Your directors welcome the Shareholders and take pleasure in presenting
the 35th Annual Report together with the Audited Standalone and Consolidated Financial
Statements of the Company for the Financial Year ended March 31, 2023.
FINANCIAL RESULTS (CONSOLIDATED)
Capital Adequacy Ratio (CRAR)
The Capital Adequacy Ratio (CRAR) as on March 31, 2023 was 24.43%
(comprising Tier I capital of 22.40% and Tier II capital of 2.03%). The Reserve Bank of
India (RBI) has prescribed minimum CRAR of 15% of total risk weighted assets.
(Rs. in crorec)
Particulars |
March 31
2023 |
March 31 2022 |
Total Income |
6,529.66 |
6,200.73 |
Total expenditure |
5,168.75 |
5,116.77 |
Profit before tax |
1,360.91 |
1,083.96 |
Less: Provision for Tax |
|
|
- Current year |
87.78 |
249.15 |
- Deferred Tax |
227.13 |
(1.67) |
Profit After Tax |
1,046.00 |
836.48 |
Other Comprehensive income
(OCI) |
77.06 |
97.30 |
Total Comprehensive income for
the year |
1,123.06 |
933.78 |
Transfer to Statutory /
Special reserves |
212.00 |
165.00 |
Balance carried to balance
sheet |
911.06 |
768.78 |
The standalone and the consolidated financial statements for the
Financial Year ended March 31, 2023, forming part of this annual report, have been
prepared in accordance with Ind AS notified under section 133 of the Companies Act, 2013
(‘the Act') and other relevant provisions of the National Housing Bank Act, 1987
as amended from time to time, the Master Directions Non-Banking Financial
Company–Housing Finance Company (Reserve Bank) Directions, 2021 dated February
17, 2021 (‘RBI Directions') as amended from time to time and
the RBI circular DOR.CRE.REC. No.60/03.10.001/2021-22
dated October 22, 2021 on "Scale Based Regulation (SBR), a revised
regulatory framework for NBFCs.
The Net Interest Income for financial year 2023 stood at H2,345.54
crore as compared to H1,868.92 crore, registering an increase of 26% year on year. The Pre
provision Operating Profit increased by 24% to H2,052.19 crore from H1,660.32 crore.
The Credit cost including write offs for financial year 2023 was
H691.28 crore registering an increase of 20% year on year.
The Spread on loans for financial year 2023 stood at 2.81% as compared
to 2.12%. Net Interest Margin for financial year 2023 stood at 3.73% as compared to 2.80%.
Gross Margin, net of acquisition cost for financial year 2023, was at 4.06% as compared to
3.16%. Return on Assets for financial year
2023 was at 1.61% as compared to 1.24%. Return on Equity for financial
year 2023 was at 9.98% as compared to 8.92%.
During the year, the Company has transferred a sum of H45.00 crore to
Special Reserve and a sum of H167.00 crore to the Statutory Reserves.
DIVIDEND
In order to conserve capital, your directors have not recommended any
dividend for the year (Previous year nil). The dividend distribution policy is available
on the website of the Company and can be accessed at https://www.
pnbhousing.com/investor-relations/corporate-governance/.
RIGHTS ISSUE
The Board of Directors on March 9, 2022 had authorized the Company for
Rights Issue up to H2,500 crore. On March 28, 2023 the Board approved issue of 9,06,81,828
fully paid-up Equity Shares each for amount aggregating up to H2,493.76 crore. The Board
fixed issue price of H275 per fully paid-up Equity Share (including a premium of H265 per
Equity Share).
The Record date for Rights share eligibility was April 05, 2023. The
issue opened for subscription on April 13, 2023 and closed for subscription on April 27,
2023. The Board allotted 9,06,81,828 fully paid-up Equity Shares each for amount
aggregating up to H2,493.76 crore. Pursuant to the allotment, the paid-up equity share
capital of the Company has increased from H1,68,86,18,680 comprising of 16,88,61,868 fully
paid-up Equity Shares of H10 each to H2,59,54,36,960 comprising of 25,95,43,696 fully
paid-up Equity Shares of H10.
The promoter, PNB subscribed H498.75 crore as per RBI approval dated
June 2, 2022. Post Rights issue, promoter's shareholding in the Company is 28.15%
(32.52% as on March 31, 2023).
Your Board wish to thank all the shareholders for the good response to
the Rights issue, which was oversubscribed by around 1.21 times.
LENDING OPERATIONS
The Company is a Non-Banking Financial Company - Housing Finance
Company (NBFC-HFC) and is engaged in financing purchase and construction of residential
houses, loan against property and loan for other related purposes. All other activities
revolve around the main business.
During the year, the Company has sanctioned loans amounting to H23,564
crore in respect of 71,839 loan applications, as compared to H17,495 crore in respect to
57,360 loan applications in the previous year, growth of 25% in number of loan
applications sanctioned and 35% growth in loan sanctioned amount.
During the year, the Company has disbursed loans amounting to H14,965
crore as compared to H11,246 crore in the previous year, a growth of 33%.
During the year, the Company has accelerated growth with focus on
retail loans which contributed 99% of total
disbursements. The Company has built a separate affordable loan
vertical called ‘Roshni' with dedicated sales, credit, collection, and
operation. The target ticket size of a loan under Roshni is H15-17 lakh. The affordable
loan segment presence was expanded to 82 branches/outreaches in more than 150 districts.
This segment will be one of the focus areas going forward.
Company's digital onboarding platform ACE was enhanced for
improving distribution and customer experience. The Company has robust underwriting,
monitoring, collection and risk management practices.
Loan Assets
Loan Assets as on March 31, 2023 were H59,273 crore as compared to
H57,895 crore as on March 31, 2022 registering an increase of 2%. With focus on retail
segment, during the year, the Company's retail loan book has grown by 10% from
H50,520 crore to H55,471 crore, whereas the corporate loan book has declined by 48% from
H7,375 crore to H3,802 crore. The retail book constitutes around 94% of the Loan Assets as
on March 31, 2023.
The Assets Under Management (including securitized loan book) as on
March 31, 2023 were H66,617 crore as compared to H66,983 crore as at March 31, 2022, a
decline of 1% YoY.
Further details on lending operations are provided in the Management
Discussion and Analysis Report.
Asset Quality
The overall Gross Non-performing Assets (GNPAs), declined by 430 bps to
3.83% as on March 31, 2023 as compared to 8.13% as on March 31, 2022. The retail and
corporate GNPAs declined to 2.57% and 22.25% respectively as on March 31, 2023 as compared
to 3.89% and 37.13% respectively as on March 31, 2022.
The overall Net Non-performing Assets (NNPAs), declined to 2.76% as on
March 31, 2023 as compared to 5.06% as on March 31, 2022. The retail and corporate NNPAs
declined to 1.74%
and 18.24% respectively as on March 31, 2023 as compared to 2.85% and
20.21% respectively as on March 31, 2022.
The overall ECL provision coverage as on March 31, 2023 was 2.42%
(retail loans 1.74% and corporate loans 12.28%).
PMAY Subsidy
During the year, the Company disbursed subsidy under PMAY scheme in
11,424 accounts with a sanction value of H2,140.44 crore. The total subsidy transferred to
the beneficiary accounts amounted to H296 crore.
DISTRIBUTION
During the year, the Company expanded its branch network to 189
branches/outreaches (including 82 affordable loan branches/outreaches) an increase from
137 branches/
outreaches (including 24 affordable loan branches/outreaches)
as on March 31, 2022. Majority of new branches were opened in tier II
and tier III cities to expand affordable loan business.
The Company has 22 underwriting hubs for credit decision making.
BORROWINGS
The outstanding borrowings as on March 31, 2023 were H53,651 crore as
compared to H53,005 crore as on March 31, 2022. During the year, the Company has raised
fresh resources of H24,451 crore from multiple sources.
Details of market borrowings are provided in the Management Discussion
and Analysis Report and Notes to Accounts.
The Company is in compliance with the provisions of Chapter XI of RBI
Master Directions for issue of Non-Convertible Debentures on Private Placement basis. The
Company has been regular in payment of principal and interest on the Non- Convertible
Debentures.
DEPOSITS
The Company has accepted public deposits as per RBI Directions as
amended from time to time, erstwhile National Housing Bank Directions, 2010 and as per the
provisions of the Act. The Company has paid/accrued interest on all the outstanding
deposits on due dates. There has been no default on repayment of deposits or payment of
interest thereon during the year.
The outstanding deposits (including accrued interest) as on March 31,
2023 were H17,247.90 crore (including intercorporate deposits of H1,722.54 crore) as
against H17,687.05 crore (including inter-corporate deposits of H2,665.19 crore)
outstanding as on March 31 2022, registering a decline of 2%. The Company has raised
H6,068 crore of fresh deposits during the year.
The deposits of the Company have been rated AA (Outlook Stable) by
CRISIL and CARE AA (Outlook Stable) by CARE.
Investment in SLR
The Company has maintained its Statutory Liquid Ratio (SLR) as
stipulated under RBI Directions. The Company was having total SLR investments of H2,299.17
crore as on March 31, 2023. The Company has classified its SLR investments as per RBI
Directions.
Unclaimed Deposits and NCDs
Out of the deposits which became due for repayment up to March 31,
2023, deposits worth H29.94 crore, including interest accrued and due relating to 1,575
depositors had not been claimed or renewed. The Depositors have been intimated regarding
the maturity of their deposits with a
request to either renew or claim the deposits and subsequent reminders
have been sent.
Deposits remaining unclaimed for a period of seven years from the date
they became due for payment have to be transferred to Investor Education and Protection
Fund (IEPF) established by the Central Government under section 125
of the Act. During the year, the Company has transferred an amount of
H14.13 lakh to IEPF. The concerned depositors can claim the deposit from the IEPF.
During the year, there was no NCDs unpaid, remaining unclaimed after
its due date. The Company is not required to maintain debenture redemption reserve on
privately placed NCDs.
CREDIT RATING
During the year, ICRA, CRISIL and India Ratings upgraded the
Company's rating outlook to ‘Stable' from ‘Negative'. The Company
is rated AA ‘Stable' from all the major rating agencies i.e. CARE, CRISIL, ICRA
and India Ratings.
The credit rating on deposits, term loans, NCDs and commercial paper
and migration during the year is disclosed in the General Shareholder Information-
Annexure to Director's Report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT, REPORT OF THE DIRECTORS ON
CORPORATE GOVERNANCE AND BUSINESS RESPONSIBILITY REPORT
In accordance with the Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) and
directions issued by the Reserve Bank of India, the Management Discussion and Analysis
Report (MD&A) and the Report of the Directors on Corporate Governance form part of
this report.
In accordance with the Listing Regulations, Business Responsibility and
Sustainability Report (BRSR) also forms part of Annual Report.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The total amount allocated for CSR activities for financial year 2023
was H18.76 crore (including for PHFL Home Loans and Services Limited). Out of this, the
amount spent was H11.76 crore on various CSR activities. A sum of H7.00 crore was
transferred to Unspent CSR Account to carry out ongoing CSR activities.
Pehel Foundation (wholly owned subsidiary) is the implementation arm of
the Company for CSR activities along with other partnering agencies.
During the year, the Company focused on healthcare initiatives to
strengthen healthcare infrastructure across multiple locations, continued supporting
projects for the welfare of construction workers, enabling access to formal education by
strengthening school infrastructure, water conservation, livelihood generation for women
and persons with disability.
Healthcare: Strengthening of Primary Health Centers, infrastructure at
Community Health Centers, Eye Hospital, Govt. hospital for sick Newborn Care Unit,
Operation of mobile medical care units, ambulance operation etc.
Education: Setting e-learning infrastructure in Govt. schools, STEM
learning in Govt. schools, supported tribal school with digital learning, scholarship
programs for the underprivileged, smart anganwadis, PNB Housing Finance Ki Paathshaala- a
transformation project in Govt. School.
Environmental: Jal Khushhali, water conservation project, solar
electrification in Govt. schools, providing safe drinking water in villages, setting
community based sustainable drinking water systems, plastic waste management project.
Women Empowerment: Promoting women owned spice and snacks units,
setting sanitary napkin manufacturing units, skill development of artisans in carpet
sector, developed skill- based livelihoods of women.
The details are captured in Annexure 2 to Directors Report on CSR
activities.
HUMAN RESOURCE
As on March 31, 2023 the Company had 1,690 full time employees on its
rolls. There were 10 employees employed throughout the year, who were in receipt of
remuneration of H1.02 crore or more per annum or receipt of remuneration of H8.5 lakh or
more per month. The remuneration comprises salary, allowances, perquisites/ taxable value
of perquisites, excluding perquisite value of ESOPs exercised and ex- gratia amount.
In accordance with the provisions of Rule 5(2) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and
particulars of the top ten employees in terms of remuneration drawn and of the aforesaid
employees are set out in the annex to the Directors' report. In terms of the
provisions of Section 136(1) of the Act read with the rule, the Directors' report is
being sent to all Shareholders of the Company excluding the annexure. Any Shareholder
interested in obtaining a copy of the annexure may write to the Company.
Further, disclosures on managerial remuneration are provided in
Annexure 1 appended to the Directors' Report. On-boarding of key positions and vacant
positions at all levels across locations were made to ensure uninterrupted business
operations.
The Learning and Development (L&D) team implemented a learning
roadmap for employees on techno-functional and behavioural skills. The L&D team
provided physical as well as virtual learning interventions for existing employees and new
joinees.
Chief Financial Officer (CFO)
The Board appointed Mr Vinay Gupta as CFO with effect from October 26,
2022. Mr Kaushal Mithani was interim CFO from April 8, 2022 to August 23 2022 post
resignation of Mr Kapish Jain as CFO with effect from April 7, 2022.
Prevention, Prohibition and Redressal of Sexual Harassment of Women at
the Workplace
The Company has adopted a policy on prevention, prohibition and
redressal of sexual harassment at the workplace.
Members of the Internal Complaints Committee constituted by the Company
are responsible for reporting and conducting inquiries pertaining to such complaints.
The Company on a regular basis sensitises its employees including
subsidiary employees on the prevention of
sexual harassment at the workplace through workshops, group meetings,
online training modules and awareness programmes. During the year, one complaint was
received by the Committee, which is under investigation.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
Since the Company is a housing finance company, the disclosures
regarding particulars of the loans given, guarantees given and security provided is exempt
under the provisions of Section 186(11) of the Act. As regards, investments made by the
Company, the details of the same are provided in notes to the financial statements of the
Company for the year ended March 31, 2023.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
In accordance with the provisions of Section 188 of the Act and rules
made thereunder, the transactions with related parties are in the ordinary course of
business and on an arm's length pricing basis, the details of which are included in
the notes forming part of the financial statements. The particulars of contracts or
arrangements with related parties as prescribed in Form No. AOC–2 of the Companies
(Accounts) Rules, 2014, are annexed to this report. Details of related party transactions
are given in the Notes to Accounts. The Policy on Related Party Transactions is published
elsewhere in the Annual Report and is also placed on the Company's website at
https://www.pnbhousing.com/investor-relations/ corporate-governance/
PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND
FOREIGN EXCHANGE EARNINGS AND EXPENDITURE
There is no information to disclose under the head ‘Conservation
of Energy and Technology Absorption' given in the above rules since the Company is
engaged in providing housing loans. However, the Company understands the importance of
energy conservation for the environment and this is covered under Environment, Social and
Governance (ESG) section.
There were no foreign exchange earnings, and the Company has incurred
foreign exchange expenditure of H235.74
crore during the year primarily on account of interest on borrowings
from external sources.
Business Continuity
The Company has a Business Continuity Plan (BCP), designed to minimise
operational, financial, legal, reputational, and other material consequences arising from
a disaster.
The Business Continuity & Disaster Recovery policy at PNB Housing
Finance is developed with intent to prevent,
contain, and respond to potential disruptions that may impact the
continuity of business/support processes performed by PNB Housing Finance, along with
ensuring safety of PNB Housing Finance employees.
We have implemented multi-layered controls for identification,
prevention, detection, and response to various cyber
security threats we face today. We have applied safeguards for
protection of customer information. We have framed information security policy, cyber
security policy and cloud security policy to support information security management
system and to protect business information at network, endpoint, perimeter, application,
and human layer.
MAINTENANCE OF COST RECORDS
Being a housing finance company, the Company is not required to
maintain cost records as per sub-section (1) of Section 148 of the Act.
UNCLAIMED DIVIDEND
As on March 31, 2023, dividend amounting to H7.07 lakh had not been
claimed by Shareholders of the Company. The Company has been informing these Shareholders
to claim unclaimed dividend.
EMPLOYEES STOCK OPTION SCHEME & RSU SCHEME
During the year, 2,44,572 Equity Shares of H10 each were allotted on
exercise of ESOP options under ESOP Scheme 2016 and 2018. Further, 12,691 Equity Shares of
H10 each were allotted on exercise of RSUs under RSU Scheme 2020.
Grant of fresh ESOS & RSUs
During the year, the Nomination and Remuneration Committee has granted
14,78,559 ESOPs under ESOP Scheme 2016
and 2020.
(6,78,559 options were granted at H345.30, 25,000 options at H345.20,
5,75,000 options at H444.05 and 2,00,000 options at H431.20).
During the year, the Nomination and Remuneration Committee has granted
25,000 RSUs under RSU Scheme 2020 at H10 per option.
There has been no variation in the terms of the options granted under
any of these schemes and all the schemes are in compliance with the SEBI (Share Based
Employee Benefits and Sweat Equity) Regulations, 2021 as amended. The certificate from the
Secretarial Auditors confirming that ESOS Schemes have been implemented in accordance with
the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations,
2021 and Shareholder's resolutions has been obtained and will be
available for inspection of the Shareholders at the ensuing Annual General Meeting
(‘AGM'). The Nomination and Remuneration Committee monitors the compliance of
these Schemes. The disclosures as required under the regulations have been placed on the
website of the Company at https:// www.pnbhousing.com/investor-relations/updates-events/.
REGULATORY INTERVENTIONS
The RBI vide circular dated September 30, 2022 has classified PNB
Housing Finance in Upper Layer (NBFC-UL) category under Scale Based Regulation (SBR) for
NBFCs issued on October 22, 2021.
The Companies classified under NBFC-UL are required to implement a
comprehensive scale based regulatory
framework covering internal capital adequacy assessment process
(ICAAP), common equity Tier I, leverage, differential standard asset provisioning,
concentration of credit and investment, sensitive sector exposure, large exposure
framework, restriction on loans to directors, their relatives and senior officers,
enhanced disclosure in annual report, core financial services etc.
The RBI has issued following circulars under scale-based regulation
(SBR) for NBFC-UL in Financial year 2022.
Compliance function and role of Chief Compliance Officer (April 11),
restriction on loans and advances to directors and senior officers (April 19), capital
requirements (April 19), large exposure framework (April 19), disclosure in financial
statements-Notes to Accounts (April 19), compensation of KMPs and senior management (April
29) and provisioning for standard assets (June 06).
The Company has requisite policies in compliance with
NBFC-UL requirements and is in compliance with the various circulars
issued by RBI for NBFC-UL.
Regulatory Compliance
The Company has implemented RBI Directions as amended from time to time
and other directions/guidelines prescribed by RBI regarding deposit acceptance, accounting
standards, prudential norms for asset classification, income recognition, provisioning,
capital adequacy, credit rating, corporate governance, information technology framework,
fraud monitoring, concentration of investments, capital market exposure norms, guidelines
on maintenance of Liquidity Coverage Ratio (LCR), transfer of loans and know your customer
and anti-money laundering.
During the year, the Company has not made any application and no
proceeding is pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016). The
Company has not entered into one-time settlement for any loans availed from the Banks or
Financial Institutions.
POLICIES AND CODES
During the year, the Company has revised its policies as required in
terms of provisions of the Act, RBI Directions, Listing Regulations and Insider Trading
Regulations issued by the SEBI and placed all the statutory policies on its website at
https://www.pnbhousing.com/investor-relations/corporate- governance/
DIRECTORS
During the financial year, the Board on the recommendation of
Nomination and Remuneration Committee made the following appointments of Directors.
Mr. Atul Kumar Goel (DIN: 07266897) was appointed Non-Executive Nominee
Director with effect from April 28, 2022. The appointment was approved by the shareholders
in the 34th AGM on July 26, 2022. He is nominee of Punjab National Bank and is liable to
retire by rotation.
Mr. Girish Kousgi (DIN: 08524205) was appointed Managing Director &
CEO with effect from October 21, 2022. The appointment was approved by the shareholders
through postal ballot on December 22,
2022 for a term of 4 years effective October 21, 2022. He is not liable
to retire by rotation.
Mr. Pavan Kaushal (DIN: 07117387) was appointed Independent Director
with effect from October 27, 2022. The appointment was approved by the shareholders
through postal ballot on December 22, 2022 for a term of 3 years effective October 27,
2022. He is not liable to retire by rotation.
Mr. Dilip Kumar Jain (DIN: 06822012) was appointed Non-Executive
Nominee Director with effect from November 04, 2022. The appointment was approved by the
shareholders through postal ballot on December
22, 2022. He is nominee of Punjab National Bank and is liable to retire
by rotation.
During the year, following Directors have resigned from the Board or
completed their term.
Mr Ashwani Kumar Gupta (DIN 00108678) completed his five years term as
an Independent Director on
May 11, 2022.
Mr. Hardayal Prasad (DIN: 08024303) resigned as Managing Director &
CEO with effect from October 20, 2022.
Mr Binod Kumar (DIN 07361689) resigned as Non- Executive Director with
effect from October 21, 2022. He was nominee of Punjab National Bank.
Your Board wishes to place on record its sincere appreciation for the
contributions made by these directors on the Board and also on various Committees of the
Board.
In accordance with the provisions of the Act and Articles of
Association of the Company, Mr Sunil Kaul and Mr. Atul Kumar Goel will retire by rotation
at the ensuing AGM. They are eligible for re-appointment and your Board recommends their
re-appointment.
All the directors of the Company have confirmed that they satisfy the
fit and proper criteria as prescribed under the applicable regulations and that they are
not disqualified from being appointed as directors in terms of Section 164(2) of the Act.
The Company has also received a certificate from the Practising Company Secretary
confirming that none of the directors have been debarred or disqualified.
The Company has received necessary declaration from each Independent
Director under Section 149(7) of the Act that he/ she meets the criteria of Independence
laid down in the Act and Listing Regulations as amended.
The Board is of the opinion that the Independent Directors of the
Company possess requisite qualifications, experience, and expertise. All the Independent
Directors of the Company have registered their names with the data bank created for
Independent Directors.
The details on the number of Board/ Committee Meetings held are
provided in the Corporate Governance Report, which forms part of this report.
The evaluation of the Board, its committees and individual Directors
was carried out in terms of the provisions of the Act and Listing Regulations. (Refer
Corporate Governance Report).
STATUTORY AUDITORS
The Reserve Bank of India has issued Guidelines for Appointment of
Statutory Central Auditors (SCAs)/Statutory Auditors (SAs) of Commercial Banks (excluding
RRBs), UCBs and NBFCs (including HFCs) on April 27, 2022.
The Shareholders in the 33rd AGM have appointed M/s. T R Chadha &
Co, LLP, Chartered Accountants (ICAI Firm Registration No. 006711N/N500028) and M/s.
Singhi & Co.,
Chartered Accountants (ICAI Firm Registration No. 302049E) as the Joint
Statutory Auditors of the Company for a period of three years from the conclusion of 33rd
Annual General Meeting till the conclusion of the 36th AGM of the Company.
During the year, the Statutory Auditors were paid remuneration of H1.08
crore (The subsidiaries Statutory Auditor was paid remuneration of H0.09 crore). The
remuneration pertains to fees for audit, internal financial control reporting, limited
reviews, tax audits and taxation services, certifications and other matters and
reimbursement of expenses.
In addition, the Statutory Auditors were paid fees in relation to the
Rights Issue related services amounting to H0.65 crore (excluding applicable taxes).
During the year under review, the Statutory Auditors have not reported
any matter under Section 143 (12) of the Act. Therefore, no details are required to be
disclosed under Section 134 (3) (ca) of the Act.
The Statutory Auditors have confirmed that they continue to satisfy the
eligibility norms and independence criteria as prescribed by RBI guidelines and the
Companies Act, 2013.
SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of the Act, the Board has
appointed M/s Chandrasekaran Associates, a firm of Company Secretaries in practice, to
undertake the Secretarial Audit of the Company.
Secretarial Audit Report forms part to Directors Report as annexure.
The Secretarial Compliance Report forms part of the Annual Report.
During the year, the Company has complied with applicable Secretarial
Standards i.e. SS-1 and SS-2, relating to "Meetings of the Board of Directors"
and "General Meetings", respectively.
DIRECTORS' RESPONSIBILITY STATEMENT
In accordance with the provisions of Section 134(3)(c) of the Act and
based on the information provided by the management, your directors state that:
In the preparation of annual accounts, the applicable accounting
standards have been followed;
Accounting policies selected have been applied consistently. Reasonable
and prudent judgements and estimates have been made so as to give a true and fair view of
the state of affairs of the Company as on March 31, 2023 and of the profit of the Company
for the year ended on that date;
Proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the Act for safeguarding
the assets of the Company and for
preventing and detecting frauds and other irregularities;
The annual accounts of the Company have been prepared on a going
concern basis;
Internal financial controls have been laid down to be followed by the
Company and such internal financial controls are adequate and operating effectively; and
Systems to ensure compliance with the provisions of all applicable laws
are in place and were adequate and operating effectively.
INTERNAL FINANCIAL CONTROL
The Company has put in place adequate policies and procedures to ensure
that the system of internal financial control is commensurate with the size and nature of
the Company's business.
These systems provide a reasonable assurance in respect of providing
financial and operational information, complying with applicable statutes, safeguarding of
assets of the Company, prevention and detection of frauds, accuracy and
completeness of accounting records and ensuring compliance with
Company's policies.
EXTRACTS OF ANNUAL RETURN
The Annual Return in Form MGT-7 as on March 31, 2023 is available on
the website of the Company at https://www.
pnbhousing.com/investor-relations/annual-reports/.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS
During the year, there were no significant or material orders passed by
the regulators or courts or tribunals that would impact the going concern status or
operations of the Company in the future.
Settlement Order passed by SEBI
A settlement application was filed on Suo motto basis with SEBI on
January 17, 2022 on behalf of the Company and its directors, in terms of the SEBI
(Settlement Proceedings) Regulations, 2018 ("Settlement Regulations"), seeking
settlement of all the matters that may arise in connection with Preferential Issue of
Equity Shares for an aggregate amount of H4,000 crore, without admitting or denying the
findings
of fact or conclusions of law. Pursuant to completion of the
requirements under the Settlement Regulations, SEBI has notified a Settlement Order dated
July 18, 2022. The Company paid settlement amount of H72.76 lakh to SEBI including the
legal expenses of H44.27 lakh.
PARTICULARS OF CONTRACT OR ARRANGEMENTS ENTERED MATERIAL CHANGES,
DETAILS OF SUBSIDIARIES AND LITIGATIONS
There has been no material change or commitment, affecting the
financial position of the Company which has occurred between the close of the Financial
Year 2023 to which the financial statement relates and the date of the Report.
There has been no change in the nature of business of the Company.
PHFL Home Loans and Services Limited (PHFL)
PHFL is a wholly owned subsidiary and is the distribution arm for PNB
Housing Finance, offering doorstep services to the prospective customers. The Subsidiary
has trained workforce to source business for the loans and deposits offered by
PNB Housing Finance.
During the year, the PHFL has sourced loan applications in respect of
74% of total loans disbursed by PNB Housing Finance. The annual accounts of PHFL are
enclosed along with the Annual Accounts of PNB Housing Finance.
A report on the performance and financials of PHFL, as per Act and
rules made thereunder (the "Act") is provided in Form AOC - 1 attached to the
Consolidated Financial Statements forming an integral part of the Annual Report.
Pehel Foundation
It is a wholly owned non-profit subsidiary Company incorporated under
Section 8 of the Act. It is an implementation arm to carry out various CSR activities of
PNB Housing Finance and PHFL.
ACKNOWLEDGEMENTS
The Directors place on record their gratitude for the support of
various regulatory authorities including Reserve Bank
of India, National Housing Bank, Securities and Exchange Board of
India, Ministry of Housing and Urban Affairs, Ministry of Corporate Affairs, Registrar of
Companies, Financial Intelligence Unit (India), the Stock Exchanges and the Depositories.
The Company acknowledges the role of all its key stakeholders -
Shareholders, borrowers, channel partners, depositors, deposit agents, lenders and
Registrar for their continued support.
The Directors express their appreciation for the dedication and
commitment with which the employees of the Company at all levels have worked during the
period.
For and on behalf of the Board
Girish Kousgi Atul Kumar Goel
Managing Director & CEO Non-Executive Director
Place: New Delhi Date: June 22, 2023
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