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, 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 Shareholders’ 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 ‘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 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 ‘ESOS-2009, Plan II’ in 2009-10 and additional 12,34,670 equity share options were approved to be granted under ‘ESOS-2009, Plan III’ 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 (“DHFL ESAR 2015”). 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 ‘ESAR Scheme 2015 (Grant - I)’ 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 (“DHFL ESAR 2015”). 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 Company’s 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 - ‘Contingencies and Events Occurring after the Balance sheet date’ (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 Company’s 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 Company’s 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 HFC’s 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 (“NCDs”) 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 (“Prospectus”). The said NCDs were allotted on August 16, 2016.
b. 10,00,00,000 Secured Redeemable Non-Convertible Debentures (“NCDs”) 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 (“Prospectus”). 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 ‘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.
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 borrower’s life and thereby further secure the loan portfolio by way of risk mitigation method and to secure the Company’s 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 Hon’ble High Court of judicature at Bombay vide its Order dated 27 July, 2012 and by the Hon’ble 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. “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 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 (“DPLI”) in December, 2013. In order to unlock the value of Company’s 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 (“DIL”) 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 “Related Party Disclosures” details of transactions with related parties as defined therein are given below: I) List of related parties where control exists:
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:
- Money Market Hedge
- Rollover Contracts
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 year’s figures.