCs ("Guidelines")vide its notification no. NHB/ND/DRS/ Policy Circular No. 90/2017-18 dated June 15 2018in order to enhance the safety security efficiency in processes leading to benefits forHFCs and their customers.

Your Company is in compliance with the aforesaid guidelines. Your Company conductsaudit of its IT systems through external agencies at regular intervals. The externalagencies' suggestions and recommendations are reported to the IT Strategy Committee andAudit Committee and implemented wherever found feasible.


The Familiarization Programme of your Company aims to familiarize Independent Directorswith the Housing industry scenario the Socio-economic environment in which your Companyoperates the business model the operational and financial performance of your Companyto update the Independent Directors on a continuous basis on significant developments inthe Industry or regulatory changes affecting your Company so as to enable them to takewell informed decisions in a timely manner. The familiarization programme also seeks toupdate the Independent Directors on their roles responsibilities rights and duties underthe Act and other relevant legislations. The details of the familiarization programmeshave been hosted on the website of the Company and can be accessed on the link:


Your Company's success depends largely upon the quality and competence of itsManagement team and key personnel. Attracting and retaining talented professionals istherefore a key element of the Company's strategy and a significant source of competitiveadvantage.

Across all its business operations your Company had a workforce of 4581 people as onMarch 31 2020.

Human resource development is considered vital for effective implementation of businessplans. Constant endeavors are being made to offer professional growth opportunities andrecognition apart from imparting training to the employees at all levels. Your Companyhas also provided the sales training to the new recruits to provide them betterunderstanding of the Company and align them towards the working culture of the Company.

Your Company hired professionals at senior positions as Functional Heads for headingthe various Departments of the Company having relevant industry experience and expertiseto strengthen and grow the housing finance business of the Company. Your Company has ateam of dedicated individuals and qualified professionals like Chartered AccountantsCompany Secretaries Lawyers Engineers and Software Developers having academicqualifications from various premier institutions.

In pursuance of your Company's commitment to develop and retain the best availabletalent your Company has been organizing in house training programmes on regular basis forits employees covering various specialized functions viz lending operations Underwriting& Due diligence KYC & AML norms Risk Management Information TechnologyRecoveries CLSS PMAY Grievance Redressal and soft skills.

During the Financial Year under review your Company has nominated employees to attendthe external training programmes conducted by NHB and other institutions on KYC-FairPractice Code Customer Service Legal Support for Recoveries NPA Management GrievanceRegistration & Information Database (GRIDS) CERSAI PMAY CLSS Loans-Credit Appraisaland Risk Management.

The Company further sponsors employees for Professional Courses to employee fromreputed business schools such as Indian Institute of Management (IIM) which ensuresquality training and personal growth.


Your Company has in place a Board constituted Risk Management Committee. The details ofthe Committee and its terms of reference are set out in the Corporate Governance Reportforming part of this Report.

Your Company has Board approved Risk Management Policy wherein all material risks facedby the Company are identified and assessed. Your Company has set up a policy framework forensuring better management of its asset & liability profile. Your Company gives dueimportance to prudent lending practices and has put in place suitable measures for riskmitigation which include verification of credit history from credit information bureauspersonal verification of customer's business place and residence in house technical andlegal verification conservative loan to value parameters and compulsory term cover forinsurance. The Risk management framework of your Company seeks to minimize adverse impactof risks on the key business objectives and enables your Company to leverage marketopportunities effectively.

The NHB vide its circular "NHB/ND/DRS/Policy Circular No. 95/2018-19 dated May 292019 had issued the guidelines for appointment of Chief Risk Officer (CRO) by HFCs toensure highest standards of risk management. The Company has duly complied with theaforesaid guidelines by appointing Mr. Ashutosh Atre as CRO of the Company who has directreporting to MD & CEO of the Company.

During the Financial Year under review the Risk Management Committee reviewed therisks associated with the business of your Company undertook its root cause analysis andmonitored the efficacy of the measures taken to mitigate the same.


Your Company believes in conducting its affairs in a fair and transparent manner byadopting highest standards of professionalism honesty integrity and ethical behaviour.Your Company is committed to develop a culture where it is safe for all the Directors andemployees to raise concerns about any wrongful conduct.

The Board of Directors has approved the vigil mechanism/ whistle blower policy of theCompany which provides a framework to promote a responsible and secure whistle blowing. Itprotects Directors/ employees wishing to raise a concern about serious irregularitieswithin the Company. It provides for a vigil mechanism to channelize reporting of suchinstances/ complaints/ grievances to ensure proper governance. The Audit Committeeoversees the vigil mechanism. No employee has been denied access to the Chairperson ofAudit Committee. The whistle blower policy is placed on the website of the Company and canbe accessed at


Your Company has formulated Code of Conduct for Prevention of Insider Trading inCompany's Securities ("Code") in accordance with SEBI (Prohibition of InsiderTrading) Regulations 2015 as amended. The objective of this Code is to protect theinterest of Shareholders at large to prevent misuse of any price sensitive informationand to prevent any insider trading activity by way of dealing in securities of the Companyby its Designated Persons. Mr. Sharad Pathak Company Secretary and Compliance Officer ofthe Company is authorized to act as Compliance Officer under the Code.

During the Financial Year under review the code was mainly amended in line with theCircular SEBI/HO/ISD/ISD/ CIR/P/2019/82 dated July 19 2019 issued by SEBI.


Your Company doesn't have any holding Company.

The Shareholder having the substantial interest in the Company is Lake DistrictHoldings Limited.

As on March 31 2020 your Company has one unlisted wholly owned subsidiary named"AAVAS FINSERV LIMITED". The subsidiary Company has not started any businessoperations as on the date of this Report.

Pursuant to the provisions of Section 129(3) of the Act your Company has preparedConsolidated Financial Statements of the Company which forms part of this Annual Report.Further a Statement containing salient features of financial statements of theSubsidiary in the prescribed format AOC-1 pursuant to Section 129(3) of the Act readwith the Companies (Accounts) Rules 2014 is annexed as "Annexure-6" to thisReport. In accordance with Section 136 (1) of the Act the Annual Report of your Companycontaining inter alia Financial Statements including consolidated Financial Statementshas been placed on our website: Further the Financial Statements of thesubsidiary have also been placed on our website:


Your Company has an effective Investor Relations Program through which the Companycontinuously interacts with the investment community through various communicationchannels viz Periodic Earnings Calls Annual Investor/Analyst Day Individual MeetingsVideo-conferences Participation in conferences One-on-One interaction.

Your Company ensures that critical information about the Company is made available toall its investors by uploading such information on the Company's website under theInvestors section. Your Company also intimates stock exchanges regarding upcoming eventslike earnings calls declaration of quarterly & annual earnings with financialstatements and other such matters having bearing on the share price of the Company.


The statement containing particulars of employees as required under Section 197 readwith Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 annexed as "Annexure-7" to the Directors' Report. In accordancewith the provisions of Rule 5(2) of the above mentioned rules the names and particularsof the top ten employees in terms of remuneration drawn and of the aforesaid employees areset out in the Annexure to this report. In terms of the provisions of Section 136(1) ofthe Act the Directors' Report including the said annexure is being sent to allShareholders of the Company.


In line with the provisions of Section 135 of the Act read with the Companies(Corporate Social Responsibility Policy) Rules 2014 Aavas Foundation a Public CharitableTrust settled by the Company for the purpose of carrying its CSR Activities has undertakenvarious CSR projects in the area of health care promoting gender equality empoweringwomen education promoting traffic rules regulation and road safety providing safedrinking water and promoting Sports which are in accordance with the Schedule VII of theAct and CSR Policy of the Company. Further in this exceptionally difficult period ofCOVID-19 the Company believes that urgent emergency resources need to be deployed to copewith the needs of fighting the COVID-19 crisis which is one of the toughest challenges forhumanity. The Company accordingly donated funds to Rajasthan Chief Minister's Relief Fund(CMRF) COVID-19 Mitigation Fund and Prime Minister's Citizen Assistance and Relief inEmergency Situations Fund (PM CARES Fund). Further it engaged in providing food to needypeople in night shelters and slum areas and distributed Personal Protective Equipment'sMasks Sanitizers and Gloves for the medical personnel and police personnel on the frontlines. The Annual Report on CSR Activities which forms part of the Directors' Report isannexed as "Annexure-8" to this report.


In accordance with the provisions of Sec 134 (3) (m) of the Act read with Rule 8 of theCompanies (Accounts) Rules 2014 the requisite information relating to your Company are asunder:-

A) Conservation of energy:

(i) The Steps taken / impact on conservation of energy: The operations of the Companybeing financial services do not require intensive consumption of electricity. Howeveryour Company is taking every necessary step to reduce its consumption of energy.

(ii) The Steps taken by the Company for utilizing alternate sources of energy: YourCompany has procured the Energy Saving Green IT Equipments and power saving lamps LEDsthat have been installed in branches as a measure for conservation of energy. Your Companyhas installed High-end Copier Machine in High Print volume in Branches to reduce theCarbon Footprint.

As a part of Save Green efforts a lot of paper work at branches and the registeredoffice has been reduced by suitable leveraging of technology and promoting digitization.

(iii) The Capital investment on energy conservation equipment: In view of the nature ofthe activities carried on by your Company there is no capital investment on energyconservation equipment.

B) Technology absorption:

(i) the efforts made towards technology absorption: a. Your Company has implemented afully equipped "Core Housing Finance Solutions Platform" which is a step towardsaligning technology to the projected business growth. b. Your Company completed adoptionof automation of Ind As accounting.

c. The Company utilizes a mobile application through which almost all leads arerecorded which assists in the monitoring and tracking of leads from an early stage andgenerating a credit appraisal memorandum resulting in lower costs and an increase inproductivity. d. The Company utilizes an enterprise-wide loan management system to providean integrated platform for credit processing credit management general ledger debtmanagement and reporting. It also uses e-KYC measures whereby a customer's credit score isautomatically retrieved resulting in faster processing times. e. On the part of customerservice and retention your Company has implemented an online payment gateway on itswebsite to enable its customers to make online payments.

(ii) the benefits derived like product improvement cost reduction product developmentor import substitution: The Company consistently monitored its cost-to-income ratioleveraging economies-of-scale increasing manpower productivity with growing disbursementsthrough the enhanced use of information technology systems resulting in quicker loanturnaround time and reducing transaction costs.

(iii) in case of imported technology (imported during the last three years reckonedfrom the beginning of the Financial Year) a) the details of technology imported: N.A. b)the year of import: N.A. c) whether the technology has been fully absorbed: N.A. d) if notfully absorbed areas where absorption has not taken place and the reasons thereof: N.A.

(iv) the expenditure incurred on Research and Development: N.A.

C) Foreign exchange earnings and Outgo:

During the Financial Year under review your Company had no foreign exchange earningsand the aggregate of the foreign exchange outgo during the Financial Year under review wasH1839.77 lakh. The aforesaid details are shown in the Note No. 41 of notes to theaccounts forming part of the Standalone Financial Statements. The Members are requestedto refer to these Notes.


As required under Regulation 34(2)(f) of SEBI LODR Regulations Business ResponsibilityReport describing the initiatives taken by the Company from an environmental social andgovernance perspective forms part of this Annual Report "Annexure-12".


Pursuant to sub-section 3(a) of Section 134 and sub-section (3) of Section 92 of theAct read with Rule 12(1) of the Companies

(Management and Administration) Rules 2014 the extract of the Annual Return in formMGT-9 as at March 31 2020 forms part of this report as "Annexure-9".


Your Company has zero tolerance towards any action on the part of any of its employeeswhich may fall under the ambit of ‘Sexual Harassment' at workplace. Your Companyrecognizes and promotes the right of women to protection from sexual harassment and theright to work with dignity as enshrined under the Constitution of India and the Conventionon the Elimination of all forms of Discrimination against Women (CEDAW).

Pursuant to the requirements of Section 22 of Sexual Harassment of Women at Workplace(Prevention Prohibition & Redressal) Act 2013 read with Rules there under theInternal Complaints Committee of the Company has not received any complaint of sexualharassment during the Financial Year under review. The following is a summary of sexualharassment complaints received and disposed off during the year 2019-20: No. of complaintsreceived: Nil No. of complaints disposed off: Nil


Since the Company is a HFC the disclosure regarding particulars of loans givenguarantees given and security provided in the ordinary course of business is exemptedunder the provisions of Section 186 (11) of the Act.


In accordance with the provisions of Section 188 of the Act and rules made thereunderthe transactions entered with related parties are in the ordinary course of business andon an arm's length pricing basis the details of which are included in the notes formingpart of the financial statements.

During the Financial Year under review your Company had entered into an arrangementwith Aavas Finserv Limited wholly owned unlisted subsidiary of the Company whichconstitutes Related Party Transactions covered within the purview of Section 188(1) of theAct Accordingly requirement of disclosure of Related Party Transactions in terms ofSection 134(3)(h) of the Act is provided in Form AOC-2 as "Annexure-10".

Further as required by NHB notification no. NHB.HFC.CG-DIR.1/ MD&CEO/2016 datedFebruary 9 2017 "Policy on transactions with Related Parties" is given as"Annexure-11" to this Report and can be accessed on the website of the Companyat


During the Financial Year under review your Company adhered to the Internal Guidelineson Corporate Governance adopted in accordance with Housing Finance Companies-CorporateGovernance (NHB) Directions 2016 which inter-alia defines the legal contractual andsocial responsibilities of the Company towards its various stakeholders and lays down theCorporate Governance practices of the Company.

The said policy is available on the website of the Company and can be accessed at


In accordance with the provisions of Section 134(3)(c) read with Section 134(5) of theAct and based on the information provided by the Management the Board of Directorsreport that: a) in the preparation of the annual accounts the applicable accountingstandards have been followed along with proper explanation relating to materialdepartures. b) the Directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent to give atrue and fair view of the state of affairs of the Company at the end of the Financial Yearand of the profit and loss of the Company for that period. c) the Directors had takenproper and sufficient care for the maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities. d) the Directors hadprepared the annual accounts on a going concern basis. e) the Directors had devised propersystems to ensure compliance with the provisions of all applicable laws and that suchsystems were adequate and operating effectively; and f) the Directors had laid downinternal financial controls to be followed by the Company and that such internal financialcontrols are adequate and were operating effectively.


A detailed business review & future outlook of the Company is appended in theManagement Discussion and Analysis Section of Annual Report.


Your Directors would like to place on record their gratitude for the valuable guidanceand support received from the NHB.

Your Directors would like to acknowledge the role of all its Stakeholders viz.Shareholders Debenture holders Bankers Lenders Borrowers Debenture Trustees and allothers for the continued support confidence and faith they have reposed in the Company.

Your Directors further take this opportunity to appreciate and convey their thanks theKedaara Capital and Partners Group for their invaluable and continued support andguidance.

Your Directors acknowledge and appreciate the guidance and support extended by all theRegulatory authorities including NHB SEBI MCA Registrar of Companies-Rajasthan BSENational Stock Exchange of India Limited National Securities Depository Limited andCentral Depository Services Limited. Your Directors thank the Rating Agencies (ICRA CARECRISIL and India Ratings & Research Ltd. [Fitch group]) local /statutory authoritiesand all others for their whole-hearted support during the Financial Year and look forwardto their continued support in the years ahead.

Your Directors also wish to place on record their appreciation for the commitmentdisplayed by all the executives officers staff and the Senior Management team of theCompany in recording an excellent performance by the Company during the Financial Year.

Sushil Kumar Agarwal

Managing Director & CEO (DIN: 03154532) Date: May 14 2020 Place: Jaipur

For and on behalf of the Board of Directors


Manas Tandon

Promoter Nominee Director

(DIN: 05254602)

Date: May 14 2020

Place: Mumbai