Mar 31, 2018
1. LEASES
Operating Lease
The company has taken certain premises for office and residential use for its employees under cancellable and non cancellable operating lease agreements. Terms of the lease include terms for renewal, increase in rents in future periods and terms of cancellation. The total lease rent recognized as an expense during the year under the lease agreements amounts to Rs, 5,039 Lakh (Rs, 3,893 Lakh).
2. Two subsidiaries of the Company were amalgamated into the company pursuant to the Scheme of amalgamation (Scheme) under Sections 391 to 394 of the Companies Act, 1956 approved by the Board of directors of all the three companies and sanctioned by the HonRs,ble High Court of judicature at Bombay vide its order dated July 27, 2012 and by the Honâble High Court of judicature at Delhi vide its order dated January 4, 2013 which were filed with the Registrar of Companies on January 31, 2013 being the effective date for the amalgamation scheme. In terms of the above scheme, the Assets and Liabilities of the subsidiary companies were amalgamated with DHFL at their respective fair value in the earlier years. Proportionate Fair value appreciation surplus amounting to Rs, 2,451 Lakh (Rs, 5,110 Lakh) has been amortized out of the Capital Reserve and Rs, 2,826 Lakh (Rs, Nil) has been amortized out of the General Reserve in terms of the valuation report of the scheme.
3. The Company operates under the principal business segment viz. "Providing loans for construction or purchase of residential property and loans against propertyâ. Further, the Company is operating in a single geographical segment. Accordingly disclosures relating to primary and secondary business segments under the Accounting Standard on âSegment Reportingâ (AS 17) notified u/s 133 of the Companies Act, 2013 are not applicable to the Company
4. Estimated amount of contracts remaining to be executed on capital accounts and not provided for (net of advances) is Rs, 4,007 Lakh (Rs, 8,380 Lakh).
5. Income Tax assessment of the Company has been completed upto Assessment Year 2015-16. Company has made rectification applications to Income Tax Authorities to rectify certain errors in assessment orders which are apparent from the records. Subject to such rectifications, there are no demands for which company is contingently liable.
6. Contingent Liability in respect of undertaking provided by the Company for meeting the shortfall in collection, if any, at the time of securitization of receivables outstanding as at March 31, 2018 amounting to Rs, 28,608 Lakh (Rs, 34,067 Lakh). The outflows would arise in the event of short collections, in the cash inflows of the pool of securitized receivables.
7. In the previous financial year, the Board of Directors at its meeting held on February 14, 2017 and Shareholders of the Company on March 17, 2017 approved the sale of investments in DHFL Pramerica Life Insurance Company Limited ("DPLIâ) to its Wholly
Owned Subsidiary i.e. DHFL Investments Limited ("DILâ) at the fair market value determined by an internationally reputed actuarial consultants. Post receipt of the applicable approvals from Insurance Regulatory and Development Authority of India, Competition Commission of India and Reserve Bank of India, the equity shares in DPLI were sold to DIL at fair market value of Rs, 200,050 Lakh determined by internationally reputed actuarial consultants. Gain of Rs, 196,943 Lakh arising on sale of investments has been considered as exceptional item.
* Certification and other matters includes Rs, Nil (Rs, 72 Lakh) paid towards fees for public issue of Secured Non-Convertible Debentures (NCDs) and utilised out of Securties Premium account over a period of NCDs.
8. RELATED PARTY TRANSACTIONS
As per Accounting Standard on âRelated Party Disclosuresâ (AS 18) details of transactions with related parties as defined therein are given below:
A) List of related parties where control exists:
(i) Subsidiaries
a. DHFL Advisory & Investments Pvt Limited
b. DHFL Investments Limited
B) List of related parties with whom transactions have taken place during the year and relationship:
(ii) Joint Ventures
a. DHFL Pramerica Life Insurance Company Limited (upto March 31, 2017)
b. DHFL Pramerica Asset Managers Pvt Limited
c. DHFL Pramerica Trustees Pvt Limited
(iii) Associate Companies
a. Avanse Financial Services Limited
b. DHFL Venture Trustee Company Pvt Limited
c. Aadhar Housing Finance Limited (Formerly known as DHFL Vysya Housing Finance Limited)2
d. Aadhar Housing Finance Limited (erstwhile)(1)
(iv) Enterprises over which KMPs are able to exercise significant influence
a. Arthveda Fund Management Pvt Limited
b. Wadhawan Holdings Pvt Limited
c. Dish Hospitality Pvt Limited
d. WGC Management Services Pvt Limited
e. Wadhawan Sports Pvt Limited
f. Essential Hospitality Pvt Limited
g. DHFL General Insurance Limited (w.e.f.November 1, 2017)
h. DHFL Changing Lives Foundation (w.e.f. December 1, 2017)
i. DHFL Pramerica Life Insurance Company Limited (w.e.f. April 1, 2017)
(v) Key Management Personnel
a. Mr. Kapil Wadhawan Chairman & Managing Director
b. Mr. Harshil Mehta Joint Managing Director & Chief Executive Officer
c. Mr. Santosh Sharma Chief Financial Officer
(vi) Relatives of Key Managerial Personnel
a. Mr. Dheeraj Wadhawan
b. Mrs. Aruna Wadhawan
Notes
1) Related party relationship is as identified by the Company and relied upon by the Auditors.
2) The figures of income and expenses are net of applicable taxes.
3) Transactions with the related parties are disclosed only till the relationship exists.
4) Previous years figues have been regrouped, rearranged and reclasified wherever necessary
5) Term loans from banks and loans from NHB are further guaranteed by personal guarantees of Mr. Kapil Wadhawan and Mr. Dheeraj Wadhawan.
6) Loans from NHB are further guaranteed by personal guarantee of Mrs. Aruna Wadhawan and Corporate Guarantee of Wadhawan Global Capital Pvt Limited.
7) * Others includes Enterprises over which KMP are able to exercise significant influence.
8) Managerial remuneration excludes the contribution for gratuity as the incremental liability has been accounted by the Company as a whole.
9) There are no provisions for doubtful debts or amount written off or written back for debts due from or due to related parties.
9.EMPLOYEE BENEFIT PLANS
Both the employees and the Company make pre-determined contributions to the Provident Fund. Amount recognized as expense amounts to '' 1,281 Lakh, ('' 1,033 Lakh).
The Company provides for gratuity, a defined benefit plan (the Gratuity Plan), to its employees. The Gratuity Plan provides a lump sum payment to vested employees at retirement or termination of employment, an amount based on the respective employeeâs last drawn salary and years of employment with the Company. The Company has employeesâ gratuity fund managed by the Life Insurance Corporation of India and Canara HSBC.
The details of post retirement benefits for the employees (including Key Management Personnel) as mentioned hereunder are based on the above report as provided by Independent Actuary as mentioned above and relied upon by the Auditors.
The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary.
10. As required by the revised guidelines dated February 9, 2017 by NHB, read with additional requirement/guidelines with reference to the interpretation of various terms/classifications, in computing the above information, certain estimates, assumptions and adjustment have been made by the Management which have been relied upon by the Auditors, the following additional disclosures are given as under:
11. Exchange Traded Interest Rate (IR) Derivative
The company has not entered into any exchange traded Interest rate Derivative during the financial year 2017 -2018.
12. Disclosures on Risk Exposure in Derivatives
A Qualitative Disclosure
Financial Risk Management of the Company constitutes the Audit Committee, Asset Liability Committee (ALCO), Risk management and hedging team (front office), mid office, back office and internal auditors. The Treasury front-office enters into derivative transactions with various counterparties. The Company has an independent back-office and mid-office. The Company periodically monitors various counterparty risk and market risk limits, within the risk architecture and processes of the Company. The Company raises funds overseas through foreign currency borrowings through instruments such as ECBs, Foreign Currency Term Loans or other instruments as permitted under the regulations of Government of India and the Regulators from time to time. The Company may also import goods and services resulting into related foreign currency exposures at different times. In such scenario, the Company is exposed to Exchange Risk, which is required to be managed effectively
The Company is also be exposed to interest rate risk, which arises from the maturity mismatching of foreign currency positions.
Foreign Exchange Exposures can be classified into three broad categories depending upon the nature of exposure:
- Transaction Exposure
- Translation Exposure
- Operating Exposure
For mitigation of risks owing to foreign exchange exposure, the Company uses techniques from among the following tools, often substitutes, available for hedging of foreign exchange risk:
- Forwards
- Options
- Futures
- Swaps
- Money Market Hedge
- Rollover Contracts
3. Registration obtained from other financial sector regulators
a) The Company has obtained a Coporate Agent (Composite) license bearing registration no. CA0052 from insurance Regulatory and Development Authority of India (IRDAI).
b) Other Registration with:
i) Financial Intelligence Unit, India (FIU) vide Registration No. FIHFC00010
ii) Association of Mutual Funds in India (AMFI) vide registration no. ARN-101515, as AMFI Registered Mutual Fund Advisor.
14. No penalty has been levied on the company by NHB and other regulators.
15. Revenue Recognition
During the year there were no revenue recognition which has been postponed pending the resolution of significant uncertainities.
16. There was no draw down from the Statutory/Special Reserve during the year.
17. The Company does not have any overseas assets.
18. The Company does not have any sponsored SPVs which needs to be consolidated as per Accounting norms.
19. Figures for the previous year have been regrouped, rearranged and reclassified wherever necessary. Figures in brackets represent previous
Mar 31, 2017
1 CORPORATE INFORMATION
Dewan Housing Finance Corporation Limited (âDHFLâ), âthe Companyâ was incorporated in India on April 11, 1984 and has been carrying on, as its main business of providing loans to Retail customers for construction or purchase of residential property, loans against property, loans to real estate developers and loans to SMEs. The Company is deposit taking Housing Finance Company registered with National Housing Bank (NHB) under Section 29A of the National Housing Bank Act, 1987.
2.1 The Company has only one class of shares i.e. equity. The shareholders have voting rights in the proportion of their shareholdings. The shareholders are entitled to dividend, if declared and paid by the Company. In the event of liquidation, these shareholders are entitled to receive remaining assets of the Company after distribution of all liabilities, in the proportion of their shareholdings.
2.2 During the year, pursuant to the approval of the Members of the Company through postal ballot on 20th February 2017, the Authorised Share Capital of Rs.82,800 Lakh was re-classified from (i) 74,80,00,000 (Seventy Four Crore Eighty Lakh) equity shares of Rs.10 each aggregating Rs.74,800 Lakh (ii) 7,50,00,000 (Seven Crore Fifty Lakh) preference shares of Rs.10/- each aggregating Rs.7,500 Lakh; and 5,00,000 (Five Lakh) redeemable preference shares of Rs.100/- each aggregating Rs.500 Lakh to 57,80,00,000 (Fifty Seven Crore Eighty Lakh) equity shares of Rs.10 (Rupees Ten) each aggregating Rs.57,800 Lakh; and (ii) 25,00,000 (Twenty Five Lakh) non-convertible redeemable cumulative preference shares of Rs.1,000 (Rupees One Thousand) each aggregating Rs.25,000 Lakh
2.3 During the previous year, pursuant to the Shareholdersâ approvals under Section 63 and other applicable provisions of the Companies Act, 2013, the Company had issued Bonus Shares in the ratio of 1:1 (i.e. one bonus equity share of Rs.10/- each for every one fully paid up Equity Share of Rs.10/- each), to the shareholders on record date of 10th September, 2015, by capitalising existing reserve by a sum of Rs.14,586 Lakh.
2.4 Company had allotted 14,58,56,530 no. of Equity Shares as fully paid up for consideration other than cash towards Bonus issue during the financial year 2015-16 (refer note no. 3.5). During the financial year 2012-13, as per the Scheme of Amalgamation, the Company had allotted 1,08,86,375 no. of Equity Shares as fully paid up for consideration other than cash.
2.5 The Allotment Committee of the Board of Directors of the Company at its meeting held on September 30, 2016, allotted 2,12,30,070 fully paid up equity shares of Rs.10/- each to M/s. Wadhawan Global Capital Private Limited (WGCPL), promoter entity on receipt of balance payment of Rs.37,500 Lakh i.e. 75% of the total consideration amount of Rs.50,000 Lakh ( including share premium of Rs.47,877 Lakh) against the equivalent number of convertible warrants issued in the past as per the provisions of Chapter VII of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009, as amended and applicable provisions of the Companies Act, 2013 (including the rules made thereunder). (also refer note 5.1).
2.6 Employee Stock Option Plans:
a. Employee Stock Option Scheme 2008 (ES0S-2008) was implemented by the Company. 14,22,590 equity stock options were granted under âESOS-2008â in 2008-09 to the employees as approved by the remuneration and compensation committee of directors of the Company at Rs.53.65 per share, the reconsidered price approved in the EOGM dated March 31, 2009.
Consequent to issue of Bonus Shares by the Company the adjusted exercise price is Rs.26.83 per Equity Share and the total number of options also increased in the same ratio.
b. Employee Stock Option Scheme 2009 (ESOS-2009) was implemented by the Company. 12,75,000 equity share options were granted under âESOS-2009, Plan IIâ in 2009-10 and additional 12,34,670 equity share options were approved to be granted under âESOS-2009, Plan IIIâ in 2010-11 to the employees by the remuneration and compensation committee of directors of the Company at Rs.141/- per share, the price approved in the remuneration and compensation committee meeting held on November 25, 2009.
Consequent to issue of Bonus Shares by the Company the adjusted exercise price is Rs.70.50 per Equity Share and the total number of options also increased in the same ratio.
c. The Company has approved the grant of 15,50,100 (Fifteen Lakh, Fifty Thousand And One Hundred ) Employee Stock Appreciation Rights (ESARs - Grant - I) to the eligible employees of the Company, in terms of Dewan Housing Finance Corporation Limited-Employee Stock Appreciation Rights Plan 2015 (âDHFL ESAR 2015â). The said ESAR shall vest over a period of five years and to be exercised within three years from the date of vesting of ESAR and carry the right to apply for number of equity shares of the Company of face value of Rs.10/- each, equivalent to Appreciation in those rights, over the grant price i.e. ESAR price of Rs.380/- per ESAR (Rs.190/per ESAR Post Bonus issue), the price approved in the Nomination and Remuneration Committee meeting held on March 21, 2015.
Consequent to the Bonus shares issued by the Company to its shareholders in the ratio 1:1 during the financial year 2015-16, the total number of ESARs also increased in the same ratio.
During the year, the Company has allotted, from time to time, 124,147 number of equity shares of Rs.10/- each on excercise of 3,47,200 number of ESAR to various eligible employees under âESAR Scheme 2015 (Grant - I)â at the price of Rs.10/- per equity share.
d. The Company has approved the grant of 20,81,545 (Twenty Lakh Eighty One Thousand Five Hundred Forty Five) Employee Stock Appreciation Rights (ESARs - Grant - II) to the eligible employees of the Company, in terms of Dewan Housing Finance Corporation Limited-Employee Stock Appreciation Rights Plan 2015 (âDHFL ESAR 2015â). The said ESARs shall vested over a period of four years and to be exercised within three years from the date of vesting of ESARs and carry the right to apply for number of equity shares of the Company of face value of Rs.10/each, equivalent to Appreciation in those rights, over the grant price i.e. ESAR price of Rs.230.80 per SAR , the price approved in the Nomination and Remuneration Committee meeting held on November 17, 2016.
h Fair Value Methodology:
The Company has followed intrinsic value based method of accounting for Stock options granted based on Guidance Note issued by the Institute of Chartered Accountant of India. Had the compensation cost for the stock options granted under ES0S-2008, ES0S-2009 III and ESAR -2015 (Grant I & II) been determined based on the fair value calculated using the Black Scholes Option Pricing model, the Companyâs net profit and earnings per share would have been as per the pro-forma amounts indicated below:
3.1 During the year, the Company has paid interim dividend on Equity Shares @ Rs.1/- (Rs.6/-) per share.
The Board of Directors, have recommended final dividend of Rs.3/- per equity share to the equity shareholders. The dividend will be paid after the approval of shareholders at the ensuing Annual General Meeting. During the previous year, the Company had made a provision for the dividend declared by the Board of Directors as per the requirements of pre-revised Accounting Standard 4 - âContingencies and Events Occurring after the Balance sheet dateâ (AS 4). However, as per the requirements of revised AS 4 which is applicable w.e.f April 1, 2016 the Company is not required to provide for dividend proposed after the Balance Sheet date. Consequently, no provision has been made in respect of the aforesaid dividend proposed by the Board of Directors for the year ended March 31, 2017. Had the Company continued with creation of provision for proposed dividend, as at the Balance Sheet date, its Surplus in Statement of Profit and Loss would have been lower by Rs.1 1,307 Lakh and Short-Term Provision would have been higher by Rs.1 1,307 Lakh (including dividend distribution tax of Rs.1,913 Lakh).
3.2 In accordance with Section 52 of the Companies Act, 2013, during the year the Company has utilised Securities Premium Account towards premium on redemption of Zero Coupon Secured Redeemable Non-Convertible Debentures and Securities issue expenses amounting to Rs.11,465 Lakh (Rs.10,594 Lakh) net of tax of Rs.6,068 Lakh (Rs.5,606 Lakh).
3.3 Statement for Disclosure on Statutory / Special Reserves, as prescribed by NHB vide its circular no NHB(ND)/DRS/Pol. Circular.61/2013-14, dated: 7th April, 2014 and NHB.HFC.CG-DIR.1/MD&CEO/2016 dated February 9, 2017:
3.4 National Housing Bank vide circular No.NHB(ND)/DRS/Policy Circular 65/2014-15 dated August 22, 2014 has clarified that deferred tax liability (contingent upon Companyâs withdrawal of Section 36(1)(Viii) Reserves leading to tax liability) in respect of opening balance under special reserve as at April 1, 2014 may be adjusted from free opening reserves of the Company over a period of 3 years in the ratio of 25:25:50 respectively. Accordingly, the Company has proportionately adjusted its opening reserves with an amount of Rs.8,323 Lakh (Rs.4,162 Lakh) as contingent deferred tax liability during the year and unamortised amount against the same is Nil. Deferred Tax Liability on current year Special Reserve has been charged to Statement of Profit & Loss amounting to Rs.3,946 Lakh ( Rs.6,297 Lakh).
4.1 During the financial year 2015-16, the Company had issued 21,230,070 convertible warrants being issued at a Issue Price of Rs.235.52 per warrant, with a right exercisable by the warrant holder to convert each warrant with one equity share of the Company of face value Rs.10/- each at a premium of Rs.225.52 , any time before the expiry of 18 months from the date of allotment of the said convertible warrants , in one or more tranches. During the current financial year the Company has allotted 21,230,070 equity shares of face value of Rs.10/- each to the warrant holders on exercise of the conversion right and receipt of balance payment.
5.1 Non-Convertible Debentures (NCD) (current and non-current portion) amounting to Rs.2,882,951 Lakh (Rs.1,414,496 Lakh) are secured by way of first charge read with Note 6.2 herein below and are redeemable at par, in one or more installments, on various periods, as below.
Secured NCDs also include amount outstanding for Zero Coupon Secured Redeemable Non-Convertible Debentures (ZCD) aggregating Rs.290,565 Lakh (Rs.335,884 Lakh), which are redeemable at premium on maturity. The accumulated premium payable on outstanding ZCD accrued till March 31, 2017 amounting to Rs.73,275 Lakh (Rs.57,754 Lakh) is included above and a part of which has been provided out of the Securities Premium Account (refer Note 4.2).
5.2 All Secured loans (Current and Non-Current portion), from the National Housing Bank, Other Banks, Foreign Financial Institution, Financial Institutions and Secured Non-Convertible Debentures / ZCD are secured by way of first charge to and in favour of participating banks, Institutions, National Housing Bank and Debenture Trustees jointly ranking pari passu (read with Note 9.1), inter-se, on the Companyâs whole of the present and future book debts, housing loan Installments/ receivables, investments including all the receivables of the Company and other movable assets, wherever situated, excluding SLR assets, read with Note 6.4 hereinafter and term loans from banks, debentures and certain ECBs are further secured on pari passu basis by constructive delivery of title deeds of certain immovable properties of the Company, to Union Bank of India, acting for itself and as an agent of other participating lenders and Debenture trustees, and are also guaranteed by the promoter directors of the Company.
Pursuant to the refinancing arrangement, the Company has provided to NHB certain standard documents such as a non-disposal undertaking from the Promoters and Promoter Group with respect to their shareholdings and corporate guarantee from Wadhawan Global Capital Private Limited ( promoter entity )
5.3 During the year Company has availed ECB of total USD 150 million under two ECB facilities -
(a) USD 130 MM ECB Facility from following parties for a period of 5 years. The principal amount has been hedged by way of currency swaps to protect the foreign currency risk and converted into rupee liability of Rs.87,415 Lakh in compliance of statutory requirement.
(b) USD 20 MM ECB from DEG Germany for a period of 5 years. The principal amount has been hedged by way of currency swaps to protect the foreign currency risk and converted into rupee liability of Rs.13,344 Lakh in compliance of statutory requirement.
In the previous year, Company had availed ECB of USD 110 million under Syndicated Loan facility for a period of 5 years. The principal amount has been hedged by way of currency swaps to protect the foreign currency risk and converted into rupee liability, in compliance of statutory requirement.
As a part of Assets Liability management on account of the Companies adjustable rate home loan products as well as to reduce the overall cost of borrowing, during the year, the Company has entered into Interest Rate swaps wherein it has converted its variable rate rupee liability of notional amount of USD 240 million into fixed rate rupee liability.
As on March 31, 2017 the Company has an outstanding foreign currency borrowing of USD 493 million (USD 355 million) equivalent to Rs.3,17,355 Lakh (Rs.2,23,566 Lakh).
5.4 The National Housing Bank directives require all HFCâs accepting public deposits to create a floating charge on the statutory liquid assets maintained in favor of depositors through the mechanism of a trust deed. The Company has accordingly appointed a SEBI approved trustee Company as trustee for the above by executing the trust deed.
Accordingly, the public deposits of the Company as defined in paragraph 2(1)(y) of the Housing Finance Companies (NHB) Directions, 2010, are secured by floating charge on the Statutory Liquid Assets maintained in terms of sub-sections (1) & (2) of Section 29B of the National Housing Bank Act, 1987.
5.5 Unsecured Redeemable Non-Convertible Subordinated Debentures aggregating Rs.150,680 Lakh (Rs.119,150 Lakh), outstanding as at March 31, 2017, are subordinated to present and future senior indebtedness of the Company. It qualifies as Tier II capital in accordance with National Housing Bank (NHB) guidelines for assessing capital adequacy based on balance term to maturity. These debentures are redeemable at par on maturity on various periods read with note No. 6.1
5.6 Fixed Deposits and Other Deposits, including short-term fixed deposits and short term other deposits, are repayable as per individual contracted maturities ranging from 12 to 120 months from the date of deposit. The interest is payable on contracted terms depending upon the scheme opted by the depositor.
5.7 During the year ended March 31, 2017, the Company has issued and allotted the following securities by way of public issue :
a. 4,00,00,000 Secured Redeemable Non-Convertible Debentures (âNCDsâ) having face value of Rs.1,000 each aggregating to Rs.4,00,000 Lakh in terms of the Shelf Prospectus and Tranche 1 Prospectus dated July 26, 2016 (âProspectusâ). The said NCDs were allotted on August 16, 2016.
b. 10,00,00,000 Secured Redeemable Non-Convertible Debentures (âNCDsâ) having face value of Rs.1,000 each aggregating to Rs.10,00,000 Lakh in terms of the Shelf Prospectus and Tranche 1 Prospectus dated August 25, 2016 (âProspectusâ). The said NCDs were allotted on September 9, 2016.
As at the end of the year, funds raised by public issue of above securities has been utilised for the purposes for which it has been raised.
5.8 Department of Company Affairs with reference to the General Circular No. 4/2003 vide G.S.R. 413 (E) dated 18.06.2014, had clarified that, Housing Finance Companies registered with National Housing Bank are exempted from the requirement of creating Debenture Redemption Reserve (DRR) in case of privately placed debentures. However, the Company needs to create DRR in case of public issue of Debentures and accordingly, the Company has created DRR to the tune of Rs.1,17,000 Lakh against its public issue of Secured Redeemable Non-Convertible Debentures.
5.9 Percentage of Deposits of top twenty largest depositors to total deposits of the Company was 4.67% (2.89%) aggregating Rs.31,639 Lakh (Rs.14,569 Lakh).
6.1 The Company has written off Rs.8,749 Lakh (Rs.2,146 Lakh) as bad debts to recover some of its old NPA and Loss Accounts by way of one time settlement or sale to Asset Reconstruction Company. The Company has withdrawn Rs.8,749 Lakh (Rs.2,146 Lakh) from contingency provisions created out of profits of earlier years. During the year, the Company has sold 201 accounts aggregating Rs.2,219 Lakh net of provision (Nil) to Asset Reconstruction Company for a total consideration of Rs.1,661 Lakh (Nil) with aggregate loss over net book value Rs.558 Lakh (Nil).
6.2 Details of Housing and Property Loans and Contingency Provisions
Housing and property loans and provision in respect thereof on account of standard, sub standard, doubtful and loss assets are recorded in accordance with the guidelines on prudential norms as specified by National Housing Bank are as follows:
6.3 Provision for Contingencies
The Company has made full provisions for Contingencies for diminution in value of investment and on standard as well as on non-performing housing loans and other property loans as per the Prudential Norms prescribed by the National Housing Bank. The Company has also maintained an additional provision amounting to Rs.843 Lakh (Rs.717 Lakh) as at year end.
6.4 Concentration of NPAs:
Total exposure of top ten NPA accounts were Rs.24,689 Lakh (Rs.16,609 Lakh).
7.1 Loans repayable on demand comprising of Cash credit facilities from banks and are secured by a first charge by way of hypothecation of book debts of specific loan assets of the Company and are further secured by negative lien on the underlying specific properties and/or secured by demand promissory notes. Certain Cash credit facilities are also secured by way of a first pari passu charge along with other secured loans read with Note 6.2. All cash credit facilities are repayable as per the contracted/ roll over term.
8 TRADE PAYABLES:
There is no amount due and payable to micro and small suppliers registered under the Micro, Small and Medium Enterprises Development Act, 2006 at the end of the year. No interest has been paid/ is payable by the Company during/ for the year to these âSuppliersâ. The above information takes into account only those suppliers who have submitted their registration details or has responded to the inquiries made by the Company for this purpose.
9.1 As required under Section 124 of the Companies Act, 2013, the Company has transferred unclaimed dividend of the year 2008-09 Rs.6 Lakh (Rs.3 Lakh) and towards unclaimed Deposits and interest accrued thereon Rs.12 Lakh (Rs.39 Lakh) to Investor Education & Protection Fund (IEPF) during the year. The amounts payable for March, 2017 has been transferred to IEPF in the month of April, 2017.
10.1 Investment in Government and other SLR Securities aggregating Rs.42,532 Lakh (Rs.29,652 Lakh) carry a floating charge created in favour of depositors in the Fixed Deposit schemes of the Company (read with Note 6.4 above).
10.2 Pursuant to approval from the Honorable High Court of Bombay, the Joint Venture entity -DHFL Pramerica Asset Managers Private Limited Ltd. reduced and consolidated its issued and paid up equity share capital. Consequent to which the number of equity shares held by the Company stood reduced to 1,85,68,825 equity shares of Rs.10 each from 15,61,36,360 equity shares of Rs.10 each.
10.3 All non current investments are in India with gross value of Rs.94,757 Lakh (Rs.71,974 Lakh) and there is no provision on diminution in value of Investment.
11.1 Other property loans include mortgage loan, non-residential property loan, plot loan for self construction where construction has not began in last three years and loan against the lease rental income from properties in accordance with directions of National Housing Bank (NHB). These also include loans granted to Small & Medium Enterprise (SME) and certain part are unsecured in terms of the particular scheme of an aggregate amount of Rs.9,265 Lakh (Rs.6,327 Lakh).
11.2 The Company has not exceeded the prudential exposure limits during the year with reference to Single Borrower Limit (SGL) / Group Borrower Limit (GBL) and also does not finance any projects (including infrastructure projects) where the collateral being an intangible security i.e. rights, licenses, authorisations, etc.
11.3 As certified by the management, loans given by the Company are secured by equitable mortgage/ registered mortgage of the property and assets financed and/or assignment of Life Insurance policies and/or personal guarantees and/or undertaking to create a security and/or hypothecation of assets and are considered appropriate and good.
11.4 Composite Loans sanctioned (i.e. loans allowed for purchase of plot and self construction of house) on or before March 31, 2014, in which construction has not started till March 31, 2017, as per information available with the Company, is excluded from Housing Loans and regrouped under Other Loans (Non Housing) in above outstanding as on March 31, 2017 aggregating to Rs.19,111 Lakh (Rs.18,106 Lakh).
11.5 Insurance portion of Housing Loan is excluded from Housing Loan and regrouped in Other Property Loan. The insurance portion amounting to Rs.136,668 Lakh (Rs.109,612) Lakh to meet the cost of the insurance premium to secure the borrowerâs life and thereby further secure the loan portfolio by way of risk mitigation method and to secure the Companyâs Housing loan portfolio against any eventuality.
11.6 The Company has entered into Loan Syndication arrangements with certain public and private sector banks to provide Housing loan to borrowers wherein DHFL originates the loan files and gets it processed under common credit norms. The said banks have agreed to participate upto 50% of the disbursed loan portfolio under loan syndication arrangement. Entire/partial processing fees and other charges/ income on these loans, depending upon the syndication arrangements, accrues to DHFL. The Company has derecognised the said loan portion syndicated to others in its books.
11.7 The Company has entered into Loan Syndication arrangements with DHFL Vysya Housing Finance Limited and Aadhar Housing Finance Limited in the earlier year to provide Housing and Property Loans to borrowers wherein DHFL originates the loan files through its branches and gets it processed under common credit norms at the Central Processing Unit. The loan syndicate participants have agreed to participate in the disbursed loan portfolio under loan syndication arrangement. During the year Company has disbursed Rs.NIL (Rs.700 Lakh) under joint syndication out of which Rs.NIL (Rs.105 Lakh) has been shared by syndicate partners, which has been derecognised.
11.8 The Company has acquired certain assets under SARFAESI Act which are retained for the purpose of sale under the rules and regulations of SARFAESI Act involving Rs.7,890 Lakh (Rs.4,756 Lakh), which are part of NPA portfolio for which necessary provisions have already been made. These assets are accounted as and when they are realised as per related accounting policy.
11.9 The Company has securitised / assigned pool of certain housing and property loans and managed servicing of such loan accounts. The balance outstanding in the pool, as at the reporting date aggregates Rs.1,146,373 Lakh (Rs.774,886 Lakh). These assets have been de-recognised in the books of the Company. The Company is responsible for collection and getting servicing of this loan portfolio on behalf of buyers / investors. In terms of the said securitisation/assignment agreements, the Company pays to buyer/investor on monthly basis the prorata collection amount as per individual agreement terms.
The Company has purchased home loan pools in two tranches aggregating to Rs.30,863 Lakh in compliance with RBIs norms on securitisation, specific to Direct Assignment transactions, in terms of Minimum Holding Period (MHP) and Minimum Retention Requirement (MRR).
11.10 Details of outstanding amount of securitised assets as per books of the SPVs sponsored by the Company and total amount of exposures retained by the Company as on 31st March, 2017 towards the Minimum Retention Requirements (MRR):
11.12 Housing and other property loans (current and non-current) includes Rs.315 Lakh (Rs.242 Lakh) given to the key managerial persons of the Company under the normal course of business.
12.1 Loans to employees are secured by the hypothecation of respective assets against which these loans have been granted.
13.1 Current portion of balances with Banks in Deposit Accounts includes deposits under lien aggregating Rs.24,784 Lakh (Rs.21,495 Lakh) being earmarked for SLR requirements of NHB. Rs.1,220 Lakh (Rs.644 Lakh) being margin money for bank guarantees, Rs.34,162 Lakh (Rs.19,156 Lakh) being securitisation comforts provided to various Trustees/ buyer, Rs.1,350 Lakh (Rs.1,225 Lakh) toward sinking fund requirement of debenture provided to Trustee of debentures and Rs.1,850 Lakh (Rs.4,145 Lakh) under lien against Interest rate swaps.
14.1 Non-Current portion of balances with Banks in Deposit Accounts includes deposits under lien aggregating Rs.NIL (Rs.8,082 Lakh) being securitisation comforts provided to various Trustees/ buyer, Rs.18,300 Lakh (Rs.10,790 Lakh) being earmarked for SLR requirements of NHB and Rs.NIL (Rs.1,350 Lakh) towards sinking fund requirement of debenture provided to Trustee of debentures.
15.1 Corporate Social Responsibility (CSR)
Company is required to spend money on Corporate Social Responsibility (CSR) activity as per CSR Rules under the Companies Act 2013. During the year Company has spent Rs.883 Lakh (Rs.703 Lakh) out of required sum of Rs.1,854 Lakh (Rs.1,519 Lakh). The CSR committee is in the process of evaluating various scheme to meet the requirement as per section 135 of the Companies Act, 2013 read with Schedule VII.
15.2 Remuneration of Non Executive Directions consist of Rs.43 Lakh towards sitting fee and Rs.64 Lakh as commission including Service Tax.
16 LEASES Operating Lease
The Company has taken certain premises for office and residential use for its employees under cancellable and non cancellable operating lease agreements. Terms of the lease include terms for renewal, increase in rents in future periods and terms of cancellation. The total lease rent recognised as an expense during the year under the lease agreements amounts to Rs.3,893 Lakh ( Rs.2,691 Lakh).
17 Two subsidiaries of the Company were amalgamated into the Company pursuant to the Scheme of amalgamation (Scheme) under Section 391 to 394 of the Companies Act, 1956 approved by the Board of directors of all the three companies and sanctioned by the Honâble High Court of judicature at Bombay vide its Order dated 27 July, 2012 and by the Honâble High Court of judicature at Delhi vide its Order dated 4 January, 2013 which were filed with the Registrar of Companies on 31 January, 2013 being the effective date for the Scheme. In terms of the Scheme, the Assets and Liabilities of the subsidiary companies were amalgamated with the Company at their respective fair value in the earlier years. Proportionate Fair value appreciation surplus amounting to Rs.5,110 Lakh (Rs.4,759 Lakh) is being amortised out of the capital reserve in terms of the Scheme.
18 The Company operates under the principal business segment viz. âProviding loans for construction or purchase of residential property and loans against propertyâ. Further, the Company is operating in a single geographical segment. Accordingly, disclosures relating to primary and secondary business segments under the Accounting Standard on Segment Reporting (AS-17) notified u/s 133 of the Companies Act, 2013 are not applicable to the Company.
19.1 Estimated amount of contracts remaining to be executed on capital accounts and not provided for (net of advances) is Rs.8,380 Lakh (Rs.8,422 Lakh).
19.2 Income Tax assessment of the Company has been completed upto Assessment Year 2014-15. Company has made rectification applications to Income Tax Authorities to rectify certain errors in assessment orders which are appeared from the records. Subject to such rectifications, there are no demands for which company is contingently liable
20 Contingent Liability in respect of undertaking provided by the Company for meeting the shortfall in collection, if any, at the time of securitisation of receivables outstanding as at March 31, 2017 amounting to Rs.34,067 Lakh (Rs.27,238 Lakh) . The outflows would arise in the event of short collection, in the Cash inflows of the pool of securtised receivable.
21 Company had acquired 50% stake in DHFL Pramerica Life Insurance Company Limited (âDPLIâ) in December, 2013. In order to unlock the value of Companyâs investment in DPLI and create more head room for future fund raising in the Company, the Board of Directors at its meeting held on 14 February, 2017 and Shareholders of the Company on 17 March, 2017 approved the sale of investments in DPLI to its Wholly Owned Subsidiary i.e. DHFL Investments Limited (âDILâ) at the fair market value determined by an internationally reputed actuarial consultants. Post receipt of the applicable approvals from Insurance Regulatory and Development Authority of India, Competition Commission of India and Reserve Bank of India, the equity shares in DPLI were sold to DIL at fair market value of Rs.200,050 Lakh determined by internationally reputed actuarial consultants. Gain of Rs.196,943 Lakh arising on sale of investments has been considered as exceptional item.
22 REMITTANCE IN FOREIGN CURRENCIES ON ACCOUNT OF DIVIDEND
The Company has paid dividend in respect of shares held by Non-Residents on repatriation basis. This inter alia includes portfolio investment and direct investment, where the amount is also credited to Non-Resident External Account (NRE A/c). The exact amount of dividend remitted in foreign currency cannot be ascertained. The total amount remittable in this respect is given herein below:
23 RELATED PARTY TRANSACTIONS (A) As per Accounting Standard (AS 18) on âRelated Party Disclosuresâ details of transactions with related parties as defined therein are given below: I) List of related parties where control exists:
(i) Subsidiaries
a. DHFL Advisory & Investments Private Limited
b. DHFL Investments Limited (w.e.f. February 13, 2017)
II) List of related parties with whom transactions have taken place during the year and relationship:
(ii) Joint Ventures
a. DHFL Pramerica Life Insurance Company Limited
b. DHFL Pramerica Asset Managers Private Limited
c. DHFL Pramerica Trustees Private Limited
(iii) Associate Companies
a. Avanse Financial Services Limited
b. DHFL Venture Trustee Company Private Limited
c. DHFL Vysya Housing Finance Limited
d. Aadhar Housing Finance Limited
(iv) Enterprises over which KMP are able to exercise significant influence
a. Arthveda Fund Management Private Limited
b. Wadhawan Holdings Private Limited
c. Dish Hospitality Private Limited
d. WGC Management Services Private Limited
e. Wadhawan Sports Private Limited
f. Essential Hospitality Private Limited
(v) Key Management Personnel
a. Mr. Kapil Wadhawan Chairman & Managing Director
b. Mr. Harshil Mehta Chief Executive Officer
c. Mr. Santosh Sharma Chief Financial Officer
(vi) Relatives of Key Managerial Personnel
a. Mr. Dheeraj Wadhawan
b. Mrs. Aruna Wadhawan
24 As required by the notification dated February 9, 2017 by NHB, read with additional requirement/guidelines with reference to the interpretation of various terms/classifications, In computing the above information, certain estimates, assumptions and adjustment have been made by the Management which have been relied upon by the Auditors, the following additional disclosures are given as under:
24.1.1 Exchange Traded Interest Rate (IR) Derivative Not Applicable
24.1.2 Disclosures on Risk Exposure in Derivatives A) Qualitative Disclosure
The Company raises funds overseas through foreign currency borrowings through instruments such as ECBs, Foreign Currency Term Loans or other instruments as permitted under the regulations of Govt. of India and the Regulators from time to time. The Company may also imports goods and services resilting into related foreign currency exposures at different times. In such scenario, the Company is exposed to Exchange Risk, which is required to be managed effectively.
The Company is also be exposed to interest rate risk, which arises from the maturity mismatching of foreign currency positions.
Foreign Exchange Exposures can be classified into three broad categories depending upon the nature of exposure:
- Transaction Exposure
- Translation Exposure
- Operating Exposure
For mitigation of risks owing to foreign exchange exposure, the Company use techniques from among the following tools, often substitutes, available for hedging of foreign exchange risk:
- Forwards
- Options
- Futures
- Swaps
- Money Market Hedge
- Rollover Contracts
24.2 Miscellaneous
24.2.1 Registration obtained from other financial sector regulators
a. The Company has obtained a Corporate Agent (Composite) license bearing registration no. CA0052 from Insurance Regulatory and Development Authority of India (IRDAI.)
b. Other Registration with;
i) Financial Intelligence Unit, India (FIU) vide registration no. FIHFC00010.
ii) Association of Mutual Funds in India (AMFI) vide registration no. ARN-101515, as AMFI Registered Mutual Fund Advisor.
24.2.2 Disclosure of Penalties imposed by NHB and other regulators
No penalty has been levied on the company by NHB and other regulators.
24.3 Overseas Assets
The Company does not have any overseas assets
24.4 Off-balance Sheet SPVs sponsored (which are required to be consolidated as per accounting norms)
The Company does not have any sponsored SPVs which needs to be consolidated as per Accounting norms.
25 Figures for the previous year have been regrouped, rearranged and reclassified wherever necessary. Figures in brackets represent previous yearâs figures.
Mar 31, 2015
1 CORPORATE INFORMATION
Dewan Housing Finance Corporation Limited (''DHFL''), ''the Company'' was
incorporated in India on April 11, 1984 and has been carrying on, as
its main business of providing loans to Retail customers for
construction or purchase of residential property and loans against
property. The Company is registered with National Housing Bank (NHB)
under Section 29A of the National Housing Bank Act, 1987. DHFL has its
registered office in Mumbai and has 188 branches, 150 service centres,
19 Circle / Cluster, 2 Disbursement Hub and 1 Collection centers in
India and 2 representative offices in UAE and UK.
2 CONTINGENT LIABILITY : (Rs. in lakh)
As at As at
March 31,2015 March 31,2014
Guarantees provided by the Company 10,003 10,003
Claims against the Company not
acknowledged as debts 546 105
Income Tax Demand (Net of amount
deposited under protest Rs. 50 lakh) 480 430
3 Contingent Liability in respect of undertaking provided by the
Company for meeting the shortfall in collection, if any, at the time of
securitisation of receivables outstanding as at 31st March, 2015
amounting to Rs. 34,271 lakh (Rs. 29,259 lakh). The outflows would arise in
the event of short collection, in the Cash inflows of the pool of
securtised receivable.
4 Capital Work in Progress includes Rs. 79,615 lakh (Rs. 79,615 lakh) paid
as part consideration for acquiring office premises under construction.
5 The Company has paid dividend Rs. 9 lakh (Rs. 3 lakh) and Rs. 2 lakh (Rs. 1
lakh) as tax on distribution of dividend thereon to new shareholders on
account of Final Dividend for the year 2013-14 as required under the
Listing Agreement as those shares were allotted prior to record date
for the dividend payment and after the date of earlier year Balance
Sheet.
6 NHB, vide its letter dated October 15, 2014, in terms of provisions
of paragraph 29(5) of the Housing Finance Companies (NHB) direction
2010 had levied a penalty of Rs. 20,000/- (Rupees twenty thousand), on
the Company, which has been paid by the Company. The penalty was levied
for non-compliance of the provisions of paragraph 21 of Housing Finance
Companies (NHB) Directions, 2010, in relation to delay in intimation to
NHB for closure of branches at 2 locations. NHB, vide its letter dated
9th January, 2015, had also levied a penalty of Rs. 25,000/- (Rupees
twenty five thousand) on the Company during F Y 2014-15 and has been
paid by the company, on account of delayed submission of Dynamic Report
relating to Assets Liability Management (ALM) System for HFCs in the
earlier year.
7 The managerial remuneration including perquisites, Rs. 171 lakh (Rs. 171
lakh) paid to Chairman and Managing Director and Rs. 30 lakh (Rs. 30 lakh)
as commission to other Non Executive Directors.
8 REMITTANCE IN FOREIGN CURRENCIES ON ACCOUNT OF DIVIDEND
The particulars of dividends payable to non-resident shareholders
(including Foreign Institutional Investors) is as under, however, the
Company does not have information as to the extent to which
remittances, if any, has been made in foreign currencies on account of
such dividend during the year on behalf of non-resident share holders.
9 RELATED PARTY TRANSACTIONS
As per Accounting Standard (AS 18) on "Related Party Disclosures"
details of transactions with related parties as defined therein are
given below:
A) List of related parties with whom transactions have taken place
during the year and relationship:
1) companies
Joint Ventures
DHFL Pramerica Life Insurance Company Limited Associate / Related
entities.
Avanse Financial Services Limited, Aadhar Housing Finance Limited, DHFL
Vysya Housing Finance Limited,DHFL Venture Trustee Company Private
Limited, Shri Rajesh Kumar Wadhawan Education Trust, Wadhawan Global
Capital Private Limited, Arthveda Fund Management Private Limited, DHFL
Property Services Limited (upto 16.03.2015), Wadhawan Retail Private
Limited (Upto 14.11.2014),DHFL Sales and Services Limited (upto
16.03.2015), Wadhawan Holdings Private Limited(upto 16.03.2015),Dish
Hospitality Private Limited (upto 14.11.2014), Wadhawan Consolidated
Holdings Private Limited (upto 14.11.2014)
2) KEY MANAGEMENT pERSONNEL
a. Mr. Kapil Wadhawan Chairman & Managing Director
b. Mr. Harshil Mehta Chief Executive Officer (w.e.f. January 17, 2015)
c. Mr. Santosh Sharma Chief Financial Officer
d. Ms. Niti Arya Company Secretary
e. Mr. Deo Shanker Tripathy President and Chief Operating officer (upto
January 16, 2015)
f. Mr. Rakesh Makkar President (upto August 11,2014)
Notes
1) * Advances includes amounts debited towards reimbursement of
expenses and income receivable.
2) The figures of income and expenses are net of service tax.
3) ** Advances given during the year includes outstanding opening loan
balance of Rs. 45 lakh given to KMP as per Companies Act, 2013.
4) # The Company, in its capacity as Life Insurance Corporate Agent,
has entered into an agreement with DHFL Pramerica Life Insurance
Company Limited (Insurance Company) to distribute their life insurance
products.
As required under Accounting Standard 15 [AS-15 Revised, 2005] the
Company has made full provision for future gratuity liability & leave
encashment liability payable at the time of retirement as on March
31,2015. On the basis of Gratuity and GLES report under Accounting
Standard 15 [AS-15 Revised, 2005] provided by Certified Actuary, the
Company has made necessary full contribution to LIC of India of its own
liabilities.
The details of post retirement benefits for the employees (including
Key Management Personnel) as mentioned hereunder are based on the above
report as provided by Certified Actuary and LIC of India as mentioned
above and relied upon by the auditors :
10 Figures for the previous year have been regrouped, rearranged and
reclassified wherever necessary. Figures in brackets represent previous
year''s figures.
Mar 31, 2014
1 CORPORATE INFORMATION
Dewan Housing Finance Corporation Limited (''DHFL''), ''the Company''
was incorporated in India on April 11, 1984 and has been carrying on,
as its main business of providing loans to Retail customers for
construction or purchase of residential property and loans against
property. The Company is registered with National Housing Bank (NHB)
under Section 29A of the National Housing Bank Act, 1987. DHFL has its
registered office in Mumbai and has 162 branches, 92 service centers,
19 camp locations, 20 Zonal / Regional office, 2 Disbursement Hub and 2
Collection centres in India and 2 representative offices in UAE and UK.
2.1 The Company has, at present, one class of issued, subscribed and
paid up share referred to as equity shares having a par value of H10/-
each. Each holder of equity share is entitled to one vote per share.The
Company declares and pays dividends in Indian Rupees. The dividend
proposed by the Board of Directors is subject to the approval of the
shareholders in the ensuing Annual General Meeting.
2.2 Details of aggregate number of shares issued for consideration
other than cash during the period of five years:
Company has alloted 1,08,86,375 No of Equity Shares as fully paid up
for consideration other than cash as per the Scheme of Amalgamation
during the financial year 2012 - 13.
2.3 Employee Stock Option Plans:
a. Employee Stock Option Scheme 2008 (ESOS-2008) was implemented by
the Company. 14,22,590 equity share options were granted under
''ESOS-2008'' in 2008-09 to the employees as approved by the
remuneration and compensation committee of directors of the Company at
H53.65 per share, the reconsidered price approved in the EOGM dated
March 31, 2009.
During the year, the Company has allotted, from time to time, 81,458
(256,094) number of equity shares of H10/- each to various eligible
employees under ''ESOS 2008'' at the price of H53.65 per equity share
(including a premium of H43.65 per equity share) aggregating to H8 lakh
(H137 lakh) as approved in the AGM dated July 23, 2007 and allotted at
the reconsidered price approved in the EOGM dated March 31, 2009.
b. Employee Stock Option Scheme 2009 (ESOS-2009) was implemented by
the Company. 12,75,000 equity share options were granted under
''ESOS-2009, Plan I'' in 2009-10 and additional 12,34,670 equity share
options were approved to be granted under ''ESOS-2009, Plan II'' in
2010-11 to the employees by the remuneration and compensation committee
of directors of the Company at H141/- per share, the price approved in
the remuneration and compensation committee meeting held on November
25, 2009.
During the year, the Company has allotted, from time to time, 120,073
(236,259) number of equity shares of H10/- each to various eligible
employees under ''ESOS 2009'' at the price of C141/- per equity share
(including a premium of H131/- per equity share) aggregating to H12
lakh (H333 lakh) as approved in the AGM dated July 23, 2007.
3.1 During the year, the Company has paid an interim dividend on equity
shares @ H3/-(H2/-) per share. The Board of Directors, has further
recommended dividend to be paid out of current year profits @ H2/-
(H3/-) per equity share to the equity shareholders as final dividend
along with additional special 30th Anniversary celebration dividend @
H3/- per equity share, aggregating to H8/- per equity share for the
year 2013-14.
3.2 In accordance with Section 78 of the Companies Act, 1956, during
the year, the Company has utilised Securities Premium Account towards
amortisation of securities issue expenses and premium on redemption of
Zero Coupon Secured Redeemable Non-Convertible Debentures amounting to
H3,471 lakh (H807 lakh), net of tax of H773 lakh (H283 lakh).
4.1 Non Convertible Debentures (NCD) (current and non current portion)
amounting to H490,889 lakh (H346,399 lakh) are secured by way of first
charge read with Note 5.2 herein below and are redeemable at par, in
one or more instalments, on various dates, as below.
4.2 All Secured loans (Current and Non Current portion), from the
National Housing Bank, other Banks, Asian Development Bank, Financial
Institutions and Secured Non Convertible Debentures / ZCD are secured
by way of first charge to and in favour of participating banks,
Institutions, National Housing Bank and Debenture Trustees jointly
ranking pari passu (read with Note 9.1), inter-se, on the Company''s
whole of the present and future book debts outstanding, investments
including all the receivables of the Company and other movable assets,
wherever situated, excluding SLR assets, read with Note 5.3 & 5.4
hereinafter. They are further secured on pari passu basis by
constructive delivery of various title deeds of certain immovable
properties of the Company, to Union Bank of India, acting for itself
and as an agent of other participating lenders and Debenture trustees,
and are also guaranteed by the promoter directors of the Company.
4.3 During the year, Company has availed ECB of USD 70 millions from
IFC Washington for a period of 8 years. The principal amount has been
hedged to protect the foreign currency risk and converted into Rupee
liability of H41,825 lakh and reflected as Loan from Financial
Institutions.
4.4 The National Housing Bank directives require all HFCs accepting
public deposits to create a floating charge on the statutory liquid
assets maintained in favour of depositors through the mechanism of a
trust deed. The Company has accordingly appointed a SEBI approved
trustee Company as trustee for the above by executing the trust deed.
4.5 Unsecured Redeemable Non Convertible Subordinated Debentures
aggregating to H119,150 lakh (H114,150 lakh), outstanding as at March
31, 2014, are subordinated to present and future senior indebtedness of
the Company. It qualifies as Tier II capital in accordance with
National Housing Bank (NHB) guidelines for assessing capital adequacy
based on balance term to maturity. These debentures are redeemable at
par on maturity on various dates read with note no 5.1.
4.6 Fixed Deposits and Other Deposits, including short term fixed
deposits and short term other deposits, are repayable as per individual
contracted maturities ranging from 12 to 84 months from the date of
deposit. The interest is payable on contracted terms depending upon the
scheme opted by the depositor.
4.7 Department of Company Affairs with reference to the General
Circular no. 4/2003 dated 16.01.2003, has clarified that, Housing
Finance Companies registered with National Housing Bank are exempted
from the requirement of creating Debenture Redemption Reserve (DRR) in
case of privately placed debentures. Since the Debenture issues of the
Company till date are through private placement, as such no DRR has
been created.
5.1 The Company has written off H355 lakh (H494 lakh) as bad debts and
by way of one time settlement to recover some of its NPA and Loss
Accounts. The Company has withdrawn H355 lakh (H494 lakh) from
contingency provisions created out of profits of earlier years.
5.2 Provision for Contingencies
The Company has made full provisions for Contingencies for diminution
in investment value and on standard as well as on non-performing
housing loans and other property loans as per the Prudential Norms
prescribed by the National Housing Bank. The Company has maintained
additional provision amounting to H901 lakh (H1,375 lakh).
6.1 Loans repayable on demand and other short term loans comprises of
Cash credit facilities from banks and are secured by a first charge by
way of hypothecation of book debts of specific loan assets of the
Company and are further secured by negative lien on the underlying
specific properties and / or secured by demand promissory notes.
Certain Cash credit facilities are also secured by way of a first pari
passu charge along with other secured loans read with Note 5.2. All
cash credit facilities are repayable as per the contracted / roll over
term.
7.1 As required under Section 205 (C) of the Companies Act, 1956, the
Company has transferred unclaimed dividend of the year 2005-06 H8 lakh
(H6 lakh), unclaimed Interim dividend of the year 2006-07 H8 lakh (H6
lakh) and H19 lakh (H5 lakh) towards unclaimed Deposits and interest
accrued thereon to Investor Education & Protection Fund (IEPF) during
the year. There were no amounts due for transfer to IEPF on the date of
Balance Sheet.
8.1 Investment in Government and other SLR Securities aggregating to
H15,087 lakh (H10,281 lakh) carry a floating charge created in favour
of depositors in the Fixed Deposit schemes of the Company (read with
Note 5.2 and Note 5.4 above).
8.2 The Company has acquired 16,29,01,250 number of shares being 50%
stake in DLF Pramerica Life Insurance Co Ltd, a registered life
insurance company in India regulated by IRDA during the year from DLF
Limited at deminimus value of H1. The Company had capitalised H694
lakh being expenses incurred in relation to the above acquisition as a
cost of investment. Subsequently Company has subscribed for 72,86,589
number of shares @ H10 each for H729 lakh to maintain its holding at
50% and to augument the resources of the Company. Consequent to this
acquisition name of the company has been changed to DHFL Pramerica Life
Insurance Co Limited with the approval of IRDA and ROC.
9.1 Property loans consists of non-housing loans such as mortgage
loans, project loans, commercial loans, plot loans, lease rental
finance and other loans which are all against real estate properties
and which are not covered under the housing loan criteria of National
Housing Bank.
9.2 As certified by the management, loans given by the Company are
secured by equitable mortgage / registered mortgage of the property and
assets financed and / or assignment of Life Insurance policies and / or
personal guarantees and / or undertaking to create a security and / or
hypothecation of assets and are considered appropriate and good.
9.3 Composite Loans sanctioned (i.e. loans allowed for purchase of
plot and self construction of house) on or before March 31, 2011, in
which construction has not started till March 31, 2014, as per
information available with the Company, is excluded from Housing Loans
and regrouped under Other Property Loans (Non Housing) in above
outstanding as on March 31, 2014 aggregating to H2,206 lakh (H811
lakh).
9.4 The Company has entered into Loan Syndication arrangements with
certain public and private sector banks to provide Housing loan to
borrowers wherein DHFL originates the loan files and gets it processed
under common credit norms. The said banks have agreed to participate
upto 50% of the disbursed loan portfolio under loan syndication
arrangement. Entire / partial processing fees and other charges /
income on these loans, depending upon the syndication arrangements,
accrues to DHFL. The Company has derecognised the said loan portion
syndicated to others in its books.
9.5 The Company has also entered into Loan Syndication arrangements
with DHFL Vysya Housing Finance Limited and Aadhar Housing Finance
Limited to provide Housing and Property Loans to borrowers wherein DHFL
originates the loan files through its branches and gets it processed
under common credit norms at the Central Processing Unit. The loan
syndicate participants have agreed to participate in the disbursed loan
portfolio under loan syndication arrangement. The Company has
derecognised above loan portion syndicated to others in its books.
9.6 The Company has acquired certain assets under SARFAESI which are
retained for the purpose of sale under the rules and regulations of
SARFAESI involving H4,419 lakh (H 1,663 lakh) out of 148 (124) cases
which are part of NPA portfolio for which necessary provisions have
already been made.
9.7 The Company has securitised / assigned pool of certain housing and
property loans and managed servicing of such loan accounts. The
balance outstanding in the pool, as at the reporting date aggregates to
H422,544 lakh (H221,473 lakh). These assets have been de-recognised in
the books of the Company. The Company is responsible for collection and
getting servicing of this loan portfolio on behalf of buyers /
investors. In terms of the said securitisation / assignment agreements,
the Company pays to buyer / investor on monthly basis the prorata
collection amount as per individual agreement terms.
9.8 Housing and other property loans (current and non-current)
includes H139 lakh (H47 lakh) given to the key managerial persons of
the Company under the normal course of business.
10.1 Non Current portion of balances with Banks in Deposit Accounts
includes deposits under lien aggregating to H7,088 lakh (H14,725 lakh)
being securitisation comforts provided to various Trustees / buyer,
H11,153 lakh (H10,634 lakh) being earmarked for SLR requirements of
NHB, HNil (H500 lakh) being margin money for bank guarantees, and HNil
(H1,300 lakh) under lien against Interest rate swaps.
11 LEASES
Operating Lease
The Company has taken certain premises for office and residential use
for its employees under cancellable and non cancellable operating lease
agreements. Terms of the lease include terms for renewal, increase in
rents in future periods and terms of cancellation. The total lease
rent recognised as an expense during the year under the lease
agreements amounts to H2,051 lakh (Previous Year H2,032 lakh).
12
Two subsidiaries of the Company were amalgamated into the Company
during the year 2012-13 pursuant to the Scheme of amalgamation (Scheme)
under Section 391 to 394 of the Companies Act, 1956 approved by the
Board of directors of all the three companies and sanctioned by the
Hon''ble High Court of judicature at Bombay vide its order dated July
27, 2012 and by the Hon''ble High Court of judicature at Delhi vide its
order dated January 4, 2013 which were filed with the Registrar of
Companies on January 31, 2013 being the effective date for the
amalgamation scheme. In terms of the above scheme the Assets and
Liabilities of the subsidiary companies were amalgamated with DHFL at
their respective fair value in the previous year. Proportionate Fair
value appreciation surplus amounting to H4,162 lakh (H5,206 lakh) has
been amortised out of the capital reserve in terms of the valuation
report of the scheme, based on the documented repayment schedule.
13
In the opinion of the Board, the assets of the Company have a value on
realisation in the ordinary course of business atleast equal to the
amount at which they are stated, net of contingency provisions.
14
The Company''s Income Tax Assessment has been completed upto assessment
year 2011-12. In respect of amalgamating company, additional demands
have been raised by the department which are pending in appeal at
various forums. Company has partially deposited the additional tax so
demanded under protest. No provision has been made in the books against
such demands as the Company believes that the cases will be decided in
its favour based on legal advice and similar precedent case laws
available.(Refer Note 33)
15 INTEREST RATE SWAPS
In compliance with Asset Liability Management Policy, the Company had
in past entered into interest rate swaps of notional value aggregating
to H9,500 Lakh to hedge its interest rate risk which were designated as
fair value hedges, in accordance with the generally accepted accounting
principles.
The changes in the fair value of these derivatives are recorded in the
income statement, together with any changes in the fair value of the
underlying asset or liability that are attributable to the hedged risk.
The Mark to Market (MTM) losses on these swaps recognised in past, is
amortised over the period of the hedges. Accordingly, net gain in
current year on hedging of interest rate swaps and write back of MTM
losses amounting to H27 lakh (H Nil) has been adjusted in "Interest and
Finance Cost".
16
The Company operates under a single (primary) business segment viz.
"Providing loans for construction or purchase of residential property
and loans against property". Further, the Company is operating in a
single geographical segment. Accordingly, disclosures relating to
primary and secondary business segments under the Accounting Standard
on Segment Reporting (AS-17) notified u/s 211(3C) of the Companies Act,
1956 are not applicable to the Company.
17 CONTINGENT LIABILITY (Rs. in Lakh)
As at As at
Particulars March 31,
2014 March 31,
2013
Guarantees provided by the Company 10,003 9,996
Claims against the Company not acknowledged
as debts 105 83
Income Tax Demand (Net of amount deposited
under protest Rs.67 lakh) 430 430
18
Contingent liability in respect of undertaking provided by the Company
for meeting the shortfall in collection, if any, at the time of
securitisation of receivables outstanding as at March 31, 2014
amounting to H29,259 lakh (H18,929 lakh). The outflows would arise in
the event of short collection, in the cash inflows of the pool of
securtised receivable.
19
Capital Work in Progress includes H79,615 lakh (H25,871 lakh) paid as
part consideration for acquiring office premises under construction.
20
The Company has paid dividend H3 lakh (H8 lakh) and H1 lakh (H1 lakh)
as tax on distribution of dividend thereon to new shareholders on
account of Final Dividend for the year 2012-13 as required under the
Listing Agreement as those shares were allotted prior to record date
for the dividend payment and after the date of earlier year balance
sheet.
21
The managerial remuneration including perquisites, H171 lakh (H175
lakh) paid to Chairman and Manging Director and H30 lakh (H30 lakh) as
commission to other Non Executive Directors.
22
NHB, vide its letter dated March 31, 2014 in terms of provisions of
paragraph 29(5) of the Housing Finance Companies (NHB) direction 2010
had levied a penalty of H5,000/- (Rupees five thousand), which has been
paid by the Company, under protest, in relation to Section 29C of the
National Housing Bank Act, 1987 on the Company for the year 2012-13.
23 REMITTANCE IN FOREIGN CURRENCIES ON ACCOUNT OF DIVIDEND
The particulars of dividends payable to non-resident shareholders
(including Foreign Institutional Investors) is as under, however, the
Company does not have information as to the extent to which
remittances, if any, has been made in foreign currencies on account of
such dividend during the year on behalf of non-resident share holders.
24 RELATED PARTY TRANSACTIONS
As per Accounting Standard (AS 18) on " Related Party Disclosures"
details of transactions with related parties as defined therein are
given below:
A) List of related parties with whom transactions have taken place
during the year and relationship:
1) COMPANIES
(i) Associate Companies
a. DHFL Vysya Housing Finance Ltd.
b. DHFL Property Services Ltd.
c. Aadhar Housing Finance Ltd. (Formerly known as "Aadhar Housing
Finance Pvt. Ltd.")
d. First Blue Business Advisors Ltd. (Formerly known as "DHFL
Insurance Services Ltd.")
e. Arthveda Fund Management Pvt. Ltd.
f. Dish Hospitality Pvt. Ltd.
g. Wadhawan Holdings Pvt. Ltd.
h. Wadhawan Retail Pvt. Ltd.
i. Avanse Financial Services Ltd.
j. DHFL Sales and Services Ltd.
k. DHFL Venture Trustee Co. Pvt. Ltd.
(ii) Joint Venture Company
a. DHFL Pramerica Life Insurance Company Ltd.
(iii) Others
a. Shri Rajesh Kumar Wadhawan Education Trust
2) KEY MANAGEMENT PERSONNEL
a. Mr. Kapil Wadhawan Chairman & Managing Director
b. Mr. Anil Sachidanand President (till September 16, 2013)
c. Mr. Anoop Pabby President (till February 9, 2014)
d. Mr. Rakesh Makkar President
e. Mr. Deo Shankar Tripathi President (w.e.f May 6, 2013)
25
Figures for the previous year have been regrouped, rearranged and
reclassified wherever necessary. Figures in brackets represent previous
year''s figures
Mar 31, 2013
1 CORPORATE INFORMATION
Dewan Housing Finance Corporation Limited (''DHFL''), ''the Company'' was
incorporated in India on 11th April, 1984 and is carrying on the
business of providing loans to retail customers for construction or
purchase of residential property and loans against property. The
company is registered with National Housing Bank under section 29A of
the National Housing Bank Act, 1987. DHFL has its registered office in
Mumbai and has 166 branches, 75 service centres, 31 camp locations, 18
zonal/ regional office, 2 disbursement hub and 4 collection centers in
India and 2 representative offices in UAE and UK.
2.1 Authorised capital of the company is increased on account of
amalgamation as approved by the Hon''ble High Court''s of Judicature at
Bombay and Delhi, read with Note 27.
The Company has, at present, one class of issued, subscribed and paid
up share referred to as equity shares having a par value of Rs. 10/-
each. Each holder of equity share is entitled to one vote per share.
The Company declares and pays dividends in Indian rupees. The dividend
proposed by the Board of Directors is subject to the approval of the
shareholders in the ensuing Annual General Meeting.
2.2 Details of aggregate number of shares issued for consideration
other than cash during the period of five years:
Company has allotted 1,08,86,375 No of Equity Shares as fully paid up
for consideration other than cash as per the Scheme of Amalgamation
during the year (Refer Note 27).
2.3 Employee Stock Option Plans:
a. Employee Stock Option Scheme 2008 (ESOS-2008) was implemented by
the Company. 14,22,590 equity share options were granted under
''ESOS-2008'' in 2008-09 to the employees as approved by the remuneration
and compensation committee of directors of the Company at Rs. 53.65 per
share, the reconsidered price approved in the EOGM dated 31st March,
2009.
During the year, the Company has allotted, from time to time, 256,094
(301,264) number of equity shares of Rs. 10/- each to various eligible
employees under ''ESOS 2008'' at the price of Rs. 53.65 per equity share
(including a premium of Rs. 43.65 per equity share) aggregating to Rs.
137 lacs (Rs. 162 lacs) as approved in the AGM dated 23rd July, 2007
and allotted at the reconsidered price approved in the EOGM dated 31st
March, 2009.
b. Employee Stock Option Scheme 2009 (ESOS-2009) was implemented by
the Company. 12,75,000 equity share options were granted under
''ESOS-2009, Plan I'' in 2009-10 and additional 12,34,670 equity share
options were approved to be granted under ''ESOS-2009, Plan II'' in
2010-11 to the employees by the remuneration and compensation committee
of directors of the Company at Rs. 141/- per share, the price approved
in the remuneration and compensation committee meeting held on 25th
November, 2009.
During the year, the Company has allotted, from time to time, 236,259
(202,442) number of equity shares of Rs. 10/- each to various eligible
employees under ''ESOS 2009'' at the price of Rs.141/- per equity share
(including a premium of Rs. 131/- per equity share) aggregating to Rs.
333 lacs (Rs. 285 lacs) as approved in the AGM dated 23rd July, 2007.
2.4 During the year, the Company has paid an interim dividend on equity
shares @ Rs. 2/-(Nil) per share. The Board of Directors, has further
recommended final dividend to be paid out of current year profits @ Rs.
3/- (Rs. 3.50) per equity share to the equity shareholders.
3.1 Non Convertible Debentures (NCD) (current and non current portion)
amounting to Rs. 346,399 lacs (Rs. 185,020 lacs) are secured by way of
first charge read with Note 5.2 herein below and are redeemable at par,
in one or more instalments, on various dates, between June, 2013 and
December, 2022.
Secured NCDs also include amount outstanding for Zero Coupon Secured
Redeemable Non-Convertible Debentures (ZCD) aggregating to Rs. 7,996
lacs (Rs. Nil), including Rs. 5,869 lacs (Rs. Nil) of the amalgamating
company read with note 5.3, which are redeemable at premium on
maturity. The accumulated premium payable on outstanding ZCD accrued
till 31st March, 2013 amounting to Rs. 756 lacs is included above and
has been provided out of the securities premium account (refer Note
4.1).
3.2 All Secured loans (Current and Non Current portion), from the
National Housing Bank, other Banks, Asian Development Bank, Financial
Institutions and Secured Non Convertible Debentures / ZCD are secured
by way of first charge to and in favour of participating banks,
Institutions, National Housing Bank and Debenture Trustees jointly
ranking pari passu (read with Note 9.1), inter-se, on the Company''s
whole of the present and future book debts outstanding, investments
including all the receivables of the Company and other movable assets,
wherever situated, excluding SLR assets, read with Note 5.3 & 5.4
hereinafter. They are further secured on pari passu basis by
constructive delivery of various title deeds of certain immovable
properties of the Company, to Union Bank of India, acting for itself
and as an agent of other participating lenders and Debenture trustees,
and are also guaranteed by the promoter directors of the Company.
3.3 The secured loans (current and non current portion) read with Note
9.1 availed by amalgamating company from various lenders/ institutions
are secured for the time being as under. However, the Company is in
discussions with its various lenders for re-alignment of security
clauses in terms of its existing debts.
a. Secured NCDs and ZCDs aggregating to Rs. 66,919 lacs are secured by
a first charge by way of hypothecation of book debts of specific loan
assets and by way of mortgage of certain land of the Company.
b. The term loans from National Housing Bank amounting to Rs. 44,721
lacs are secured by mortgage of certain immovable properties and a
first exclusive charge by way of hypothecation of all movable
properties, excluding specific housing and property loans &
investments, of amalgamating Company. These loans are further secured
by a first exclusive mortgage/ charge by way of hypothecation of
specific book debts in respect of housing loans against which refinance
has been availed.
c. The term loans from Banks aggregating to Rs. 403,136 lacs are
secured by a first charge by way of hypothecation of book debts of
specific loan assets of the amalgamating Company and some of them are
further secured by negative lien on the underlying specific properties
and / or secured by demand promissory notes.
3.4 The National Housing Bank directives require all HFC''s accepting
public deposits to create a floating charge on the statutory liquid
assets maintained in favour of depositors through the mechanism of a
trust deed. The Company has accordingly appointed a SEBI approved
trustee Company as trustee for the above by executing the trust deed.
3.5 Unsecured Redeemable Non Convertible Subordinated Debentures
aggregating to Rs. 114,150 lacs (Rs. 65,500 lacs), outstanding as at
31st March, 2013, are subordinated to present and future senior
indebtedness of the company. It qualifies as Tier II capital in
accordance with National Housing Bank (NHB) guidelines for assessing
capital adequacy based on balance term to maturity. These debentures
are redeemable at par on maturity between August 2013 and October 2023.
3.6 Fixed Deposits and Other Deposits, including short term fixed
deposits and short term other deposits, are repayable as per individual
contracted maturities ranging from 12 to 84 months from the date of
deposit. The interest is payable on contracted terms depending upon the
scheme opted by the depositor.
3.7 Department of Company affairs vide their general circular no.
4/2003 dated 16.01.2003, which has not been modified, has clarified
that Housing Finance Companies registered with National Housing Bank
are exempt from the requirement of creating Debenture Redemption
Reserve (DRR) in case of privately placed debentures. Since the
Debenture issues of the Company till day are through private placement,
no DRR has been created.
4.1 The Company has written off Rs. 494 lacs (Rs. 236 lacs) as bad
debts and by way of one time settlement to recover some of its NPA and
Loss Accounts. The Company has withdrawn Rs. 494 lacs (Rs. 236 lacs)
from contingency provisions created out of profits of earlier years.
4.2 Provision for Contingencies
The Company has made full provisions for Contingencies for diminution
in investment value and on standard as well as on non- performing
housing loans and other property loans as per the Prudential Norms
prescribed by the National Housing Bank. The Company has maintained
additional provision amounting to Rs. 1,375 lacs.
5.1 Loans repayable on demand and other short term loans comprising of
Cash credit facilities from banks includes borrowings of amalgamating
company and are secured by a first charge by way of hypothecation of
book debts of specific loan assets of the company and are further
secured by negative lien on the underlying specific properties and / or
secured by demand promissory notes. Certain Cash credit facilities are
also secured by way of a first pari passu charge along with other
secured loans read with Note 5.2. All cash credit facilities are
repayable as per the contracted/ roll over term.
6 TRADE PAYABLES
There is no amount due and payable to ''Suppliers'' registered under the
Micro, Small and Medium Enterprises Development Act, 2006 at the end of
the year. No interest has been paid/ is payable by the Company
during/for the year to these ''Suppliers''. The above information takes
into account only those suppliers who have submitted their registration
details or has responded to the inquiries made by the Company for this
purpose.
7.1 Investment in Government and other SLR Securities aggregating to
Rs. 10,381 lacs (Rs. 4,887 lacs) carry a floating charge created in
favour of depositors in the Fixed Deposit schemes of the Company (read
with Note 5.2 and Note 5.4 above).
7.2 As required by NHB, the Company has divested its shareholding in
Aadhar Housing Finance Private Limited from 50.00% to 14.90% during the
year. A profit of Rs. 246 lacs was earned from the dis-investment.
8.1 Property loans consists of non-housing loans such as mortgage
loans, project loans, commercial loans, plot loans, lease rental
finance and other loans which are all against real estate properties
and which are not covered under the housing loan criteria of National
Housing Bank.
8.2 As certified by the management, loans given by the Company are
secured by equitable mortgage/ registered mortgage of the property and
assets financed and/or assignment of Life Insurance policies and/or
personal guarantees and/or undertaking to create a security and/or
hypothecation of assets and are considered appropriate and good.
8.3 Composite Loans sanctioned (i.e. loans allowed for purchase of
plot and self construction of house) on or before 31st March, 2010, in
which construction has not started till 31st March, 2013, as per
information available with the Company, is excluded from Housing Loans
and regrouped under Other Property Loans (Non Housing) in above
outstanding as on 31st March, 2013 aggregating to Rs. 811 lacs (Rs.
1,256 lacs).
8.4 The Company has entered into Loan Syndication arrangements with
certain public and private sector banks to provide Housing loan to
borrowers wherein DHFL originates the loan files and gets it processed
under common credit norms. The said banks have agreed to participate
upto 50% of the disbursed loan portfolio under loan syndication
arrangement. Entire/partial processing fees and other charges/ income
on these loans, depending upon the syndication arrangements, accrues to
DHFL. The Company has derecognised the said loan portion syndicated to
others in its books.
8.5 The Company has also entered into Loan Syndication arrangements
with DHFL Vysya Housing Finance Limited and Aadhar Housing Finance
Limited to provide Housing and Property Loans to borrowers wherein DHFL
originates the loan files through its branches and gets it processed
under common credit norms at the Central Processing Unit. The loan
syndicate participants have agreed to participate in the disbursed loan
portfolio under loan syndication arrangement. The Company has
derecognised above loan portion syndicated to others in its books.
8.6 The Company has acquired certain assets under SARFAESI which are
retained for the purpose of sale under the rules and regulations of
SARFAESI involving Rs. 1,663 lacs (Rs. 1,403 lacs) out of 124 (163)
cases which are part of NPA portfolio for which necessary provisions
have already been made.
8.7 The Company has securitized / assigned pool of certain housing and
property loans and managed servicing of such loan accounts. The balance
outstanding in the pool, as at the reporting date aggregates to Rs.
221,473 lacs (Rs. 173,927 lacs). These assets have been de- recognised
in the books of the Company. The Company is responsible for collection
and getting servicing of this loan portfolio on behalf of buyers /
investors. In terms of the said securitization/assignment agreements,
the Company pays to buyer/investor on monthly basis the prorata
collection amount as per individual agreement terms.
8.8 Housing and other property loans (current and non-current)
includes Rs. 47 lacs (Rs. 42 lacs) given to the key managerial persons
of the company under the normal course of business.
9.1 Loans to employees are secured by the hypothecation of respective
assets against which these loans have been granted.
9.2 Other loans and advances include servicing asset for
securitization of Rs. 340 lacs (Rs. Nil) secured by underlying
mortgages of the specific loan assets in the securitized pool of assets
and is subordinated to the rights of the senior Class PTCs. The Company
shall realize these assets upon settlement of dues to the senior class
PTCs as per the contracted terms and conditions for the respective
securitization deals.
10 LEASES
10.1 Operating Lease
The Company has taken certain premises for office and residential use
for its employees under cancellable and non cancellable operating lease
agreements. Terms of the lease include terms for renewal, increase in
rents in future periods and terms of cancellation. The total lease
rent recognized as an expense during the year under the lease
agreements amounts to Rs. 2,032 lacs (Previous Year Rs. 1,058 lacs).
11 a. DHFL Led consortium including Caledonia Investments PLC, UK and
its subsidiary have acquired 100% shareholding of Deutche Post Bank
Home Finance Ltd, a NHB registered Housing finance company, with effect
from 25th March, 2011, with the ultimate object to amalgamate with
DHFL, and whose name was subsequently changed to First Blue Home
Finance Ltd. (FBHFL) for an aggregate amount of Rs. 1,079 Crores.
b. With effect from 1st April, 2011 being appointed date for
amalgamation, First Blue Home Finance Ltd. and DHFL Holding Private
Limited (both subsidiaries of the Company) were amalgamated into the
Company pursuant to the Scheme of amalgamation (Scheme) under Section
391 to 394 of the Companies Act, 1956 approved by the Board of
Directors of all the three companies and sanctioned by the Hon''ble High
Court of judicature at Bombay vide its order dated 27th July, 2012 and
by the Hon''ble High Court of judicature at Delhi vide its order dated
4th January,2013 which were filed with the Registrar of Companies on
31st January, 2013 being the effective date for the amalgamation
scheme.
c. The Company has carried out the accounting treatment by adopting
''purchase method'' as prescribed in the Amalgamation Scheme approved by
the Hon''ble High Courts. The required disclosures as per paragraph 23 &
42 of Accounting Standard 14 (AS 14) ''Accounting for Amalgamations'' as
prescribed under the Companies (Accounting Standards) Rules, 2006 have
also been provided. Company has also been legally advised that the
accounting treatment for the amalgamation is in line with the scheme
approved by the Hon''ble Courts. Accordingly the Assets and Liabilities
of the subsidiary companies were amalgamated with DHFL at their
respective fair value.
d. In consideration for the amalgamation, Company has allotted to all
shareholders other than specified shareholders of FBHFL whose name was
registered on record date for such allotment, a total of 108,86,375
equity shares of Rs. 10/- each credited as fully paid at share premium
of Rs. 311.50 per share, being fair value as per paragraph 14 of AS 14,
based on the cost of shares of FBHFL on acquisition and swap ratio
recommended by ERNST & YOUNG, for the purpose of amalgamation of First
Blue Home Finance Ltd into DHFL, of 10 Equity shares of DHFL for every
97 equity Shares of FBHFL and fairness opinion on the above swap ratio
in relation to fairness of consideration (Exchange Ratio) for the
proposed transfer, issued by Standard Chartered Bank.
e. FBHFL has valued its all assets and liabilities in its books of
accounts at their fair value and for this purpose, to follow the
paragraph 11.1 of the scheme of merger, has appointed SEBI approved
category one Merchant Banker, Antique Capital Marketing Pvt. Ltd. as
independent valuer for the valuation of its Housing Loan Portfolio as
on appointed date for the amalgamation and also for the subsequent
period up to effective date of the amalgamation to give uniform
treatment on matching principle of accounting to its all assets. As
company and its both subsidiaries has already adopted the financial
accounts for the year ended 31st March, 2012 in their respective AGMs,
effective date has been considered as the date of amalgamation for the
purpose of AS 14. As per above valuation report Fair value appreciation
surplus of FBHFL Housing loan book as on 1st April, 2011 was Rs. 741
crores and Rs. 1,030 crores on effective date for amalgamation. FBHFL
has also appointed another SEBI approved Category-I Merchant Banker The
Trust Capital for providing fairness opinion on the above valuation
report on loan portfolio. The Trust Capital has issued the fairness
opinion on above valuation report of FBHFL saying that the valuation so
arrived is fair in their opinion.
f. In terms of Clause 11 of the High Court approved Amalgamation
Scheme, read with the Accounting Standard AS-14 issued by the Institute
of Chartered Accountants of India, the difference between fair value of
assets and liabilities as recorded by FBHFL in its books reduced by the
issued capital and premium thereon issued by the DHFL by way of
amalgamation consideration, as mentioned above and also as reduced by
other statutory reserves, free reserves and balance in Profit & Loss
Account of transferor companies as stipulated in clause 11.2 and clause
11.3 of the Amalgamation Scheme, are amalgamated with DHFL, amounting
to Rs. 26,136 lacs, net of expenses related to amalgamation is credited
to Capital Reserve account.
g. Subsequent to the date of amalgamation , proportionate Fair value
appreciation surplus amounting to Rs. 5,206 lacs has been amortized out
of the above capital reserve on account of repayment / prepayment
received of the housing loans portfolio amalgamated on amalgamation as
fair value appreciation surplus was directly taken into capital
reserves of the company.
h. Had the court approved amalgamation scheme not prescribed the above
accounting treatments for transferring of other free reserves and
balance of profit and loss account aggregating to Rs. 17,430 lacs, the
balance added in P&L account on account of amalgamation and other free
reserves would have been lower and Capital Reserve account would have
been higher by such amount.
i. Since the figures of previous year does not include the financials
of the amalgamating companies, the figures are not comparable with
those of the current year.
12 In the opinion of the Board, the assets of the company have a value
on realization in the ordinary course of business atleast equal to the
amount at which they are stated, net of contingency provisions.
13 The Company''s income tax assessment has been completed upto
assessment year 2010-11. In respect of amalgamating company, additional
demands have been raised by the department which are pending in appeal
at various forums. Company has partially deposited the additional tax
so demanded under protest. No provision has been made in the books
against such demands as the company believes that the cases will be
decided in its favour based on legal advice and similar precedent case
laws available (Refer Note 32).
14 INTEREST RATE SWAPS
"In compliance with Asset Liability Management Policy, the company
had in past entered into interest rate swaps of notional value
aggregating to Rs. 9,500 Lacs to hedge its interest rate risk which
were designated as fair value hedges, in accordance with the generally
accepted accounting principles.
The changes in the fair value of these derivatives are recorded in the
income statement, together with any changes in the fair value of the
underlying asset or liability that are attributable to the hedged risk.
The Mark to Market (MTM) losses on these swaps recognized in past, is
amortized over the period of the hedges. Accordingly, net gain in
current year on hedging of interest rate swaps and write back of MTM
losses amounting to Rs. 27 lacs (Rs. Nil) has been adjusted in
"Interest and Finance charges".
15 The Company operates under a single (primary) business segment viz.
"Providing loans to retail customers for construction or purchase of
residential property and loans against property". Further, the
Company is operating in a single geographical segment. Accordingly,
disclosures relating to primary and secondary business segments under
the Accounting Standard on Segment Reporting (AS-17) notified u/s
211(3C) of the Companies Act, 1956 are not applicable to the Company.
16 CONTINGENT LIABILITY: (Rs. in Lacs)
31.03.2013 31.03.2012
Guarantees provided by the Company 9,996 22,473
Claims against the Company not acknowledged
as debts 83 54
Income Tax Demand in respect of amalgamating
company (Net of amount deposited under protest
Rs. 67 lacs) 430 -
17 Estimated amount of contracts remaining to be executed on capital
account and not provided for (net of advances) is Rs. 49,100 lacs (Rs.
160 lacs).
18 Capital Work in Progress includes Rs. 25,871 lacs (Rs. 17,618 lacs)
paid as advance consideration for acquiring office premises under
construction.
19 The Company has paid dividend Rs. 8 lacs (Rs. 8 lacs) and Rs. 1 lac
(Rs. 1 lacs) as tax on distribution of dividend thereon to new
shareholders on account of Final Dividend for the year 2011-12 as
required under the Listing Agreement as those shares were allotted
prior to record date for the dividend payment and after the date of
earlier year balance sheet.
20 The managerial remuneration including perquisites, Rs. 175 lacs (Rs.
175 lacs) paid to Chairman and Managing Director and Rs. 30 lacs (Rs.
30 lacs) as commission to other non executive directors.
21 RELATED PARTY TRANSACTIONS
As per Accounting Standard (AS 18) on "Related Party Disclosures"
details of transactions with related parties as defined therein are
given below:
A) List of related parties with whom transactions have taken place
during the year and relationship:
1) COMPANIES
(i) Subsidiary Companies
a. DHFL Holdings Pvt. Ltd.*
b. First Blue Home Finance Ltd.* (formerly known as Deutsche Postbank
Home Finance Ltd.)
* As per the Scheme of Amalgamation, erstwhile First Blue Home Finance
Limited and DHFL Holdings Private Limited as approved by the respective
Hon''ble High Court''s of Judicature at Bombay and Delhi read with Note
27 was amalgamated with the Company
(ii) Associate Companies
a. DHFL Vysya Housing Finance Ltd.
b. DHFL Property Services Ltd.
c. Aadhar Housing Finance Pvt. Ltd.
d. DHFL Insurance Services Ltd.
e. Arthveda Fund Management Pvt. Ltd.
f. Dish Hospitality Pvt. Ltd.
g. Wadhawan Holdings Pvt. Ltd.
h. Wadhawan Retail Pvt. Ltd.
i. Avanse Financial Services Pvt Ltd.
j. DHFL Sales and Services Ltd.
2) KEY MANAGEMENT PERSONNEL
a. Shri Kapil Wadhawan Chairman & Managing Director
b. Shri Anil Sachidanand President
c. Shri Anoop Pabby President
d. Shri Rajeev Sathe Chief Operating Officer
22 NHB, vide its letter dated 9th October, 2012 has levied under
section 52A of the National Housing Bank Act, 1987 a penalty of Rs.
5,000/- (Rupees five thousand), which has been paid by the Company, in
relation to section 29C of the National Housing Bank Act, 1987 on the
Company for the years 2007-08 & 2010-11.
23 Figures for the previous year have been regrouped, rearranged and
reclassified wherever necessary. Since the figures of previous year do
not include the financials of the amalgamating companies, the figures
are not comparable with those of the current year. Figures in brackets
represent previous year''s figures. Further, the income and expense,
fixed assets movements for the year of the amalgamating companies have
been added line by line in the statement of profit and loss account,
fixed assets (Refer note 12) and cash flow statement.
Mar 31, 2012
1 CORPORATE INFORMATION
Dewan Housing Finance Corporation Limited ('DHFL'), 'the Company' was
incorporated in India on 11th April, 1984 and is carrying on the
business of providing loans to retail customers for construction or
purchase of residential property and loans against property. The
Company is registered with National Housing Bank under Section 29A of
the National Housing Bank Act, 1987. DHFL has its registered office in
Mumbai and has 122 branches, 72 service centres, 24 camp locations, 8
regional processing units and 4 central processing units in India and 2
representative offices in UAE and UK.
The Company has 3 subsidiaries viz. DHFL Holdings Private Limited,
First Blue Home Finance Limited and First Blue Financial Consultants
Limited.
(Rs. in lacs)
31.03.2012 31.03.2011
2 Contingent Liability
Guarantees provided by the Company 22,473 7
Claims against the Company not
acknowledged as debts 54 28
2.1 The Company has given corporate guarantee in favour of
intitutional subscriber of secured, redeemable, non convertible
debentures issued by its subsidiary First Blue Home Finance Limited fo
Rs. 25,000 lacs and interest thereon.
3 Estimated amount of contracts remaining to be executed on capital
account and not provided for (net of advances) is Rs. 160 lacs (Rs. 5,768
lacs).
4 Capital Work in Progress includes Rs. 17,618 lacs (Rs. 16,000 lacs) paid
as advance consideration for acquiring office premises under
construction, and Rs. 450 lacs paid in lieu of part consideration towards
sale of leasehold land in earlier years.
5 The Company has paid dividend of Rs. 8 lacs (Rs. 659 lacs) and Rs. 1 lac
(Rs. 112 lacs) as tax on distribution of dividend to new shareholders on
account of final dividend for the year 2010-11 as required under the
Listing Agreement as those shares were allotted prior to record date
for the dividend payment and after the date of earlier year balance
sheet.
6 The managerial remuneration including perquisites, Rs. 168 lacs (Rs. 157
lacs) paid to Chairman and Manging Director and Rs. 30 lacs (Rs. 30 lacs)
as comission to other directors.
7 As per Accounting Standard (AS-18) on "Related Party Disclosures"
details of transactions with related parties as defined therein are
given below:
A) List of related parties with whom transactions have taken place
during the year and relationship:
1) COMPANIES
(i) Subsidiary Companies
a. DHFL Holdings Pvt. Ltd.
b. First Blue Home Finance Ltd.
(formerly known as Deutsche Postbank Home Finance Ltd.)
c. First Blue Financial Consultants Ltd.
(formerly known as DPB Financial Consultants Ltd.)
(ii) Associate Companies
a. DHFL Vysya Housing Finance Ltd.
b. DHFL Property Services Ltd.
c. Aadhar Housing Finance Pvt. Ltd.
d. DHFL Insurance Services Ltd.
e. Arthveda Fund Management Pvt.Ltd.
f. Dish Hospitality Pvt. Ltd.
g. Wadhawan Holdings Pvt. Ltd. h. Wadhawan Retail Pvt. Ltd.
2) KEY MANAGEMENT PERSONNEL
a. Shri Kapil Wadhawan Chairman & Managing Director
b. Shri Anil Sachidanand Chief Executive Officer
c. Shri Rajeev Sathe Chief Operating Officer
d. Shri Anoop Pabby Head Corp Strategy Group
8 Figures for the previous year have been regrouped, rearranged and
reclassified wherever necessary. Accordingly, amounts and other
disclosure for the previous year are included as an integral part of
the current year's financial statement and are to be read in relation
to the amounts and other disclosures relating to the current year.
9 Figures in brackets represent previous year's figures.
Mar 31, 2011
1. During the year, the Company obtained approval of shareholders at
the Extra-Ordinary General Meeting held on 18th May, 2010, for
placement of Equity Shares to Qualified Institutional Buyers (QIBs) and
preferential issue of Equity Shares to Promoters/Promoter Group and
Caledonia Investment Plc. The Committee of the Board of Directors has
from time to time, issued and allotted shares along with Equity Shares
under ESOS scheme as under:
(a) On 2nd June, 2010, issued and allotted to QIBs 1,68,69,095 Equity
Shares of Rs. 10/- each, at a price of Rs. 222.30 per Equity Share
(including a premium of Rs. 212.30 per Equity Share), aggregating to Rs.
37,500 lacs.
(b) On 12th June, 2010, issued and allotted to Promoters/Promoter Group
40,00,000 Equity Shares of Rs. 10/- each, at a price of Rs. 222.30 per
Equity Share (including a premium of Rs. 212.30 per Equity Share),
aggregating to Rs. 8,892.00 lacs.
(c) On 12th June, 2010, issued and allotted to Caledonia Investment Plc
10,00,000 Equity Shares of Rs. 10/- each, at a price of Rs. 222.30 per
Equity Share (including a premium of Rs. 212.30 per Equity Share),
aggregating to Rs. 2,223.00 lacs.
(d) During the year, the Company has allotted, from time to time,
291,930 number of Equity Shares of Rs. 10/- each to various eligible
employees under (ESOS 2008) at a price of Rs. 53.65 per Equity Share
(including a premium of Rs. 43.65 per Equity Share) aggregating to Rs.
156.62 lacs as approved in the AGM dated 23rd July, 2007 and allotted
at the reconsidered price approved in the EOGM dated 31st March, 2009.
(e) During the year, the Company has allotted, from time to time,
238,833 number of Equity Shares of Rs. 10/- each to various eligible
employees under (ESOS 2009) at a price of Rs. 141/- per Equity Share
(including a premium of Rs. 131/- per Equity Share) aggregating to Rs.
336.75 lacs as originally approved in the AGM dated 23rd July, 2007.
2. Non Convertible Debentures (NCD) amounting to Rs. 119,066.64 lacs (Rs.
63,716.61 lacs) are secured /to be secured by way of first charge as
per note B-4 herein below and are redeemable at par, in one or more
installments, on various dates, with the earliest redemption being 23rd
May, 2011 and the last being 22nd October, 2020.
3. The Company has raised Rs. 58,000.00 lacs through issue of long term
Unsecured, Redeemable, Non Convertible Debentures. These Debentures are
redeemable at par between 28th December, 2012 and 31st March, 2021.
These Debentures are Sub-ordinate to present and future senior debt
holders of the Company and qualifies as Tier II Capital under the NHB
Guidelines.
4. Secured term loans from the National Housing Bank, other Banks,
International Finance Corporation (IFC Washington), Asian Development
Bank (ADB, Manila), Financial Institutions and Secured Non Convertible
Debentures are secured/to be secured by way of first charge to and in
favour of participating banks, Institutions, National Housing Bank and
Debenture Trustees jointly ranking pari passu inter-se, on the
Company's whole of the present and future book debts outstanding,
investments including all the receivables of the Company and other
movable assets wherever situated excluding SLR investments read with
Note no. 8 hereinafter. They are further secured / to be secured on
pari passu basis by constructive delivery of various title deeds of
certain immovable properties, to Union Bank of India, acting for itself
and as an agent of other participating lenders and Debenture trustees,
and are also guaranteed by some of the present and earlier directors of
the Company.
5. Term loans include cash credit received from banks Rs. 99.11 lacs and
are secured on pari passu basis with other term loans.
6. As certified by the Management, loans given by the Company are
secured by Equitable Mortgage/Registered Mortgage of the Property and
Assets Financed and/or assignment of Life Insurance Policies and/or
Personal Guarantees and/or undertaking to create a security and are
considered appropriate and good.
7. The Company had earlier allotted 30 lacs Non Convertible Redeemable
Preference Shares (NCRPS), of Rs. 10/- each at a premium of Rs. 90/- per
share, aggregating to Rs. 3,000 lacs, carrying dividend @ 1% per annum on
10th December, 2007 which were redeemable at the end of 36 months from
the date of allotment @ Rs. 136/- per share. During the year, the Company
has redeemed all the above NCRPS @ Rs. 136/- per share and has utilised
the share premium for redemption on pro rata basis.
8. As the National Housing Bank directives require all HFC's accepting
public deposits to create a floating charge on the statutory liquid
assets maintained in favour of depositors through the mechanism of a
trust deed. The Company has appointed in earlier year a SEBI approved
trustee Company i.e. GDA Trustee and Consultancy Ltd. as trustee for
the above by executing the trust deed and has created necessary
required charge.
9. The Non Performing Assets (NPA) consisting of principal loans
outstanding where payments of EMI/PEMI were in arrears for 90 days or
more amounted to Rs. 9,429.07 lacs (Rs. 10,048.28 lacs). As per prudential
norms prescribed by the NHB, the Company is required to carry a
contingency provision of Rs. 3,641.60 lacs (Rs. 1,911.06 lacs) in respect
of Non Performing Housing Loan, Non-Housing Standard Assets and Other
Loan Assets. The Company has also provided for Rs. 59.15 lacs (Rs. 125.51
lacs) in respect of diminution in the value of Investment. The Company
has Written off Rs. 144.05 lacs (Rs. 98.34 lacs) as bad debts and by way of
one time settlement to recover some of its NPA and Loss Accounts. The
Company has withdrawn Rs. 144.05 lacs (Rs. 98.34 lacs) from contingency
provisions created out of profits of earlier years. The Company has
made, during the year, provision of Rs. 900 lacs (Rs. 850 lacs) for
contingencies and has excess provision over and above the requirements
of the guidelines on Prudential Norms issued by the National Housing
Bank (NHB). The amount of required provision based on Non Performing
Assets is as hereunder:
10. Composite Loans sanctioned (i.e. loans allowed for purchase of plot
and self construction of house) on or before 31st March, 2009, in which
construction has not started till 31st March, 2011, as per the
information available with the Company, is excluded from Housing Loans
and regrouped under Other Loans (Non Housing) in Schedule 'G',
outstanding as on 31st March, 2011 aggregating to Rs. 1,097.05 lacs. The
previous year figures of Housing Loans and Other Loans have not been
regrouped, hence are not comparable.
11. In terms of the requirement of the National Housing Bank (NHB)
Circular No.NHB (ND)/DRS Pol. No. 37/2010-11 dated 24th December,
2010, the Company has met the said requirements as under by utilizing
excess provisions made in the earlier period and by further providing
during the year:
i. 0.40% on all Standard Assets in respect of all loans other than
individual housing loans, and
ii. 2% on total outstanding Standard Assets in respect of Housing
Loans given on Dual Interest Rate Scheme,
12. Retirement Benefit Plans
ii. As required under Accounting Standard 15 (AS 15 Revised, 2005) the
Company has made full provision for future gratuity liability & leave
encashment liability payable at the time of retirement as on 31st
March, 2011. On the basis of Gratuity and GLES report under Accounting
Standard 15 (AS 15 Revised, 2005) provided by LIC of India, the Company
has made necessary full contribution to LIC of India of its own
liabilities as well as liabilities of its Subsidiary Company, DHFL
Property Services Limited.
13. Employee Stock Option Scheme:
Employee Stock Option Scheme 2008 (ESOS-2008) was implemented by the
Company. 14,22,590 Equity Share options were granted under (ESOS-2008)
in 2008-09 to the employees as approved by the Remuneration and
Compensation Committee of Directors of the Company at Rs. 53.65 per
share, the reconsidered price approved in the EOGM dated 31st March,
2009.
Employee Stock Option Scheme 2009 (ESOS-2009) was implemented by the
Company. 12,75,000 Equity Share options were granted under (ESOS-2009)
in 2009-10 and additional 73,470 Equity Share options were granted
under (ESOS-2009) in 2010-11 to the employees as approved by the
Remuneration & Compensation Committee of the Directors of the Company
at Rs. 141/- per share, the price approved in the Remuneration and
Compensation Committee meeting held on 25th November, 2009.
During the financial year 2010-11, under (ESOS-2008), 372,260 options
vested with eligible employees, 291,930 Equity Share options were
exercised leaving balance of 80,330 Equity Share options exercisable at
the end of the year and 184,222 Equity Share options lapsed during the
year while 614,310 Equity Share options were unvested at the end of the
year.
During the financial year 2010-11, under (ESOS-2009), 346,803 options
vested with eligible employees, 238,833 Equity Share options were
exercised leaving balance of 107,970 Equity Share options exercisable
at the end of the year and 92,270 Equity Share options lapsed during
the year while 877,147 Equity Share options were unvested at the end of
the year.
Method used for accounting for share based payment plan:
The Company has used intrinsic value method, which is the amount by
which quoted market price of the underlying shares exceeds the exercise
price of the Equity Share options, for accounting the compensation cost
of its options to employees of the Company on date of the grant. As the
Equity Share options under (ESOS-2008) were granted at the market
price, the intrinsic value of the Equity Share option was NIL. However
for Equity Share options under (ESOS-2009) the intrinsic value of such
options was Rs. 43.95.
Fair Value methodology:
The fair value of options used to compute ESOP adjusted net income and
earnings per Equity Shares have been estimated using Black Scholes
Option Pricing model as provided by independent consultants and relied
upon by the Management and the auditors.
14. During the year, the Company has subscribed 500 lac fully paid up
Equity Shares of Rs. 10/- each for cash at par of Aadhar Housing Finance
Private Limited. Aadhar Housing Finance Private Limited is a joint
venture between the Company, its subsidiary DHFL Vysya Housing Finance
Limited and International Finance Corporation (private sector arm of
World Bank) with shareholding of 50%, 30% and 20% respectively to
promote financing of low cost housing in rural and semi urban areas of
the selected states of the country.
15. During the year, the Company has promoted, subscribed and acquired
2,160.10 lac fully paid up Equity Shares of Rs. 10/- each for cash at par
of DHFL Holdings Private Limited, being 100% shares of the Company and
promoted as a Special Purpose Vehicle for acquiring and holding
21,99,45,206 Equity Shares of Rs. 10/- each fully paid up, representing
67.56% of the Equity of Deutsche Postbank Home Finance Limited by
investing Rs. 73,552.47 lacs.
16. During the year, a Company led consortium acquired 100% Equity
Share capital of Deutsche Postbank Home Finance Limited from BHW
Holding AG, Germany under a share purchase agreement whereby the
Company has acquired above shares through DHFL Holdings Private
Limited.
17. Unsecured Loans includes short term loans (Deposits and Commercial
Papers) due and payable within one year Rs. 34,299.13 lacs (Rs. 6,374.28
lacs).
18. During the year, the Company has utilized Rs. 2,949.52 lacs (Rs. 360
lacs) out of share premium account in accordance with Section 78 of the
Companies Act, 1956 towards premium payable on the redemption of Non
Convertible Redeemable Preference Shares of the Company.
19. Other income includes Rent income of Rs. 141.59 lacs (Rs. 117.77 lacs)
and Miscellaneous income of Rs. 47.20 lacs (Rs. 81.54 lacs).
21. The Company has sold during the year, 13,21,510 number of shares
being part of its strategic investment in erstwhile Promoter Group
Company for Rs. 3,585.77 lacs thereby earning exceptional tax free income
of Rs. 3,542.95 lacs.
22. The Company has created a Contingency Reserve of Rs. 3,500 lacs in
view of the above exceptional income to provide for future
contingencies.
23. As per Accounting Standard (AS 18) on "Related Party Disclosures"
details of transactions with related parties as defined therein are
given below:
A) List of related parties with whom transactions have taken place
during the year and relationship:
1) COMPANIES
(i) Subsidiary Companies
(a) DHFL Vysya Housing Finance Ltd.
(b) DHFL Property Services Ltd.
(c) DHFL Holdings Pvt. Ltd.
(d) Aadhar Housing Finance Pvt. Ltd.
(e) Deutsche Postbank Home Finance Ltd.
(f) DPB Financial Consultants Ltd.
(ii) Associate Companies
(a) DHFL Insurance Services Ltd.
(b) DHFL Venture Capital Fund ( Trust)
(c) DHFL Venture Capital India Pvt. Ltd.
(d) DHFL Venture Trustee Company Pvt. Ltd.
(e) Dish Hospitality Pvt. Ltd.
(f) Wadhawan Holdings Pvt. Ltd. [WHPL]
(g) Wadhawan Retail Pvt. Ltd.
(h) Wadhawan Housing Pvt. Ltd.
(i) Caledonia Investments Plc.
2) OTHERS
(a) Shri Dheeraj Wadhawan
(b) Smt. Aruna Wadhawan
(c) Smt. Pooja Wadhawan
3) KEY MANAGEMENT PERSONNEL
(a) Shri Kapil Wadhawan Chairman & Managing Director
(b) Shri Anil Sachidanand Chief Executive Officer
(c) Shri Rajeev Sathe Chief Operating Officer
24. The Company's Income Tax assessment has been completed up to
Assessment Year 2008-09. Additional demands of Rs. 195.84 lacs have been
raised by the department which are pending in appeal. The Company has
deposited additional tax so demanded which is pending in appeals. No
provision has been made as the Company has been advised that appeals
will be allowed, in due course of time, based on similar case laws on
the subject and there is no need to make any provision for the same and
refunds are expected to be received.
25. The Company has derecognized Interest income on Non-Performing
Assets as on 31st March, 2011 of Rs. 438.89 lacs (Rs. 610.33 lacs).
26. Dividend includes Rs. 161.22 lacs (Rs. 103.02 lacs) and Interest income
includes Rs. 58.17 lacs (NIL) received from Subsidiary Company. Interest
payment includes Rs. NIL (Rs. 40.21 lacs) paid to Subsidiary Company.
27. Provision for Taxation includes Rs. 6,460.89 lacs (Rs. 5,193.58 lacs)
provision for current year tax, and Rs. 1,170.45 lacs (Rs. - 43.58 lacs)
deferred tax liability for the year.
28. The main business of the Company is to provide loans for the
purchase or construction of residential houses and all other activities
of the Company revolve around the main business and as such there are
no separate reportable segments as specified in Accounting Standard (AS
17) on "Segment Reporting", and under paragraph 29 (2) of the Housing
Finance Companies (NHB) Directions, 2010, which needs to be reported.
29. Estimated amount of contracts remaining to be executed on capital
account and not provided for (net of advances) is Rs. 5,767.74 lacs (Rs.
5,557.99 lacs).
30. Capital Work in Progress includes Rs. 16,000.00 lacs paid as advance
consideration for acquiring office premises under construction, Rs.157.58
lacs paid for software and Rs.450.00 lacs paid in lieu of part
consideration towards sale of leasehold land in earlier years.
31. The Company has paid dividend of Rs. 659.36 lacs and Rs.112.06 lacs as
tax on distribution of dividend to new shareholders on account of final
dividend for the year 2009-10 as required under the Listing Agreement
as those shares were allotted prior to record date for the dividend
payment and after the date of earlier year Balance Sheet.
32. There is no amount due and payable to 'Suppliers' registered under
the Micro, Small and Medium Enterprises Development Act, 2006 at the
end of the year. No interest has been paid/is payable by the Company
during/for the year to these 'Suppliers'. The above information takes
into account only those suppliers who have responded to the inquiries
made by the Company for this purpose.
33. Figures for the previous year have been regrouped, rearranged and
reclassified wherever necessary. Accordingly, amounts and other
disclosure for the previous year are included as an integral part of
the current year's financial statement and are to be read in relation
to the amounts and other disclosures relating to the current year.
34. Figures in brackets represent previous year's figures.