DIRECTORS' REPORT To, The Shareholders, India Home Loan Limited Your directors have pleasure in presenting the 25th Annual Report of the Company together with the Audited Statement of Accounts for the year ended 31st March, 2015 OPERATIONS: Your directors are pleased to inform you that the Revenue of the company is Rs. 250.92 Lakhs, showing an increase of 20.05%, as compared to Rs. 209.02 Lakhs in the previous year. Profit before Tax is Rs. 81.77 Lacs as compared to Rs. 81.10 Lacs in previous year THE YEAR UNDER REVIEW The Company is registered with National Housing Bank and Governed by NHB Norms. During the year the NPA of the company has come down from Rs. 57 Lakhs to Rs. 41 Lakhs. The Company disbursed 53 loan applications amounting to Rs. 8,12,81,281/-. The total portfolio as on 31st March 2015 stands at Rs.19.80 Cr. PREFERENTAIL ALLOTMENT OF CONVERTIBLE WARRANTS The Company allotted 40,50,000 convertible warrants to the Promoters & Non-Promoter Groups at a price of Rs.45 per warrant in February 2013. The Company received Rs.4,55,62,500/- towards the initial subscription for the convertible warrants. Due to market conditions, the company received balance subscription only to the extent of 4,30,000 convertible warrants and accordingly these warrants were converted to 4,30,000 Equity shares in August 2014. Pursuant to the ICDR REGULATION 2009, the balance 36,20,000 convertible warrants were forfeited since the balance 75 % subscription was not paid by the due date. So, the 25% initial subscription money amounting to Rs.4,07,25,000/- on the said warrants received in February 2013 were forfeited. The Company received the trading permission on 9th March 2015 from BSE. DIVIDEND In view of the carry forward losses incurred in the earlier years and pursuant to section 123 of the Companies Act, 2013, the board regrets its inability to declare any dividend for the year under review. PARTICULARS OF LOANS, GURANTEE OR INVESTMENTS Loans, Guarantees and Investments covered under section 186 of the Companies Act, 2013 form part of the notes to the financial statements provided in this Annual Report. TRANSFER TO RESERVE The Company proposes to carry Rs. 57,50,898/- to the General Reserve of the Company. FIXED DEPOSITS As on 31.03.2015, the company held no deposit in any form from anyone. There was no deposit held by the company as on 31.03.2015, which was overdue or unclaimed by the depositors. For the present the broad of directors have resolved not to accept any deposits from public. CORPORATE GOVERNANCE As per the directions of SEBI and the Bombay Stock Exchange Ltd., the code of corporate governance become applicable to the company w.e.f. 2002-03 and accordingly the company has been adhering to the directions and guidelines as required. The report on the code of corporate governance is annexed separately in this Annual report. DIRECTORS The Companies Act, 2013, provides for the appointment of independent directors. Sub-section (10) of Section 149 of the Companies Act, 2013 provides that independent directors shall hold office for a term of up to five consecutive years on the board of a company; and shall be eligible for re-appointment on passing a special resolution by the shareholders of the Company. Further, according to Sub-section (11) of Section 149, no independent director shall be eligible for appointment for more than two consecutive terms of five years. Sub-section (13) states that the provisions of retirement by rotation as defined in Sub-sections (6) and (7) of Section 152 of the Act shall not apply to such independent directors. The Nomination and remuneration committee on 28th June 2014 has confirmed and ratified the appointment of Mr. Ramesh Mishra and Mr. Paresh Khandelwal as Independent Director of the company for a period of five years starting from 28th June, 2014. On the suggestion of the Nomination and remuneration committee the Board seek the ratification of the same from the members. They are not liable to retire by rotation. The Nomination and remuneration committee at their meeting held on 30th March 2015 has recommended the appointment of Miss Aditi Bhatt as the Independent Woman Director of the company with effect from 30.5. 2015 and for period of 5-years and her appointment will be confirmed by the members at the Annual general meeting to be held on 25th July, 2015 as required under Section 149(10). She is not liable to retire by rotation Mr. Ashok Patel appointed Mrs. Parul Patel as his Alternate Director in the Board as per section 161 of the Companies Act, 2013. Mr. Rishabh Siroya and Mr. Subhash Patel are directors liable to retire by rotation and being eligible offered themselves for re-appointment The Independent Director is the Chairman of the Company. BOARD EVALUATION Clause 49 of the Listing Agreement mandates that the Board shall monitor and review the Board evaluation framework. The Companies Act, 2013 states that a formal annual evaluation needs to be made by the Board of its own performance and that of its committees and individual directors. Schedule IV of the Companies Act, 2013 states that the performance evaluation of independent directors shall be done by the entire Board of Directors, excluding the director being evaluated. The evaluation of all the directors and the Board as a whole was conducted based on the criteria and framework adopted by the Board. The evaluation process has been explained in the Corporate governance report section in this Annual Report. The Board approved the evaluation results as collated by the nomination and remuneration committee. NUMBER OF MEETINGS OF THE BOARD The Board met 9 times during the financial year, the details of which are given in the corporate governance report that forms part of this Annual Report. The intervening gap between any two meetings was within the period prescribed by the Companies Act, 2013. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION The current policy is to have an appropriate mix of executive and independent directors to maintain the independence of the Board and separate its functions of governance and management. As on March 31, 2015, the Board consists of 10 members. Out of which one is the Managing Director, four Independent Directors. The Woman Director is also one of the Independent Directors. The policy of the Company on directors' appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under Sub section (3) of Section 178 of the Companies Act, 2013, adopted by the Board, are stated in this Board report. We affirm that the remuneration paid to the directors is as per the terms laid out in the nomination and remuneration policy of the Company. TRAINING OF INDEPENDENT DIRECTORS Every new independent director of the Board attended an orientation program. To familiarize the new inductees with the strategy, operations and functions of our Company, the executive directors / senior managerial personnel make presentations to the inductees about the Company's strategy, operations, product and service offerings, markets, software delivery, organization structure, finance, human resources, technology, quality, facilities and risk management. The Company has organized the following workshops for the benefit of Directors and Independent Directors: (a) a program on how to review, verify and study the financial reports; (b) a program on Corporate Governance; (c) provisions under the Companies Act, 2013; and (d) SEBI Insider Trading Regulation, 2015. Further, at the time of appointment of an independent director, the Company issues a formal letter of appointment outlining his/her role, functions, duties and responsibilities as a director. The format of the letter of appointment is available on our website, www.indiahomeloan.co.in COMMITTEES OF THE BOARD Currently, the Board has seven committees: 1. Audit Committee, 2. Nomination and Remuneration Committee, 3. Corporate Social Responsibility Committee, 4. Stake Holders Relationship Committee, 5. Loan & Investment Committee, 6. Asset Liability Management Committee and 7. Risk and Strategy Committee. A detailed note on the Board and its committees is provided under the Corporate governance report section in this Annual Report. DECLARATION BY INDEPENDENT DIRECTORS The Company has received necessary declaration from each independent director under Section 149(7) of the Companies Act, 2013, that he/she meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. INDEPENDENT DIRECTORS DECLARATIONS In the opinion of the Board, the independent directors are, individually, person of integrity and possess relevant expertise and experience. The Independent Directors under section 149(6) of the Companies Act, 2013 declared that: 1. They are not a promoter of the Company or its holding, subsidiary or associate company; 2. They are not directors in the company, its holding, subsidiary or associate company. 3. The independent Directors have/had no pecuniary relationship with company, its holding, subsidiary or associate company, or their promoters, or directors, during the two immediately preceding financial years or during the current financial year; 4. None of the relatives of the Independent Directors have or had pecuniary relationship or transaction with the company, its holding, subsidiary or associate company, or their promoters, or directors, amounting to two per cent. or more of its gross turnover or total income or fifty lakh rupees or such higher amount as may be prescribed, whichever is lower, during the two immediately preceding financial years or during the current financial year; 5. Independent Director, neither himself nor any of his relatives— (i) holds or has held the position of a key managerial personnel or is or has been employee of the company or its holding, subsidiary or associate company in any of the three financial years immediately preceding the financial year in which he is proposed to be appointed; (ii) is or has been an employee or proprietor or a partner, in any of the three financial years immediately preceding the financial year in which he is proposed to be appointed, of— (A) a firm of auditors or company secretaries in practice or cost auditors of the company or its holding, subsidiary or associate company; or (B) any legal or a consulting firm that has or had any transaction with the company, its holding, subsidiary or associate company amounting to ten per cent. or more of the gross turnover of such firm; (iii) holds together with his relatives two per cent or more of the total voting power of the company; or (iv) is a Chief Executive or director, by whatever name called, of any nonprofit organization that receives twenty-five per cent. or more of its receipts from the company, any of its promoters, directors or its holding, subsidiary or associate company or that holds two per cent or more of the total voting power of the company; or 6. Independent director possesses such qualifications as may by required by the Board. 7. The Company & The Independent Directors shall abide by the provisions specified in schedule IV of the Companies Act, 2013. NOMINATION AND REMUNERATION COMMITTEE AND STAKEHOLDERS RELATIONSHIP COMMITTEE Pursuant to section 178 of the Companies Act, 2013, the Company has set up a Nomination and Remuneration and stakeholders Relationship Committee under the Chairmanship of the Independent Director Mr. Ramesh Mishra, Mr. Bharat Merchant and Miss. Aditi Bhatt. The Gist of the Policy of the said committee: 1. For Appointment of Independent Director (ID): a. Any person who is between the age of 25 years and below 75 years eligible to become Independent Director; b. He has to fulfill the requirements as per section 149 of the Companies Act, 1956 read with clause 49 of the Listing Agreement; c. Adhere the code of conduct as per Schedule IV to the Companies Act, 2013; d. Strictly adhere the Insider Trading Regulation of the SEBI and Insider Trading policy of the Company; e. The Independent Director has adequate knowledge and reasonably able to contribute to the growth of the Company and stakeholders; f. Independent Director are able to devote time for the Board and other meetings of the company; g. Entitled for sitting fees and Reasonable conveyance to attend the meetings; and h. Able to review the policy, participate in the meeting with all the stake holders of the company, Annual Meeting. PERFORMANCE OF THE BOARD AND COMMITTEE During the year under review, the performance of the Board & Committee and Individual Director(s) based on the below parameters satisfactory: 1. Most of the Directors attended the Board meeting ; 2. The remunerations paid to executive Directors strictly as per the company and industry policy. The Independent Directors only received sitting fees. 3. The Independent Directors contributed a lot based on their experience and knowledge and Independent views. 4. The Credit Policy, Loan Policy and compliances were reviewed; 5. Development of Risk Management Policy The Company is Registered governed by National Housing Bank and the company has fully complied with the NHB requirements. RISK MANAGEMENT POLICY: India Home Loan Ltd is exposed to risks such as liquidity risk, Interest rate risk, Credit risk, increase in NPA and Operational risk that are inherent in the housing finance business. At the moment we are giving loans on fixed interest rates thus mitigating the interest rate risks. The Credit risks are minimized by following an established credit appraisal system, prescribed exposure limits, periodic review of the portfolio, etc, Our Company operates in the mid segment and large chunk of borrowers are having steady income flows giving comfort for the lending team. By strictly following the regulatory norms, the company effectively manages the risks and has a focused Risk Management monitoring in place. DIRECTORS' RESPONSIBILITY STATEMENT AS REQUIRED UNDER SECTION 134(3) (c) OF THE COMPANIES ACT, 2013 The financial statements are prepared in accordance with the Generally Accepted Accounting Principles (GAAP) under the historical cost convention on accrual basis. GAAP comprises mandatory accounting standards as prescribed under Section 133 of the Companies Act, 2013 ('the Act'), read with Rule 7 of the Companies (Accounts) Rules, 2014, the provisions of the Act (to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). There are no material departures from prescribed accounting standards in the adoption of these standards. The directors hereby confirm that: 1. In preparation of the annual accounts for the financial year ended March 31, 2015, the applicable accounting standards have been followed. 2. The directors have selected such accounting policies and applied them consistently and 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 at the end of the financial year and of the profit and loss of the Company for that period. 3. The directors have taken proper and sufficient care towards the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. 4. The directors have prepared the annual accounts on a going concern basis. 5. The directors have laid down internal financial controls, which are adequate and are operating effectively. 6. The directors have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively. AUDITORS: STATUTORY AUDITORS At the Annual General Meeting held on June 14, 2014, G.P. Kapadia & Co., Chartered Accountants, were appointed as statutory auditors of the Company to hold office till the conclusion of the Annual General Meeting to be held in the calendar year 2017. In terms of the first proviso to Section 139 of the Companies Act, 2013, the appointment of the auditors shall be placed for ratification at every Annual General Meeting. Accordingly, the appointment of G.P. Kapadia & Co, Chartered Accountants, as statutory auditors of the Company, is placed for ratification by the shareholders. In this regard, the Company has received a certificate from the auditors to the effect that if they are reappointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013. SECRETARIAL AUDITOR M/s. Satyajit Mishra & Co. - Practicing Company Secretaries, was appointed to conduct the secretarial audit of the Company for the financial year 2014-15, as required under Section 204 of the Companies Act, 2013 and Rules thereunder. The secretarial audit report for FY 2014-15 forms part of the Annual Report and part of the Board's report as Annexure -1. The Board has re-appointed SATYAJIT MISHRA - Practicing Company Secretaries, as secretarial auditor of the Company for the financial year 2015-16. PARTICULARS OF CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES All related party transactions that were entered into during the financial year were on arm's length basis and were in the ordinary course of the business. There are no materially significant related party transactions made by the company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the company at large. SUBSIDIARY COMPANIES: The Company does not have any subsidiary. CODE OF CONDUCT: The Board of Directors has approved a Code of Conduct which is applicable to the Members of the Board and all employees in the course of day to day business operations of the company. The Company believes in "Zero Tolerance" against bribery, corruption and unethical dealings / behaviors of any form and the Board has laid down the directives to counter such acts. The Code has been posted on the Company's website www.indiahomeloan.co.in The Code lays down the standard procedure of business conduct which is expected to be followed by the Directors and the designated employees in their business dealings and in particular on matters relating to integrity in the work place, in business practices and in dealing with stakeholders. The Code gives guidance through examples on the expected behavior from an employee in a given situation and the reporting structure All the Board Members and the Senior Management personnel have confirmed compliance with the Code. All Management Staff were given appropriate training in this regard. VIGIL MECHANISM / WHISTLE BLOWER POLICY: The Company has a vigil mechanism named Fraud and Risk Management Policy to deal with instance of fraud and mismanagement, if any, in staying true to our values of Strength, Performance and Passion and in line with our vision of being one of the most respected companies in India, the Company is committed to the high standards of Corporate Governance and stakeholder responsibility. The Company has a Fraud Risk and Management Policy to deal with instances of fraud and mismanagement, if any. The FRM Policy ensures that strict confidentiality is maintained whilst dealing with concerns and also that no discrimination will be meted out to any person for a genuinely raised concern. A high level Committee has been constituted which looks into the complaints raised. The Committee reports to the Audit Committee and the Board. PREVENTION OF INSIDER TRADING: The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Company's shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code. All Board of Directors and the designated employees have confirmed compliance SIGNIFICANT AND MATERIAL ORDERS There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company's operations in future. AUDITORS REPORT The Auditors have not made any qualification to the financial statement. Their reports on relevant notes on accounts are self explanatory and do not call for any comments under section 134 of the companies Act, 2013. EXTRACT OF ANNUAL RETURN In accordance with Section 134(3)(a) of the Companies Act, 2013, an extract of the annual return is as under. 1. The Paid up capital of the Company is Rs.113,700,000/- consisting of 11,370,000 equity shares of face value of Rs.10/- each. 2. The Board of Directors of the company consists of 10 Directors. Out of which 6 promoter directors namely Mr. Mahesh Pujara, Mr. Rishabh Siroya, Mr. Ashok Patel (Mrs. Parul Patel alternate Director to him), Mr. Anant Bhalotia, Mr. Subhash Patel, Mr. Mitesh Pujara and Mr. Ramesh Mishra, Mr. Bharat Merchant, Mr. Paresh Khandelwal and Miss. Aditi Bhatt are the Four Independent Directors. Mr. Mahesh Pujara working as Managing Director of the Company. 3. The Secured Debt of the company is of Rs. 5 Crore. 4. The Promoters holding consists of 7,210,539 equity shares of Rs.10/- each amounting to 63.42% as on 31.3.2015. 5. There was no un-paid dividend require to be transferred to the Investor Education and Protection Fund. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY: The Board has adopted the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the 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 disclosures. The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit function is defined in the Internal Audit Manual. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee. The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and recommendations along with corrective actions thereon are presented to Board. M/s. Muktesh Jain & Co. - Chartered Accountants is the internal Auditor of the Company INVESTOR COMPLAINTS AND COMPLIANCE All the investor complaints have been duly resolved and as on date no complaints are outstanding. HUMAN RESOURCES MANAGEMENT Your Directors would like to place on record their deep appreciation to all the employees for rendering quality services in every constituent of the company. To ensure good human resources management at the company, we focus on all aspects of the employee lifecycle. This provides a holistic experience for the employee as well. During their tenure at the Company, employees are motivated through various skill-development, engagement and volunteering programs. As per provisions 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 appended as Annexure 2 to the Board's report. As per the Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, none of the employee employed in the company throughout the financial year or part thereof in receipt of remuneration of Rs. 60 lakh or more, or employed for part of the year and in receipt of Rs. 5 lakh or more a month. Under Section 22 & 28 of the Sexual Harassment of Women at the Workplace Act, 2013, there were no complaints filed against any person or reported. CORPORATE SOCIAL RESPONSIBILITY As per the Companies Act, 2013, all companies having net worth of Rs. 500 crore or more, or turnover of Rs. 1,000 crore or more or a net profit of Rs. 5 crore or more during any financial year are required to constitute a corporate social responsibility (CSR) committee of the Board of Directors comprising three or more directors, at least one of whom should be an independent director and such Company shall spend at least 2% of the average net profits of the Company's three immediately preceding financial year. The Company presently does not meet with any of the criteria stated herein above. PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO The details of conservation of Energy, Technology Absorption are not applicable in the case of the company. The Company is into Home Loan segment and regulated by NHB (National Housing Bank). However the company took adequate steps to conserve the Energy and used the latest technology. During the year under review there were no foreign Exchange Earnings. The Foreign Exchange out go is Nil. CERTIFICATE ON CORPORATE GOVERNANCE Certificate on corporate governance as required by Clause 49 of the Listing Agreement, the Mr. Satyajit Mishra -Company Secretary in Practice has issued the certificate on corporate governance is appended as Annexure 3 to the Board's report. PAYMENT OF LISTING FEES Your company shares are listed on Bombay Stock Exchange Ltd., the listing fees for the year 2015-2016 have been paid to the stock exchange. The company has been complying with all the conditions require to be complied with in the listing agreement. ACKNOWLEDGEMENTS The Directors place on record their appreciation for co-operation and support extended by the Government, Banks, Shareholders, and Customers for their continued support extended to the Company at all times. The Directors further express their deep appreciation to all employees for commendable teamwork, high degree of professionalism and enthusiastic effort displayed by them during the year. FOR AND ON BEHALF OF THE BOARD OF DIRECTORS Sd/- MAHESH PUJARA CHAIRMAN Sd/- RISHABH SIROYA DIRECTOR Place: Mumbai Dated: 15/05/2015 |