PNB Housing Finance Ltd Directors Report.

Your Directors welcome the shareholders and take pleasure in presenting the 33rd Annual Report together with the Audited Standalone and Consolidated Financial Statements of the Company for the year ended March 31, 2021.


(Rs in crores)

March 31, 2021 March 31, 2020
Total Income 7,624.08 8,489.55
Total Expenditure 6,417.05 7,678.54
Profit Before tax 1,207.03 811.01
Less: Provision for Tax
-Current Year 413.25 389.24
-Deferred Tax (136.12) (224.47)
Profit After Tax 929.90 646.24
Other Comprehensive (20.69) (55.30)
I ncome (OCI)
Total Comprehensive Income 909.21 590.94
for the Year
Transfer to Statutory / 197.00 182.00
Special Reserves
Dividend Paid - 151.27
Dividend Distribution - 31.10
Tax Paid
Balance Carried to Balance 732.90 226.57

The standalone and the consolidated financial statements for the financial year ended March 31, 2021, forming part of this annual report, have been prepared in accordance with Ind AS notified under section 133 of the Companies Act, 2013 and other relevant provisions of the Companies Act, 2013.

During the year, the Company has earned a total income of Rs 7,624.08 crores as compared to Rs 8,489.55 crores in the previous year, recording a decline of 10.19%. Total expenses, provisions and write offs during the year were Rs 6,417.05 crores as compared to Rs 7,678.54 crores in the previous year, a decline of 16.43%.

During the year, the Company has earned Pre-provision Operating Profit of Rs 2,068.93 crores as compared to Rs 2,062.38 crores in the previous year.

During the year, the Company has earned a Profit before Tax of Rs 1,207.03 crores as compared to Rs 811.01 crores in the previous year, recording an increase of 48.83%. The Profit after Tax during the year was Rs 929.90 crores as compared to Rs 646.24 crores in the previous year, an increase of 43.89%.

As per IND AS, during the year, the Company has made Expected Credit Loss (ECL) provision (on loan assets) of Rs 778.50 crores as compared to Rs 1,171.49 crores in the previous year. The Company is carrying total ECL provision of Rs 2,544.11 crores.


The Capital Adequacy Ratio (CRAR) as on March 31, 2021, was 18.73% (comprising Tier I capital of 15.53% and Tier II capital of 3.30%). The Reserve Bank of India (RBI) has prescribed minimum CRAR of 14% of total risk weighted assets for FY 21.


It is advisable to preserve capital in these difficult times. Therefore, like last financial year, your Directors have not recommended any dividend for the year.


The Company during the year has laid out its strategy with focus upon strengthening the core, driving efficiency and accelerating growth. These are built upon core pillars viz. Management, Capital Position, Risk Management, Cost Management, Digital Drive, Retail Focussed Lending and Grow Affordable Housing "Unnati".

The Company is a housing finance company registered with NHB and is engaged in financing purchase and construction of residential houses, loan against property and loan for other related purposes. All other activities revolve around the main business.

The Company as a retail focussed housing finance company, continued to leverage its expertise in self-employed and mass housing especially in affordable housing Unnati segment, where it has developed niche in terms of distribution network, underwriting capability and services.

The first half of financial year 2021 was impacted by partial/ complete lockdown in the country. The business started picking up from quarter 3 onwards.

The Company has sanctioned loans amounting to Rs 15,301 crores in respect of 50,454 loan applications, as compared to Rs 24,503 crores in respect to 73,553 loan applications in the previous year, decline of 31% in number of loan applications received and decline of 38% in loan sanctioned amount.

During the year, the Company has disbursed loans amounting to Rs 10,445 crores as compared to Rs 18,626 crores in the previous year, decline of 44%. With retail focussed lending, during FY 21, 96% of loans disbursed were in retail segment.

Company has taken various steps such as digital sourcing, entering into co-lending arrangement with banks etc. for scaling up of business, which will continue to benefit in coming years.

PMAY subsidy

During the year, the Company disbursed subsidy under PMAY scheme in 12,412 accounts with a sanction value of Rs 2,809 crores. The total subsidy transferred in the beneficiary accounts amounted to Rs 297 crores.

Loan Book

Principal outstanding of loans as at March 31, 2021 were Rs 62,255 crores. The Assets Under Management (AUM) as at March 31, 2021 were Rs 74,469 crores. Further details of lending operations are provided in the MD&A.


During the year, the Company has raised fresh resources of Rs 29,131 crores from multiple sources. The Company also securitised Rs 789 crores in FY 21 through direct assignment route. The Company repaid short and long-term borrowings of Rs 37,405 crores.

Details of market borrowings are provided in the MD&A and notes to accounts.

The Company is in compliance with the provisions of Non-Banking Financial Company – Housing Finance Company (Reserve Bank) Directions, 2021, and erstwhile Housing Finance Companies issuance of Non-Convertible Debentures on private placement basis (NHB) Directions, 2014 and has been regular in payment of principal and interest on the Non-Convertible Debentures. As at March 31, 2021, there was no NCDs or interest thereon, remaining unclaimed or unpaid.


The Company has raised Rs 7,289 crores of fresh deposits during the year. The outstanding deposits (including inter corporate deposits) as at March 31, 2021, were Rs 17,129 crores as against Rs 16,470 crores (including inter corporate deposits) outstanding last year, registering a growth of 4%.

The Company has accepted public deposits as per Non-Banking Financial Company – Housing Finance Company (Reserve Bank) Directions, 2021, erstwhile National Housing Bank Directions, 2010 and as per the provisions of the Companies Act, 2013. The Company has paid/accrued interest on all the outstanding deposits on due dates. There has been no default on repayment of deposits or payment of interest thereon during the year.

The deposits of the Company have been rated FAA+ (Outlook Negative) by CRISIL and CARE AA+ (Outlook Stable) by CARE.

Investment in SLR

The Company has maintained its Statutory Liquid Ratio (SLR) as stipulated by Non-Banking Financial Company – Housing Finance Company (Reserve Bank) Directions, 2021. The Company is having a total SLR investments of Rs 1,941.79 crores as on March 31, 2021. The Company has classified its SLR investments as per RBI Directions.

Unclaimed Deposits and NCDs

Out of the deposits, which became due for repayment up to March 31, 2021, deposits worth Rs 45.66 crores, including interest accrued and due relating to 2,710 depositors had not been claimed or renewed. The Depositors have been intimated regarding the maturity of their deposits with a request to either renew or claim the deposits and subsequent reminders have been sent.

Deposits remaining unclaimed for a period of seven years from the date they became due for payment have to be transferred to Investor Education and Protection Fund (IEPF). During the year, the Company has transferred an amount of Rs 5.21 lakhs to IEPF established by the Central Government under section 125 of the Companies Act, 2013. The concerned depositors can claim the deposit from the IEPF.


The credit rating on deposits, term loans, NCDs and commercial paper and migration during the year is disclosed in the General Shareholder Information- Annexure to Directors Report.


As on March 31, 2021, the Company has presence through 94 branches, 17 outreach locations, totalling to 111 distribution outlets. The Company also has 22 underwriting hubs for credit decision making.


In accordance with the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) and directions issued by the National Housing Bank (NHB), Reserve Bank of India (RBI), the Management Discussion and Analysis Report (MD&A) and the Report of the Directors on Corporate Governance form part of this report.

In accordance with the Listing Regulations, the Business Responsibility Report (BRR) also forms part of Annual Report.


During FY 21, the whole country faced once in a century medical emergency due to Covid-19. It required immediate response in terms of enhanced expenditure towards medicines, personal protection kits, upgrade of medical facilities/infrastructure etc. The Company quickly responded to nations need with enhanced allocation/expenditure on Covid-19 and other medical related requirements. During the year, the Company supported;

a) IIT Delhi with its research project aimed at making cost effective face masks and face shields.

b) The Company, jointly with an organization helped in Maharashtra Governments Initiative to establish CT Scan Facility in the state run Covid-19 facility.

c) The Company is investing in renovation and upgradation of the Biochemistry lab and civil infrastructure of a large state-run hospital in Pune.

d) The other healthcare initiatives of the Company included: providing a state-of-the-art digital anatomy printer to AIIMS Delhi, providing medical equipment to three primary health care centers in Bangalore and launch of two mobile health care units in New Delhi for generic health facility and to support cancer patients.

The other CSR activities undertaken by the Company during the year were;

a) Support for the real estate sector providing for skilling programme for construction workers and day care centers for their children. The Company supported operational cost of running care centers for children across the country for holistic development and safety of the children of the construction workers.

b) In the field of education, the Company continued its support towards operational cost for running two formal schools. The Company initiated physical transformation project for two schools in socio-economic backward districts of Haryana and Rajasthan.

c) For women empowerment and livelihood generation, the Company has provided e-vehicles to poor women. Company sponsored setting up of women owned spice-based units in Rajasthan.

d) Company has partnered with an organization for construction of ponds and check dams in Rajasthan.

The details of Companys CSR activities and initiatives are detailed in the Annual Report on CSR activities and forms part of annexure to the Boards Report.

During the year, the Company and its subsidiary have spent a sum of Rs 24.68 crores on various CSR activities. Out of total allocation for FY 21, a sum of Rs 16.04 crores (14.71 crores from PNB Housing and Rs 1.33 crores from PHFL) was transferred to Pehel Foundation to carry out CSR activities of PNB Housing and its subsidiary.


The HR played an important role during the year not only taking care of the existing employees but also timely onboarding of vacant positions across all locations including internal talent pool growth. The Company also introduced Restricted Stock Unit (RSU) scheme in order to retain talent.

The Learning and Development (L&D) is continuously building and developing talent pipeline. The Company introduced digital initiatives for loans and deposit customers. The L&D team played an important role in developing skillsets required by the ground teams for digital initiatives. Due to movement restrictions and to exercise abundant precautions, the L&D used technology based virtual learning interventions to meet the diverse needs of the workforce. The entire classical learning model has been transformed into robust digital and social learning model at the Company. E-Guru is an exclusive learning platform used by L&D that intends to implement a learning roadmap for new employees and also ensures upskilling of existing employees on both techno-functional and behavioural skills.

As on March 31, 2021, the Company had a total of 1,391 full time employees on its rolls. There were 4 employees employed throughout the year, who were in receipt of remuneration of Rs 1.02 crores or more per annum. The remuneration comprises salary, allowances, perquisites/ taxable value of perquisites including perquisite value of ESOPs exercised and ex-gratia amount.

In accordance with the provisions of Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and particulars of the top ten employees in terms of remuneration drawn of the aforesaid employees are set out in the Annexure to the Directors report. In terms of the provisions of Section 136(1) of the Companies Act, 2013 read with the rule, the Directors report is being sent to all shareholders of the Company excluding the Annexure. Any shareholder interested in obtaining a copy of the Annexure may write to the Company.

Further disclosures on managerial remuneration are provided in Annexure appended to the Directors Report.

Prevention, Prohibition and Redressal of Sexual Harassment of Women at the Workplace

The Company has adopted a policy on prevention, prohibition and redressal of sexual harassment at the workplace. Members of the Internal Complaints Committee constituted by the Company are responsible for reporting and conducting inquiries pertaining to such complaints.

The Company on a regular basis sensitises its employees including subsidiary employees on the prevention of sexual harassment at the workplace through workshops, group meetings, online training modules and awareness programmes. During the year, one complaint was received by the committee which was reviewed and actioned upon. There are no pending complaints with the committee as at March 31, 2021.


Since the Company is a housing finance company, the disclosures regarding particulars of the loans given, guarantees given and security provided is exempt under the provisions of Section 186(11) of the Companies Act, 2013. As regards investments made by the Company, the details of the same are provided in notes to the financial statements of the Company for the year ended March 31, 2021.


In accordance with the provisions of Section 188 of the Act and rules made thereunder, the transactions entered with related parties are in the ordinary course of business and on an arms length pricing basis, the details of which are included in the notes forming part of the financial statements. The particulars of contracts or arrangements with related parties as prescribed in Form No. AOC–2 of the Companies (Accounts) Rules, 2014, is annexed to this report. Details of related party transactions are given in the notes to the financial statements. The Policy on Related Party Transactions is published elsewhere in the Annual Report and is also placed on the Companys website at


There is no information to disclose under the head ‘Conservation of Energy and Technology Absorption given in the above rules since the Company is engaged in providing housing loans. However, the Company understands the importance of energy conservation for the environment and is covered under Environment, Social and Governance (ESG) section.

There were no foreign exchange earnings and the Company has incurred foreign exchange expenditure of Rs 115.62 crores during the year.

Business Continuity

The Company has upgraded its technology to facilitate on-boarding of new loans and deposit customers by using digital platforms. These platforms are now extensively used to service existing customers. Given the current uncertain environment, the Company can swiftly shift all its operations to work from home environment and continue operations with least disruptions in service operations.


Being an housing finance company, the Company is not required to maintain cost records as per sub-section (1) of Section 148 of the Companies Act, 2013.


As at March 31, 2021, dividend amounting to Rs 7.25 lakhs had not been claimed by shareholders of the Company. The Company has been informing the shareholders to claim unclaimed dividend.


During the year, 81,215 equity shares of Rs 10 each were allotted to the eligible employees on exercise of ESOP options under ESOP Scheme 2016 at a grant price of Rs 338 per share.

Grant of Fresh ESOS

During the year, the Company has granted 5,50,000 options under ESOP Scheme 2016 and 1,45,000 options under ESOP Scheme 2018.

There has been no variation in the terms of the options granted under any of these schemes and all the schemes are in compliance with the SEBI (Share Based Employee Benefits) Regulations, 2014. The certificate from the statutory auditors confirming that ESOS Schemes have been implemented in accordance with the SEBI (SBEB) Regulations and shareholders resolutions has been obtained and will be available for inspection of the shareholders at the ensuing AGM. The Nomination and Remuneration Committee monitors the compliance of these Schemes. The disclosures as required under the regulations have been placed on the website of the Company at updates-events/

Grant of Restricted Stock Units (RSUs)

The shareholders have approved grant of 5,00,000 RSUs by postal ballot on January 21, 2021. Thereafter, the Nomination and Remuneration Committee has granted 2,75,676 RSUs to eligible employees on February 15, 2021. These RSUs will be allotted to the eligible employees over a period of 4 years as per the RSU scheme approved by the Board and shareholders.


The Reserve Bank of India (RBI) vide its press release dated August 13, 2019, had notified that HFCs will be treated as one of the categories of Non-Banking Financial Companies (NBFCs) for regulatory purposes.

The RBI post review of the extant regulatory framework applicable to the HFCs on February 17, 2021 has notified Non-Banking Financial Company–Housing Finance Company (Reserve Bank) Directions, 2021, referred to as RBI Directions. The notification has repealed The Housing Finance Companies (NHB) Directions 2010, Policy circulars and Misc. Policy circulars issued by NHB.

Post issuance of RBI notification, the regulation part of housing finance companies (HFCs) now stands transferred to RBI. The NHB will however continue to supervise HFCs.

The RBI has also made applicable to HFCs its Master Directions on; Know Your Customer (KYC) Direction, 2016, Monitoring of Frauds in NBFCs (Reserve Bank) Directions, 2016 and Information Technology Framework for the NBFC Sector dated June 08, 2017, as amended from time to time.

Some of the key NHB notifications/ circulars replaced by RBI Directions are:

(a) Terms and Conditions applicable to Hybrid Debt Capital Instruments to qualify for inclusion as Tier II Capital;

(b) Schedule to the Balance Sheet of an HFC;

(c) Indicative list of Balance Sheet Disclosure for HFCs;

(d) ‘Fit and Proper Criteria for Directors of HFCs;

(e) Model Code of Conduct for Direct Selling Agents/ Direct Marketing Agents of HFCs;

(f) Guidelines for engaging Recovery Agents by HFCs;

(g) Display of Information by HFCs & Most Important Terms and Conditions (MITC);

(h) Valuation of Properties– Empanelment of Valuers; and

(i) Guidelines on Wilful Defaulters.

RBI has also stipulated that the minimum capital adequacy ratio for HFCs would increase to 15% on or before March 31, 2022.

Regulatory Compliance

The Company has complied with Non-Banking Financial Company–Housing Finance Company (Reserve Bank) Directions, 2021 and erstwhile the Housing Finance Companies (NHB) Directions, 2010 and other directions/ guidelines prescribed by RBI regarding deposit acceptance, accounting standards, prudential norms for asset classification, income recognition, provisioning, capital adequacy, credit rating, corporate governance, information technology framework, fraud monitoring, concentration of investments, capital market exposure norms and know your customer and anti-money laundering.

During the year, the Company has not made any application, or no proceeding is pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016). The Company has not entered into one-time settlement for any loans availed from the banks or financial institutions.


During the year, the Company has revised its statutory policies as required in terms of provisions of the Companies Act, 2013, RBI Regulations, Listing Obligation and Disclosure Requirement and Insider Trading Regulations issued by the SEBI and placed all the statutory policies on its website at https://www.


The Board on the recommendation of Nomination and Remuneration Committee made the following appointments/ re-appointments of additional directors subject to approval of shareholders:

a) Mr. Hardayal Prasad was appointed as Managing Director & CEO with effect from August 10, 2020, for a term of three years.

b) Mr. Neeraj Vyas was appointed as Non-Executive Director with effect from September 01, 2020. He is liable to retire by rotation.

c) Mr. Sudarshan Sen was appointed as an Independent Director with effect from October 01, 2020, for a term of five years.

d) Mr. Kapil Modi was appointed Non-Executive Nominee Director with effect from October 01, 2020. He is a nominee of Quality Investment Holdings. He is liable to retire by rotation.

e) Mr. R. Chandrasekaran was re-appointed as an Independent Director with effect from October 07, 2020 for a term of five years.

f) Mr. Rajneesh Karnatak was appointed Non-Executive Nominee Director with effect from January 19, 2021. He is a nominee of Punjab National Bank. He is liable to retire by rotation.

g) Mr. Nilesh S. Vikamsey was re-appointed as an Independent Director with effect from April 22, 2021, for a term of five years.

h) Ms. Gita Nayyar was appointed as an Independent Director with effect from May 29, 2021 for a term of three years.

The following Directors have resigned or completed their term;

a) Mr Shital Kumar Jain completed his second term of one year as an Independent Director on August 09, 2020.

b) Mr. Neeraj Vyas resigned as interim Managing Director & CEO with effect from August 10, 2020.

c) Mrs. Shubhalakshmi Panse resigned as an Independent Director with effect from January 05, 2021.

d) Dr Gourav Vallabh completed his five years term as an Independent Director on April 21, 2021.

Your Board wish to place on record its sincere appreciation for the significant contributions made by these Directors on the Board and also on its various committees.

In accordance with the provisions of the Companies Act, 2013 and Articles of Association of the Company, Mr CH SS Mallikarjuna Rao and Mr. Sunil Kaul are liable to retire by rotation at the ensuing AGM. They are eligible for re-appointment.

All the Directors of the Company have confirmed that they satisfy the fit and proper criteria as prescribed under the applicable regulations and that they are not disqualified from being appointed as Directors in terms of Section 164(2) of the Companies Act, 2013.

The Company has received necessary declaration from each Independent Director under Section 149(7) of the Companies Act, 2013 (Act) that he/she meets the criteria of independence laid down in the Act and SEBI (Listing Obligations and Disclosures Requirements), Regulations 2015 as amended.

The Board is of the opinion that the Independent Directors of the Company possess requisite qualifications, experience and expertise. All the Independent Directors of the Company have registered their names with the data bank created for Independent Directors.

The details on the number of board/committee meetings held are provided in the Report of the Directors on Corporate Governance, which forms part of this report.


The members had appointed Messrs B R Maheshwari & Co LLP having registration no. 001035N as the statutory auditors for a term of 5 consecutive years at the 30th AGM of the Company to hold office until the conclusion of the 35th AGM.

Messrs B R Maheshwari & Co is one of leading firms of Chartered Accountants with experienced partners. The report of Statutory Auditors on annual accounts is enclosed along with Directors Report.

During the year, Messrs B R Maheshwari & Co LLP, received a total remuneration of Rs 0.61 crores from the Company and its subsidiaries. The remuneration pertains to fees for audit, internal financial control reporting, limited reviews, tax audits and taxation services, certifications and other matters and reimbursement of expenses.

During the year under review, the Statutory Auditors have not reported any matter under Section 143 (12) of the Companies Act, 2013 therefore no detail is required to be disclosed under Section 134 (3) (ca) of the Act.


Pursuant to the provisions of Section 204 of the Companies Act, 2013 the Company has appointed M/s Chandrasekaran Associates a firm of Company Secretaries in practice to undertake the Secretarial Audit of the Company.

The Report of the Secretarial Audit is annexed herewith as annexure to this report. The Secretarial Compliance Report as prescribed under SEBI regulations is provided elsewhere in the Annual Report.

During the year, the Company has complied with applicable Secretarial Standards i.e. SS-1 and SS-2, relating to "Meetings of the Board of Directors" and "General Meetings", respectively.


In accordance with the provisions of Section 134(3)(c) of the Companies Act, 2013 and based on the information provided by the management, your Directors state that:

a) In the preparation of annual accounts, the applicable accounting standards have been followed;

b) Accounting policies selected have been applied consistently. Reasonable and prudent judgements and estimates have been made so as to give a true and fair view of the state of affairs of the Company as at March 31, 2021 and of the profit of the Company for the year ended on that date;

c) 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 frauds and other irregularities;

d) The annual accounts of the Company have been prepared on a going concern basis;

e) Internal financial controls have been laid down to be followed by the Company and such internal financial controls are adequate and operating effectively; and

f) Systems to ensure compliance with the provisions of all applicable laws are in place and were adequate and operating effectively.


The Company has put in place adequate policies and procedures to ensure that the system of internal financial control commensurate with the size and nature of the Companys business.

These systems provide a reasonable assurance in respect of providing financial and operational information, complying with applicable statutes, safeguarding of assets of the Company, prevention and detection of frauds, accuracy and completeness of accounting records and ensuring compliance with Companys policies.


The details forming part of the extracts of the Annual Return in Form MGT-9 has been attached as part of Directors Report which is available at


During the year, there were no significant or material orders passed by the regulators or courts or tribunals that would impact the going concern status or operations of the Company in the future.


There has been no material changes and commitment affecting the financial position of the Company which has occurred between the close of the financial year to which the financial statement relates and the date of the Report.

There has been no change in the nature of business of the Company.

PHFL Home Loans and Services Limited

The Company is a wholly owned subsidiary and is the distribution arm for PNB Housing, offering doorstep services to the prospective customers. The Company has trained workforce to source business for the loans and deposits offered by PNB Housing.

During the year, the Company has sourced 77% of loan applications resulting into 65% of total loans disbursed by PNB Housing. The annual accounts of PHFL are enclosed along with the Annual Accounts of PNB Housing.

A report on the performance and financials of PHFL, as per Companies Act, 2013 and rules made thereunder is provided in Form AOC 1 attached to the Consolidated Financial Statements forming an integral part of the Annual Report.

Pehel Foundation

It is a wholly owned non-profit subsidiary company incorporated under Section 8 of the Companies Act, 2013. It is an implementation arm to carry out various CSR activities of PNB Housing and PHFL. FY 2021 was the first year of its operation after getting the required regulatory approvals.


The Board of Directors in its meeting held on May 31, 2021 have recommended Preferential Issue of equity shares and warrants aggregating to Rs 4,000 crores. The allotment will be made post receipt of regulatory/shareholders/legal approvals. The details of the capital raise is given in Notice of Extra Ordinary General Meeting, scheduled for June 22, 2021.


The Directors place on record their gratitude for the support of various regulatory authorities including Reserve Bank of India, National Housing Bank, Securities and Exchange Board of India, Ministry of Housing and Urban Affairs, Ministry of Corporate Affairs, Registrar of Companies, Financial Intelligence Unit (India), the stock exchanges and the depositories.

The Company acknowledges the role of all its key stakeholders - shareholders, borrowers, channel partners, depositors, deposit agents and lenders for their continued support.

The Directors express their appreciation for the dedication and commitment with which the employees of the Company at all levels have worked during the period.

Finally, your Directors express their gratitude to medical fraternity, other professionals and front-line workers who have worked throughout to save lives and to contain the spread of the pandemic.

For and on behalf of the Board
Place: New Delhi Chairman
Dated: June 19, 2021