About India Shelter Finance Corporation Ltd

India Shelter Finance Corporation Ltd was incorporated under the name 'Satyaprakash Housing Finance India Limited' on October 26, 1998, as a Public Limited Company, pursuant to a Certificate of Incorporation dated October 26, 1998. A Certificate for Commencement of Business dated November 18, 1998, was granted to 'Satyaprakash Housing Finance India Limited' by the Registrar of Companies, Madhya Pradesh at Gwalior. Pursuant to Change of the Name of Company from 'Satyaprakash Housing Finance India Limited' to 'India Shelter Finance Corporation Limited', as approved by Shareholders, Company was issued a fresh Certificate of Incorporation dated July 8, 2010, by the Registrar of Companies, Madhya Pradesh and Chhattisgarh at Gwalior. A Certificate of Registration dated September 14, 2010 was granted to Company by the National Housing Bank (NHB) to carry on the business of a housing finance institution without accepting public deposits. The Company is a retail housing finance company with a distribution network of 183 branches in the States of Rajasthan, Maharashtra, Madhya Pradesh, Karnataka and Gujarat and a scalable technology infrastructure. The Company has presence in states which cover nearly 94% of the affordable housing finance market in India. The Company leverage technology and analytics across the operations and throughout the customer life cycle including onboarding, underwriting, asset quality monitoring, collections and customer services. The Company has introduced a paperless approach to customer acquisition and onboarding, with mobile solutions in different stages of lending process. On these solutions, the iSales application integrates, streamlines and optimizes customer acquisition process whereas IndiaShelter iCredit application facilitates underwriting. Overall sales and productivity is enhanced while maintaining customer relationships combining digital solutions with personal interaction. The Company introduced IndiaShelter iServe application service, designed to address concerns and queries from the existing customers online. Apart from these, the Company has an integrated customer relationship management and loan management system set up on a cloud-based platform, providing with connectivity and access to real time information for customers. The IT systems allows them to increase productivity, reduce turnaround times and transaction costs. It has adopted the key aspects of lending operations including customer acquisition, underwriting, collateral valuation, legal assessment, and collections. This allows the customers to directly connect with our customers, minimize turnaround times, increases customer retention, and mitigate the risk of fraudulent activities. The underwriting processes are customized to access creditworthiness of the low and middle-income segment and as a result, have developed data centric and iterative processes. The Company has different and separate verticals to underwrite customer's creditworthiness, collateral legal verification, and collateral valuation which work in parallel and are independent to each other. In 2009, the Company was taken over by the Individual Promoter. In 2010, the Company started operations by opening the first branch in Rajasthan. In 2016, the Company opened first branch in Southern India in Karnataka State through expansion of geographical presence. In 2023, the Asset Under Management (AUM) crossed Rs 4,359.4 Crores. The Company is planning issuing Equity Shares aggregating upto Rs 1800 Crores, comprising Rs 1000 Crores Equity Shares through Fresh Issue and Rs 800 Crores through Offer for Sale.

India Shelter Finance Corporation Ltd Chairman Speech

India Shelter Finance Corporation Ltd Company History

India Shelter Finance Corporation Ltd was incorporated under the name 'Satyaprakash Housing Finance India Limited' on October 26, 1998, as a Public Limited Company, pursuant to a Certificate of Incorporation dated October 26, 1998. A Certificate for Commencement of Business dated November 18, 1998, was granted to 'Satyaprakash Housing Finance India Limited' by the Registrar of Companies, Madhya Pradesh at Gwalior. Pursuant to Change of the Name of Company from 'Satyaprakash Housing Finance India Limited' to 'India Shelter Finance Corporation Limited', as approved by Shareholders, Company was issued a fresh Certificate of Incorporation dated July 8, 2010, by the Registrar of Companies, Madhya Pradesh and Chhattisgarh at Gwalior. A Certificate of Registration dated September 14, 2010 was granted to Company by the National Housing Bank (NHB) to carry on the business of a housing finance institution without accepting public deposits. The Company is a retail housing finance company with a distribution network of 183 branches in the States of Rajasthan, Maharashtra, Madhya Pradesh, Karnataka and Gujarat and a scalable technology infrastructure. The Company has presence in states which cover nearly 94% of the affordable housing finance market in India. The Company leverage technology and analytics across the operations and throughout the customer life cycle including onboarding, underwriting, asset quality monitoring, collections and customer services. The Company has introduced a paperless approach to customer acquisition and onboarding, with mobile solutions in different stages of lending process. On these solutions, the iSales application integrates, streamlines and optimizes customer acquisition process whereas IndiaShelter iCredit application facilitates underwriting. Overall sales and productivity is enhanced while maintaining customer relationships combining digital solutions with personal interaction. The Company introduced IndiaShelter iServe application service, designed to address concerns and queries from the existing customers online. Apart from these, the Company has an integrated customer relationship management and loan management system set up on a cloud-based platform, providing with connectivity and access to real time information for customers. The IT systems allows them to increase productivity, reduce turnaround times and transaction costs. It has adopted the key aspects of lending operations including customer acquisition, underwriting, collateral valuation, legal assessment, and collections. This allows the customers to directly connect with our customers, minimize turnaround times, increases customer retention, and mitigate the risk of fraudulent activities. The underwriting processes are customized to access creditworthiness of the low and middle-income segment and as a result, have developed data centric and iterative processes. The Company has different and separate verticals to underwrite customer's creditworthiness, collateral legal verification, and collateral valuation which work in parallel and are independent to each other. In 2009, the Company was taken over by the Individual Promoter. In 2010, the Company started operations by opening the first branch in Rajasthan. In 2016, the Company opened first branch in Southern India in Karnataka State through expansion of geographical presence. In 2023, the Asset Under Management (AUM) crossed Rs 4,359.4 Crores. The Company is planning issuing Equity Shares aggregating upto Rs 1800 Crores, comprising Rs 1000 Crores Equity Shares through Fresh Issue and Rs 800 Crores through Offer for Sale.

India Shelter Finance Corporation Ltd Directors Reports

To,

The Members of,

India Shelter Finance Corporation Limited

6th Floor, Plot -15, Institutional Area, Sector – 44, Gurgaon-122002, Haryana

Your Directors have pleasure in presenting the 25th Annual Report on the Business and Operations of the Company and the Audited Standalone and Consolidated Financial Statements for the Financial Year ended on 31 March, 2023.

Financial Results

A brief highlight of the Standalone & Consolidated Financial Performance of your Company is presented as below:

Rs. in lakhs

Dividend

With a view to devote your Company's resources towards its growth activities, your Directors deem it proper to preserve its resources and hence, do not propose any dividend for the financial year ended 31 March, 2023.

Change in Share Capital

During the year Company had allotted:

• Allotted 25,000 equity shares pursuant to the provisions of the Employee Stock Option Plan 2012, by Resolution by Circulation approved by the Board of Directors dated 26 April, 2022.

• Issued and allotted 1,35,000 equity shares having a face value of Rs. 10/- each at a premium of Rs. 427/- each on a partly paid-up basis through private placement (preferential allotment) approved by the meeting of members in the Extra-Ordinary General Meeting held dated 16 November, 2022 and allotment made by Resolution by Circulation approved by the Board of Directors on 19 November, 2022.

• Allotted 5,997 equity shares pursuant to the provisions of the Employee Stock Option Plan 2017 and 2021, by Resolution by Circulation approved by the Board of Directors dated 22 December, 2022.

The shareholding pattern of the Company on 31 March, 2023 is as follows:

Brief description of the Company's working

Your Company is incorporated to carry on the business of Housing Finance by way of providing facilities in the form of term loans to individuals, firms, companies, cooperative societies and other institutions for construction, alteration, repair or for outright purchase of all types of accommodation and loan against property.

Material Changes and Commitments, if any, Affecting the Financial Position of the Company which have Occurred between the End of the Financial Year of the Company to which the Financial Statements relate and the Date of the Report.

No material change and commitment occurred between the end of the FY 2022-23 of the Company and this report date except as disclosed below that may affect the financial position of the Company.

Change in Nature of Business

During the financial year under review, there has been no change in the nature of business of the Company.

Details of Companies which have become its Holding, Subsidiary, Associate or Joint Venture Companies:

Holding Company

WestBridge Crossover Fund, LLC , together with its wholly-owned subsidiary Aravali Investment Holdings is the holding Company.

Subsidiary Company

During the previous year, the Company ‘India Shelter Capital Finance Limited' which was incorporated on dated 24 March, 2022 to carry on the business of short, medium and long-term financing is the Subsidiary Company subject to regulatory approvals.

Statement containing salient features of the financial statements of the subsidiary, pursuant to first proviso to sub – section (3) of Section 129 read with rule 5 of Companies (Accounts) Rules, 2014 in Form AOC – 1, which forms part of this Report as Annexure 01.

Associate or joint venture companies

As per the provisions of the Act, the Company did not have any Joint Ventures/Associates during the financial year under review.

Particulars of loans, guarantees or investments to wholly-owned subsidiary

The Company had made investments of Rs. 1,200 lakhs in the equity share capital of the subsidiary company.

For details refer to Note No. 40 in relation to related party transactions disclosed as per notes to the Standalone Financial Statements.

Net Worth

As of 31 March, 2023, the net worth of your Company stood at Rs. 1,241 Crore compared to Rs. 1,076 Crore on 31 March, 2022 registering an increase of 15%.

Performance of the Company

Disbursement

During the year, your Company disbursed Rs. 1,964 Crore compared to Rs. 1,295 Crore in the previous year.

Assets Under Management (AUM)

Your Company had assets under management of Rs. 4,359 Crore compared to Rs. 3,073 Crore in the previous year and recorded a growth of 42% over the previous year.

Resource Mobilisation

Your Company's overall borrowing is guided a by Borrowing and Investment Policy duly approved by the Board of Directors.

Your Company manages its cash flows through prudent Asset-Liability Management and takes the various measures, which includes the diversification of funding sources, tenure optimisation, and prudent borrowing timing to maintain its borrowing costs at an optimum level. Your Company secured financing from a variety of sources, including term loans, proceeds from the issuance of NCDs and refinancing from the NHB. As of 31 March, 2023, the Company's total borrowings stood at Rs. 2,989 Crore. Your Company remains committed to maintaining a vigorous diversified resource profile.

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.

Borrowings from Other Sources

During the year, your Company raised Rs. 2,080 Crore from various sources such as term loans, ECB, NHB refinance, PTC transactions and Direct Assignments. Further, your Company has undrawn sanction of Rs. 70 Crore as on 31 March, 2023 from NHB.

Your Company being a Non-Deposit taking Housing Finance Company, was resolved by the Board of Directors in their meeting held on 12 May, 2022, that it shall not accept public deposits and has not accepted any public deposits within the meaning of Section 73 to 76 of the Companies Act, 2013 read with the Companies [Acceptance of Deposits] Rules, 2014 and amendments made thereunder. The Company has borrowed in compliance with the Section 180 of the Companies Act, 2013 and applicable provisions of the Companies Act, 2013.

Listing with Stock Exchange:

Your Company is up to date in the payment of annual listing fees to the Bombay Stock Exchange (BSE), on which its debentures are listed.

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 any interest amount that was not claimed by the investors or not paid by the Company after the date on which the same became due for payment.

The disclosures under the RBI Master Directions 2021 on NBFC and HFC dated 17 February, 2021 is as below:

(i) The total number of non-convertible debentures that have not been claimed by the Investors or not paid by the housing finance Company after the date on which the non-convertible debentures became due for redemption: Nil (ii) The total amount in respect of such debentures remaining unclaimed or unpaid beyond the date referred to in clause (1) as aforesaid: Nil

Debenture Trustee

Debenture Trust Agreement(s) were executed in favour of Catalyst Trusteeship Services Limited for NCDs issued on a private placement basis. Following are details of Catalyst Trusteeship Limited.

Catalyst Trusteeship Limited

CIN: U74999PN1997PLC110262

GDA House, First Floor, Plot No. 85 S. No. 94 & 95, Bhusari Colony (Right), Kothrud Pune MH 411038 IN

Credit Rating

During the financial year under review , the credit rating of your Company was upgraded to ICRA A+ (Stable) and CARE A+ (Stable):

Reserves

In terms of Section 29C of the National Housing Bank Act, 1987, every Housing Finance Company is required to transfer at least 20% of its net profit every year to a Statutory Reserve account before any dividend is declared. Accordingly, your Company has transferred an amount of Rs. 31 Crore (previous year Rs. 26 Crore) to ‘Statutory Reserve' and it stands at Rs. 101 Crore as on 31 March, 2023.

Profitability

During the year, your Company earned total revenue of Rs. 606 Crore compared to Rs. 460 Crore of revenue earned last year, registering an increase of 31.85%. Your Company earned a profit after tax of Rs. 155 Crore compared to Rs. 128 Crore earned last year, registering an increase of 20.94%.

Robustness of Assets

Your Company has adhered to the Policy on Provisioning for NPAs and write off approved by its Board of Directors and as per the Expected Credit Loss (ECL) Methodology. The provision computed as per the ECL methodology is higher than the provision computed in accordance with the Income Recognition and Asset Classification (IRAC) Norms specified by the RBI.

Recovery Mechanism

Your Company is a "Financial Institution" under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002, and it initiated proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 against defaulting borrowers for recovery of dues. Your Company has also filed cases under Section 138 of the Negotiable Instruments Act, 1881.

Your Company is disbursing 100% loans through electronic mode. The Company is working to maximise collection through electronic means.

Capital Adequacy Ratio

NHB Housing Finance Companies (NHB) Directions, 2010, require your Company to maintain a minimum capital adequacy of 15% on a standalone basis. Your Company's capital adequacy ratio (CRAR) stood at 52.66% (comprising Tier I capital of 51.93% and Tier II capital of 0.73%) as of 31 March, 2023, compared to 55.87% (comprising Tier I capital of 55.35% and Tier II capital of 0.52%) as of 31 March, 2022.

Branch Expansion

During the year, your Company added 53 additional branches, bringing the total number of offices to 185 across 15 states as of 31 March, 2023. This increase in branches has contributed to the better performance of your Company. Your Company now operates in the states of Rajasthan, Maharashtra, Gujarat, Madhya Pradesh, Haryana, Chhattisgarh, Uttar Pradesh, Uttaranchal, Punjab, Tamil Nadu, Karnataka, Telangana, Andhra Pradesh, Delhi and Orissa . Your Company has undertaken several measures to improve its visibility through a focus on marketing and advertising.

Conservation of Energy, Technology Absorption

In compliance with Section 134 of the Companies Act, 2013 and Rule 8(3) of the Companies (Accounts) Rules, 2014, your Company did not carry out any activity relating to conservation of energy, or technology absorption during the year. Hence, the requirement of disclosure of particulars relating to conservation of energy and technology absorption in terms of Section 134 of the Companies Act, 2013 and the rules framed thereunder are not applicable.

Foreign Exchange Earnings and Outgo

The Foreign Exchange earned and the Foreign Exchange outgo during the year are as below:

During the year, the Company raised USD 10 million in foreign currency loan exposure in the form of a 15-year External Commercial Borrowing (‘ECB') loan. The Company has undertaken cross currency swaps to hedge the foreign currency risk of the ECB cash flows. All the derivative instruments are purely for hedging the underlying ECB transactions as per applicable RBI guidelines and not for any speculative purpose.

Regulatory Guidelines

During the year under review, the RBI/NHB has issued various Notifications, Circulars and Guidelines to Housing Finance Companies. The Circulars and the Notifications issued by RBI/NHB are also placed before the Board of Directors at regular intervals to update the Board members on their compliance with the same. Your Company has adhered to all the Circulars, Notifications and Guidelines issued by RBI/ NHB from time to time.

Your Company has been complying with the Master Directions, guidelines and circulars issued by the Reserve Bank of India, the National Housing Bank, the Companies Act, 2013, the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, to the extent applicable to the Company, the Foreign Exchange Management Act, 1999, the Labour Laws, the Income Tax Act, the Goods and Services Tax Act and other applicable Acts from time to time.

Your Company has also complied with the provisions of Secretarial Standard 1 (SS-1) and Secretarial Standard 2 (SS-2) issued by the Institute of Company Secretaries of India relating to ‘Meetings of the Board of Directors' and ‘General Meetings', respectively.

Environmental, Social & Governance (ESG) Practices

Your Company has always stayed strong in its commitment to positively impact the environment, its customers, employees, and the community at large. Our core values have guided our ESG practices, which seek to drive growth and empower communities through our corporate decision-making processes.

Environmental

We look at natural capital and the communities we operate in, as integral elements of our business. That is why we work to strike a balance between the economic, social and environmental aspects of our decisions. Our environmental initiatives form part of this Annual Report.

Social

We maintain a strong relationship with society and the community and empower them with financial inclusion and other developmental initiatives. We strive towards the progress of society, through our Corporate Social Responsibility (CSR) policy. We have a CSR policy that lays down the action plan for defining how CSR is to be implemented and is in compliance with the Schedule VII of the Companies Act, 2013.

The Board constituted the Corporate Social Responsibility Committee in terms of the provisions of Section 135 of the Act and is chaired by a Non-Executive Director. At present, the Corporate Social Responsibility Committee comprises of 3 Directors as its members including two of whom are being Independent Directors. The Corporate Social Responsibility Committee of your Company as of 31 March, 2023 comprises three members, including one Independent Directors as below:

The CSR Committee met once in the year under consideration on 29 July, 2022.

The attendance of the members at the Corporate Social Responsibility Committee Meetings during the year is as below:

*The Corporate Social Responsibility Committee was reconstituted on 08 February, 2023 and Mr. Thomson Thomas became a member of the Corporate Social Responsibility Committee. Further, Mr. Sunil Ramakant Bhumralkar ceased to be a member of the Corporate Social Responsibility Committee w.e.f. 30 November, 2022.

The disclosures as per Rule 9 of the Companies (Corporate Social Responsibility Policy) Rules, 2014, are attached as Annexure 02. Your Company has developed and implemented the Corporate Social Responsibility Policy, which is placed on the website at https://www.indiashelter.in/policies-reports.php and is attached as Annexure 03.

Corporate Governance

We are committed to maintaining the highest levels of ethical standards in integrity, corporate governance and regulatory compliance. These parameters form the bedrock of our corporate governance policy. We have proactively upheld good governance practices and are constantly striving to enhance our standards. Our Board of Directors is responsible for setting the course for and evaluating the bank's performance with regards to corporate governance. The parameters of evaluation include compliance, internal control, risk management, information and cybersecurity, customer service, and social & environmental responsibility.

Your Company has been complying with the Standards of corporate governance required under the Companies Act, 2013 and other applicable acts. Your Board has discharged the duties and responsibilities as required under the applicable statute(s), including the Companies Act.

Your Company has a Board of Directors, which has a defined schedule of matters reserved for its consideration and decision, apart from legally required matters. The Board of Directors of the Company comprises of eight Directors, consisting of one Chairman & Non-Executive Director, one Managing Director & CEO, two Independent Directors (including one Woman Director), and four Non-Executive Nominee Directors, as of 31 March, 2023, who bring in a wide range of skills and experience to the Board.

The Board of Directors of the Company as of 31 March, 2023 is:

The following changes took place in the composition of the Board of Directors during the FY 2022-23:

The Board of Directors of the Company in their meeting held on 30 July, 2022, appointed Mr. Thomson Thomas as an Additional (Independent & Non-Executive) Director with effect from 02 August, 2022 and shareholders confirmed his appointment as an Independent Director in their meeting held on 29 September, 2022.

The Board of Directors of the Company vide Circular resolution dated 30 November, 2022 accepted the resignation of Mr. Sunil Ramakant Bhumralkar as an (Independent & Non-Executive Director) the Company with effect from 30 November, 2022.

COMMITTEES OF THE BOARD

The Company has the following Eight (8) Board-level Committees that have been constituted in compliance with the requirements of the business and relevant provisions of applicable laws and statutes:

1. Audit Committee

2. Nomination and Remuneration Committee

3. Corporate Social Responsibility Committee

4. Enterprise Risk Management Committee

5. Asset Liability Management Committee

6. IT Strategy Committee

7. Wilful Defaulter Identification & Review Committee and

8. Customer Service & Grievance Redressal Committee

The recommendations made by the above Committees were accepted by the Board.

The details with respect to the composition, terms of reference, number of Meetings held, etc. of these Committees are given in the Corporate Governance Report, which forms part of this Report as Annexure 04.

Key Managerial Personnel (KMP):

During the year under review, the Key Managerial Personnel of the Company are as follows: a. Mr. Rupinder Singh –Managing Director & CEO b. Mr. Ashish Gupta- Chief Financial Officer c. Ms. Mukti Chaplot – Company Secretary

Company's Policy on Director's Appointments, Remuneration & Evaluation

The Board on the recommendation of the Nomination & Remuneration Committee adopted a ‘Nomination & Remuneration Policy', which, inter alia, lays down the criteria for identifying the persons who are qualified to be appointed as Directors and/or Senior Management Personnel of the Company, along with the criteria for the determination of remuneration of Directors, KMPs and other employees and their evaluation and includes other matters, as prescribed under the provisions of Section 178 of the Companies Act, 2013. The RBI, vide its notification dated 22 October, 2021, prescribed the ‘‘Scale Based Regulation (SBR): A Revised Regulatory Framework for NBFCs dated 22 October, 2021' (‘SBR Framework') which is applicable to the Non-Banking Financial Companies including Housing Finance Companies (collectively referred to as ‘NBFCs'). As per the SBR Framework, NBFCs in the Middle Layer and NBFCs in the Upper Layer are required to comply with the ‘Compensation Guidelines' prescribed by the RBI. Thereafter, the RBI prescribed the ‘Guidelines on Compensation of Key Managerial Personnel (KMP) and Senior Management in NBFCs' (‘RBI Compensation Guidelines'), vide notification dated 29 April, 2022, which has prescribed certain additional requirements with respect to the fixing of compensation and remuneration of KMPs and SMPs of NBFCs in the Middle Layer and NBFCs in the Upper Layer. In pursuance of the same the Board of Directors of your Company adopted the revised policy. The ‘Nomination & Remuneration Policy' of the Company is placed on the website of the Company at https://www.indiashelter.in/policies-reports.php. The Remuneration paid to the Directors is in line with the remuneration policy of the Company.

Director & Key Management Personnel

Retirement by Rotation and Re-appointment

As per Section 152 of the Companies Act, 2013, Mr. Sudhin Bhagwandas Choksey (DIN: 00036085) and Mr. Shailesh Jayantilal Mehta (DIN: 01633893) Nominee Directors of the Company, will retire by rotation at the ensuing Annual General Meeting and, being eligible, offer themselves for reappointment.

Resignation/Retirement of Independent Director

Pursuant to Section 149 (6), Section 152 and Section 161 of the Companies Act, 2013 and other applicable provisions (including any modification or re-enactment thereof), if any, of the Companies Act, 2013, the Board of Directors via a circular resolution dated 30 November, 2022, took the note of the resignation of Mr. Sunil Ramakant Bhumralkar from the position of Independent Director of the Company with effect from the closure of business hours as of 30 November, 2022. The same was placed before the Nomination and Remuneration Committee Meeting and Board Meeting dated 08 February, 2023.

Appointment of Independent Director

Pursuant to the provisions of Section 149, 150, 152 read with schedule IV and Section 161(1) read with Companies (Appointment and Qualification of Directors) Rules, 2014, and other applicable provisions, sections, rules of the Companies Act, 2013, on the recommendation by the members of Nomination and Remuneration Committee in their meeting held on 30 July, 2022, the Board of Directors in their meeting held on 30 July, 2022 appointed Mr. Thomson Thomas (DIN: 09691435) as an Additional Director (Non-Executive & Independent) (DIN: 09691435) on the Board of the Company w.e.f. 02 August, 2022 and was confirmed as Independent Director in the Extra-Ordinary General Meeting held on 29 September, 2022.

Declaration by Independent Director

Your Company has received the declarations by the Independent Director(s) that they:

• meet the criteria of independence as provided in sub-section (6) of Section 149 of the Companies Act, 2013 has been obtained; • have registered to the Indian Institute of Corporate Affairs (IICA) as specified in sub-rule (2) of Rule 6 of the Companies (Appointment and Qualifications of Directors) Rules, 2014.

Disqualifications of Directors, if any:

None of the Directors on the Board of the Company are disqualified pursuant to the provisions of Section 164 or Schedule V Part II of the Companies Act, 2013.

Declaration of Fit & Proper Criteria

Your Company is adhering to the Fit and Proper Criteria and your Board of Directors has approved the Fit and Proper Policy, which assesses the Fit and Proper Criteria for the directors at the time of appointment and on a continuing basis, as per the criteria prescribed by the RBI.

Remuneration to Directors

During the year, the Company has not paid any remuneration to Non-executive Directors except as disclosed in the Financial Statements forming part of this Report. Sitting fees have been paid to the Independent Directors as per the provisions of the Companies Act, 2013.

Annual Evaluation

Your Company follows the best practices to ensure that the Board of Directors understands their duties and adopts good governance practices. The Nomination & Remuneration Committee carried out the evaluation of each Director's performance and the Board additionally carried out a formal evaluation of its own performance, the Statutory Board Committees and all the Individual Directors without the presence of the Director concerned who is being evaluated. During the year, Independent Directors of the Company also held separate meetings to review the performance of the Non- Independent Directors and the Board as a whole and assess the quality, quantity and timeliness of the flow of information between the Company management and the Board, which is necessary for the Board to effectively and reasonably perform their duties. Major aspects of board evaluation include who is to be evaluated, the process of evaluation, including the laying down of objectives and criteria to be adopted for evaluation of different persons, feedback to the persons being evaluated and an action plan based on the results.

Human Resources Development

Your Company has been following best human resource practices and had 2,709 employees on its payroll as of 31 March, 2023 compared to 2,200 employees as of 31 March, 2022, registering an increase of 23.14%.

Disclosures under the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act 2013, are read with rules.

The Company has zero tolerance for any action on the part of any of its officials, that falls under the ambit of ‘Sexual Harassment' at the workplace. the Company promotes and recognises the rights of women to protection from sexual harassment and the right to work with dignity. In this regard, India Shelter has instituted an Internal Complaints Committee for the redressal of sexual harassment complaints (made by the victim) and for ensuring time bound treatment of such complaints. The Internal Complaints Committee as of 31 March, 2023 comprises of the following four members out of whom 3 members are women:

An Appellate Committee is also constituted as below:

Your Company has imparted training for Sexual Harassment of Women at Workplace as part of the Induction training provided to the employees.

Pursuant to the requirements of Section 22 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act 2013 read with Rules thereunder, the Internal Complaints Committee of the Company did not receive any complaint of sexual harassment during the year under review.

Risk Management Framework

Your Company has in place a Board-constituted Risk Management Committee. The details of the Committee and its terms of reference are set out in the Corporate Governance Report that forms part of this Report. Your Company has a Board-approved Risk Management Policy wherein risks faced by the Company are identified and assessed.

Effective risk management and mitigation are critical to sustaining and growing any business. At India Shelter, we recognise the importance of identifying risks and implementing mitigation plans to reduce their impact. The Company proactively manages various business risks through mitigation strategies tailored to each risk. It constantly reviews and updates risk management policies to ensure our business is well-positioned to navigate potential risks successfully. In compliance with the clause 51 of Chapter IX- Corporate Governance of Non-Banking Financial Companies-Housing Finance Companyies (Reserve Bank) Directions, 2021, the Company has designated Mr. Sharad Pareek as Chief Risk Officer (CRO) of the Company. During the financial year under review, the Risk Management Committee reviewed the risks associated with the business of your Company, undertook a root cause analysis and monitored the efficacy of the measures taken to mitigate the same.

Vigil Mechanism & Whistle Blower Policy

Section 177 of the Companies Act, 2013 read with the rules made thereunder requires your Company to establish a vigil mechanism. Your Company has adopted a Fraud Management Policy and Whistle Blower Mechanism. The said policy has been uploaded to the website of the Company. The Company has also provided all its employees with the facility to report any suspected, alleged or actual fraud without disclosing their identity. A dedicated Email ID – Whistleblowing@indiashelter.in has been made for this purpose, which acts as a single point of contact for all the employees.

Further, no report under sub section (12) of section 143 of the Companies Act has been filed by the Statutory Auditors as prescribed under Rule 13 of the Companies (Audit and Auditors) Rules, 2014 with the Central Government, during the year or up to the date of the report.

As for the fraud on the Company, no frauds have been reported as disclosed in Note 44.31 of the financial statements.

Particulars of Employee-Related Disclosures

Your Company grants Employee Stock options, share-based benefits to eligible employees with a view to attracting and retaining the best talent, encouraging employees to align individual performance with the Company's objectives and promoting increased participation by them in the success of the Company.

The details of the ESOP plan form part of the Notes to Accounts of the Financial Statements in this Annual Report. The details as per Rule 12 (9) of the Companies (Share Capital and Debentures) Rules, 2014 are enclosed as Annexure 05.

Particulars of Contracts or Arrangements with Related Parties

The particulars of every contract or arrangement entered into by the Company with related parties referred to in sub-section (1) of Section 188 of the Companies Act, 2013 have been disclosed in Form No. AOC-2 as Annexure 06. The Company has framed a Related Party Transaction policy for the Company as per the NHB/RBI Directions. The same is enclosed as Annexure 07 to this report.

Internal Audit & Internal Controls over Financial Reporting

As per the provisions of Section 134(5)(e) of the Companies Act, 2013, the Directors have an overall responsibility for ensuring that the Company has implemented robust systems and a framework of internal financial controls to provide them with reasonable assurance regarding the adequacy and operating effectiveness of controls with regards to reporting, operational and compliance risks. Your Company has implemented sound internal control practices across all processes, units and functions. It has well- defined policies and processes for the management of its day-to-day activities.

Your Company has an Internal Audit Department that is responsible for independently evaluating the adequacy and effectiveness of all internal controls, risk management, systems and governance processes.

Significant audit observations and follow-up actions thereon are reported to the Audit Committee on a quarterly basis. The Audit Committee reviews and evaluates the adequacy and effectiveness of the Company's internal control environment and monitors the implementation of audit recommendations. The Company has implemented all the recommendations of the Audit Committee. Based on the information provided, nothing has come to the attention of the Directors to indicate that any material breakdown in the function of these controls, procedures or systems occurred during the year under review. There have been no significant changes in our internal financial controls during the year that have materially affected, or are reasonably likely to materially affect, our internal financial controls.

Your Company has an internal control system, commensurate with the size, scale and complexity of its operations. Your Company's Internal Auditors, review internal control and risk-management measures, accounting procedures, highlight areas requiring attention, and report their main findings and recommendations to the Audit Committee.

Dematerialisation of Shares & Non-Convertible Debentures

The equity shares of the Company are dematerialised by National Securities Depository Limited (NSDL) with ISIN No. INE922K01016 for fully paid-up shares and ISIN No. IN9922K01030 for partly paid-up equity shares.

Particulars of Loans, Guarantees or Investments under Section 186

As your Company is a housing finance Company, the disclosure regarding particulars of loans given, guarantees given and security provided is exempt under the provisions of Section 186(11) of the Companies Act, 2013. Thus, the provisions of Section 186, except subsection (1) of the Act, are not applicable to the Company.

Disclosure under Section 43(a)(ii) of the Act

Your Company has not issued any shares with differential rights and hence no information as per the provisions of Section 43(a)(ii) of the Act read with Rule 4(4) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished.

Disclosure under Section 67(3) of the Act

During the year under review, there were no instances of non-exercising of voting rights in respect of shares purchased directly by employees under a scheme; hence, no information pursuant to Section 67(3) of the Act read with Rule 16(4) of the Companies (Share Capital and Debentures) Rules, 2014 is furnished.

Disclosure under Rule 8 of the Companies (Accounts) Rules, 2014

During the year under review, the Company neither made had any application against it self nor had any proceedings are pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016). Further there were no instances of one-time settlements for any loans taken from banks or financial institutions.

Maintenance of Cost Records

The Central Government has not specified the maintenance of cost records under Section 148(1) of the Act, for the services of the Company.

Investor Education and Protection Fund

The Company has not transferred any amount to the Investor Education and Protection Fund during the year under review, since nothing remained unpaid or unclaimed during the current year or during the period of the past 7 years.

Website Disclosures

Your Company has made its disclosures on its website, www.indiashelter.in. All the regulatory disclosures, compliances, public notices and policies have been regularly updated. Our customers can also reach us through our toll-free helpline number, contact details of the Principal Officer, and submit any complaints or grievances, if any, etc.

Extract of the annual return

Pursuant to Section 92(3) read with Section 134(3)(a) of the Companies Act, 2013 and Rule 12 of the Companies (Management and Administration) Rules, 2014, copies of the Annual Return of the Company prepared in accordance with Section 92(1) of the Companies Act, 2013 read with Rule 11 of the Companies (Management and Administration) Rules, 2014 are placed on the website of the Company at https://www.indiashelter.in/policies-reports.php.

Management Discussion and Analysis

The Management Discussion and Analysis form part of this report, which gives a detailed information on the state of affairs of the operations of the Company.

Directors' Responsibility Statement

In terms of sub-section (5) of Section 134 of the Companies Act, 2013, we, the Directors of your Company, state in respect of FY 2022-23 that:

In the preparation of the annual accounts, the applicable accounting standards have been followed along with a proper explanation relating to material departures;

a. 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;

b. The directors have taken proper and sufficient care for 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; c. The directors have prepared the annual accounts on a going-concern basis;

d. Company has laid down internal controls that are adequate and are operating effectively; and

e. The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Auditors

Statutory Auditors

As per provisions of Section 139, 142 and other applicable provisions of the Companies Act, 2013, if any, read with the Companies (Audit & Auditors) Rules, 2014, and RBI guidelines dated 27 April, 2021 and other relevant provisions including any statutory enactment or modification thereof, appointment of M/s. T R Chadha & Co LLP, Chartered Accountants, having Registration number 006711N/ N500028 was approved by the Audit Committee by Circular resolution bearing No 01/2021-22 dated 01 September, 2021 and the Board of Directors by Circular resolution bearing No 15/2021-22 dated 01 September, 2021 subject to the approval of shareholders of the Company and subsequently by the shareholders of the Company in the Annual General Meeting held on 29 September, 2021 as Statutory Auditors of India Shelter to hold the office from the conclusion of 23rd Annual General Meeting till the conclusion of 26th Annual General Meeting.

Auditors' Report

The Statutory Auditors' Report is unqualified. The Statutory Auditors have not made any adverse comments on the workings of the Company. The Standalone and Consolidated Financials, and notes to the Financial Statements, read with the Auditors' Report, are self-explanatory and do not require further clarification.

Details in respect of frauds under sub-section (12) of Section 143 of the Act

There were no instances of frauds reported by the Company's auditors.

Secretarial Auditors and Secretarial Audit Report

In accordance with Section 204 of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, Mr. Jitender Singh (Membership No.: A33610 & CP: 12463) was appointed as Secretarial Auditor to conduct the Secretarial Audit of the Company for the year FY 2022-23 by the Board Of Directors in their meeting held on 10 February, 2023. the Company has provided all assistance and facilities to the Secretarial Auditor for conducting their audit. The Report of the Secretarial Auditor for 2022-23 is annexed to this report as Annexure 08. The report is self-explanatory and there were no qualifications in the Auditor's Report.

Significant and Material Orders Passed by the Regulators/Courts/Tribunals Impacting the Going Concern Status and the Company's Pperations in Future

There were no orders passed by the Regulators/Courts/Tribunals that would impact the going-concern status of the Company and its future operations.

Appreciation

Your Company acknowledges the role of all its key stakeholders - shareholders, borrowers, key partners and lenders for their continued support to the Company. The Directors place on record their gratitude for the support of various regulatory authorities including NHB, RBI, SEBI, IRDA, MCA, the Registrar of Companies, the Financial Intelligence Unit (India), the Foreign Investment Promotion Board, the Bombay Stock Exchange and the depositories. While recognising the challenging work environment, your Directors place on record their appreciation for the hard work and dedication of all the employees of your Company.

Acknowledgement

An acknowledgement to all with whose help, cooperation and hard work the Company is able to achieve the results. For and on behalf of the Board of Directors.

India Shelter Finance Corporation Ltd Company Background

India Shelter Finance Corporation Ltd Company Management

India Shelter Finance Corporation Ltd Listing Information

India Shelter Finance Corporation Ltd Finished Product