00 Annual Report FY-2020 - Vastu Housing Finance

ANNUAL REPORT2019-2020

THE VASTU WAY!

SIMPLICITY SPEED HONESTY EXCELLENCE

CONTENTS

MESSAGE FROM THE CHAIRPERSON

MANAGING

DIRECTOR'S MESSAGE

MANAGEMENT

DISCUSSION & ANALYSISBRANCH DETAILS

BOARD REPORT SECRETARIAL AUDIT REPORT

INDEPENDENT AUDITORS’

REPORT & CONSOLIDATED

FINANCIAL STATEMENT

03 04

15 25

26 55

58 120INDEPENDENT AUDITORS’

REPORT & STANDALONE

FINANCIAL STATEMENT

Leveraging Vastu’s strong fundamentals around people,

technology, customer analytics, product and risk management,

your Company has successfully initiated its NBFC operations.

While the medium-to-long term plan is to launch multiple products

within the NBFC, the business has kicked off with the Commercial

Vehicle Financing product. In addition to the rich experience of the

founder team and senior management team, a separate team (with

years of experience in managing the product) has been identified to

support the new business line. A detailed plan has been put in

place to scale the NBFC operations in a measured way.

The year gone by has seen your Company excel at all its metrices,

despite an industry slowdown. Vastu’s AUM at the year-end stands

at close to INR 1,800 cr, representing a 32% growth over the

previous year. Post the year gone by, your Company has

cumulatively disbursed loans of around INR 2,340 cr in its lifetime.

This healthy growth is accompanied by strong asset quality and

return metrics – gross NPA of 0.33% as of March 31, 2020 and

return on assets of 4.5% for FY20. Your Company has been able to

navigate this difficult environment on the back of its diversified

geographical presence, prudent underwriting practices, strong

focus on collections, low leverage and a balanced asset-liability

position. Vastu’s credit rating stands re-affirmed at A/Stable from

CRISIL and ICRA, which is further testimony to your Company’s

performance and track record.

It gives me great pleasure to announce Vastu’s excellent results

during the year, despite a challenging economic backdrop of tepid

GDP growth, slow employment generation and low market liquidity.

In the current environment, your Company has actively focused on

sustaining its asset quality, ensuring Balance Sheet liquidity, and

maintaining its low operating cost base with continuous use of

technology. This approach has been made possible because of

your Company’s conscious investment behind technology, people,

and credit underwriting / monitoring processes.

ANNUAL REPORT 2019-2020

Vastu Housing Finance Corporation Limited |

Sincerely,

Renuka Ramnath

Overall, your Company has demonstrated its resilience in a difficult

period, as it continues its journey with an ambition to become a

dominant financial services institution in the future. I would like to

conclude by extending my heartfelt thanks to the entire team of

Vastu, our customers, regulators, lenders, board members, and

other stakeholders, without whose support all these initiatives and

achievements would not have been possible.

The end of the financial year saw the world experience an

unfortunate pandemic, which India has not been insulated from.

Nation-wide lockdown to prevent the spread of COVID-19 resulted

in disruption of not only your Company’s regular operations but also

the businesses of your Company’s customers. In such

unprecedented times, Vastu’s robust risk management &

governance practices, resilient Balance Sheet and quick response

have enabled it to tide the wave. In times of this disruption, your

Company has calibrated fresh disbursals in the short-term and re-

oriented its processes to focus on collections and customer

service. Leveraging technology, your Company has actively

engaged with all its customers to explain the implications of opting

for the RBI-mandated moratorium, in addition, to focus on recovery

/ support of high-risk customers. Vastu’s diversified geographical

presence, low LTV, highly granular book, diversified end-user

industry, low leverage, and comfortable liquidity position give it the

firepower to emerge stronger out of the pandemic.

Message from

The Chairperson

I am pleased to present this report, which details your Company’s

performance for the year ended March 31, 2020. During the year,

Vastu Housing Finance Corporation (“Vastu HFC” or “Company”)

continued to post robust results, even under difficult

macroeconomic and industry conditions.

Dear Shareholders,

Managing Director’s

MESSAGE



The PAT has increased 145% in FY 20 to 92.3 Crs from 38 crores

in FY 19

The total income has gone up 66% in FY 20 to 292.30 Crs from

176.16 Crs in FY 19

Our cumulative loan disbursements reached over 2350 crores as

of March 2020

The Assets Under Management has increased 32% in FY 20 to

1769 crores from 1335 crores in FY 19

The quality of the assets has been best in class and stands GNPA

of 0.33% (46 Accounts and PAR X of 1.51% (205 accounts)

Return on Assets (ROA) and Return on Equity in FY 20 is at 4.5%

and 11.2%

Over the last year, the Indian economy experienced a marked

slowdown, with GDP growing at a seven-year low of 5%. The year

was challenging for all sectors, more so for non-bank lenders, as

liquidity continued to remain a challenge post the crisis that started

in September 2018.

During the year despite a challenging external environment, we

took a calibrated approach and continued to grow new business.

We consciously slowed origination in a few markets where

economic challenges, market dislocation and customer distress

was eminent. We added 19 new locations in the year, taking our

branch count to 63 locations PAN India, we chose to tighten lending

norms in all existing markets basis our learnings, market trends.

Despite these measures, we were able to grow our AUM 32% year-

on-year to INR 1,769 Crore. Our ability to assess on-ground,

location-specific risk ahead of time and alter credit measures

accordingly has resulted in best-in-class asset quality. We closed

the year with Gross Non-Performing Assets (GNPA) at 0.33% and

Net Non-Performing Assets (NNPA) at 0.28%.

With each market downturn including that of demonetisation, GST

implementation and more recently an economic slowdown, the

Company has learnt, innovated, evolved and emerged victorious in

the aftermath. As I look back, I realise that robust business

fundamentals, operational agility and disciplined execution, strong

Risk Management and governance practices underscored by an

uncompromising value system puts the Company in a strong

position to achieve success and ensure sustenance. Since

inception, we have exercised prudence in our lending decisions,

functioning with a clear view on risk. We consciously stayed away

from builder originated loans, large ticket loans, opting to grow

sustainably with predictable manageable risk. It is these

fundamentals that have enabled us to build a highly granular,

entirely retail portfolio, backed mostly by complete owner-occupied

residential properties with low LTVs. This strong base, along with

strategic agility, will enable us to deliver predictable calibrated

growth with profitability and controls over operational, credit and

market risks.

Recognising the larger potential in retail lending in India, we

continued to invest in our key pillars of strength viz. people,

technology and franchise. Over the years, we have successfully

built a highly passionate team with in-depth domain knowledge,

credibility from experience, a predilection for innovation and most

importantly, integrity. We continued to nurture, grow and retain

talent through focussed training and development opportunities

and a culture that fosters openness, mutual respect, meritocracy

and trust. We also launched our Graduate Leadership Development

Program, the first of its kind in the housing finance space. The

program entailed a forty-day residential program getting incoming

young graduates ready to forge a career in housing finance. We

closed the year with a family of over 900 highly motivated

individuals, each of whom adds high value to the business.



It gives me immense pleasure when I see Vastu at the forefront of

technology-led innovation. We were among the first few lenders in

India to have established an end-to-end paperless loan process.

This year, we launched a variety of machine-learning and AI-

powered tools to assess the Risk reward and probability of default

on new loans. The launch has both bolstered and simplified our

underwriting process, reducing underwriter bias. With features

such as digital onboarding, audio and video underwriting, UPI

linked digital payments, automated scorecards, extensive real-time

dashboards and customer self-service capabilities; our platform

Pulse is a comprehensive platform on which cover every aspect of

Vastu’s business.

I am also pleased to share that we initiated operations in our Non-

Banking Finance Company (NBFC), Vastu Finserve, a wholly-

owned subsidiary of Vastu Housing Finance. In the year, we

launched the platform in 11 locations and onboarded the requisite

talent to scale across products such as SME loans, vehicle loans

and other consumer loans. We are certain that Vastu Finserve will

effectively complement our existing housing finance franchise, with

tremendous opportunities to be leveraged across secured and

unsecured retail credit products. The Company was possibly

amongst the earliest to get ratings reaffirmed from leading rating

agencies which is a testimony to the Company’s overall

performance and governance standards.

As I write this, the economic activity has been materially affected by

COVID 19 and the unavoidable lockdown implemented by the

government to limit the spread of Covid-19. Lockdown restrictions

have dampened demand, disrupted labour and supply chain.

Keeping the current external landscape in mind, during the year, we

held excess cash and liquid investments to secure the franchise

against any potential risks. As on March 31, 2020, we had INR 532

Crores of cash and cash equivalents, which enables us to meet all

medium-term obligations comfortably. Our strong reputation, robust

fundamentals and established relationship capital enabled us to

raise liabilities comfortably in the year. As on March 31, 2020, the

Company had outstanding liabilities of INR 1,292 Crore, with

participation from private sector banks, public sector banks, mutual

funds and National Housing Bank (NHB). Even as reasonably

priced liquidity posed a huge challenge to non-bank lenders, Vastu

reduced the cost of borrowings to 9.79%, against 10.08% in the

previous year. We continue to leverage our technology stack to

monitor cash flows daily, manage dues and conduct stress tests in

line with our stated risk policy. We have no exposure to short-term

debt instruments and maintained an ALM surplus across all buckets

on an actuarial basis.

On the whole, Vastu’s focus on operational excellence, high

productivity, technology-led execution, strong risk management

and governance systems, robust cost controls, and ROE discipline

have resulted in strong profitability metrics. In the year, we

achieved a Profit After Tax (PAT) of INR 92.25 Crore, representing

year-on-year growth of 145% and translating into a Return on

Assets (ROA) of 4.5%.

We continue to derive significant comfort from Vastu’s portfolio

fundamentals, by way of being highly diversified across

geographies, industries and customers. A large majority of our

exposures have been to essential service sectors or those that are

bound to see an early rebound. Furthermore, a low LTV provides

adequate room for recovery even in case of a significant decline in

property prices. I would also like to reiterate the Company’s strong

funding position, having over INR 500 Crores in liquid balances.

I believe the COVID challenge and resultant disruption will be a

largely metropolitan city phenomenon. Vastu’s business is beyond

the large urban agglomerations of India in semi-urban and rural

areas which may recover sooner than metropolitan / large cities.

We have built our franchise on a philosophy of exercising discipline

not only in bad times but also during the good times, and I am

certain that our efforts until this point secures the franchise to a

large extent.

We understand and acknowledge the enhanced credit risk that the

crisis has brought upon on in the market. Accordingly, we have

taken the necessary steps to tighten our credit policies and loan

appraisal processes. We proactively updated our entire data stack

and revised rule engines for our scorecards to account for the

stress.We are confident in our ability to grow the franchise

profitably while continuing to lend responsibly without diluting our

risk standards even under the current credit environment.

I take great pride in the agility that our platform was able to

demonstrate even as our offices became inaccessible under the

lockdown in March 2020. We continued to keep up our core value of

being highly customer-centric, ensuring round the clock customer

support, leveraging our technology-driven remote working

capabilities. Within, the first few days, we were able to seamlessly

reach out to our entire customer base to extend support and assess

signs of stress early on. We recognise that this is a difficult time for

one and all, including our employees. We ensured safety to our

employees, bringing in social distancing, work from home,

staggered shifts, increased sanitation and a ban on travel well

before any official mandate. True to our spirit, we continued to

uphold transparency by regularly engaging with employees to quell

any anxiety surrounding the impact of the crisis and communicating

key developments within the Company across the Board.

We are leveraging this opportunity to rethink legacy processes,

launch innovative new products, enhance our technology and

analytics stack further, and evaluate accretive capital buyouts.

I genuinely believe that our efforts to date will ensure the Company

comes out stronger while continuing to be fit for growth. While near

term challenges exist, the retail lending opportunity in India is

compelling, and I strongly believe that we are well poised to

harness the same. I would like to conclude by extending my sincere

appreciation to the entire team of Vastu, our customers, regulators,

lenders, the Board, and other stakeholders.

Sincerely,

Sandeep Menon



Highest Credit Rating

13500Up to FY-19

19862Up to FY-20

NPAAUM

44

63

Branches

Cumulative Disbursement

Net Profit

Capital Adequacy Ratio

528

858

Employees

7.49%

7.83%

NIM

FY Disbursement

A/Stable

Key Performance HIGHLIGHTS

1,600 Cr.

2,345 Cr.

37.65 Cr.

92.25 Cr.

1,336+ Cr.

1,769+ Cr.

0.09%

0.33%FY-20

FY-19

FY-20

83.28%

65.10%FY-20

FY-19

FY-19

FY-20

FY-19

FY-20

FY-19

FY-20

FY-19

FY-20

FY-19

Up to FY-20

Up to FY-19 761 Cr.FY-19

737 Cr. FY-20

16222

11977

FY-20

FY-19

Amount Number

Amount Number

Lakshmi and Ravikumar did not think that getting a home loan

could be much of a struggle. But they saw it all -right from instant

rejection to exorbitant pricing and extensive documentation.

Their experience made them think that the aspiration to build

their own home would always remain a distance dream

Lakshmi and her husband, Ravi Kumar moved to Bangalore

nearly 20 years back to forge a better future for themselves.

Lakshmi set up her beauty parlour business while her husband

set up a tailoring business. After some initial struggle, they saw

their clientele grow and business thrive. The only missing piece

was a home they could call their own.

Today, they have moved into their own home. It is close to their workplace and their children's school. Lakshmi says, there is a unique

satisfaction in living in your own home. This is missing when you're living on rent. This would not have been possible without Vastu's help.

Some months later, Ravikumar's friend recommended Vastu. Without much to lose, they made a visit to the branch and were extremely happy

with the staff's cooperation and the convenience in making the application. In no time, Lakshmi and Ravikumar got the requisite funding to

construct their own home.

I always wanted to build a house for my family. I went to several

banks for a home loan but they were asking for too many

documents.. Then a friend recommended Vastu. Vastu's process

was very convenient -I was serviced at my residence, the staff was

friendly, the documentation was easy. Infact, I did not have to

arrange for any photocopies. They took all details on their tab and

before I realised, I had my loan approved.

Devaraj K, the owner of Granite Business shop in bangalore had just

one dream of completing the construction of his dream house.

Today, he is all smiling as he sits proudly inside his completed

house. Devaraj story is tat of hope and persistence. He is pleased

with Vastu's service and intends to apply for a new loan too.

Aspirations we've fulfilled



Life at Vastu



GRADUATE LEADERSHIP DEVELOPMENT PROGRAM

FOCUS FY20

Emerging Leaders Conclave - FY20

Held a PAN India strategy meet for all the leaders at the branch

level to discuss the way forward for the business, current branch-

level issues, new initiatives, and process improvements. Over

200 leaders form all Vastu branches attended this meet and

deliberated on topics related to branch performance, business

expansion, alternate channels, credit process improvements,

incorporation of data science in decisioning, etc.

Vastu has always cultivated an open and transparent culture. In

line with our values, we ensure that our employees are aware of

our progress and participate in larger strategic decisions.

FOCUS, a PAN India connect aims to do just that! Spanning

discussions on business, team building and motivational

sessions, FOCUS beings together employees across all

markets to discuss our progress and future roadmap.

Vastu hosted its a Graduate Leadership Development program

in partnership with Pioneer Housing Finance Academy, a first in

the HFC space. This was a comprehensive forty-day residential

training program for young, talented graduates to kickstart a

career in BFSI. The program covered all facets of financial

services, with a focus on mortgages. The program was also

carefully designed to nurture soft skills, including stress

management, time management, communication, negotiation

and team building.

Events we've hosted

we hosted financial literacy camps in Surat, Jaipur and

Ahmedabad in support of Angikaar, a Ministry of Housing and

Urban Authority initiative. The camp aims at helping

beneficiaries under Pradhan Mantri Awas Yojna (PMAY) to

navigate changes that arise from moving into a pucca house,

across areas such as resource conservation, waste

management, sanitation etc. Through this initiative, we were

able to impact over 100 families.

FINANCIAL LITERACY CAMPS



Execution & Excellence Build seamless execution capabilities that

are nimble, innovative and responsive.

Reward and recognize excellence

Engaging & Inclusive Encourage ownership, promote enterprise,

drive energy and excitement. Build a culture

of boundaryless inclusive team work.

Ethical & Transparent

Be ethical and transparent in our interactions

with customers, employees and all stakeholders.

Externally Focused

& Customer Centric Focus on the ever changing market place.

Define success from the customer's stand point.

Values Drive Us



Renuka brings on board her deep experience of raising, investing and returning third

party capital across several economic cycles. She looks to build Multiples as a platform

to channelize long-term capital, to create valuable enterprises and successful

entrepreneurs. She draws motivation from the fact that supporting entrepreneurs to

build sustainable businesses has the potential to generate employment, to create ripple

effects in the Indian economy and to facilitate the greater process of nation building.

She has spent over three decades in the Indian financial services sector across private

equity, investment banking and structured finance. As one of the early private equity

investors in India, she played a pivotal role in shaping the market both in terms of

leading pioneering investments such as buy-outs as well as opening new pockets of

capital for investment in Indian private equity. In her last role as the MD & CEO of ICICI

Venture for close to a decade, she has contributed in many ways to the evolution of that

firm to one of the largest private equity funds in India.

Renuka holds a Bachelor’s degree in Engineering from VJTI, University of Mumbai and

an MBA from the University of Mumbai. She has also completed the AMP from the

Harvard Business School.

Ms. Renuka Ramnath joined the Company in July 2017 as a Director and became the

Chairperson & Nominee Director of the Company. She is also the Founder, Managing

Director & CEO of Multiples Alternate Asset Management Private Limited (“Multiples”).

BOARD OF DIRECTORS

Mr. Sudhir N. Variyar is a Nominee Director at Vastu, he joined Multiples Alternate Asset

Management in 2009 at inception. Sudhir has been in the private equity industry since

2005 and has a strong investment management track record.

At Multiples, Sudhir is one of the Investment Committee member. Sudhir is also on the

Board of Vikram Hospitals (Bengaluru) Private Limited.

Prior to Multiples, Sudhir was a Senior Director at ICICI Venture. In this capacity, Sudhir

led investments in the financial services and energy sectors and was part of the

Investment Committee at ICICI Venture.

Mr. Sudhir N. VariyarNon-Executive Nominee Director

Ms. Renuka RamnathChairperson & Nominee Director



For most part of his association and by virtue of his position he was involved with

promoters and founders in shaping the broader and long-term vision of the various

organizations.

He recently retired from the services of SR Batliboi LLP and works with certain

companies as a financial consultant. He was also associated with iconic companies

such as Infosys, Wipro and Dr. Reddy's Lab as Engagement Partner and by virtue of

which, he possesses deep insight into and understanding about the working of

Boards, Audit Committees, their roles, responsibilities in evolving and implementing

strategy, culture, branding and in setting the tone at the top through the

communication on policies and procedures of the organization. He has an expert

knowledge of the organization's business structure, policies and processes, risk

management and governance structures.

Mr. Natrajh Ramakrishna, Independent Director at Vastu, is a qualified chartered

accountant and a fellow member of the Institute of Chartered Accountants of India

with over 42 years of association across various professional services firms. Over his

extensive tenure, to name a few Mr. Natrajh held key positions such as the Country

Head of Audit at KPMG and RSM in addition to partner positions at EY and PwC.

Mr. Natrajh was a part of the Accounting Standards Board of the ICAI. He has been

speaking at public forums on matters of importance to the profession, lecturing on

Management Accounting and Taxation at some of the leading institutions offering

post graduate courses in Management Studies (and all affiliated to the Mumbai

University).

BOARD OF DIRECTORS

Mr. Natrajh RamakrishnaIndependent Director

Mr. Vijay Kumar is on the Board of the Company as an Independent Director since

January 2018.

Mr. Vijay Kumar has over 30 years of experience in the Banking and Information

Technology sectors. He worked with the NIIT Group from the year 2000 until August

2012. During this period, he was responsible for M&A and corporate finance activities of

NIIT and NIIT Technologies and was involved in several large transactions involving

acquisition and divestiture of companies, joint ventures, strategic alliances and

corporate restructuring.

Prior to the year 2000, he worked with the ICICI Group for over 15 years. He was

involved in various roles with project finance and investment banking. He advised

several companies across industries in equity and debt raising, M&A and corporate

structuring. His last position with the group was with ICICI Securities, as Head of

Investment Banking. Since August 2012, he was also associated as Advisor/Director,

with companies in the BPO, Media, and Private Equity areas, besides his role as a

consultant with NIIT Technologies. He is currently serving as an independent director

on several boards. He holds a B. Tech degree from IIT Delhi and an M.B.A from FMS,

University of Delhi.

Mr. Vijay KumarIndependent Director



Mr. Sandeep Menon is the Founder Managing Director and CEO at Vastu (post change

of ownership and control). He is a senior banker with over 23+ years of diverse

experience in General Management, Business Strategy and Risk Management with

various country level business leadership roles across Consumer Lending, SME

Lending, Home Loans, Personal Loans and Commercial Finance across leading

Foreign Banks and Financial Institutions such as GE Capital, Standard Chartered Bank

and Barclays Bank PLC.

He has built large lending business across secured and unsecured lending. Sandeep

was part of the founding team at Barclays Bank PLC in India as the Director and Head of

Retail Assets and Banking Strategy.

BOARD OF DIRECTORS

Mr. Sandeep MenonManaging Director & CEO

He has researched extensively on the emerging issue of convergence into Global

Accounting Standards called IFRS including transition, reporting and audit.

He is instrumental in rendering professional advice on International Tax issues

including DTAA application and Transfer Pricing. He is also an Independent director in

some Public and Private Limited companies in his professional capacity

Mr. Girija Shankar Nayak joined the Board of the Company as an Independent Director

on March 2, 2015. He is a Sr. Chartered Accountant and the Managing Partner at G S

Nayak & Co, Mumbai. He leads the Audit, Taxation and Bank Audit team.

Mr. Girija Shankar Nayak (effective till 29th April, 2020)

Independent Director

Mr. Rajasekhara Reddy, Non-Executive Independent Director at Vastu, has over 35

years of experience in the Banking sector. He is the former Chairman and Managing

Director of Andhra Bank, an Executive Director of Union Bank of India and a Chief

Executive at Bank of India, New York.

He worked on several committees of RBI and Indian Banks Association. He has varied

exposure in Rural and small & medium enterprises lending, NRI business, foreign

exchange, and cross-country products. He is a Strong man-manager, and team builder

with a firm belief that the leader should be a role model, and his actions should always

be transparent, consistent, and predictable. He is presently on the board of several

companies and also advises many companies on finance and management.

Mr. Rajasekhara Reddy is a Certified Associate of the Indian Institute of Bankers and

holds a Master degree in science from the University of Agricultural Sciences.Mr. Rajasekhara Reddy(with effect from 29th April, 2020)

Independent Director



Ms. Renuka Ramnath- Chairperson & Non-Executive Nominee Director

Mr. Sudhir Variyar -Non-Executive Nominee Director

Mr. Vijay Kumar-Independent Director

Mr. Sandeep Menon- Managing Director & CEO

Mr. Natrajh Ramakrishna - Independent Director

Mr. Rajasekhara Reddy - Independent Director (with effect from 29th April, 2020)

Corporate Information

Mr. Natrajh Ramakrishna- Chairman

Mr. Vijay Kumar- Member

Mr. Rajasekhara Reddy- Member

A

BAudit Committee

Mr. Sudhir Variyar- Chairman


Mr. Natrajh Ramakrishna- Member

Nomination & Remuneration Committee

Mr. Sandeep Menon- Member

Mr. Sudhir Variyar - Member


Risk Management Committee

Mr. Natrajh Ramakrishna- Member

Mr. Sujay Patil- Member

Mr. Sitaraman Swaminathan - Member

Mr. Rohith Balakrishnan - Member

Mr. Bharat Mehta - Member

Mr. Om Agarwal - Member

Corporate Social Responsibility Committee

Mr. Sandeep Menon - Chairman

Mr. Sudhir Variyar - Member

Mr. Vijay Kumar – Member

Asset Liability Committee

Mr. Sandeep Menon - Chairman

Mr. Sujay Patil - Member

Mr. Rohith Balakrishnan - Member

Mr. Srivatsan Bhaskaran - Member

Chief Financial Officer

Mr. Sujay Patil Unit 203 & 204, 2nd Floor, A Wing, Navbharat Estate,

Zakaria Bunder Road, Sewri (West), Mumbai - 400015

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C

Details of Committees

Board of Directors

Registered and Corporate Office

D

E

FStatutory Auditors

GInternal Auditors

Banks

HSecretarial Auditors

IDebenture Trustee

Mr. Girija Shankar Nayak - Independent Director (effective till 29th April, 2020)



Indian Economy – Overview and Outlook

The Indian economy between 2015-2019, was a growth champion

while successfully taming inflation and controlling its current account

deficit on the back of strong structural and policy reforms. The fiscal

year 2020, however, saw GDP growth fall to sub 5% levels, breaching

the 6% mark for the first time in seven years. The phenomenon that had

a significant bearing on the economy was the liquidity crisis among

non-Bank lenders, cascading down its impact to several sections of the

economy, including major manufacturers, ancillary industries and

MSMEs. In addition to the liquidity crunch, sluggish rural demand and

stress on the financial and real estate sectors also contributed to the

sluggish growth. At the same time, inflation measured by the

Consumer Price Index (CPI) rose to 7.4% in December 2019 from 3.3%

in the first half of 2019-20 on account of rising food prices.

On the external front, the economy was treading on a positive trajectory

with a reduction in the current account deficit at 1.5% of GDP. The

economy also saw strong inflows from Foreign Direct Investments

(FDI) and a rebound in Foreign Portfolio Investments (FPI) in the

second half of the year FY 20.

Against this backdrop, the Government and the Reserve Bank of India

(RBI) were seen taking proactive steps to revamp the financial sector,

address liquidity concerns among Non-Banking Financial Companies

(NBFC), reduce stress in the real estate sector and speed up resolution

under the Insolvency and Bankruptcy Code (IBC).

Even as a recovery in the Indian economy was gaining momentum, in

February 2020, an unexpected and sudden shock in the form of the

COVID-19 outbreak posed immense fresh challenges. Normal

business activity significantly slowed down in March 2020 as the

movement of people got affected. The Government rightfully had to

take urgent steps to mitigate the spread of the virus and announced

PAN India lockdown in March 2020 bringing all economic activity,

barring essential services to a virtual standstill.

A three-month moratorium on all instalments of outstanding balances

on term loans and working capital facilities for the period March 1,

2020, to May 31, 2020. RBI subsequently extended this moratorium by

three more months, till August 31, 2020.

An increase in the Marginal Standing Facility (MSF) to 3% of the

Statutory Liquidity Ratio (SLR) from 2% earlier

A 100 basis points cut in Cash Reserve Ratio (CRR) to 3% for one year

Auctions of Targeted Long-Term Repo Operations (TLTRO) of INR 1

Lakh Crore

A 75 basis points cut in repo rates from 5.15% to 4.40%

To deal with the economic dislocation, the Government announced a

slew of measures including cash transfers and food security measures

targeted at those in the bottom of the economic ladder. The Reserve

Bank of India (RBI) also announced liquidity and regulatory measures

across two relief packages, including:

Mortgage Finance Sector Overview

Auctions of TLTRO 2.0 for INR 50,000 Crore fund flow to Non

Banking Financial Companies (NBFCs), Microfinance Institutions

(MFIs) and Housing Finance Companies

The Finance Ministry also announced relaxations on dates with

respect to compliance return filings.

An INR 50,000 Crore refinance facility for institutions such as

National Bank for Agriculture and Rural Development (NABARD),

Small Industries Development Bank of India (SIDBI) and National

Housing Bank (NHB) for on-lending to Micro Small and Medium

Enterprises (MSMEs), NBFCs and MFIs

The Government announced a financial support package for MSME

sector to the tune of INR 3,00,000 Crore, under which the MSMEs

would be eligible for collateral-free financial facilities from lenders,

which would have the backing of the guarantee from the

Government.

The combined impact of the above measures is expected to partially

mitigate the adverse effect on the economy caused due to the onset

of the COVID 19 pandemic.

The mortgage loan penetration in India is currently at 10.30% of GDP

up from 7.8% in FY 14, is still one of the lowest in the world. As per

CRISIL, the same is expected to touch 13% by FY 2023, thereby

presenting a massive opportunity for growth. The mortgage industry,

pegged at INR 6.30 trillion in FY 12, has grown to INR 21 trillion by

Dec 2019, translating into a growth of around 16-17% per annum.

The overall mortgage market size was pegged at INR 21 Lakh Crore

as on December 31, 2019, growing 10% year on year. The slowdown

in mortgage credit growth is attributable to muted growth of 4%

among HFCs and NBFCs as liquidity constraints in the sector

continued to exert a drag on disbursal. On the other hand, banks

continued to grow at 19% versus 16% in the previous year, partly

supported by portfolio buyouts.

According to a recent study by ICRA, while the loan book growth of

the HFCs in affordable housing segment is likely to be in the range of

16-20 per cent in FY20 as the COVID-19-related lockdown impacted

business only during the last two weeks of March, however, the

growth numbers for FY21 could see a more pronounced impact.

That measure of this impact would depend on how the lenders

82.0%69.0% 63.0%

50.0% 45.0%36.0% 34.0% 31.0%

20.0% 18.0% 13.0% 10.3% 13.0%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

Mortgage to GDP Ratio (%)

MANAGEMENT DISCUSSION AND ANALYSIS

the time when the effect of the COVID 19 pandemic would be directly

felt on various sectors of the economy. In this period, the focus of the

lenders would be to reach out and engage with their existing borrowers

and re-assess the impact of COVID 19 on their business. Many

businesses did get impacted, and the operations had to slow down or

stop. In view of the above, the growth rate is expected to be slower in

H1FY21 and pick up gradually in H2FY21, when the economic

activities are again expected to rebound back.

In order to ease the economic burden from the pandemic, the RBI

announced two COVID-19 Regulatory Packages in March 2020 and

April 2020. The regulatory intervention which entails a three-month

moratorium initially and further extended by another three months, on

all dues on term loans between March 1, 2020, and May 31, 2020

(extended till August 31, 2020) is expected to provide good relief to

borrowers whose cash flows got impacted due to the business slowing

down. Furthermore, regulatory support in the form of an exclusion of

the moratorium period from the 90-day NPA classification and freezing

of delinquency buckets for delinquent customers as on February 29,

2020, will likely provide HFCs and NBFCs the required time to ensure

adequate recovery and avoid significant slippages.

Overall, the profitability of the HFCs in the affordable housing segment

would remain largely stable in FY20. However, given the pandemic

situation, the profitability indicators of HFCs could get impacted in

FY21.

In addition to this, the RBI also took various liquidity measures,

including the Targeted Long-Term Repo Operations (TLTRO) worth

INR 1 Lakh Crore for banks to on-lend to companies. These measures

would ease the liquidity situation in the market.

To ensure liquidity transmission to critical sectors such as MSMEs,

small and mid-sized NBFCs and HFCs and Microfinance Institutions

(MFIs), the RBI announced a second regulatory package. This entailed

the launch of TLTRO 2.0, where the RBI mandated deployment of

funds towards MSMEs, NBFCs, HFCs and MFIs. The RBI also

announced an INR 50,000 Crore refinance facility for on-lending to

HFCs, NBFCs, MFIs and MSMEs through National Bank for

Agriculture and Rural Development (NABARD), Small Industries

Development Bank of India (SIDBI) and National Housing Bank (NHB)

which will enable transmission of liquidity to these priority sectors.

Key Regulatory Changes for HFC:

Amendments to Capital Adequacy Requirements (CAR):

The National Housing Bank (NHB) vide its circular dated June 17,

2019, proposed for HFC to maintain a minimum capital ratio consisting

of Tier-I and Tier-II capital which shall not be less than-

(I) 13% on or before March 31, 2020

(ii) 14% on or before March 31, 2021; and

(iii) 15% on or before March 31, 2022, and thereafter

of its aggregate risk-weighted assets and risk-adjusted value of off-

balance sheet items. Further, the Tier-I capital, at any point of time,

shall not be less than 10%.

As on March 31, 2020, your Company's total CAR, calculated in line

with NHB regulations, stood at 65.10% well above the regulatory

minimum of 13.00 percent. Of this, Tier I CAR was 64.21%

a.

Disbursement of housing loan to individuals linked to the

stages of construction:

The NHB vide its circular dated July 19, 2019, advised HFC to desist

from offering loan products involving servicing of the loan dues by

builders, developers etc. on behalf of the borrowers and HFCs to

have in place a well-defined mechanism for effective monitoring of

the progress of construction of housing projects and obtaining the

consent of the borrower(s) before the release of payments to the

builder/developer.

Transfer of Regulation of Housing Finance Companies (HFCs)

to Reserve Bank of India:

The Reserve Bank of India (RBI) vide its circular dated August 13,

2019, directed that it will review the current regulatory framework

applicable to Housing Finance Companies (HFCs) following which it

will come out with revised regulations and HFCs will henceforth be

treated as one of the categories of non-banking financial companies

(NBFC) for regulatory purposes. In the meantime, HFCs shall

continue to comply with directions and instructions issued by the

National Housing Bank (NHB) till the RBI issues revised framework.

The Reserve Bank of India (RBI) issued COVID 19 – Regulatory

Package dated March 27, 2020, for all lending institutions to grant a

moratorium of three months on payment of all instalments falling due

between March 1, 2020, and May 31, 2020, which got further

extended by three months till August 31, 2020.

COVID19 Regulatory Package - Asset Classification and

Provisioning

The Reserve Bank of India vide notification dated November 19,

2019, rescinded its notification dated June 18, 1997, granting

exemption to housing finance companies from the provisions of

Chapter IIIB of the Reserve Bank of India Act, 1934 except its

application to section 45-IA of the said Act. Consequently, all the

provisions of Chapter IIIB of the RBI Act shall also apply to the

housing finance companies except Section 45-IA relating to the

requirement of registration and net owned fund of HFCs.

Withdrawal of exemptions granted to Housing Finance

Institutions:

Pursuant to the said circular and the extension thereof, the Company

has approved and adopted Policy on Moratorium ("COVID -19

Policy") effective from 30th March 2020.

In terms of on COVID 19 Regulatory Package, dated March 27,

2020, the Reserve Bank of India (RBI) on April 17, 2020, issued

guidelines on Asset Classification and Provisioning for all accounts

to be classified at the same level as per the position on February 29,

2020. The moratorium period, wherever granted, is allowed to be

excluded by the lending institutions from the computation of a

number of days past-due for asset classification in compliance with

the Indian Accounting Standards (IndAS).

RBI COVID-19 – Regulatory Package:

b.

c.

d.

e.

f.

Extension of due date for submission of various returns to the

Department of Supervision (DoS)

(I) All monthly returns, which will become due for submission up to

June 30, 2020, for a further period of 15 days from the prescribed

due date of submission of the returns respectively; and

(ii) All quarterly, half-yearly and annual returns, which will become due

for submission up to June 30, 2020, for a further period of 30 days

from the prescribed due to date of submission of the returns

respectively.

BUSINESS OVERVIEW

Vastu Housing Finance Corporation ("Vastu HFC" or 'The Company")

is a retail focussed, housing finance company serving financially

underserved middle-income segments in urban, semi-urban and rural

India since its change of management and control in July 2015. An

overwhelming proportion of Indians do not have access to formal credit

due to lack of adequate documentation, challenges faced in income

assessment or lack of long-standing credit history. The Company

works to bridge this gap using its comprehensive and innovative credit

evaluation mechanism that focuses on business cash flows and which

is suitably supported by an advanced technology and analytics

platform and has managed to bring affordable and reliable credit to the

doors to several Indian businesses. The methods of reaching out to the

customers, collecting documents and information for loans and

processing the loan application, are all the way backed by superior

technological support tools, that the Company has trained each

employee.

To redress the hardship faced by the Housing Finance Companies

(HFCs) due to the COVID19 pandemic, the National Housing Bank

vide it's circular dated April 02, 2020, extended the due date of:

The profit before tax of the Company for the year ended March 31,

2020, was INR 119.40 Crore in comparison to INR 56.25 Crore in the

previous year, representing a growth of 112%. The reported profit after

tax of the Company for the year ended March 31, 2020, was INR 92.25

Crore in comparison to INR 37.65 Crore in the previous year,

representing a growth of 145%.

The Company primarily offers two key products – housing loans and

mortgages. The Company's housing loan product is available for a

myriad of uses including the purchase of new residential properties,

construction of new residential properties and the renovation,

extension and repair of existing residential properties. In addition to

this, the Company also offers mortgages or loan against property on

existing housing and commercial units to finance the personal and

business needs of customers.

The Company reported robust income and profitability metrics in the

year under review.

The COVID 19 pandemic has posed several challenges to the

economy. Vastu is managing this challenge, by engaging its

employees to reach out to its existing customers to proactively assess

and understand their liquidity position in light of the pandemic, working

with customers and supporting them to get back to normalcy at the

earliest.

Financial Overview

PERFORMANCE REVIEW

Key elements of the statement of profit and loss for the year

ended March 31, 2020, are:

Operating expenses grew 3% year-on-year to INR 58.09 Crore. The

Operating expenses include exceptional items of expenses on

employee stock option scheme and corporate social responsibility

Net Income of the Company for the year ended March 31, 2020, was

INR 181.79 Crore in comparison to INR 117.59 Crore in the previous

year, representing a growth of 54.6%.

Net Interest Margin for the year stood at 7.8%, as against 7.5% in the

previous year. The Net Interest margin does not include the net gain

on derecognition of assigned loans.

Operating expense to income ratio stood at 32%, as against 47.9%

in the previous year.

Return on average net worth stood at 11.2%, as against 9.7% in the

previous year.

Return on average assets stood at 4.5%, as against 2.7% in the

previous year.

g.

Mar-20

INR Bn

22.67

18.71 4.09 13.36

8.87 17.70 16.84

21% 117% 32% 26%

Mar-19

Balance Sheet Net Worth AUM Loan Book

FY20 4.5% 11.2% 1.5x 32.0%

INR Bn

FY19 2.7% 9.7% 2.4x 47.9%

ROA ROE Leverage Cost toIncome

FY20 1,818 581 1195 923

INR Mn 54% 3% 128% 145%

OperatingIncome

1,176 563 563 377

OperatingExpenses

PBT PAT

FY19

FY20Audited

FY19Audited

INR Mn FY18Audited

FY17Audited

Net Worth

Borrowings

AUM

Cash & Liquid

investments

Operating Income

Operating Expenses

Provisions

PBT

PAT

ROA

ROE

D/E

Cost to Income

1,224

1,331

1,976

509

209

187

17

5

5

0.30%

0.50%

0.7

89.30%

3,670

4,753

7,258

2,052

744

431

38

275

196

3.20%

8.00%

1.3

57.90%

4,087

9,902

13,065

4,332

1176

563

50

563

377

2.70%

9.70%

2.4

47.90%

8,869

12,918

17,697

4,829

1818

581

43

1,194

922

4.47%

11.22%

1.5

31.96%

INR Mn

13.36

Share Capital

Liquidity, Investments and Cash Flow Management

The Company has focused on having strong cash and cash

equivalent reserves on its balance sheet. The investment philosophy

of the Company has been to focus on instruments and institutions

with high liquidity & safety. The investments of the Company has

predominantly been in Fixed Deposits issued by Banks and

Certificate of Deposits issued by leading deposit-taking HFCs and

NBFCs and liquid and overnight schemes of Mutual Funds.

The Company's borrowing mix as on March 31, 2020, is detailed

below:

During the year, the paid-up equity share capital increased as a

result of the Rights issue, whereby the Board allotted 1,64,13,347

equity shares on a rights basis on 26th April 2019 at an exercise price

of INR 230/- each. The paid-up equity share capital further increased

as a result of the allotment of 50,000 equity shares at face value of

INR 100/- each on 24th December 2019 upon exercise of stock

options under Core Management ESOP 2018 – Scheme 1. As at

March 31, 2020, the equity share capital stood at INR

5,18,45,52,700 divided into 5,18,45,527 equity shares of INR 100/-

each. The Company's net worth, including accumulated reserves

and surplus, stood at INR 886.92 Crores as on March 31, 2020.

Borrowings

The Company has a diversified lender mix, with participation from

banks, financial institutions, mutual funds and NHB. As on March 31,

2020, the Company had INR 1,292 Crores of debt on its balance

sheet, up 30% from the previous year. Despite tight liquidity

conditions, the Company managed to successfully raise INR 498

Crores in the financial year, from leading private banks, public sector

banks, financial institutions and NHB. The Company's cost of funds

also declined from 10.08% in FY19 to 9.79% in FY20.

The Company's capital adequacy ratio as of March 31, 2020, stood

at 65%, comfortably higher than the minimum requirement as stated

by NHB.

Funding

The Company has always focussed on maintaining adequate

liquidity, minimizing risk and ensuring capital is deployed

responsibly. Over the review period, the Company planned the

treasury activities well to ensure adequate liquidity required to

support its fast-growing business. Accordingly, the Company held

INR 532 Crores in cash, bank balances and liquid investments as on

March 31, 2020. Due to this planned approach to liquidity

management, the Company is well-poised not only to support its

growing business fully but also to emerge stronger (as compared

with its competitors in the affordable housing finance space), in the

post-pandemic period.

Mutual Funds28%

National u Ho singBank18%

Banks & Financial Institutions

54%

Borrowing Mix

Almost all housing units are residential and occupied by the borrower.

Majority property units are independent houses and are complete,

minimizing risk from exposure to underconstruction projects.

The Company's operations are geographically well-diversified across

operating locations, with none of the states contributing more than 20%

to the AUM.

Spread on Loans

Non-Performing Assets

The average yield on loan assets during the year was 15.30% per

annum. The average cost of borrowing was 9.79% per annum as

compared to 10.08% in the previous year. Accordingly, the Company

maintained a healthy spread of 5.51% on its loan assets.

Our cumulative loan disbursements reached over 2350 crores as of

March 2020

In its core business, the Company follows geography by geography

contiguous lending model. After extensive research, the Company has

identified geographies that offer a substantial opportunity to make an

impact, in line with its stated risk appetite. Over four years, the

Company has established a PAN India presence covering a sizable

proportion of the mortgage opportunity in India.

As on March 31, 2020, the Company operates out of 63 branches and

12 states namely Karnataka, Rajasthan, Delhi, Haryana, Gujarat,

Madhya Pradesh, Andhra Pradesh, Telangana, Tamil Nadu,

Maharashtra, Uttar Pradesh and Uttarakhand. The Company's

registered office is located in Mumbai, Maharashtra.

Operating Overview

Disbursements

In the year ended March 31, 2020, the Company disbursed a total of

INR 736.73 Crores in loans to 6,365 customers, as against INR 760.96

Crore to 6,315 customers in the previous year. The average sanction

size on loans disbursed in the year stood at INR 12.20 Lakhs. The

Company had taken a conscious decision to moderate volume growth

in FY 20 taking into account liquidity crisis triggered by a few large

lenders, availability of liquidity at a reasonable cost to HFCs and

NBFCs and slowdown in economic growth in FY20 making certain

groups across certain markets more vulnerable from a credit risk

perspective.

Assets Under Management

As of March 31, 2020, Assets Under Management (AUM) stood at INR

1,769 Crore (including an assignment of INR 78 Crore) as against INR

1,336 Crore the previous year representing a growth of 32%. The

Company's loan assets showed robust risk fundamentals, whereby:

100% of the loan book comprises of granular retail loans, having an

average ticket size of INR 12 Lakhs. The Company has no exposure to

any wholesale corporate or builder loans.

Branch Network

The Company's strong approach to risk, portfolio management and

collections have contributed to best-in-class asset quality metrics. The

Company posted a gross NPA 0.33% of loan assets as on March 31,

2020. Net NPA in the year stood at 0.28%.

Capital Adequacy Ratio

By way of a notification dated March 4, 2019, the National Housing

Bank (NHB) proposed an increase in capital adequacy norms for HFCs

from a minimum of 12% to 15% by March 2022. Accordingly, HFCs are

required to maintain a minimum capital adequacy ratio of 13% by

March 2020, 14% by March 2021 and 15% by March 2022.

effective date of such transition is April 1, 2018.

During the year, the Company sold individual loans amounting to Rs.

8,738.44 lakhs (Previous Year: Nil). As of March 31, 2020, individual

loans outstanding in respect of all loans assigned/securitized stood at

Rs. 7625.18 lakhs. Vastu continues to service these loans.

Transition to Indian Accounting Standards

The Ministry of Corporate Affairs vide its press release dated January

18, 2016, had issued directions for implementation of Indian

Accounting Standards (Ind AS) for the accounting period beginning

April 1, 2019, along with comparatives for the period beginning April 1,

2018. The National Housing Bank vide its circulars dated April 16,

2018, and June 14, 2018, had directed Housing Finance Companies

(HFCs) to comply with Ind AS as stated above.

Vastu HFC has historically maintained a prudent approach to liquidity

and cash management. The treasury team undertakes daily tracking of

the Company's liquidity and cash flow position, which is further

complemented by regular stress tests and scenario analysis

accounting for idiosyncratic or market-wide stress. The Company

regularly makes adjustments and undertakes remedial measures to

ensure its liquidity and solvency position is not compromised under any

situation.

The Company has prepared standalone and consolidated financial

statements for the year ended March 31, 2020, in accordance with Ind

AS for the first time. The Company has adopted Ind AS notified under

Section 133 of the Companies Act 2013 read with the Companies

(Indian Accounting Standards) Rules, 2015 from April 1, 2019, and the

Assignment /Sale of Loans

For the periods up to and including the year ended March 31, 2020,

the Company had prepared its financial statements in accordance

with the accounting standards notified under Section 133 of the

Companies Act, 2013, read together with paragraph 7 of the

Companies (Accounts) Rules, 2014, now referred as 'Previous

GAAP’

The Corporation has prepared its financial statements to comply with

Ind AS for the year ended March 31, 2020, together with comparative

information for the year ended March 31, 2019.

In preparing these financial statements, the Corporation's opening

balance sheet was made as of April 1, 2018, i.e. the transition date to

Ind AS for the Corporation. Accordingly, the impact of transition has

been recorded in the opening reserves as of April 1, 2018. The

corresponding figures presented in these results have been

prepared based on the previously published results under previous

GAAP for the relevant periods, duly re-stated to Ind AS. This Ind AS

adjustments has been audited by the statutory auditors.

The preparation of financial statements in accordance with Ind AS

requires the management to make estimates, judgements, and

assumptions. The application of accounting policies that require

critical accounting estimates involving complex and subjective

judgments and the use of assumptions in the financial statements

are also disclosed in the Notes to Accounts.

Detailed explanations capturing areas of differences and

reconciliations from previous GAAP to Ind AS have been provided in

the Notes to Accounts which form a part of the financial statements.

Reconciliation of total equity as at April 01, 2018, and March 31, 2019, and profit or loss for the year ended March 31, 2019:

Particulars

Equity Reconciliation Net profitReconciliation

Net profit / equity as per previous GAAP 3,765.33 39,853.17 1,317.25

IndAS Adjustments:

Provision for Expected Credit Loss e 142.83 253.66 110.83

Effective interest rate for financial assets and liabilities at amortised cost g -178.12 -505.28 -327.16

Reclassification of actuarial gains and losses on employee benefit

plans to other comprehensive income

j 9.95 8.86 -1.10

Fair value of financial assets c & f 8.20 8.20 -

Fair value of employee stock option i -667.41

-

-

Rent equalization and interest free deposit c & f -2.09

-4.81

-2.71

Reversal of deferred tax liability on special reserve h 337.44

510.37

172.93

Deferred tax impact on above 193.21

253.35

60.14

Total (155.99)

524.36

12.93

Net profit / equity for the year as per Ind AS 3,609.34 40,377.53

1,330.18

Other comprehensive income (net of tax) (9.95) -8.86

1.10

Total comprehensive income / equity as per Ind AS

3,599.39 40,368.67 1,331.28

(Rs. Lakhs)

Note No.As at

April 01, 2018As at

March 31, 2019Year ended

March 31, 2019

Impairment on Financial Instruments - Expected Credit Loss

Under Ind AS, asset classification and provisioning move from the 'rule-based', incurred loss model to the Expected Credit Loss (ECL) model ofproviding for expected future credit losses. Thus, loan loss provisions were made based on the Corporation's historical loss experience, and futureexpected credit loss, after factoring in various other parameters.

Under Ind AS, assets are classified into three stages:

Asset ClassificationAsset Classification DescriptionDescription

Stage 1Stage 1

Stage 3Stage 3

0-30 days past due loans – performing assets0-30 days past due loans – performing assets

>90 days past due loans – non-performing assets>90 days past due loans – non-performing assets

Stage 2Stage 2 31-90 days past due loans or assets with a significant increase in

credit risk – underperforming assets

31-90 days past due loans or assets with a significant increase in

credit risk – underperforming assets

Classification of Assets

Exposure at Default (EAD) As at March 31, 2019

Stage 1 98.45% 99.33%

(%)

As at March 31, 2020

Stage 2 1.21% 0.58%

Stage 3 0.34% 0.09% Total 100% 100%

Expected Credit Loss Based on Exposure at Default (EAD)

Particulars As at March 31, 2019

Gross Stage 3 574.40 118.67

(Rs. Lakhs)


ECL Stage 3 126.37 26.11

Net Stage 3 448.03 92.56

ECL as a % to EAD 0.60% 0.50%

Coverage Ratio % Stage 3 22% 22%

Gross Stage 1&2 1,67,858.86 1,33,483.89

ECL Stage 1& 2

ECL % Stage 1& 2

884.23 641.91

Net Stage 1& 2 1,66,974.63 1,32,841.98

*EAD includes financial guarantees

0.53% 0.48%

The total balance in the Impairment on Financial Instruments – Expected Credit Loss (provisions carried) as at March 31, 2020, amounted to

Rs. 1,010.60 lakhs. This is equivalent to 0.60% of the EAD. The balance in the Impairment on Financial Instruments – Expected Credit Loss

more than adequately covers loans where the installments were in arrears for over 90 days.

Credit Rating

The Company's robust technology and analytics-driven process, best-in-class asset quality, strong capitalization levels, prudent liquidity

management and execution capability of the leadership team have consistently garnered its credit upgrades over the last four years. The

table below summarizes the Credit Ratings assigned to the Company as on March 31, 2020:

Nature of Borrowing ICRABrickwork RatingsIndia Ratings & Research

Rating/Outlook

CRISIL Ratings

Bank Loan FacilityBank Loan Facility --BWR A/PositiveBWR A/PositiveIND A/StableIND A/StableCRISIL A/StableCRISIL A/Stable

Non-Convertible Debentures -BWR A/Positive-CRISIL A/Stable

Long Term Bank Lines [ICRA] A/Stable---

Technology and Analytics

Since its inception, Vastu HFC has proactively invested in building a state-of-the-art technology and analytics stack inhouse. The Company's

proprietory customizable modular platform, known as Pulse, has digitized the entire customer journey from sourcing till disbursement of loans,

leading to superior business outcomes and minimal disruptions. Vastu HFC is among the first mortgage players to have achieved an entirely

paperless process from sourcing till disbursement of the loans. Furthermore, all backend functions such as treasury, finance, compliance and

human resource management are also technology-driven providing speed, simplicity and robustness to process, besides ensuring data accuracy

and integrity.

In the year under review, the Company undertook a number of initiatives to hone technology and analytics capabilities. The same has been

detailed below:

Leveraged machine-learning to build out a scorecard capable of deriving default probability on new loans.

Strengthened verification capabilities through an integrated Karza for real-time online verification of customer documentation such as KYC,

Bills, ITR, Mobile etc

Launched a customer connect the app with a completely digital interface for customers to track loan metrics, make payments, understand

dues (if any) and raise service issues.

Enhanced digital payment capabilities through integration with payment wallets.

Launched a modular app to track real-time status on recovery and provide on-demand customer information to field agents to improve

customer efficiency

Launched a module for tracking under construction properties to provide real-time feedback on the progress of properties.

Launched a module to track the daily activities of field agents

As on March 31, 2020, the Company's headcount stood at 858.

Vastu HFC's success thus far is primarily attributable to its people. The Company's on-ground team comes with strong local and domain

knowledge, which, when backed by a highly talented and agile central team, creates a winning combination for success.

Since inception, the Company has fostered a unique culture of trust, ownership and empowerment, with accountability. The Company's

ethos promotes diversity, inclusiveness and focuses on driving a meritocratic culture where age or experience holds no bar to achievement

and reward. A vast majority of leaders in the Company are young, who aside from bringing zeal and enthusiasm to work, constantly

question the status quo in their strive for operational excellence.

Human Resources

The Company attaches significant importance to training and development, both classroom and digital, to build future leaders that can

protect and grow the franchise. Apart from regular internal training, the Company launched a Graduate Leadership Development program

in partnership with Pioneer Housing Finance Academy in FY2020, the first of its kind in the housing finance space. During a forty-day

residential program, identified young and talented individuals were mentored and trained on various aspects of financial services (with a

focus on mortgages) and softskill development before being inducted into the Company. Vastu HFC strongly believes in moulding leaders

of tomorrow and leaves no stone unturned in investing behind its vision for its people.

Risk Management

Risk is an integral part of the Company's business, and sound risk management is critical to the success of the organization. The Company

is exposed to various risks that are, particular to its operations, the environment it operates in and the economy at large. The Company has

identified and implemented comprehensive risk management policies and procedures to assess, monitor and manage risks throughout the

life cycle of the loan portfolio and across different functional verticals in the Company. The risk management process is continuously

reviewed on an ongoing basis, improved and adapted to the changing risk scenarios. The process of continuous evaluation of risks includes

bringing in a futuristic perspective that takes into consideration the evolution and build-out of business risks due to emerging economic

scenarios. Further, the risk management function also evaluates risks on an event-driven basis and issues suitable advisories to the

business for implementation on the ground.

The Risk Management oversight structure includes Committees of the Board and Senior Management Committees. The Company’s Board

of Directors has overall responsibility for the establishment and oversight of the risk management framework. The Board of Directors has

constituted several committees, including the Audit Committee, the Asset Liability Management Committee, Risk Management Committee

and defined their role for monitoring the risk management policies of the Company.

An overview of key risks and mitigants are as follows:

Risk Type Mitigant

The Company's credit risk is governed by a board-approved credit policy that details the approval

process and guidelines for monitoring and mitigating risk.

The possibility that borrowers will fail

to meet their payment obligations on

time

The inability to decipher accurate

collateral value or titles to the property

The inability to cope with dislocations

in the market

Loss from inadequate internal

processes, people, systems or

external events

Loss from inadequate internal

processes, people, systems or

external events

Risk of a breach of confidential and

proprietary data

Credit Risk

Collateral Risk

Market Risk

Operational Risk

Liquidity Risk

Cyber Risk

The credit appraisal is a structured and standardized process which encompasses a detailed

assessment of the borrower's current and emergent cash flows and financial commitments, nature of

industry and behaviour on past loans availed.

The Company, in partnership with an external agency, has developed a machine-learning driven

scorecard using traditional and alternate data points to derive default probability at the inception of the

loan.

Over a period of time, it is intended to use this machine-learning data to aid and facilitate a faster

decision-making process in credit underwriting in Vastu.

The Company has strong data science and analytics capabilities that allow for continuous and rigorous

monitoring of over-due accounts and for identifying early warning signs on the portfolio.

Detail review of Risk MIS, Portfolio quality reports, collection MIS, Data analytics report and various

other analytics and risk matrix are the cornerstones of Vastu's Risk Management which has been

certified as best in class and indicated by performance.

The Company also has a dedicated in-house collections team that actively engages with customers

to ensure mutual resolution of stressed accounts.

A sound network of professional vendors across the country to support the Company in its process

of collateral evaluation to mitigate property risk. This network consists of lawyers and valuation

agencies which operate under the close supervision of the local and Head Office teams of the

Company.

The Company's market risk management is guided by a host of comprehensive board-approved

policies that are benchmarked to the best industry practices.

The Company has a high level of consistency in its processes and controls.

The Company manages liquidity risk by maintaining sufficient cash and marketable securities and

by having access to funding through an adequate amount of committed credit lines for a sustainable

future even in the absence of inflows.

The Company has a robust governance structure in place to ensure effective security management.

The Company periodically tests all its IT infrastructure to identify and remedy security issues, if any.

The Company's treasury operations are entirely system-driven, lending standardization to the

process. The Company's cash flow and liquidity position are monitored daily to ensure robustness

in liquidity management.

All critical operational processes have been made amenable to technological platforms and are

hence standardized.

Internal audit overview subjects these operations to review on an ongoing basis. This approach has

enabled predictability of transactions, as a risk mitigant.

The Company conducts regular stress tests to monitor the business vulnerability to external

headwinds and takes appropriate corrective and preventive actions to ensure business resilience.

The Company has a board-approved business continuity plan in place in case of any market-related

halt to business operations

Every security that comes to Vastu as a part of its loan is evaluated thoroughly by the lawyers for a

clear title and inspected by a valuer for determination of the market value. These processes ensure

that there is adequate security cover available to Vastu during the process of lending.

Internal Control Systems and their Adequacy

Fixed Assets and Investment Properties

Compliance

Subsidiaries

Company Outlook

Vastu has put in place adequate internal control systems commensurate with the nature of its business and the size of its operations. 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 policies. Internal audit is carried out by independent firms of chartered accountants and cover all the offices and key

areas of business. All significant audit observations and follow up actions thereon are reported to the Audit Committee. The Audit Committee

comprises three independent directors.

Net fixed assets as at March 31, 2020, amounted to Rs. 812.78 lakhs. Additions to fixed assets during the year was Rs. 102.43 lakhs.

At Vastu HFC, we follow a policy of absolute compliance, regulatory or legal requirements, in both letter and spirit. The Company places

overarching importance to ensure compliance with all extant regulations and laws. The dedicated Compliance department strives to be at the

forefront of all regulatory changes, and it works in close quarters with the Company's business and operations teams to ensure absolute

compliance with all requirements.

Vastu Finserve, a wholly-owned subsidiary of Vastu HFC is a Non-Banking Financial Company (NBFC). The Company received its NBFC

license on April 22, 2019, and commenced its business in September 2019 and currently operates in the states of Maharashtra, Rajasthan

and Madhya Pradesh with an employee base of over 50 employees.

The dramatic spread of COVID-19 and associated lockdowns that started in March 2020 has disrupted lives, livelihood, communities and

business across India. Following the guidance given by international agencies and health care experts, the Company believes that

COVID-19 and its associated impact is here to stay over the next year.

Vastu Finserve currently provides backed collateral credit primarily to MSMEs. In FY2021, the Company has plans to add a host of

secured retail products primarily catering to the emerging low and middle-income segments in India that will effectively complement the

existing franchise with diversification, cross-sell opportunities and access to a larger opportunity pool with a strong focus on TATs and

employee productivity through technology and analytics.

Key highlights of Vastu Finserve for the year ended March 31, 2020, are as follows:

Asset Under Management INR 3.49 Crores

Profit Before Tax INR (1.98) Crores

Profit After Tax INR (1.95) Crores

Share Capital INR 52.50 Crores

Net worth INR 50.55 Crores

Credit Rating A/Stable

Vastu's commitment, disciplined execution, technology and analytics backed infrastructure and robust risk fundamentals hold the

Company in a strong position to tide over the present crisis. The Company's business model has shown high resilience against several

dislocations in the past, including demonetization, GST rollout, economic slowdown and the NBFC liquidity crisis. Key aspects that lend

comfort to tackle the present crisis on hand are as follows:

The Company's portfolio is 100% retail and highly granular, with an average ticket size of INR 12 Lakhs.

The Company focuses on the emergent low and middle-income groups (having an annual household income of INR 3 to 18 Lakhs). This

segment shows significantly higher resilience to income shocks in comparison to economically weaker sections (having annual

household income under INR 3 Lakhs).

The Company's exposure to under-construction builder-led projects is minimal, with over 90% of the book being backed by complete

self-occupied residential properties.

The Company has a high reliance on technology and paperless workflows which allows it to deliver services remotely with minimal need

for in-person interactions, which is the need of the hour.

The Company has adequate cash and bank balances, which even in the absence of any incremental borrowing or capital inflows is

sufficient to meet all-expense obligations for the next 12-18 months.

The Company's maintains low loan-to-value rations at an average of 37%, ensuring adequate margin for recovery in case of any changes

to the valuation of the collateral in the future.

The team is young, dynamic and agile with a high degree of comfort with technology, allowing for rapid adaption to a new normal, which

will mandate a higher degree of businesses having to be undertaken remotely.

The Company's management team has a strong execution track record in retail lending and have seen companies to success even

across stressed economic cycles.

The Company's shareholders come with superior expertise in their respective domains and are committed to guiding and supporting the

Company every step of the way.

As an organization, Vastu HFC will continue to maintain high service quality levels, ensure consistency and undertake recoverability.

While near term challenges exist, the Company firmly believes that retail housing finance in India is a multi-decade opportunity and

institutions that sustain the current downturn have a great opportunity to grow over the next 5 to 10 years. Vastu HFC, with its committed

team engrained in an efficient performance-oriented culture, strong liquidity position, sound technological platform and robust process

are well-poised to take on the challenges, emerge strong and grow in the years to come.

Cautionary Statement

Cautionary Statements made in the Management Discussion & Analysis describing the Company’s objectives, projections,estimates,

expectations may be “forward-looking statements” within the meaning of applicable laws & regulations. Actual results could differ from those

expressed or implied. Important factors that could make a difference to the Company’s operations include economic conditions affecting

demand supply and price conditions in the domestic & overseas markets in which the Company operates, changes in the government

regulations, tax laws & other statutes and other incidental factors.

Geographical FOOTPRINT

Madhya Pradesh

Maharashtra

Karnataka

Uttarakhand

Andhra Pradesh

Uttar Pradesh

Telangana

Gujarat

Rajasthan

Tamil Nadu

Delhi

Haryana

TOTAL BRANCHES

63

GUJARAT08

10

TAMILNADU

TELANGANA

UTTAR PRADESH

UTTARAKHAND03

02 DELHI

RAJASTHAN

08 MADHYA PRADESH

09 MAHARASHTRA

04 KARNATAKA

05

02

ANDHRA PRADESH07

04

BRANCHES

HARYANA01

tB

oard

's R

epor

VASTU HOUSING FINANCE CORPORATION LIMITED

BOARD’S REPORT

Dear Members,

1. STATE OF COMPANY’S AFFAIRS

FINANCIAL PERFORMANCE:

(Amount in INR in lakh)

Particulars

2019-20 2019-202018-19 2018-19

Your Directors are pleased to present the Sixteenth Annual Report on the business and operational performance of the Company together with

the Audited Financial Statements (Standalone and Consolidated), and the Reports of the Auditors for the financial year ended March 31, 2020.

The financial performance of your Company for the year ended March 31, 2020 is as summarized below:

Consolidated Standalone

Revenue from Operations 25,047.40 15,502.06 25,071.98 15,502.07

Other Income 4,182.44 2,114.34 4,320.60 2,119.75

Total Revenue

29,229.84

17,616.40 29,392.58

17,621.83

Profit before Finance Costs, Depreciation and Taxation

23,122,89

11,914.27 22,966.91

11,915.24

Less: Finance Costs 11,050.55

6,928.05 11,061.87

6,928.06

Less: Depreciation and amortization expenses 132.70

44.07 163.38

44.73

Profit Before Tax

11,939.66 4,942.15 11,741.66 4942.45

Less: Tax expense

2,714.85 1,332.82 2,712.09 1,332.97

Profit After Tax

9,224.81 3,609.34 9,029.56 3,609.48

2. OPERATIONAL HIGHLIGHTS:

3. BUSINESS OVERVIEW:

a. Income

b. Profit Before Tax

c. Profit after Tax

Particulars

2019-20 2019-202018-19 2018-19

Consolidated Standalone

Number of branches

63

44 74

44

Number of borrowers

6,365

6,315 6,398

6,315

Amount Sanctioned (INR in Lakh) 77,254.95

78,187.62 77,628.45

78,187.62

Amount disbursed (INR in Lakh)

Amount outstanding (INR in Lakh)

Your Company’s Standalone revenue from operations for the current year was INR 25,047.40 Lakh as compared to INR 15,502.06 Lakh in the

previous year.

Your Company’s Standalone Profit before tax for the current year was INR 11,939.66 Lakh as against INR 4,942.15 Lakh in the previous year.

Your Company’s Standalone Profit after tax for the current year was INR 9,224.81 Lakh as against INR 3,609.34 Lakh in the previous year.

As of March 31, 2020, Assets Under Management (AUM) stood at INR 1,769 Crore (including an assignment of INR 78 Crore) as against INR

1,336 Crores the previous year representing a growth of 32%. The Company's loan assets showed robust risk fundamentals, whereby:

73,673.86 76,096.13 74,026.36 76,096.13

1,76,943.72 1,33,601.30 1,77,293.2 1,33,601.30

Please refer to the Management Discussion and Analysis Report for more information on the Company’s Business Overview.

4. INDIAN ACCOUNTING STANDARDS (IND AS)

The Company has adopted Indian Accounting Standards (‘Ind AS’) notified under Section 133 of the Companies Act 2013 read with the

Companies (Indian Accounting Standards) Rules, 2015 from April 01, 2019 and the effective date of such transition is April 01, 2018. Such

transition has been carried out from the erstwhile Accounting Standards notified under the Companies Act, 2013, read with relevant rules issued

thereunder and guidelines issued by the National Housing Bank (‘NHB’) (collectively referred to as ‘the Previous GAAP’).

5. LOAN ASSETS

Assets Under Management


BOARD’S REPORT

Spread on Loans

6. ASSET QUALITY

7. BORROWINGS

100% of the loan book comprises of granular retail loans, having an average ticket size of INR 12 Lakhs. The Company has no exposure to any

wholesale corporate or builder loans.

Almost all housing units are residential and occupied by the borrower.

Majority property units are independent houses and are complete, minimizing risk from exposure to projects.under-construction

The Company's operations are geographically well-diversified across operating locations, with none of the states contributing more than 20%

to the AUM.

The average yield on loan assets during the year was 15.30% per annum. The average cost of borrowing was 9.79% per annum as compared to

10.08% in the previous year. Accordingly, the Company maintained a healthy spread of 5.51% on its loan assets.

The Company's strong approach to risk, portfolio management and collections have contributed to best-in-class asset quality metrics. The

Company posted a gross NPA 0.33% of loan assets as on March 31, 2020. Net NPA in the year stood at 0.28%.

8. RESOURCE MOBILISATION

Non-Convertible Debentures (NCDs) issued on a private placement basis

As on March 31, 2020, the Company’s outstanding Term Loans stood at INR 93,052.01 Lakh vis-à-vis INR 56,951.73 Lakh as on March 31, 2019.

The Company’s Bank Borrowings enjoy a rating of “A” Stable.

During the year under review, your Company has made early redemption of 500 Series B rated, secured, senior, redeemable, taxable,

transferable, listed, Non-Convertible Debentures of INR 10 Lakh each aggregating up to INR 5,000 Lakh allotted on October 26, 2018, bearing

ISIN INE459T07074.

During the period between March 31, 2020 and the date of this report, your Company has also made early redemption of 500 Series A rated,

secured, senior, redeemable, taxable, transferable, listed, Non-Convertible Debentures of INR 10 Lakh each aggregating up to INR 5,000 Lakh

allotted on August 27, 2018, bearing ISIN INE459T07066.

The Company has a diversified lender mix, with participation from banks, financial institutions, mutual funds and NHB. As on March 31, 2020, the

Company had INR 1,292 Crores of debt on its balance sheet, up 30% from the previous year. Despite tight liquidity conditions, the Company

managed to successfully raise INR 498 Crores in the financial year, from leading private banks, public sector banks, financial institutions and

NHB. The Company's cost of funds also declined from 10.08% in FY19 to 9.79% in FY20.

The Company's borrowing mix as on March 31, 2020, is detailed below:

Mutual Funds28%

National Housing Bank18%

Banks & Financial Institutions

54%

Borrowing Mix

Term Loans

As on March 31, 2020, the Company’s outstanding NCDs stood at INR 36,153.85, as compared to INR 41,923.08 as on March 31, 2019. During

the financial year under review, your Company has not issued any Non-Convertible Debentures.

During the financial year under review, the interest on Non-Convertible Debentures issued on a private placement basis was paid by the

Company on their respective due dates, and there were no instances of the interest amount which were claimed by the Investors or not paid by

the Company. Also, there was no amount in respect of the debentures remaining unclaimed or unpaid beyond the due date for redemption.


BOARD’S REPORT

Debenture Trustees

Refinance from National Housing Bank (NHB)

Credit Rating

Key Rating Commentaries from Rating Agencies:

CRISIL:

ICRA:

INDIA RATINGS & RESEARCH:

BRICKWORK:

9. AWARD AND RECOGNITION:

10. COVID-19:

rdMilestone Trusteeship Services Private Limited having its registered office at Co Works Worli, PS 56, 3 Floor, Birla Centurion, Pandurang

Budhkar Marg, Worli, Mumbai - 400 030 (Tel: 022-62886119) are acting as Debenture Trustee for NCDs issued by the Company on private

placement basis.

During the financial year under review, your Company has been granted a LIFt and refinance sanction amounting to INR 10,000 Lakh each,

by National Housing Bank (“NHB’) under the NHB’s refinancing schemes for Housing Finance Companies. The Outstanding borrowings

from NHB as at March 31, 2020 was INR 22,594.65 Lakh.

During the financial year under review, Credit Ratings assigned to the Company are as under:

The rating on the debt instruments and bank loan facilities of Vastu Housing continue to factor in healthy capitalization, with demonstrated

ability to raise capital, strong risk management systems and processes, and the extensive experience of the management in the retail

finance space. These strengths are partially offset by the small scale of operations. While the AUM remains small in the mortgage finance

industry, it remains a sizeable player in the overall pure-play affordable housing industry.

The Company benefits from the long-standing experience of the shareholders in the retail finance business across various retail asset

classes. Moreover, Vastu has a strong and experienced senior management team. With the oversight of the Board and the management,

ICRA expects the Company to grow its portfolio prudently.

The Company has been establishing the basic blocks for its business growth and will derive the benefits of operating leverage with an

increase in scale. The Company has strong systems and processes in comparison to its peers of the same size.

The positive outlook takes into account improvement in the Company’s operating and financial performance, equity infusion of INR

37,751 Lakh in FY 2019-20, and expectation of steady growth in the portfolio while maintaining the asset quality.

Your Company has won the "Best Workplace Culture Award 2019" in the event held by "Indian HR Summit & Awards, 2019" in Hyatt

Regency, Mumbai, in July 2019. This was awarded to the Company considering the core values of the organisation, passion and

self-motivation of all employees, rewards and recognition, freedom of expression, team bonding and unity, the work culture, the

openness, the trust and the team work. This award recognises the character and personality of your Company.

An unexpected and sudden shock in the form of the COVID-19 outbreak posed immense fresh challenges post Feb 2020. Normal

business activity significantly slowed down in March 2020 as the movement of people got affected. The Government rightfully had

to take urgent steps to mitigate the spread of the virus and announced PAN India lockdown in March 2020 bringing all economic

activity, barring essential services to a virtual standstill.

The rating continues to factor the strong and experienced management, healthy capitalization and comfortable asset quality.

Rating/Outlook

Bank Loan Facility

Non-Convertible Debentures

Long Term Bank Lines

CRISIL A/Stable

CRISIL A/Stable

-

IND A/Stable

-

-

BWR A/Positive

BWR A/Positive

-

-

-

[ICRA] A/Stable

Nature of Borrowing CRISIL Ratings India Ratings & Research Brickwork Ratings ICRA


BOARD’S REPORT

TRANSFER TO RESERVES:

The COVID challenge and resultant disruption will be a largely

metropolitan city phenomenon. Your Company's business is beyond

the large urban agglomerations of India in semi-urban and rural

areas, which may recover sooner than metropolitan / large cities. The

Company has built its franchise on a philosophy of exercising

discipline not only in bad times but also during the good times, and

that your efforts until this point secures the franchise to a large extent.

Vastu HFC, with its committed team engrained in an efficient

performance-oriented culture, strong liquidity position, sound

technological platform, and robust process is well-poised to take on

the challenges, emerge stronger and grow in the years to come.

DIVIDEND:

To deal with the economic dislocation, the Government announced a

slew of measures including cash transfers and food security

measures targeted at those in the bottom of the economic ladder. The

Reserve Bank of India (RBI) also announced liquidity and regulatory

measures across two relief packages.

To conserve resources, your Directors do not recommend any

dividend for the year under review.

During the financial year under review, your Company has

transferred INR 1,951.63 Lakh to the Statutory Reserve under

Section 29C of National Housing Bank (NHB) Act, 1987, out of the

amount available for appropriation.

REVISION OF FINANCIAL STATEMENTS:

There was no revision of Financial Statements during the year under

review.

DEMATERIALISATION OF SHARES & NON-CONVERTIBLE

DEBENTURES

The equity shares of the Company have been admitted for

dematerialisation by National Securities Depository Limited (NSDL)

with ISIN No. INE459T01010.

The Non-Convertible Debentures of the Company have been

admitted for dematerialisation by National Securities Depository

Limited (NSDL) with ISIN Nos. INE459T07025, INE459T07033,

INE459T07041, INE459T07058, INE459T07066, INE459T07074,

INE459T07082, INE459T07090.

CHANGE IN NATURE OF BUSINESS:

There was no change in the nature of the business of the Company.

MATERIAL CHANGES AND COMMITMENTS, AFFECTING THE

FINANCIAL POSITION OF THE COMPANY WHICH HAS

OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR &

THE DATE OF REPORT:

There are no material changes and commitments affecting the

financial position of your Company, which has occurred between the

end of the financial year of the Company, i.e., March 31, 2020, and

the date of this Board's Report, i.e., April 29, 2020.

SHARE CAPITAL:

During the year under review, the paid-up equity share capital increased as a result of the Rights issue, whereby your Company allotted 1,64,13,347 equity shares on rights basis on April 26, 2019, at an exercise price of INR 230/- each. The paid-up equity share capital further increased as a result of the allotment of 50,000 equity shares at face value of INR 100/- each on December 24, 2019, upon exercise of stock options under Core Management ESOP 2018 – Scheme 1. As at March 31, 2020, the equity share capital stood at INR 5,18,45,52,700 divided into 5,18,45,527 equity shares of INR 100/- each.

Share Capital structure of the Company as on March 31, 2020, is as follows:

11.

12.

13.

14.

15.

16.

17.

Authorised Capital:(Amount in INR Lakh)

10,00,00,000 Equity Shares of INR 100/- each 1,00,000.00

Issued, subscribed and paid-up Share Capital:

51,845.525,18,45,527 Equity Shares of INR 100/- each

The Company has neither issued sweat equity shares nor equity shares with differential rights as on March 31, 2020.

None of the Directors of the Company hold convertible instruments of the Company.

Capital Adequacy Ratio (CAR):

As on March 31, 2020, your Company's total CAR, calculated in line with NHB regulations, stood at 65.10% well above the regulatory minimum of 13.00 percent. Of this, Tier I CAR was 64.21%.

DETAILS OF HOLDING, SUBSIDIARY, ASSOCIATE, AND JOINT VENTURE COMPANIES:

Pursuant to Section 2(46) of the Companies Act, 2013, Plenty Private

Equity Fund I Limited is the Holding Company of the Company as it

holds 68.04% stake in the Company.

Pursuant to Section 2(87) of the Companies Act, 2013, Vastu Finserve

India Private Limited (“Finserve”) is a Wholly Owned Subsidiary of the

Company registered with Reserve Bank of India to carry out business

as a financial institution without accepting public deposits. Finserve

has received its NBFC license on April 22, 2019, and commenced its

business in September 2019 and currently operates in the states of

Maharashtra, Rajasthan, and Madhya Pradesh and has an employee

base of over 50 employees. Reporting on the highlights of

performance of Subsidiary, its contribution to the overall performance

of the Company during the period under report is provided in Form

AOC-1 (Statement containing the salient features of the financial

statements of subsidiaries/associate companies / joint ventures)

annexed herewith as “Annexure I.”

The Company did not have any Joint Venture or Associate Company,

and there were no companies which became or ceased to be the

Company’s Subsidiary, Joint Venture or Associate Company;

accordingly, reporting on the highlights of performance of Associates

and Joint Venture companies and their contribution to the overall

performance of the Company during the period under report, is not

required to be made.

18.


BOARD’S REPORT

Cessation

Mr. Ravikumar Hayagreeva Puranam (DIN: 00280010), Nominee

Director, and Mr. Samir Bhatia (DIN: 01769655), Non-Executive

Director of the Company, resigned from the Board w.e.f. December 31,

2019, and February 18, 2020, respectively, consequent to the

divestment of their shareholding in the Company.

As on the date of this Report, Mr. Rajasekhara Reddy (DIN: 02339668)

has been appointed as an Additional Director in the Independent

Capacity on the Board of the Company subject to members’ approval

at the ensuing Annual General Meeting (‘AGM’).

Based on the declarations and confirmations received in terms of the

provisions of Section 164 of the Companies Act 2013 and the NHB/RBI

Directions, none of the Directors on the Board of your Company are

disqualified from being appointed/continuing as Directors.

During the year under review, the following changes took place in the

Board of Directors of your Company:

The Company attaches significant importance to training and

development, both classroom and digital, to build future leaders that

can protect and grow the franchise. Apart from regular internal training,

the Company launched a Graduate Leadership Development program

in partnership with Pioneer Housing Finance Academy in FY2020, the

first of its kind in the housing finance space. During a forty-day

residential program, identified young and talented individuals were

mentored and trained on various aspects of financial services (with a

focus on mortgages) and soft-skill development before being inducted

into the Company. Vastu HFC strongly believes in moulding leaders of

tomorrow and leaves no stone unturned in investing behind its vision

for its people. The Company has offered Employees Stock Option

Schemes (ESOPs) to its key employees and for other high performing

mid-level employees.

As at March 31, 2020 your Company has Six (6) Directors consisting of

three (3) Independent Directors, two (2) Non-Executive Directors

including a Woman Director and one (1) Executive Director.

Since inception, the Company has fostered a unique culture of trust,

ownership and empowerment, with accountability. The Company's

ethos promotes diversity, inclusiveness and focuses on driving a

meritocratic culture where age or experience holds no bar to

achievement and reward. A vast majority of leaders in the Company

are young, who aside from bringing zeal and enthusiasm to work,

constantly question the status quo in their strive for operational

excellence.

As on March 31, 2020, the Company's headcount stood at 858.

Board of Directors

19. HUMAN RESOURCES

20. DIRECTORS AND KEY MANAGERIAL PERSONNEL:

As on the date of this report, Mr. Girija Shankar Nayak (DIN:

00138401), Independent Director, resigned from the Board.

Your Directors place on record their appreciation for valuable

contributions made by Mr. Ravikumar Hayagreeva Puranam, Mr.

Samir Bhatia, and Mr. Girija Shankar Nayak during their term as

Directors of the Company.

Director retiring by Rotation

In terms of Section 152(6) of the Act read with the Articles of

Association of the Company, Ms. Renuka Ramnath (DIN:

00147182), Nominee Director being longest in office, shall retire by

rotation and being eligible has offered herself for reappointment at

the ensuing Annual General Meeting of the Company. A brief profile

of Ms. Renuka Ramnath has been included in the notice convening

the ensuing Annual General Meeting of the Company.

Key Managerial Personnel (“KMP”)

Pursuant to the provisions of Section 203 of Companies Act, 2013,

Mr. Sandeep Menon (DIN: 02032154), Managing Director, Mr. Sujay

Patil, Chief Financial Officer, and Ms. Pallavi Bhambere, Company

Secretary are the Key Managerial Personnel of the Company as on

the date of this report.

As required under Section 149(7) of the Companies Act, 2013,

declarations were received from Mr. Vijay Kumar, Mr. Girija Shankar

Nayak and Mr. Natrajh Ramakrishna Independent Directors of the

Company confirming that they meet the criteria of independence as

specified in Section 149(6) of the Companies Act, 2013 for FY 2019-

20.

There was no change in the composition of the Key Managerial

Personnel during the year.

Policy on Nomination and Remuneration of Directors/ KMP/ Senior

Management has been formulated by the Nomination and

Remuneration Committee (NRC or the Committee). It has been

approved by the Board of Directors of the Company. The said policy

is for determining qualifications, positive attributes, and

independence of a Director, KMP, and Senior Management. Salient

features of the said policy are as follows:

21. STATEMENT ON DECLARATION GIVEN BY THE INDEPENDENT DIRECTORS:

22. POLICY ON NOMINATION AND REMUNERATION OF

DIRECTORS/KMP/SENIOR MANAGEMENT


BOARD’S REPORT

During the financial year under review, the National Housing Bank

("NHB") has issued various Notifications, Circulars, and Guidelines to

Housing Finance Companies.

The Policy on Nomination and Remuneration Of Directors/ KMP/

Senior Management is available on the website

As per the Reserve Bank of India (“RBI”) Press Release: 2019-

2020/419 dated August 13, 2019, Housing Finance Companies will

be treated as one of the categories of Non-Banking Financial

Companies (NBFCs) for regulatory purposes.

applicable statutory requirements.

Circulars and Notifications issued by NHB and RBI were also placed

before the Board of Directors at regular intervals to update the Board

members on compliance of the same. Your Company has adhered to

all the Circulars, Notifications, and Guidelines issued by NHB and

RBI from time to time.

Your Company is also in compliance with the provisions of the

Companies Act, 2013 including Secretarial Standards, SEBI (Listing

Obligations and Disclosure Requirements) Regulations, 2015,

Foreign Exchange Management (Transfer or Issue of Security by a

Person Resident Outside India) Regulations, 2017 and other

During the year, the Company has reviewed and revised statutory

policies as required in terms of provisions of Companies Act, 2013,

and guidelines issued by NHB from time to time and placed the

revised policies on its website at

https://www.vastuhfc.com/view/policies.

of the Company at https://www.vastuhfc.com/view/policies.

During the financial year under review, your Company adhered to all

Internal Guidelines on Corporate Governance in accordance with the

Housing Finance Companies-Corporate Governance (NHB)

Directions, 2016, which lay down the Corporate Governance

practices of the Policy. The said policy is available on the website of

the Company at https://www.vastuhfc.com/view/policies.

Appointment and Removal of Directors, KMP, and Senior

Management:

Evaluation/ Assessment of Directors/ KMP/ Senior Management

Remuneration to Non-Executive Directors and Executive Directors

Remuneration to the Key Managerial Personnel and Senior

Management

Stock Options

a.

b.

c.

d.

e.

As required under Section 134(3)(m) of the Companies Act, 2013

read with Rule 8(3) of the Companies (Accounts) Rules, 2014; the

Company lays great emphasis on saving the cost of energy

consumption. Therefore, effective measures have been taken to

check the loss of energy, as far as possible.

Your Company is registered as a non-deposit taking Housing

Finance Company with National Housing Bank and hence does not

accept any deposits. The Company has not accepted any deposits

under Section 73 of the Companies Act, 2013, and the Companies

(Acceptance of Deposits) Rules, 2014, during the year ended March

31, 2020.

During the financial year under review, the foreign exchange

earnings and out-go were as under:

(i) Foreign Exchange earnings– Nil

(ii) Foreign Exchange spent – Nil

Technology Absorption is not applicable to the Company as the

Company is carrying on the business of providing long term housing

finance and term loans for non-housing purposes.

23. REGULATORY AND STATUTORY COMPLIANCES:

24. POLICIES AND CODES

25. INTERNAL GUIDELINES ON CORPORATE GOVERNANCE

26. DEPOSITS:

27 . CONSERVATION OF ENER GY, R ESEAR CH AND

DEVELOPMENT, TECHNOLOGY ABSORPTION AND FOREIGN

EXCHANGE EARNINGS & OUTGOING:


BOARD’S REPORT

Requirements Disclosure

The ratio of the remuneration of each director to the median remuneration

of the employees for the financial year 2019-20.

The percentage increase in remuneration of each Director, Chief Financial

Officer, Chief Executive Officer and Company Secretary in the financial year

2019-20

The percentage increase in the median remuneration of employees in the

financial year 2019-20.

Average percentile increase already made in the salaries of employees

other than the managerial personnel in the last financial year and its

comparison with the percentile increase in the managerial remuneration and

justification thereof and point out if there are any exceptional circumstances

for increase in the managerial remuneration.

The number of permanent employees on the rolls of the Company.

Affirmation that the remuneration is as per the Nomination and Remuneration

Policy of the Company

858 (as on March 31, 2020)

It is hereby affirmed that the remuneration is as per the Nomination

and Remuneration Policy of the Company.

Executive Director

Executive Director

Mr. Sandeep Menon – Managing Director - 36.58X

Mr. Sandeep Menon – Managing Director – 7%

13.08%

The median percentage increase made in the salaries of employees

other than the Key Managerial Personnel was 13.7% while the

median increase in the salaries of the Key Managerial Personnel

was 8.03%. The increase in the remuneration is in line with the

Company’s Performance appraisal policy.

Key Managerial Personnel other than Directors

Mr. Sujay Patil – Chief Financial Officer – 10%

Ms. Pallavi Bhambere – Company Secretary – 10%

Non-Executive Directors

Ms. Renuka Ramnath – Nil

Mr. Sudhir Variyar – Nil

Mr. Samir Bhatia (till February 18, 2020) – Nil

Mr. Puranam Hayagreeva Ravikumar (till December 31, 2019)- Nil

Mr. Girija Shankar Nayak - Nil

Mr. Vijay Kumar – Nil

Mr. Natrajh Ramakrishna - Nil

Non-Executive Directors

Ms. Renuka Ramnath – Nil

Mr. Sudhir Variyar – Nil

Mr. Samir Bhatia (till February 18, 2020) – Nil

Mr. Puranam Hayagreeva Ravikumar (till December 31, 2019)- Nil

Mr. Girija Shankar Nayak - Nil

Mr. Vijay Kumar – Nil

Mr. Natrajh Ramakrishna - Nil

The statement containing particulars of employees as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(2) of the

Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of this report. However, as per the second proviso

to Section 136(1) of the Companies Act, 2013 and second proviso of Rule 5(3) of the Companies (Appointment and Remuneration of Managerial

Personnel) Rules, 2014, the Report and Financial Statements are being sent to the Members of the Company excluding the said statement. Any

Member interested in obtaining a copy of the said statement may write to the Company Secretary at the Registered Office of the Company.

The ratio of the remuneration of each director to the median remuneration of employees and other details in terms of Section 197(12) of the

Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is as follows:

DISCLOSURE AS TO REMUNERATION:28.


BOARD’S REPORT

29. DISCLOSURE OF EMPLOYEE STOCK OPTIONS

Name and Designation Options ExercisedOptions Granted Options Vested Exercise DateGrant Date

Mr. Sandeep Menon, Managing Director

Mr. Sujay Patil, Chief Financial Officer

Mr. Ravikumar Hayagreeva Puranam,

Non-Executive Nominee Director (till

December 31, 2019)

19.04.2018

19.04.2018

01.11.2018

01.11.2018

19.04.2018

7,50,000

2,50,000

1,00,000

2,50,000

50,000

6,00,000

2,00,000

40,000

1,00,000

50,000

-

-

-

-

19.12.2019

-

-

-

-

50,000

The Options granted under the CMESOP 2019 shall vest not earlier than the minimum period of 1 (one) year and in the following manner, and

depending upon an Exit Event, IRR Hurdle, and Pro-rata Percentage as per the terms and conditions stated in CMESOP 2019:

(a) Tranche A (time vested), 5,00,000 Options shall vest over a 4 (four) year period from the Rights Issue Subscription Date; and

During the year under review, the new ESOP Scheme “Core Management Employee Stock Option Plan 2019” (“CMESOP 2019”) has been

approved by the ESOP Committee of the Board of the Company subject to members’ approval at the ensuing Annual General Meeting (‘AGM’). As

per the CMESOP 2019, 10,00,000 ESOPs shall be granted to Mr. Sandeep Menon, Managing Director of the Company.

i. 50,000 ESOPs were allotted to Mr. Ravikumar Hayagreeva Puranam on December 24, 2019, and the same was transferred to Plenty Private

Equity Fund I Limited on December 26, 2019. Further, Mr. Ravikumar Hayagreeva Puranam has resigned from the Board effective from

December 31, 2019.

ii. Apart from the abovementioned Directors/ Key Managerial Personnel, remaining Directors/ Key Managerial Personnel have not been granted

any ESOP during the year under review.

(b) Tranche B 5,00,000 Options shall vest only upon the Exercise Conditions being met.

The Extract of Annual Return is also available on the website of the Company at https://www.vastuhfc.com/view/annual-report.

The Managing Director of the Company does not receive any remuneration or commission from the Holding and Subsidiary Company, and

accordingly, provisions of Section 197(14) of the Companies Act, 2013 are not applicable to the Company.

EXTRACT OF ANNUAL RETURN:

DISCLOSURE UNDER SECTION 197(14) OF THE COMPANIES ACT, 2013:

Pursuant to Rule 12 of the Companies (Share Capital and Debentures) Rules, 2014, the details of the Employees Stock Option Scheme for the

financial year ended March 31, 2020, are provided under Note No. 40 forming part of the audited financial statements for the year ended March 31,

2020.

Pursuant to Section 92(3) of the Companies Act, 2013, the Extract of Annual Return in Form MGT-9 for the financial year ended March 31, 2020, is

annexed herewith as ''Annexure-II."

30.

31.


BOARD’S REPORT

32. BOARD MEETINGS/GENERAL MEETINGS:

Annual General Meeting

held on August 09, 2019

Attendance

Board Meeting

Audit Committee Meetings held in

Member’s tenure

Board Meetings held

in Director’s tenureName of Director

Name of Member

1. Ms. Renuka Ramnath

1. Mr. Natrajh Ramakrishna

3. Mr. Sandeep Menon

3. Mr. Girija Shankar Nayak

4. Mr. G S Nayak

4. Mr. Vijay Kumar

4

3

4

4

4

4

4 (1 meeting attended through telecon)

4

4 (1 meeting attended through Video

Conference)

No


4 (1 meeting attended through Video Conference)

3 (1 meeting attended through telecon and 1 meeting

attended through Video Conference)

2. Mr. Puranam Hayagreeva

Ravikumar (till December 31, 2019)

2. Mr. Puranam Hayagreeva Ravikumar (till December 31, 2019)

3

3

2 Yes

2

5. Mr. Sudhir Variyar

6. Mr. Samir Bhatia

8. Mr. Natrajh Ramakrishna

As on March 31, 2020, the Audit Committee of the Company comprised the following members:

(a) Mr. Natrajh Ramakrishna - Independent Director

(b) Mr. Vijay Kumar –Independent Director

(c) Mr. Girija Shankar Nayak –Independent Director

The Audit Committee of the Company held 4 (Four) meetings during the financial year 2019-20 on April 26, 2019, July 31, 2019, October 22,

2019 and February 18, 2020 respectively. All the recommendations made by the Audit Committee to the Board during the year were accepted

by the Board of Directors. Mr. Natrajh Ramakrishna, Chairman of the Audit Committee, attended the Annual General Meeting held on August 09,

2019.

As on the date of this report, consequent to the resignation of Mr. Girija Shankar Nayak, Independent Director, the Audit Committee of the

Company was re-constituted comprised the following members:

(a) Mr. Natrajh Ramakrishna - Independent Director

(b) Mr. Vijay Kumar – Independent Director

(c) Mr. Rajasekhara Reddy – Additional Director in the Independent Capacity

Attendance of Committee members at Audit Committee Meetings:

4

4

4

4

3


7. Mr. Vijay Kumar 4 3(1 meeting attended through telecon and 1

meeting attended through Video Conference)

4 (Four) Board Meetings were held during the financial year 2019-20. The Company held a minimum of one board meeting in every quarter with

a gap of not exceeding 120 days (Maximum period permitted) between two consecutive board meetings. The details of which are given as under:

During the year, one general meeting took place in the form of Annual General Meeting on August 09, 2019.

Attendance of Directors at Board Meetings and General Meetings:

33. AUDIT COMMITTEE:

Number of days from previous Board MeetingQuarterBoard Meeting date

1. April 26, 2019

2. July 31, 2019

3. October 22, 2019

4. February 18, 2020

April - June

July - September

October - December

January - March

73

96

83

119

Yes

Yes

No

No

No

Yes


BOARD’S REPORT

34. NOMINATION AND REMUNERATION COMMITTEE:

Attendance

Attendance

Nomination and Remuneration

Committee Meetings held in

Member’s tenure

Corporate Social ResponsibilityCommittee Meetings held in

Member’s tenure

Name of Member

Name of Member

1. Mr. Puranam Hayagreeva Ravikumar

(till December 31, 2019)


2. Mr. Girija Shankar Nayak

2. Mr. Vijay Kumar


3. Mr. Sandeep Menon

4. Mr. Vijay Kumar

3

4

4

4

4

4

4

2

4

4 (1 meeting attended through Video Conference)

3 (1 meeting attended through telecon and 1 meeting

attended through Video Conference)

4

4

4 (1 meeting attended through telecon and 1

meeting attended through Video Conference)

The Corporate Social Responsibility Committee of the Company held 4 (Four) meetings during the financial year 2019-20 on April 26, 2019, July

31, 2019, October 22, 2019 and February 18, 2020 respectively. All the recommendations made by the Committee to the Board during the year

were accepted by the Board of Directors.

As on March 31, 2020, the Corporate Social Responsibility Committee of the Company comprised the following members:

Attendance of Committee members at Corporate Social Responsibility Committee Meetings:

(a) Mr. Sudhir Variyar - Nominee Director

(b) Mr. Vijay Kumar –Independent Director

(c) Mr. Sandeep Menon –Managing Director

In accordance with the provisions of Section 188 of the Companies Act, 2013 and rules made thereunder, the transactions entered with related

parties during the year were 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. Further, during the year under review, the Company had not entered into transactions with

related parties, which could be considered to be ‘material’ in accordance with the Related Party Transaction Policy of the Company.

The Policy on Related Party Transactions is available on the website of the Company at


As on March 31, 2020, the Nomination and Remuneration Committee of the Company comprised the following members:

(a) Mr. Sudhir Variyar - Nominee Director

(b) Mr. Natrajh Ramakrishna –Independent Director

(c) Mr. Vijay Kumar –Independent Director

(d) Mr. Girija Shankar Nayak –Independent Director

Attendance of Committee members at Nomination and Remuneration Committee Meetings:

The Nomination and Remuneration Committee of the Company held 3 (Three) meetings during the financial year 2019-20 on April 26, 2019,

October 22, 2019 and February 18, 2020 respectively. All the recommendations made by the Committee to the Board during the year were

accepted by the Board of Directors.

Mr. Natrajh Ramakrishna was inducted in the Nomination and Remuneration Committee, w.e.f. February 18, 2020.

35. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE:

36.RELATED PARTY TRANSACTIONS:


BOARD’S REPORT

Your Company engages with the services of M/s. Khimji Kunverji &

Co. LLP, Chartered Accountants, for checking the effectiveness of

internal financial controls as well as to carry out an internal audit. The

internal audit function independently scrutinizes audit areas based on

audit plans that are reviewed and approved by the Audit Committee.

These audit plans are formulated on the basis of a risk evaluation

exercise to determine the focus areas for review.

The Company’s CSR Policy is available on the website of the

Company at https://www.vastuhfc.com/view/policies.

The Company has also adopted an Internal Financial Control

framework in line with section 134(5)(e) of Companies Act, 2013 for

ensuring the orderly and efficient conduct of its business, including

adherence to Company’s policies, safeguarding of its assets,

prevention and detection of frauds and errors, accuracy and

completeness of the accounting records and timely preparation of

reliable financial information.

In terms of Section 135 of the Companies Act, 2013 read with the

Companies (Corporate Social Responsibility Policy) Rules, 2014,

your Company has undertaken various CSR projects in the areas of

Healthcare, Education, School Adoption, which are in accordance

with the Schedule VII of the Act and CSR Policy of the Company.

As the Company is a housing finance company, the disclosures

regarding particulars of the loans made, guarantee given, security

provided or any investment made is exempt under the provisions of

Section 186(11) of the Companies Act, 2013. Accordingly, the

particulars of loans, guarantee and investment have not been

provided in this report.

Remaining Non-Executive Directors do not receive any sitting fees

from the Company.

During the year under review, your Company has not given any

guarantee and inter-corporate loan to any other Company or Body

Corporate. As regards to investments made by the Company, the

details of the same are provided under Note No. 41 forming part of the

audited financial statements for the year ended March 31, 2020.

Details of the composition of the CSR Committee and the CSR Policy

have been provided in the Annual report on Corporate Social

Responsibility disclosed “Annexure IV,” which forms an integral part

of this Board’s Report.

During the year under review, sitting fees have been paid to Mr.

Puranam Hayagreeva Ravikumar and Mr. Girija Shankar Nayak for

the Board and Committee Meetings attended by them. Details of the

sitting fees have been provided in the Extract of annual return.

Your Company has proper and adequate systems, documented

policies, defined authority matrix, and internal controls to ensure the

efficiency of operations, compliance with internal systems/policies,

and applicable laws.

37. DETAILS OF TRANSACTIONS OF NON-EXECUTIVE

DIRECTORS WITH THE COMPANY:

38. PARTICULARS OF INVESTMENTS, LOANS AND

GUARANTEES UNDER SECTION 186:

39. CORPORATE SOCIAL RESPONSIBILITY:

40. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

Significant Internal Audit findings are periodically reviewed by the

Audit Committee and the Board and corrective action plans

suggested by them are implemented to strengthen internal controls

continuously. The main function of the Internal Auditors is to provide

to the Audit Committee and the Board of Directors, objective

assurance of the adequacy and effectiveness of the organization’s

risk management control and governance process. The Risk

Management Committee and the Audit Committee periodically

review various risks associated with the business of the Company

and ensure that they have an integrated view of risks faced by the

Company.

The Internal Audit Charter is disclosed as “Annexure III,” which

forms an integral part of this Board’s Report.

The Internal Audit Charter is available on the website of the

Company at https://www.vastuhfc.com/view/policies.

At the Annual General Meeting held on June 15, 2016, M/s. T. R.

Chadha & Co LLP, Chartered Accountants, (Firm Registration No.

006711N/N500028), were appointed as the Statutory Auditors of the

Company to hold office for a period of 5 consecutive years, i.e., till

the conclusion of the Annual General Meeting for the year ending on

March 31, 2021.

There are no amounts due and outstanding to be credited to the

Investor Education and Protection Fund as of March 31, 2020.

As per the provisions of the NHB Notification No. NHB.HFC.CG-

DIR.1/MD&CEO/2016, partner of the audit firm is being rotated

every three years.

The Statutory Auditors have not made any adverse comments or

given any qualification, reservation, or adverse remarks or

disclaimer in their Standalone and Consolidated Audit Reports on

the financial statements for FY 2019-20.

Also, the Statutory Auditors have not reported any instances of fraud

in the Company committed by officers or employees of the Company

to the Audit Committee under Section 143(12) of the Companies Act,

2013.

In accordance with Section 204 of the Companies Act, 2013 and

Rule 9 of the Companies (Appointment and Remuneration of

Managerial Personnel) Rules 2014, M/s. Pradeep Purwar &

Associates, Practicing Company Secretaries, were appointed as

Secretarial Auditors to conduct the Secretarial Audit of the Company

for the FY 2019-20. Your Company has provided all assistance and

information to the Secretarial Auditors for conducting their audit. The

Report of Secretarial Auditors in the prescribed Form MR-3 does not

contain any audit observations, and accordingly, explanations or

comments by the Board are not required to be provided.

Auditors’ Reports

41. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND

PROTECTION FUND:

42. STATUTORY AUDITORS:

43. SECRETARIAL AUDIT REPORT:


BOARD’S REPORT

The Company’s Board of Directors has overall responsibility for the

establishment and oversight of the risk management framework. The

Board of Directors has constituted several committees, including the

Audit Committee, the Asset Liability Management Committee, Risk

Management Committee and defined their role for monitoring the risk

management policies of the Company.

In terms of Section 177(9) and Section 177(10) of the Companies Act,

2013 read with the rules made thereunder, the Company has adopted

a Whistle Blower Policy and has established the necessary vigil

mechanism for Directors, employees and external stakeholders to

approach the Chairman of the Audit Committee of the Company and to

report genuine concerns about unethical behavior, actual or suspected

fraud or violation of the Company’s code of conduct and provide

adequate safeguards against victimization of Whistle Blower who

avails of such mechanism. None of the Whistle-Blowers have been

denied access to the Audit Committee. Whistle Blower Policy is

uploaded on the website of the Company at URL

Risk Management systems have been evaluated in detail and are

discussed at every Board meeting by the Risk Committee outside of

Board meeting. Detail review of Risk MIS, Portfolio quality reports,

collection MIS, Data analytics report and various other analytics and

risk matrix are the cornerstones of Vastu's Risk Management which

has been certified as best in class and indicated by performance.

This exercise was carried out through a structured questionnaire

prepared separately for Board, Committees, and individual Directors.

The questionnaire for Board evaluation was prepared taking into

consideration various aspects of the Board’s functioning such as

adequacy of the composition and role of the Board, Board meeting and

reporting process, the effectiveness of strategies, risk management

systems, external relationships, ethics and governance framework.

Committee performance was evaluated on the basis of its composition,

effectiveness in carrying out its mandate, relevance of its

recommendations and allocation of adequate time to fulfil its mandate.

Risk Management is an integral part of the Company's business

strategy with a focus on building risk management culture across the

organization. The Risk Management oversight structure includes

Committees of the Board and Senior Management Committees. Risk

Management Framework which lays down guidelines for Risk

identification, assessment and monitoring as an on-going process that

is supported by a robust risk reporting framework. It entails the

establishment of robust systems and processes within the Risk

Management Framework to mitigate risks effectively. Risk

Management at the Company covers Credit Risk, Market Risk,

Operational Risk, Fraud Risk and other risks, such as compliance risk,

reputation risk and other risks.


In terms of the provisions of the Companies Act, 2013, the Board at its

meeting held on April 29, 2020, carried out an annual evaluation on the

performance of the Board, that of its Committee(s) and individual

Directors including the Chairperson and expressed its satisfaction as

to their performance for the Financial Year 2019- 20.

44. RISK MANAGEMENT FRAMEWORK:

45. WHISTLEBLOWER POLICY (VIGIL MECHANISM)

46. EVALUATION OF PERFORMANCE OF BOARD, ITS

COMMITTEES, AND INDIVIDUAL DIRECTORS:

47. DIRECTORS’ RESPONSIBILITY STATEMENT PURSUANT TO

SECTION 134(5) OF THE COMPANIES ACT, 2013:

In terms of Section 134(5) of the Companies Act, 2013; the Directors

state to the best of their knowledge and belief and according to the

information and explanations obtained by them:

that in the preparation of the annual accounts the applicable

accounting standards have been followed and there were no material

departures;

that proper and sufficient care has been taken for the maintenance of

adequate accounting records in accordance with the provisions of the

Companies Act, 2013 for safeguarding the assets of the Company and

for preventing and detecting fraud and other irregularities;

that the annual accounts have been prepared on a ‘going concern’

basis;

that proper systems to ensure compliance with the provisions of all

applicable laws were in place and were adequate and operating

effectively; and

that appropriate accounting policies have been selected and applied

consistently, and Directors have made judgments and estimates that

are reasonable and prudent so as to give a true and fair view of the

state of affairs of the Company as at March 31, 2020 and of the profit of

the Company for that period;

that internal financial controls to be followed by the Company have

been laid down and that such internal financial controls are adequate

and operating effectively.

Details of a fixed component and performance-linked incentives

along with the performance criteria;

future.

Service contracts, notice period, severance fees: - N.A.

Stock option details, if any and whether the same has been issued

at a discount as well as the period over which accrued and over

which exercisable during FY 2019-20:

As per Schedule V of the Companies Act, 2013, details of the

remuneration of Mr. Sandeep Menon (DIN: 02032154), Managing

Director of the Company for FY 2019-20, are given hereunder:

One time Performance linked :INR 1,75,00,000/-

During the year under review, there have not been any significant and

material orders passed by the Regulators/Courts/Tribunals, which will

impact the going concern status and operations of the Company in the

Incentive for FY 2019-20

All elements of remuneration package such as salary, benefits,

bonuses, stock options, pension, etc., of all the directors;

INR1,87,25,000/-

Fixed Component :INR 1,87,25,000/-

48. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED

BY REGULATORS OR COURTS OR TRIBUNALS IMPACTING

THE GOING CONCERN STATUS AND THE COMPANY’S

OPERATIONS IN FUTURE:

49. CORPORATE GOVERNANCE:

(a)

(b)

(d)

(e)

(f)

(a)

(b)

(d)

c

c


BOARD’S REPORT

50. DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT,

2013 READ WITH RULES:

51. COST RECORDS:

52. LISTING WITH STOCK EXCHANGES

53. ACKNOWLEDGEMENTS:

Name and Designation Options ExercisedOptions Granted Options Vested Exercise DateGrant Date

Mr. Sandeep Menon, Managing Director 19.04.2018

01.11.2018

7,50,000

2,50,000

6,00,000

1,00,000

-

-

-

-

Pursuant to the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, the Company

has adopted a policy on prevention, prohibition and redressal of sexual harassment and a formal process for dealing with complaints of

harassment of and/or discrimination against women.

During the financial year under review, your Company has complied with provisions relating to the constitution of the Internal Complaints

Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Pursuant to the requirements of Section 22 of Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act 2013

read with Rules thereunder, the Internal Complaint Committee of the Company has not received any complaint of Sexual Harassment

during the financial year under review.

The following is a summary of Sexual Harassment complaints received and disposed off during the year 2019- 20:

No. of complaints received: Nil

No. of complaints disposed off: Nil

The Company is not required to make and maintain cost records pursuant to Section 148(1) of the Companies Act, 2013.

The Company is up-to-date in the payment of annual listing fees to Bombay Stock Exchange (BSE) on which its debentures are listed.

Your director's place on record thanks to the regulator National Housing Bank, stock exchange, the Company’s bankers, the Govt. Authorities,

Clients of the Company, Staff Members of the Company for extending valuable support to the Company.

Your Directors also gratefully acknowledge all stakeholders of the Company viz. customers, dealers, vendors, and other business partners for the

excellent support received from them during the year. Your involvement as a shareholder is also greatly valued.

ChairpersonManaging Director

(DIN00147182)(DIN02032154 )

sd/- sd/-

For and on behalf of the Board of Directors of Vastu Housing Finance Corporation Limited

ANNEXURE I TO THE BOARD’S REPORT

FORM AOC-1

as on the financial year ended on March 31, 2020

A statement containing the salient features of the financial statements of

subsidiaries/associate companies / joint ventures

Part “A”: Subsidiaries

Pursuant to the first proviso to sub-section (3) of section 129 read with rule 5 of the Companies (Accounts) Rules, 2014

a. Names of subsidiaries which are yet to commence operations: Nil

b. Names of subsidiaries which have been liquidated or sold during the year: Nil

Part “B”: - Associates and Joint Ventures:

Statement pursuant to Section 129(3) of the Companies Act, 2013 related to Associate Companies and Joint Ventures:

Since the Company does not have any Associate or Joint venture Company, the disclosure under this section is not applicable.

Particulars

1. Name of the Subsidiary

2. Date since when Subsidiary was acquired

3. The reporting period for the subsidiary concerned, if different from the holding Company’s reporting

period

4. Reporting Currency and Exchange rate as on the last date of the relevant Financial year in the case

of foreign subsidiaries.

5. Share capital (in INR)

6. Reserves & surplus (in INR)

7. Total assets (in INR)

12. Provision for taxation (in INR)

8. Total Liabilities (in INR)

13. Profit / (loss) after taxation (in INR)

9. Investments (in INR)

14. Proposed Dividend (in INR)

10. Turnover (in INR)

15. Extent of shareholding (in percentage)

11. Profit / (loss) before taxation (in INR)

16. contribution to the overall performance of the Company during the period under report

Vastu Finserve India Private Limited

September 28, 2018

-

-

52,50,00,000

(1,95,10,444)

52,68,66,258

(2,75,056)

52,68,66,258

(1,95,24,495)

46,40,17,538

1,60,66,719

100%

(1,97,99,551)

The Company has commenced its operations post receipt of NBFC license and has incurred losses on account of business setup manpowercost and incorporation expenses during the Financial Year 2019-20.


-

Renuka Ramnath Natrajh Ramakrishna Sandeep Menon

Chairperson Director Managing Director

(DIN00147182) (DIN06597041) (DIN02032154 )

Sujay Patil Pallavi Bhambere

Chief Financial Officer Company Secretary

sd/-

Date : April 29, 2020

Place : Mumbai

For and on behalf of the Board of Directors of Vastu Housing Finance Corporation Limited

sd/- sd/-

sd/- sd/-

ANNEXURE Il TO THE BOARD’S REPORT

EXTRACT OF ANNUAL RETURN

Form No. MGT-9

as on the financial year ended on March 31, 2020

1. REGISTRATION AND OTHER DETAILS:

[Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014]

2. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY:

3. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES:

All the business activities contributing 10 % or more of the total turnover of the Company shall be stated: -

CIN

Registration Date

Name of the Company

Category / Sub-Category of the Company

Address of the Registered Office and contact details


A company limited by shares/Indian Non-Government Company

Unit Nos. 203 & 204, 2nd Floor, A wing, Navbharat Estates, Zakaria Bunder Road,

Sewri (West) Mumbai, Maharashtra – 400 015

Phone: 022-2419 0911

Whether listed Company

Name, address and contact details of Registrar and

Transfer Agent, if any

U65922MH2005PLC272501

04/02/2005

Debt Listed Company

BigShare Services Private Limited

1st Floor, Bharat Tin Works Building, Opp. Vasant Oasis, Makwana

Road, Marol, Andheri East, Mumbai, Maharashtra - 400 059

Contact Person: Mr. Babu Rapheal

Tel No: 022- 6263 8200; Fax No: 022- 6263 8299

Email: [email protected]

Website: www.bigshareonline.com

% to the total turnover of the

Company

Applicable

Section% of shares

heldCIN / GLN

NIC Code of the Product/Service

Holding/ Subsidiary

/ Associate

Name and Description of the main Products / Services

Name and address of the Company

Financial intermediation except Insurance and Pension Funding

Plenty Private Equity Fund I Limited

Address: 1st Floor, 78 Saint Jean Road, Quatre-Bornes, Mauritius


Address: Unit Nos. 203 & 204, 2nd Floor,A wing, Navbharat

Estates, ZakariaBunder Road, Sewri, Mumbai - 400 015

64990

Holding

Subsidiary

NA

U65990MH2018

PTC314935

100.00

2(46)

2(87)

68.04

100


4. SHAREHOLDING PATTERN (Equity Share Capital Breakup as a percentage of Total Equity)

I.Category-wise Share Holding

A. Promoters

(1) Indian

- - - - - - ---

- - - - - - ---

- - - - - - ---

- - - - - - ---

- - - - - - ---

- - - - - - ---

- - - - - - ---

- - - - - - ---

- - - - - - ---

- - - - - - ---

- - - - - - ---

- - - - - - ---

- - - - - - ---

- - - - - - ---

- - - - - - ---

31,45,664 - 40,14,006 - 40,14,006 7.74 1.158.8931,45,664

2,72,90,421 3,20,000 4,49,37,437 3,20,000 4,52,57,437 87.29 -9.2678.032,76,10,421

2,61,283 - - - - - -0.742,61,283

33,01,510 - 19,24,552 - 19,24,552 3.71 4.898.6033,01,510

- - - - - - ---

- - - - - - ---

- - - - - - ---

- - - - - - ---

- - - - - - ---

- - - - - - ---

- - - - - - ---

- - - - - - ---

- - - - - - ---

a) Individual / HUF

b) Central Govt.

c) State Govt.(s)

d) Bodies Corporate

e) Banks / FI

f) Any Other….

Sub-Total (A) (1):

(2) Foreign

a) NRIs - Individuals

b) Other – Individuals

c) Bodies Corporate

d) Banks / FI

e) Any Other….

Sub-Total (A) (2):

Total Shareholding of

Promoters (A) =

(A)(1)+(A)(2)

B. Public Shareholdiang

(1) Institutions

a) Mutual Funds / UTI

b) Banks / FI

c) Central Govt.

d) State Govt.(s)

e) Venture Capital Funds

f) Insurance Companies

g) FIIs

h) Foreign Venture Capital

Funds

I) Others (specify)

a) Bodies Corporate

b) Individual

i) Indian

ii) Overseas

ii) Individual Shareholders

holding nominal share

capital in

i) Individual Shareholders

holding nominal share

capital upto Rs. 1 Lakh

Sub-Total (B)(1):

(2) Non-Institutions


BOARD’S REPORT

Category of

Shareholders

% of

Change

during

the year% of Total

Share

% of Total

ShareDemat DematPhysical PhysicalTotal Total

No. of Shares held at the end of the year

(31.03.2020)

No. of Shares held at the beginning of the year

(01.04.2019)

No. of Shares held at the end of the

year (31.03.2020)

No. of Shares held at the beginning

of the year (01.04.2019)Shareholders

Name

excess of Rs. 1Lakh

c) Other (Specify)

- - - - - - ---

-

-

-

At the beginning of the year (01.04.2019)

At the end of the year (31.03.2020)

-

Date wise Increase/Decrease in Promoters

Shareholding during the year specifying the

reasons for increase/decrease (e.g. allotment/

transfer/bonus/sweat equity etc.):

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

- - - - - - ---

3,50,62,180

3,50,62,180

3,50,62,180

3,20,000

3,20,000

3,20,000

5,15,25,527

5,15,25,527

5,15,25,527

3,20,000

3,20,000

3,20,000

5,18,45,527

5,18,45,527

5,18,45,527

100

100

100

-

-

-

100

100

100

3,53,82,180

3,53,82,180

3,53,82,180

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

10,63,302 - 6,49,532 - 6,49,532 1.25 1.763.0110,63,302

- - - - - - ---

- - - - - - ---

I) Non-Resident (Non-Rep)

lI) Non-Resident (Rep)

iii) Trust

iv) OCB

v) Clearing Members

Sub-Total (B)(2):

Total Public Shareholding

(B)= (B)(1) +(B)(2)

C. Shares held by

Custodian for GDRs &

ADRs

Grand Total(A+B+C)

ii. Shareholding of Promoters – Not Applicable

iii. Change in Promoters’ Shareholding - Not Applicable

% of the

change in

shareholding

during the year

% of total shares

of the Company

% of total shares of

the CompanyNo. of

Shares

No. of

Shares

% of Shares Pledged

/ encumbered to total

shares

% of Shares Pledged

/ encumbered to total

shares

Cumulative Shareholding during the year Shareholding at the beginning of the year

No. of SharesNo. of Shares % of total shares of

the Company

% of total shares of

the Company


BOARD’S REPORT

Category of

Shareholders

% of

Change

during

the year% of Total

Share

% of Total

ShareDemat DematPhysical PhysicalTotal Total

No. of Shares held at the end of the year

(31.03.2020)

No. of Shares held at the beginning of the year

(01.04.2019)

- - - - - - ---

Cumulative shareholding during

the year 01.04.2019 to 31.03.2020Shareholding

Name

2,72,90,421

3,52,73,730

77.13

68.04

-Allotment Transfer from Ms. MalavikaTiwari, Mr.PramodBhasin and Mr.Samir Bhatia jointlywith Ms.Neela Bhatia

Transfer from Mr.

Puranam Hayagreeva

Ravi Kumar jointly with

Ms. Namagiri

Ravikumar, Ms.

Neeraja Puranam

jointly with Mr. Omnath

Killekar and Mr. PR

Kalyanaraman jointly

with Ms. K. Jayalakshmi

Transfer from Mr.

Puranam Srikanth

jointly with Ms.

Ananthi Srikanth

Transfer from Mr.

Puranam Hayagreeva

Ravikumar jointly Ms.

with Namagiri Ravikumar

-

2,72,90,421

3,37,92,341

3,51,25,204

3,51,95,249

3,52,23,730

3,52,73,730

3,52,73,730

77.13

65.24

67.82

67.95

67.94

68.04

68.04

-

65,01,920

13,32,863

70,045

28,481

50,000

-

01.04.2019

26.04.2019

19.12.2019

20.12.2019

24.12.2019

26.12.2019

31.03.2020

Plenty

Private

Equity Fund

I Limited

Increase/

Decrease in

shareholding

% of total

shares of

the Company

No. of Shares at

the beginning

(01.04.2019) end of

the year (31.03.2020)

ReasonDateNo. of shares % of total shares

of the Compa ny

iv. Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs):


BOARD’S REPORT

1.

2.

Plenty CI

Fund I Limited

(w.e.f. April 26,

2019)

- - 01.04.2019 - -

26.04.2019 89,62,173 Allotment 89,62,173 17.30

19.12.2019 6,28,245 Transfer from

Mr. Vikram Gandhi and

Mr. Samir Bhatia jointly

with Ms. Neela Bhatia

95,90,418 18.52

24.12.2019 73,289 Transfer from

Mr. Puranam Srikanth

jointly with

Ms. Ananthi Srikanth

96,63,707 18.64

96,63,707 18.64 31.03.2020 96,63,707 18.64

3.

30,45,664 8.61 01.04.2019 30,45,664 8.61

26.04.2019 6,64,310 Allotment 37,09,974 7.16

Multiples

Private Equity

Fund II LLP

19.12.2019 1,32,466Transfer from

Mr. Samir Bhatia jointly

with Ms. Neela Bhatia

38,42,440 7.42


BOARD’S REPORT

Cumulative shareholding during the

year 01.04.2019 to 31.03.2020Shareholding

Name Increase/

Decrease in

shareholding

% of total

shares of

the Company

No. of Shares at

the beginning

(01.04.2019) end of

the year (31.03.2020)


of the Compa ny


38,64,853 7.4522,413 Transfer from Mr.

Puranam Hayagreeva

Ravi Kumar jointly

with Ms. Namagiri

Ravikumar, Mr.

Vaidyanathan

Viswanathan jointly

with Ms. Sudha

Viswanathan, Mr.

Ameya Anil

Deshpande jointly

with Ms. Priyanka

Deshpande and Ms.

Namagiri Ravikumar

jointly with Mr.

Puranam Hayagreeva

Ravi Kumar

20.12.2019

38,64,853 7.45 - 38,64,853 7.45-31.03.2020

16,03,065Mr. Pramod

Bhasin

4.

5.

6.

7.

8.

4.53

Transfer to Plenty

Private Equity Fund I

Limited

16,03,065

10,68,710

4.53

2.06

-

(5,34,355)

01.04.2019

19.12.2019

10,68,710 2.06 -

-

10,68,710 2.06-31.03.2020

9,61,532

6,49,532

Mr. Vikram

Gandhi

2.72

1.25

Transfer to Plenty

CI Fund I Limited

-

9,61,532

6,49,532

6,49,532

2.72

1.25

1.25

-

(3,12,000)

-

01.04.2019

19.12.2019

31.03.2020

1,01,770

-

Mr. Puranam

Srikanth

jointly with

Ms. Ananthi

Srikanth (till

December

24, 2019)

0.29

-

Transfer to Plenty

Private Equity Fund

I Limited and Plenty

CI Fund I Limited

-

1,01,770

-

-

0.29

-

-

-

(1,01,770)

-

01.04.2019

24.12.2019

31.03.2020

2,00,000

2,00,000

Mr. BD

Narang

0.57

0.39

--

2,00,000

-

2,00,000

0.57

0.39

01.04.2019

-

31.03.2020

2,00,000

1,00,000

Ms. Malavika

Tiwari

0.57

0.19

Transfer to Plenty

Private Equity Fund I

Limited

(1,00,000)

2,00,000

1,00,000

1,00,000

0.57

0.19

0.19

01.04.2019

19.12.2019

31.03.2020



Name Increase/

Decrease in

shareholding

% of total

shares of

the Company

No. of Shares at

the beginning

(01.04.2019) end of

the year (31.03.2020)


of the Compa ny


3,20,000

3,20,000

Sea Shells

Limited

0.90

0.62

- - --

3,20,000

3,20,000

0.90

0.62

01.04.2019

-

31.03.2020

9.

10.

11.

1,49,153

1,00,000The Vacuum

Forming

Company Pvt

Ltd

0.29

0.28

-

Allotment

1,49,153

1,00,000

1,49,153

0.29

0.28

0.29

-

49,153

31.03.2020

01.04.2019

26.04.2019

-Mr. Shirish

Godbole

(w.e.f.

October 09,

2019)

30,000

-

Transfer f rom Mr.

Ravichandra Madapati

30,000

-

30,000

0.06

-

0.06

31.03.2020

30,000

0.06

01.04.2019

09.10.2019

31.03.2020- - - -

Mr.Natrajh

Ramakrishna-

Independent

Director

01.04.2019

26.04.2019

31.03.20200.0210,869

10,869 Allotment 10,869

-

10,869

0.02

0.02

Notes: -

54,731

89,283

1,11,023

-

Mr.Ravikumar

Hayagreeva

Puranam

Non Executive

Nominee

Director

(shares held

jointly with

Ms.Namagiri

Ravikumar)

Mr. Samir

Bhatia -

Non-Executive

Director

(shares held

jointly with

Ms. Neela

Bhatia)

Mr. Sujay Patil

Chief Financial

Officer (shares

held jointly

with Ms.

Meera Patil)

a. Mr. Ravikumar Hayagreeva Puranam and Mr. Samir Bhatia, resigned from the Board effective from December 31, 2019 and February 18, 2020,

respectively.

b. Apart from the abovementioned Directors/ Key Managerial Personnel, remaining Directors/ Key Managerial Personnel did not hold any shares

of the Company during the year under review.

0.15

Transfer to Multiples

Private Equity Fund II

LLP & Plenty Private

Equity Fund I Limited

54,731

-

0.15

-

-

(54,731)

01.04.2019

20.12.2019

v. Shareholding of Directors and Key Managerial Personnel



Name Increase/

Decrease in

shareholding

% of total

shares of

the Company

No. of Shares at

the beginning

(01.04.2019) end of

the year (31.03.2020)


of the Company


BOARD’S REPORT

-

24.12.2019 50,000 ESOP Allotment 50,000 0.10

26.12.2019 (50,000) Transfer to Plenty

Private Equity Fund

I Limited

- -

31.03.2020

11,47,219 3.24 01.04.2019

19.12.2019 (11,47,219) Transfer to

Multiples

Private Equity

Fund II LLP,

Plenty Private

Equity Fund I

Limited & Plenty

CI Fund I Limited

- -

B. Key Managerial Personnel

Mr. Sandeep

Menon -

Managing

Director

01.04.20191,51,226 0.43

26.04.2019

31.03.20200.381,94,705

43,479 Allotment 1,94,705

1,51,226

1,94,705

0.43

0.38

0.38

0.25 01.04.2019

26.04.2019

31.03.20200.21

21,740 Allotment 1,11,023

89,283

1,11,023

0.25

0.21

0.21

11,47,219 3.24

A. Directors

- - -


BOARD’S REPORT



Total Indebtedness

Total Amount

Secured Loans

excluding deposits

Particulars of Remuneration

Unsecured Loans

Name of Managing Director

Deposits

Indebtedness at the beginning of the financial year

Gross Salary

Mr. Sandeep Menon

I. Principal Amount

ii. Interest due but not paid

iii. Interest accrued but not due

Total (i+ ii+ iii)

Change in Indebtedness during the financial year

Addition

Reduction

Net Change

Indebtedness at the end of the financial year

I. Principal Amount

ii. Interest due but not paid

iii. Interest accrued but not due

Total (i+ ii+ iii)

(a) Salary as per provisions contained in Section 17(1) of the Income Tax Act, 1961

(b) Value of perquisites under Section 17(2) Income Tax Act, 1961

(c) Profits in lieu of salary under Section 17(3) Income Tax Act, 1961

Stock Options*

Sweat Equity

Commission

- as % of the profit

- others, specify….

Others, please specify

Ceiling as per Act

99,020.99

-

204.46

99,225.45

49,800.00

21,435.96

28,364.04

1,27,385.03

-

475.52

1,27,860.55

99,020.99

-

204.46

99,225.45

49,800.00

21,435.96

28,364.04

1,27,385.03

-

475.52

1,27,860.55

-

-

-

-

-

-

-

-

-

-

-

362.00

-

-

-

-

-

-

-

362.00

5% of the Net Profit of the Company

vii. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

a. Remuneration to Managing Director, Whole-time Directors and/or Manager:

The Company has only one Managing Director viz. Mr. Sandeep Menon.

Note: No ESOPs have been granted to Mr. Sandeep Menon, Managing Director, during FY 2019-20. However, 10,00,000 ESOPs had been

granted to Mr. Sandeep Menon, Managing Director, during FY 2018-19, but the same has not been exercised yet.

-

-

-

-

-

-

-

-

-

-

-

vi. INDEBTEDNESS:

Indebtedness of the Company including interest outstanding/accrued but not due for payment:

362.00

-

-

-

-

-

-

-

362.00Total (A)

1

2

3

4

5


BOARD’S REPORT



Total Amount

Key Managerial Personnel

Total AmountCFO – Mr.

Sujay Patil

Company Secretary –

Ms. Pallavi Bhambere



1. Independent Director

-Fee for attending Board/Committee Meetings

- Commission

- Others, please specify

Total (1)

Mr. Vijay Kumar

-

-

-

-

Mr. Puranam

Hayagreeva

Ravikumar

1.75

-

-

1.75

-

Mr. Natrajh

Ramakrishna

-

-

-

-

Mr. Sudhir

Variyar

-

-

-

-

-

-

-

-

-

-

-

Mr. Samir

Bhatia

-

-

-

-

-

-

1.75

-

-

1.75

3.40

-

1.65

-

-

1.65

B. Remuneration to other Directors:

C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD/MANAGER/WTD

2. Other Non-Executive Directors

-Fee for attending Board/Committee Meetings

- Commission

- Others, please specify

Total (2)

Total B= 1+2

Total Managerial Remuneration

Mr. Girija Shankar

Nayak

1.65

-

-

1.65

Ms. Renuka

Ramnath

-

-

-

-

-

Overall Ceiling as per Act

1. Gross Salary

(a) Salary as per provisions contained in Section 17(1) of the Income Tax Act, 1961

(b) Value of perquisites under Section 17(2) Income Tax Act, 1961

(c) Profits in lieu of salary under Section 17(3) Income Tax Act, 1961

2. Stock Options*

3. Sweat Equity

4. Commission

- as % of the profit

- Others, specify….

5. Others, please specify

Total

1% of the Net Profit of the Company

7.71

-

-

-

-

-

-

-

7.71

176.21

-

-

-

-

-

-

-

176.21

168.50

-

-

-

-

-

-

-

168.50

Note: No ESOPs have been granted to CS and CFO of the Company during FY 2019-20. However, 3,50,000 ESOPs had been granted to

Mr. Sujay Patil, CFO, during FY 2018-19, but the same has not been exercised yet.

ANNEXURE Il TO THE BOARD’S REPORT

viii. PENALTIES / PUNISHMENT / COMPOUNDING OF OFFENCES:

Appeal made, if

any (give details)

Authority [ RD/

NCLT/ COURT]

Details of Penalties/ Punishment/

Compounding Fees imposedType

None

None

BOARD’S REPORT

Brief DescriptionSection of the

Companies Act

None

A. COMPANY

Penalty

Punishment

Compounding

B. DIRECTORS

Penalty

Punishment

Compounding

C.OTHER OFFICER IN DEFAULT

Penalty

Punishment

Compounding

ChairpersonManaging Director

(DIN00147182)(DIN02032154 )

sd/- sd/-

For and on behalf of the Board of Directors of

Vastu Housing Finance Corporation Limited

ANNEXURE III TO THE BOARD’S REPORT

INTERNAL AUDIT CHARTER1. OBJECTIVE:

2. SCOPE OF WORK:

3. INDEPENDENCE

4. RESPONSIBILITIES:

a. Internal Controls


BOARD’S REPORT

This internal audit charter forms the foundation for the work of the internal audit. It provides an independent, objective assurance and consulting

services designed to add value and improve the organization’s operations. It helps the organization accomplish its objectives by bringing a

systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes.

Internal Audit will help Management achieve its business targets including cost reduction, maximization of turnover and profit and improving

efficiency and effectiveness of process / operations through:

The scope of work of the Internal Audit is to determine whether the organization’s network of risk management, control and governance

processes, as designed and represented by management, is adequate and functioning in a manner to ensure:

Operational Audit:

Process review:

Internal audit performs its work independent, non-committed and objectively. It is not bound by any instructions for its audit work,

particularly for defining audit objectives and scopes, audit type, timing and reporting of audit findings.

Internal Audit has access to all documents (including all systems) necessary to perform its work. Internal audit has the right to

interview employees and third parties regarding their tasks and to inquire written confirmations for their statements. All employees

are obliged to support internal audit in performing their work, to provide necessary resources immediately and to grant insight

into all operational and business processes of the Company organization.

a. Review of Loan Processing

a. Review of Financial Transactions

c. HR Operations and Payroll processing

f. Compliance with SARFAESI Act, 2002

b. Review of Customer service

e. Review of Capital Expenditure and Insurance

d. Compliance with Sec 138 of Negotiable Instrument Act, 1881

g. Review of Internal Financial Controls

i. Evaluate the adequacy and effectiveness of the internal control systems on a continuous basis through a systematic and disciplined

approach.

ii. The Internal Audit team will in consultation with management present an annual internal audit plan to the Audit Committee for approval.

The plan shall set out the recommended scope of their work in the period.

iii.Implement the annual audit plan, as approved, including, and as appropriate, any special tasks or projects requested by

management and the Audit Committee from time to time. Review information systems including information technology, information

security and application controls, network controls, hardware and software controls.

iv. Present to the Audit Committee significant findings relating to internal control / process weakness along with process owners action

plan.

vi. Issue periodic reports to the Audit Committee and management summarizing results of audit activities.

vii.Conduct investigations as directed by the Audit Committee / Management or suo- moto in case of matters of suspected fraud,

irregularity or failure of internal control system after keeping Management informed.

viii.Establish a system of Controls Self-Assessment (CSA) across the enterprise which will supplement internal audit efforts, improve

coverage and importantly help Process Owners take ownership of controls.

v. Keep track and follow up with the process owners for pending action plans and present the status to the Audit Committee.


BOARD’S REPORT

b. Compliance with Regulatory requirements and Policies:

c. Subsidiary and JV Company oversight:

d. Risk Management:

5. ACCOUNTABILITY:

6. COOPERATION WITH THIRD PARTIES

i. Review effectiveness of the system for monitoring compliance with laws and regulations.

ii. Review compliance with Accounting Standards

iii.Review mechanism for adherence to the Code of Conduct.

iv.Review compliance on policies, plans, procedures, laws and regulations

v. Assist the Audit Committee in the review of the Company’s financial reporting process and the disclosures of its financial information to

ensure that the financial statement is correct, sufficient and credible.

Conduct internal audits in subsidiary companies to assist the Audit Committee in overseeing the systems of internal control, results of audits

and integrity of financial reporting of subsidiary companies.

To provide the policy framework for proactive identification and management of the Companies strategic, operational, financial & compliance

risks in order to achieve reasonable assurance on the achievement of its business objectives & compliance.

The risk management process will be integrated with the Long-Term Strategic Planning Process and other business processes of the

Company and will inter-alia ensure in deriving enterprise level risks from individual business exercises and ensuring ownership for mitigation

and action planning.

The primary purposes of internal audit reports are to provide management and Audit Committee with an opinion on the adequacy of the

internal control system, and to inform management and Audit Committee of significant audit findings, conclusions and recommendations.

The internal audit ensures a regular exchange of information with external third parties, like, for example, the statutory auditor of the

Company, as well as with internal areas and functions, like for example finance, compliance, legal, etc.

The internal audit team shall be accountable to Management and the Audit Committee to:

i. Provide an assessment periodically on the adequacy and effectiveness of the organization's processes for controlling its activities and

managing its risks in the areas set forth under the scope of work.

ii. Report critical and important issues related to the processes for controlling the activities of the organization and its affiliates, including

potential improvements to those processes, and provide information concerning such issues.

iii.Provide information on fraud findings, reporting as per AML guidelines.

iv.Provide information periodically on the status and results of the annual audit plan and the sufficiency of department resources.

v.Coordinate with and provide oversight of other control and monitoring functions (risk management, finance, compliance, legal, CSR,

ESG).

ANNEXURE IV TO THE BOARD’S REPORT

ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBILITY

INTRODUCTION:

COMPOSITION OF CSR COMMITTEE


BOARD’S REPORT

Vastu Housing Finance Corporation Limited is a growing Company and the Company considers social responsibility as an integral part of

its business activities and endeavors to utilize allocable CSR budget for the benefit of society.

Your Company would be undertaking the CSR activities as listed in Schedule VII and Section 135 of the Companies Act, 2013 and the

Rules framed thereunder. The Company will engage with stakeholders, including experts, NGOs, professional bodies/forums, and the

Government and would take up such CSR activities in line with the Government’s intent, which are important for the society at large. \

CSR Policy is provided at the below-mentioned web link:

Web-link: https://www.vastuhfc.com/view/policies

[Pursuant to clause (o) of sub-section (3) of section 134 of the Act and Rule 8 of the Companies (Corporate Social Responsibility Policy)

Rules, 2014]

The Board has duly constituted CSR committee pursuant to the provisions of Companies Act, 2013 comprising of following:

The Committee shall be required to carry out the following activities:

a. Formulate and recommend to the Board for its consideration and approval, a CSR Policy for the Company, which shall indicate

the activities to be undertaken by the Company in areas or subject specified in Schedule VII;

c. Monitor the Corporate Social Responsibility Policy of the Company from time to time;

d. Update the Board on the status of CSR programs/ projects undertaken by the Company during the financial year and amount of

expenditure incurred.; and

e. Recommend to the Board, the Company’s Annual Report on CSR Activities, for inclusion in the Report of the Board of Directors

of the Company.

b. Recommend for the approval of the Board, programs/ projects identified by the Committee to be undertaken during the financial

year which are in line with the activities specified in Schedule VII and amount of expenditure to be incurred for each of the

programs/ projects;

a. Mr. Sandeep Menon – Managing Director

b. Mr. Sudhir Variyar – Nominee Director

c. Mr. Vijay Kumar – Independent Director

PRESCRIBED CSR SPEND OF VASTU HOUSING FINANCE CORPORATION LIMITED:

a. Average net profit of the Company for the last three financial years

b. Prescribed CSR expenditure

c. Details of CSR spent during the Financial Year 2019-20

The average net profit of the Company of the last three financial years calculated to be INR 2,813.10 Lakh.

The recommended CSR expenditure as per Section 135 for the financial year 2019-20 was INR 56.26 Lakh.

I. Total amount spent – 41.50 Lakh

ii. Amount unspent, if any – INR 32.28 Lakh (cumulative)

iii.The manner in which the amount spent during the financial year is detailed below:


BOARD’S REPORT

Amount spent Direct or

through implementing

agency

Projects or programs

(1) Local area or other

(2) Specify the State

and district where the projects

or programs were undertaken

Amount spent

on the projects

(in INR Lakh)

CSR project

Early intervention Care unit for

mentally challenged children

Healthcare Mumbai, Local area Implementing Agency –

Rotary Club of Mumbai

North End

(Trust Registration No:

E-11419)

5.00

Mid Day Meal Healthcare Mumbai, Local area Implementing Agency –

Rotary Club of Mumbai

Western Elite Charitable

Trust


E-32919)

1.5

Adoption and renovation of School Education Mumbai, Local area Implementing Agency –

Yuva Unstoppable


E-17710)

10.00

a. Purchase of 20 Life Ventilators

b. COVID 19 testing Kits

c. Aprons for Doctors and Nurses

d. Medical camps to provide basic

health check-up

e. Medical equipment

Healthcare Baramati, Local area Implementing Agency –

Sharayu Foundation


e-30444)

25.00

The Sector in which

the Project is

covered

d. In case the Company has failed to spend the two percent of the average net profit of the last three financial years or any part thereof,

the Company shall provide the reasons for not spending the amount in its Board report.

During the year under review, the Company, while continuing to support its ongoing projects, has associated itself with few new projects and also

intends to expand its CSR initiatives in a systematic manner to create meaningful contributions in the development of the underprivileged and

weaker sections of society. Your Company endeavoured to meet the budgeted expenditure by contributing to various eligible CSR activities and

has committed to incur expenditure for CSR initiatives in the coming years through structured events or programs and projects.

e.Responsibility statement of the CSR Committee that the implementation and monitoring of the CSR Policy, is in compliance with

CSR objectives and Policy of the Company:

The CSR committee confirms that the monitoring of the CSR Policy is in compliance with the CSR objectives and Policy of the Company.

ChairpersonMD & Chairperson of CSR Committee

(DIN00147182)(DIN02032154 )

sd/- sd/-

For and on behalf of the Board of Directors of


To,

(iv) Foreign Exchange Management Act, 1999 and the rules and

regulations made thereunder to the extent of Foreign Direct

Investment;

(iii) The Depositories Act, 1996 and the Regulations and Bye-

laws framed thereunder;


(i) The Companies Act, 2013 (‘the Act’) and the rules made

thereunder;

(ii) The Securities Contracts (Regulation) Act, 1956 (‘SCRA’)

and the rules made thereunder;

(v) The following Regulations and Guidelines prescribed under

the Securities and Exchange Board of India Act, 1992 (‘SEBI

Act’):

The Members,

We have examined the books, papers, minute books, forms and

returns filed and other records maintained by the Company for the

financial year ended on 31st March, 2020 according to the

provisions of:

We have conducted the secretarial audit of the compliance of

applicable statutory provisions and the adherence to good

corporate practices by Vastu Housing Finance Corporation

Limited (hereinafter called ‘the Company’). Secretarial Audit was

conducted in a manner that provided us a reasonable basis for

evaluating the corporate conducts/statutory compliances and

expressing our opinion thereon.

Based on our verification of the books, papers, minute books, forms

and returns filed and other records maintained by the Company and

also the information provided by the Company, its officers, agents

and authorized representatives during the conduct of secretarial

audit, we hereby report that in our opinion, the Company has,

during the audit period covering the financial year ended on 31st

March, 2020 complied with the statutory provisions listed

hereunder and also that the Company has proper Board-processes

and compliance-mechanism in place to the extent, in the manner

and subject to the reporting made hereinafter:

(a) The Securities and Exchange Board of India (Registrars

to an Issue and Share Transfer Agents) Regulations,

1993 regarding the Companies Act, 2013 and dealing

with client;

FORM NO. MR-3SECRETARIAL AUDIT REPORT

For the Financial Year ended 31st March, 2020

[Pursuant to Section 204(1) of the Companies Act, 2013 and Rule No. 9 of the Companies

(Appointment and Remuneration of Managerial Personnel) Rules, 2014]

UDIN: F005769B000147108

(b) The Securities and Exchange Board of India (Listing

Obligations and Disclosure Requirements) Regulations,

2015.

Provisions of the following Acts, Regulations and Guidelines were

not applicable to the Company under the financial year under

report:

(a) Foreign Exchange Management Act, 1999 and the rules

and regulations made thereunder to the extent of

Overseas Direct Investment and External Commercial

Borrowings;

We have also examined compliance with the applicable clauses of

the following:

(b) The Listing Agreement entered into by the Company with

BSE Limited.

(c) The Securities and Exchange Board of India (Issue and

Listing of debt securities) Regulations, 2008;

(b) The Securities and Exchange Board of India (Issue of

Capital and Disclosure Requirements) Regulations,

2009;

(a) Secretarial Standards issued by The Institute of

Company Secretaries of India, and

(e) The Securities and Exchange Board of India (Substantial

Acquisition of Shares and Takeovers) Regulations, 2011;

(f) The Securities and Exchange Board of India (Delisting of

Equity Shares) Regulations, 2009;

(g) The Securities and Exchange Board of India (Buyback of

Securities) Regulations, 1998; and

(vi)The National Housing Bank Act, 1987 and The Housing

Finance Companies (NHB) Directions, 2010, being special

act governing the Company, as the Company is a Housing

Finance Company.

(d) The Securities and Exchange Board of India (Share

Based Employee Benefits) Regulations, 2014;

(h) The Securities and Exchange Board of India (Prohibition

of Insider Trading) Regulations, 2015.

We further report that during the audit period:

(iii) The Board at its meeting held on 26th April, 2019 approved

allotment of 16,413,347 Equity Shares of INR 100/- each for

cash at INR 230/- each on rights basis to existing

shareholders who subscribed to the rights offer and offered

the 977,958 unsubscribed Equity Shares to such persons

who offered to subscribe to the same at a price not below

INR 230/- per share, which however remained unsubscribed

and the offer was closed.

During the period under review, the Company has complied with

the provisions of the Act, Rules, Regulations, Guidelines,

Standards etc. as mentioned above, to the extent applicable.

We further report that the Board of Directors of the Company is

duly constituted with proper balance of Executive Directors, Non-

Executive Directors and Independent Directors. The changes in the

composition of the Board of Directors that took place during the

period under review were carried out in compliance with the

provisions of the Act.

(I) The Audit Committee of the Company at its meeting held on

26th April, 2019 accorded its approval for grant of guarantee

by the Company from time to time in respect of amount not

exceeding INR 500 Crores, to be borrowed by Vastu

Finserve India Private Limited, wholly owned subsidiary

during the Financial Year 2019-20.

We further report that there are adequate systems and processes

in the company commensurate with the size and operations of the

company to monitor and ensure compliance with applicable laws,

rules, regulations and guidelines.

(iv) The Board at its meeting held on 26th April, 2019 accorded

its approval for investment of surplus funds of the Company

by way of investment or acquisition from time to time by way

of subscription, purchase, conversion or otherwise of Equity

Shares, Preference Shares, Debentures (whether

convertible or non-convertible) or any other financial

instruments of Vastu Finserve India Private Limited, wholly

Majority decision is carried through and there were no dissenting

members’ views which were required to be captured and recorded

as part of the minutes.

(ii) The Board at its meeting held on 26th April, 2019 accorded

its approval to give guarantee in respect of borrowings from

banks, financial institutions, Reserve Bank of India,

incorporated bodies or otherwise by Vastu Finserve India

Private Limited, wholly owned subsidiary during the

Financial Year 2019-20.

Adequate notice is given to all directors to schedule the Board

Meetings, agenda and detailed notes on agenda were sent at least

seven days in advance in most cases and consents for convening

the meetings at a shorter notice were obtained in a few instances

and a system exists for seeking and obtaining further information

and clarifications on the agenda items before the meeting and for

meaningful participation at the meeting.

(xi)Authority to make investment(s) by way of subscription,

purchase or otherwise, securities of any body corporate;

from time to time in one or more tranches, upto an

aggregate amount not exceeding INR 500 Crores

outstanding at any time notwithstanding that the aggregate

of such investments so far made or to be made are in excess

of the limits prescribed under Section 186 of the Companies

Act, 2013, by passing a Special Resolution at the Annual

General Meeting of the Company held on 9th August, 2019.

(xii)30,000 Equity Shares of INR 100/- each of the Company

were transferred by Mr. Ravichandra Madapati to Mr. Shirish

Godbole on 9th October, 2019 in demat mode.

Company held on 9th August, 2019.

owned subsidiary company, upto an amount not exceeding

INR 200 Crores in one or more tranches.

(v) The Board at its meeting held on 31st July, 2019 noted co-

origination of loans with scheduled commercial banks for

creation of loans.

(vi) The remuneration payable to Mr. Sandeep Menon (DIN:

02032154), Managing Director of the Company was revised

with effect from the Financial Year 2019-20 from the existing

INR 17,500,000/- to INR 1,87,25,000/- pursuant to the

provisions of Sections 196, 197 and 203 read with Schedule

V of the Companies Act, 2013, by passing a Special

Resolution at the Annual General Meeting of the Company

held on 9th August, 2019.

(vii)The appointment of Mr. Natrajh Ramakrishna (DIN:

06597041) as Independent Director for a period of five

consecutive years, to hold office from 12th February, 2019 to

11th February, 2024, was approved by the shareholders by

passing of an Ordinary Resolution at their Annual General

Meeting held on 9th August, 2019.

(viii) The borrowing limit of the Company was increased from INR

2,000 Crores to INR 2,500 Crores pursuant to the provisions

of Section 180(1)(c) of the Companies Act, 2013, by passing

a Special Resolution at the Annual General Meeting of the

(ix) Authority to create charge on the properties of the Company

not exceeding INR 2,500 Crores pursuant to the provisions

of Section 180(1)(a) of the Companies Act, 2013, was

accorded to the Board of Directors by passing a Special

Resolution at the Annual General Meeting of the Company

held on 9th August, 2019.

(x)Authority to raise funds through Private Placement of

Unsecured/ Secured Redeemable Non-Convertible

Debentures/ Bonds pursuant to the provisions of Sections

42 & 71 of the Companies Act, 2013 for an amount not

exceeding INR 2,500 Crores, in or more tranches during the

period of one year from the date of passing of the , resolution

by passing a Special Resolution at the Annual General

Meeting of the Company held on 9th August, 2019.

(xiii)The Company made an investment of INR 50 Crores in

Vastu Finserve India Private Limited, wholly owned

subsidiary company, through subscription of rights issue of

Equity Shares and the shares were allotted to the Company

on 13th September, 2019.

(xvii) The Board at its meeting held on 18th February, 2020 noted

transfers of 2,337,802 Equity Shares of the Company

between 19th December, 2019 to 24th December, 2019, in

demat mode.

(xviii) Mr. Samir Bhatia (DIN: 01769655), Non-Executive Director of

the Company resigned from the Board of the Company with

effect from 18th February, 2020.

(xix) The Board at its meeting held on 18th February, 2020 ratified

the Software License Agreement executed by the Company

with People Strong Technologies Private Limited on 18th

December, 2019 for using their technology services,

pursuant to Section 188 of the Companies Act, 2013 read

with Rule 15 of the Companies (Meetings of Board and its

Powers) Rule 2014.

(xiv) Mr. Ravikumar Hayagreeva Puranam exercised his right to

subscribe to 50,000 Equity Shares of the Company against

50,000 Stock Options granted under Employees Stock

Options Plan 2018 – Scheme I (ESOP Scheme-2018) and

shares were allotted to him jointly with Ms. Namagiri

Ravikumar on 24th December, 2019.

(xx) 500, Secured, Senior, Rated, Redeemable, Taxable,

Transferable, Listed Series B -Non Convertible Debentures

of INR 10 Lakh each of the Company (‘NCD’) which were

allotted on Private Placement basis on 26th October, 2018

and listed on the WDM of BSE Limited on 5th November,

2018 were redeemed early on 31st March, 2020 as per the

request received from the NCD holder.

For Pradeep Purwar & Associates

Company Secretaries

[Unique Identification No.: S2003MH071600]

(xv) Mr. Ravikumar Hayagreeva Puranam (DIN: 00280010), Non-

Executive Nominee Director of the Company resigned from

the Board of the Company with effect from 31st December,

2019.

(xvi) The Board at its meeting held on 18th February, 2020

accorded its approval to enter into and execute an

Agreement of Management and Administrative Services with

Vastu Finserve India Private Limited, wholly owned

Subsidiary company, for providing Management and

Administrative services to Vastu Finserve.

[PR: 599/2019]

Pradeep Kumar PurwarProprietor

FCS No. 5769 CoP No. 5918

Place: Thane

Date: 6th April, 2020

sd/-

Independent Auditors’ Report & Consolidated Financial Statement

1. Opinion

To the Members of Vastu Housing Finance Corporation Limited

Report on the Audit of the Consolidated Financial Statements

2. Basis for Opinion

We have audited the accompanying consolidated Ind AS financial

statements of Vastu Housing Finance Corporation Limited

(‘Holding Company’) and its subsidiary (the Company and its

subsidiary together referred to as ‘the Group’), which comprise the

Consolidated Balance Sheet as at 31st March 2020, the

Consolidated Statement of Profit and Loss (including Other

Comprehensive Income), the Consolidated Statement of Change in

Equity, the Consolidated Statement of Cash Flows for the year then

ended, and notes to the consolidated financial statements,

including a summary of the significant accounting policies and other

explanatory information (hereinafter referred to as “consolidated

Ind AS financial statements”).

In our opinion and to the best of our information and according to

the explanations given to us,the aforesaid consolidated Ind AS

financial statements prepared in accordance with the Accounting

Standards prescribed under Section 133 of the Companies Act,

2013 (‘the Act’) read with Companies (Indian Accounting

Standards) Rules, 2015, as amended, (‘Ind AS’), gives the

information required by the Act in the manner so required and gives

a true and fair view in conformity with the accounting principles

generally accepted in India, of the state of affairs of the Group as at

March 31, 2020, the profit (including other comprehensive income),

changes in equity and its cash flows for the year ended on that date

We conducted our audit of the consolidated Ind As financial



Independent Auditors’ Report

3. Emphasis of matter

4. Key Audit Matter

Key audit matters are those matters that, in our professional

judgment, were of most significance in our audit of the

consolidated Ind AS financial statements of the current period.

These matters were addressed in the context of our audit of the

consolidated Ind AS financial statements as a whole, and in forming

our opinion thereon, and we do not provide a separate opinion on

these matters. We have determined the matters described below to

be the key audit matter to be communicated in our report.

in accordance with the Code of Ethics issued by the Institute of

Chartered Accountants of India (ICAI) together with the ethical

requirements that are relevant to our audit of the consolidated Ind

AS financial statements under the provisions of the Act and the

Rules thereunder, and we have fulfilled our other ethical

responsibilities in accordance with these requirements and the

ICAI’s Code of Ethics. We believe that the audit evidence we have

obtained is sufficient and appropriate to provide a basis for our

audit opinion on the consolidated Ind AS financial statements.

We draw attention to Note 47 to the consolidated Ind AS financial

statement, which describes the extent to which the Covid-19

pandemic will impact the Company’s consolidated Ind AS financial

statement will depend on the future developments, which are highly

uncertain.Our opinion is not modified in respect of this matter.

statements in accordance with the Standards on Auditing (SAs)

specified under section 143(10) of the Act. Our responsibilities

under those SAs are further described in the Auditor’s

Responsibilities for the Audit of the consolidated Ind AS financial

statements section of our report. We are independent of the Group

Understood the consolidated financial statement closure

process and the additional controls (including IT controls)

established by the Group for transition to Ind AS.

Assessed the judgement applied by the Group in determining

its business model for classification of financial assets.

Read the Ind AS impact assessment performed by the

management to identify areas to be impacted on account of Ind

AS transition.

Read changes made to the accounting policies in light of the

requirements of the new framework.

Assessed the judgement exercised by the management in

applying the first-time adoption principles of Ind AS 101

especially in respect of fair valuation of assets and liabilities

existing as at transition date.

Transition to Ind AS accounting framework (as described in note 42 of the Ind AS financial statements)

frameworks.

Ind AS is applicable to the Group with effect from April 1, 2019.

Accordingly, the Group has prepared financial statements which

comply with Ind AS for the period ended March 31, 2020. In

preparing these financial statements,the Group’s opening

balance sheet under Ind AS was prepared as at 1 April 2018,

the Group’s date of transition to Ind AS.

The transition has involved significant change in the Group’s

policies and processes relating to financial reporting, including

generation of reliable and supportable information. Further, the

management has exercised significant judgement for giving an

appropriate effect of the first-time adoption principles of Ind AS

101, as at transition date and to determine the impact of the

new accounting framework on certain accounting and

disclosure requirements prescribed under extant regulatory

Key Audit Matter How our audit addressed the Key Audit Matter



Assessed disclosures included in the Ind AS financial

statements in accordance with the requirements of Ind AS 101,

with respect to the previous periods presented.

Assessed the judgements applied by the Group in respect of

areas where the accounting treatment adopted or the

disclosures made under the new accounting framework were

inconsistent with the extant regulatory requirements.

Performed test of details on the accounting adjustments posted

as at the transition date and in respect of the previous year to

convert the financial information reported under erstwhile

Indian GAAP to Ind AS.


In view of the complexity and the resultant risk of material

misstatement arising from an error or omission in correctly

implementing the principles of Ind AS at the transition date,

which could result in a misstatement of one or more periods

presented in these consolidated Ind AS financials statements,

this has been an area of key focus in our audit.

Impairment of financial asset (expected credit loss)

Our audit procedures included reading the Group’s accounting

policies for impairment of financial instruments and assessing

compliance with the policies in terms of Ind AS 109.

Assessed the assumptions used by the Group for grouping and

staging of loan portfolio into various categories and default

buckets and determining the probability-weighted default (PD)

and loss-given default (LGD) rates including those of peers.

Assessed the disclosures included in the Consolidated Ind AS

financial statements with respect to such allowance / estimate

in accordance with the requirements of Ind AS 109 and Ind AS

107.

Tested the arithmetical accuracy of computation of ECL

Provision performed by the Group in spreadsheets.

Tested the operating effectiveness of the controls for staging of

loans based on their past-due status. We also reviewed a

sample of stage 1 and Stage 2 loans to assess whether any

loss indicators were present requiring them to be classified

under stage 2 or 3.

Performed sample testing to ascertain the completeness and

accuracy of the input data used for determining the PD and

LGD rates and agreed the data with the underlying books of

accounts and records.

Ind AS 109 requires the Group to provide for impairment of its

financial assets using the expected credit loss (‘ECL’) approach

involving an estimation of probability of loss on the financial

assets over their life, considering reasonable and supportable

information about past events, current conditions and forecasts

of future economic conditions which could impact the credit

quality of the Group’s loans and advances. In the process, a

significant degree of judgement has been applied by the

management in respect of following matters:

Estimation of losses in respect of those groups of loans which

had no/ minimal defaults in the past.

Estimation of expected loss from historical observation of

Group and its peers.

Estimation of expected delinquency from Covid 19 lockdown.

Staging of loans and estimation of behavioural life.

The Group has developed models that derive key assumptions

used within the provision calculation such as probability of

default (PD) and loss given default (LGD). The output of these

models is then applied to the provision calculation with other

information including and the exposure at default (EAD).

The Group has grouped its loan portfolio into Housing Loan

and Loan Against property. Loans grouped under a particular

category are assumed to represent a homogeneous pool

thereby expected to demonstrate similar credit

characteristics.

Considering the significance of such provision to the overall

consolidated financial statements and the degree of

management’s judgment, any error or misstatement in such

estimate may give rise to a material misstatement of the Ind AS

financial statements or omission of any disclosure required by

the standards. Therefore, it is considered as a key audit matter.




The Holding Company’s management and board of directors

are responsible for the matters stated in section 134(5) of the

Act with respect to the preparation of these consolidated Ind AS

financial statements that give a true and fair view of the

consolidated financial position, consolidated financial

performance including other comprehensive income,

consolidated changes in equity and consolidated cash flows of

the Group in accordance with the Ind AS and other accounting

principles generally accepted in India. The respective Board of

Directors of the companies included in the Group are

responsible for maintenance of adequate accounting records in

accordance with the provisions of the Act for safeguarding of

the assets of the Group and for preventing and detecting frauds

and other irregularities; selection and application of appropriate

accounting policies; making judgments and estimates that are

reasonable and prudent; and design, implementation and

maintenance of adequate internal financial controls, that were

operating effectively for ensuring the accuracy and

completeness of the accounting records, relevant to the

preparation and presentation of the consolidated Ind AS

financial statements that give a true and fair view and are free

from material misstatement, whether due to fraud or error,

which have been used for the purpose of preparation of the

consolidated Ind AS financial statements by the Directors of the

Holding Company, as aforesaid.

In preparing the consolidated Ind AS financial statements, the

respective Board of Directors of the Companies included in the

Group are responsible for assessing the Group’s ability to

continue as a going concern, disclosing, as applicable, matters

related to going concern and using the going concern basis of

accounting unless management either intends to liquidate the

Group or to cease operations, or has no realistic alternative but

to do so.

The Holding Company’s management and Board of Directors

are responsible for the other information. The other information

comprises the information included in Holding Company’s

Annual report but does not include the consolidated Ind AS

financial statements and our auditor’s report thereon. The other

information is expected to be made available to us after the

date of this auditor's report.

5. Information Other than the Consolidated Financial

Statements and Auditor’s Report thereon

Our opinion on the consolidated Ind AS financial statements

does not cover the other information and we will not express

any form of assurance conclusion thereon. In connection with

our audit of the consolidated Ind AS financial statements, our

responsibility is to read the other information when it becomes

available and, in doing so, consider whether the other

information is materially inconsistent with the consolidated Ind

AS financial statements or our knowledge obtained in the audit,

or otherwise appears to be materially misstated.

6. Responsibilities of Management and Those Charged with

Governance for the consolidated Ind AS financial

statements

The respective Board of Directors of the Companies included in

the Group are also responsible for overseeing the Group’s

financial reporting process.

7. Auditor’s Responsibilities for the Audit of the Consolidated

Financial Statements

Our objectives are to obtain reasonable assurance about

whether the consolidated Ind AS financial statements as a whole

are free from material misstatement, whether due to fraud or

error, and to issue an auditor’s report that includes our opinion.

Reasonable assurance is a high level of assurance, but is not a

guarantee that an audit conducted in accordance with SAs will

always detect a material misstatement when it exists.

Misstatements can arise from fraud or error and are considered

material if, individually or in the aggregate, they could reasonably

be expected to influence the economic decisions of users taken

on the basis of these consolidated Ind AS financial statements.

Obtain an understanding of internal control relevant to the

audit in order to design audit procedures that are appropriate

in the circumstances. Under section 143(3)(I) of the Act, we

are also responsible for expressing our opinion on whether the

Holding Company has adequate internal financial controls

system in place and the operating effectiveness of such

controls.

Evaluate the overall presentation, structure and content of the

consolidated Ind AS financial statements, including the

disclosures, and whether the consolidated Ind AS financial

statements represent the underlying transactions and events

in a manner that achieves fair presentation.

As part of an audit in accordance with SAs, we exercise

professional judgment and maintain professional skepticism

throughout the audit. We also:

Identify and assess the risks of material misstatement of the

consolidated Ind AS financial statements, whether due to fraud

or error, design and perform audit procedures responsive to

those risks, and obtain audit evidence that is sufficient and

appropriate to provide a basis for our opinion. The risk of not

detecting a material misstatement resulting from fraud is

higher than for one resulting from error, as fraud may involve

collusion, forgery, intentional omissions, misrepresentations,

or the override of internal control.

Evaluate the appropriateness of accounting policies used and

the reasonableness of accounting estimates and related

disclosures made by management.

Conclude on the appropriateness of management’s use of the

going concern basis of accounting and, based on the audit

evidence obtained, whether a material uncertainty exists

related to events or conditions that may cast significant doubt

on the Group’s ability to continue as a going concern. If we

conclude that a material uncertainty exists, we are required to

draw attention in our auditor’s report to the related disclosures

in the consolidated financial statements or, if such disclosures

are inadequate, to modify our opinion. Our conclusions are

based on the audit evidence obtained up to the date of our

auditor’s report. However, future events or conditions may

cause the Group to cease to continue as a going concern.



We also provide those charged with governance with a statement

that we have complied with relevant ethical requirements regarding

independence, and to communicate with them all relationships and

other matters that may reasonably be thought to bear on our

independence, and where applicable, related safeguards.

The comparative financial information of the Group for the year

ended March 31, 2019 included in these consolidated financial

statements, have been prepared after adjusting previously issued

8. Reporting on comparatives in case of First Consolidated Ind

AS Financial statements

the consolidated financial statements prepared in accordance with

the Companies (Accounting Standards) Rules, 2006 to comply with

Ind AS.

9. Report on Other Legal and Regulatory Requirements

a. As required by Section 143(3) of the Act, based on our audit we

report that:

auditors regarding, among other matters, the planned scope and

timing of the audit and significant audit findings, including any

significant deficiencies in internal control that we identify during our

audit.

From the matters communicated with those charged with

governance, we determine those matters that were of most

significance in the audit of the consolidated Ind AS financial

statements of the current period and are therefore the key audit

matters. We describe these matters in our auditor’s report unless

law or regulation precludes public disclosure about the matter or

when, in extremely rare circumstances, we determine that a matter

should not be communicated in our report because the adverse

consequences of doing so would reasonably be expected to

outweigh the public interest benefits of such communication.

We communicate with those charged with governance of the

Holding Company and such other entities included in the

consolidated financial statement of which we are the independent

iii. The Consolidated Balance Sheet, the Consolidated Statement

of Profit and Loss including Other Comprehensive Income,

Consolidated Statement of Changes in Equity and the

Consolidated Cash Flow Statement dealt with by this Report

are in agreement with the relevant books of account

maintained for the purpose of preparation of consolidated Ind

AS financial statements.

ii. In our opinion, proper books of account as required by law

relating to preparation of the aforesaid consolidated Ind AS

financial statements have been kept so far as it appears from

our examination of those books.

i. We have sought and obtained, all the information and

explanations which to the best of our knowledge and belief

were necessary for the purposes of our audit of the

consolidated Ind AS financial statements.

iv. In our opinion, the aforesaid consolidated Ind AS financial

statements comply with the Accounting Standards specified

under Section 133 of the Act, read with Rule 7 of the

Companies (Accounts) Rules, 2014.

v. On the basis of the written representations received from the

Directors of the Holding Company as on 31st March, 2020

taken on record by the Board of Directors of the Holding

Company and the report of the statutory auditors of its

subsidiary company incorporated in India, none of the

directors of the Group Companies incorporated in India is

disqualified as on 31st March, 2020 from being appointed as a

director in terms of Section 164 (2) of the Act.

vii. With respect to the matter to be included in the Auditor’s

Report under section 197(16) of the Act, as amended:

In our opinion and to the best of our information and according

to the explanations given to us, the remuneration paid by the

Companies, under the Group, to its directors during the

current year is in accordance with the provisions of section

197 of the Act.

i. The Group does not have any pending litigations which would

impact its financial position.

Firm’s Registration No. 006711N/N500028

viii. With respect to the other matters to be included in the

Auditor’s Report in accordance with Rule 11 of the Companies

(Audit and Auditors) Rules, 2014, in our opinion and to the

best of our information and according to the explanations

given to us:

For T R Chadha & Co LLP

subsidiary company incorporated in India.

Chartered Accountants

vi. With respect to the adequacy of the internal financial controls

over financial reporting and the operating effectiveness of

such controls, refer to our separate Report in ‘Annexure A’

which is based on the auditor’s reports of the Holding

Company and its

ii. The Group did not have any long-term contracts including

derivative contracts for which there were any material

foreseeable losses.

iii. There were no amounts which were required to be transferred

to the Investor Education and Protection Fund by the Group.

Vikas Kumar

Partner

Membership No. 075363

UDIN: 20075363AAAAAH5601

Place: Mumbai

29th April, 2020Date:

sd/-

Our responsibility is to express an opinion on the internal financial

controls with reference to financial statement of the Company and its

subsidiary company, which are companies incorporated in India, based

on our audit. We conducted our audit in accordance with the Guidance

Note on Audit of Internal Financial Controls Over Financial Reporting

(the “Guidance Note”) issued by the ICAI and the Standards on Auditing

prescribed under section 143(10) of the Act to the extent applicable to an

audit of internal financial controls with reference to financial statement.

Those Standards and the Guidance Note require that we comply with

ethical requirements and plan and perform the audit to obtain

reasonable assurance about whether adequate internal financial

controls with reference to financial statement was established and

maintained and if such controls operated effectively in all material

respects.

We have audited the internal financial controls with reference to financial

statement of Vastu Housing Finance Corporation Limited (‘the

Company’) and its subsidiary company, which are companies

incorporated in India, as of 31st March, 2020, in conjunction with our

audit of the consolidated Ind AS financial statements of the Company for

the year ended on that date.

Auditors’ Responsibility

Report on the Internal Financial Controls with reference to

consolidated financial statements, of Vastu Housing Finance

Corporation Limited (‘Company’), under Clause (i) of Sub-section 3

of Section 143 of the Companies Act, 2013 (“the Act”)

Management’s Responsibility for Internal Financial Controls

The Board of Directors of the Company and its subsidiary company,

which are companies incorporated in India, are responsible for

establishing and maintaining internal financial controls based on the

internal control with reference to financial statement criteria established

by the respective companies considering the essential components of

internal control stated in the Guidance Note on Audit of Internal Financial

Controls Over Financial Reporting issued by the Institute of Chartered

Accountants of India (ICAI). These responsibilities include the design,

implementation and maintenance of adequate internal financial controls

that were operating effectively for ensuring the orderly and efficient

conduct of its business, including adherence to respective Company’s

policies, the safeguarding of its assets, the prevention and detection of

frauds and errors, the accuracy and completeness of the accounting

records, and the timely preparation of reliable financial information, as

required under the Act.

In our opinion, to the best of our information and according to the

explanations given to us, the Company and its subsidiary company,

which are companies incorporated in India, have, in all material

respects, an adequate internal financial controls with reference to

financial statement and such internal financial controls with reference to

financial statement were operating effectively as at 31st March, 2020,

based on the internal control with reference to financial statement criteria

established by the respective Companies considering the essential

components of internal control stated in the Guidance Note on Audit of

Internal Financial Controls Over Financial Reporting issued by the

Institute of Chartered Accountants of India.

Opinion



‘Annexure A’ to the Independent Auditor’s Report

Our audit involves performing procedures to obtain audit evidence about

the adequacy of the internal financial controls with reference to financial

statement and their operating effectiveness. Our audit of internal

financial controls with reference to financial statement included

obtaining an understanding of internal financial controls with reference

to financial statement, assessing the risk that a material weakness

exists, testing and evaluating the design and operating effectiveness of

internal control based on the assessed risk. The procedures selected

depend on the auditor’s judgement, including the assessment of the

risks of material misstatement of the financial statements, whether due

to fraud or error.

We believe that the audit evidence we have obtained is sufficient and

appropriate to provide a basis for our audit opinion on the internal

financial controls with reference to financial statement of the Company

and its subsidiary company, which are companies incorporate in India.

Meaning of Internal Financial Controls with reference to financial

statement

A company's internal financial control with reference to financial

statement is a process designed to provide reasonable assurance

regarding the reliability of financial reporting and the preparation of

financial statements for external purposes in accordance with generally

accepted accounting principles. A company's internal financial control

with reference to financial statement includes those policies and

procedures that (1) pertain to the maintenance of records that, in

reasonable detail, accurately and fairly reflect the transactions and

dispositions of the assets of the company; (2) provide reasonable

assurance that transactions are recorded as necessary to permit

preparation of financial statements in accordance with generally

accepted accounting principles, and that receipts and expenditures of

the company are being made only in accordance with authorizations of

management and directors of the company; and (3) provide reasonable

assurance regarding prevention or timely detection of unauthorized

acquisition, use, or disposition of the company's assets that could have a

material effect on the financial statements.

Because of the inherent limitations of internal financial controls with

reference to financial statement, including the possibility of collusion or

improper management override of controls, material misstatements due

to error or fraud may occur and not be detected. Also, projections of any

evaluation of the internal financial controls with reference to financial

statement to future periods are subject to the risk that the internal

financial control with reference to financial statement may become

inadequate because of changes in conditions, or that the degree of

compliance with the policies or procedures may deteriorate.



Inherent Limitations of Internal Financial Controls with reference to

financial statement


Vikas Kumar

Partner



Place: Mumbai


sd/-


CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2020 (Rs. in Lakh)

ASSETS

I. Financial assets

(a) Cash and cash equivalents 5 5,807.36

13,020.72

(b) Bank balances other than (a) above 6 20,544.63

30,522.00

(c) Loans 7 169,454.34

133,652.17

(d) Investments 8 26,648.42

8,038.20

(e) Other financial assets 9 2,296.57

284.70

224,751.31

185,517.79

II. Non-financial assets

(a) Current tax assets (net) 10 290.30

0.54

(b) Deferred tax assets (net) 11 178.63

540.97

(c) Property, plant and equipment 12 153.98

102.52

(d) Other intangible assets 12 36.69

36.01

(e) Right of use asset 13 538.65

-

(f) Other non-financial assets 14 108.26

81.70

1,306.52

761.74

III. Assets held for sale 15 652.22

49.76

Total Assets 226,710.05

186,329.28

LIABILITIES AND EQUITY

I. Financial liabilities

(a) Trade payables 16

- total outstanding dues of micro and small enterprises 4.15

-

- total outstanding dues to creditors other than micro and

small enterprises

147.57

88.43

(b) Debt securities 17 36,129.00

41,891.30

(c) Borrowings (other than debt securities) 18 93,052.01

56,951.73

(d) Other financial liabilities 19 8,432.64

11,093.87

137,765.37

110,025.33

Non-financial liabilities

(a) Current tax liabilities (net) 20 -

143.68

(b) Provisions 21 160.21

79.05

(c) Deferred tax liabilities 11 -

0.15

(c) Other non-financial liabilities 22 287.03

330.08

447.24

552.96

III. EQUITY

(a) Equity share capital 23 51,845.53

35,382.18

(b) Other equity 24 36,651.92

40,368.81

Total equity 88,497.44

75,750.99

Total liabilities and equity 226,710.05

186,329.28

1 to 51



(DIN00147182) (DIN06597041) (DIN02032154 )



The accompanying notes form an integral part of the financial statements

Particulars Note

No.

As at

March 31, 2019

As at

March 31, 2020

sd/-

For M/s T R Chadha & Co LLP

Firm Registration No.: 06711N/N500028

Vikas Kumar

Partner



Place : Mumbai

Chartered Accountants For and on behalf of the Board of Directors of


sd/- sd/- sd/-

sd/- sd/-

II.

In terms of our report attached

(Rs. in Lakh)

1 to 51The accompanying notes form an integral part of the financial statements

Particulars Note

No.

For the year ended

March 31, 2020

For the year ended

March 31, 2019

I. IncomeRevenue from operations

Interest income 25 22,896.27

15,035.11

Fees and commission income 26 301.07

371.31

Net gain on derecognition of financial instruments 27 1,636.39

-

Other operating income 28 238.25

95.65

Total revenue from operations 25,071.98

15,502.07

Other income 29 4,320.60

2,119.75

Total income 29,392.58

17,621.83

II. Expenses

Finance costs 30 11,061.87

6,928.06

Impairment on financial instruments 31 432.18

356.76

Employee benefits expense 32 4,778.49

4,476.46

Depreciation and amortisation expense 12 163.38

44.73

Other expenses 33 1,215.00

873.37

Total expenses 17,650.92

12,679.38

III. Profit before tax 11,741.66

4,942.45

IV. Tax expense

Current tax 34 2,329.44

1,528.88

Earlier year tax 13.76

153.73

Deferred tax 34 368.90

(349.64)

Total tax expense 2,712.09

1,332.97

V. Net profit after tax 9,029.56

3,609.48

VI. Other comprehensive income

Items that will not be reclassified to profit or loss- Actuarial loss on post retirement benefit plans (33.57)

(13.74)

- Income tax on above 8.60

3.79

Total other comprehensive income (24.96)

(9.95)

VII. Total comprehensive income 9,004.60

3,599.53

VIII. Earnings per equity share 36

(Face value of Rs. 100/- each)Basic (Rs.) 17.81

10.20

Diluted (Rs.) 17.58

9.45



(DIN00147182) (DIN06597041) (DIN02032154 )



sd/-



Vikas Kumar

Partner



Place : Mumbai



sd/- sd/- sd/-

sd/- sd/-



CONSOLIDATED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2020

(Rs. in Lakh)

Particulars Note

No.

A. Cash flow from operating activitiesProfit before tax 11,741.66

6,006.91

Adjustment for:Depreciation and amortisation expenses 12 65.70

44.73

Depreciation and amortisation expenses (ROU) 13 97.68

-

Net gain on fair value changes (unrealised) 29 (13.11)

(8.20)

Net gain on fair value changes (realised) 29 (477.24)

Provision for impairment on financial instruments 31 432.18

356.76

Interest on fixed deposits (2,439.44)

(798.53)

Interest expense on lease liabilty 30 41.24

-

Reversal of rent equalization (opening) 4.81

-

Gain / loss on derecognition of financial asset 27 (1,636.39)

-

Employee stock option 32 299.95

-

Provision for employee benefit expense (OCI) (24.97)

-

Gain/Loss on sale of fixed asset 29 (0.02)

(10.50)

Operating profit before working capital changes 8,092.04

5,591.17

Adjustment for:Decrease / (Increase) in non-financial assets (27.73)

(60.82)

Decrease / (Increase) in other financial assets (984.62)

833.89

Decrease / (Increase) in financial liabilities (3,057.53)

436.51

Decrease / (Increase) in non financial liabilities 43.26

(168.91)

Cash generated from (used in) operations 4,065.42

6,631.82

Direct taxes paid (net) (2,776.64)

(1,465.17)

Net cash (used in) operating activities 1,288.78

5,166.65

Loans disbursed to customer (67,339.68)

(76,523.77)

Loans repayment received (incl. foreclosed, direct assignment, etc.) 31,105.32

16,887.99

Net cash (used in) operating activities (34,945.58)

(54,469.12)

B. Cash flow from investing activitiesInvestments in mutual fund units (703,474.93)

(231,053.20)

Sale of mutual fund units 705,355.06

223,023.20

Investment in other deposits 8 (20,000.00)

-

Interest received on bank deposits 2,439.44

798.53

12 (117.82)

(57.04)

Investment in Bank deposits (65,194.70)

(68,046.68)

Proceeds from redemption of Bank deposit 75,172.07

36,545.68

Net cash (used in) investment activities (5,820.89)

(38,789.51)

C. Cash flow from financing activities

Proceeds from issue of equity share 3,437.11

-

Payment of lease liabilities (221.99)

-

Share application money (pending allotment) -

34,363.59

Proceeds from long-term borrowings 49,783.02

61,720.31

Repayment of long-term borrowings (21,443.68)

(10,309.25)

(Repayment of) / proceeds from short-term borrowings (net) 1,998.64

(17.15)

Net cash generated from financing activities

Net (decrease) / increase in cash and cash equivalents (A+B+C) (7,213.36)

(7,501.13)

Cash and cash equivalents at the beginning of the year 13,020.72

20,521.85

Acquisition/Purchase/Sale of property, plant & equipment and intangible assets (net)

5,807.36 13,020.72Cash and cash equivalents at the end of the year (refer note 5)

For the year ended

March 31, 2020

For the year ended

March 31, 2019

33,553.09 85,757.50


CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED MARCH 31, 2020

Components of Cash & Cash EquivalentsCash on hand 13.92 8.87

Balance with banks:768.92

1,688.06

24.51

13.79

5,000.00

11,310.00

Total cash & cash equivalents 5,807.36

13,020.72

Operational cash flow from InterestInterest received 20,684.87

13,402.93

Interest paid (10,474.19)

(6,618.03)

The accompanying notes form an integral part of the financial statements 1 to 51

- In deposit accounts with original maturity less than 3 months or less

- In cash credit accounts- In current accounts

(Rs. in Lakh)

Particulars Note

No. For the year ended

March 31, 2020

For the year ended

March 31, 2019



(DIN00147182) (DIN06597041) (DIN02032154 )



sd/-



Vikas Kumar

Partner



Place : Mumbai



sd/- sd/- sd/-

sd/- sd/-



CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED MARCH 31, 2020

A. E

QU

ITY

SH

AR

E C

AP

ITA

L(R

s. in

Lakh

)

Bala

nc

e a

s a

t

Ap

ril

1,

2018

Bala

nc

e a

s a

t

Marc

h 3

1,2

020

35,3

82.1

8

-

35

,382

.18

1

6,4

63

.35

5

1,8

45

.53

S

pe

cial r

ese

rve

S

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Pre

miu

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Sh

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Op

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n

Ou

tsta

nd

ing

Acc

ou

nt

Re

tain

ed

Earn

ing

s

Bala

nc

e a

s a

t A

pri

l 1, 2018

-

627

.65

-

11

1.9

9

-

5

91

.64

Oth

er

com

pre

hensiv

e incom

e for

the y

ear

-

-

-

-

-

Re

ceiv

ed d

uri

ng the y

ear

34,3

63.5

9

-

-

-

-

Tra

nsfe

rred fro

m s

tate

ment of

pro

fit and

-

1,1

25.0

0

-

-

-

(1

,12

5.0

0)

Em

plo

yee s

tock

option s

che

me

-

-

-

-

1,0

74.4

1

-

-

-

-

-

3,6

09.3

4

Bala

nc

e a

s a

t M

arc

h 3

1, 2

019

34,3

63.5

9

1,7

52.6

5

-

11

1.9

9

1,0

74.4

1

3,0

66.0

3

-

-

-

-

-

9,2

24.8

1

Re

vers

al fo

r openin

g -

rent equaliz

ation

-

-

-

-

-

Pre

miu

m r

eceiv

ed o

n s

hare

s issued d

uri

ng

-

-

21,3

37

.35

-

-

Tra

nsfe

rred fro

m s

tate

ment of

pro

fit and

-

1,9

51.6

3

-

-

299

.95

(1,9

51.6

3)

Pre

miu

m o

n s

hare

s issued u

nder

em

plo

yee

-

-

39.3

6

-

(39.3

6)

Sha

re issu

ed a

gain

st share

applic

ation

(34,3

63.5

9)

-

-

-

-

Oth

er

com

pre

hensiv

e incom

e for

the y

ear

-

-

(4.9

8)

-

-

(24.9

7)

Bala

nc

e a

s a

t M

arc

h 3

1, 2020

-

3,7

04.2

8

21,3

71

.73

11

1.9

9

1,3

35.0

1

10,3

19

.03

Th

e a

ccom

panyi

ng n

ote

s form

an inte

gra

l part

of

the fi

nancia

l sta

tem

en

ts 1

to

51

Ch

an

ge

s i

n e

qu

ity

sh

are

cap

ita

l d

uri

ng

th

e y

ea

r

Re

serv

es

an

d S

urp

lus

Bala

nc

e a

s a

t

Marc

h 3

1,2

01

9

Ch

an

ge

s i

n e

qu

ity

sh

are

cap

ita

l d

uri

ng

th

e y

ea

r

Eq

uit

y s

ha

re c

ap

ital

B. O

TH

ER

EQ

UIT

Y

sto

ck

option s

chem

e

Share

Ap

plic

atio

n

Mo

ney

(Pen

din

g

Allo

tmen

t)

Part

icu

lars

Pa

tla

s

ric

ur

(Rs.

in L

akh

)

1,3

31.2

8

(9.9

5)

(9.9

5)

-3

4,3

63

.59

loss

-

-1

,07

4.4

1 P

rofit fo

r th

e y

ear

3,6

09.3

44

0,3

68

.67

Pro

fit fo

r th

e y

ear

9,2

24.8

14

.81

4.8

1

the

year

-2

1,3

37

.35

loss

299

.95

--

-(3

4,3

63

.59

)

(24.9

7)

36,8

47

.02

To

tal

Ren

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Ram

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sh

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San

deep

Men

on

Chairpers

on

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r

(DIN

00147182)

(DIN

06597041)

(DIN

02032154 )

Su

jay

Pati

lP

allav

i B

ham

bere

Chie

f F

inancia

l Offi

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Com

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Secre

tary

sd/-

Fo

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/s T

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ha

dh

a &

Co

LL

P

Firm

Re

gis

tratio

n N

o.: 0

6711

N/N

500028

Vik

as

Ku

ma

r

Part

ner

Me

mb

ers

hip

No. 075363

Da

te :

April 2

9, 2020

Pla

ce : M

um

bai

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Fo

r a

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Va

stu

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imit

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sd/-

sd/-

sd/-

sd/-

sd/-

In te

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of our

report

attach

ed

VA

ST

U H

OU

SIN

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INA

NC

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OR

PO

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IMIT

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OF

CH

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MA

RC

H 3

1, 2020

VASTU HOUSING FINANCE CORPORATION LIMITEDNotes forming part of the consolidated financial statements

Vastu Housing Finance Corporation Limited ('the Holding

Company') is a public limited company domiciled in India and

incorporated under the provisions of the Companies Act, 1956

and holding a certificate of registration number 02.0062.05 from

the National Housing Bank ("NHB") dated October 27, 2005. The

principal business of the Company is to provide long term

financing regarding housing finance for purchase, construction,

development and repair of houses, apartments and other in India.

The Company is registered with the National Housing Bank as

Non-Deposit taking Housing Finance Company (HFC). At

present, the Company is providing its service in 12 states through

66 branches including 3 Head offices.

Vastu Finserve India Private Limited ('the Subsidiary') is a

deemed public company domiciled in India and incorporated

under the provisions of the Companies Act, 2013. The Company

is a Non-Banking Financial Company (NBFC) engaged in the

business of providing financial services, to lend and advance

money and assets of all kinds or give credit on any terms or mode

and with or without security to any individual, firm, body corporate

or any other entity, to enter into guarantees, contracts of

indemnity and suretyship of all kinds, and to secure or guarantee

in any manner and upon any terms the payment of any sum of

money or the performance of any obligation by any person, firm or

company.The Company is registered as a Non-Systemically

Important Non-Deposit taking NBFC as defined under Section 45-

IA of the Reserve Bank of India (’RBI’) Act,1934 with effect from

April 22, 2019.The consolidated financial statements were

authorised for issue by the Company's Board of Directors on April

29, 2020.

The Consolidated Financial Statement ('Financial Statement')

relates to Vastu Housing Finance Corporation Limited ('the

Holding Company') and its wholly owned subsidiary Vastu

Finserve India Private Limited (hereinafter collectively referred to

as 'Group' or 'Company')

Effective April 01, 2019, the Group has adopted Ind AS, and the

adoption was carried out under Ind AS 101, First-time Adoption of

Indian Accounting Standards, with April 1, 2018, as the transition

date.

The Consolidated financial statements of the Group are prepared

under the Indian Accounting Standards (Ind AS) and the relevant

provisions of the Companies Act, 2013 (the “Act”) (to the extent

notified). Ind AS are prescribed under Section 133 of the Act read

with Rule 3 of the Companies (Indian Accounting Standards)

Rules, 2015 and relevant amendment rules issued after that.

Basis of preparation and presentation of consolidated financial statements & significant accounting policies

Basis of preparation and presentation of financial statementsStatement of compliance / basis of preparation

Corporate information1.

2.

2.1.

The financial statements presented in Indian Rupees which is the

functional and the presentation currency and all values rounded

to the nearest lakh, except when otherwise indicated.

Accounting policies have been consistently applied except where

a newly-issued Ind AS is initially adopted or a revision to an

existing Ind AS requires a change in the accounting policy

hitherto in use.

The transition was carried out from Indian Accounting Principles

generally accepted in India as prescribed under Section 133 of

the Act, read with Rule 7 of the Companies (Accounts) Rules,

2014 (IGAAP) (Indian Generally Accepted Accounting Principles),

Regulatory directions and guidelines as amended, from time to

time, to the extent applicable, which was the previous Generally

Accepted Accounting Principles (GAAP).

Basis of measurementb.

Historical cost is generally based on the fair value of the

consideration given in exchange for goods and services.

The consolidated financial statements have been prepared on

accrual basis under the historical cost convention except for

specific financial instruments that are measured at fair values at

the end of each reporting period, as explained in the accounting

policies below:

Fair value is the price that would be received to sell an asset or

paid to transfer a liability in an orderly transaction between

market participants at the measurement date, regardless of

whether that price is directly observable or estimated using

another valuation technique. In estimating the fair value of an

asset or a liability, the Group takes into account the

characteristics of the asset or liability that market participants

would take those characteristics into account when pricing the

asset or liability at the measurement date. Fair value for

measurement and disclosure purposes in these financial

statements is determined on such a basis, except for share-

based payment transactions that are within the scope of Ind AS

102, leasing transactions that are within the scope of Ind AS 17,

and measurements that have some similarities to fair value but

are not fair value in use under Ind AS 36.

Fair value measurements under Ind AS are categorised into Level

1, 2, or 3 based on the degree to which the inputs to the fair value

measurements are observable and the significance of the inputs

to the fair value measurement in its entirety, which are as follows;

Level 2 inputs are inputs, other than quoted prices included

within level 1, that are observable for the asset or liability, either

directly or indirectly; and

Level 1 inputs are quoted prices (unadjusted) in active markets

for identical assets or liabilities that the Group can access at the

measurement date.

a.

Level 3 inputs are unobservable inputs for the valuation of assets

or liabilities.

Presentation of financial statements

The consolidated financial statements comprise the financial

statements of the Company and its subsidiary as of March 31st,

2020. The Company consolidates a subsidiary when its controls

exist. Control is achieved when the Company is exposed, or has

rights, to variable returns from its involvement with the investee

and can affect those returns through its power over the investee.

Generally, there is a presumption that a majority of voting rights

result in control. To support this presumption and when the

Company has less than a majority of the voting or similar rights of

an investee, the Company considers all relevant facts and

circumstances in assessing whether it has power over an

investee, including :

The Balance Sheet and the Statement of Profit and Loss are

prepared and presented in the format prescribed in Schedule III

to the Act. The Statement of Cash Flows has been prepared and

presented as per the requirements of Ind AS 7 “Statement of

Cash Flows”.

Basis of consolidation

c.

d.

Rights arising from other contractual arrangements

The size of the Company’s holding of voting rights relative

to the size and dispersion of the holdings of the other

voting rights holders

The Company’s voting rights and potential voting rights

The contractual arrangement with the other vote holders

of the investee

The Company re-assesses whether or not it controls an investee

if facts and circumstances indicate that there are changes to one

or more of the three elements of control. Consolidation of a

subsidiary begins when the Company obtains control over the

subsidiary and ceases when the Company loses control of the

subsidiary. Assets, liabilities, income and expenses of a

subsidiary acquired or disposed of during the year are included in

the consolidated financial statements from the date the Company

gains control until the date the Company ceases to control the

subsidiary.

Consolidated financial statements are prepared using uniform

accounting policies for like transactions and other events in

similar circumstances. If a member of the Company uses

accounting policies other than those adopted in the consolidated

financial statements for like transactions and events in similar

circumstances, appropriate adjustments are made to that

Company member’s financial statements in preparing the

consolidated financial statements to ensure conformity with the

Company’s accounting policies.

The financial statements of all entities used for the purpose of

consolidation are drawn up to same reporting date as that of the

parent company, i.e., year ended on 31 March.

Combine like items of assets, liabilities, equity, income,

expenses and cash flows of the parent with those of its

subsidiary. For this purpose, income and expenses of the

subsidiary are based on the amounts of the assets and

liabilities recognised in the consolidated financial statements at

the acquisition date.

Eliminate in full intra-Company assets and liabilities, equity,

income, expenses and cash flows relating to transactions

between entities of the Company (profits or losses resulting

from intra Company transactions that are recognised in assets,

such as inventory and fixed assets, are eliminated in full). Intra

Company losses may indicate an impairment that requires

recognition in the consolidated financial statements. Ind AS 12

Income Taxes applies to temporary differences that arise from

the elimination of profits and losses resulting from intra

Company transactions. Profit or loss and each component of

OCI are attributed to the equity holders of the parent of the

Company and to the noncontrolling interests, even if this results

in the non-controlling interests having a deficit balance.When

necessary, adjustments are made to the financial statements of

subsidiary to bring their accounting policies in line with the

Company’s accounting policies. All intra-Company assets,

liabilities, equity, income, expenses and cash flows relating to

transactions between members of the Company are eliminated

in full on consolidation.

Offset (eliminate) the carrying amount of the parent’s

investment in each subsidiary and the parent’s portion of equity

of each subsidiary. Business combinations policy explains how

to account for any related goodwill.

Consolidation Procedure

a.

b.

c.

2.2. Significant Accounting Policies

Property, plant and equipment and intangible assets

Depreciation/amortization is recognized on a straight-line basis

over the lower of the estimated useful lives of respective assets

prescribed under the Schedule II to the Companies Act, 2013 or

as estimated by Management as under:

I. Property, plant and equipment (PPE) are recognised when

it is probable that future economic benefits associated with the

item flows to the group Companies, and the cost of the item can

be measured reliably. The cost comprises of the purchase price,

and any attributable cost of bringing the asset to its working

condition for intended use net of tax/duty credits availed, less

accumulated depreciation and cumulative impairment if any.

Premises

Furniture & Fixtures

Computer Hardware

Leasehold Improvements

Office Equipment

30 Years

10 Years

3 Years

3 Years

5 Years

Category of Assets Useful Life

a.

Assets costing less than Rs 5,000 are fully depreciated in the

year of capitalization. The estimated useful lives, residual

values and depreciation method are reviewed at the end of

each reporting period, with the effect of any changes in estimate

accounted for on a prospective basis. An item of property, plant

and equipment is derecognised upon disposal or when no future

economic benefits are expected to arise from the continued use

of the asset. Gain/loss arising on disposal/retirement of an item

of property, plant and equipment is determined as the difference

between the sales proceeds and the carrying amount of the

asset and is recognised in profit or loss.

ii. Intangible: Intangible assets are recognised when it is

probable that the future economic benefits that are attributable

to the asset flow to the enterprise, and the cost of the asset can

be measured reliably. Intangible assets are stated at original

cost net of tax/duty credits availed, if any, less accumulated

amortisation and cumulative impairment. Administrative and

other general overhead expenses that are individually

attributable to the acquisition of intangible assets are allocated

and capitalised as a part of the cost of the intangible assets.

Intangible assets are amortised on a straight-line basis over the

estimated useful life of 3 years. The method of amortisation,

useful life are reviewed at end of accounting year with the effect

of changes in the estimate being accounted for on a prospective

basis.

Amortisation on impaired assets is provided by adjusting the

amortisation charge in the remaining periods to allocate the

asset’s revised carrying amount over its remaining useful life.

An intangible asset is derecognised on disposal, or when no

future economic benefits are expected from use or disposal.

Gains or losses arising from derecognition of an intangible

asset, measured as the difference between the net disposal

proceeds and the carrying amount of the asset, are recognised

in profit or loss when the asset is derecognised.

Deemed cost on transition to Ind AS

For the transition to Ind AS, the group Companies has elected

to continue with the carrying value of all of its property, plant

and equipment and intangible assets recognised as of April 1,

2018 (transition date) measured as per the previous GAAP and

use that carrying value as its deemed cost as of the transition

date.

As at the end of each year, the group Companies reviews the

carrying amount of its non-financial assets that is PPE and

intangible to determine whether there is any indication that

these assets have suffered an impairment loss. An asset is

considered as impaired when on the balance sheet date there

are indications of impairment in the carrying amount of the

assets, or where applicable the cash-generating unit to which

the asset belongs, exceeds its recoverable amount (i.e. the

higher of the assets’ net selling price and value in use). Carrying

amount is reduced to the level of recoverable amount, and the

reduction is recognized as an impairment loss in the Statement

of Profit and Loss.

Impairment on non-financial assetsb.

When an impairment loss is subsequently reversed, the

carrying amount of the asset (or the cash-generating unit) is

increased to the revised estimate of its recoverable amount. But

so that the increased carrying amount does not exceed the

carrying amount that would have been determined had no

impairment loss been recognised for the asset (or the cash-

generating unit) in prior years. A reversal of an impairment loss

is recognised immediately in the statement of profit or loss.

Revenue Recognition

ii. Fees and commission income Fee and commission income

include fees and commitment charges other than those that are

an integral part of EIR. The group Companies recognises the

other fee and commission income under the terms and

conditions of the relevant contract/agreement.

iii. Investment Income Gains/ losses on the sale of

investments are recognized in the Statement of Profit and Loss

on the trade date. Gain or loss on the sale o investments is

determined after consideration of cost on a first in first out

(FIFO) basis.

Revenue is recognised to the extent that the economic benefits

probably flow to the group Companies, and the revenue can be

reliably measured, and there exists reasonable certainty of its

recovery.

The calculation takes into account all contractual terms of the

financial instrument (for example, prepayment options). It

includes all fees paid or received between parties to the

contract that are incremental and are directly attributable to the

specific lending arrangement, transaction costs, and all other

premiums or discounts. For financial assets at FVTPL (fair

value through profit & loss), transaction costs are recognised in

profit or loss at initial recognition.

Overdue interest and other ancillary charges in respect of loans

are recognized upon realisation.

The EIR is the rate that exactly discounts estimated future cash

flows of the financial instrument through the expected life of the

financial instrument or, where appropriate, a shorter period, to

the net carrying amount of the financial instrument. The future

cash flows are estimated, taking into account all the contractual

terms of the instrument.

The interest income is calculated by applying the EIR to the

gross carrying amount of non-credit impaired financial assets

(i.e. at the amortised cost of the financial asset before adjusting

for any expected credit loss allowance). For credit-impaired

financial assets, the interest income is calculated by applying

the EIR to the amortised cost of the credit-impaired financial

assets (i.e. the gross carrying amount less the allowance for

expected credit losses (ECLs). However, no interest has been

charged on credit impaired loans as a matter of prudence.

i. Interest income Interest income on financial instruments at

amortised cost is recognised on a time proportion basis, taking

into account the amount outstanding and the effective interest

rate (EIR) applicable. Interest on financial instruments

measured as at fair value is included within the fair value

movement during the period.

c.

Right of use assets is depreciated from the commencement

date on a straight-line basis over the shorter of the lease term

the recognition of the gain or loss on the change in fair value of

the item (i.e., translation differences on items whose fair value

gain or loss is

Transactions in foreign currencies are initially recorded by the

group Companies at their respective functional currency spot

rates at the date the transaction first qualifies for recognition.

iv Dividend Income Dividend income is recognized when the

group’s right to receive the payment is established; probably,

the economic benefits associated with the dividend flow to the

entity and the amount of the dividend can be measured reliably.

Generally, when shareholders approve the dividend.

Income and expenses in foreign currencies are initially

recorded by the group Companies at the exchange rates

prevailing on the date of the transaction.

Non-monetary items that are measured in terms of historical

cost in a foreign currency are translated using the exchange

rates at the dates of the initial transactions. Non-monetary

items measured at fair value in a foreign currency are translated

using the exchange rates at the date when the fair value is

determined. The gain or loss arising on translation of non-

monetary items measured at fair value is treated in line with

Lease

The group’s lease asset primarily consists of leases for

buildings. The group assesses whether a contract contains a

lease, at the inception of a contract. A contract is, or contains, a

lease if the contract conveys the right to control the use of an

identified asset for a period of time in exchange for a

consideration. To assess whether a contract conveys the right

to control the use of an identified asset, the group Companies

assesses whether: (i) the contract involves the use of an

identified asset (ii) the group Companies has substantially all of

the economic benefits from the use of the asset through the

period of the lease and (iii) the group Companies has the right

to direct the use of the asset.

At the date of commencement of the lease, the group

Companies recognizes a right-of-use asset (“ROU”) and a

corresponding lease liability for all lease arrangements in which

it is a lessee, except for leases with a term of twelve months or

less (short-term leases) and low-value leases. For these short-

term and low-value leases, the group Companies recognizes

the lease payments as an operating expense.

The right-of-use assets initially recognized at cost, which

comprises the initial amount of the lease liability adjusted for

any lease payments made at or before the commencement date

of the lease plus any initial direct costs less any lease

incentives. They are subsequently measured at cost less

accumulated depreciation and impairment losses.

Foreign currency

Foreign currency denominated monetary assets and liabilities

are translated at the functional currency spot rates of exchange

at the reporting date, and exchange gains and losses arising on

settlement and restatement are recognized in the Statement of

profit and loss.

d.

e.

and useful life of the underlying asset. Right of use assets is

evaluated for recoverability whenever events or changes in

circumstances indicate that their carrying amounts may not be

recoverable. For impairment testing, the recoverable amount

(i.e. the higher of the fair value less cost to sell and the value-in-

use) is determined on an individual asset basis unless the asset

does not generate cash flows that are largely independent of

those from other assets. In such cases, the recoverable amount

is determined for the Cash Generating Unit (CGU) to which the

asset belongs.

The lease liability is initially measured at amortized cost at the

present value of the future lease payments. The lease

payments are discounted using the interest rate implicit in the

lease or, if not readily determinable, using the incremental

borrowing rates. Lease liabilities are remeasured with a

corresponding adjustment to the related right of use asset if the

group Companies changes its assessment of whether it

exercises an extension or a termination option.

Lease liability and ROU asset have been separately presented

in the Balance Sheet, and lease payments have been classified

as financing

cash flows.

Borrowing costs

Borrowing costs that are attributable to the acquisition,

construction or production of qualifying assets as defined in Ind

AS 23 are capitalized as a part of costs of such assets. A

qualifying asset is one that necessarily takes a substantial time

to get ready for its intended use.

Employee Benefits

Interest expenses are calculated using the effective interest

rate (EIR), and all other Borrowing costs are recognised in the

Statement of profit and loss in the period in which they are

incurred.

Share-based payment arrangements

the vesting period, the cumulative discount recognised as an

expense in respect of such grant is transferred to the general

reserve within other equity.

Defined contribution plan

Retirement benefit costs and termination benefits

Retirement benefit in the form of provident fund is a defined

contribution scheme. The group Companies has no obligation,

other than the contribution payable to the provident fund. The

group Companies recognizes contribution payable to the

provident fund scheme as an employee benefit expense when

an employee renders the related service. If the contribution

payable to the scheme for service received before the balance

sheet date exceeds the contribution already paid, the deficit

payable to the scheme is recognized as a liability after

deducting the contribution already paid.

The stock options granted to employees under the group’s

stock options schemes are measured at the fair value of the

options at the grant date. The fair value of the options is treated

as a discount and accounted as employee compensation cost

over the vesting period on a straightline basis. Amount

recognised as an expense in each year is arrived at based on

the number of grants expected to vest. If a grant lapses after

f.

g.

Defined benefit obligation

The group Companies gratuity liability under the Payment of

Gratuity Act,1972 is determined based on an actuarial valuation

made at the end of each financial year using the projected unit

credit method.

The group Companies net obligation in respect of defined

benefit plans is calculated by estimating the amount of future

benefit that employees have earned in the current and prior

periods, discounting that amount and deducting the fair value of

any plan assets. The calculation of defined benefit obligations is

performed annually by a qualified actuary using the projected

unit credit method. When the calculation results in a potential

asset for the group Companies, the recognised asset is limited

to the present value of economic benefits available in the form

of any future refunds from the plan or reductions in future

contributions to the plan.

Remeasurement of the net defined benefit liability, which

comprises of actuarial gains and losses, the return on plan

assets (excluding interest) and the effect of the asset ceiling (if

any, excluding interest), are recognised immediately in other

comprehensive income (OCI). Remeasurements are not

reclassified to profit or loss in the subsequent year. Net interest

expense (income) on the net defined liability (assets) is

computed by applying the discount rate, used to measure the

net defined liability (asset), to the net defined liability (asset) at

the start of the financial year after taking into account any

changes as a result of contribution and benefit payments made

during the year. Net interest expense and other expenses

related to defined benefit plans are recognised in the statement

of profit and loss.

When the benefits of a plan are changed or when a plan is

curtailed, the resulting change in benefit that relates to past

service or the gain or loss on curtailment is recognised

immediately in Statement of profit and loss. The group

Companies recognises gains and losses on the settlement of a

defined benefit plan when the settlement occurs.

The undiscounted amount of short term employee benefits

expected to be paid in exchange for the services rendered by

employees are recognised during the year when the employee

renders the service. A liability is recognised for the amount

expected to be paid if the group Companies has a present legal

or constructive obligation to pay this amount as a result of past

service provided by the employee and the obligation can be

estimated reliably. These benefits include performance

incentive etc. which are expected to occur within twelve months

after the end of the period in which the employee renders the

related service.

Short-term employee benefits

Other Long-term employee benefits

Liabilities recognised in respect of other long-term employee

benefits are measured at the present value of the estimated

future cash outflows expected to be made by the group

Companies in respect of services provided by employees up to

the reporting date.

The Income tax expense represents the sum of the current tax

and deferred tax. Current and deferred taxes are recognised in

the Statement of profit and loss, except when they relate to

items that are recognised in other comprehensive income or

directly in equity, in which case, the current and deferred tax are

also recognised in other comprehensive income or directly in

equity respectively.

Income tax

Current tax

The tax currently payable is based on the taxable profit for the

year of the group Companies. Taxable profit differs from 'profit

before tax' as reported in the Statement of profit and loss

because of items of income or expense that are taxable or

deductible in other years and items that are never taxable or

deductible. The current tax is calculated using applicable tax

rates that have been enacted or substantively enacted by the

end of the reporting period.

The carrying amount of deferred tax assets is reviewed at the

end of each reporting period and reduced to the extent that it is

no longer probable that sufficient taxable profits are available to

allow all or part of the assets to be recovered.

Deferred tax liabilities and assets are measured at the tax rates

that are expected to apply in the period in which the liability is

settled, or the asset is realised, based on tax rates (and tax

laws) that have been enacted or substantively enacted by the

end of the reporting period.

Deferred tax is recognised on temporary differences between

the carrying amounts of assets and liabilities in the Company’s

consolidated financial statements and the corresponding tax

bases used in the computation of taxable profit. Deferred tax

assets are generally recognised, for all temporary deductible

differences, to the extent that it is probable that taxable profits

are available against which those temporary deductible

differences can be utilised. Such deferred tax assets and

liabilities are not recognised if the temporary difference arises

from the initial recognition (other than in a business

combination) of assets and liabilities in a transaction that

affects neither the taxable profit nor the accounting profit. Also,

deferred tax liabilities are not recognised if the temporary

difference arises from the initial recognition of goodwill.

Deferred tax liabilities are recognised for taxable temporary

differences associated with investments in subsidiaries, except

where the group Companies is able to control the reversal of

temporary difference and it is probable that the temporary

difference will not reverse in the foreseeable future. Deferred

tax assets arising from deductible temporary differences

associated with such investments and interests are only

recognised to the extent that it is probable that there will be

sufficient taxable profits against which it can utilise the benefits

of the temporary differences and they are expected to reverse

in the foreseeable future.

Deferred tax

h.

Provisions, contingent liabilities and contingent assets

Goods and Services tax input credit is accounted for in the

books for the period in which the supply of goods or service

received is accounted and when there is no uncertainty in

availing/utilising the credits.

Deferred tax assets and liabilities are offset when there is a

legally enforceable right to set off current tax assets against

current tax liabilities and when they relate to income taxes

levied by the same taxation authority and the group Companies

intends to settle its current tax assets and liabilities on a net

basis.

Goods and Service tax input credit

Group has a present obligation (legal or constructive) as a

result of a past event; and

it is probable that an outflow of resources embodying

economic benefits will be required to settle the obligation;

and

a reliable estimate can be made of the amount of the

obligation.

These are reviewed at each balance sheet date and adjusted to

reflect the current best estimates.Long term provisions are

determined by discounting the expected future cash flows

specific to the liability. The unwinding of the discount is

recognised as a finance cost. A provision for onerous contracts

is measured at the present value of the lower of the expected

cost of terminating the contract and the expected net cost of

continuing with the contract. Before a provision is established,

the group Companies recognises any impairment loss on the

assets associated with that contract.

Contingent liability is disclosed in case of:

i. a present obligation arising from past events, when it is not

probable that an outflow of resources will be required to settle

the obligation; and

Contingent liabilities are reviewed at each balance sheet date.

ii. a present obligation arising from past events, when no reliable

estimate is possible.

Provisions are recognised when:

Contingent assets:

Contingent assets are not recognized in the financial

statements. Contingent asset are disclosed where an inflow of

economic benefits is

Commitments are future liabilities for contractual expenditure,

classified and disclosed as follows:

Uncalled liability on shares and other investments partly paid;

Other non-cancellable commitments, if any, to the extent they

are considered material and relevant in the opinion of

management. Other commitments related to ales/

procurements made in the normal course of business are not

disclosed to avoid excessive details.

Commitments

Estimated amount of contracts remaining to be executed on

capital account and not provided for;

j.

ii.

iii.

k.

Cash and cash equivalents (including bank balances) shown in

the Statement of Cash Flows exclude items which are not

available for general use as on the date of Balance Sheet

Segments

in all other cases, the fair value will be adjusted to bring it in line

with the transaction price (i.e. day 1 profit or loss will be

deferred by including it in the initial carrying amount of the asset

or liability). After initial recognition, the deferred gain or loss is

released to the Statement of profit and loss on a rational basis,

only to the extent that it arises from a change in a factor

(including time) that market participants would take into account

when pricing the asset or liability.

iii. All other items for which the cash effects are investing or

financing cash flows.

Recognised financial assets and financial liabilities are initially

measured at fair value. Transaction costs and revenues that are

directly attributable to the acquisition or issue of financial assets

and financial liabilities (other than financial assets and financial

liabilities at FVTPL) are added to or deducted from the fair value

of the financial assets or financial liabilities, as appropriate, on

initial recognition. Transaction costs and revenues directly

attributable to the acquisition of financial assets or financial

liabilities at FVTPL are recognised immediately in the statement

of profit or loss.

ii. Non-cash items such as depreciation, provisions, deferred

taxes, unrealised foreign currency gains and losses, and;

Statement of Cash Flows is prepared segregating the cash

flows into operating, investing and financing activities. Cash

flow from operating activities is reported using indirect method

adjusting the net profit for the effects of:

Financial Instruments

i. Changes during the period in inventories and operating

receivables and payables transactions of a non-cash nature;

The group's primary business is financing by way of loans for

the purchase or construction of residential houses and other

mortgage loans in India. All other activities of the group

Companies revolve around the main business. In the context of

Ind AS 108 – Operating Segments reporting is considered to

constitute as one reportable segment.

i. Recognition of financial instruments

Financial instruments comprise of financial assets and financial

liabilities. Financial assets and liabilities are recognized when

the group Companies becomes the party to the contractual

provisions of the instruments. Financial assets primarily

comprise of loans and advances, deposits, trade receivables

and cash and cash equivalents. Financial liabilities primarily

comprise of borrowings and trade payables.

ii. Initial measurement of financial instruments

If the transaction price differs from fair value at initial

recognition, the group Companies will account for such

difference as follows:

if fair value is evidenced by a quoted price in an active market

for an identical asset or liability or based on a valuation

technique that uses only data from observable markets, then

the difference is recognised in profit or loss on initial recognition

(i.e. day 1 profit or loss);

m.

n.

ii.

iii.

i.

i.

i.

the group Companies may irrevocably designate a debt

instrument that meets the amortised cost or FVTOCI criteria as

measured at FVTPL if doing so eliminates or significantly

reduces an accounting mismatch (referred to as the fair value

option).

all other debt instruments (e.g. debt instruments managed on a

fair value basis, or held for sale) and equity investments are

subsequently measured at FVTPL.

Subsequent measurement of financial assets:

All recognised financial assets that are within the scope of Ind

AS 109 are required to be subsequently measured at amortised

cost or fair value on the basis of the entity’s business model for

managing the financial assets and the contractual cash flow

characteristics of the financial assets

Classification of Financial Assets:

Debt instruments that are held within a business model whose

objective is to collect the contractual cash flows, and that have

contractual cash flows that are solely payments of principal and

interest on the principal amount outstanding (SPPI), are

subsequently measured at amortised cost;

However, the group Companies may make the following

irrevocable election / designation at initial recognition of a

financial asset on an asset-by-asset basis:

iii. Financial Assets

the group Companies may irrevocably elect to present

subsequent changes in fair value of an equity investment that is

neither held for trading nor contingent consideration recognised

by an acquirer in a business combination to which Ind AS 103

applies, in OCI; and

A. financial asset is held for trading if:

it has been acquired principally for the purpose of selling it in

the near term; or

Debt instruments at amortised cost or at FVTOCI

The group Companies assesses the classification and

measurement of a financial asset based on the contractual cash

flow characteristics of the individual asset basis and the group

Companies business model for managing the asset.

For an asset to be classified and measured at amortised cost or

at FVTOCI, its contractual terms should give rise to cash flows

that are meeting SPPI test.

For SPPI test, the principal is the fair value of the financial asset

at initial recognition. That principal amount may change over

the life of the financial asset (e.g. if there are repayments of

principal). Interest consists of consideration for the time value

of money, for the credit risk associated with the principal

amount outstanding during a particular time and for other

primary lending risks and costs, as well as a profit margin. The

SPPI assessment is made in the currency in which the financial

asset is denominated.

it is a derivative that is not designated and effective as a

hedging instrument or a financial guarantee.

on initial recognition it is part of a portfolio of identified financial

instruments that the group Companies manages together and

has a recent actual pattern of short-term profit-taking; or

Debt instruments that are subsequently measured at amortised

cost or at FVTOCI are subject to impairment.

An assessment of the business model for managing financial

assets is fundamental to the classification of a financial asset.

The group Companies determines the business model at a level

that reflects how financial assets are managed at an individual

basis and collectively to achieve a particular business objective.

Reclassifications

Contractual cash flows that are SPPI are consistent with a basic

lending arrangement. Contractual terms that introduce

exposure to risks or volatility in the contractual cash flows that

are unrelated to a basic lending arrangement, such as exposure

to changes in equity prices or commodity prices, do not give

rise to contractual cash flows that are SPPI. An originated, or an

acquired financial asset can be a basic lending arrangement

irrespective of whether it is a loan in its legal form.

Financial assets at fair value through profit or loss (FVTPL)

When a debt instrument measured at FVTOCI is derecognised,

the cumulative gain/loss previously recognised in OCI is

reclassified from equity to profit or loss. In contrast, for an

equity investment designated as measured at FVTOCI, the

cumulative gain/loss previously recognised in OCI is not

subsequently reclassified to profit or loss but transferred within

equity.

A financial asset that meets the amortised cost criteria or debt

instruments that meet the FVTOCI criteria may be designated

as FVTPL upon initial recognition if such designation eliminates

or significantly reduces a measurement or recognition

inconsistency that would arise from measuring assets or

liabilities or recognising the gains and losses on them on

different bases.

If the business model under which the group Companies holds

financial assets changes, the financial assets affected are

reclassified. The classification and measurement requirements

related to the new category apply prospectively from the first

day of the first reporting period following the change in the

business model that results in reclassifying the group’s financial

assets.

Financial assets at FVTPL are measured at fair value at the end

of each reporting period, with any gains or losses arising on

remeasurement recognised in profit or loss. The net gain or loss

recognised in profit or loss incorporates any dividend or interest

earned on the financial asset. Dividend on financial assets at

FVTPL is recognised when the group's right to receive the

dividends is established, and the economic benefits associated

with the dividend probably flow to the entity, the dividend does

not represent a recovery of a part of the cost of the investment,

and the amount of dividend can be measured reliably.

Debt instruments that do not meet the amortised cost criteria or

FVTOCI criteria are measured at FVTPL. In addition, debt

instruments that meet the amortised cost criteria or the FVTOCI

criteria but are designated as at FVTPL are measured at

FVTPL.

Impairment of financial assets

During the current financial year and previous accounting

period, there was no change in the business model under which

the group Companies holds financial assets, and therefore no

reclassifications were made. Changes in contractual cash flows

are considered under the accounting policy on Modification and

derecognition of financial assets described below.

Overview of the Expected Credit Loss (ECL) principles :

The group Companies records allowance for expected credit

losses for all loans, other debt financial assets not held at

FVTPL, together with loan commitments and financial

guarantee contracts, in this section all referred to as ‘financial

instruments’. Equity instruments are not subject to impairment

under Ind AS 109.

Expected credit losses (ECL) are a probability-weighted

estimate of the present value of credit losses. Credit loss is the

difference between all contractual cash flows that are due to the

group Companies under the contract, and all the cash flows that

the group Companies expects to receive (i.e. net cash

shortfalls), discounted at the original effective interest rate (or

credit-adjusted effective interest rate for purchased or

originated credit-impaired financial assets). The group

Companies estimates cash flows by considering all contractual

terms of the financial instrument (for example, prepayment,

extension, call and similar options) through the expected life of

that financial instrument.

The group Companies measures the loss allowance for a

financial instrument at an amount equal to the lifetime expected

credit losses if the credit risk on that financial instrument has

increased significantly since initial recognition. If the credit risk

on a financial instrument has not increased significantly since

initial recognition, the group Companies measures the loss

allowance for that financial instrument at an amount

equal to 12-month expected credit losses. 12-month expected

credit losses are a portion of the lifetime expected credit losses

and represent the lifetime cash shortfalls that result if a default

occurs within the 12 months after the reporting date and thus,

are not cash shortfalls that are predicted over the next 12

months.

Impairment losses and releases are accounted for and

disclosed separately from modification losses or gains that are

accounted for as an adjustment of the financial asset’s gross

carrying value.

A loss allowance for full lifetime ECL is required for a financial

instrument if the credit risk on that financial instrument has

increased significantly since initial recognition. For all other

financial instruments, ECLs are measured at an amount equal

to the 12-month ECL.

The group Companies measures ECL for stage 3 assets (as

defined below) on an individual basis. The measurement of the

loss allowance is based on the present value of the asset’s

expected cash flows using the asset’s original effective interest

rate (EIR).

The group Companies has established a policy to perform an

assessment, at the end of each reporting period, whether a

financial instrument’s credit risk has increased significantly

since initial recognition, by considering the change in the risk of

a default occurring over the remaining life of the financial

instrument.

Based on the above process, the group Companies categorises

its loans into Stage 1, Stage 2 and Stage 3, as described below:

Stage 3 - Non-performing assets (credit impaired assets) with

overdue more than 90 DPD.

Stage 1 - Performing assets (high quality assets) with zero to

thirty days past due (DPD). Stage 1 loans also include facilities

where the credit risk has improved and the loans has been

reclassified from Stage 2.

Stage 2 - Under-performing assets (assets for which there is

significant increase in credit risk) having 31 to 90 DPD. Stage 2

loans also include facilities, where the credit risk has improved

and the loan has been reclassified from Stage 3.

Definition of Default

The definition of default is used in measuring the amount of ECL

and in the determination of whether the loss allowance is based

on 12-

Retains the contractual rights to receive the cash flows of the

financial assets, but assumes a contractual obligation to pay the

cash flows to one or more recipients.

This expected credit loss allowance is computed based on a

provision matrix which takes into account historical credit loss

experience and adjusted for forward-looking information. The

impairment requirements for the recognition and measurement

of a loss allowance are equally applied to debt instruments at

FVTOCI except that the loss allowance is recognised in other

comprehensive income and is not reduced from the carrying

amount in the balance sheet.

A financial asset is derecognised only when :

The Financial assets for which the group Companies has no

reasonable expectations of recovering either the entire

outstanding amount, or a proportion thereof, the gross carrying

amount of the financial asset is reduced. This is considered a

(partial) derecognition of the financial asset.

Derecognition of financial assets

Where the entity has transferred an asset, the group

Companies evaluates whether it has transferred all risks and

rewards of ownership of the financial assets substantially. In

such cases, the financial assets are derecognised.

For trade receivables or any contractual right to receive cash or

another financial asset that result from transactions that are

within the scope of Ind AS 18 and loans under short term

financing, the group Companies always measures the loss

allowance at an amount equal to lifetime expected credit losses.

Further, to measure lifetime expected credit loss allowance for

trade receivables, the group Companies have used a practical

expedient as permitted under Ind AS 109.

The group has transferred the rights to receive cash flows from

the financial assets or

On derecognition of a financial asset under assignment

transaction, the difference between the carrying amount and the

consideration received shall be recognized in the statement of

Profit and Loss.

Write-off

Collateral Valuation and Repossession

Loans and debt securities are written off when the group

Companies have no reasonable expectations of recovering the

financial asset (either in its entirety or a portion of it). In such

cases, the group Companies determines that the borrower does

not have assets or sources of income that could generate

sufficient cash flows to repay the amounts subject to the write-

off. A write-off constitutes a derecognition event. The group

Companies may apply enforcement activities to financial assets

written off. Recoveries resulting from the group’s enforcement

activities result in impairment gains and are credited to

statement of profit and loss.

Financial liabilities and equity instruments

Classification as debt or equity

Debt and equity instruments issued by a group Companies

entity are classified as either financial liabilities or as equity

under the substance of the contractual arrangements and the

definitions of a financial liability and an equity instrument.

Financial liabilities at FVTPL

cash (or another financial asset) for a fixed number of the

group’s equity instruments.

A financial liability is a contractual obligation to deliver cash or

another financial asset or to exchange financial assets or

financial liabilities with another entity under conditions that are

potentially unfavourable to the group Companies or a contract

that will or may be settled in the group’s equity instruments and

is a non-derivative contract for which the group Companies are

or may be obliged to deliver a variable number of its equity

instruments, or a derivative contract over own equity that will or

may be settled other than by the exchange of a fixed amount of

All financial liabilities are subsequently measured at amortised

cost using the effective interest method or at FVTPL. However,

financial liabilities that arise when a transfer of a financial asset

does not qualify for derecognition or when the continuing

involvement approach applies, financial guarantee contracts

issued by the group Companies, and commitments issued by

the group Companies to provide a loan at below-market interest

rate are measured under the specific accounting policies set out

below.

Financial liabilities

Financial liabilities are classified as at FVTPL when the financial

liability is either contingent consideration recognised by the

group Companies as an acquirer in a business combination to

which Ind AS 103 applies or is held for trading or it is designated

as at FVTPL. A financial liability is classified as held for trading

if:

it has been incurred principally for the purpose of repurchasing

it in the near term; or

.

iv.

Financial liabilities subsequently measured at amortized

cost


instruments that the group Companies manages together and

has a recent actual pattern of short-term profit-taking; or

liability (whether or not attributable to the financial difficulty of

the debtor) is accounted for as an extinguishment of the original

financial liability and the recognition of a new financial liability.

The difference between the carrying amount of the financial

liability derecognised and the consideration paid and payable is

recognised in profit or loss.

Cash and cash equivalent in the balance sheet comprise cash

at banks and on hand and short-term investments with an

original maturity of three months or less, which are subject to an

insignificant risk of changes in value. For the purpose of the

statement of cash flows, cash and cash equivalents consist of

cash and short-term investments, as defined above.

Earnings per share


hedging instrument. Financial liabilities that are not held-for-

trading and are not designated as at FVTPL are measured at

amortized cost.

Financial liabilities that are not held-for-trading and are not

designated as at FVTPL are measured at amortized cost at the

end of subsequent accounting periods. The carrying amounts of

financial liabilities that are subsequently measured at amortized

cost are determined based on the effective interest method.

Interest expense that is not capitalized as part of the costs of an

asset is included in the 'Finance costs' line item.

The effective interest method is a method of calculating the

amortized cost of a financial liability and of allocating interest

expense over the relevant period. The effective interest rate is

the rate that exactly discounts estimated future cash payments

(including all fees and points paid or received that form an

integral part of the effective interest rate, transaction costs and

other premiums or discounts) through the expected life of the

financial liability, or (where appropriate) a shorter period, to the

net carrying amount on initial recognition.

Derecognition of financial liabilities

The group Companies derecognises financial liabilities when,

and only when, the group’s obligations are discharged,

cancelled or have expired. An exchange between/with a lender

of debt instruments with substantially different terms is

accounted for as an extinguishment of the original financial

liability and the recognition of a new financial liability. Similarly,

a substantial modification of the terms of an existing financial

Cash and cash equivalents

Basic earnings per share are calculated by dividing the net

profit or loss (before Other Comprehensive Income) for the year

attributable to equity shareholders (after deducting attributable

taxes) by the weighted average number of equity shares

outstanding during the year.

For calculating diluted earnings per share, the net profit or loss

(before Other Comprehensive Income) for the year attributable

to equity shareholders and the weighted average number of

shares outstanding during the year are adjusted for the effects

of all dilutive potential equity shares.

o.

p.

Assets held for sale

date.

In the ordinary course of business, the group Companies does

not physically repossess properties or other assets in its retail

portfolio but generally engages external or internal agents to

recover funds generally at auctions to settle outstanding debt.

Any surplus funds are returned to the customers/obligors. As a

result of this practice, the residential properties under legal

repossession are not recorded on the balance sheet and are

treated as assets held for sale at (i) fair value less cost to sell or

(ii) principal outstanding, whichever is less, at the repossession

Investments in Subsidiaries, Joint Ventures and Associates

Investments in Subsidiaries are measured at cost less

impairment loss (if any) as per Ind AS 27 – Separate Financial

Statements.

Use of Estimates

The preparation of financial statements in conformity with the

Ind AS requires the management to make judgments, estimates

and assumptions that affect the reported amounts of revenues,

expenses, assets and liabilities and the accompanying

disclosure and the disclosure of contingent liabilities, at the end

of the reporting year. Estimates and underlying assumptions

are reviewed on an ongoing basis. Revisions to accounting

estimates are recognised in the year in which the estimates are

revised. Although these estimates are based on the

management’s best knowledge of current events and actions,

uncertainty about these assumptions and estimates could result

in the outcomes requiring a material adjustment to the carrying

amounts of assets or liabilities in future years.

In particular, information about significant areas of estimation,

uncertainty and critical judgments in applying accounting

policies that have the most significant effect on the amounts

recognized in the financial statements is included in the

following notes:

Business model assessment

The group determines its business model at the level that best

reflects how it manages groups of financial assets to achieve its

business objective. The group determines its business model at

a level that reflects how financial assets as a whole and not an

individual instrument performs; therefore the business model is

developed basis a higher level of assessment at portfolio level

rather than on granular instrument-level information and is

based on observable factors such as :

(iv) How managers of the business are compensated (e.g.

whether the compensation is based on the fair value of the

assets managed or on the contractual cash flows collected).

(ii) The risks that affect the performance of the business model

(I) How the performance of the business model and the

financial assets held within that business model are

evaluated and reported to the entity’s key management

personnel.

and, in particular, the way those risks are managed.

(iii) The expected frequency, value and timing of sales are also

essential aspects of the group’s assessment.

The group’s EIR methodology recognises interest income using

a rate of return that represents the best estimate of a constant

rate of return over the expected behavioural life of loans and

recognises the effect of potentially different interest rates

charged at various stages and other characteristics of the

product life cycle (including prepayments and penalty interest

and charges). This estimation, by nature, requires an element

of judgement regarding the expected behaviour and life-cycle of

the instruments, as well expected changes to the group’s base

rate and other fee income/expense that are integral parts of the

Defined employee benefit assets and liabilities

Fair value measurement

quoted prices in active markets, their fair value is measured

using valuation techniques including the DCF model. The inputs

to these models are taken from observable markets where

possible, but where this is not feasible, a degree of judgement

is required in establishing fair values. Judgements include

considerations of inputs such as liquidity risk, credit risk and

volatility. Changes in assumptions about these factors could

affect the reported fair value of financial instruments.

When the fair values of financial assets and financial liabilities

recorded in the balance sheet cannot be measured based on

Inputs used and the process followed by the group Companies

in determining the increase in credit risk has been detailed in

the notes to accounts on Impairment. Estimation is also

involved in the selection of forward-looking macroeconomic

scenarios and their probability weightings, to derive the

economic inputs into the ECL models.

which is dependent on the terms and conditions of the grant.

This estimate also requires determination of the most

appropriate inputs to the valuation model, including the

expected life of the share option, volatility and dividend yield

and making assumptions about them.

Share based payment

Effective interest rate method

instrument.

Estimating fair value for share-based payment transactions

requires determination of the most appropriate valuation model,

The cost of the defined benefit gratuity plan the present value of

the gratuity obligation are determined using actuarial

valuations. An actuarial valuation involves making various

assumptions that may differ from actual developments in the

future; these include the determination of the discount rate,

future salary increases and mortality rate. Due to the

complexities involved in the valuation and its long-term nature,

a defined benefit obligation is highly sensitive to changes in

these assumptions. All assumptions are reviewed at the end of

each reporting date.

Impairment losses on financial assets (ECL)

When determining whether the risk of default on a financial

instrument has increased significantly since initial recognition,

the group Companies considers reasonable and supportable

information that is relevant and available without undue cost or

effort. This includes both quantitative and qualitative

information and analysis, based on the group’s historical

experience and credit assessment and including forward-

looking information. In some instances, the assessment based

on experience is required for future estimation of cash flows

which requires significant judgment.

vi.

v.

iv.

ii.q.

r.

3.

iii.

i.

Deemed cost for property, plant and equipment and other

intangible assets:

Income tax

The assessment of derecognition criteria being met involves

significant judgements. Furthermore, the measurement of the

the amount expected to be paid/recovered for uncertain tax

positions.

Exemptions and exceptions availed:

We have set out below the applicable Ind AS 101 optional and

mandatory exceptions applied in the transition from previous

GAAP to Ind AS.

Ind AS exemptions:

Companies made estimates for following items under Ind AS at

the date of transition as these were not required under the

previous GAAP:

related EIS receivable income, servicing asset and liability

requires significant estimates to be made for the discount rate,

expected portfolio life, prepayment and foreclosures.

Transition to Ind AS:

Overall principle

The group’s tax jurisdiction is in India. Significant judgments are

involved in determining the provision for income tax, including

The accounting policies set out in note 2 have been applied in

preparing the financial statements for the year ended March 31,

2020, the comparative information presented in these financial

statements for the year ended March 31, 2019, and in the

preparation of an opening Ind AS transition balance sheet as at

April 1, 2018 (the group's date of transition). In preparing it's

opening Ind AS balance sheet, the group Companies has

adjusted the amounts reported previously in financial

statements prepared under the accounting standards notified

under Companies (Accounting Standards) Rules, 2006 (as

amended) and other relevant provisions of the Act (previous

GAAP or Indian GAAP). An explanation of how the transition

from previous Indian GAAP to Ind AS has affected the group's

financial position, financial performance and cash flows is set

out in the following tables and note 42.

Excess interest spread on direct assignment

Ind AS 101 permits a first-time adopter to select to continue with

the carrying value for all of its property, plant and equipment as

recognised in the financial statements as at the date of

transition to Ind AS, measured as per the previous GAAP and

use that as its deemed cost as at the date of transition after

making necessary adjustments for de-commissioning liabilities.

This exemption has also been used for intangible assets

covered by Ind AS 38 Intangible Assets.

Accordingly, the group Companies have elected to measure all

of its property, plant and equipment and intangible assets at its

previous GAAP carrying value.

Estimates:

An entity’s estimates under Ind AS at the date of transition to

Ind AS shall be consistent with estimates made for the same

date under previous GAAP (after adjustments to reflect any

difference in accounting policies), unless there is objective

evidence that those estimates were in error. Ind AS estimates

as at 1 April 2018 are consistent with the estimates as at the

same date made in conformity with previous GAAP. The group

vii.

viii.

4.

Effective April 1, 2019, the group Companies adopted Ind AS

116 “Leases” and applied the standard to all lease contracts

existing on April 1, 2019, using the modified retrospective

method and has taken the cumulative adjustment to retained

earnings, on the date of initial application. Consequently, the

group Companies recorded the lease liability, of Rs. 455.57 lakh

(PY Nil) as at March 31, 2020, at the present value of the lease

payments, discounted at the incremental borrowing rate and the

right of use asset at its carrying amount, of Rs. 538.65 Lakh (PY

Nil) as at March 31, 2020, as if the standard had been applied

since the commencement date of the lease, but discounted at

the group’s incremental borrowing rate at the date of initial

application. Comparatives as at and for the year ended March

31, 2019, have not been retrospectively adjusted and therefore

continues to be reported under the accounting policies included

as part of our Annual Report for the year ended March 31, 2019.


The group Companies classify the financial assets under Ind AS

109 based on facts and circumstances that exist at the date of

transition to

Lease

Classification and measurement of financial assets

Ind AS.

The group Companies have applied the impairment

requirements of Ind AS 109 retrospectively; however, as

permitted by Ind AS 101, it has used reasonable and

supportable information that is available without undue cost or

effort to determine the credit risk at the date that financial

instruments were initially recognized to compare it with the

credit risk at the transition date.

March 31, 2020 March 31, 2019

13.92

8.87

768.92 1,688.06

24.51 13.79

5,000.00 11,310.00

5,807.36 13,020.72

- In cash credit accounts- In deposit accounts with original maturity less than 3 months or less

Total

Balances with banks:

- In current accounts

Cash in hand

5.1. Short-term deposits are made for varying periods of between one day and three months, depending on the immediate cash requirements of

the Company, and earn interest at the respective short-term deposit rates.

20,544.63

30,522.00

20,544.63

30,522.00

Total

In deposits account with original maturity of more than 3 months to upto 12 months

(Rs. in Lakh)

As at

March 31, 2020

As at

March 31, 2019 Particulars

6. Bank balances other than cash and cash equivalents

6.2. Includes deposit under lien aggregating to Rs.1,000 Lakh (as at March '31, 2019 is Nil and as at April 1, 2018 is Nil) towards guarantee

provided by the group Companies towards refinance facility provided by the National Housing Bank.

6.1. Deposits are made for varying period and earn interest at the respective fixed rates.

Particulars

At amortised costLoans given in India to other than public sector

Housing loans 107,792.42

86,063.15

Loans against properties 60,990.31

47,539.40

Interest accrued on loans 2,038.11

1,400.67

Total – Gross (A) 170,820.84

135,003.22

Less: Impairment loss allowance 1,012.35

668.01

Less: Unamortized processing fee 354.15

683.05

Total – Net (A) 169,454.34

133,652.17

(a) Secured by tangible assets 170,820.84

135,003.22

Total – Gross (B) 170,820.84

135,003.22


668.01

Less: Umamortized processing fee 354.15

683.05

Total – Net (B) 169,454.34 133,652.17

(Rs. in Lakh)

As at

March 31, 2020

As at

March 31, 2019

7. Loans

5. Cash and cash equivalents (Rs. in Lakh)

As at As at Particulars


Notes to consolidated financial statement for the year ended March 31, 2020

a) Equitable / Registered Mortgage of Property.

d) Assignment of insurance policies.

7.5 Includes loans under on-going cheque handover post completion of disbursement process but under security creation.

7.3 Collateral and Other Credit Enhancements :

Loans granted by the group Companies are secured by any or all of the following as applicable, based on their categorisation:

c) The personal guarantees of borrowers.

7.2 Loans and receivables are non-derivative financial assets which generate a fixed or variable interest income for the group Companies. The

carrying value may be affected by changes in the credit risk of the counterparties.

b) Undertaking to create a security.

7.4 The group Companies monitors the value of collateral and will request additional collateral in accordance with the loan agreement.

7.6 There were no loans given against the collateral of gold jewellery & hence the percentage of such loan to the total outstanding assets is Nil

(as at March '31, 2019 is Nil and as at April 1, 2018 is Nil).

7,625.18 -

Carrying amount of associated liabilities -

-

Fair value of assets of the assets that represent the entity’s continuing involvement in the derecognised

financial assets (representing 90% of the outstanding amount)

7,625.18

-

Fair value of associated liabilities

Net position at FV

-

-

7,625.18

-

-

Gain or loss recognised at the date of transfer of the assets (Refer Note 9 & 27) 1,901.86

-

Carrying amount of the assets that represent the entity’s continuing involvement in the derecognised

financial assets (representing 90% of the outstanding amount)

Particulars

(Rs. in Lakh)

As at

March 31, 2020

As at

March 31, 2019

7.7 Housing Loan

An analysis of changes in the gross carrying amount and the corresponding Expected Credit Loss allowances in relation to lending is as follows;

(Rs. in Lakh)

Particulars Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total

Gross Carrying amount opening balance 85,555.03

427.83

80.29

86,063.15

48,926.83

148.65

-

49,075.49

New Asset Originated / purchased /

further increase in existing asset (net)

36,757.89

-

-

36,757.89

47,875.06

-

-

47,875.06

Assets derecognised or repaid

(excluding write offs)

(14,505.48) (378.44) (144.56) (15,028.48) (10,711.47) (124.00) 0.33 (10,835.13)

Transfers to/(from) Stage 1 (1,415.77)

-

-

(1,415.77)

(535.29)

-

-

(535.29)

Transfers to/(from) Stage 2 -

1,108.43

-

1,108.43

-

423.84

-

423.84


-

307.34

307.34

-

-

111.45

111.45

Amount Written off (0.14)

-

-

(0.14)

(0.11)

(20.66)

(31.49)

(52.26)

Gross Carrying amount closing balance 106,391.53

1,157.82

243.07

107,792.42

85,555.03

427.83

80.29

86,063.15

For the year 31st March '20 For the period 31st March '19



7.1 Disclosure for transferred financial assets

The group Companies have derecognised certain financial assets on account of assignment without recourse. However, the group Companies

have retained 10% of the financial assets and below are the disclosures of assets and liabilities associated with the continuing involvement in

the financial assets.

Particulars

Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total


Reconciliation of Expected Credit Loss allowances balance is given below :

ECL Allowance - opening balance 371.59 41.06 17.66 430.32 362.31 14.27 - 376.58



123.13

- - 123.13 12.13

-

-

12.13



(10.11)

(36.38)

(31.80)

(78.29)

(2.71)

(11.90)

0.07

(14.54)

Transfers to/(from) Stage 1 (0.99)

-

-

(0.99)

(0.14)

-

-

(0.14)


104.97

-

104.97

-

40.68

-

40.68


-

67.62

67.62

-

-

24.52

24.52

Amount Written off (0.00)

-

-

(0.00)

(0.00)

(1.98)

(6.93)

(8.91)

ECL Allowance closing balance 483.63

109.65

53.47

646.75

371.59

41.06

17.66

430.32

Stage 1 allowance includes excess provision of Rs. 409.51 Lakh as at March 31, 2020 (Rs. 349.91 Lakh as at March 31, 2019 and Rs. 218.71

Lakh as at April 1, 2018).

Particulars



7.8 Non-Housing Loan

An analysis of changes in the gross carrying amount and the corresponding Expected credit loss allowances is as follows :

Gross Carrying amount opening balance 47,151.10

349.93

38.38

47,539.40

25,184.93

134.14

-

25,319.07



29,920.39

-

-

29,920.39

28,220.82

-

-

28,220.82



(16,181.10)

(208.76)

(79.51)

(16,469.38)

(5,956.42)

(35.55)

(7.02)

(5,998.98)

Transfers to/(from) Stage 1 (1,105.77)

-

-

(1,105.77)

(297.84)

-

-

(297.84)


733.30

-

733.30

-

251.55

-

251.55


-

372.47

372.47

-

-

46.29

46.29

Amount Written off -

(0.10)

-

(0.10)

(0.39)

(0.21)

(0.90)

(1.49)

Gross Carrying amount closing balance 59,784.61

874.37

331.33

60,990.31

47,151.10

349.93

38.38

47,539.40

Particulars



Reconciliation of Expected credit loss allowances balance is given below :

ECL Allowance - opening balance 195.67 33.58 8.44 237.70 190.10 12.87 - 202.98



26.27 - - 26.27 7.15 - - 7.15



(11.27) (20.21) (17.49) (48.98) (1.51) (3.41) (1.54) (6.47)

Transfers to/(from) Stage 1 (0.77) - - (0.77) (0.08) - - (0.08)

Transfers to/(from) Stage 2 - 69.45 - 69.45 - 24.14 - 24.14

Transfers to/(from) Stage 3 - - 81.94 81.94 - - 10.18 10.18

Amount Written off - (0.01) - (0.01) (0.00) (0.02) (0.20) (0.22)

ECL Allowance closing balance 209.89

82.80

72.89

365.59

195.67

33.58

8.44

237.70





(Rs. in Lakh)

(Rs. in Lakh)

(Rs. in Lakh)

8 In

ve

stm

en

ts(R

s. in

La

kh)

Th

rou

gh

Oth

er

Co

mp

reh

en

siv

e

Inc

om

e

Th

rou

gh

pro

fit

or

los

s

De

sig

na

ted

at

fair

va

lue

th

rou

gh

pro

fit

or

los

s

Su

b-T

ota

l

(1)

(2)

(3)

(4)

(5

)=(2

)+(3

)+(4

) (6

) (

7)=

(1)+

(5)+

(6)

As

as

Ma

rch

31

,20

20

Mu

tua

l fu

nd

s-

-

6,6

48

.42

-

6,6

48

.42

-

- 1

,85

6,2

08

.79

un

its o

f IC

ICI o

vern

igh

t fu

nd

DP

-

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2,0

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-

2,0

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5,9

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un

its o

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DF

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vern

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t fu

nd

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-

2,5

50

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-

- 1

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7.5

4 u

nits

of K

ota

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nd

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ts w

ith H

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00

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6,6

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-

6,6

48

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-

26

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stm

en

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--

--

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stm

en

t in

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ia2

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00

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-

6,6

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20

,00

0.0

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6,6

48

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-

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2

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: A

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ce for

imp

air

men

t lo

ss (

C)

--

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tal N

et

(D =

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0.0

0

-

6,6

48

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-

6,6

48

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-

26

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2

As

at

Ma

rch

31

, 2

01

9

Mu

tua

l fu

nd

s-

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8,0

38

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-

8,0

38

.20

-

63

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0.8

0 u

nits

of H

DF

C li

qu

id fu

nd

- g

row

th-

-

2,3

42

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-

2,3

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3 u

nits

of S

un

dara

m m

on

ey

fun

d -

-

-

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-

2,3

47

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-

79

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4.2

2 u

nits

of T

ata

liq

uid

fu

nd

- g

row

th-

-

2,3

46

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-

2,3

46

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-

35

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5.9

07

un

its o

f F

ran

klin

In

dia

liq

uid

fu

nd

--

1,0

01

.20

-

1,0

01

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-

--

8,0

38

.20

-

8,0

38

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Inve

stm

en

t ou

tsid

e In

dia

--

--

--

Inve

stm

en

t in

Ind

ia-

-

-8

,03

8.2

0

8,0

38

.20

-

--

-8

,03

8.2

0

8,0

38

.20

-

Less

: A

llow

an

ce for

imp

air

men

t lo

ss (

C)

--

--

--

To

tal N

et

(D =

A -

C)

--

8,0

38

.20

-

8,0

38

.20

-

To

tal

Am

ort

ise

d

co

st

At

Fa

ir V

alu

e

Oth

ers

6,6

48

.42

gro

wth

2,0

08

.24

2,5

50

.69

2,0

89

.49

To

tal (A

)

-

To

tal (B

)

-

8,0

38

.20

2,3

42

.36

gro

wth

2,3

47

.80

2,3

46

.84

1,0

01

.20

To

tal (A

)8

,03

8.2

0

-

8,0

38

.20

To

tal (B

)8

,03

8.2

0

-

8,0

38

.20

Pa

rtic

ula

rs

VA

ST

U H

OU

SIN

G F

INA

NC

E C

OR

PO

RA

TIO

N L

IMIT

ED

No

tes

to

co

ns

olid

ate

d fi

na

nc

ial s

tate

me

nt

for

the

ye

ar

en

de

d M

arc

h 3

1, 2020



Particulars

Total

Current Tax Asset (net)

(Rs. in Lakh)

Particulars

10. Current tax assets (net)

Particulars

*Refer note 34

(Rs. in Lakh)11. Deferred tax assets (net)*

Total

133.73 101.25

1,636.39

-

397.44

139.58

129.01

43.88

2,296.57

284.70

Total

Security deposits

Other receivables - Unsecured; considered good

Interest only strip receivable*

Interest accrued but not due on bank deposits

*Under Ind AS, with respect to assignment deals, the group has created an Interest only strip receivable amounting to Rs. 1,636.39 Lakh as on

March 31, 2020 (Nil as on Mar. 2019, April 01, 2018) with corresponding credit to Profit and loss for the year, which has been computed by

discounting Excess Interest Spread (EIS) to present value with necessary adjustment.

290.30 0.54

290.30 0.54





256.66 197.82

68.59 23.84

286.01 323.91

Unrealised profit on change in fair value of mutual funds (1.11) -

Impact on assignment transaction on account of EIS (419.33) -

Changes in Tax rate (19.99) -

7.80 (4.75)

178.63 540.82

Ind AS adjustment (effective interest rate on fee income and exp)

Disallowances under section 43B of the Income Tax Act, 1961

Difference between books and tax written down value of fixed assets

Impairment of financial instruments (expected credit loss)

9. Other financial assets (Rs. in Lakh)



As

set

for

ow

n u

se

Lease

hold

impro

vem

ents

*All

redeem

able

non-c

onve

rtib

le d

ebentu

res

are

secu

red o

n p

ari p

ass

u b

asi

s b

y a

firs

t ra

nki

ng

ch

arg

e b

y w

ay

of

leg

al m

ort

ga

ge

on

th

e p

rem

ise

s si

tua

ted

at C

oim

ba

tore

in th

e s

tate

of Ta

mil

Na

du

.

12. P

rop

ert

y, p

lan

t a

nd

eq

uip

men

t

As

at

Ap

ril

01,

20

19

As

at

Ap

ril

01,

20

18

As

at

Ma

rch

31

, 2

02

0

As

at

Ma

rch

31

, 2

01

9

As

at

Ma

rch

31

, 2

02

0

As

at

Ma

rch

31

, 2

01

9

Fo

r th

e

ye

ar

Fo

r th

e

ye

ar

As

at

Ap

ril

01

, 2

01

9

As

at

Ap

ril

01

, 2

01

8

As

at

Ma

rch

31

, 2

02

0

As

at

Ma

rch

31

, 2

01

9

Dis

po

sa

l

du

rin

g t

he

ye

ar

Dis

po

sa

l

du

rin

g t

he

ye

ar

Dis

po

sa

l

du

rin

g t

he

ye

ar

Dis

po

sa

l

du

rin

g t

he

ye

ar

Ad

dit

ion

du

rin

g t

he

ye

ar

Ad

dit

ion

du

rin

g t

he

ye

ar

At

Fa

ir V

alu

e

Ne

t B

loc

k

De

pre

cia

tio

n

De

pre

cia

tio

nG

los

s B

loc

k (

at

co

st)

10

.25

--

10

.25

1.9

00

.28

-2

.17

22

.54

5.3

4-

27

.88

5.4

64

.68

-1

0.2

0

23

.08

9.7

6

-

32

.85

9.1

4

2.1

4

-

11.2

8

8.3

40

.74

-

9.0

8

5.6

2

1.7

0

-

7.3

1

111

.14

84

.77

0.4

5

19

5.4

6

50

.73

39

.59

0.0

2

90

.57

175

.36

10

0.6

1

0.4

5

27

5.5

1

72

.84

48

.38

0.0

2

12

1.5

3

15

3.9

8

As

set

for

ow

n u

se

10

.25

--

10

.25

1.6

20

.28

-1

.90

8.3

5

12

.22

10

.32

-2

2.5

42

.11

3.3

4-

5.4

61

7.0

8

18

.47

4.6

1-

23

.08

8.3

70

.77

-9

.14

13

.95

Lease

hold

impro

vem

ents

6.5

71

.78

-8

.34

3.2

72

.34

-5

.62

2.7

3

107

.22

40

.07

36

.15

111

.14

45

.88

25

.47

20

.62

50

.73

60

.41

154

.73

56

.78

36

.15

17

5.3

66

1.2

63

2.2

02

0.6

27

2.8

41

02

.52

*All

redeem

able

non-c

onve

rtib

le d

ebentu

res

are

secu

red o

n p

ari p

ass

u b

asi

s b

y a

firs

t ra

nki

ng

ch

arg

e b

y w

ay

of

leg

al m

ort

ga

ge

on

th

e p

rem

ise

s si

tua

ted

at C

oim

ba

tore

in th

e s

tate

of Ta

mi N

ad

u.

8.0

8

17

.68

21

.57

1.7

7

10

4.8

9

Fu

rnitu

re a

nd fi

ttin

gs

Fu

rnitu

re a

nd fi

ttin

gs

Glo

ss

Blo

ck

(a

t c

os

t)

To

tal

Pre

mis

es*

Offi

ce e

quip

ments

Co

mp

ute

rs

Ta

ng

ible

As

set

As

at

Ma

rch

31

, 2

01

9

As

at

Ma

rch

31

, 2

01

8

(Rs.

in L

akh

)

(Rs.

in L

akh

)

8.3

5

17

.08

13

.95

2.7

3

60

.41

10

2.5

2

Pre

mis

es*

8.6

3

Offi

ce e

quip

ments

10

.11

10

.11

3.3

0

Co

mp

ute

rs6

1.3

4

To

tal

93

.48

Note

s to the

consolid

ate

d fi

na

ncia

l sta

tem

ents

for

yea

r e

ndin

g 3

1st M

arc

h 2

01

9

As

at

Ap

ril

01,

20

19

As

at

Ma

rch

31

, 2

02

0

As

at

Ma

rch

31

, 2

02

0 F

or

the

ye

ar

As

at

Ap

ril

01

, 2

01

9

As

at

Ma

rch

31

, 2

02

0

Dis

po

sa

l

du

rin

g t

he

ye

ar

Dis

po

sa

l

du

rin

g t

he

ye

ar

Ad

dit

ion

du

rin

g t

he

ye

ar

Ne

t B

loc

k

- -

39

.42

- -

75

.42

17

.67

93

.09

16

.98

56

.40

36

.69

75

.42

17

.67

93

.09

16

.98

56

.40

36

.69

39

.42

Glo

ss

Blo

ck

(a

t c

os

t)

Inta

ng

ible

as

sets

To

tal

Co

mp

ute

r so

ftw

are

As

at

Ma

rch

31

, 2

01

9

(Rs.

in L

akh

)

36

.01

36

.01

Ta

ng

ible

as

sets

De

pre

cia

tio

n

VA

ST

U H

OU

SIN

G F

INA

NC

E C

OR

PO

RA

TIO

N L

IMIT

ED

No

tes

to

co

ns

olid

ate

d fi

na

nc

ial s

tate

me

nt

for

the

ye

ar

en

de

d M

arc

h 3

1, 2020

Th

e g

roup C

om

panie

s ha

ve a

vaile

d t

he d

eem

ed c

ost

exe

mp

tion

in r

ela

tion

to

th

e p

rop

ert

y, p

lan

t a

nd

eq

uip

me

nt

on

th

e d

ate

of

tra

nsi

tion

an

d h

en

ce th

e n

et b

lock

ca

rryi

ng

am

ou

nt h

as

be

en

consi

dere

d a

s th

e g

ross

blo

ck c

arr

ying a

mount

on t

hat

date

. R

efe

r b

elo

w f

or

the

gro

ss b

lock

va

lue

an

d t

he

acc

um

ula

ted

de

pre

cia

tion

on

Ap

ril 1

, 2

01

8 u

nd

er

the

pre

vio

us

GA

AP.

A

s a

t A

pri

l

01, 2

01

8

As

at

Ma

rch

31

, 2

01

9

As

at

Ma

rch

31

, 2

01

9 F

or

the

ye

ar

As

at

Ap

ril

01

, 2

01

8

As

at

Ma

rch

31

, 2

01

9

Dis

po

sa

l

du

rin

g t

he

ye

ar

Dis

po

sa

l

du

rin

g t

he

ye

ar

Ad

dit

ion

du

rin

g t

he

ye

ar

Ne

t B

loc

k

- -

26

.89

- -

49.1

32

6.3

07

5.4

2

12

.53

39

.42

36

.01

36

.01

Glo

ss

Blo

ck

(a

t c

os

t)

49.1

32

6.3

07

5.4

2

26

.89

12

.53

39

.42

A

s a

t A

pri

l

01, 2

01

9

As

at

Ma

rch

31

, 2

02

0

As

at

Ma

rch

31

, 2

02

0 F

or

the

ye

ar

As

at

Ap

ril

01

, 2

01

9

As

at

Ma

rch

31

, 2

02

0

Dis

po

sa

l

du

rin

g t

he

ye

ar

Dis

po

sa

l

du

rin

g t

he

ye

ar

Ad

dit

ion

du

rin

g t

he

ye

ar

Ne

t B

loc

kG

los

s B

loc

k (

at

co

st)

13

Rig

ht

of

us

e a

ss

et

35

0.0

72

86

.25

-6

36

.32

-9

7.6

8-

97

.68

53

8.6

5

35

0.0

72

86

.25

-6

36

.32

-9

7.6

8-

97

.68

53

8.6

5

De

pre

cia

tio

n

De

pre

cia

tio

n

(Rs.

in L

akh

)

Inta

ng

ible

as

sets

To

tal

Co

mp

ute

r so

ftw

are

As

at

Ma

rch

31

, 2

01

8

22

.24

22

.24

(Rs.

in L

akh

)

Pa

rtic

ula

rsA

s a

t M

arc

h

31

, 2

01

9

Bu

ildin

g3

50

.07

To

tal

35

0.0

7

VA

ST

U H

OU

SIN

G F

INA

NC

E C

OR

PO

RA

TIO

N L

IMIT

ED

No

tes

to

co

ns

olid

ate

d fi

na

nc

ial s

tate

me

nt

for

the

ye

ar

en

de

d M

arc

h 3

1, 2020

14. Other non-financial assets (Rs. in Lakh)

As at

March 31, 2020

As at

April 1, 2019

Total

Particulars

Prepaid expenses

Particulars

(I) The principal amount and the interest due thereon remaining unpaid to any supplier at the end of

each accounting year;

(ii) the amount of interest paid by the buyer in terms of section 16 of the Micro, Small and Medium

Enterprises Development Act, 2006, along with the amount of the payment made to the supplier

beyond the appointed day during each accounting year

(iii) the amount of interest due and payable for the period of delay in making payment (which has

been paid but beyond the appointed day during the year) but without adding the interest specified

under the Micro, Small and Medium Enterprises Development Act, 2006

(iv) the amount of interest accrued and remaining unpaid at the end of each accounting year; and

(vi) the amount of further interest remaining due and payable even in the succeeding years, until

such date when the interest dues above are actually paid to the small enterprise, for the purpose

of disallowance of a deductible expenditure under section 23 of the Micro, Small and Medium

Enterprises Development Act, 2006.

-

-

(Rs. in Lakh)

As at As at

March 31, 2019 April 1, 2018

Disclosure pertaining to Micro and Small Enterprises as at March 31,2020 are as under:

15. Assets held for sale

16. Trade payables

(Rs. in Lakh)

(Rs. in Lakh)

As at

As at

March 31, 2020

March 31, 2019

As at

April 1, 2019

As at

April 1, 2018

4.15

147.57

147.57

-

88.43

88.43

Total

Total

Particulars

Particulars

Properties obtained by taking possession (refer note below)

Payable to micro and small enterprises

The amounts due to Micro and Small Enterprises as defined in the Micro, Small and Medium Enterprises Development Act, 2006, has been

determined to the extent of information available and compiled by the Company. This has been relied upon by the auditors.

Less: Provision for diminution in value of property

Payable to others

108.26 81.70

108.26 81.70

664.68 49.76 (12.46) -

652.22 49.76

Note: Assets held for sale represents loan value or market value of property whichever is lower of properties acquired by taking possession of

collateral held as security against loans and advances and held at the year-end. The group's policy is to realized collateral on a timely basis.

and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

Assets held for sale includes Rs. 652.22 Lakhs (Previous Year Rs. 49.76 Lakhs) in respect of properties held for disposal under Securitisation

4.15

0.11

0.11

-

-

-

-

-





17. Debt securities

17.2. Non-Convertible Debentures (NCD) at Face Value repayable at par;

18. Borrowings (other than debt securities)

(Rs. in Lakh)

(Rs. in Lakh)

(Rs. in Lakh)

As at

March 31, 2020

As at

March 31, 2019

Total

Total

Total

Particulars

Instrument No. - fixed / variable - rate of interest

Particulars

17.1. Non-convertible debentures are secured by a first ranking exclusive and continuing charge on the hypothecated receivables in favour of the

debenture trustee and first ranking pari passu basis charge over the immovable property (on the premises situated at Coimbatore in the state

of Tamil Nadu) created by way of a mortgage (without possession) under the debenture trust deed in favour of the debenture trustee.

At amortised cost (within India)

Secured

Non-Convertible Debentures 36,153.85 41,923.08

Less: Unamortised borrowing cost (24.85) (31.78)

36,129.00 41,891.30

INE459T07017 - variable - SBI MCLR + spread 2.4%

INE459T07025 - fixed 9.95%

INE459T07033 - fixed 9.95%

INE459T07041 - fixed 9.95%

INE459T07058 - fixed 9.95%

INE459T07066 - variable - SBI MCLR + spread 3.5%

INE459T07074 - variable - SBI MCLR + spread 3.75% *

INE459T07082 - fixed 10.4%

INE459T07090 - fixed 10.4%

*Early redemption during the year.

18.1. Nature of security

As at

March 31, 2020 Maturity date As at

March 31, 2019

22/May/21 1,153.85 1,923.08

27/Feb/25 5,000.00 5,000.00

27/Feb/25 5,000.00 5,000.00

27/Feb/25 4,000.00 5,000.00

27/Feb/25 6,000.00 5,000.00

25/Aug/23 5,000.00 5,000.00

25/Aug/23 - 5,000.00

27/Nov/25 5,000.00 5,000.00

27/Nov/25 5,000.00 5,000.00

36,153.85 41,923.08

Cash credit from banks (refer note 18.4)

Term loan and cash credit from banks, term loan from NHB and other parties are secured by way of exclusive first charge and hypothecation

of specific loan receivables.

Total borrowings (other than debt securities) (A)

Less: Unamortised borrowing cost

As at

March 31, 2020

As at

March 31, 2019

22,594.65 4,383.90

48,672.69 32,564.11

19,963.83 20,149.90

1,998.64 -

93,229.81 57,097.91

(177.81) (146.19)

93,052.01 56,951.73

Term loans from banks (refer note 18.1, 18.2 & 18.3)


Secured

Term loans from NHB (refer note 18.1 & 18.2)

Term loans from other parties (refer note 18.1, 18.2 & 18.3)

18.2 Terms of repayment & rate of interest in case of borrowings (other than debt securities)(Rs. in Lakh)

1-3 years Up to one year 3-5 years

As at 31.03.2020

5 years & aboveResidual maturities

Term loan from NHB - Quarterly

Variable Rate 7.4% - 8.15% 2,693.18 7,118.08 6,018.08 6,765.31

Term loan from banks & other parties - half yearly

Variable Rate 9.55% 450.00

945.00 - -

Term loan from banks & other parties - quarterly

Fixed Rate 9.63% - 11.00% 1,160.00

9,199.58 6,166.67 -

Variable 9.40% - 10.57% 10,573.13 15,906.52 2,979.17 -

Term loan from banks & other parties - monthly

Fixed Rate 9.5% - 9.85% 2,666.21

4,965.25 62.16 -

Variable 9.4% - 11.05% 3,690.21 7,138.46 2,734.18 -

21,232.73

45,272.89

17,960.25

6,765.31

Total


As at 31.03.2019



Variable Rate 9.05% - 10.50 % 254.98

611.68

611.68

2,905.56


Variable Rate 10% 270.00

1,080.00

315.00

-

Term loan from banks & other parties - quarterly-

Fixed Rate 9.63 - 10.95 % -

1,160.00

4,017.92

3,583.33

Variable 9.5 - 10.84 % 5,807.15

11,331.35

2,737.50

-


Fixed Rate 9.5 - 9.85 % 2,419.46

5,652.76

2,040.86

-

Variable 9.95 - 11.30 % 3,603.64

5,667.17

3,027.88

-

13,515.23 28,360.87 12,316.26 2,905.56Total

18.5 There has been no default in repayment of principal and/or interest for borrowing as per the repayment schedules during the year. Further,

the Company is compliant of the covenants mentioned in the respective borrowing's deeds.

18.3 For variable interest rate borrowings, rate of interest is linked to the MCLR/base rates of the banks and is subject to change from time to

time. The above categorisation of loans has been based on the interest rates, prevalent as on the respective reporting dates.

18.4 The rate of interest for the cash credit from bank, repayable on demand, ranges from 10.00% to 12.00%.

19. Other financial liabilities (Rs. in Lakh)

As at

March 31, 2020

As at

March 31, 2019

Total

Particulars

5,774.26

9,548.61

475.52

204.46

10.91 11.99

455.57 -

1,716.39 1,328.82

8,432.64 11,093.87

Interest accrued but not due on borrowings

Employee benefits payable

Other financial liabilities

Book overdraft

Lease rental liability

(Rs. in Lakh)



(Rs. in Lakh)

Total

Total

Particulars

Particulars

Total

Total

Particulars

Particulars

Particulars

20. Current tax liabilities (net)

21. Provisions

22. Other non-financial liabilities

23. Equity share capital

Less than one year

One to three years

More than three years

Current tax liability (net)

Provision for employee benefits - gratuity (refer note 39)

Other non-current financial liabilities

Instalments received in advance

Statutory dues

Issued, subscribed and paid up

5,18,45,527 Equity Shares of ₹ 100 each

(FY 2019 and FY 2018 - 3,53,82,180 Equity Shares of ₹ 100 each)

Authorised


(FY 2019 10,00,00,000 FY 2018 6,00,00,000, Equity Shares of ₹ 100 each)

As at

As at

March 31, 2020

March 31, 2020

As at

As at

March 31, 2019

March 31, 2019

As at

As at

As at

March 31, 2020

March 31, 2020

March 31, 2020

As at

As at

As at

March 31, 2019

March 31, 2019

March 31, 2019

260.40 -

153.97 -

41.20 -

455.57 -

- 143.68

- 143.68

160.21

79.05

160.21 79.05

158.90 54.77

126.62

270.47

1.51

4.84

287.03

330.08

100,000.00 100,000.00

100,000 100,000

51,845.53 35,382.18

Particulars

23.1. (a) Reconciliation of number of shares outstanding at the beginning and at the end of the reporting period:

Shares outstanding at the beginning of the year

Shares issued under right issue


Shares issued under ESOP

Shares outstanding at the end of the year


Rs in LakhNumberRs in LakhNumber

35,382,180

16,413,347

50,000

51,845,527

35,382.18

16,413.35

50.00

51,845.53

35,382,180

-

-

35,382,180

35,382.18

35,382.18

-

-

(Rs. in Lakh)

(Rs. in Lakh)

(Rs. in Lakh)

(Rs. in Lakh)

(Rs. in Lakh)



The table below provides details regarding the contractual maturities of lease liabilities as at March 31, 2020 on an undiscounted basis:

51,845.53 35,382.18

23.1. (b) Rights, Preferences and Restrictions

Particulars


As at March 31, 2019As at March 31, 2020

%NumberNumber

35,273,730 68.04% 27,290,421 77.13%

The Company has only one class of equity shares, having a par value of Rs.100 per share. Each shareholder of equity shares is eligible for one

vote per share. The dividend, if any, proposed by the Board of Directors, is subject to the approval of the shareholders at the ensuing Annual

General Meeting except in case of interim dividend. In the event of liquidation of the Company, the holders of equity shares shall be eligible to

receive the remaining assets of the Company, after distribution of all preferential amounts, in the proportion of their shareholding.

23.1. (c) List of shares held by Holding Company

%

Particulars


Plenty CI Fund I Limited

Multiples Private Equity Fund II LLP

As at March 31, 2019As at March 31, 2020

%NumberNumber

35,273,730 68.04% 27,290,421 77.13%

23.1. (d) List of shareholders holding more than 5% shares

%

9,663,707 18.64% - -

3,864,856 7.45% 8.61%3,045,664

During the period the company has issued equity shares at a premium of Rs.130 (face value Rs.100) aggregating to Rs.37,750.70 Lakh (face

value Rs. 16,413.35 Lakh) through right issue.

During the year 2018-19, the Company had introduced 2 ESOP schemes. The primary objective of the ESOP 2018 Scheme I & II is to reward

the key employees for their association, dedication and contribution to the goals of the Company. The Company intends to use this ESOP

2018 - Scheme I & II to attract, retain and motivate critical talents working with the Company, by way of rewarding their high performance and

motivate them to contribute to the overall corporate growth and profitability. The Company views employee stock options as long-term

incentive tools that would enable the employees not only to become shareholders but also to create potential wealth out of such shareholding

in future.

The stock option granted to eligible employees operate under the employee stock option plan: Employees Stock Options Plan 2018 Scheme I

and Employees Stock Options Plan 2018 Scheme II. (Refer Note 40)

23.3. Equity shares reserved for issue under stock options.

24. Other equity (Rs. in Lakh)

- 34,363.59

3,704.28 1,752.65

Securities premium 21,376.71 -

111.99 111.99

Share option outstanding account 1,335.01 1,074.41

10,123.93 3,066.17

36,651.92 40,368.81

Particulars

Share application money pending allotment

Retained earnings

Total

Statutory / Special Reserve

General reserve

Note: For additions and deductions under each of the above heads, refer statement of changes in equity

As at

March 31, 2020

As at

March 31, 2019

(Rs. in Lakh)

(Rs. in Lakh)





23.2.

The statutory reserve is the reserve created by transferring a sum not less than twenty per cent of the group's net profit after tax every year in

terms of Section 29 C of the National Housing Bank Act, 1987 and Section 45-IC of the Reserve Bank of India Act, 1934. For this purpose, any

special reserve created by group Companies under section 36(1)(viii) of the Income Tax Act, 1961 is considered to be an eligible transfer.

Further, the group Companies doesn't anticipate any withdrawal from the statutory reserve in the foreseeable future.

Securities premium account is used to record the premium on issue of shares.

Statutory reserve:

Retained earnings:

This reserve relates to stock options granted by the group Companies to employees under various ESOP schemes. This reserve is transferred to

securities premium account on exercise of vested options.

Share option outstanding account

General reserve

The general reserve created from time to time by transferring profits from retained earnings for appropriation purpose.

Securities premium

Retained earnings are the profits that the group Companies has earned till date, less any transfers to general reserve, statutory reserve,

dividends or other distributions paid to shareholders.

25. Interest income (Rs. in Lakh)

22,896.27 15,035.11

15,035.11

Particulars

On financial assets measured at amortised cost

Total

- Interest on loans

For the year ended

March 31, 2020

22,89627

For the year ended

March 31, 2019

Loan origination income included in Interest income on Loan is disclosed net of the direct incremental costs of Rs. 686.88 lakh for year ended

March 31, 2020 (P.Y. 386.97 lakh) associated with the origination of the underlying loans.

26. Fees and commission income (Rs. in Lakh)

301.07 371.31

371.31

Particulars

Total

Login fee and other charges

For the year ended

March 31, 2020

301.07

For the year ended

March 31, 2019

27. Net gain on derecognition of financial instruments (Rs. in Lakh)

1,636.39 -

-

Particulars

Total

On assignment of portfolio

For the year ended

March 31, 2020

1,636.39

For the year ended

March 31, 2019

28. Other operating income (Rs. in Lakh)

238.25

Particulars

Total

Other charges (cersai, cancellation, cheque bouncing charges, etc.)

For the year ended

March 31, 2020

238.25

For the year ended

March 31, 2019

95.65

95.65



29. Other income (Rs. in Lakh)

Particulars For the year ended

March 31, 2020

For the year ended

March 31, 2019

Net gain/loss on fair value changes (realised) 477.24 189.20

Net gain/loss on fair value changes (unrealised) 13.11 8.20

Interest Income on fixed deposit 2,697.30 885.37

Discount on buyback of debenture 60.32 -

Income from display of advertisement 939.86 826.95

Training development and consultancy charges 131.30 199.05

Profit on sale of property, plant & equipment 0.02 10.50

Other misc. income 1.45 0.48

Total 4,320.60 2,119.75


March 31, 2020

For the year ended

March 31, 2019

30. Finance costs

6,648.46 3,889.03

4,273.90 2,933.46

27.35 -

Interest Expense on lease liabilities 41.24 -

70.93 105.57

11,061.87 6,928.06

On financial liabilities measured at amortised cost

Total

Interest on borrowings (other than debt securities)

Interest on debt securities

Interest on overdraft facility

Other interest expense


March 31, 2020

For the year ended

March 31, 2019

31. Impairment on financial instruments

344.33 296,03

432.18 356.76


Total

Provision for expected credit loss

Bad debt written off (net)

Diminution in value of properties (unrealized)

75.38

12.46

60.72

-


March 31, 2020

For the year ended

March 31, 2019

32. Employee benefits expense

4,138.89 3,190.84

218.23 149.69

63.45 32.28

Employee stock option scheme (refer note 40) 299.95 1,074.41

57.97 29.25

Salaries, bonus and other allowances

Contribution to provident fund and other funds (refer note 39)

Staff welfare and training expenses

Gratuity (refer note 39)

4,778.49 4,476.47Total

(Rs. in Lakh)

(Rs. in Lakh)

(Rs. in Lakh)



33. Other expenses (Rs. in Lakh)


March 31, 2020

For the year ended

March 31, 2019

Rent, taxes and energy costs 129.29 245.40

Communication costs 201.85 120.51

Advertisement and publicity 18.98 3.72

Printing and stationery 69.05 84.49

Repairs and maintenance 67.95 52.51

Insurance 85.50 38.60

Auditor’s fees and expenses (refer details below) 62.65 29.91

Legal & professional charges 305.65 196.44

Corporate social responsibility (refer note 38) 73.78 -

Travelling and conveyance 29.77 36.31

ROC fees and stamp duty 93.97 0.60

Other expense (indirect tax reversal, admin exp. etc.) 73.07

59.59

Director’s fees, allowances, and expenses 3.48

5.30

1,215.00 873.37Total

34. Payment to auditor (Rs. in Lakh)


March 31, 2020

For the year ended

March 31, 2019

a) For audit 36.25

23.16

b) For taxation matter 2.50

2.00

c) For other services (limited review) etc. 23.90

5.01

Total 62.65 30.17

Current tax 2,329.44

1,528.88 Deferred tax 368.90

(349.64)

Total income tax expenses recognised in the current year 2,698.34

1,179.24

Income tax expense recognised in other comprehensive income (8.60)

(3.79)

Income tax expense for the year reconciled to the accounting profit:

Profit before tax 11,741.67 4,942.45

Income tax rate 25.63% 27.82%

Income tax expense 3,059.61

1,374.96

Tax effect of:

Effect of Ind AS adjustments (net) (520.99)

-

Provision for special reserve (237.28) -

Others (including tax adjustment for earlier years) 28.10 153.92

Income tax expense recognised in Profit and Loss 2,329.44 1,528.88

34. 1. Reconciliation of total tax charge (Rs. in Lakh)


March 31, 2020

For the year ended

March 31, 2019



34. 2. The following table shows deferred tax recorded in the balance sheet and changes recorded in the Income tax expense:

a. For the year ended March 31, 2020

b. For the year ended March 31, 2019

(Rs. in Lakh)

(Rs. in Lakh)

Recognised inother comprehensive

income


income

Opening balances

as on 01.04.2019

Opening balances

as on 01.04.2018

Closingbalances as on

31.03.2020


31.03.2019

Recognised in profitor loss (Expense) /

Income


Income

Total

Total

Deferred tax asset / (liability)


8.60

3.79

540.82

187.39

178.63

540.82

(368.90)

349.64

Impairment of financial instruments Ind AS adjustment (effective interest rate onfee income and exp)

197.82 58.84 - 256.66

323.91 (37.90) - 286.01

Changes in the Tax Rate - (19.99) - (19.99)

Disallowances under section 43B of the

Income Tax Act, 1961

23.84 37.15 8.60 68.59

Impact on assignment transaction on

account of EIS

- (419.33) - (419.33)

Difference between books and tax written

down value of fixed assets

(4.75) 12.56 - 7.80

Impairment of financial instruments 102.19 95.63 - 197.82

Ind AS adjustment (effective interest rate on

fee income and exp, EIS on assignment)

90.97 232.94 323.91



9.12 10.93 3.79 23.84



(14.90) 10.14 - (4.75)

(Rs. in Lakh)

Contingent liabilities*

Capital commitments:

Undisbursed commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for

*Bank guarantee aggregating to Rs 1,000 Lakhs to National Housing Bank against refinance assistance.

As at

March 31, 2020

As at

March 31, 2019

1,000.00

-

6,851.58 4,706.72

- -

Unrealised profit on change in fair value of mutual funds

(1.11)-(1.11) -

35. Contingent Liabilities and commitments



(Rs. in Lakh)

(Rs. in Lakh)

For the Year Ended

March 31,2020

For the Year Ended

March 31,2020

For the Year Ended

March 31,2019

For the Year Ended

March 31,2019Particular

Profit attributable to equity shareholders (Rs. in Lakh) 9,029.56

3,609.48

50,687,921

35,382,180

Dilutive effect of stock option (Nos.) 667,551 313,283

51,355,472 38,195,463

Basic earnings per share (Rs.) 17.81

10.20

Diluted earnings per share (Rs.) 17.58

9.45

Nominal value per share (Rs.)

The Company operates in a single reportable operating segment of providing loans. Accordingly, there are no separate reportable segments,

as per the Accounting Standard on 'Operating Segments' (Ind AS 108) prescribed under section 133 of the Companies Act, 2013.

a Gross amount required to be spent by the group Companies during the year – Rs. 56.26 lakh (Previous Year, Rs. 17.52 lakh)

The Company operates a defined contribution plan (Provident fund & ESIC) for all qualifying employees of the Company. The employees of the

Company are members of a retirement contribution plan & ESIC operated by the government. The Company is required to contribute a specified

percentage of payroll cost to the retirement contribution scheme & ESIC to fund the benefits. The only obligation of the Company for the plan is to

make the specified contributions.

The liability under the Payment of Gratuity Act,1972 is determined based on the actuarial valuation made at the end of each financial year using

the projected unit credit method. The plan is of a final salary defined benefit in nature which is sponsored by the group Companies, and hence it

underwrites all the risks of the plan. The actuarial risks associated are:

b Operating expense include Rs. 41.50 lakhs (Previous Year, Rs. Nil) towards CSR in accordance with Companies Act, 2013.

The Company has its operation within India, and all revenues generated within India.

37. Segment reporting

38. Expenditure towards corporate social responsibility as per Section 135 of the Companies Act, 2013 (read with schedule VII thereof)

39. Employee benefit


Defined benefit obligation plan

100.00

110.00

Weighted average number of equity shares outstanding during the year for calculating basic

earnings per share (Nos.)

Weighted average number of equity shares outstanding during the year for calculating for diluted earnings per share (Nos.)

1. Construction / acquisition of asset

Amount spent - -

Amount unpaid / provision - -

2. On purposes other than above

Amount spent 41.50

-

Amount unpaid / provision 32.28

-

(Rs. in Lakh)

March 31, 2020 March 31, 2019 April 1, 2018 Particulars

Employers Contribution to Provident Fund 215.42 149.69 92.79

36. Earning per equity share



The details of amount spent in respective year towards CSR as follows;



a. The assumptions used for the purposes of the actuarial valuations were as follows;

b. Amount recognised in the balance sheet

c. Expenses recognized in the statement of profit and loss

(Rs. in Lakh)

(Rs. in Lakh)

(Rs. in Lakh)

March 31, 2020

March 31, 2020

March 31, 2020

March 31, 2019

March 31, 2019

March 31, 2019

April 1, 2018

April 1, 2018

April 1, 2018

Particulars

Particulars

Particulars

Significant assumption

Closing present value of obligations

Discount rate

Closing fair value of plan assets

Salary escalation rate

Liability recognised in the balance sheet

Mortality rate table

Other assumption

6.35%

160.21

-

12.00%

160.21

IALM 2012 - 14

7.10%

79.05

-

12.00%

79.05

IALM 2012 - 14

7.80%

33.04

-

12.00%

33.04

IALM 2006 - 08

Investment / interest rate risk:

Longevity risks:

Salary risks:

The group Companies are exposed to Investment / Interest risk if the return on the invested fund falls below the discount rate used to arrive at

the present value of the benefit.

The group Companies are unexposed to the risk of employees living longer since benefit under the scheme ceases on the employee separating

from the employer for any reason.

Current service cost 41.78 26.46 20.40

Past service cost -

0.89

-

Interest cost 5.80

4.92

2.58

Expected return on plan assets -

-

-

Losses / (gains) on “Curtailments and Settlements” -

-

-

Total expenses to be recognized in the statement of profit and loss

Remeasurements on the net defined benefit liability :

47.58

32.27

22.98

Actuarial losses / (gain) 33.57

13.74

(4.72)

Total expenses to be recognized in the other comprehensive income 33.57

13.74

(4.72)

Total 81.15

46.01

18.26

The gratuity benefits under the plan are related to the employee’s last drawn salary. Consequently, any unusual rise in future salary of the

employee raises the quantum of benefit payable by the group Companies, which results in a higher liability for the group Companies and is,

therefore, a plan risk for the group Companies.

The following table summarises the component of net benefit expense recognised in the statement of profit and loss and amounts recognised in

the balance sheet for the individual plans based on actuarial report and relied upon by auditors.

d. Change in in the present value of the defined benefit obligation are as follows:

e. Changes in the fair value of plan assets are as follows:

g. Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate and expected salary increase. The

sensitivity analysis below has been determined based on reasonable possible changes of the assumptions occurring at the end of the reporting

period, while holding all other assumptions constant. The results of sensitivity analysis are as follows :

(Rs. in Lakh)

(Rs. in Lakh)

(Rs. in Lakh)

March 31, 2020

March 31, 2020

March 31, 2019

March 31, 2019

April 1, 2018

April 1, 2018

2015 - 162016 - 172018 - 19 2017 - 182019 - 20

Particulars

Particulars

Particulars

Opening present value of obligation 79.05

33.04

14.77

Current service cost 41.78

26.46

20.40

Interest on defined benefit obligation 5.80

4.92

2.58

Remeasurements (gains) / losses:

- Actuarial gain from change in demographic assumptions

Benefits paid -

-

-

Past service cost -

0.89

0.00

Liabilities assumed on acquisition / (settled on divestiture) -

-

-

Closing present value of obligations 160.20 79.05 33.04

13.74

33.57

-4.72

- Actuarial loss from change in financial assumptions

- Actuarial gain from change in experience adjustments

Opening fair value of plan assets - - -

Expected return on plan assets - - -

Actuarial gains / (losses) - - -

Contributions by employer -

-

-

Benefits paid -

-

-

Closing fair value of plan assets -

-

-

Defined benefit obligation 159.26 79.05 33.04 14.77 2.25

Plan asset -

- - - -

Surplus / (deficit) (159.26) (79.05) (33.04) (14.77) (2.25)

Experience adj. on plan liabilities 23.79

9.48 7.54 2.76 -

Experience adj. on plan asset -

- - - -

Expected contribution next year 12.28

0.16 0.09 0.03 -

(Rs. in Lakh)

Particulars

Defined benefit obligation on increase

in 50 bps

Impact of increase in 50 bps on DBO


Defined benefit obligation ondecrease in 50 bps

Discount rate Discount rateSalary

Escalation RateSalary

Escalation Rate

March 31, 2019March 31, 2020

154.57 165.84 78.68 84.40

-3.51% 3.52% -3.76% 3.24%

166.17 154.83 85.02 79.23

3.73% -3.35% 3.99% -3.08%



f.

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the

change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

There is no change in the method of valuation for the prior periods in preparing the sensitivity analysis. For change in assumptions refer to note

(a) above

Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the

projected unit credit method at the end of the reporting period. It's applied in calculating the defined benefit obligation asset recognised in the

balance sheet.

h. Projected benefits payable:

The weighted average duration to the payment of these cash flows is 7.31 years (FY2018-19 : 7.75 years, FY 2017- 18 : 8.47 years)

40. Employee stock option plan

Employees stock options plan 2018 - Scheme I

Employees stock options plan 2018 - Scheme II

The Board of Directors took the decision to introduce Vastu Employees Stock Option Scheme, 2018 (hereinafter called “Employees Stock

Options Plan 2018 – Scheme I” or referred as “The Scheme”) at the meeting held on 21st July 2017. The shareholders approved it at the Annual

General Meeting held on 23rd March 2018. The plan provides for the issuance of stock options to eligible employees based on the ESOP

committee’s recommendations. Under the plan, the options vest not later than the maximum period of 10 (Ten) years from the date of the Grant


Options Plan 2018 – Scheme II” or referred as “The Scheme”) at the meeting held on 8th August 2018. The shareholders approved it at the

Annual General Meeting held on 21st August 2018. The plan provides for the issuance of stock options to eligible employees based on the ESOP


Pursuant to Rule 12(9) of Companies (Share Capital and Debentures) Rules, 2014, the details of the Vastu Employees Stock Option Scheme,

(Rs. in Lakh)

(Rs. in Lakh)

As at

March 31, 2020

As at

March 31, 2019

Scheme IIScheme I

Particulars

Particulars

Expected benefits for year 1 12.28 0.16





Expected benefits for year 6 to 9 50.60 28.62

Expected benefits for year 10 years and above 135.12 83.24

Scheme Name Employees Stock

Options Plan 2018

Employees Stock

Options Plan 2018

Options approved to be issued as ESOPs 2,000,000 500,000

Date of Grant 22nd Apr. 2018 2nd Nov. 2018

Options granted 1,841,400 462,500

Method of Settlement Equity Equity

Pursuant to Rule 12(9) of Companies (Share Capital and Debentures) Rules, 2014, the details of the Vastu Employees Stock Option

Scheme, 2018 as on 31st March 2020 are :-





a. Reconciliation of options

b. Balance outstanding at the end of the year are as follows

(Rs. in Lakh)

(Rs. in Lakh)

Particulars

Particulars

Shares arisingfrom Option

Nos.


Nos.

Wt. avg.exercise price

Exercise price


Exercise price

As at 31st March '19




Scheme IOutstanding at the beginning of the year 1,841,400

100

-

-

Granted -

-

1,841,400

100

Exercised 50,000

100

-

-

Reinstated -

-

-

-

Lapsed -

-

-

-

Forfeited -

-

-

-

Outstanding at the end of the year 1,791,400

100

1,841,400

100

Scheme IIOutstanding at the beginning of the year 462,500

100

-

-

Granted -

-

462,500

100

Exercised -

-

-

Reinstated -

-

-

-

Lapsed -

-

-

-

Forfeited -

-

-

-

462,500

100

462,500

100

Outstanding at the end of the year

Vested Options

Scheme I 1,301,810 100 973,548 100

Scheme II 277,500 100 185,000 100

Un-Vested Options

d. Following amount has been recognized as an expense and included in 'Note 32 - Employee benefit expenses' and total carrying

amount at the end of the period.

Scheme I 489,590 100 867,852 100

Scheme II 100 100

2018 - 19

2018 - 19

2019 - 20

2019 - 20

c. Weighted average remaining life of the of the ESOP outstanding

Particulars

Scheme I

Expense arising from equity settled share based payment transaction

1.34

299.95

2.33

1,074.41

Scheme II

Carrying amount at the end of the period

2.00

1,335.01

3.00

1,074.41

-

185,000 277,500

(Rs. in Lakh)

(Rs. in Lakh)

e. Fair value of the options granted;

b. Disclosure of related party transactions:

Scheme II

31-Mar-19

Scheme I

31-Mar-20

Particulars

Nature of transactions

Note :The remuneration to the key managerial personnel does not include the provisions made for gratuity benefits, as

they are determined on an actuarial basis for the Company as a whole.

The expected life of the share options is based on historical data and current expectations and is not necessarily indicative of exercise

patterns that may occur. The expected volatility reflects the assumption that the historical volatility over a year similar to the life of the options

is indicative of future trends, which may not necessarily be the actual outcome.

41. Related party disclosures

a. List of related parties:

Share price as on the date of grant (INR) 130 130

Exercise price (INR) 100 100

Expected volatility (%) 12.25% 12.25%

Life of the options granted (years) 9.07 9.6

Risk free interest rate (%) 7.35% 7.35%

Expected dividend rate (%) Nil Nil

Fair value of options as per black scholes (INR) 178.71 180.67

ii. Key Managerial Personnel (KMP)

iii. Other Related Company


People Strong Technologies Private Limited

- having common director (related party by virtue of sec2(76)(iv))

Managerial remunerations (included in employee benefit exps.)

Sandeep Menon - Managing Director 362.25

300.00

Sujay Patil - Chief Financial Officer 168.50

145.00

Pallavi Bhambere - Company Secretary 7.71

5.61


Software License 3.35 -



i. Holding Company

c. There are no transaction other than sitting fees paid to Non-Executive director details are as under:

31-Mar-1931-Mar-20Nature of transactions

Sitting Fees

Puranam Hayagreeva Ravikumar 1.75 3.50

Girija Shankar Nayak 0.75 1.80

Sandeep Menon - Managing Director

Sujay Patil - Chief Financial Officer

Pallavi Bhambere - Company Secretary

(Rs. in Lakh)

(Rs. in Lakh)

(Rs. in Lakh)



42. First-time Ind AS adoption reconciliations

42.1. Reconciliation of total equity as at March 31, 2019 and April 01, 2018 and profit or loss for the year ended March 31, 2019:

Note: Related party relationship is as identified by the company and relied upon by the auditors. The transactions with related parties are

disclosed only till the relationship exists

(Rs. in Lakh)

Particulars Note No.As at

April 01, 2018As at

March 31, 2019Year ended

March 31, 2019

Equity Reconciliation Net profit Reconciliation


IndAS Adjustments:


Effective interest rate for financial assets and liabilities at amortised cost g (178.12) (505.28) (327.16)

Reclassification of actuarial gains and losses on employee benefit plans to

other comprehensive income

j 9.95 8.86 (1.10)

Fair value of financial assets c & f 8.20

8.20

-

Fair value of employee stock option i (667.41)

-

-

Rent equalization and interest free deposit c & f (2.09)

(4.81)

(2.71)


510.37

172.93


253.35

60.14

Total (155.99)

524.36

12.93

Net profit / equity for the year as per Ind AS 3,609.34

40,377.53

1,330.18

Other comprehensive income (net of tax) (9.95)

(8.86)

1.10


42.2. Effect of Ind AS adoption on the statement of cash flows for the year ended March 31, 2019:

3,599.53 40,368.67 1,331.28

(Rs. in Lakh)

As per Previous

GAAP Effect of ransition

to Ind AS As per Ind ASBalance sheetParticulars

Net cash flow from operating activities (55,775.87) (1,306.75) (54,469.12)

Net cash flow (used in) investing activities (35,292.23) 3,747.27 (39,039.51)

Net cash flow (used in) financing activities

The cash flow adjustments are primarily on account of Ind AS reclassification.

85,856.50 99.00 86,007.50

Net (decrease) / increase in cash and cash equivalents (4,961.61) 2,539.52 (7,501.13)

Cash and cash equivalents at the beginning of the year 20,503.33 (18.52) 20,521.85

Cash and cash equivalents at the end of the year 15,541.72 2,521.00 13,020.72

For the periods up to and including the year ended March 31, 2019, the group Companies prepared its financial statements under the accounting

standards notified under Section 133 of the Companies Act, 2013, read together with the Companies (Accounting Standards) Rules, 2006, as

amended (Previous GAAP). Accordingly, the group Companies has prepared its first financial statements to comply with Ind AS for the year

ending March 31, 2020, together with comparative information as at and for the year ended March 31, 2019. In preparing these financial s

tatements, the group Companies prepared its opening Balance Sheet as of April 1, 2018, i.e. the transition date to Ind AS for the group. Previous

GAAP financial statements as on April 1, 2018, being transition date and for the previous year ended March 31, 2019, have been restated as per

Ind AS.

Exemption availed

The group Companies has elected to continue with the carrying value of all of its property, plant and equipment and intangible assets recognised

as of April 1, 2018 (the transition date), measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition

date under Ind AS.

Under Indian GAAP, the group Companies have created provision for loans and advances based on the Guidelines on prudential norms issued

by National Housing Bank and Reserve Bank of India. Under Ind AS, impairment allowance has been determined based on the Expected Loss

model (ECL). However, as the group have little historical information about its own credit loss experience, the expected credit loss has been

calculated based on self-experience, peer group experience for comparable financial instruments as allowed as per Ind AS 109.

Deferred tax on special reserve :

The application of Ind AS 12 approach has resulted in the various transitional adjustments being temporary differences. Accordingly, the group

Companies have accounted for such differences. Adjustments recognised in correlation to the underlying transaction either in retained earnings,

OCI or profit and loss, respectively.

Share-based payments :

The group Companies have classified the financial assets under Ind AS 109 based on facts and circumstances that exist at the date of transition

to Ind AS.

Deemed cost for property, plant and equipment and intangible assets :


Investments

Effective interest rate (EIR) :

Classification and measurement of financial assets :

recognized and compared that to the credit risk as at April 1, 2018.

Under previous GAAP, transaction costs (processing fee) charged to customers was recognised upfront while under Ind AS, such costs are

included in the initial recognition amount of financial asset and recognised as interest income using the effective interest method. Similarly,

Under Indian GAAP, transaction costs incurred in connection with loans and advances are amortised upfront and charge to profit and loss for the

year. Under Ind AS, transactions cost are included in the initial recognition amount of financial assets measured at amortised cost and charged

to profit and loss using the effective interest method.

Fair value of financials assets and liabilities :

Expected credit loss on financial assets

As per Ind AS exemption, the group Companies has not fair valued the financial assets and liabilities retrospectively and has measured the

same prospectively.

The group Companies have applied the exception related impairment of financial assets given in Ind AS 101. It has used reasonable and

supportable information that is available without undue cost or effort to determine the credit risk at the date that financial assets were initially

Under Previous GAAP, Investments in Mutual Funds are valued at Lower of Cost or Net Assets Value. Under Ind AS the same has been

classified

Under previous GAAP, transaction costs incurred on borrowings was charged to statement of profit and loss while under Ind AS, such costs are

included in the initial recognition amount of financial liabilities and recognised as interest expense using the effective interest method.

Under previous GAAP, as per NHB and RBI guidelines, the deferred tax liability is required to be created on special reserve. Creation of

deferred tax liability

on account of the special reserve is not required under IND AS and the same is reversed.

Under previous GAAP, the cost of equity-settled employee share-based payments was recognised using the intrinsic value method. Under Ind

AS, the cost of equity-settled employee share-based payments is recognised based on the fair value of the options as on the grant date. The

change does not affect total equity, but there is a decrease in profit.

Defined benefit obligation :

Both under previous GAAP and Ind AS, the group Companies recognised costs related to its post-employment defined benefit plan on an

actuarial basis. Under Previous GAAP, the entire cost, including actuarial gain and losses, are charged to profit or loss. Under Ind AS,

remeasurements comprising of actuarial gains and losses are recognised in other comprehensive income (OCI).



j.

i.

h.

g.

f.

e.

d.

c.

b.

a.

43. Maturity Analysis of Assets and Liabilities

54,784.07 131,545.21Total

Particulars

186,329.2859,776.47 166,933.58 226,710.05

Within 12

months

After 12

months

31st March '19

Total

(Rs. in Lakh)

Within 12

months

After 12

months

31st March '20

Total

Assets

Financial assets

Cash and cash equivalents 5,807.36 - 5,807.36 13,020.72 - 13,020.72

Bank balances other than (a) above 19,544.63 1,000.00 20,544.63 30,522.00 - 30,522.00

Loans 6,446.58 163,007.77 169,454.34 2,938.00 130,714.17 133,652.17

Investments 26,648.42 - 26,648.42 8,038.20 0.00 8,038.20

Other financial assets 975.46 1,321.11 2,296.57 183.45 101.25 284.70

59,422.44 165,328.87 224,751.31 54,702.37 130,815.42 185,517.79

Non financial assets

Current tax assets (net) - 290.30 290.30 - 0.54 0.54

Deferred tax assets (net) - 178.63 178.63 - 540.97 540.97

Property, plant and equipment -

153.98

153.98

-

102.52

102.52

Other intangible assets -

36.69

36.69

-

36.01

36.01

Right of use asset 245.76

292.89

538.65

-

-

-

Other non-financial assets 108.26

-

108.26

81.70

-

81.70

354.02

952.49

1,306.52

81.70

680.04

761.74

Asset held for sale -

652.22

652.22

-

49.76

49.76



Sr. No.

A

I

a

b

c

d

e

II

a

b

c

d

e

f

III

Liabilities


Trade payables - 151.72 88.43 - 88.43

Debt securities 30,366.70 36,129.00 41,122.62 41,891.30

Borrowings (other than debt securities) 69,878.41 93,052.01 43,436.50 56,951.73

Other financial liabilities 8,237.47 195.16 8,432.64 - 11,093.87

151.72

B

a

b

c

d

I

Non-financial liabilitiesII

Current tax liabilities (net)

Provisions

Deferred tax liabilities

Other non-financial liabilities

a

b

c

d

5,762.30

23,173.60

37,325.09

26,019.17 84,559.12Total 186,329.2837,612.12 100,600.48 138,212.60

287.03

287.03

-

-

-

160.21

160.21

-

-

-

100,440.27 137,765.37

447.24

160.21

-

-

287.03

768.68

13,515.23

11,093.87

25,466.21

143.68

79.05

0.15

330.08

552.97

-

-

-

-

-

84,559.12 110,025.33

143.68

79.05

0.15

330.08

552.97

Total


To achieve this overall objective, the group's capital management, amongst other things, aims to ensure that it meets financial covenants

attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in financial covenants would permit

the lender to call loans and borrowings immediately. Under the terms of the significant borrowing facilities, the group Companies have complied

with the covenants throughout the reporting period.

The following table combines comparable information about:

- fair value hierarchy levels of financial assets and financial liabilities for which fair value was disclosed

Set out below, is a comparison by class of the carrying amounts and fair value of the Company's financial instruments, other than those with carrying amounts that are reasonable approximations of fair values:

- classes of financial instruments based on their nature and characteristics

- the carrying amounts of financial instruments

- fair values of financial instruments (except financial instruments when carrying amount approximates their fair value); and


Accounting classifications and fair values

Cash and cash equivalents -

5,807.36

5,807.36

-

-

-

Other bank balances -

20,544.63

20,544.63

-

-

-

-

169,454.34

169,454.34

-

-

-

6,648.42

20,000.00

26,648.42

6,648.42

-

-

Other financial assets -

2,296.57

2,296.57

-

-

-

6,648.42

218,102.90

224,751.31

6,648.42

-

-

Assets Held for Sale 652.22 - 652.22 - 652.22 -


-

147.57

147.57

-

-

-

-

36,129.00

36,129.00

-

-

-

Borrowings (other than debt securities) -

93,052.01

93,052.01

-

-

-

Other financial liabilities -

8,432.64

8,432.64

-

-

-

-

137,761.22

137,761.22

-

-

-

Debt to Equity Ratio (in times)

For the purpose of the group's capital management, capital includes issued capital and other equity reserves.

The group Companies manages its capital to ensure that the group would be able to continue as going concern while maximizing the return to

stakeholders through the optimization of the debt and equity balance.

Financial assets

Loans

Investments

Total

Trade payables

Debt securities

Level 2Amortised Cost Level 3Total

Fair ValueCarrying Value

Level 1FVTPL Total

-

-

-

6,648.42

-

6,648.42

652.22

-

-

-

-

-

(Rs. in Lakh)

Particulars

Debt

Total Equity

44.2. Fair Value

44. Financial instruments

44.1. Capital management

The group maintains an actively managed capital base to cover risks inherent in the business and is meeting the capital adequacy

requirements of National Housing Bank (NHB) and Reserve Bank of India (RBI). The adequacy of the group’s capital is monitored using,

among other measures, the regulations issued by NHB and RBI. The group Companies have complied with the applicable capital

requirements over the reported period.

(Rs. in Lakh)

98,843.03

75,750.99

1.30


129,181.01

88,497.44

1.46



Total

As at March 31, 2019 Level 2Amortised Cost Level 3Total


Level 1FVTPL


Other bank balances

Other financial assets

Assets Held for Sale


Borrowings (other than debt securities)


Financial assets

Loans

Investments

Total

Trade payables

Debt securities

Total

(Rs. in Lakh)

- 13,020.72 13,020.72 - - -

- 30,522.00 30,522.00 - - -

- 133,652.17 133,652.17 - - -

-

-

-

-

-

- 284.70

284.70

-

-

-

177,479.59

177,479.59

-

-

-

49.76 -

49.76

-

49.76

-

- 88.43

88.43

-

-

-

- 41,891.30

41,891.30

-

-

-

- 56,951.73

56,951.73

-

-

-

- 11,093.43

11,093.43

-

-

-

- 110,025.33

110,025.33

-

-

-

-

-

-

-

-

49.76

-

-

-

-

-

-

-

a) All loans are floating interest bearing thus, amortised costs equals their fair value.

b) For financial assets and liabilities measured at amortised cost other than as mentioned in (a) above, the group Companies considers that the

carrying amounts recognised in the financial statements approximate their fair values except as under:

Fixed rate debt securities March 31, 2019March 31, 2020

Carrying Value

Debt securities & borrowings other than short term debt 48,874.32 54,219.87

Note: Fair value is determined by discounting the contractual cashflows using weighted average rate of variable rate borrowing.

c) Asset held for sale - Real estate properties are valued on the basis of a well progressed sale process with price quotes from real estate valuers.

(Rs. in Lakh)

March 31, 2019March 31,2020

Fair Value

55,492.70 48,819.20



44.3. Financial risk management

Risk management framework

The Company has exposure to the following risks arising from financial instruments:

Credit risk;

Operational risk;

Liquidity risk; and

Market risk (including interest rate risk)

Risk Management is an integral part of the group's business strategy with a focus on building risk management culture

across the organization. The Risk Management oversight structure includes Committees of the Board and Senior

Management Committees. Risk Management Framework which lays down guidelines for Risk identification, assessment

and monitoring as an on-going process that is supported by a robust risk reporting framework. It entails the establishment

of robust systems and processes within the Risk Management Framework to mitigate risks effectively. Risk Management at

the group Companies cover Credit Risk, Market Risk, Operational Risk, Fraud Risk and other risks, such as compliance

risk, reputation risk and other risks.

The group’s Board of Directors has overall responsibility for the establishment and oversight of the risk management

framework. The Board of Directors has constituted several committees, including the Audit Committee, the Asset Liability

Management Committee, Risk Management Committee and defined their role for monitoring the risk management policies

of the group Companies.

The Risk management framework adopted is enabled by the risk-oriented Company level culture characterized by:

1. The rigour and discipline required in managing the portfolio and transactional risk are embedded in the Vastu culture with a

consensus that risk management is everyone’s responsibility.

2. Staff members across all verticals appreciate it and actively partake in ensuring that risk management remains strong, even

as the Company makes incremental strides in its business growth.

3. An iterative process of identifying and evaluating risks, setting risk strategies, and monitoring results are within the oversight

by Senior Management & Board of Directors, via Risk Management Committee.

Risk Management systems have been evaluated in detail and are discussed at every Board meeting by the Risk

Committee outside of Board meeting. Detail review of Risk MIS, Portfolio quality reports, collection MIS, Data analytics

report and various other analytics and risk matrix are the cornerstones of Vastu's Risk Management which has been

certified as best in class and indicated by performance.

i) Credit risk

Credit risk refers to the risk of the inability of the borrower to repay the loan availed due to any circumstance. In any lending

operation, credit risk remains on the top of all risks to be managed well. Therefore, managing credit risk in the business has

remained a priority. The credit risk management framework that has been put together by Vastu constitutes a robust

alignment of the following:

Well-constructed detailed manuals guiding the teams on the group Companies policies and processes which are approved

by the Board backed by technology, analytics and decision science. The documents articulate in detail the various products

and programs that can be offered to the customers, with clearly defined norms for all the credit parameters across all product

variants and programs.



An experienced, well-trained, professional team are working on exercising adequate rigour and discipline in the process of

customer assessment. The team undergoes adequate refresher training sessions and interactive sessions with the senior

leadership at frequent intervals reinforcing the rigour and discipline required in the evaluation process. The credit appraisal

process used by the team encompasses identification of underlying risks, mitigating factors and residual risks associated

with the customer.

The credit team works closely with the relationship management team in ensuring that growth of the business in every

location is well supported while maintaining the focus on the asset quality.

Data science know-how supporting the underwriting process, wherein a well-curated data scoring model, produces an

application-level score, defining the probability of default for each loan at the time of approval. This score supports the credit

decision process at each loan level, even as the qualitative factors of each loan are appraised in detail by the team.

Structured and standardized credit approving process, which includes a well-established procedure of comprehensive credit

appraisal across all the markets.

State-of-the-art technology platform built In-house to support the capture of data, information and other details

required for decision making. The technology application is available to the users on their mobile phones for use. Every staff

member, when they meet a customer for collection of any data, information or document, the mobile application facilitates

the capture of the same. Vastu is the first group to implement an entirely paperless loan approval and disbursal process.

Measurement, monitoring and reporting of the Credit risk are regularly done during periodic reviews and Risk Management

Committee meetings using detailed Portfolio Quality reports.

Credit Approval Authority

As a part of the risk management framework, the group Companies has well-defined metrics for delegation of authorities for

standard approvals and deviation approvals. The sanctioning authorities delegated to individual staff members, based on

defined norms of the group Companies on the staff members' experience, position and knowledge of the business.

The group Companies measures, monitors, and manages credit risk at an individual borrower level and at the group

exposure level for other borrowers. Actual credit exposures, credit limits and asset quality are regularly monitored and

analyzed at various levels.

Exposure to Credit Risk and Concentration

The carrying amount of financial assets represents the maximum credit exposure. The group’s concentrations of risk are

managed based on Loan to value (LTV) segregation as well as geographical spread. LTV calculated by the gross amount of

the loan to the value of the collateral at origination. Average Loan to Value for Vastu is at 38%, and only 13% of the portfolio

has LTV > 70%. Vastu has a well-balanced portfolio across all operating states and does not contribute to > 16- 17% in any

of the states. Vastu portfolio is highly granular, with majority business categories contributing less than 3%, representing

diverse elements in the supply chain that deal in goods which are domestic consumption-led, focus on daily needs, are

standalone businesses that are mostly B2B models, have a loyal customer base, and have a resilient business



The group Companies follows a bureau led approach besides of right customers, the launch of new markets with high

delinquencies. The group Companies has a dedicated team to develop a robust technology platform to digitize processes,

risk management and analytics. It enables the sales officer to input customer records online, digitize customer documents,

record customer discussions, and check the credit score real-time. The system backed by data science, analytics along with

a physical on- ground model where every customer met by a Vastu employee and personal credit decision done has

The group Companies caters to primarily from low, middle and high income salaried and self-employed individuals in Tier

2/3/4 markets. The founder team, the board, and the management focused on prudent underwriting practices, 100% in-

house fulfilment, 100% retail book, stable higher credit-rated customer (>63% of customers with a CIBIL score of more than

700 and good Bureau vintage), a higher proportion of self-constructed properties to manage asset quality and local

economy focused business lines. Along with the intense focus on self-employed self-construction and resale properties

(77% of the book) it is ensured Vastu is not exposed to the risk of financing under construction apartment by Tier II, III

builders.

enabled the team to pursue leads with a higher probability of sanctions while rejecting weak applications upfront and

reducing incidents of frauds and misrepresentations.

The group's credit officers evaluate credit proposals based on active credit policies as on the date of approval. A structured

and standardized credit approval process includes customer selection criteria, comprehensive credit risk assessment and

cash flow analysis, which encompasses an analysis of relevant quantitative and qualitative information to ascertain the

creditworthiness of a potential customer. The criteria also include factors such as the borrower’s income & obligations, the

loan-to-value ratio, Fixed obligation to income ratio and demographic parameters subject to regulatory guidelines.

Risk Management and Portfolio Review

Credit Risk Assessment methodology for retail Loans

The group Companies caters to primarily from low, middle and high income salaried and self employed individuals in Tier 2/

3/ 4 markets. The founder team, the Board, management has focused on prudent underwriting practices, 100% in-house

fulfilment, 100% retail book, Stable higher credit-rated customer (>63% of customers with a CIBIL score of more than 700

and good Bureau vintage), a higher proportion of self-constructed properties to manage asset quality and local economy

focused business lines. Along with the intense focus on Self Occupied Self construction and resale properties (77% of the

book) ensures Vastu not exposed to the risk of financing under construction apartment by Tier II, III builders has a

comprehensive portfolio monitoring process under which there is a monthly review of portfolio asset quality and efficiency of

its collection processes. The portfolio monitoring process engages all the members of senior leadership in studying the

behaviour of various portfolio segments. These reviews are done in the monthly Risk Management Committee meetings.

Based on these reviews, well-informed, data-driven decision are taken in giving the future direction to the policies of the

group Companies. The collection efficiency review focusses on formulating and implementing location-based collection

strategies. In this manner, group Companies analyses the portfolio performance of each product segment regularly, and use

these as inputs in revising the product programs, target market definitions and credit assessment criteria to meet the twin

objectives of combining volume growth and maintenance of asset quality.

As a part of the RMC meetings, the group Companies also reviews various other process adherences for retail borrowers,

to ensure that the terms of sanctions and disbursements have been met. The technology platform of the group Companies

has appropriate mechanisms to carve out and publish exception at granular, segmental levels that help in ensuring a well-

structured watch on process adherence.



The group Companies have a central monitoring unit that on an on-going basis, conducts a thorough review and audit of the

quality of the credit appraisal and documentation that has been done by the different teams across locations. This process

ensures that any gaps noticed in the location level processing of the loans are immediately identified, and corrective action

is taken. There is also an internal auditor who independently reviews adherence to policies and processes, carries out an

internal audit and briefs the Audit Committee and the Board periodically.

The group company’s current credit risk grading framework comprises the following categories:

Basis for recognising expected credit lossesCategory

Stage 1

Stage 2

Stage 3

Outstanding between 0 to 30 days


Outstanding for more than 90 days

The key elements in calculation of ECL are as follows:

PD - The Probability of Default is an estimate of the likelihood of default over a given time horizon. A default may only

happen at a specific time over the assessed period if the facility has not been previously derecognised and s still in

the portfolio. The PD has been determined based on the historical behaviour of the book & roll rates for retail and

comparative financial instruments of peer group companies.

EAD – The estimated credit exposure at point of default

The table below shows the credit quality and the exposure to credit risk based on the year-end stage classification.

The amounts presented are gross of impairment allowances.

LGD - The Loss Given Default is an estimate of the loss arising in the case where a default occurs at a given time. It is

based on the difference between the contractual cash flows due and those that the lender would expect to receive,

including from the realisation of any collateral. It is usually expressed as a percentage of the EAD. The LGD is

determined based on valuation of collaterals and other relevant factors

Category

Stage 1 – High quality assets Loan 166,176.14 693.53 165,482.61

Loan 2,032.19 192.45 1,839.74

Loan 574.40 126.37 448.03

Stage 2 – Assets for which there is significant increase in

credit risk

Stage 3 - Credit impaired assets

(Rs. in Lakh)


Net Carrying

Amount

Expected

Credit Loss

Gross Carrying

Amount

Assets category

168,782.73 1,012.35 167,770.38Total



Category


Loan 777.76 74.64 703.12

Loan 118.67 26.11 92.56


credit risk


(Rs. in Lakh)


Net Carrying

Amount

Expected

Credit Loss

Gross Carrying

Amount

Assets category

133,602.56 668.01 132,934.54Total

(Rs. in Lakh)

(Rs. in Lakh)

Stage 2

Stage 2

Stage 1

Stage 1

Stage 3

Stage 3

Total

Total

FY 2019-20

FY 2018-19

Gross carrying amount opening balance 132,706.13 777.76 118.67 133,602.56

New assets originated or purchased 66,678.28 - - 66,678.28

Assets derecognised or repaid (excluding write offs) (30,686.58) (587.20) (224.08) (31,497.86)

Transfers to Stage 1 (2,521.54) - - (2,521.54)

Transfers to Stage 2 -

1,841.73

-

1,841.73


-

679.81

679.81

-

-

-

-

Amounts written off (0.14)

(0.10)

-

(0.24)

Gross carrying amount closing balance 166,176.14 2,032.19 574.40 168,782.73

Changes to contractual cash flows due to modifications not

resulting in derecognition

Gross carrying amount opening balance 74,111.76 282.79 - 74,394.55



Transfers to Stage 1 (833.13)

-

-

(833.13)


675.38

-

675.38


-

157.74

157.74

-

-

-

-


(20.86)

(32.39)

(53.75)

Gross carrying amount closing balance 132,706.13 777.76 118.67 133,602.56

Changes to contractual cash flows due to modifications not resulting in derecognition



(Rs. in Lakh)

Stage 2Stage 1 Stage 3 TotalFY 2019-20

567.26 74.64 26.11 668.01

New assets originated or purchased 149.40 - - 149.40

Assets derecognised or repaid (excluding write offs) (21.38) (56.60) (49.30) (127.27)

Transfers to Stage 1 (1.76) - - (1.76)

Transfers to Stage 2 - 174.42 - 174.42

Transfers to Stage 3 - - 149.56 149.56

Amounts written off (0.00) (0.01) - (0.01)

693.53 192.45 126.37 1,012.35ECL allowance - closing balance

ECL allowance - opening balances

(Rs. in Lakh)

Stage 2Stage 1 Stage 3 TotalFY 2018-19

552.41 27.14 - 579.55

New assets originated or purchased 19.28 - - 19.28

Assets derecognised or repaid (excluding write offs) (4.22) (15.31) (1.47) (21.01)

Transfers to Stage 1 (0.21) - - (0.21)

Transfers to Stage 2 - 64.82 - 64.82

Transfers to Stage 3 - - 34.70 34.70

Amounts written off (0.00) (2.00) (7.13) (9.13)

567.26 74.64 26.11 668.01ECL allowance - closing balance


Significant estimates and judgements related to Impairment of financial assets

The impairment provisions for financial assets disclosed above are based on assumptions about the risk of default and

expected loss rates. The group Companies uses judgement in making these assumptions and selecting the inputs to the

impairment calculation, based on the group’s history, existing market conditions as well as forward-looking estimates at the

end of each reporting period.

The group’s first year full year of operation was FY 2016-17 and accordingly up to date of transition very little historical

information about its own experience of impairment is available. As on 31.03.2018, no account was above 90 days past

dues, whereas as on 31.03.2019 only 9 such accounts were there.

In such scenarios, peer group experience for the comparable financial instrument (or groups of financial instruments) used

as prescribed in Ind AS.

The group Companies have a sound operational process framework and infrastructure, which governs and mitigates the

operational risks that arise in the business. Operational risks refer to risk of loss arising from failure of any of the internal

processes, people frauds, vendor frauds, system malfunctions or from any external events. The operations risk

management framework for the group Companies consists of the following components:

ii) Operational risk

- A comprehensive system of internal controls, wherein the performance of each unit/branch is monitored against defined

thresholds. Thresholds are defined for various operational risk areas. These thresholds are monitored regularly, which

helps in identification and assessment of various operational risks, managing and responding to specific operational

incidents and mitigation through appropriate process and control enhancements.



liquidity ratios considered while reviewing the liquidity position.

- A sound network of professional vendors across the country to support the group Companies in its process of collateral

evaluation. This network consists of lawyers and valuation agencies which operate under the close supervision of the

local and Head Office teams of the group Companies. Every security that comes to Vastu as a part of its loan is evaluated

thoroughly by the lawyers for a clear title and inspected by a valuer for determination of the market value. These

processes ensure that there is adequate security cover available to Vastu during the process of lending. The title

certification as a clear and marketable property is necessary for the group Companies to respond in default situations

where actions under SARFAESI or any other laws may be required.

- Fully technology-enabled to process pre and post disbursal processes and account maintenance. The home-grown

mobile application used by the frontend teams to collect data and sanction the loans is seamlessly integrated with the

back-end system to provide automated feeds, effecting smooth processing of loans with all checks and controls in place.

iii) Liquidity risk

Liquidity risk is the current and prospective risk arising out of an inability to meet financial commitments as they fall due,

through available cash flows or the sale of assets at fair market value. It includes both the risk of unexpected increases in

the cost of funding an asset portfolio at appropriate maturities and the risk of being unable to liquidate a position on time

at a reasonable price.

The group Companies manages liquidity risk by maintaining sufficient cash and marketable securities and by having

access to funding through an adequate amount of committed credit lines. Given the need to fund various products, the

group Companies maintains flexibility in funding by maintaining availability under committed credit lines to meet

obligations when due. Management regularly monitors the position of cash and cash equivalents vis-à-vis projections.

Assessment of maturity profiles of financial assets and financial liabilities, including debt financing plans and maintenance

of Balance Sheet

The group Companies manages liquidity risk under our asset-liability management policy. This policy is framed as per the

current regulatory guidelines and approved by the Board of Directors. The asset-liability management policy reviewed

periodically to incorporate changes as required by regulatory stipulation or to realign the policy with changes in the

economic landscape. The asset-liability committee (ALCO) of the group Companies formulates and reviews strategies

and provides guidance for management of liquidity risk within the framework laid out in the asset-liability management

policy.

The group Companies have the right to draw upon these lines of credit based on its requirement and terms of draw down.

The group Companies has undrawn lines of credit of Rs. 51,000 lakhs, Rs. 18,800 lakhs and Rs.4,300 lakhs as of March

31, 2020, March 31, 2019 and April 1,2018 respectively, from its bankers for working capital requirements.



(Rs. in Lakh)

(Rs. in Lakh)

1 - 3 years

1 - 3 years

0 - 1 year

0 - 1 year

Carrying amount

Carrying amount

3 - 5 years

3 - 5 years

Contractual cash flows


More than 5 years

More than 5 years

March 31, 2020

March 31, 2019

The following are the details of Company’s remaining contractual maturities of financial liabilities and assets at the reporting date. The amounts

are gross and undiscounted.

Exposure to liquidity risk


Trade payables 151.72

151.72

-

-

-

Debt securities 36,129.00

5,762.30

372.01

19,994.69

10,000.00

Borrowings (other than debt securities) 93,052.01

23,173.60

45,177.47

17,935.63

6,765.31

Other financial liabilities 8,432.64

8,237.47

158.06

37.10

-

Total 137,765.37

37,325.09

45,707.53

37,967.43

16,765.31

Financial Assets

Cash and cash equivalents 5,807.36

5,807.36

-

-

-

Bank balances other than (a) 20,544.63

19,544.63

1,000.00

-

-

Loans 169,454.34

6,446.58

11,029.74

14,561.20

137,416.82

Investments 26,648.42

26,648.42

-

-

-

Other financial assets 2,296.57

983.83

628.83

483.71

200.20

Total 224,751.31 59,430.81 12,658.57 15,044.92 137,617.01


Trade payables 88.43

88.43

-

-

-

Debt securities 41,891.30

768.68

1,152.97

9,992.41

29,977.24

Borrowings (other than debt securities) 56,951.73

13,515.23

28,360.87

12,316.26

2,759.37

Other financial liabilities 11,093.87

11,093.87

-

-

-

Total 110,025.33

25,466.21

29,513.84

22,308.67

32,736.61

Financial Assets

Cash and cash equivalents 13,020.72

13,020.72

-

-

-

Bank balances other than (a) 30,522.00

30,522.00

-

-

-

133,652.17

2,938.00

7,412.95

9,922.60

113,378.62

Investments 8,038.20

8,038.20

-

-

0.00

Other financial assets 284.70

183.45

-

101.25

-

Total 185,517.79

54,702.37

7,412.95

10,023.85

113,378.62

Loans

The gross inflows disclosed in the above table represent the contractual undiscounted cash flows relating to financial

liabilities held for risk management purposes and which are not usually closed out before contractual maturity.



iv) Market risk (interest risk)

The group's exposures to interest rates on financial assets and financial liabilities are detailed in the liquidity risk

management section of this note.

Exposure to interest rate risk

The group Companies are exposed to interest rate risk as it has assets and liabilities based on floating interest rates as

well. The group Companies have an approved Asset and Liability Management Policy which empowers the Asset and

Liability Management Committee (ALCO) to assess the interest rate risk run by it and provide appropriate guidelines to

the Treasury to manage the risk. The ALCO reviews the interest rate risk periodically and decides on the asset profile

and the appropriate funding mix. The ALCO reviews the interest rate gap statement and the interest rate sensitivity

analysis.

(Rs. in Lakh)

March 31, 2020 March 31, 2019

45,544.63 41,622.00

168,781.39 135,003.22

214,326.02 176,625.22

54,219.87 48,874.32

75,163.79 50,146.67

129,383.66

99,020.99

Financial assets

Fixed-rate instruments

Floating-rate instruments

Total




Total

If interest rates had been 100 basis points higher or lower and all other variables were constant, the group's profit before tax

would have changed by the following:

Fair value sensitivity analysis for Floating-rate instruments

The sensitivity analysis below has been determined based on exposure to the interest rates for financial instruments at the

end of the reporting period and the stipulated change taking place at the beginning of the financial year and held constant

throughout the reporting period in case of instruments that have floating rates.

(Rs. in Lakh)

Particulars

Floating rate loans

Floating rate borrowings

100 bps higher 100 bps lower 100 bps higher 100 bps lower

March 31, 2019March 31, 2020

1,687.81 (1,687.81) 1,350.03 (1,350.03)

(1,293.84) 1,293.84 (990.21) 990.21

393.98 (393.98) 359.82 (359.82)



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47. The spread of COVID-19 across the globe and India has contributed to a significant decline and volatility in economic activity and financial

markets. The outbreak of the virus has already been declared a global pandemic by the World Health Organization (WHO) on March 11, 2020.

On March 24, 2020, the Indian government announced a strict 21-day lockdown which was further extended by 19 days. The extent to which

the COVID-19 pandemic will impact the group’s results will depend on future developments, which are highly uncertain, including, among other

things, any new information concerning the severity of the said pandemic and any action to contain its spread or mitigate its impact whether

government mandated or elected by the group Companies.

The group Companies holds provisions as at March 31, 2020 against the potential impact of COVID-19 based on the information available at this

point in time. The provisions held by the group Companies are in excess of the RBI prescribed norms.

In accordance to guidelines on COVID 19 - regulatory package issued by RBI dated March 27, 2020 and April 17, 2020, the group Companies

would be granting a moratorium of three months on the payment of all installments as applicable, falling due between March 1, 2020 and May

31, 2020 to all eligible borrowers classified as Standard, even if overdue, as on February 29, 2020. For all such accounts where the moratorium

is granted, the asset classification shall remain stand still during the moratorium period (i.e. the number of days past-due shall exclude the

moratorium period for the purposes of asset classification).

50.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 other than as disclosed. No interest has been paid/ is payable by the group Companies during / for the year to these

‘Suppliers’ other than as disclosed. The above information takes into account only those suppliers who have submitted their registration details or

has responded to the inquiries made by the group Companies for this purpose.

In the opinion of the management, the loans and advances are approximately of the value stated, if realized, paid in ordinary course of business.

The provision for all known liabilities is adequate and is not in excess of amount considered reasonably necessary.

49.Balance grouped under loans and advances in certain cases are subject to confirmation and reconciliation. Impact of the same, if any, shall be

accounted as and when determined, which are not expected to be material.

51.Previous year figures have been re-grouped / re-arranged and re-classified wherever necessary, to conform to current year's classification.





(DIN00147182) (DIN06597041) (DIN02032154 )



sd/-



Vikas Kumar

Partner



Place : Mumbai



sd/- sd/- sd/-

sd/- sd/-


(Rs in Lakh)

Mar-20 Mar-19

- -

Particulars

Expenditure in Foreign Currency

48. Expenditure in foreign currency

Independent Auditors’ Report & Standalone Financial Statement

1.



Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements prepared in accordance with Accounting Standards prescribed under Section 133 of the Companies Act, 2013 (‘the Act’) read with Companies (Indian Accounting Standards) Rules, 2015, as amended, (‘Ind AS’), gives the information required by the Act in the manner so required and gives a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2020,the profits (including other comprehensive income), changes in equity and its cash flows for the year ended on that date.

Report on the Audit of the Standalone Financial Statements

We have audited the accompanying standalone Ind AS financial statements of Vastu Housing Finance Corporation Limited (‘Company’), which comprise the Standalone Balance Sheet as at 31st March 2020, the Standalone Statement of Profit and Loss (including Other Comprehensive Income), the Standalone Statement of Change in Equity, the Standalone Statement of Cash Flows for the year then ended and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information (hereinafter referred to as “standalone financial statements”).

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those SAs are further described in the ‘Auditor’s Responsibilities for the Audit of the Standalone Ind AS Financial Statements’ section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and

To the Members of Vastu Housing Finance Corporation Limited

Basis for Opinion

Emphasis of Matter

we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI’s Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.

We draw attention to Note 47 to the standalone Ind AS financial statement, which describes the extent to which the Covid-19 pandemic will impact the Company’s standalone financial statement will depend on the future developments, which are highly uncertain. our opinion is not modified in respect of this matter.

Key Audit Matter

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone Ind AS financial statements of the current period. These matters were addressed in the context of our audit of the standalone Ind AS financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matter to be communicated in our report.

Ind AS is applicable to the Company with effect from April 1, 2019. Accordingly, the Company has prepared financial statements whichcomply with Ind AS for the period ended March 31, 2020. In preparing these financial statements, the Company’s opening balance sheet under Ind AS was prepared as at 1 April 2018, the Company’s date of transition to Ind AS.

The transition has involved significant change in the Company’s policies and processes relating to financial reporting, including generation of reliable and supportable information. Further, the management has exercised significant judgement for giving an appropriate effect of the first-time adoption principles of Ind AS 101, as at transition date and to determine the impact of the new accounting framework on certain accounting and disclosure requirements prescribed under extant National Housing Bank (NHB) directions.

In view of the complexity and the resultant risk of material misstatement arising from an error or omission in correctly implementing the principles of Ind AS at the transition date, which could result in a misstatement of one or more

Read the Ind AS impact assessment performed by the management to identify areas to be impacted on account of Ind AS transition.

Understood the financial statement closure process and the additional controls (including IT controls) established by the Company for transition to Ind AS.

Assessed the judgement exercised by the management in applying the first-time adoption principles of Ind AS 101 especially in respect of fair valuation of assets and liabilities existing as at transition date.

Assessed the judgement applied by the Company in determining its business model for classification of financial assets.

Performed test of details on the accounting adjustments posted as at the transition date and in respect of the previous year to convert the financial information reported under erstwhile Indian GAAP to Ind AS.

Read changes made to the accounting policies in light of the requirements of the new framework.

2.

3.

4.

Independent Auditors’ Report



Impairment of financial asset (expected credit loss)

periods presented in these Ind AS financials statements, this has been an area of key focus in our audit.

Assessed the judgements applied by the Company in respect of areas where the accounting treatment adopted or the disclosures made under the new accounting framework were inconsistent with the extant NHB directions.

Assessed disclosures included in the Ind AS financial statements in accordance with the requirements of Ind AS 101, with respect to the previous periods presented.

Ind AS 109 requires the Company to provide for impairment of its

financial assets using the expected credit loss (‘ECL’) approach

involving an estimation of probability of loss on the financial assets

over their life, considering reasonable and supportable information

about past events, current conditions and forecasts of future economic

conditions which could impact the credit quality of the Company’s

loans and advances. In the process, a significant degree of judgement

has been applied by the management in respect of following matters:

The Company has grouped its loan portfolio into Housing Loan and

Loan Against property. Loans grouped under a particular category

are assumed to represent a homogenous pool there by expected to

demonstrate similar credit characteristics.

Staging of loans and estimation of behavioural life.

Estimation of expected loss from historical observation of Company

and its peers.

The Company has developed models that derive key assumptions

used within the provision calculation such as probability of default (PD)

and loss given default (LGD). The output of these models is then

applied to the provision calculation with other information including

and the exposure at default (EAD).

misstatement in such estimate may give rise to a material

misstatement of the Ind AS financial statements or omission of any

disclosure required by the standards. Therefore, it is considered as a

key audit matter.

Considering the significance of such provision to the overall financial

statements and the degree of management’s judgment, any error or

Estimation of losses in respect of those groups of loans which had

no/ minimal defaults in the past.

Estimation of expected delinquency from Covid 19 lockdown.

Our audit procedures included reading the Company’s accounting

policies for impairment of financial instruments and assessing

compliance with the policies in terms of Ind AS 109.

Assessed the disclosures included in the Ind AS financial

statements with respect to such allowance / estimate in accordance

with the requirements of Ind AS 109 and Ind AS 107.

Tested the arithmetical accuracy of computation of ECL provision

Performed sample testing to ascertain the completeness and

accuracy of the input data used for determining the PD and LGD

rates and agreed the data with the underlying books of accounts and

records.

Assessed the assumptions used by the Company for grouping and

staging of loan portfolio into various categories and default buckets

and determining the probability-weighted default (PD) and loss-

given default (LGD) rates including those of peers.

Tested the operating effectiveness of the controls for staging of

loans based on their past-due status. We also reviewed a sample of

stage 1 and Stage 2 loans to assess whether any loss indicators

were present requiring them to be classified under stage 2 or 3.

performed by the Company in spreadsheets.

Our opinion on the standalone Ind AS financial statements does not cover the other information and we will not express any form of assurance conclusion thereon.

Information Other than the Standalone Ind AS Financial Statements and Auditor’s Report thereon

The Company’s management and Board of Directors are responsible for the other information. The other information comprises the information included in Company’s Annual report but does not include the standalone Ind AS financial statements and our auditor’s report thereon. The other information is expected to be made available to us after the date of this auditor's report.

In connection with our audit of the standalone Ind AS financial statements, our responsibility is to read the other information when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the standalone Ind AS financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

5.

resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Auditor’s Responsibilities for the Audit of the Standalone Ind AS Financial Statements

In preparing the standalone Ind AS financial statements, management and Board of Directors are responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Company’s Board of Directors are responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, changes in equity and cash flows of the Company in accordance with the Ind AS and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Responsibilities of Management and Those Charged with Governance for the Standalone Ind AS Financial Statements

The Board of Directors is also responsible for overseeing the Company’s financial reporting process.

Our objectives are to obtain reasonable assurance about whether the standalone Ind AS financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone Ind AS financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the standalone financial Ind AS statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls system in place and the operating effectiveness of such controls.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Companies Act, 2013, we give in the ‘Annexure A’, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

The comparative financial information of the Company for the year ended March 31, 2019 and the related transition date opening balance sheet as at April 1, 2018 included in these standalone financial statements, have been prepared after adjusting previously issued the standalone financial statements prepared in accordance with the Companies (Accounting Standards) Rules, 2006 to comply with Ind AS.

Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

Evaluate the overall presentation, structure and content of the standalone Ind AS financial statements, including the disclosures, and whether the standalone Ind AS financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Reporting on comparatives in case of First Ind AS Financial statements

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone Ind AS financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

As required by Section 143(3) of the Act, we report that:

6.

7.

8.

9.

a.

b.

i.

ii.

books of account.

With respect to the matter to be included in the Auditor’s Report under section 197(16) of the Act, as amended:

On the basis of the written representations received from the directors as on 31st March, 2020 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2020 from being appointed as a director in terms of Section 164 (2) of the Act.

With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:


There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

The Company does not have any pending litigations which would impact its financial position.

With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in ‘Annexure B’.

In our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Companies (India Accounting Standards) Rules, 2015, as amended.

In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the current year is in accordance with the provisions of section 197 of the Act.

The Standalone Balance Sheet, the Standalone Statement of Profit and Loss including Other Comprehensive Income, Standalone Statement of Changes in Equity and the Standalone Cash Flow Statement dealt with by this Report are in agreement with the

The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

For T R Chadha & Co LLPChartered Accountants

iii.

iv.

v.

vi.

vii.

viii.

a)

b)

c)

Vikas Kumar

Partner



Place: Mumbai


sd/-

According to the information and explanations given to us and on

the basis of our examination of the records of the Company, the

title deeds of the immovable property is held in the name of the

Company as at the balance sheet date.

The Company is maintaining proper records showing full

particulars including quantitative details and situtation of its fixed

assets.

According to the information and explanation given to us, the

company has not accepted any deposits which are covered under

the directives issued by the Reserve Bank of India and the

provisions of section 73 to 76 or any other relevant provisions of the

Companies Act, 2013. Accordingly, paragraph 3 (v) of the Order is not

applicable to the Company.

The annexure referred to in Independent Auditors’ Report to the

member of Vastu Housing Finance Corporation Limited (‘the

Company’) on the standalone financial statement for the year

The Company has a regular program of physical verification to

cover all the items of fixed assets in a phased manner which, in

our opinion, is reasonable having regard to the size of the

Company and the nature of its assets. Pursuant to the program,

certain fixed assets were physically verified by the management

during the year. According to the information and explanations

given to us, no material discrepancies were noticed on such

verification.

(i) In respect of Fixed Assets

The Company has not granted any secured or unsecured loan to

companies, firms, Limited Liability Partnerships or other parties

covered in the register maintained under Section 189 of the

Companies Act, 2013 (“the Act”). Accordingly, paragraph 3 (iii) (a), (b)

and (c) of the Order is not applicable to the Company.

In our opinion and according to the information and explanations

given to us, the Company has complied with the provisions of

Sections 185 and 186 of the Act in respect of grant of loans, making

investments and providing guarantees and securities, as applicable.

The nature of business of the company does not require to have any

physical inventory. Accordingly, paragraph 3(ii) of the Order is not

applicable to the company.

ended 31st March 2020, we report that;

The maintenance of cost records has not been specified by the

Central Government under section 148(1) of the Act for the business

activities carried out by the Company. Accordingly, paragraph 3(vi) of

the Order is not applicable to the Company.

According to the information and explanations given to us, in respect

of Statutory Dues:

The Company has been regular in depositing its undisputed

statutory dues (with respect to amounts deducted / accrued in the

books of account) including Provident Fund, Employees State

insurance, income-tax, goods and services tax, cess and other

material statutory dues (where applicable) to the appropriate

authorities. There were no material undisputed dues payable,

outstanding as on 31st March, 2020 for a period of more than six

months from the date they became payable.

‘Annexure A’ to the Independent Auditor’s Report

a)

b)

c)

(ii)

(iii)

(iv)

(v)

(vi)

(vii)

a)

There are no amounts in respect of income tax, service tax, goods

and service tax, duty of customs, duty of excise or value added tax

that have not been deposited with the appropriate authorities on

account of any dispute.

According to the information and explanation given to us, no material

fraud on the Company or any fraud on the company by its officers or

employees has been noticed or reported during the year.

The managerial remuneration has been paid or provided in

accordance with the requisite approvals mandated by the provisions

of section 197 read with Schedule V of the Act.

The company has applied the amount raised by it by way of term

loans and debt instruments for the purpose for which those loans

were obtained except parking of the funds amounting to Rs.47,545

Lakh (PY Rs. 15,288 Lakh) in fixed deposits or mutual funds pending

utilization. The company did not raise money by way of initial public

offer or further public offer during the year.

According to the information and explanations given to us and based

on the records of the Company examined by us, the Company has

not defaulted in the repayment of loans or borrowings to financial

institutions, banks, government or debenture holders.

In our opinion and according to the information and explanations

given to us, the Company is not a nidhi company. Accordingly,

paragraph 3(xii) of the Order is not applicable to the Company.

As per the information and explanations given by the management

and on the basis of our examination of the records of the Company,

the transactions with the related parties are in compliance with

section 177 and 188 of Act where applicable and the details have

been disclosed in the financial statements, as required by the

applicable accounting standards.

According to the information and explanations given to us, the

company has not made any preferential allotment or private

placement of shares or fully or partly convertible debentures during

the year. Accordingly, paragraph 3(xiv) of the Order is not applicable.

As per the information and explanations given by the management,

the Company has not entered into any non-cash transaction with

directors or persons connected with him during the year and hence

the provisions of Section 192 of the Act is not applicable to the

company.

As per the information and explanations given by the management,

company is not required to be registered under section 45-IA of the

Reserve Bank of India Act, 1934. Accordingly, paragraph 3 (xvi) of

the order is not applicable to the company.

For T R Chadha & Co LLPChartered Accountants


(xvi)

(xv)

(xiv)

(xiii)

(viii)

(ix)

(x)

(xi)

(xii)

Vikas Kumar

Partner



Place: Mumbai


sd/-

Report on the Internal Financial Controls with reference to

financial statements of Vastu Housing Finance Corporation

Limited (‘the Company’) under Clause (i) of Sub-section 3 of

Section 143 of the Companies Act, 2013 (“the Act”)

Opinion

We have audited the internal financial controls with reference to financial

statement of Vastu Housing Finance Corporation Limited (‘the

Company’) as of 31st March, 2020, in conjunction with our audit of the

standalone financial statements of the Company for the year ended on

that date.

In our opinion, to the best of our information and according to the

explanations given to us, the Company has, in all material respects, an

adequate internal financial controls with reference to financial

statements and such internal financial controls with reference to

financial statements were operating effectively as at 31st March, 2020,

based on the internal control with reference to financial statements

reporting criteria established by the Company considering the essential

components of internal control stated in the Guidance Note on Audit of

Internal Financial Controls Over Financial Reporting issued by the

Institute of Chartered Accountants of India.

Management’s Responsibility for Internal Financial Controls

Our responsibility is to express an opinion on the Company's internal

financial controls with reference to financial statements based on our

audit. We conducted our audit in accordance with the Guidance Note on

Audit of Internal Financial Controls Over Financial Reporting (the

“Guidance Note”) issued by the ICAI and the Standards on Auditing

prescribed under section 143(10) of the Act to the extent applicable to an

audit of internal financial controls. Those Standards and the Guidance

Note require that we comply with ethical requirements and plan and

perform the audit to obtain reasonable assurance about whether

adequate internal financial controls over financial reporting was

established and maintained and if such controls operated effectively in

all material respects.

The Company’s management and Board of Directors are responsible for

establishing and maintaining internal financial controls based on the

internal financial controls with reference to financial statements criteria

established by the Company considering the essential components of

internal control stated in theGuidance Note on Audit of Internal Financial

Controls Over Financial Reporting issued by the Institute of Chartered

Accountants of India (ICAI). These responsibilities include the design,

implementation and maintenance of adequate internal financial controls

that were operating effectively for ensuring the orderly and efficient

conduct of its business, including adherence to respective Company’s

policies, the safeguarding of its assets, the prevention and detection of

frauds and errors, the accuracy and completeness of the accounting

records, and the timely preparation of reliable financial information, as

required under the Companies Act, 2013 (‘the Act”).

Our audit involves performing procedures to obtain audit evidence about

the adequacy of the internal financial controls with reference to financial

statements and their operating effectiveness. Our audit of internal

financial controls with reference to financial statements included

obtaining an understanding of internal financial controls with reference

to financial statements, assessing the risk that a material weakness

exists, and testing and evaluating the design and operating

effectiveness of internal control based on the assessed risk. The

procedures selected depend on the auditor’s judgement, including the

assessment of the risks of material misstatement of the financial

statements, whether due to fraud or error.

Auditors’ Responsibility

‘Annexure B’ to the Independent Auditor’s Report

Inherent Limitations of internal financial controls with reference to

financial statements

We believe that the audit evidence we have obtained is sufficient and

appropriate to provide a basis for our audit opinion on the Company’s

internal financial controls with reference to financial statements of the

Company.

Meaning of internal financial controls with reference to financial

statements

A company's internal financial controls with reference to financial

statements is a process designed to provide reasonable assurance

regarding the reliability of financial reporting and the preparation of

financial statements for external purposes in accordance with generally

accepted accounting principles. A company's internal financial control

over financial reporting includes those policies and procedures that (1)

pertain to the maintenance of records that, in reasonable detail,

accurately and fairly reflect the transactions and dispositions of the

assets of the company; (2) provide reasonable assurance that

transactions are recorded as necessary to permit preparation of financial

statements in accordance with generally accepted accounting

principles, and that receipts and expenditures of the company are being

made only in accordance with authorizations of management and

directors of the company; and (3) provide reasonable assurance

regarding prevention or timely detection of unauthorized acquisition,

use, or disposition of the company's assets that could have a material

effect on the financial statements.




Because of the inherent limitations of internal financial controls with

reference to financial statements, including the possibility of collusion or

improper management override of controls, material misstatements due

to error or fraud may occur and not be detected. Also, projections of any

evaluation of the internal financial controls over financial reporting to

future periods are subject to the risk that the internal financial control

over financial reporting may become inadequate because of changes in

conditions, or that the degree of compliance with the policies or

procedures may deteriorate.

Vikas Kumar

Partner



Place: Mumbai


sd/-

(Rs. in Lakh)

LIABILITIES AND EQUITY

Particulars Note

No.

As at

April 01, 2018

As at

March 31, 2020

As at

March 31, 2019

I.

(a) Cash and cash equivalents 5 5,739.92 12,794.62 20,521.85

(b) Bank balances other than (a) above 6 20,544.63

30,522.00

21.00

(c) Loans 7 169,106.07

133,652.17

74,373.15

(d) Investments 8 27,258.24

8,288.20

-

(e) 9 2,288.20

283.85

169.34

224,937.06

185,540.84

95,085.34

II.

(a) Current tax assets (net) 10 289.55 - 74.30(b) Deferred tax assets (net) 176.04

540.97

187.39

(c) 12 145.82

102.52

93.48

(d) Other intangible assets 12 14.74

14.60

22.24

(e) Right of use asset 13 383.75

-

-

(f) 14 99.22

81.70

29.54

1,109.12

739.79

406.95

III. 15 652.22

49.76

-

226,698.40

186,330.39

95,492.29

I.

(a) 16

4.15 - -

141.20 88.43 65.39

(b) Debt securities 17 36,129.00 41,891.30 12,500.00

(c) Borrowings (other than debt securities) 18 93,052.01

56,951.73

34,949.12

(d) 19 8,229.00

10,684.43

137,555.36

58,198.94

(a) Current tax liabilities (net) 20 -

143.68

-

(b) Provisions 21 159.26

79.05

33.10

(c) 22 291.23

331.92

546.79

III.

II.

(a) Equity share capital 23 51,845.53

35,382.18

35,382.18

(b) Other equity 24 36,847.02

40,368.67

1,331.28

88,692.55

75,750.85

36,713.46

226,698.40

186,330.39

95,492.29

1 to 51

579.89450.49 554.65

- Total outstanding dues to creditors other than microand small enterprises



(DIN00147182) (DIN06597041) (DIN02032154 )



sd/-



Vikas Kumar

Partner



Place : Mumbai



sd/- sd/- sd/-

sd/- sd/-



STANDALONE BALANCE SHEET AS AT MARCH 31, 2020

(Rs. in Lakh)


Particulars Note

No.

For the year ended

March 31, 2020

For the year ended

March 31, 2019

VI. Other comprehensive income

Items that will not be reclassified to profit or loss- Actuarial loss on post retirement benefit plans- Income tax on above

Total other comprehensive income

VII. Total comprehensive income

VIII. Earnings per equity share

(Face value of Rs. 100/- each)Basic (Rs.)Diluted (Rs.)



(DIN00147182) (DIN06597041) (DIN02032154 )



sd/-



Vikas Kumar

Partner



Place : Mumbai



sd/- sd/- sd/-

sd/- sd/-



STANDALONE STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2020

I. IncomeRevenue from operations

Interest income 25 22,875.40 15,035.11

Fees and commission income 26 297.55 371.31

Net gain on derecognition of financial instruments 27 1,636.39

-

Other operating income 28 238.06 95.65

Total revenue from operations 25,047.40

15,502.06

Other income 29 4,182.44

2,114.34

Total income

29,229.84 17,616.40

II. Expenses

Finance costs 11,050.55 6,928.05

Impairment on financial instruments 430.43 356.76

Employee benefits expense 4,616.54 4,476.46

Depreciation and amortisation expense 132.70 44.07

Other expenses 1,059.96 868.92

Total expenses

III. Profit before tax 11,939.66 4,942.15

IV. Tax expense

Current tax 2,329.44 1,528.88

Earlier year tax 13.76 153.73

Deferred tax 371.65 (349.80)

Total tax expense

V. Net profit after tax

17,290.18 12,674.26

9,224.81 3,609.34

2,714.85 1,332.82

303132

12 & 1333

34

34

(33.57) (13.74)8.60 3.79

36

18.20 10.20

17.96 10.11

1 to 51

(24.97) (9.95)

3,599.399,199.84

(Rs. in Lakh)

Particulars Note

No.

Operating profit before working capital changes

Adjustment for:Decrease / (Increase) in non-financial assetsDecrease / (Increase) in other financial assetsDecrease / (Increase) in financial liabilitiesDecrease / (Increase) in non financial liabilitiesCash generated from (used in) operationsDirect taxes paid (net)

Net cash (used in) operating activitiesLoans disbursed to customerLoans repayment received (incl. foreclosed, direct assignment, etc.)

Net cash (used in) operating activities

B. Cash flow from investing activitiesInvestments in mutual fund unitsSale of mutual fund unitsInvestment in other depositsInterest received on bank deposits

Investment in Bank depositsProceeds from redemption of Bank deposit

Net cash (used in) investment activities

C. Cash flow from financing activities

Proceeds from issue of equity share (net)

Payment of lease liabilities

Share application money (pending allotment)

Proceeds from long-term borrowings

Repayment of long-term borrowings

(Repayment of) / proceeds from short-term borrowings (net)

Net cash generated from financing activities

Net (decrease) / increase in cash and cash equivalents (A+B+C)

Cash and cash equivalents at the beginning of the year

Acquisition/Purchase/Sale of property, plant & equipment and intangible

assets (net)

Cash and cash equivalents at the end of the year (refer note 5)

For the year ended

March 31, 2020

For the year ended

March 31, 2019

A. Cash flow from operating activities

Profit before tax 11,939.65

6,006.62

Adjustment for:

Depreciation and amortisation expenses 12 58.56

44.07

Depreciation and amortisation expenses (ROU) 13 74.14

-

Net gain on fair value changes (unrealised) 29 (8.24)

(8.20)

Net gain on fair value changes (realised) 29 (346.02)

Provision for impairment on financial instruments (ECL) 31 430.43

356.76

Interest on fixed deposits (2,432.49)

(797.99)

Interest expense on lease liabilty 30 29.96

Reversal of rent equalization (opening) 4.81

-

Gain / loss on derecognition of financial asset 27 (1,636.39)

-

Employee stock option 32 299.95

-

Provision for employee benefit expense (OCI) (24.97) -

Gain/Loss on sale of fixed asset 29 (0.02) (10.50)

8,389.37 5,590.75

(24.23) (55.95)

(970.43) 835.74

(3,105.11) 432.04

(66,986.62) (76,523.77)

31,102.29 16,887.99

(5,000.00) (250.00)(685,452.04) (231,053.20)

691,836.26

223,023.20

8(20,000.00)

-

2,432.49

797.99

12

(101.98)

(34.97)

(65,194.70)

(68,046.68)

75,172.07

36,545.68

3,437.11 -

-(190.25)

- 34,363.59

49,783.02

61,720.31

(21,443.68) (10,309.25)

(7,054.71)

(7,727.22)

12,794.63 20,521.85

1,998.64 (17.15)

39.51 (168.92) 4,329.12 6,633.65

(2,776.43) (1,464.63)

1,552.69 5,169.03

33,584.83 85,757.50

(34,331.64) (54,466.75)

(6,307.90) (39,017.98)

5,739.92 12,794.63


STANDALONE STATEMENT OF CASH FLOWS FOR THE YEAR ENDED MARCH 31, 2020

Components of Cash & Cash EquivalentsCash on handBalance with banks:

Total cash & cash equivalents

Operational cash flow from InterestInterest receivedInterest paid


- In deposit accounts with original maturity less than 3 months or less

- In cash credit accounts- In current accounts

(Rs. in Lakh)

Particulars Note

No. For the year ended

March 31, 2020

For the year ended

March 31, 2019



(DIN00147182) (DIN06597041) (DIN02032154 )



sd/-



Vikas Kumar

Partner



Place : Mumbai



sd/- sd/- sd/-

sd/- sd/-


12.33 8.87

703.07 1,671.96

24.51 13.79

5,000.00 11,100.00

20,669.95 13,402.93(10,474.19) (6,618.03)

1 to 51

5,739.92 12,794.62


STANDALONE STATEMENT OF CASH FLOWS FOR THE YEAR ENDED MARCH 31, 2020

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9, 2020

VASTU HOUSING FINANCE CORPORATION LIMITEDNotes forming part of the standalone financial statements

Vastu Housing Finance Corporation Limited ('the Company') is a public limited company domiciled in India and incorporated under theprovisions of the Companies Act, 1956 and holding a certificate of registration number 02.0062.05 from the National Housing Bank ("NHB") dated October 27, 2005. The principal business of the Company is to provide long term financing regarding housing finance for purchase, construction, development and repair of houses, apartments and other in India. The Company is registered with the National Housing Bank as Non-Deposit taking Housing Finance Company (HFC). At present, the Company is providing its service in 12 states through 66 branches. The Standalone financial statements were authorised for issue by the Company's Board of Directors on April 29, 2020.

Basis of preparation and presentation of financial statements &significant accounting policies

Basis of preparation and presentation of financial statementsStatement of compliance / basis of preparation

Corporate information1.

2.

2.1.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability that market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and disclosure purposes in these financial statements is determined on such a basis, except for share-based payment transactions that are within the scope of Ind AS 102, leasing transactions that are within the scope of Ind AS 17, and measurements that have some similarities to fair value but are not fair value in use under Ind AS 36.

measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are as follows;

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company can access at the

indirectly; and

Level 3 inputs are unobservable inputs for the valuation of assets or liabilities.

Fair value measurements under Ind AS are categorised into Level 1, 2, or 3 based on the degree to which the inputs to the fair value

measurement date.

Level 2 inputs are inputs, other than quoted prices included within level 1, that are observable for the asset or liability, either directly or

Basis of measurement

c. Presentation of financial statements

2.2. Significant Accounting Policies

a. Property, plant and equipment and intangible assets

a

b.

generally accepted in India as prescribed under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (IGAAP)

Disclosures as required in terms of Housing Finance Companies – Corporate Governance (National Housing Bank) Directions, 2016NHB(ND)/DRS/REG/MC-07/2019, July 01, 2019, have been prepared based on previous GAAP under the NHB circular no. NHB(ND)/DRS/Policy Circular No.89/2017-18 dated June 14, 2018, and have been presented solely based on the information compiled by the Management. Refer to note 45.

AS requires a change in the accounting policy hitherto in use.

Effective April 01, 2019, the Company has adopted Ind AS, and the adoption was carried out under Ind AS 101, First-time Adoption of

2010 as amended from time to time and various guidelines issued by NHB to the extent applicable, which was the previous Generally

The Standalone financial statements of the Company are prepared under the Indian Accounting Standards (Ind AS) and the relevant

Accepted Accounting Principles (GAAP).

(Indian Generally Accepted Accounting Principles), National Housing Bank Act, 1987, the Housing Finance Companies, (NHB) Directions,

The financial statements presented in Indian Rupees which is the functional and the presentation currency and all values rounded to the

Accounting policies have been consistently applied except where a newly-issued Ind AS is initially adopted or a revision to an existing Ind

provisions of the Companies Act, 2013 (the “Act”) (to the extent notified). Ind AS are prescribed under Section 133 of the Act read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 a.nd relevant amendment rules issued after that.

Indian Accounting Standards, with April 1, 2018, as the transition date. The transition was carried out from Indian Accounting Principles

nearest lakh, except when otherwise indicated.

that are measured at fair values at the end of each reporting period, as explained in the accounting policies below:

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

The financial statements have been prepared on accrual basis under the historical cost convention except for specific financial instruments

The Balance Sheet and the Statement of Profit and Loss are prepared and presented in the format prescribed in Schedule III to the Act. The Statement of Cash Flows has been prepared and presented as per the requirements of Ind AS 7 “Statement of Cash Flows”.

I. Property, plant and equipment (PPE) are recognised when

it is probable that future economic benefits associated with the

item flows to the group Companies, and the cost of the item can

be measured reliably. The cost comprises of the purchase price,

and any attributable cost of bringing the asset to its working

condition for intended use net of tax/duty credits availed, less

accumulated depreciation and cumulative impairment if any.

Depreciation/amortization is recognized on a straight-line basis

over the lower of the estimated useful lives of respective assets

prescribed under the Schedule II to the Companies Act, 2013 or

as estimated by Management as under:

Premises

Furniture & Fixtures

Computer Hardware

Leasehold Improvements

Office Equipment

30 Years

10 Years

3 Years

3 Years

5 Years

Category of Assets Useful Life

Assets costing less than Rs 5,000 are fully depreciated in the year of capitalization.

The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect ofany changes in estimate accounted for on a prospective basis.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Gain/loss arising on disposal/retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss.

ii. Intangible: Intangible assets are recognised when it is

probable that the future economic benefits that are attributable

to the asset flow to the enterprise, and the cost of the asset can

be measured reliably. Intangible assets are stated at original

cost net of tax/duty credits availed, if any, less accumulated

amortisation and cumulative impairment. Administrative and

other general overhead expenses that are individually

attributable to the acquisition of intangible assets are allocated

and capitalised as a part of the cost of the intangible assets.

Amortisation on impaired assets is provided by adjusting the

amortisation charge in the remaining periods to allocate the

asset’s revised carrying amount over its remaining useful life.

An intangible asset is derecognised on disposal, or when no

future economic benefits are expected from use or disposal.

Gains or losses arising from derecognition of an intangible

asset, measured as the difference between the net disposal

proceeds and the carrying amount of the asset, are recognised

in profit or loss when the asset is derecognised.

Intangible assets are amortised on a straight-line basis over the

estimated useful life of 3 years. The method of amortisation,

useful life are reviewed at end of accounting year with the effect

of changes in the estimate being accounted for on a prospective

basis.

Deemed cost on transition to Ind AS

For the transition to Ind AS, the company has elected to

continue with the carrying value of all of its property, plant and

equipment and intangible assets recognised as of April 1, 2018

(transition date) measured as per the previous GAAP and use

that carrying value as its deemed cost as of the transition date.

Impairment on non-financial assets

As at the end of each year, the Company reviews the carrying

amount of its non-financial assets that is PPE and intangible to

determine whether there is any indication that these assets

have suffered an impairment loss.

An asset is considered as impaired when on the balance sheet

date there are indications of impairment in the carrying amount

of the assets, or where applicable the cash-generating unit to

which the asset belongs, exceeds its recoverable amount (i.e.

the higher of the assets’ net selling price and value in use).

Carrying amount is reduced to the level of recoverable amount,

and the reduction is recognized as an impairment loss in the

Statement of Profit and Loss.

b.

When an impairment loss is subsequently reversed, the carrying amount of the asset (or the cash-generating unit) is increased to the revised estimate of its recoverable amount. But so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or the cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in the statement of profit or loss.

The calculation takes into account all contractual terms of the

financial instrument (for example, prepayment options). It

includes all fees paid or received between parties to the

contract that are incremental and are directly attributable to the

specific lending arrangement, transaction costs, and all other

premiums or discounts. For financial assets at FVTPL (fair

value through profit & loss), transaction costs are recognised in

profit or loss at initial recognition.

ii. Fees and commission income Fee and commission income

include fees and commitment charges other than those that are

an integral part of EIR. The group Companies recognises the

other fee and commission income under the terms and

conditions of the relevant contract/agreement.

evenue is recognised to the extent that the economic benefits

probably flow to the Company, and the revenue can be reliably

measured, and there exists reasonable certainty of its recovery.

Overdue interest and other ancillary charges in respect of loans

are recognized upon realisation.

iii. Investment Income Gains/ losses on the sale of

investments are recognized in the Statement of Profit and Loss

on the trade date. Gain or loss on the sale o investments is

determined after consideration of cost on a first in first out

(FIFO) basis.

The EIR is the rate that exactly discounts estimated future cash

flows of the financial instrument through the expected life of the

financial instrument or, where appropriate, a shorter period, to

the net carrying amount of the financial instrument. The future

cash flows are estimated, taking into account all the contractual

terms of the instrument.

Revenue Recognition

I. Interest income Interest income on financial instruments at

amortised cost is recognised on a time proportion basis, taking

into account the amount outstanding and the effective interest

rate (EIR) applicable. Interest on financial instruments

measured as at fair value is included within the fair value

movement during the period.

The interest income is calculated by applying the EIR to the

gross carrying amount of non-credit impaired financial assets

(i.e. at the amortised cost of the financial asset before adjusting

for any expected credit loss allowance). For credit-impaired

financial assets, the interest income is calculated by applying

the EIR to the amortised cost of the credit-impaired financial

assets (i.e. the gross carrying amount less the allowance for

expected credit losses (ECLs). However, no interest has been

charged on credit impaired loans as a matter of prudence.

c.

iii. the Company has the right to direct the use of the asset.

i. the contract involves the use of an identified asset

iv Dividend Income Dividend income is recognized when the

Company’s right to receive the payment is established;

probably, the economic benefits associated with the dividend

flow to the entity and the amount of the dividend can be

measured reliably. Generally, when shareholders approve the

dividend.

Foreign currency

Transactions in foreign currencies are initially recorded by the

Company at their respective functional currency spot rates at

the date the transaction first qualifies for recognition. Income

and expenses in foreign currencies are initially recorded by the

Company at the exchange rates prevailing on the date of the

transaction.

Foreign currency denominated monetary assets and liabilities

are translated at the functional currency spot rates of exchange

at the reporting date, and exchange gains and losses arising on

settlement and restatement are recognized in the Statement of

profit and loss.

Lease

Non-monetary items that are measured in terms of historical

cost in a foreign currency are translated using the exchange

rates at the dates of the initial transactions.

The Company’s lease asset primarily consists of leases for

buildings. The Company assesses whether a contract contains

a lease, at the inception of a contract. A contract is, or contains,

a lease if the contract conveys the right to control the use of an

identified asset for a period of time in exchange for a

consideration. To assess whether a contract conveys the right

to control the use of an identified asset, the Company assesses

whether:

Non-monetary items measured at fair value in a foreign

currency are translated using the exchange rates at the date

when the fair value is determined. The gain or loss arising on

translation of non-monetary items measured at fair value is

treated in line with the recognition of the gain or loss on the

change in fair value of the item (i.e., translation differences on

items whose fair value gain or loss is recognized in Other

Comprehensive Income ('OCI') or profit or loss are also

recognized in OCI or profit or loss, respectively).

ii. the Company has substantially all of the economic benefits from the use of the asset through the period of the lease and

At the date of commencement of the lease, the Company

recognizes a right-of-use asset (“ROU”) and a corresponding

lease liability for all lease arrangements in which it is a lessee,

except for leases with a term of twelve months or less (short-

term leases) and low-value leases. For these short-term and

low-value leases, the Company recognizes the lease payments

as an operating expense.

d.

e.

Right of use assets is depreciated from the commencement

date on a straight-line basis over the shorter of the lease term

and useful life of the underlying asset. Right of use assets is

evaluated for recoverability whenever events or changes in

circumstances indicate that their carrying amounts may not be

recoverable. For impairment testing, the recoverable amount

(i.e. the higher of the fair value less cost to sell and the value-in-

use) is determined on an individual asset basis unless the asset

does not generate cash flows that are largely independent of

those from other assets. In such cases, the recoverable amount

is determined for the Cash Generating Unit (CGU) to which the

asset belongs.

The lease liability is initially measured at amortized cost at the

present value of the future lease payments. The lease

payments are discounted using the interest rate implicit in the

lease or, if not readily determinable, using the incremental

borrowing rates. Lease liabilities are remeasured with a

corresponding adjustment to the related right of use asset if the

Company changes its assessment of whether it exercises an

extension or a termination option.

Lease liability and ROU asset have been separately presented

in the Balance Sheet, and lease payments have been classified

as financing cash flows.

The right-of-use assets initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses.

The stock options granted to employees under the group’s

stock options schemes are measured at the fair value of the

options at the grant date. The fair value of the options is treated

as a discount and accounted as employee compensation cost

over the vesting period on a straightline basis. Amount

recognised as an expense in each year is arrived at based on

the number of grants expected to vest. If a grant lapses after the

vesting period, the cumulative discount recognised as an

expense in respect of such grant is transferred to the general

reserve within other equity.

Borrowing costs

Employee Benefits

Share-based payment arrangements

Borrowing costs that are attributable to the acquisition,

construction or production of qualifying assets as defined in Ind

AS 23 are capitalized as a part of costs of such assets. A

qualifying asset is one that necessarily takes a substantial time

to get ready for its intended use.

Interest expenses are calculated using the effective interest

rate (EIR), and all other Borrowing costs are recognised in the

Statement of profit and loss in the period in which they are

incurred.

f.

g.

Retirement benefit costs and termination benefits

Retirement benefit in the form of provident fund is a defined

contribution scheme. The Company has no obligation, other than the

contribution payable to the provident fund. The Company recognizes

contribution payable to the provident fund scheme as an employee

benefit expense when an employee renders the related service. If

the contribution payable to the scheme for service received before

the balance sheet date exceeds the contribution already paid, the

deficit payable to the scheme is recognized as a liability after

deducting the contribution already paid. If the contribution already

paid exceeds the contribution due for services received before the

balance sheet date, then the excess is recognized as an asset to the

extent that the pre-payment leads to, for example, a reduction in

future payment or a cash refund.

Remeasurement of the net defined benefit liability, which comprises

of actuarial gains and losses, the return on plan assets (excluding

interest) and the effect of the asset ceiling (if any, excluding interest),

are recognised immediately in other comprehensive income (OCI).

Remeasurements are not reclassified to profit or loss in the

subsequent year. Net interest expense (income) on the net defined

liability (assets) is computed by applying the discount rate, used to

measure the net defined liability (asset), to the net defined liability

(asset) at the start of the financial year after taking into account any

changes as a result of contribution and benefit payments made

during the year. Net interest expense and other expenses related to

defined benefit plans are recognised in the statement of profit and

loss.

When the benefits of a plan are changed or when a plan is curtailed,

the resulting change in benefit that relates to past service or the gain

or loss on curtailment is recognised immediately in Statement of

profit and loss. The Company recognises gains and losses on the

settlement of a defined benefit plan when the settlement occurs.

The Company's Gratuity liability under the Payment of Gratuity

Act,1972 is determined based on an actuarial valuation made at the

end of each financial year using the projected unit credit method.


The Company’s net obligation in respect of defined benefit plans is

calculated by estimating the amount of future benefit that employees

have earned in the current and prior periods, discounting that

amount and deducting the fair value of any plan assets. The

calculation of defined benefit obligations is performed annually by a

qualified actuary using the projected unit credit method. When the

calculation results in a potential asset for the Company, the

recognised asset is limited to the present value of economic benefits

available in the form of any future refunds from the plan or reductions

in future contributions to the plan.

Defined benefit obligation

Short-term employee benefits

Other Long-term employee benefits

Liabilities recognised in respect of other long-term employee benefits are measured at the present value of the estimated future cash outflows expected to be made by the Company in respect of services provided by employees up to the reporting date.

The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employees are recognised during the year when the employee renders the service. A liability is recognised for the amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably. These benefits include performance incentive etc. which are expected to occur within twelve months after the end of the period in which the employee renders the related service.

Income tax

Current tax

The tax currently payable is based on the taxable profit for the

year of the Company. Taxable profit differs from 'profit before

tax' as reported in the Statement of profit and loss because of

items of income or expense that are taxable or deductible in

other years and items that are never taxable or deductible. The

current tax is calculated using applicable tax rates that have

been enacted or substantively enacted by the end of the

reporting period.

The Income tax expense represents the sum of the current tax

and deferred tax. Current and deferred taxes are recognised in

the Statement of profit and loss, except when they relate to

items that are recognised in other comprehensive income or

directly in equity, in which case, the current and deferred tax are

also recognised in other comprehensive income or directly in

equity respectively.

Deferred tax

Deferred tax is recognised on temporary differences between

the carrying amounts of assets and liabilities in the Company’s

financial statements and the corresponding tax bases used in

the computation of taxable profit. Deferred tax assets are

generally recognised, for all temporary deductible differences,

to the extent that it is probable that taxable profits are available

against which those temporary deductible differences can be

utilised. Such deferred tax assets and liabilities are not

recognised if the temporary difference arises from the initial

recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. Also, deferred tax liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill.

Deferred tax liabilities are recognised for taxable temporary

differences associated with investments in subsidiaries, except

where the Company is able to control the reversal of temporary

difference and it is probable that the temporary difference will

not reverse in the foreseeable future. Deferred tax assets

arising from deductible temporary differences associated with

such investments and interests are only recognised to the

h.

extent that it is probable that there will be sufficient taxable profits against which it can utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits are available to allow all or part of the assets to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled, or the asset is realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.

Goods and Service tax input credit

Goods and Services tax input credit is accounted for in the

books for the period in which the supply of goods or service

received is accounted and when there is no uncertainty in

availing/utilising the credits.

Contingent assets are not recognized in the financial

statements. Contingent asset are disclosed where an inflow of

economic benefits is probable.

iii. a reliable estimate can be made of the amount of the

obligation.

I. a present obligation arising from past events, when it is not

probable that an outflow of resources will be required to settle

the obligation; and

Contingent liability is disclosed in case of:

Provisions, contingent liabilities and contingent assets

ii. it is probable that an outflow of resources embodying

economic benefits will be required to settle the obligation; and

These are reviewed at each balance sheet date and adjusted to

reflect the current best estimates. Long term provisions are

determined by discounting the expected future cash flows

specific to the liability. The unwinding of the discount is

recognised as a finance cost. A provision for onerous contracts

is measured at the present value of the lower of the expected

cost of terminating the contract and the expected net cost of

continuing with the contract. Before a provision is established,

the Company recognises any impairment loss on the assets

associated with that contract

Contingent assets:

Provisions are recognised when:

i. Company has a present obligation (legal or constructive)

as a result of a past event; and

ii. a present obligation arising from past events, when no

reliable estimate is possible. Contingent liabilities are

reviewed at each balance sheet date.

j.

Financial instruments comprise of financial assets and financial

liabilities. Financial assets and liabilities are recognized when

the company becomes the party to the contractual provisions of

the instruments. Financial assets primarily comprise of loans

and advances, deposits, trade receivables and cash and cash

equivalents. Financial liabilities primarily comprise of

borrowings and trade payables.

Statement of Cash Flows is prepared segregating the cash

flows into operating, investing and financing activities. Cash

flow from operating activities is reported using indirect method

adjusting the net profit for the effects of:

iii. All other items for which the cash effects are investing or

financing cash flows.

Financial Instruments

iii. Other non-cancellable commitments, if any, to the extent

they are considered material and relevant in the opinion of

management. Other commitments related to

sales/procurements made in the normal course of business are

not disclosed to avoid excessive details.

Cash and cash equivalents (including bank balances) shown in

the Statement of Cash Flows exclude items which are not

available for general use as on the date of Balance Sheet.

i. Estimated amount of contracts remaining to be executed on

capital account and not provided for;

Commitments are future liabilities for contractual expenditure,

classified and disclosed as follows:

ii. Uncalled liability on shares and other investments partly paid;

Statement of Cash Flows

i. Changes during the period in inventories and operating

receivables and payables transactions of a non-cash nature;

Commitments

ii. Non-cash items such as depreciation, provisions, deferred

taxes, unrealised foreign currency gains and losses, and;

Segments

The Company's primary business is financing by way of loans

for the purchase or construction of residential houses in India.

All other activities of the Company revolve around the main

business. In the context of Ind AS 108 – Operating Segments

reporting is considered to constitute as one reportable segment.

i. Recognition of financial instruments

ii. Initial measurement of financial instrumentsRecognised financial assets and financial liabilities are initially

measured at fair value. Transaction costs and revenues that are

directly attributable to the acquisition or issue of financial assets

and financial liabilities (other than financial assets and financial

liabilities at FVTPL) are added to or deducted from the fair value

of the financial assets or financial liabilities, as appropriate, on

initial recognition. Transaction costs and revenues directly

attributable to the acquisition of financial assets or financial

liabilities at FVTPL are recognised immediately in the statement

of profit or loss.

l.

m.

n.

i.

k.

If the transaction price differs from fair value at initial recognition, the

Company will account for such difference as follows:

After initial recognition, the deferred gain or loss is released to the

Statement of profit and loss on a rational basis, only to the extent that

it arises from a change in a factor (including time) that market

participants would take into account when pricing the asset or

liability.

Subsequent measurement of financial assets:

if fair value is evidenced by a quoted price in an active market for an

identical asset or liability or based on a valuation technique that uses

only data from observable markets, then the difference is recognised

in profit or loss on initial recognition (i.e. day 1 profit or loss);

in all other cases, the fair value will be adjusted to bring it in line with

the transaction price (i.e. day 1 profit or loss will be deferred by

including it in the initial carrying amount of the asset or liability).

iii. Financial Assets

All recognised financial assets that are within the scope of Ind

AS 109 are required to be subsequently measured at amortised

cost or fair value on the basis of the entity’s business model for

managing the financial assets and the contractual cash flow

characteristics of the financial assets.

Classification of Financial Assets:

Debt instruments that are held within a business model whose

objective is to collect the contractual cash flows, and that have

contractual cash flows that are solely payments of principal and

interest on the principal amount outstanding (SPPI), are

subsequently measured at amortised cost;


hedging instrument or a financial guarantee.

it has been acquired principally for the purpose of selling it in

the near term; or

A. financial asset is held for trading if:

all other debt instruments (e.g. debt instruments managed on a

fair value basis, or held for sale) and equity investments are

subsequently measured at FVTPL


instruments that the Company manages together and has a

recent actual pattern of short-term profit-taking; or

the Company may irrevocably designate a debt instrument that

meets the amortised cost or FVTOCI criteria as measured at

FVTPL if doing so eliminates or significantly reduces an

accounting mismatch (referred to as the fair value option).

However, the Company may make the following irrevocable

election / designation at initial recognition of a financial asset on

an asset-by-asset basis:

the Company may irrevocably elect to present subsequent

changes in fair value of an equity investment that is neither held

for trading nor contingent consideration recognised by an

acquirer in a business combination to which Ind AS 103 applies,

in OCI; and

The Company assesses the classification and measurement of

a financial asset based on the contractual cash flow

characteristics of the individual asset basis and the Company’s

business model for managing the asset.

.

When a debt instrument measured at FVTOCI is derecognised,

the cumulative gain/loss previously recognised in OCI is

reclassified from equity to profit or loss. In contrast, for an

equity investment designated as measured at FVTOCI, the

cumulative gain/loss previously recognised in OCI is not

subsequently reclassified to profit or loss but transferred within

equity.

Financial assets at fair value through profit or loss (FVTPL)

Contractual cash flows that are SPPI are consistent with a basic

lending arrangement. Contractual terms that introduce

exposure to risks or volatility in the contractual cash flows that

are unrelated to a basic lending arrangement, such as exposure

to changes in equity prices or commodity prices, do not give

rise to contractual cash flows that are SPPI. An originated, or an

acquired financial asset can be a basic lending arrangement

irrespective of whether it is a loan in its legal form.

Debt instruments at amortised cost or at FVTOCI

For SPPI test, the principal is the fair value of the financial asset

at initial recognition. That principal amount may change over

the life of the financial asset (e.g. if there are repayments of

principal). Interest consists of consideration for the time value

of money, for the credit risk associated with the principal

amount outstanding during a particular time and for other

primary lending risks and costs, as well as a profit margin. The

SPPI assessment is made in the currency in which the financial

asset is denominated.

For an asset to be classified and measured at amortised cost or

at FVTOCI, its contractual terms should give rise to cash flows

that are meeting SPPI test.

An assessment of the business model for managing financial

assets is fundamental to the classification of a financial as

The Company determines the business model at a level that

reflects how financial assets are managed at an individual basis

and collectively to achieve a particular business objective.The

Company determines the business model at a level that reflects

how financial assets are managed at an individual basis and

collectively to achieve a particular business objective.

Debt instruments that are subsequently measured at amortised

cost or at FVTOCI are subject to impairment.

Debt instruments that do not meet the amortised cost criteria or

FVTOCI criteria are measured at FVTPL. In addition, debt

instruments that meet the amortised cost criteria or the FVTOCI

criteria but are designated as at FVTPL are measured at

FVTPL.

The Company measures the loss allowance for a financial

instrument at an amount equal to the lifetime expected credit

losses if the credit risk on that financial instrument has

increased significantly since initial recognition. If the credit risk

on a financial instrument has not increased significantly since

initial recognition, the Company measures the loss allowance

Financial assets at FVTPL are measured at fair value at the end of

each reporting period, with any gains or losses arising on

remeasurement recognised in profit or loss. The net gain or loss

recognised in profit or loss incorporates any dividend or interest

earned on the financial asset. Dividend on financial assets at FVTPL

is recognised when the Company's right to receive the dividends is

established, and the economic benefits associated with the dividend

probably flow to the entity, the dividend does not represent a

recovery of a part of the cost of the investment, and the amount of

dividend can be measured reliably.

During the current financial year and previous accounting

period, there was no change in the business model under which

the Company holds financial assets, and therefore no

reclassifications were made. Changes in contractual cash flows

are considered under the accounting policy on Modification and

derecognition of financial assets described below.

A financial asset that meets the amortised cost criteria or debt

instruments that meet the FVTOCI criteria may be designated as

FVTPL upon initial recognition if such designation eliminates or

significantly reduces a measurement or recognition inconsistency

that would arise from measuring assets or liabilities or recognising

the gains and losses on them on different bases.

If the business model under which the Company holds financial

assets changes, the financial assets affected are reclassified.

The classification and measurement requirements related to the

new category apply prospectively from the first day of the first

reporting period following the change in the business model that

results in reclassifying the Company’s financial assets.


Overview of the Expected Credit Loss (ECL) principles:

The Company records allowance for expected credit losses for

all loans, other debt financial assets not held at FVTPL,

together with loan commitments and financial guarantee

contracts, in this section all referred to as ‘financial

instruments’. Equity instruments are not subject to impairment

under Ind AS 109.

Expected credit losses (ECL) are a probability-weighted

estimate of the present value of credit losses. Credit loss is the

difference between all contractual cash flows that are due to the

group Companies under the contract, and all the cash flows that

the group Companies expects to receive (i.e. net cash

shortfalls), discounted at the original effective interest rate (or

credit-adjusted effective interest rate for purchased or

originated credit-impaired financial assets). The group

Companies estimates cash flows by considering all contractual

terms of the financial instrument (for example, prepayment,

extension, call and similar options) through the expected life of

that financial instrument.

Reclassifications

Stage 1 - Performing assets (high quality assets) with zero to

thirty days past due (DPD). Stage 1 loans also include facilities

where the credit risk has improved and the loans has been

reclassified from Stage 2.

for that financial instrument at an amount equal to 12-month

expected credit losses. 12-month expected credit losses are a

portion of the lifetime expected credit losses and represent the

lifetime cash shortfalls that result if a default occurs within the 12

months after the reporting date and thus, are not cash shortfalls that

are predicted over the next 12 months.

A loss allowance for full lifetime ECL is required for a financial

instrument if the credit risk on that financial instrument has increased

significantly since initial recognition. For all other financial

instruments, ECLs are measured at an amount equal to the 12-

month ECL.

The Company measures ECL for stage 3 assets (as defined

below) on an individual basis. The measurement of the loss

allowance is based on the present value of the asset’s expected

cash flows using the asset’s original effective interest rate

(EIR).

Definition of Default

Impairment losses and releases are accounted for and

disclosed separately from modification losses or gains that are

accounted for as an adjustment of the financial asset’s gross

carrying value.

Stage 3 - Non-performing assets (credit impaired assets) with

overdue more than 90 DPD.

The Company has established a policy to perform an

assessment, at the end of each reporting period, whether a

financial instrument’s credit risk has increased significantly

since initial recognition, by considering the change in the risk of

a default occurring over the remaining life of the financial

instrument.

Based on the above process, the Company categorises its

loans into Stage 1, Stage 2 and Stage 3, as described below:

Stage 2 - Under-performing assets (assets for which there is

significant increase in credit risk) having 31 to 90 DPD. Stage 2

loans also include facilities, where the credit risk has improved

and the loan has been reclassified from Stage 3.

the borrower is unlikely to pay its credit obligations to the

Corporation in full.

the borrower is past due more than 90 days on any material

credit obligation to the Corporation; or

The Corporation considers the following as constituting an

event of default:

The definition of default is used in measuring the amount of ECL

and in the determination of whether the loss allowance is based

on 12- month or lifetime ECL.

The Financial assets for which the Company has no reasonable

expectations of recovering either the entire outstanding

amount, or a proportion thereof, the gross carrying amount of

the financial asset is reduced. This is considered a (partial)

derecognition of the financial asset.

For trade receivables or any contractual right to receive cash or

another financial asset that result from transactions that are

within the scope of Ind AS 18 and loans under short term

financing, the Company always measures the loss allowance at

an amount equal to lifetime expected credit losses. Further, to

measure lifetime expected credit loss allowance for trade

receivables, the Company has used a practical expedient as

permitted under Ind AS 109.

The impairment requirements for the recognition and

measurement of a loss allowance are equally applied to debt

instruments at FVTOCI except that the loss allowance is

recognised in other comprehensive income and is not reduced

from the carrying amount in the balance sheet.

Retains the contractual rights to receive the cash flows of the

financial assets, but assumes a contractual obligation to pay

the cash flows to one or more recipients.

This expected credit loss allowance is computed based on a

provision matrix which takes into account historical credit loss

experience and adjusted for forward-looking information.

A financial asset is derecognised only when :

Derecognition of financial assets

On derecognition of a financial asset under assignment

transaction, the difference between the carrying amount and

the consideration received shall be recognized in the statement

of Profit and Loss.

Collateral Valuation and Repossession

To mitigate the credit risk on financial assets, the Company

seeks to use collateral, where possible as per the powers

conferred on the Housing Finance Companies under the

Securitisation and Reconstruction of Financial Assets and

Enforcement of Securities Interest Act, 2002 (“SARFAESI”).

The Company has transferred the rights to receive cash flows

from the financial assets or

Where the entity has transferred an asset, the Company

evaluates whether it has transferred all risks and rewards of

ownership of the financial assets substantially. In such cases,

the financial assets are derecognised. Where the entity has not

transferred all risks and rewards of ownership of the financial

asset substantially, the financial asset is not derecognised.

The Company provides fully secured, partially secured and

unsecured loans to individuals. In its ordinary course of

business, the Corporation does not physically repossess

properties or other assets in its retail portfolio, but engages with

the external agents to recover funds, generally at auction, to

settle outstanding debt.

Write-off

Loans and debt securities are written off when the Company

has no reasonable expectations of recovering the financial

asset (either in its entirety or a portion of it). In such cases, the

Company determines that the borrower does not have assets

or sources of income that could generate sufficient cash flows

to repay the amounts subject to the write-off. A write-off

constitutes a derecognition event. The Company may apply

enforcement activities to financial assets written off.

Recoveries resulting from the Company’s enforcement

activities result in impairment gains and are credited to

statement of profit and loss.

All financial liabilities are subsequently measured at amortised

cost using the effective interest method or at FVTPL.

A financial liability is a contractual obligation to deliver cash or

another financial asset or to exchange financial assets or

financial liabilities with another entity under conditions that are

potentially unfavourable to the Company or a contract that will

or may be settled in the Company’s equity instruments and is a

non-derivative contract for which the Company is or may be

obliged to deliver a variable number of its equity instruments, or

a derivative contract over own equity that will or may be settled

other than by the exchange of a fixed amount of cash (or

another financial asset) for a fixed number of the Company’s

equity instruments.

However, financial liabilities that arise when a transfer of a

financial asset does not qualify for derecognition or when the

continuing involvement approach applies, financial guarantee

contracts issued by the group Companies, and commitments

issued by the group Companies to provide a loan at below-

market interest rate are measured under the specific

accounting policies set out below.



repossession processes are not recorded on the balance sheet

and not treated as non–current assets held for sale.

Financial liabilities are classified as at FVTPL when the

financial liability is either contingent consideration recognised

by the Company as an acquirer in a business combination to

which Ind AS 103 applies or is held for trading or it is

designated as at FVTPL.

it has been incurred principally for the purpose of repurchasing

it in the near term; or

Financial liabilities at FVTPL

Debt and equity instruments issued by a Company entity are

classified as either financial liabilities or as equity under the

substance of the contractual arrangements and the definitions

of a financial liability and an equity instrument.


Financial liabilities and equity instruments

A financial liability is classified as held for trading if:

Classification as debt or equityiv.

The Company derecognises financial liabilities when, and only

when, the Company’s obligations are discharged, cancelled or

have expired. An exchange between/with a lender of debt

instruments with substantially different terms is accounted for

as an extinguishment of the original financial liability and the

recognition of a new financial liability. Similarly, a substantial

modification of the terms of an existing financial liability

(whether or not attributable to the financial difficulty of the

debtor) is accounted for as an extinguishment of the original


designated as at FVTPL are measured at amortized cost.


hedging instrument.


instruments that the Company manages together and has a

recent actual pattern of short-term profit-taking; or

Financial liabilities subsequently measured at amortized

cost

Derecognition of financial liabilities

The effective interest method is a method of calculating the

amortized cost of a financial liability and of allocating interest

expense over the relevant period. The effective interest rate is

the rate that exactly discounts estimated future cash payments

(including all fees and points paid or received that form an

integral part of the effective interest rate, transaction costs and

other premiums or discounts) through the expected life of the

financial liability, or (where appropriate) a shorter period, to the

net carrying amount on initial recognition.

financial liability and the recognition of a new financial liability.

The difference between the carrying amount of the financial

liability derecognised and the consideration paid and payable is

recognised in profit or loss.


designated as at FVTPL are measured at amortized cost at the

end of subsequent accounting periods. The carrying amounts of

financial liabilities that are subsequently measured at amortized

cost are determined based on the effective interest method.

Interest expense that is not capitalized as part of the costs of an

asset is included in the 'Finance costs' line item.

Cash and cash equivalent in the balance sheet comprise cash

at banks and on hand and short-term investments with an

original maturity of three months or less, which are subject to an

insignificant risk of changes in value. For the purpose of the

statement of cash flows, cash and cash equivalents consist of

cash and short term investments, as defined above.

Basic earnings per share are calculated by dividing the net

profit or loss (before Other Comprehensive Income) for the year

attributable to equity shareholders (after deducting attributable

taxes) by the weighted average number of equity shares

outstanding during the year.

Earnings per share

For calculating diluted earnings per share, the net profit or loss

(before Other Comprehensive Income) for the year attributable

to equity shareholders and the weighted average number of


shares outstanding during the year are adjusted for the effects

of all dilutive potential equity shares.

Assets held for sale

In the ordinary course of business, the Company does not

physically repossess properties or other assets in its retail

portfolio but generally engages external or internal agents to

recover funds generally at auctions to settle outstanding debt.



repossession are not recorded on the balance sheet and are

treated as assets held for sale at (i) fair value less cost to sell or

(ii) principal outstanding, whichever is less, at the repossession

date.

Investments in Subsidiaries are measured at cost less

impairment loss (if any) as per Ind AS 27 – Separate Financial

Statements.

Investments in Subsidiaries, Joint Ventures and Associates

Use of Estimates

The preparation of financial statements in conformity with the

Ind AS requires the management to make judgments, estimates

and assumptions that affect the reported amounts of revenues,

expenses, assets and liabilities and the accompanying

disclosure and the disclosure of contingent liabilities, at the end

of the reporting year. Estimates and underlying assumptions

are reviewed on an ongoing basis. Revisions to accounting

estimates are recognised in the year in which the estimates are

revised. Although these estimates are based on the

management’s best knowledge of current events and actions,

uncertainty about these assumptions and estimates could result

in the outcomes requiring a material adjustment to the carrying

amounts of assets or liabilities in future years.

(i) How the performance of the business model and the

financial assets held within that business model are

evaluated and reported to the entity’s key management

personnel.

whole and not an individual instrument performs; therefore the

business model is developed basis a higher level of

assessment at portfolio level rather than on granular

instrument-level information and is based on observable factors

such as :

The Company determines its business model at the level that

best reflects how it manages groups of financial assets to

achieve its business objective. The Company determines its

business model at a level that reflects how financial assets as a

In particular, information about significant areas of estimation,

uncertainty and critical judgments in applying accounting

policies that have the most significant effect on the amounts

recognized in the financial statements is included in the

following notes:

(iii) The expected frequency, value and timing of sales are also

essential aspects of the Company’s assessment

Business model assessment

(ii) The risks that affect the performance of the business model

and, in particular, the way those risks are managed.

i.

r.

3.

q.

o.

p.

(iv) How managers of the business are compensated (e.g.

whether the compensation is based on the fair value of the

assets managed or on the contractual cash flows

collected).

Based on this assessment and future business plans of the

Company, the management has measured its financial assets

at amortised cost as the asset is held within a business model

whose objective is to collect contractual cash flows, and the

contractual terms of the financial asset give rise to cash flows

that are solely payments of principal and interest.

Defined employee benefit assets and liabilities

which is dependent on the terms and conditions of the grant.

This estimate also requires determination of the most

appropriate inputs to the valuation model, including the

expected life of the share option, volatility and dividend yield

and making assumptions about them.

Share based payment

When the fair values of financial assets and financial liabilities

recorded in the balance sheet cannot be measured based on

quoted prices in active markets, their fair value is measured

using valuation techniques including the DCF model. The inputs

Effective interest rate method

Estimating fair value for share-based payment transactions

requires determination of the most appropriate valuation model,

The Company’s EIR methodology recognises interest income

using a rate of return that represents the best estimate of a

constant rate of return over the expected behavioural life of

loans and recognises the effect of potentially different interest

rates charged at various stages and other characteristics of the

product life cycle (including prepayments and penalty interest

and charges). This estimation, by nature, requires an element

of judgement regarding the expected behaviour and life-cycle of

the instruments, as well expected changes to the Company’s

base rate and other fee income/expense that are integral parts

of the instrument.

Fair value measurement

At initial recognition of a financial asset, the Company

determines whether newly recognised financial assets are part

of an existing business model or whether they reflect a new

business model. The Company reassesses it’s business model

at each reporting period to determine whether the business

model has changed since the preceding period.

to these models are taken from observable markets where

possible, but where this is not feasible, a degree of judgement

is required in establishing fair values. Judgements include

considerations of inputs such as liquidity risk, credit risk and

volatility. Changes in assumptions about these factors could

affect the reported fair value of financial instruments.

The cost of the defined benefit gratuity plan the present value of

the gratuity obligation are determined using actuarial

valuations. An actuarial valuation involves making various

assumptions that may differ from actual developments in the

future; these include the determination of the discount rate,

future salary increases and mortality rate. Due to the

complexities involved in the valuation and its long-term nature,

a defined benefit obligation is highly sensitive to changes in

these assumptions. All assumptions are reviewed at the end of

each reporting date.

ii.

iii.

iv.

v.

Impairment losses on financial assets (ECL)

Excess interest spread on direct assignment

expected portfolio life, prepayment and foreclosures.

Inputs used and the process followed by the Company in

determining the increase in credit risk has been detailed in the

notes to accounts on Impairment. Estimation is also involved in

the selection of forward-looking macroeconomic scenarios and

their probability weightings, to derive the economic inputs into

the ECL models.

When determining whether the risk of default on a financial

instrument has increased significantly since initial recognition,

the Company considers reasonable and supportable

information that is relevant and available without undue cost or

effort. This includes both quantitative and qualitative

information and analysis, based on the Company’s historical

experience and credit assessment and including forward-

looking information. In some instances, the assessment based

on experience is required for future estimation of cash flows

which requires significant judgment.

The assessment of derecognition criteria being met involves

significant judgements. Furthermore, the measurement of the

related EIS receivable income, servicing asset and liability

requires significant estimates to be made for the discount rate,

Income tax

The Company’s tax jurisdiction is in India. Significant judgments

are involved in determining the provision for income tax,

including the amount expected to be paid/recovered for

uncertain tax positions.

Transition to Ind AS:

Overall principle

The accounting policies set out in note 2 have been applied in

preparing the financial statements for the year ended March 31,

2020, the comparative information presented in these financial

statements for the year ended March 31, 2019, and in the

preparation of an opening Ind AS transition balance sheet as at

April 1, 2018 (the Company's date of transition). In preparing it's

opening Ind AS balance sheet, the Company has adjusted the

amounts reported previously in financial statements prepared

under the accounting standards notified under Companies

(Accounting Standards) Rules, 2006 (as amended) and other

relevant provisions of the Act (previous GAAP or Indian GAAP).

An explanation of how the transition from previous Indian GAAP

to Ind AS has affected the Company's financial position,

financial performance and cash flows is set out in the following

tables and note 42.

Exemptions and exceptions availed:

We have set out below the applicable Ind AS 101 optional and

mandatory exceptions applied in the transition from previous

GAAP to Ind AS.

Ind AS exemptions:

Deemed cost for property, plant and equipment and other

intangible assets:

Ind AS 101 permits a first-time adopter to select to continue with

the carrying value for all of its property, plant and equipment as

recognised in the financial statements as at the date of

transition to Ind AS, measured as per the previous GAAP and

use that as its deemed cost as at the date of transition after

vii.

viii.

4.

vi.

Accordingly, the Company has elected to measure all of its

property, plant and equipment and intangible assets at its

previous GAAP carrying value.

Effective April 1, 2019, the Company adopted Ind AS 116

“Leases” and applied the standard to all lease contracts existing

on April 1, 2019, using the modified retrospective method and

has taken the cumulative adjustment to retained earnings, on

the date of initial application. Consequently, the Company

recorded the lease liability, of Rs. 297.60 lakh (PY Nil) as at

March 31, 2020, at the present value of the lease payments,

discounted at the incremental borrowing rate and the right of

use asset at its carrying amount, of Rs. 383.75 Lakh (PY Nil) as

at March 31, 2020, as if the standard had been applied since

the commencement date of the lease, but discounted at the

Company’s incremental borrowing rate at the date of initial

application. Comparatives as at and for the year ended March

31, 2019, have not been retrospectively adjusted and therefore

continues to be reported under the accounting policies included

as part of our Annual Report for the year ended March 31, 2019.


Classification and measurement of financial assets

The Company has applied the impairment requirements of Ind

AS 109 retrospectively; however, as permitted by Ind AS 101, it

has used reasonable and supportable information that is

available without undue cost or effort to determine the credit

risk at the date that financial instruments were initially

recognized to compare it with the credit risk at the transition

date.

The Company classifies the financial assets under Ind AS 109

based on facts and circumstances that exist at the date of

transition to Ind AS.

Estimates:

making necessary adjustments for de-commissioning liabilities.

This exemption has also been used for intangible assets

covered by Ind AS 38 Intangible Assets.

An entity’s estimates under Ind AS at the date of transition to

Ind AS shall be consistent with estimates made for the same

date under previous GAAP (after adjustments to reflect any

difference in accounting policies), unless there is objective

evidence that those estimates were in error. Ind AS estimates

as at 1 April 2018 are consistent with the estimates as at the

same date made in conformity with previous GAAP. The

Company made estimates for following items under Ind AS at

the date of transition as these were not required under the

previous GAAP:

Lease

March 31, 2019 March 31, 2020 April 01,2018

- In cash credit accounts- In deposit accounts with original maturity less than 3 months or less

Total

Balances with banks:

- In current accounts

Cash in hand

5.1. Short-term deposits are made for varying periods of between one day and three months, depending on the immediate cash

requirements of the Company, and earn interest at the respective short-term deposit rates.

30,522.0020,544.63

21.00

30,522.0020,544.63

21.00

Total

In deposits account with original maturity of more than 3 months to upto 12 months

(Rs. in Lakh)

As at As at

March 31, 2019 March 31, 2020

As at

April 01,2018Particulars

6. Bank balances other than cash and cash equivalents

6.1. Deposits are made for varying period and earn interest at the respective fixed rates

6.2. Includes deposit under lien aggregating to Rs.1,000 Lakh (as at March '31, 2019 is Nil and as at April 1, 2018 is Nil) towards guarantee

provided by the Company towards refinance facility provided by the National Housing Bank.

Particulars

At amortised costLoans given in India to other than public sector

Housing loans 107,792.42

49,075.49

Loans against properties 60,640.85

47,539.40

Interest accrued on loans 2,033.99

1,400.67

Total – Gross (A) 170,467.25

135,003.22


668.01

Less: Umamortized processing fee 350.59

683.05

Total – Net (A) 169,106.07

133,652.17

(a) Secured by tangible assets 170,467.25

135,003.22

Total – Gross (B) 170,467.25

135,003.22


668.01 Less: Umamortized processing fee 350.59

683.05

Total – Net (B) 169,106.07 133,652.17

(Rs. in Lakh)

As at As at

March 31, 2019 March 31, 2020

As at

April 01,2018

5. Cash and cash equivalents (Rs. in Lakh)

As at As at As at Particulars


Notes to standalone financial statement for the year ended March 31, 2020

12.33 8.87 8.34

703.07 1,671.96 745.68

24.51 13.79 16.83

5,000.00 11,100.00 19,751.00

5,739.92 12,794.62 20,521.85

86,063.1547,539.401,400.67

135,003.22

668.01

133,652.17

135,003.22

133,652.17

683.05

668.01

135,003.22

683.05

7. Loans

7.2 Loans and receivables are non-derivative financial assets which generate a fixed or variable interest income for the Company.

The carrying value may be affected by changes in the credit risk of the counterparties.

b) Undertaking to create a security.

7.5 Includes loans under on going cheque handover post completion of disbursement process but under security creation.

a) Equitable / Registered Mortgage of Property.

7.3 Collateral and Other Credit Enhancements :

d) Assignment of insurance policies.

c) The personal guarantees of borrowers.

7.6 There were no loans given against the collateral of gold jewellery & hence the percentage of such loan to the total outstanding assets is Nil

(as at March '31, 2019 is Nil and as at April 1, 2018 is Nil).

Loans granted by the group Companies are secured by any or all of the following as applicable, based on their categorisation:

7.4 The group Companies monitors the value of collateral and will request additional collateral in accordance with the loan agreement.

7,625.18 --

Carrying amount of associated liabilities -

--

Fair value of assets of the assets that represent the entity’s continuing involvement

in the derecognised financial assets (representing 90% of the outstanding amount)

7,625.18

--

Fair value of associated liabilities

Net position at FV

-

--

7,625.18

--

-

Gain or loss recognised at the date of transfer of the assets (Refer Note 9 & 27) 1,901.86

--

Carrying amount of the assets that represent the entity’s continuing involvement in

the derecognised

Particulars

(Rs. in Lakh)

As at As at

March 31, 2020 March 31, 2020

As at

March 31, 2019

7.7 Housing Loan

An analysis of changes in the gross carrying amount and the corresponding Expected Credit Loss allowances in relation to lending is as follows;

(Rs. in Lakh)


Gross Carrying amount opening balance





Transfers to/(from) Stage 1



Amount Written off

Gross Carrying amount closing balance




7.1 Disclosure for transferred financial assets

The Company has derecognised certain financial assets on account of assignment without recourse. However, the Company has retained 10%

of the financial assets and below are the disclosures of assets and liabilities associated with the continuing involvement in the financial assets.

85,555.03 427.83 80.29 86,063.15 48,926.83 148.65 - 49,075.49

36,757.89 -

-

36,757.89

47,875.06

-

-

47,875.06

(14,505.48) (378.44) (144.56) (15,028.48) (10,711.47) (124.00) 0.33 (10,835.13)

(1,415.77) - - (1,415.77) (535.29) - - (535.29)

-

1,108.43

-

1,108.43

-

423.84

-

423.84

-

-

307.34

307.34

-

-

111.45

111.45

(0.14)

-

-

(0.14)

(0.11)

(20.66)

(31.49)

(52.26)

106,391.53 1,157.82

243.07

107,792.42

85,555.03

427.83

80.29

86,063.15



Reconciliation of Expected Credit Loss allowances balance is given below :

ECL Allowance - opening balance








Amount Written off

ECL Allowance closing balance





7.8 Non Housing Loan

An analysis of changes in the gross carrying amount and the corresponding Expected credit loss allowances is as follows :

Gross Carrying amount opening balance

New Asset Originated / purchased / further increase in existing asset Assets derecognised or repaid

(excluding write offs) Transfers to/(from) Stage 1


Transfers to/(from) Stage 3 Amount Written off

Gross Carrying amount closing balance



Reconciliation of Expected credit loss allowances balance is given below :

ECL Allowance - opening balance


further increase in existing asset






Amount Written off

ECL Allowance closing balance





371.59 41.06 17.66 430.32 362.31 14.27 - 376.58

123.13 - - 123.13 12.13

-

-

12.13

(10.11)

(36.38)

(31.80)

(78.29)

(2.71)

(11.90)

0.07

(14.54)

(0.99)

-

-

(0.99)

(0.14)

-

-

(0.14)

-

104.97

-

104.97

-

40.68

-

40.68

-

-

67.62

67.62

-

-

24.52

24.52

(0.00)

-

-

(0.00)

(0.00)

(1.98)

(6.93)

(8.91)

483.63

109.65

53.47

646.75

371.59

41.06

17.66

430.32

47,151.10 349.93

38.38

47,539.40

25,184.93

134.14

-

25,319.07

29,570.92 -

-

29,570.92

28,220.82

-

-

28,220.82

(16,181.10) (208.76)

(79.51)

(16,469.38)

(5,956.42)

(35.55)

(7.02)

(5,998.98)

(1,105.77) -

-

(1,105.77)

(297.84)

-

-

(297.84)

-

733.30

-

733.30

-

251.55

-

251.55 -

-

372.47

372.47

-

-

46.29

46.29

-

(0.10)

-

(0.10)

(0.39)

(0.21)

(0.90)

(1.49)

59,435.14 874.37 331.33 60,640.85 47,151.10 349.93 38.38 47,539.40

195.67 33.58 8.44 237.70 190.10 12.87 - 202.98

24.52 - - 24.52 7.15 - - 7.15

(11.27) (20.21) (17.49) (48.98) (1.51) (3.41) (1.54) (6.47)

(0.77) - - (0.77) (0.08) - - (0.08)

- 69.45 - 69.45 - 24.14 - 24.14

- - 81.94 81.94 - - 10.18 10.18

- (0.01) - (0.01) (0.00) (0.02) (0.20) (0.22)

208.15

82.80

72.89

363.85

195.67

33.58

8.44

237.70

(Rs. in Lakh)

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--

-

9. Other financial assets (Rs. in Lakh)

As at

March 31, 2020

As at

March 31, 2019

As at

April 1, 2018

125.36

1,636.39

101.25

-

90.52

-

397.44 134.70 52.74

129.01 47.90 26.07

2,288.20 283.85 169.34

Other receivables - Unsecured; considered good

Total

Particulars

Interest only strip receivable*

Interest accrued but not due on deposits

Security Deposits



289.55

- 74.30

289.55

- 74.30

Total

Current Tax Asset (net)

(Rs. in Lakh)

As at

March 31, 2020

As at


10. Current tax assets (net)

Particulars

Impairment of financial instruments

Disallowances under section 43B of the Income Tax Act, 1961

Ind AS adjustment (effective interest rate on fee income and expense etc.)

Changes in Tax rate

Impact on assignment transaction on account of EIS

Difference between books and tax written down value of fixed assets

*Refer note 34

256.66

68.77

286.83

(19.99)

(419.33)

3.10

197.82

23.02

323.91

-

-

(3.78)

102.19

9.12

90.97

-

-

(14.90)

176.04 540.97 187.39

(Rs. in Lakh)

As at

March 31, 2020

As at As at

March 31, 2019 April 1, 2018

11. Deferred tax assets (net)*

*Under Ind AS, with respect to assignment deals, the Company has created an Interest only strip receivable amounting to Rs. 1,636.39 Lakh as

on March 31, 2020 (Nil as on Mar. 2019, April 01, 2018) with corresponding credit to Profit and loss for the year, which has been computed by

discounting Excess Interest Spread (EIS) to present value with necessary adjustment.

As at

April 1, 2018

Total

VA

ST

U H

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Furn

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and fitt

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ase

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able

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ebentu

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are

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n p

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first

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ay

of

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on th

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at C

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ba

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in th

e s

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of T

am

il N

ad

u.

12. P

rop

ert

y, p

lan

t a

nd

eq

uip

men

t

12. O

the

r in

tan

gib

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ss

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12. P

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nd

eq

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men

t

No

tes

to

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ina

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10

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As

at

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(Rs. in

La

kh)

(Rs. in

La

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(Rs. in

La

kh)

8.3

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14

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(Rs. in

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are

49

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2

-

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-

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22

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50

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14. Other non-financial assets (Rs. in Lakh)

As at

March 31, 2020

As at

March 31, 2019

As at

April 1, 2018

99.22

99.22

81.70

81.70

29.54

29.54

Total

Particulars

Prepaid expenses



Particulars

(I) The principal amount and the interest due thereon remaining unpaid to any supplier

at the end of each accounting year;

(ii) the amount of interest paid by the buyer in terms of section 16 of the Micro, Small

and Medium Enterprises Development Act, 2006, along with the amount of the

payment made to the supplier beyond the appointed day during each accounting year

(iii) the amount of interest due and payable for the period of delay in making payment

(which has been paid but beyond the appointed day during the year) but without

adding the interest specified under the Micro, Small and Medium Enterprises

Development Act, 2006

(iv) the amount of interest accrued and remaining unpaid at the end of each

accounting year; and

(vi) the amount of further interest remaining due and payable even in the succeeding

years, until such date when the interest dues above are actually paid to the small

enterprise, for the purpose of disallowance of a deductible expenditure under section

23 of the Micro, Small and Medium Enterprises Development Act, 2006.

4.15

-

0.11

0.11

-

-

-

-

-

-

-

-

-

-

-

(Rs. in Lakh)

As at

March 31, 2020

As at As at

March 31, 2019 April 1, 2018

Disclosure pertaining to Micro and Small Enterprises as at March 31,2020 are as under :

15. Assets held for sale

16. Trade payables

(Rs. in Lakh)

(Rs. in Lakh)

As at

As at

March 31, 2020

March 31, 2020

As at

As at

March 31, 2019

March 31, 2019

As at

April 1, 2018

As at

April 1, 2018

664.68

4.15

(12.46)

141.20

652.22

145.35

49.76

-

81.70

88.43

49.76

88.43

-

-

-

65.39

-

65.39

Total

Total

Particulars

Particulars

Properties obtained by taking possession of collateral (refer note below)

Total outstanding dues of micro and small enterprises

Note: Assets held for sale represents loan value or market value of property whichever is lower of properties acquired by taking possession of

collateral held as security against loans and advances and held at the year end. The company's policy is to realize collaterals on a timely basis.

The amounts due to Micro and Small Enterprises as defined in the Micro, Small and Medium Enterprises Development Act, 2006, has been

determined to the extent of information available and compiled by the Company. This has been relied upon by the auditors.

Assets held for sale includes Rs. 652.22 Lakhs (Previous Year Rs. 49.76 Lakhs) in respect of properties held for disposal under Securitisation

and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

Less: Provision for diminution in value of property

Total outstanding dues to creditors other than micro and small enterprises

17. Debt securities

17.2 Non-Convertible Debentures (NCD) at Face Value repayable at par;

18. Borrowings (other than debt securities)

(Rs. in Lakh)

(Rs. in Lakh)

(Rs. in Lakh)

As at

As at

As at

March 31, 2020

March 31, 2020

March 31, 2020

Maturity date

As at

As at

As at

March 31, 2019

March 31, 2019

March 31, 2019

As at

April 1, 2018

As at

April 1, 2018

As at

April 1, 2018

Total

Total

Total

Particulars

Instrument No. - fixed / variable - rate of interest

Particulars



17.1 Non-convertible debentures are secured by a first ranking exclusive and continuing charge on the hypothecated receivables in favour of the

debenture trustee and first ranking pari passu basis charge over the immovable property (on the premises situated at Coimbatore in the state

of Tamil Nadu) created by way of a mortgage (without possession) under the debenture trust deed in favour of the debenture trustee.


Secured

Non Convertible Debentures 36,153.85 41,923.08 12,500.00

Less: Unamortised borrowing cost (24.85) (31.78) -

36,129.00 41,891.30 12,500.00

INE459T07017 - variable - SBI MCLR + spread 2.4% 22/May/21 1,153.85 1,923.08 2,500.00

INE459T07025 - fixed 9.95% 27/Feb/25 5,000.00 5,000.00 5,000.00

INE459T07033 - fixed 9.95% 27/Feb/25 5,000.00 5,000.00 5,000.00

INE459T07041 - fixed 9.95% 27/Feb/25 4,000.00 5,000.00 -

INE459T07058 - fixed 9.95% 27/Feb/25 6,000.00 5,000.00 -

INE459T07066 - variable - SBI MCLR + spread 3.50% 25/Aug/23 5,000.00 5,000.00 -

INE459T07074 - variable - SBI MCLR + spread 3.75% * 25/Aug/23 - 5,000.00 -

INE459T07082 - fixed 10.40% 27/Nov/25 5,000.00 5,000.00 -

INE459T07090 - fixed 10.40%

*Early redemption during the year.

18.1 Nature of security

27/Nov/25 5,000.00 5,000.00 -

36,153.85 41,923.08 12,500.00

22,594.65 4,383.90

1,500.00

48,672.69 32,564.11 15,227.20

19,963.83 20,149.90 18,300.89

Cash credit from banks (refer note 18.4)

Term loan and cash credit from banks, term loan from NHB and other parties are secured by way of exclusive first charge and hypothecation

of specific loan receivables.

1,998.64 - 17.15

Total borrowings (other than debt securities) (A) 93,229.81 57,097.91 35,045.25

Less: Unamortised borrowing cost (177.81) (146.19) (96.13)

93,052.01 56,951.73 34,949.12

Term loans from banks (refer note 18.1, 18.2 & 18.3)


Secured

Term loans from NHB (refer note 18.1 & 18.2)

Term loans from other parties (refer note 18.1, 18.2 & 18.3)



18.2 Terms of repayment & rate of interest in case of Borrowings (Other than Debt Securities) (Rs. in Lakh)


As at 31.03.2020



Variable Rate 7.40% - 8.15% 2,693.18 7,118.08 6,018.08 6,765.31


Variable Rate 9.55% 450.00

945.00 - -


Fixed Rate 9.63% - 11.00% 1,160.00

9,199.58 6,166.67 -

Variable 9.40% - 10.57% 10,573.13 15,906.52 2,979.17 -


Fixed Rate 9.5% - 9.85% 2,666.21

4,965.25 62.16 -

Variable 9.4% - 11.05% 3,690.21 7,138.46 2,734.18 -

21,232.73

45,272.89

17,960.25

6,765.31

Total

(Rs. in Lakh)

(Rs. in Lakh)

1-3 years

1-3 years

Up to one year

Up to one year

3-5 years

3-5 years

As at 31.03.2019

As at 01.04.2018

5 years & above

5 years & above

Residual maturities

Residual maturities


Variable Rate 9.05% - 10.50 % 254.98

611.68

611.68

2,905.56


Variable Rate 10% 270.00

1,080.00

315.00

-

Term loan from banks & other parties - quarterly-

Fixed Rate 9.63 - 10.95 % -

1,160.00

4,017.92

3,583.33

Variable 9.5 - 10.84 % 5,807.15

11,331.35

2,737.50

-


Fixed Rate 9.5 - 9.85 % 2,419.46

5,652.76

2,040.86

-

Variable 9.95 - 11.30 % 3,603.64

5,667.17

3,027.88

-

13,515.23 28,360.87 12,316.26 2,905.56Total


Variable Rate 8.4% - 8.95% 116.10

204.80

204.80

974.30


Variable Rate 9.40% -

540.00

1,260.00

-


Fixed Rate 9.38% - 10.95 % 910.00

2,470.00

1,366.25

-

Variable 9.4 - 10 % 1,711.26 5,954.40 2,548.63 -


Fixed Rate 9.5% - 9.8 % 1,878.07 4,343.69 4,025.47 -

Variable 9.6% - 10.75 % 1,841.25 2,958.48 1,720.60 -

6,456.68 16,471.37 11,125.75 974.30 Total

18.3 For variable interest rate borrowings, rate of interest is linked to the MCLR/base rates of the banks and is subject to change from time to time.

The above categorisation of loans has been based on the interest rates, prevalent as on the respective reporting dates.



18.4. The rate of interest for the cash credit from bank, repayable on demand, ranges from 10.00% to 12.00%

18.5. There has been no default in repayment of principal and/or interest for borrowing as per the repayment schedules during the year. Further,

the Company is compliant of the covenants mentioned in the respective borrowing's deeds.

19. Other financial liabilities (Rs. in Lakh)

As at

March 31, 2020

As at

March 31, 2019

As at

April 1, 2018

Total

Particulars

5,774.26

9,548.61

9,378.00

475.52

204.46

147.22

10.02 11.99 18.18

297.60 - -

1,671.60 1,328.37 1,141.03

8,229.01 11,093.43 10,684.43

Interest accrued but not due on borrowings

and debt securities

Employee benefits payable


The table below provides details regarding the contractual maturities of lease liabilities as at March 31, 2020 on an undiscounted basis:

Book overdraft

Lease rental liability

(Rs. in Lakh)

(Rs. in Lakh)

(Rs. in Lakh)

(Rs. in Lakh)

As at

As at

March 31, 2020

March 31, 2020

As at

As at

March 31, 2019

March 31, 2019

As at

April 1, 2018

As at

April 1, 2018

Total

Total

Particulars

Particulars

Total

Total

As at

As at

March 31, 2020

March 31, 2020

As at

As at

March 31, 2019

March 31, 2019

Particulars

Particulars

20. Current tax liabilities (net)

21. Provisions

22. Other non-financial liabilities

As at

April 1, 2018

As at

April 1, 2018

Less than one year 126.54 - -

One to three years 133.96 - -

More than three years 37.10 - -

297.60 - -

-

143.68

-

- 143.68 -

Current tax liability (net)

159.26

79.05

33.10

159.26 79.05 33.10

Provision for employee benefits - gratuity (refer note 39)

158.81 54.77 395.73

130.90

272.31

130.54

1.51

4.84

20.52

291.23

331.92

546.79

Other non-current financial liabilities

Instalments received in advance

Statutory dues

(Rs. in Lakh)



As at

March 31, 2020

As at


23. Equity share capital

As at

April 1, 2018

100,000.00 100,000.00 60,000.00

100,000.00 100,000.00 60,000.00

Issued, subscribed and paid up

5,18,45,527 Equity Shares of ₹ 100 each 51,845.53 35,382.18 35,382.18

(FY 2019 and FY 2018 - 3,53,82,180 Equity Shares of ₹ 100 each)

Authorised


(FY 2019 10,00,00,000 FY 2018 6,00,00,000, Equity Shares of ₹ 100 each)

51,845.53 35,382.18 35,382.18

23.2. During the period, the company has issued equity shares at a premium of Rs.130 (face value Rs.100) aggregating to Rs.37,750.70 Lakh

(face value Rs.16,413.35 Lakh) through right issue

The stock option granted to eligible employees operate under the employee stock option plan: Employees Stock Options Plan 2018 Scheme I

and Employees Stock Options Plan 2018 Scheme II. (Refer Note 40)

During the year 2018-19, the Company had introduced 2 ESOP schemes. The primary objective of the ESOP 2018 Scheme I & II is to reward

the key employees for their association, dedication and contribution to the goals of the Company. The Company intends to use this ESOP 2018

- Scheme I & II to attract, retain and motivate critical talents working with the Company, by way of rewarding their high performance and

motivate them to contribute to the overall corporate growth and profitability. The Company views employee stock options as long-term incentive

tools that would enable the employees not only to become shareholders but also to create potential wealth out of such shareholding in future.

23.1. (c) List of shares held by Holding Company

23.1. (d) List of shareholders holding more than 5% shares

23.3. Equity shares reserved for issue under stock options

23.1. (a) Reconciliation of number of shares outstanding at the beginning and at the end of the reporting period:

23.1. (b) Rights, Preferences and Restrictions

(Rs. in Lakh)

(Rs. in Lakh)

(Rs. in Lakh)

Particulars

Particulars

Particulars

35,382,180

35,273,730

35,273,730

9,663,707

3,864,856

35,382,18

68.04%

68.04%

18.64%

7.45%

35,382,180

27,290,421

27,290,421

-

3,045,664

35,382,18

77.13%

77.13%

0.00%

8.61%

12,882,180

27,290,421

27,290,421

-

3,045,664

12,882.18

77.13%

77.13%

0.00%

8.61%

50,000 50,00 - - - -

51,845,527 51,845,53 35,382,180 35,382,18 35,382,180 35,382.18

16,413,347 16,413,35 - - 22,500,000 22,500.00

Shares outstanding at the beginning of the year



Plenty CI Fund I Limited

Multiples Private Equity Fund II LLP

The Company has only one class of equity shares, having a par value of Rs.100 per share. Each shareholder of equity shares is eligible for one

vote per share. The dividend, if any, proposed by the Board of Directors, is subject to the approval of the shareholders at the ensuing Annual

General Meeting except in case of interim dividend. In the event of liquidation of the Company, the holders of equity shares shall be eligible to

receive the remaining assets of the Company, after distribution of all preferential amounts, in the proportion of their shareholding.

Shares issued under right issue

Shares issued under ESOP

Shares outstanding at the end of the year

As at April 1, 2018

As at April 1, 2018As at April 1, 2018





Number Amount Number Amount Number Amount

Number % Number % Number %

Number % Number %

As at April 1, 2018As at March 31, 2019

Number %




24. Other equity(Rs. in Lakh)

As at

March 31, 2020

As at

March 31, 2019

As at

April 1, 2018

Total

Particulars

-

34,363.59

-

3,704.28

1,752.65

627.65

Securities premium 21,376.71

-

-

111.99

111.99

111.99

Share option outstanding account 1,335.01

1,074.41

-

10,319.03

3,066.03

591.64

36,847.02 40,368.67 1,331.28

Share application money pending allotment

Retained earnings

General reserve

Statutory / Special Reserve (under Section 29 C of the National Housing BankAct, 1987 )

25. Interest income

27. Net gain on derecognition of financial instruments

26. Fees and commission income

Securities premium account is used to record the premium on issue of shares.

The general reserve created from time to time by transferring profits from retained earnings for appropriation purpose.

Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, statutory reserve, dividends or

other distributions paid to shareholders.

This Reserve relates to stock options granted by the Company to employees under various ESOP schemes. This Reserve is transferred to

securities premium account on exercise of vested options.

Loan origination income included in interest income on loan is disclosed net of the direct incremental costs of Rs. 686.45 lakh for year ended

March 31, 2020 (P.Y. Rs 386.97 lakh) associated with the origination of the underlying loans.

The statutory reserve is the reserve created by transferring a sum not less than twenty per cent of the Company's net profit after tax every year in

terms of Section 29 C of the National Housing Bank Act, 1987. For this purpose any special reserve created by Company under section 36(1)(viii)

of the Income Tax Act, 1961 is considered to be an eligible transfer. Further, the Company doesn't anticipate any withdrawal from the statutory

reserve in the foreseeable future.

(Rs. in Lakh)

(Rs. in Lakh)

(Rs. in Lakh)

For the year ended

For the year ended

For the year ended

March 31, 2020

March 31, 2020

March 31, 2020

For the year ended

For the year ended

For the year ended

March 31, 2019

March 31, 2019

March 31, 2019

Total

Total

Total

Particulars

Particulars

Particulars

22,875.40

1,636.39

297.55

15,035.11

-

371.31

22,875.40

1,636.39

297.55

15,035.11

-

371.31



- Interest on loans

On assignment of portfolio

Login fee and other charges

Note: For additions and deductions under each of the above heads, refer statement of changes in equity

Securities premium

General reserve

Retained earnings:

Share option outstanding account

Statutory reserve:



28 Other operating income(Rs. in Lakh)

For the year ended

March 31, 2020

For the year ended

March 31, 2019

Total

Particulars

238.06 95.65

238.06 95.65

Other charges (cersai, cancellation, cheque bouncing charges, etc.)

29. Other income

30. Finance costs

31 Impairment on financial instruments

32. Employee benefits expense

(Rs. in Lakh)

(Rs. in Lakh)

(Rs. in Lakh)

(Rs. in Lakh)

For the year ended

For the year ended

For the year ended

For the year ended

March 31, 2020

March 31, 2020

March 31, 2020

March 31, 2020

For the year ended

For the year ended

For the year ended

For the year ended

March 31, 2019

March 31, 2019

March 31, 2019

March 31, 2019

Total

Total

Total

Total

Particulars

Particulars

Particulars

Particulars

342.59 296.03

75.38 60.72

12.46 -

4,182.44

11,050.55

430.43

4,616.54

356.76

4,476.46

2,114.34

6,928.05


Provision for expected credit loss

Bad debt written off (net)

Diminution in value of properties (unrealized)

Net gain/loss on fair value changes (realised) 346.02

189.20

Net gain/loss on fair value changes (unrealised) 8.24

8.20

Interest income on fixed deposit 2,695.23

879.95

Discount on buyback of debenture 60.32

-

Income from display of advertisement 939.86

826.95

Training development and consultancy charges 131.30

199.05

Profit on sale of property, plant & equipment 0.02

10.50

Other misc. income 1.45

0.48

6,648.46 3,889.03

4,273.90 2,933.46

27.35 -

Interest Expense on lease liabilities 29.96 -

70.87 105.56


Interest on borrowings (other than debt securities)

Interest on debt securities

Interest on overdraft facility

Other interest expense

3,986.51 3,190.84

214.59 149.69

62.51 32.28

299.95 1,074.41

52.98 29.25

Salaries, bonus and other allowances

Contribution to provident fund and other funds

Staff welfare and training expenses

Employee stock option scheme (refer note 40)

Gratuity (refer note 39)



33. Other expenses

Payment to Auditors

34. 1 Reconciliation of total tax charge

(Rs. in Lakh)

(Rs. in Lakh)

(Rs. in Lakh)

For the year ended

For the year ended

For the year ended

March 31, 2020

March 31, 2020

March 31, 2020

For the year ended

For the year ended

For the year ended

March 31, 2019

March 31, 2019

March 31, 2019

Total

Total

Particulars

Particulars

Particulars

1,059.96

62.40 29.75

868.92

Rent, taxes and energy costs 126.56 245.40

Communication costs 199.16 120.51

Advertisement and publicity 18.72 3.72

Printing and stationery 62.55 84.49

Repairs and maintenance 55.12 52.51

Insurance 85.19 38.60

Auditor’s fees and expenses (refer details below) 62.40 29.75

Legal & professional charges 273.80 196.10

Corporate social responsibility (Refer Note 38) 73.78 -

Travelling and conveyance 27.49

36.31

ROC fees and stamp duty 1.27

0.60

Other expense (indirect tax reversal, admin exp. etc.) 70.45

55.64

Director’s fees, allowances, and expenses 3.48

5.30

a) For audit (incluing limited review) 36.00 23.00

b) For taxation audit 2.50 2.00

23.90 4.75c) For other services (certifications, GST audit, report on IFCoFS etc. )

Current tax 2,329.44

1,528.88

Deferred tax 371.65

(349.80)

Total income tax expenses recognised in the current year 2,701.09

1,179.09

Income tax expense recognised in other comprehensive income (8.60)

(3.79)

Profit before tax 11,939.66

4,942.15

Income tax rate 25.63% 27.82%

Income tax expense 3,059.61

1,374.91

Tax effect of:

Effect of Ind AS adjustments (net) (520.99) -

Provision for special reserve u/s 29C of the NHB Act (237.28) -

Others (including tax adjustment for earlier years) 28.10 153.97

Income tax expense recognised in profit and loss 2,329.44

1,528.88

Income tax expense for the year reconciled to the accounting profit:



34. 2 The following table shows deferred tax recorded in the balance sheet and changes recorded in the Income tax expense:

a. For the year ended March 31, 2020

b. For the year ended March 31, 2019

(Rs. in Lakh)

(Rs. in Lakh)


income


income

Opening balances

as on 01.04.2019

Opening balances

as on 01.04.2018


31.03.2020


31.03.2019


Income


Income

Total

Total



8.60

3.79

540.97

187.39

176.04

540.97

(371.65)

349.80




323.91 (37.08) - 286.83

Changes in the Tax Rate - (19.99) - (19.99)



23.02 37.15 8.60 68.77

Impact on assignment transaction on

account of EIS

- (419.33) - (419.33)



(3.78) 6.88 - 3.10




90.97 232.94 323.91



9.12 10.11 3.79 23.02



(14.90) 11.12 - (3.78)

(Rs. in Lakh)

As at

March 31, 2020

As at

March 31, 2019

As at

April 1, 2018 Particulars

Contingent liabilities* 1,000.00

-

-

Capital commitments:

Undisbursed commitments 6,837.58 4,706.72 4,054.32

Estimated amount of contracts remaining to be executed on capital account

and not provided for

*Bank guarantee aggregating to Rs 1,000 Lakhs to National Housing Bank against refinance assistance.

- - -

Contingent Liabilities and commitments35.



(Rs. in Lakh)

(Rs. in Lakh)

For the Year Ended

March 31,2020

For the Year Ended

March 31,2020

For the Year Ended

March 31,2019

For the Year Ended

March 31,2019

Particulars

36. Earning per equity share

Particulars

Profit attributable to equity share holders (Rs. in Lakh) 9,224.81

3,609.34

50,687,921

35,382,180

Dilutive effect of stock option (Nos.) 667,551 313,283

51,355,472 35,695,463

Basic earnings per share (Rs.) 18.20

10.20

Diluted earnings per share (Rs.) 17.96

10.11

Nominal value per share (Rs.)

The Company operates in a single reportable operating segment of providing loans. Accordingly, there are no separate reportable segments, as

per the Accounting Standard on 'Operating Segments' (Ind AS 108) prescribed under section 133 of the Companies Act, 2013.

The Company has its operation within India, and all revenues generated within India.

a. Gross amount required to be spent by the Company during the year – Rs. 56.26 lakhs (Previous Year, Rs. 17.52 lakhs) aggregating to

Rs. 73.38 Lakhs.

The Company operates a defined contribution plan (Provident fund & ESIC) for all qualifying employees of the Company. The employees of the

Company are members of a retirement contribution plan & ESIC operated by the government. The Company is required to contribute a specified

percentage of payroll cost to the retirement contribution scheme & ESIC to fund the benefits. The only obligation of the Company for the plan is to

make the specified contributions.

The liability under the Payment of Gratuity Act,1972 is determined based on the actuarial valuation made at the end of each financial year using

the projected unit credit method. The plan is of a final salary defined benefit in nature which is sponsored by the Company, and hence it

underwrites all the risks of the plan. The actuarial risks associated are:

b. The details of amount spent in respective year towards CSR as follows;

37. Segment reporting

38. Expenditure towards corporate social responsibility as per Section 135 of the Companies Act, 2013 (read with schedule VII thereof)

39. Employee benefit


Defined benefit obligation plan

100.00

100.00

Weighted average number of equity shares outstanding during the year for calculating basic

earnings per share (Nos.)

Weighted average number of equity shares outstanding during the year for calculating for diluted earnings per share (Nos.)

1. Construction / acquisition of asset

Amount spent - -

Amount unpaid / provision - -

2. On purposes other than above

Amount spent 41.50

-

Amount unpaid / provision 32.28

-

73.78 -Total

(Rs. in Lakh)

March 31, 2020 March 31, 2019 April 1, 2018 Particulars

Employers Contribution to Provident Fund, ESIS 214.59 149.69 107.28



a. The assumptions used for the purposes of the actuarial valuations were as follows;

b. Amount recognised in the balance sheet

c. Expenses recognized in the statement of profit and loss

(Rs. in Lakh)

(Rs. in Lakh)

(Rs. in Lakh)

March 31, 2020

March 31, 2020

March 31, 2020

March 31, 2019

March 31, 2019

March 31, 2019

April 1, 2018

April 1, 2018

April 1, 2018

Particulars

Particulars

Particulars

Significant assumption

Closing present value of obligations

Discount rate

Closing fair value of plan assets

Salary escalation rate

Liability recognised in the balance sheet

Mortality rate table

Other assumption

6.35%

159.26

-

12.00%

159.26

IALM 2012 - 14

7.10%

79.05

-

12.00%

79.05

IALM 2012 - 14

7.80%

33.04

-

12.00%

33.04

IALM 2006 - 08

Investment / interest rate risk:

Longevity risks:

Salary risks:

The Company is exposed to Investment / Interest risk if the return on the invested fund falls below the discount rate used to arrive at the present

value of the benefit.

The Company is unexposed to the risk of employees living longer since benefit under the scheme ceases on the employee separating from the

employer for any reason.

The gratuity benefits under the plan are related to the employee’s last drawn salary. Consequently, any unusual rise in future salary of the

employee raises the quantum of benefit payable by the company, which results in a higher liability for the company and is, therefore, a plan risk

for the company.

The following table summarises the component of net benefit expense recognised in the Statement of profit and loss and amounts recognised in

the balance sheet for the individual plans based on actuarial report and relied upon by auditors.

Current service cost 40.84 26.46 20.40

Past service cost -

0.89

-

Interest cost 5.80

4.92

2.58

Expected return on plan assets -

-

-

Losses / (gains) on “Curtailments and Settlements” -

-

-

Total expenses to be recognized in the statement of profit and loss

Remeasurements on the net defined benefit liability :

46.64

32.27

22.98

Actuarial losses / (gain) 33.57

13.74

(4.72)

Total expenses to be recognized in the other comprehensive income 33.57

13.74

(4.72)

Total 80.21

46.01

18.26



d. Change in in the present value of the defined benefit obligation are as follows:

e. Changes in the fair value of plan assets are as follows:

g.. Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate and expected salary increase. The

sensitivity analysis below have been determined based on reasonable possible changes of the assumptions occurring at the end of the reporting

period, while holding all other assumptions constant. The results of sensitivity analysis are as follows :

(Rs. in Lakh)

(Rs. in Lakh)

(Rs. in Lakh)

March 31, 2020

March 31, 2020

March 31, 2019

March 31, 2019

April 1, 2018

April 1, 2018

2015 - 162016 - 172018 - 19 2017 - 182019 - 20

Particulars

Particulars

f. Particulars

Opening present value of obligation 79.05

33.04

14.77

Current service cost 40.84

26.46

20.40

Interest on defined benefit obligation 5.80

4.92

2.58

Remeasurements (gains) / losses:

- Actuarial gain from change in

Benefits paid -

-

-

Past service cost -

0.89

0.00

Liabilities assumed on acquisition / (settled on divestiture) -

-

-

Closing present value of obligations 159.26 79.05 33.04

13.74

33.57

-4.72

- Actuarial loss from change in financial

- Actuarial gain from change in experience adjustments

Opening fair value of plan assets - - -

Expected return on plan assets - - -

Actuarial gains / (losses) - - -

Contributions by employer -

-

-

Benefits paid -

-

-

Closing fair value of plan assets -

-

-

Defined benefit obligation 159.26 79.05 33.04 14.77 2.25

Plan asset -

- - - -

Surplus / (deficit) (159.26) (79.05) (33.04) (14.77) (2.25)

Experience adj. on plan liabilities 23.79

9.48 7.54 2.76 -

Experience adj. on plan asset -

- - - -

Expected contribution next year 12.28

0.16 0.09 0.03 -

(Rs. in Lakh)

Particulars Discount rate Discount rate Discount rateSalary



Escalation Rate

April 1, 2018March 31, 2019March 31, 2020

Defined benefit obligation on increase

in 50 bps 153.67 164.87 78.68 84.40 35.13 37.85



-3.51% 3.52% -3.76% 3.24% -4.11% 3.32%

Defined benefit obligation ondecrease in 50 bps

165.21 153.92 85.02 79.23 38.23 35.47

3.73% -3.35% 3.99% -3.08% 4.37% -3.18%



The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the

change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

There is no change in the method of valuation for the prior periods in preparing the sensitivity analysis. For change in assumptions refer to note

(a) above

Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the

projected unit credit method at the end of the reporting period. It's applied in calculating the defined benefit obligation asset recognised in the

balance sheet.

h. Projected benefits payable:

The weighted average duration to the payment of these cash flows is 7.31 years (FY2018-19 : 7.75 years, FY 2017- 18 : 8.47 years)

40. Employee stock option plan

Employees stock options plan 2018 - Scheme I

Employees stock options plan 2018 - Scheme II


Options Plan 2018 – Scheme I” or referred as “The Scheme”) at the meeting held on 21st July 2017. The shareholders approved it at the Annual

General Meeting held on 23rd March 2018. The plan provides for the issuance of stock options to eligible employees based on the ESOP



Options Plan 2018 – Scheme II” or referred as “The Scheme”) at the meeting held on 8th August 2018. The shareholders approved it at the

Annual General Meeting held on 21st August 2018. The plan provides for the issuance of stock options to eligible employees based on the ESOP


(Rs. in Lakh)

As at

March 31, 2020

As at

March 31, 2019

As at

April 1, 2018

Scheme IIScheme I

Particulars

Particulars

Pursuant to Rule 12(9) of Companies (Share Capital and Debentures) Rules, 2014, the details of the Vastu Employees Stock Option Scheme,

Expected benefits for year 1 12.28 0.16 0.09





Expected benefits for year 6 to 9 50.01 28.62 16.41

Expected benefits for year 10 years and above 133.94 83.24 46.16

Scheme Name Employees Stock

Options Plan 2018

Employees Stock

Options Plan 2018

Options approved to be issued as ESOPs 2,000,000 500,000

Date of Grant 22nd Apr. 2018 2nd Nov. 2018

Options granted 1,841,400 462,500

Method of Settlement Equity Equity



a. Reconciliation of options

b. Balance outstanding at the end of the year are as follows

Particulars

Particulars


Nos.


Nos.


Exercise price


Exercise price





Scheme IOutstanding at the beginning of the year 1,841,400

100

-

-

Granted -

-

1,841,400

100

Exercised 50,000

100

-

-

Reinstated -

-

-

-

Lapsed -

-

-

-

Forfeited -

-

-

-

Outstanding at the end of the year 1,791,400

100

1,841,400

100

Scheme IIOutstanding at the beginning of the year 462,500

100

-

-

Granted -

-

462,500

100

Exercised -

100

-

-

Reinstated -

-

-

-

Lapsed -

-

-

-

Forfeited -

-

-

-

462,500

100

462,500

100

Outstanding at the end of the year

Vested Options

Scheme I 1,301,810 100 973,548 100

Scheme II 277,500 100 185,000 100

Un-Vested Options

d. Following amount has been recognized as an expense and included in 'Note 32 - Employee benefit expenses' and total carrying

amount at the end of the period.

Scheme I 489,590

185,000

100 867,852

277,500

100

Scheme II 100 100

2018 - 19

2018 - 19

2019 - 20

2019 - 20

c. Weighted average remaining life of the of the ESOP outstanding

Particulars

Scheme I

Expense arising from equity settled share-based payment transaction

1.34

299.95

2.33

1,074.41

Scheme II

Carrying amount at the end of the period

2.00

1,335.01

3.00

1,074.41

(no of years)



e. Fair value of the options granted;

b. Disclosure of related party transactions:

Scheme II

31-Mar-19

Scheme I

31-Mar-20

Particulars

Nature of transactions

The Black Scholes Model has been used for computing the weighted average fair value considering the following

Note : The remuneration to the key managerial personnel does not include the provisions made for gratuity benefits, as

they are determined on an actuarial basis for the Company as a whole.

The expected life of the share options is based on historical data and current expectations and is not necessarily indicative of exercise patterns

that may occur. The expected volatility reflects the assumption that the historical volatility over a year similar to the life of the options is indicative

of future trends, which may not necessarily be the actual outcome.

41 Related party disclosures

a. List of related parties:

I. Holding Company


Share price as on the date of grant (INR) 130 130

Exercise price (INR) 100 100

Expected volatility (%) 12.25% 12.25%

Life of the options granted (years) 9.07 9.60

Risk free interest rate (%) 7.35% 7.35%

Expected dividend rate (%) Nil Nil

Fair value of options as per Black Scholes (INR) 178.71 180.67

ii. Subsidiary Company

iii. Key Managerial Personnel (KMP)

iv. Other Related Company


Sandeep Menon - Managing Director

Sujay Patil - Chief Financial Officer

Pallavi Bhambere - Company Secretary


- having common director (related party by virtue of sec2(76)(iv))

Investment in equity shares

Vastu Finserve India Private Limited 5,000.00 250.00

Managerial remunerations (included in employee benefit expenses)

Sandeep Menon - Managing Director 362.25

300.00

Sujay Patil - Chief Financial Officer 168.50

145.00

Pallavi Bhambere - Company Secretary 7.71

5.61

Reimbursement of expenses

Vastu Finserve India Private Limited -

4.02


Software License 3.35

-

(Rs. in Lakh)



c. Amount due to / from related parties:

1-Apr-1831-Mar-1931-Mar-20Nature of transactions

42. First-time Ind AS adoption reconciliations

42.1 Reconciliation of total equity as at April 01, 2018 and March 31, 2019 and profit or loss for the year ended March 31, 2019:

Note: Related party relationship is as identified by the company and relied upon by the auditors. The transactions with related parties are

disclosed only till the relationship exists

Subsidiaries (Payable) / Receivable (Net)

Vastu Finserve India Private Limited 4.02- -

People Strong Technologies Private Limited -- -

d. There are no transaction other than sitting fees paid to Non-Executive director details are as under:

31-Mar-1931-Mar-20Nature of transactions

Sitting Fees

Puranam Hayagreeva Ravikumar 1.75 3.50

Girija Shankar Nayak 1.65 1.80

(Rs. in Lakh)

ParticularsNote No.

As atApril 01, 2018

As atMarch 31, 2019

Year ended March 31, 2019

Equity Reconciliation Net profit Reconciliation


Ind AS Adjustments:


Effective interest rate for financial assets and liabilities at amortised cost

Reclassification of actuarial gains and losses on employee benefit

plans to other comprehensive income

g (178.12) -505.28 (327.16)

j 9.95 8.86 -1.10

Fair value of financial assets c & f 8.20

8.20

-

Fair value of employee stock option i (667.41)

-

-

Rent equalization and interest free deposit c & f (2.09)

(4.81)

(2.71)


510.37

172.93


253.35

60.14

Total (155.99)

524.36

12.93

Net profit / equity for the year as per Ind AS 3,609.34 40,377.53

1,330.18

Other comprehensive income (net of tax) (9.95) (8.86)

1.10


42.2 Effect of Ind AS adoption on the statement of cash flows for the year ended March 31, 2019:

3,599.39 40,368.67 1,331.28

(Rs. in Lakh)

As per Previous

GAAP Effect of ransition

to Ind AS As per Ind ASBalance sheetParticulars

Net cash flow from operating activities (55,768.62) (1,301.87) (54,466.75)

Net cash flow (used in) investing activities (35,275.58) 3,742.40 (39,017.98)

Net cash flow (used in) financing activities

The cash flow adjustments are primarily on account of Ind AS reclassification.

85,856.50 99.00 85,757.50

Net (decrease) / increase in cash and cash equivalents (5,187.70) 2,539.52 (7,727.22)

Cash and cash equivalents at the beginning of the year 20503.33 (18.52) 20,521.85

Cash and cash equivalents at the end of the year 15,315.63 2,521.00 12,794.63

(Rs. in Lakh)

(Rs. in Lakh)



For the periods up to and including the year ended March 31, 2019, the Company prepared its financial statements under the accounting

standards notified under Section 133 of the Companies Act, 2013, read together with the Companies (Accounting Standards) Rules, 2006, as

amended (Previous GAAP). Accordingly, the Company has prepared its first financial statements to comply with Ind AS for the year ending March

31, 2020, together with comparative information as at and for the year ended March 31, 2019. In preparing these financial statements, the Company

prepared its opening Balance Sheet as of April 1, 2018, i.e. the transition date to Ind AS for the Company. Previous GAAP financial statements as

on April 1, 2018, being transition date and for the previous year ended March 31, 2019, have been restated as per Ind AS.

Exemption availed

Notes :

a. Deemed cost for property, plant and equipment and intangible assets :

b. Classification and measurement of financial assets :

c. Fair value of financials assets and liabilities :

d. Impairment of financial assets

e. Expected credit loss on financial assets

f. Investments

h. Deferred tax on special reserve :

i. Share - based payments :

j. Defined benefit obligation :

g. Effective interest rate (EIR) :

The Company has elected to continue with the carrying value of all of its property, plant and equipment and intangible assets recognised as of

April 1, 2018 (the transition date), measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date

under Ind AS.

The Company has classified the financial assets under Ind AS 109 based on facts and circumstances that exist at the date of transition to Ind AS.

As per Ind AS exemption, the Company has not fair valued the financial assets and liabilities retrospectively and has measured the same

prospectively.

The Company has applied the exception related impairment of financial assets given in Ind AS 101. It has used reasonable and supportable

information that is available without undue cost or effort to determine the credit risk at the date that financial assets were initially recognized and

compared that to the credit risk as at April 1, 2018.

Under Indian GAAP, the Company has created provision for loans and advances based on the Guidelines on prudential norms issued by National

Housing Bank. Under Ind AS, impairment allowance has been determined based on the Expected Loss model (ECL). However, as the Company

have little historical information about its own credit loss experience, the expected credit loss has been calculated based on self-experience, peer

group experience for comparable financial instruments as allowed as per Ind AS 109.

Under Previous GAAP, Investments in Mutual Funds are valued at Lower of Cost or Net Assets Value. Under Ind AS the same has been classified

as FVTPL and gain/loss on change in Net Assets Value are recognised in profit and loss.

Under previous GAAP, as per NHB guidelines, the deferred tax liability is required to be created on special reserve. Creation of deferred tax liability

on account of the special reserve is not required under IND AS and the same is reversed.

Under previous GAAP, the cost of equity-settled employee share-based payments was recognised using the intrinsic value method. Under

Ind AS, the cost of equity-settled employee share-based payments is recognised based on the fair value of the options as on the grant date. The

change does not affect total equity, but there is a decrease in profit.

Both under previous GAAP and Ind AS, the Company recognised costs related to its post-employment defined benefit plan on an actuarial basis.

Under Previous GAAP, the entire cost, including actuarial gain and losses, are charged to profit or loss. Under Ind AS, remeasurements comprising

of actuarial gains and losses are recognised in other comprehensive income (OCI).

The application of Ind AS 12 approach has resulted in the various transitional adjustments being temporary differences. Accordingly, the

Company has accounted for such differences. Adjustments recognised in correlation to the underlying transaction either in retained earnings,

OCI or profit and loss, respectively.

Under previous GAAP, transaction costs incurred on borrowings was charged to statement of profit and loss while under Ind AS, such costs are

included in the initial recognition amount of financial liabilities and recognised as interest expense using the effective interest method.

Under previous GAAP, transaction costs (processing fee) charged to customers was recognised upfront while under Ind AS, such costs are

included in the initial recognition amount of financial asset and recognised as interest income using the effective interest method. Similarly, Under

Indian GAAP, transaction costs incurred in connection with loans and advances are amortised upfront and charge to profit and loss for the year.

Under Ind AS, transactions cost are included in the initial recognition amount of financial assets measured at amortised cost and charged to profit

and loss using the effective interest method.

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(Rs. in

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NOTES TO STANDALONE FINANCIAL STATEMENT FOR THE YEAR ENDED MARCH 31, 2020

As at March 31, 2020 As at March 31, 2019 As at April 1, 2018

Debt to Equity Ratio (in times)

129,181.01

88,692.55

1.46

98,843.03

75,750.85

1.30

The following table combines comparable information about:

- fair value hierarchy levels of financial assets and financial liabilities for which fair value was disclosed

Set out below, is a comparison by class of the carrying amounts and fair value of the Company's financial instruments, other than those with

carrying amounts that are reasonable approximations of fair values:

- classes of financial instruments based on their nature and characteristics

- the carrying amounts of financial instruments

- fair values of financial instruments (except financial instruments when carrying amount approximates their fair value); and

(Rs. in Lakh)

Particulars

Debt

Total Equity

47,449.12

36,713.46

1.29

Total

To achieve this overall objective, the Company's capital management, amongst other things, aims to ensure that it meets financial covenants

attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in financial covenants would permit the

lender to call loans and borrowings immediately. Under the terms of the significant borrowing facilities, the Company has complied with the

covenants throughout the reporting period.


Accounting classifications and fair values


Other bank balances






The company manages its capital to ensure that the company would be able to continue as going concern while maximizing the return to

stakeholders through the optimization of the debt and equity balance

For the purpose of the company's capital management, capital includes issued capital and other equity reserves.

Financial assets

Loans

Investments

Total

Trade payables

Debt securities



Level 1FVTPL Total

(Rs. in Lakh)

44.2. Fair Value

44. Financial instruments

44.1. Capital management

The Company maintains an actively managed capital base to cover risks inherent in the business and is meeting the capital adequacy

requirements of National Housing Bank (NHB). The adequacy of the Company’s capital is monitored using, among other measures, the

regulations issued by NHB. The Company has complied with the applicable capital requirements over the reported period.

- 5,739.92

5,739.92

-

-

- 20,544.63

20,544.63

-

-

- 169,106.07

169,106.07

-

-

2,008.24 25,250.00 27,258.24 2,008.24 -

- 141.20 141.20 - - -

- 36,129.00 36,129.00 - - -

- 93,052.01

93,052.01

-

-

-

- 8,229.00

8,229.00

-

-

-

- 137,551.20

137,551.20

-

-

-

- 2,288.20

2,288.20

-

-

2,008.24 222,928.82 224,937.06 2,008.24 -

-

2,008.24

652.22 - 652.22 - 652.22 -

-

-

-2,008.24

652.22

-

-

-

-

-

-

-

-

-

-

-

Total


Other bank balances






Financial assets

Loans

Investments

Total

Trade payables

Debt securities



Level 1FVTPL Total

(Rs. in Lakh)

- 12,794.62 12,794.62 - - -

- 30,522.00 30,522.00 - - -

- 133,652.17 133,652.17 - - -

8,038.20 250.00

8,288.20

8,038.20

-

-

8,038.20

- 283.85

283.85

-

-

-

- 88.43

88.43

-

-

-

- 41,891.30 41,891.30 - - -

- 56,951.73 56,951.73 - - -

- 11,093.43 11,093.43 - - -

- 110,024.89 110,024.89 - - -

8,038.20 177,502.64 185,540.84 8,038.20 - - 8,038.20

49.76 - 49.76 - 49.76 - 49.76


Total


Other bank balances






Financial assets

Loans

Investments

Total

Trade payables

Debt securities



Level 1FVTPL Total

(Rs. in Lakh)

As at April 1, 2018

- 20,521.85 20,521.85 - - - -

- 21.00

21.00

-

-

-

-

- 74,373.15 74,373.15

-

-

-

-

- -

-

-

-

-

-

- 169.34 169.34 - - - -

- 95,085.34 95,085.34 - - - -

- 65.39 65.39 - - - -

- 12,500.00 12,500.00 - - - -

- 34,949.12 34,949.12

- - - -

- 10,684.43 10,684.43

-

-

-

-

- 58,198.94 58,198.94

-

-

-

-

-

-

-

-

-

-

-

-

-



44.3 Financial risk management

Risk management framework

a. All loans are floating interest bearing thus, amortised costs equals their fair value

The Company has exposure to the following risks arising from financial instruments:

Credit risk ;

Operational risk ;

Liquidity risk ; and

Market risk (including interest rate risk)

Risk Management is an integral part of the Company's business strategy with a focus on building risk management culture across the

organization. The Risk Management oversight structure includes Committees of the Board and Senior Management Committees. Risk

Management Framework which lays down guidelines for Risk identification, assessment and monitoring as an on-going process that is supported

by a robust risk reporting framework. It entails the establishment of robust systems and processes within the Risk Management Framework to

mitigate risks effectively. Risk Management at the Company covers Credit Risk, Market Risk, Operational Risk, Fraud Risk and other risks, such

as compliance risk, reputation risk and other risks.

The Company’s Board of Directors has overall responsibility for the establishment and oversight of the risk management framework. The Board of

Directors has constituted several committees, including the Audit Committee, the Asset Liability Management Committee, Risk Management

Committee and defined their role for monitoring the risk management policies of the Company.

Risk Management systems have been evaluated in detail and are discussed at every Board meeting by the Risk Committee outside of Board

meeting. Detail review of Risk MIS, Portfolio quality reports, collection MIS, Data analytics report and various other analytics and risk matrix are

the cornerstones of Vastu's Risk Management which has been certified as best in class and indicated by performance.

The Risk management framework adopted is enabled by the risk-oriented Company level culture characterized by:

1. The rigour and discipline required in managing the portfolio and transactional risk are embedded in the Vastu culture with a consensus that risk

management is everyone’s responsibility.

2. Staff members across all verticals appreciate it and actively partake in ensuring that risk management remains strong, even as the Company

makes incremental strides in its business growth.

3. An iterative process of identifying and evaluating risks, setting risk strategies, and monitoring results are within the oversight by Senior

Management & Board of Directors, via Risk Management Committee.

c. Asset held for sale - Real estate properties are valued on the basis of a well progressed sale process with price quotes from real estate valuers.

Note: Fair value is determined by discounting the contractual cashflows using weighted average rate of variable rate borrowing.

b. For financial assets and liabilities measured at amortised cost other than as mentioned in (a) above, the Company considers that the carrying

amounts recognised in the financial statements approximate their fair values except as under:

(Rs. in Lakh)

Fixed rate debt securities March 31, 2019March 31, 2020 March 31, 2019 April 1, 2018April 1, 2018 March 31,2020


Debt securities & borrowings 48,874.32 54,219.87 25,068.48 55,492.70 48,819.20 25,218.26



i) Credit risk

Credit Approval Authority

Credit Risk Assessment methodology for retail Loans

As a part of the risk management framework, the Company has well-defined metrics for delegation of authorities for standard approvals and

deviation approvals. The sanctioning authorities delegated to individual staff members, based on defined norms of the Company on the staff

members' experience, position and knowledge of the business.

The Company follows a bureau led approach besides of right customers, the launch of new markets with high delinquencies. The Company

has a dedicated team to develop a robust technology platform to digitize processes, risk management and analytics. It enables the sales

officer to input customer records online, digitize customer documents, record customer discussions, and check the credit score real-time. The

system backed by data science, analytics along with a physical on-ground model where every customer met by a Vastu employee and

personal credit decision done has enabled the team to pursue leads with a higher probability of sanctions while rejecting weak applications

upfront and reducing incidents of frauds and misrepresentations.

Credit risk refers to the risk of the inability of the borrower to repay the loan availed due to any circumstance. In any lending operation, credit

risk remains on the top of all risks to be managed well. Therefore, managing credit risk in the business has remained a priority. The credit risk

management framework that hasbeen put together by Vastu constitutes a robust alignment of the following:

Well-constructed detailed manuals guiding the teams on the company policies and processes which are approved by the Board backed by

technology, analytics and decision science. The documents articulate in detail the various products and programs that can be offered to the

customers, with clearly defined norms for all the credit parameters across all product variants and programs.

State-of-the-art technology platform built In-house to support the capture of data, information and other details required for decision making.

The technology application is available to the users on their mobile phones for use. Every staff member, when they meet a customer for

collection of any data, information or document, the mobile application facilitates the capture of the same. Vastu is the first Company to

implement an entirely paperless loan approval and disbursal process.

Structured and standardized credit approving process, which includes a well-established procedure of comprehensive credit appraisal

across all the markets Company operates.

Data science know-how supporting the underwriting process, wherein a well-curated data scoring model, produces an application-level

score, defining the probability of default for each loan at the time of approval. This score supports the credit decision process at each loan

level, even as the qualitative factors of each loan are appraised in detail by the team.

The Company measures, monitors, and manages credit risk at an individual borrower level and at the group exposure level for other

borrowers. Actual creditexposures, credit limits and asset quality are regularly monitored and analyzed at various levels.

The carrying amount of financial assets represents the maximum credit exposure. The group’s concentrations of risk are managed based

on Loan to value (LTV) segregation as well as geographical spread. LTV calculated by the gross amount of the loan to the value of the

collateral at origination. Average Loan to Value for Vastu is at 38%, and only 13% of the portfolio has LTV > 70%. Vastu has a well-balanced

portfolio across all operating states and does not contribute to > 16- 17% in any of the states. Vastu portfolio is highly granular, with

majority business categories contributing less than 3%, representing diverse elements in the supply chain that deal in goods which are

domestic consumption-led, focus on daily needs, are standalone businesses that are mostly B2B models, have a loyalcustomer base, and

have a resilient business.

Exposure to Credit Risk and Concentration



The Company caters to primarily from low, middle and high income - salaried and self-employed - individuals in Tier 2/ 3/ 4 markets. The

founder team, the Board, management has focused on prudent underwriting practices, 100% in-house fulfilment, 100% retail book, Stable

higher credit-rated customer (>63% of customers with a CIBIL score of more than 700 and good Bureau vintage), a higher proportion of

self-constructed properties to manage asset quality and local economy focussed business lines. Along with the intense focus on Self

Occupied Self construction and resale properties (77% of the book) ensures Vastu not exposed to the risk of financing under construction

apartment by Tier II, III builders.

The Company's credit officers evaluate credit proposals based on active credit policies as on the date of approval. A structured and

standardized credit approval process includes customer selection criteria, comprehensive credit risk assessment and cash flow analysis,

which encompasses an analysis of relevant quantitative and qualitative information to ascertain the creditworthiness of a potential

customer. The criteria also include factors such as the borrower’s income & obligations, the loan-to-value ratio, Fixed obligation to income

ratio and demographic parameters subject to regulatory guidelines. Any deviations are approved at the designated levels. The various

process controls such as KYC checks, credit bureau report analysis are undertaken. Company's staff performs comprehensive due

diligence process, including visits to customer's business and residence premises. The completeness of customer documentation, loan

documentation, creation of security and compliance with regulatory guidelines are reviewed. The retail loans are fully secured with

immovable properties and have full recourse against the borrower. The Company has an equitable mortgage over the collateral

immovable properties and works in compliance with the individual State laws.

The Company has a comprehensive portfolio monitoring process under which there is a monthly review of portfolio asset quality and

efficiency of its collection processes. The portfolio monitoring process engages all the members of senior leadership in studying the

behaviour of various portfolio segments. These reviews are done in the monthly Risk Management Committee meetings. Based on these

reviews, well-informed, data-driven decision are taken in giving the future direction to the policies of the Company. The collection

efficiency review focusses on formulating and implementing location-based collection strategies. In this manner, Company analyses the

portfolio performance of each product segment regularly, and use these as inputs in revising the product programs, target market

definitions and credit assessment criteria to meet the twin objectives of combining volume growth and maintenance of asset quality.

As a part of the RMC meetings, the Company also reviews various other process adherences for retail borrowers, to ensure that the terms

of sanctions and disbursements have been met. The technology platform of the Company has appropriate mechanisms to carve out and

publish exception at granular, segmental levels that help in ensuring a well-structured watch on process adherence.

The Company has a central monitoring unit that on an on-going basis, conducts a thorough review and audit of the quality of the credit

appraisal and documentation that has been done by the different teams across locations. This process ensures that any gaps noticed in

the location level processing of the loans are immediately identified, and corrective action is taken. There is also an internal auditor who

independently reviews adherence to policies and processes, carries out an internal audit and briefs the Audit Committee and the Board

periodically

The Company’s current credit risk grading framework comprises the following categories:

Risk Management and Portfolio Review

Basis for recognising expected credit lossesCategory

Stage 1

Stage 2

Stage 3



Outstanding for more than 90 days



Category


Loan 2,032.19 192.45 1,839.74

Loan 574.40 126.37 448.03


credit risk


(Rs. in Lakh)


Net Carrying

Amount

Expected

Credit Loss

Gross Carrying

Amount

Assets category

168,433.26 1,010.60 167,422.66Total

Category

Category

Stage 1 – High quality assets

Stage 1 – High quality assets

Loan

Loan

132,706.13

74,111.76

567.26

552.41

132,138.86

73,559.35

Loan

Loan

777.76

282.79

74.64

27.14

703.12

255.65

Loan

Loan

118.67

-

26.11

-

92.56

-


credit risk


credit risk



(Rs. in Lakh)

(Rs. in Lakh)


As at April 1, 2018

Net Carrying

Amount

Net Carrying

Amount

Expected

Credit Loss

Expected

Credit Loss

Gross Carrying

Amount

Gross Carrying

Amount

Assets category

Assets category

133,602.56

74,394.55

668.01

579.55

132,934.54

73,815.00

Total

Total

The key elements in calculation of ECL are as follows:

PD - The Probability of Default is an estimate of the likelihood of default over a given time horizon. A default may only happen at a specific time

over the assessed period if the facility has not been previously derecognised and is still in the portfolio. The PD has been determined

based on the historical behaviour of the book & roll rates for retail and comparative financial instruments of peer group companies.

EAD – The estimated credit exposure at point of default

The table below shows the credit quality and the exposure to credit risk based on the year-end stage classification. The amounts presented are

gross of impairment allowances.

LGD -The Loss Given Default is an estimate of the loss arising in the case where a default occurs at a given time. It is based on the difference

between the contractual cash flows due and those that the lender would expect to receive, including from the realisation of any

collateral. It is usually expressed as a percentage of the EAD. The LGD is determined based on valuation of collaterals and other

relevant factors



(Rs. in Lakh)

(Rs. in Lakh)

(Rs. in Lakh)

(Rs. in Lakh)

Stage 2

Stage 2

Stage 2

Stage 2

Stage 1

Stage 1

Stage 1

Stage 1

Stage 3

Stage 3

Stage 3

Stage 3

Total

Total

Total

Total

FY 2019-20

FY 2018-19

FY 2019-20

FY 2018-19

Gross carrying amount opening balance 132,706.13 777.76 118.67 133,602.56



Transfers to Stage 1 (2,521.54) - - (2,521.54)


1,841.73

-

1,841.73


-

679.81

679.81

-

-

-

-


(0.10)

-

(0.24)

Gross carrying amount closing balance 165,826.67 2,032.19 574.40 168,433.26

Changes to contractual cash flows due to modifications not

resulting in derecognition

Gross carrying amount opening balance 74,111.76 282.79 - 74,394.55



Transfers to Stage 1 (833.13)

-

-

(833.13)


675.38

-

675.38


-

157.74

157.74

-

-

-

-


(20.86)

(32.39)

(53.75)

Gross carrying amount closing balance 132,706.13 777.76 118.67 133,602.56

Changes to contractual cash flows due to modifications not resulting in derecognition

567.26

552.41

74.64

27.14

26.11

-

668.01

579.55

New assets originated or purchased

New assets originated or purchased

147.65

19.28

-

-

-

-

147.65

19.28

Assets derecognised or repaid (excluding write offs)

Assets derecognised or repaid (excluding write offs)

(21.38)

(4.22)

(56.60)

(15.31)

(49.30)

(1.47)

(127.27)

(21.01)

Transfers to Stage 1


(1.76)

(0.21)

-

-

-

-

(1.76)

(0.21)



-

-

174.42

64.82

-

-

174.42

64.82



-

-

-

-

149.56

34.70

149.56

34.70

Amounts written off

Amounts written off

(0.00)

(0.00)

(0.01)

(2.00)

-

(7.13)

(0.01)

(9.13)

691.78

567.26

192.45

74.64

126.37

26.11

1,010.60

668.01

ECL allowance - closing balance

ECL allowance - closing balance



An analysis of changes in the gross carrying amount and the corresponding ECL allowances in relation to loans:



Significant estimates and judgements related to Impairment of financial assets

The impairment provisions for financial assets disclosed above are based on assumptions about the risk of default and expected loss rates. The

Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the Company’s history,

existing market conditions as well as forward-looking estimates at the end of each reporting period.

The Company’s first year full year of operation was FY 2016-17 and accordingly up to date of transition very little historical information about its own

experience of impairment is available. As on 31.03.2018, no account was above 90 days past dues, whereas as on 31.03.2019 only 9 such

accounts were there.

In such scenarios, peer group experience for the comparable financial instrument (or groups of financial instruments) used as prescribed in Ind AS.

The Company has a sound operational process framework and infrastructure, which governs and mitigates the operational risks that arise in the

business. Operational risks refer to risk of loss arising from failure of any of the internal processes, people frauds, vendor frauds, system alfunctions

or from any external events. The operations risk management framework for the Company consists of the following components:

- A sound network of professional vendors across the country to support the Company in its process of collateral evaluation. This network consists

of lawyers and valuation agencies which operate under the close supervision of the local and Head Office teams of the Company. Every security

that comes to Vastu as a part of its loan is evaluated thoroughly by the lawyers for a clear title and inspected by a valuer for determination of the

market value. These processes ensure that there is adequate security cover available to Vastu during the process of lending. The title certification

as a clear and marketable property is necessary for the Company to respond in default situations where actions under SARFAESI or any other laws

may be required.

- A comprehensive system of internal controls, wherein the performance of each unit/branch is monitored against defined thresholds. Thresholds are

defined for various operational risk areas. These thresholds are monitored regularly, which helps in identification and assessment of various

operational risks, managing and responding to specific operational incidents and mitigation through appropriate process and control enhancements.

- Fully technology-enabled to process pre and post disbursal processes and account maintenance. The home-grown mobile application used by the

front-end teams to collect data and sanction the loans is seamlessly integrated with the back-end system to provide automated feeds, effecting

smooth processing of loans with all checks and controls in place.

ii) Operational risk

Liquidity risk is the current and prospective risk arising out of an inability to meet financial commitments as they fall due, through available cash

flows or the sale of assets at fair market value. It includes both the risk of unexpected increases in the cost of funding an asset portfolio at

appropriate maturities and the risk of being unable to liquidate a position on time at a reasonable price.

The Company manages liquidity risk by maintaining sufficient cash and marketable securities and by having access to funding through an adequate

amount of committed credit lines. Given the need to fund various products, the Company maintains flexibility in funding by maintaining availability

under committed credit lines to meet obligations when due. Management regularly monitors the position of cash and cash equivalents vis-à-vis

projections. Assessment of maturity profiles of financial assets and financial liabilities, including debt financing plans and maintenance of Balance

Sheet liquidity ratios considered while reviewing the liquidity position.

The Company manages liquidity risk under our asset-liability management policy. This policy is framed as per the current regulatory guidelines and

approved by the Board of Directors. The asset-liability management policy reviewed periodically to incorporate changes as required by regulatory

stipulation or to realign the policy with changes in the economic landscape. The asset-liability committee (ALCO) of the Company formulates and

reviews strategies and provides guidance for management of liquidity risk within the framework laid out in the asset-liability management policy.

The Company has undrawn lines of credit of Rs. 51,000 lakhs, Rs. 18,800 lakhs and Rs.4,300 lakhs as of March 31, 2020, March 31, 2019 and

April 1, 2018 respectively, from its bankers for working capital requirements.

The Company has the right to draw upon these lines of credit based on its requirement and terms of draw down.

iii) Liquidity risk



(Rs. in Lakh)

(Rs. in Lakh)

1 - 3 years

1 - 3 years

0 - 1 year

0 - 1 year

Carrying amount

Carrying amount

3 - 5 years

3 - 5 years



More than 5 years

More than 5 years

March 31, 2020

March 31, 2019

The following are the details of Company’s remaining contractual maturities of financial liabilities and assets at the reporting date. The amounts

are gross and undiscounted.

Exposure to liquidity risk


a. Trade payables 145.35

145.35

-

-

-

b. Debt securities 36,129.00

5,762.30

372.01

19,994.69

10,000.00

c. Borrowings (other than debt securities) 93,052.01

23,173.60

45,177.47

17,935.63

6,765.31

d. Other financial liabilities 8,229.00

8,057.94

133.96

37.10

-

Total 137,555.35

37,139.18

45,683.43

37,967.43

16,765.31

II. Financial Assets

a. Cash and cash equivalents 5,739.92

5,739.92

-

-

-

b. Bank balances other than (a) 20,544.63

19,544.63

1,000.00

-

-

c. Loans 169,106.07

6,429.78

10,997.30

14,518.31

137,160.69

d. Investments 27,258.24

22,008.24

-

-

5,250.00

e. Other financial assets 2,288.20

975.46

628.83

483.71

200.20

Total 224,937.06 54,698.03 12,626.13 15,002.02 142,610.88


a. Trade payables 88.43

88.43

-

-

-

b. Debt securities 41,891.30

768.68

1,152.97

9,992.41

29,977.24

c. Borrowings (other than debt securities) 56,951.73

13,515.23

28,360.87

12,316.26

2,759.37

d. Other financial liabilities 11,093.43

11,093.43

-

-

-

Total 110,024.89

25,465.77

29,513.84

22,308.67

32,736.61


a. Cash and cash equivalents 12,794.62

12,794.62

-

-

-

b. Bank balances other than (a) 30,522.00

30,522.00

-

-

-

133,652.17

2,938.00

7,412.95

9,922.60

113,378.62

d. Investments 8,288.20

8,038.20

-

-

250.00

e. Other financial assets 283.85

182.60

-

101.25

-

Total 185,540.84

54,475.42

7,412.95

10,023.85

113,628.62

c. Loans



(Rs. in Lakh)

1 - 3 years0 - 1 yearCarrying amount 3 - 5 years


More than 5 yearsApril 1, 2018


a. Trade payables

b. Debt securities

c. Borrowings (other than debt securities)

d. Other financial liabilities

Total


a. Cash and cash equivalents

b. Bank balances other than (a)

c. Loans

d. Investments

e. Other financial assets

Total

65.39 65.39 - - -

12,500.00 576.92 1,538.46 384.62 10,000.00

34,949.12 6,473.83 16,471.67 11,125.95 877.66

10,684.43 10,684.43 - - -

58,198.94 17,800.58 18,010.13 11,510.57 10,877.66

20,521.85

20,521.85

-

-

-

21.00

21.00

-

-

-

74,373.15

1,817.07

4,912.89

6,537.28

61,105.91

-

-

-

-

-

169.34

78.82

-

90.52

-

95,085.34

22,438.74

4,912.89

6,627.80

61,105.91

The gross inflows disclosed in the above table represent the contractual undiscounted cash flows relating to financial liabilities held for

risk management purposes and which are not usually closed out before contractual maturity.

The Company's exposures to interest rates on financial assets and financial liabilities are detailed in the liquidity risk management section

of this note.

Exposure to interest rate risk

The Company is exposed to interest rate risk as it has assets and liabilities based on floating interest rates as well. The Company has an

approved Asset and Liability Management Policy which empowers the Asset and Liability Management Committee (ALCO) to assess the

interest rate risk run by it and provide appropriate guidelines to the Treasury to manage the risk. The ALCO reviews the interest rate risk

periodically and decides on the asset profile and the appropriate funding mix. The ALCO reviews the interest rate gap statement and the

interest rate sensitivity analysis.

iv) Market risk (interest risk)

(Rs. in Lakh)

March 31, 2020 March 31, 2019 April 1, 2018

Fair value sensitivity analysis for floating-rate instruments

The sensitivity analysis below have been determined based on exposure to the interest rates for financial instruments at the end of the reporting

period and the stipulated change taking place at the beginning of the financial year and held constant throughout the reporting period in case of

instruments that have floating rates.

If interest rates had been 100 basis points higher or lower and all other variables were constant, the Company's profit before tax would have

changed by the following:

45,544.63 41,622.00

19,772.00

168,433.26 135,003.22

75,168.26

213,977.89 176,625.22 94,940.26

54,219.87 48,874.32 25,068.48

75,163.79 50,146.67 22,538.07

Financial assets



Total




129,383.66 99,020.99 47,606.55Total



a. Capital

45. Additional information required in terms of Housing Finance Companies – Corporate Governance (National Housing Bank) Directions, 2018

(Rs. in Lakh)

Particulars 100 bps higher 100 bps lower 100 bps higher 100 bps lower 100 bps higher 100 bps lower

April 1, 2018March 31, 2019March 31, 2020

(Rs. in Lakh)

Mar-20 Mar-19Particulars

Floating rate loans 1,684.33 (1,684.33) 1,350.03 (1,350.03) 751.68 (751.68)

Floating rate borrowings (1,293.84) 1,293.84 (990.21) 990.21 (476.07) 476.07

390.50 (390.50) 359.82 (359.82) 275.62 (275.62)

65.10% 83.28%

64.21% 82.29%

0.89% 0.99%

- -

- -Amount raised by issue of perpetual debt instruments

CRAR (%)

CRAR – Tier I Capital (%)

CRAR – Tier II Capital (%)

Amount of subordinated debt raised as Tier- II Capital

b. Reserve fund under Section 29C of the NHB Act, 1987 (Rs. in Lakh)


1,752.65 627.65

1,752.65 627.65

1,951.63 1,125.00

3,704.28 1,752.65

3,704.28 1,752.65

Balance at the beginning of the year

a) Statutory Reserve u/s 29C of the National Housing Bank Act, 1987

b) Amount of special reserve u/s 36(1)(viii)of Income Tax Act, 1961 taken into account for the purposes

of Statutory Reserve under Section 29C of the NHB Act, 1987

c) Total

Less

b) Amount withdrawn from the Special Reserve u/s 36(1)(viii) of Income Tax Act, 1961 which has been

taken into account for the purpose of provision u/s 29C of the NHB Act, 1987

a) Amount appropriated from the Statutory Reserve u/s 29C of the NHB Act, 1987

Balance at the end of the year

- -

Addition / Appropriation / Withdrawal during the year

a) Amount transferred u/s 29C of the NHB Act, 1987

b) Amount of special reserve u/s 36(1)(vii) of Income Tax Act, 1961 taken into account for the purposes


- -

Add

a) Statutory Reserve u/s 29C of the National Housing Bank Act, 1987

b) Amount of special reserve u/s 36(1)(viii)of Income Tax Act, 1961 taken into account for the purposes


The special reserve created as per Section 29 C of the NHB Act, 1987, qualifies for deduction as specified u/s 36 (1) (viii) of the Income Tax

Act, 1961 and accordingly Company has been availing tax benefits for such transfers.

c) Total

- -

- -

- -



c. Investments (Rs. in Lakh)


27,250.00 8,280.00

27,250.00 8,280.00

1. Value of investments

(i) Gross value of investments

(ii) Add: Provisions made during the year

(iii) Less: Write-off / Written-bank of excess provisions during the year

(iv) Closing balance

The Company has no transactions/exposure in derivatives in the current and previous year.

The Company has no transactions/exposure in securitization by way of SPV in the current and previous year.

The Company has not sold any financial asset to securitisation / reconstruction Company for asset reconstruction in the current and previous year.

The Company has not purchased / sold non performing financial asset in the current and previous year.

d. Derivatives

e. Securitisation

1. Securitisation by way of SPV

2. Details of financial assets sold to securitisation / reconstruction Company for asset reconstruction

4. Details of non-performing financial assets purchased / sold

3. Details of assignment transactions undertaken by HFCs

(iii) Net value of investments

(a) In India

(b) Outside India

(i) Opening balance

(a) In India

(b) Outside India

(ii) Provisions for depreciation

(a) In India

(b) Outside India

2. Movement of provisions held towards depreciation on investments

(Rs. in Lakh)


823.00

1,636.39

-

-

8,738.44 -

8,738.44 -

- -(iv) Additional consideration realized in respect of accounts transferred in earlier years

(v) Aggregate gain / loss over net book value

(I) No.of accounts

(ii) Aggregate value (net of provisions) of accounts assigned

(iii) Aggregate consideration



Year ending March'20*

Year ending March '19 *

g. Exposure

1. Exposure to real estate sector

Category

(Rs. in Lakh)

(Rs. in Lakh)

Particulars

Particulars

Market Borrowings - CPNCD ICD

Market Borrowings - CP NCD ICD

Borrowings from banks& Others

Borrowings from banks

Advances

Advances

Investments

Investments

Assets

Assets

Liabilities

Liabilities

1 month 2,831.31 5,000.00 331.08 22,000.00

Over 1 month to 2 months 1,106.31 192.31 332.17 -

Over 2 months to 3 months 2,791.03 - 356.90 -

Over 3 months to 6 months 5,388.93 192.31 1,096.03 -

Over 6 months to 1 year 11,113.87 384.62 2,315.37 -

Over 1 year to 3 years 45,272.89 384.62 11,063.68 652.22

Over 3 years to 5 years 17,960.25 20,000.00 14,605.94 -

Over 5 years to 7 years 2,672.24 10,000.00 19,176.93 -

Over 7 years to 10 years 3,729.91 - 38,572.14 -

Over 10 years 363.16 - 80,583.01 5,250.00

Total 93,229.89 36,153.85 168,433.26 27,902.22

1 month 489.36 - 212.91 8,030.00

Over 1 month to 2 months 1,013.10 192.31 232.82 -

Over 2 months to 3 months 1,661.67 - 234.81 -

Over 3 months to 6 months 3,332.66 10,192.31 723.10 -

Over 6 months to 1 year 7,018.43 384.62 1,534.36 -

Over 1 year to 3 years 28,360.87 31,153.85 7,412.95 49.76

Over 3 years to 5 years 12,316.26 - 9,922.60 -

Over 5 years to 7 years 611.68 - 13,158.70 -

Over 7 years to 10 years 917.52 - 27,574.79 -

Over 10 years

*In computing the above information, certain estimates, assumption and adjustments have been made by the management.

1,376.36 - 72,595.54 250.00

Total 57,097.91 41,923.08 133,602.57 8,329.76

(Rs. in Lakh)

Mar-20 Mar-19

63,115.44 49,616.44

43,882.00

Nil

Nil

Nil

Nil

35,657.45

Nil

Nil

Nil

Nil

61,435.82 48,328.66

a. Direct exposure

(I) Residential Mortgages -

(ii) Commercial Real Estate

Lending fully secured by mortgages on residential property that is or will be occupied by the borroweror that is rented;

(iii) Investments in Mortgaged Backed Securities (MBS) and other securitised exposures -

a. Residential

b. Commercial Real Estate

Fund based and non-fund based exposures on National Housing Bank (NHB) and Housing FinanceCompanies (HFCs)

b. Indirect exposure

Lending secured by mortgages on commercial real estates (office buildings, retail space, multipurposecommercial Premises, multi-family residential buildings, multi-tenanted Commercial premises, industrialor warehouse space, hotels, land acquisition, development and construction etc.) Exposurewould also include non-fund based (NFB) limits.

- Individual housing loans up to Rs.15 lakh

- Individual housing loans above Rs.15 lakh

- Other loans

Maturity pattern of certain items of assets and liabilitiesf. Asset liability management



No Remuneration paid to Non Executive directors.

There are no material prior period items. There has been no change in accounting policies followed other than those disclosed in the financial

statement. However, Company has adopted Ind AS with transition date being April 1, 2018

Revenue is recognised in line with the policy adopted by the Company.

5. Remuneration of directors

i. Additional disclosure

1. Provisions & contingencies

6. Net Profit or Loss for the period, prior period items and changes in accounting policies

7. Revenue recognition

(Rs. in Lakh)

(Rs. in Lakh)

RatingCurrent Year

Mar-20

AgencyRating

Previous Year

Mar-19

Instrument Type

Break up of 'Provisions and contingencies' shown under the head expenditure in statementof profit and loss

CRISIL A/StableCRISIL A- Stable

IND A/StableIndia Ratings A- Stable

BWR A/PositiveBrickworks BWR A Stable

[ICRA]A/StableICRA A StableLong term Bank Loans

NCD and Bank Loans

Bank Loans

NCD and Bank Loans

In computing the above information, certain estimates, assumption and adjustments have been made by the management.

The Company has no exposure to capital market directly or indirectly in the current and previous year.

There is no financing of parent company products.

The Company has not exceeded the single borrower limit and group borrower limit as prescribed by NHB.

The Company has not financed any unsecured advances against intangible securities such as rights, licenses, authority etc as collateral security.

The Company has not obtained registration from other financial sector regulators

Refer Note 41

A penalty of Rs. Nil (PY Rs. 5,000/-) was levied by National Housing Bank ("NHB") for Non compliance with the provisions of Housing Finance

Companies - Corporate Governance Direction, 2016.

2. Exposure to capital market

3. Details of financing of parent company products

4. Details of single borrower limit (SGL) / group borrower limit (GBL) exceeded by the HFC

5. Unsecured advances

1. Registration obtained from other financial sector regulators

3. Related party transactions

4. Rating assigned by credit rating agencies and migration of rating during the year

2. Disclosure of penalties imposed by NHB and other regulators

h. Miscellaneous

- -

2,343.20 1,682.61

76.05 19.65

296.52 419.18

1,000.00 -

1. Provisions for depreciation on Investment

2. Provision made towards Income tax

3. Provision towards NPA

4. Provision for Standard Assets

5. Other Provision and Contingencies (with details)



There has been no draw down from reserves during the year ended March 31, 2020 (P.Y. Nil)

*The total outstanding amount mean principal + accrued interest + other charges pertaining to loans without netting off.

2. Draw down from reserves

3. Concentration of public deposits, advances, exposures and NPAs

a. Concentration of public deposits - Not applicable

b. Concentration of loans & advances

c. Concentration of all exposure (including off-balance sheet exposure)

(Rs. in Lakh)

(Rs. in Lakh)

Mar-20

Mar-20

Mar-19

Mar-19

Particulars

Particulars

1,378.82

1,393.07

1,295.48

1,295.48

0.82%

0.73%

0.97%

0.97%

Total loans & advances to twenty largest borrowers

Total exposure to twenty largest borrowers / customers

Percentage of loans & advances to twenty largest borrowers to total advances of the HFC

Percentage of exposures to twenty largest borrowers / customers to total exposure of the HFC on

borrowers / customers

(Rs. in Lakh)

Break up of Loan & Advances and Provisions thereon

Previous YearCurrent Year Current Year Previous Year

Non housingHousing

Total

Standard Assets

a) Total Outstanding Amount 108,812.57 91,045.65 61,073.59 43,841.79

b) Provisions made 308.46 574.45 215.04 327.54

Sub-Standard Assets

a) Total Outstanding Amount 245.73 82.46 335.36 37.47


Doubtful Assets – Category-I

a) Total Outstanding Amount - - - -

b) Provisions made - - - -

Doubtful Assets – Category-II



Doubtful Assets – Category-III



Loss Assets



a) Total Outstanding Amount 109,058.30 91,128.11 61,408.95 43,879.26


d. Concentration of NPAs (Rs. in Lakh)


254.16 118.67 Total Exposure to top ten NPA accounts



4. Movement of NPAs

5. Overseas asset

6. Off - balance sheet SPVs sponsored (which are required to be consolidated as per accounting norms)

j. Disclosure of Complaints

1. Customers Complaints

(Rs. in Lakh)


(Rs. in Lakh)

SectorPercentage of NPAs to Total

Advances in that sector

e. Sector Wise NPA

A. Housing loans:

1. Individuals

2. Builders / project loans

3. Corporates

4. Others (specify)

B. Non - housing loans:

2. Builders / project loans

3. Corporates

4. Others (specify)

1. Individuals

-

-

-

-

-

-

0.23%

0.54%

0.29% 0.07%

118.67 -

1,649.31 402.36

1,193.58 283.69

574.40 118.67

99.02 -

1,376.10 310.40

996.42 211.38

478.70 99.02

19.65 -

273.21 91.96

197.15 72.32

95.70 19.65

(I) Net NPAs to Net Advances (%)

(II) Movement of NPAs (Gross)

a) Opening balance

b) Additions during the year

c) Reductions during the year

d) Closing balance

(III) Movement of Net NPAs

a) Opening balance

b) Additions during the year

c) Reductions during the year

d) Closing balance

(IV) Movement of provisions for NPAs (excluding provisions on standard assets)

a) Opening balance

b) Provisions made during the year

c) Write-off/write-back of excess provisions

d) Closing balance

The Company does not have any overseas assets as at year ended March 31, 2020 and March 31, 2019.

The Company does not have any off balance sheet Special Purpose Vehicle (SPV) which are required to be consolidated as per accounting norms.

(Rs. in Lakh)

Current Year Previous YearParticulars

1 -

128 70

129 69

- 1

a) No. of complaints pending at the beginning of the year

b) No. of complaints received during the year

c) No. of complaints redressed during the year

d) No. of complaints pending at the end of the year



(Rs. in Lakh)

(Rs. in Lakh)

Asset Classificationas per RBI Norms

Asset Classificationas per RBI Norms

Assetclassification asper Ind AS 109

Assetclassification asper Ind AS 109

Gross CarryingAmount as per

Ind AS

Gross CarryingAmount as per

Ind AS

Loss Allowances(Provisions) as

required under IndAS 109

Loss Allowances(Provisions) as

required under IndAS 109

Net CarryingAmount

Net CarryingAmount

Provisionsrequired as perIRACP norms

Provisionsrequired as perIRACP norms

Difference betweenInd AS 109

provisions andIRACP norms

Difference betweenInd AS 109

provisions andIRACP norms

46. a. Disclosure in line with RBI's circular DOR (NBFC).CC.PD.No.109/22.10.106/2019-20 dated March 13, 2020 for the

year ended March 31, 2020.

Disclosure in line with RBI's circular DOR (NBFC).CC.PD.No.109/22.10.106/2019-20 dated March 13, 2020 for the year ended

March 31, 2019.

(1)

(1)

(2)

(2)

(3)

(3)

(4)

(4)

(5)=(3)-(4)

(5)=(3)-(4)

(6)

(6)

(7) = (4)-(6)

(7) = (4)-(6)

Performing Assets

Stage 1 165,826.67

691.78

165,134.89

519.87

Stage 2 2,032.19

192.45

1,839.74

3.64

Subtotal 167,858.86

884.23

166,974.63

523.50

Non-Performing

Assets (NPA)

Substandard Stage 3 574.40

126.37

448.03

95.70

Doubtful -up to 1 year Stage 3 -

-

-

-

1 to 3 years Stage 3 -

-

-

-

More than 3 years Stage 3 -

-

-

-

Subtotal for doubtful -

-

-

-

Loss Asset Stage 3 -

-

-

-

Subtotal for NPA 574.40

126.37

448.03

95.70

Stage 1 165,826.67

691.78

165,134.89

519.87

Stage 2 2,032.19

192.45

1,839.74

3.64

Stage 3 574.40 126.37 448.03 95.70

Total 168,433.26

1,010.60

167,422.66

619.20

Standard

Total

171.91

188.82

360.73

30.67

-

-

-

-

-

30.67

171.91

188.82

30.67

391.40

Performing Assets

Stage 1 132,706.13 567.26 132,138.86 424.20

Stage 2 777.76 74.64 703.12 2.78

Subtotal 133,483.89 641.91 132,841.98 426.98

Non-Performing

Assets (NPA)

Substandard Stage 3 118.67 26.11 92.56 19.65

Doubtful - up to 1 year Stage 3 - - - -

1 to 3 years Stage 3 - - - -

More than 3 years Stage 3 - - - -

Subtotal for doubtful - - - -

Loss Asset Stage 3 -

-

-

-

Subtotal for NPA 118.67

26.11

92.56

19.65

Stage 1 132,706.13

567.26

132,138.86

424.20

Stage 2 777.76

74.64

703.12

2.78

Stage 3 118.67

26.11

92.56

19.65

Total 133,602.56

668.01

132,934.54

446.63

Total

Standard143.06

71.86

214.92

6.46

-

-

-

-

-

6.46

143.06

71.86

6.46

221.38



(Rs in Lakh)

Mar-20 Mar-19

- -

Particulars

Expenditure in Foreign Currency

(Rs. in Lakh)

Particulars Amount

b. Disclosure in line with RBI's circular DOR DOR.No.BP.BC.63/21.04.048/2019-20 dated April 17, 2020 for the year ended

March 31, 2020.

I. Respective amounts in SMA/overdue categories, where the moratorium/deferment was extended, in terms of

paragraph 2 and 3;

ii. Respective amount where asset classification benefits is extended.

iii. Provisions made during the Q4FY2020 and Q1FY2021 in terms of paragraph 5;

iv. Provisions adjusted during the respective accounting periods against slippages and the residual provisions in

terms of paragraph 6.

The Company holds provisions as of March 31, 2020, against the potential impact of COVID-19 based on the information available at this

point. The provisions held by the Company are more than the RBI prescribed norms.

In accordance to guidelines on COVID 19 - regulatory package issued by RBI dated March 27, 2020, and April 17, 2020, the Company may

grant a moratorium of three months. Payment of all instalments as applicable, falling due between March 1, 2020, and May 31, 2020, to all

eligible borrowers classified as Standard, even if overdue, as on February 29, 2020. For all such accounts where the moratorium is granted,

the asset classification shall remain standstill during the moratorium period (i.e. the number of days past-due shall exclude the moratorium

period for asset classification).

47. The spread of COVID-19 across the globe and India has contributed to a significant decline and volatility in economic activity and financial

markets. The outbreak of the virus has already been declared a global pandemic by the World Health Organization (WHO) on March 11,

2020. On March 24, 2020, the Indian government announced a strict 21-day lockdown which extended by 19 days. The extent to which the

COVID-19 pandemic impacts the Company’s results depends on future developments. The developments are highly uncertain, including,

among other things, any new information concerning the severity of the said pandemic and any action to contain its spread or mitigate its

impact whether government-mandated or elected by the Company.

2,059.30

260.23

103.28

-

48. Expenditure in foreign currency

49. Balance grouped under loans and advances in certain cases are subject to confirmation and reconciliation. Impact of the same, if any, shall

be accounted as and when determined, which are not expected to be material.

In the opinion of the management, the loans and advances are approximately of the value stated, if realized, paid in ordinary course of

business. The provision for all known liabilities are adequate and are not in excess of amount considered reasonably necessary.

50. 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 other than as disclosed. No interest has been paid/ is payable by the Company during/for the year to these

‘Suppliers’ other than as disclosed. 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.

51. Previous year figures have been re-grouped / re-arranged and re-classified wherever necessary, to conform to current year's classification.



(DIN00147182) (DIN06597041) (DIN02032154 )



sd/-



Vikas Kumar

Partner



Place : Mumbai



sd/- sd/- sd/-

sd/- sd/-


Registered & Corporate Office

Unit 203 & 204, 2nd Floor, A Wing, Navbharat Estate,

Zakaria Bunder Road, Sewri (West), Mumbai - 400 015

[email protected]

1800220001 www.vastuhfc.com

Madhya Pradesh

Maharashtra

Karnataka

Uttarakhand

Andhra Pradesh

Uttar Pradesh

Telangana

Gujarat

Rajasthan

Tamil Nadu

Delhi

Haryana

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00 Annual Report FY-2020 - Vastu Housing Finance

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