Reliance Home Director Discussions


Dear Shareowners,

Your Directors present the 15th Annual Report and the audited financial statement for the financial year ended March 31,2023.

Financial Performance and State of Companys Affairs

The performance of the Company for the financial year ended March 31, 2023 is summarised below:

(Rs in crore)

Particulars

March 31, 2023 March 31, 2022

Total revenue

391.37 293.50

Profit before depreciation and tax

9,292.98 (7,694.31)

Less: Depreciation & Amortisation

1.96 212.09

Profit before tax

9,013.79 (7,906.40)

Current tax - Deferred tax / (credit)

3,595.21 (2,466.80)

Net profit after tax

5,418.57 (5,439.60)

Amount transferred to Special Reserve Fund

- -

‘Previous year figures have been regrouped / reclassified wherever required.

Due to sudden adverse developments in the financial services sector post the IL&FS crisis and its adverse impact on the liquidity position of majority of the Non-banking and housing finance companies, the Company was adversely impacted resulting in liquidity mismatch and severe financial stress on account of which it was not in a position to services its dues to the lenders.

In view of above, certain lenders of the Company (Banks and other Financial Institutions) had entered into an Inter-Creditor Agreement (ICA) on July 6, 2019 with Bank of Baroda acting as the Lead Lender for arriving at the debt resolution plan in accordance with the circular dated June 7, 2019 issued by the Reserve Bank of India (RBI) on Prudential Framework for Resolution of Stressed Assets (RBI Circular), by way of Change in Management. The Lead Bank and the lenders forming part of ICA had appointed resolution advisors, cashflow monitoring agency, valuers and legal counsel. Bank of Baroda as the Lead Lender and on behalf of the ICA lenders had as part of the debt resolution process invited the Expression of Interest (EoI) and bids from interested bidders vide newspaper advertisement dated July 29, 2020 and through the Lead Banks website. Initially nineteen investors had expressed interest through submission of EOIs. The ICA lenders after completing the transparent process of inviting bids from eligible bidders and evaluation, voted upon and selected with overwhelming majority Authum Investment & Infrastructure Limited (Authum) as the final bidder on June 1 9, 2021. The said Resolution Plan of Authum along with the Distribution Mechanism was presented to the Company by the Lead Banker, asking the Company to seek approval of the Debenture holders. The Company had duly made requisite disclosure to the stock exchanges in this regard.

The Company shared the said Resolution Plan along with the Distribution Mechanism with the Debenture Trustees viz. IDBI Trusteeship Services Limited and Catalyst Trusteeship Limited. A meeting of the Debenture Holders of Reliance Home Finance

Limited was called by IDBI Trusteeship Services Ltd. (Debenture Trustee) and was held on May 13, 2022, for consideration and approval of the Resolution Plan along with the Distribution Mechanism approved by ICA Lenders on June 19, 2021. Further, pursuant to the Order dated May 10, 2022 passed by the Honble High Court of Judicature at Bombay, the results of the voting of the Meeting was submitted before the Honble High Court in a sealed envelope.

The Company had approached the Honble High Court of Judicature at Bombay praying that the Honble High Court exercise powers under Section 151 of the Civil Procedure Code, 1 908, to approve the resolution plan of RHFL as was done by the Supreme Court in exercise of Article 142 of the Constitution of India in case of Reliance Commercial Finance Limited in Rajkumar Nagpal (supra). However, the said application was not allowed and disposed off on December 1 6, 2022 by the Honble High Court stating that "The moulding of relief can only be done by the Supreme Court under Article 142 of the Constitution of India. This Court under Section 151 of the CPC does not have the powers akin to Article 142 of the Constitution of India".

On an appeal preferred by the Company and others, the Honble Supreme Court of India vide its Order dated March 3, 2023, in exercise of its powers under Article 142 of the Constitution of India, allowed the Resolution Plan of Authum qua the debenture holders, except the dissenting debenture holders.

Further, the Shareholders of the Company at extraordinary general meeting held on March 25, 2023 by passing a special resolution approved sale / disposal of asset(s) / undertaking(s) of the Company for the purposes of implementation of the said Resolution Plan and authorised the Board for the said purpose.

The Resolution Applicant vide its e-mail dated March 8, 2023 had informed that in terms of the Honble Supreme Court of India Order dated March 3, 2023, the Resolution Plan was to be implemented by March 31, 2023 and requested the Company to extend its co-operation for implementation of Resolution Plan and, inter-alia, fix a record date for payment along with extinguishment of RHFL debentures, not later than March 27, 2023.

The Company had fixed March 26, 2023 as the record date and intimated to the stock exchanges that the Debenture Holders will be paid as per the respective entitlement of the debenture holders as on the date of Resolution Plan in terms thereof, in full and final settlement of their dues and claims, towards extinguishment and redemption of the debentures of the Company held by them.

As per the final approved Resolution Plan, the total Resolution amount of the Company was arrived at 3,351 crore.

The entire Resolution Plan has been finalised in terms of RBI Circular No. RBI/2018-19/ 203, DBR.No.BP. BC.45/21.04.048/2018-19 dated June 7, 2019 on Prudential Framework for Resolution of Stressed Assets by the Lenders of the Company, has also been approved by the Honble Supreme Court of India by its order dated March 3, 2023 and the special resolution approved by the shareholders dated March 25, 2023. In view of the same the Company took all appropriate steps towards implementation of the Resolution Plan in compliance with the Order of Honble Supreme Court of India.

The Company in consultation with the Lead Bank, Debenture Trustee, Legal and Financial Advisors, the Company took the following steps towards implementing the approved Resolution Plan:

A. Repaid dues to ICA Lenders as per Final Distribution Mechanism approved by Lenders.

B. Distributed funds to Debenture Trustees for making payments to NCD Holders as per Final Distribution Mechanism approved by Lenders.

C. Executed Business Transfer Agreement (BTA) with Reliance Commercial Finance Limited, 100% subsidiary of Authum Investment & Infrastructure Limited.

D. Executed Resolution Plan Implementation Memorandum with the Lenders, Other ICA Members and Reliance Commercial Finance Limited, 100% subsidiary of Authum Investment & Infrastructure Limited.

E. Executed Resolution Plan Implementation Memorandum with IDBI Trusteeship Services Limited and Reliance Commercial Finance Limited, 100% subsidiary of Authum Investment & Infrastructure Limited.

As per the Resolution Plan and the Distribution Mechanism duly approved and finalised by the Banks, Financial Institutions and other Lenders in terms of the RBI Circular and informed to the Company, the beneficiary position of NCD holders (BENPOS) as of April 15, 2022 had been taken to ascertain the entitlement of 100% of their principal dues under the Resolution Plan to the small debenture holders in the category of individuals and HUFs holding debentures of the principal amount of up to 5 lakhs, as of that said BENPOS date. All other Debenture Holders including Banks and Financial Institutions were paid 27.71% for secured and 20.78% for unsecured, as per the Resolution Plan.

Accordingly, in terms of the RBI Circular and in pursuance of the order of the Honble Supreme Court of India dated March 3, 2023, the total Resolution amount of 3,351 crore has duly been paid to all the financial creditors including debenture holders as per their respective approved entitlements under the Resolution Plan in full and final settlement of their dues and the Resolution Plan stood duly implemented.

The Company had kept an amount equivalent to the respective entitlement as per Resolution Plan in full and final settlement of dues of the Dissenting Debenture Holders in fixed deposit and Debenture Holders would be paid upon receipt of assent to the Resolution Plan.

Post execution of Business Transfer Agreement (BTA) with Reliance Commercial Finance Limited (RCFL), 100% subsidiary of Authum Investment & Infrastructure Limited dated March 29, 2023, the business undertaking of the Company

i.e. identified assets and assumed liabilities are transferred to RCFL for total consideration of 180 crore. Accordingly, Assets Under Management as on March 31, 2023 was Nil as against 1 1,857 crore as on March 31, 2022.

The Board of Directors of the Company at their meeting held on July 1 7, 2023 had considered and approved the Surrender of Certificate of Registration as a housing finance institution to the National Housing Bank and in-principally approved for voluntary liquidation of the Company, subject to requisite permissions, sanctions and approvals.

Capital Adequacy Ratio

Your Companys Capital to Risk Assets Ratio (CRAR) calculated in line with the requirements of RBI Circular No. RBI/2020- 21 /73/ D0R.FIN.HFC.CC.No.1 20/03.10.136/2020-21dated February 17, 2021 on Master Direction - Non-Banking Financial Company - Housing Finance Company (Reserve Bank) Directions, 2021 (the RBI Directions), stood at (3,992.56) per cent, which is below the regulatory minimum requirement of 15 per cent.

Management Discussion and Analysis

Management Discussion and Analysis Report for the year under review as stipulated under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the Listing Regulations) and the RBI Directions, is presented in a separate section forming part of this Annual Report.

Resources and Liquidity

The Companys Net Worth as on March 31, 2023, stood at (73.83) crore. The Company has not raised any amount during the financial year 2022-23 by issuance of any securities. The Companys debt equity ratio as on March 31, 2023 stood at (1.35):1.

3,10,35,980 fully paid-up 8% Cumulative Non-Convertible Redeemable Preference Shares of 10 each issued and allotted on August 9, 2017 for a term of five years, without payment being received in cash were unredeemed, in view of Companys current financial position.

Disclosure regarding Non-Convertible Debentures (NCDs) issued by the Company through public issue and on private placement basis pursuant to the requirements of RBI Directions is as under:

Particulars

No. of Amount
NCDs (Rs in crore)

Total number of non-convertible debentures which have not been claimed by the Investors

Nil Nil

Total number of non-convertible debentures which have not paid by the Company after the date on which the non-convertible debentures became due for redemption and total amount in respect of such debentures remaining unclaimed or unpaid beyond the date referred to

10,618 55.95*

*Debenture holders amounting to 55.95 crore have dissented to the resolution plan. The Company has set aside 11.84 crore equivalent to their entitlement as per the resolution plan approved and finalised by the financial creditors of the Company.

Dividend

During the year under review, the Board of Directors had not recommended dividend on the equity shares of the Company.

Deposits

The Company has neither accepted nor renewed any fixed deposits during the year. There are no unclaimed deposits, unclaimed / unpaid interest, refunds due to the deposit holders or to be deposited to the Investor Education and Protection Fund as on March 31, 2023.

Particulars of Loans, Guarantees or Investments

The Company is registered as a Housing Finance Company with NHB. Thus, the provisions of Section 186 except sub-section (1) of the Companies Act, 2013 (the Act) is not applicable to the Company.

Promoter and Persons belonging to Promoter Group

The Company is promoted by Reliance Capital Limited (RCap), the financial services company of the Reliance Group. RCap is currently under Corporate Insolvency Resolution Process (CIRP). RCap holding in the Company has been reduced from 47.91% as on March 31, 2023 to 42.13% as on the date of this report.

During the year, the Company had received a request from Persons belonging to Promoter Group of the Company, seeking reclassification as Public under Regulation 31A of the Listing Regulations. The Persons belonging to Promoter Group seeking reclassification, together hold 35,65,449 equity shares of the Company constituting approximately 0.74%, which is not more than one percent of the total voting rights in the Company. The Company had submitted the application with respect to reclassification under Regulation 31A(3) of the Listing Regulations with the stock exchanges viz. BSE Limited and the National Stock Exchange of India Limited and response from the stock exchanges is awaited.

Subsidiary and Associate companies

The Company is an associate of Reliance Capital Limited and does not have any subsidiary or associate company.

Directors

The Company has received declarations from all the Independent Directors confirming that they meet the criteria of Independence as prescribed under the Act and the Listing Regulations. In the opinion of the Board, the Independent Directors possess the requisite expertise and experience and are the persons of high integrity and repute. They fulfil the conditions specified in the Act and the Rules made thereunder and the Listing Regulations and are independent of the management.

The details of programme for familiarisation of Independent Directors with the Company, nature of the industry in which the Company operates and related matters are put up on the website of the Company at the link https://www.reliancehomefinance. com/investor-relations.

The Company had appointed Mr. Sudeep Ghoshal as a Director (nominated by Reliance Capital Limited) of the Company at 14th Annual General Meeting (AGM) held on June 24, 2022. In terms of the provisions of the Act, he retires by rotation and being eligible, offers himself for re-appointment at the ensuing AGM.

The members of the Company have duly approved through postal ballot the special resolution for re-appointment of Mr. Sushilkumar Agrawal as an Independent Director on the Board of the Company, for a second term of five consecutive years with effect from June 28, 2023.

Further, based on the written representations received from the Directors as on March 31, 2023 taken on record by the Board of Directors and the legal opinion obtained by the Company, none of the directors are disqualified as on March 31, 2023 from being appointed as a director in terms of Section 164(2) of the Act.

Key Managerial Personnel

(i) Mr. Shanil Jain was appointed as the Chief Financial Officer (CFO) of the Company with effect from July 17, 2023.

(ii) Mr. Amit Kumar Jha ceased to be the CFO with effect from the closure of business hours on June 30, 2023.

(iii) Presently, Companys KMPs are Mr. Prashant Utreja, Chief Executive Officer, Mr. Shanil Jain, Chief Financial Officer and Ms. Parul Jain, Company Secretary & Compliance Officer.

Evaluation of Directors, Board and Committees

The Nomination and Remuneration Committee has devised a policy for performance evaluation of the individual Directors, Board and its Committees, which includes criteria for performance evaluation.

Pursuant to the provisions of the Act and Regulation 17(10) of the Listing Regulations and based on the Policy, the Board has carried out an annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of the Committees of the Board. The Board performance was evaluated based on inputs received from all the Directors after considering criteria such as Board composition and structure, effectiveness of Board / Committee processes, and information provided to the Board, etc. A separate meeting of the Independent Directors was also held for the evaluation of the performance of non-independent Directors and performance of the Board as a whole and that of the Chairperson of the Meeting of the Board.

Pursuant to the Listing Regulations, performance evaluation of independent directors was done by the entire board, excluding the independent director being evaluated.

The Nomination and Remuneration Committee has also reviewed the performance of the individual Directors based on their knowledge, level of preparation and effective participation in meetings, understanding of their role as directors, etc.

Policy on appointment and remuneration for Directors, Key Managerial Personnel and Senior Management Employees

The Nomination and Remuneration Committee of the Board has devised a policy for selection, appointment and remuneration of Directors, Key Managerial Personnel and Senior Management Employees. The Committee has also formulated the criteria for determining qualifications, positive attributes and independence of Directors. The Policy has been put up on the Companys website at https://www.reliancehomefinance.com/ corporategovernance/policies.

Directors Responsibility Statement

Pursuant to the requirements under Section 134(5) of the Act with respect to Directors Responsibility Statement, it is hereby confirmed that:

i. In the preparation of the annual financial statement for the financial year ended March 31, 2023, the applicable Accounting Standards had been followed along with proper explanation relating to material departures, if any;

ii. The Directors had 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 as at March 31, 2023 and of the profit of the Company for the year ended on that date;

iii. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. The Directors had prepared the annual financial statement for the financial year ended March 31, 2023 on a going concern basis;

v. The Directors had laid down proper internal financial controls to be followed by the Company and such financial controls are adequate and are operating effectively. The Company is taking constant steps to further strengthen the same; and

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

Contracts and Arrangements with Related Parties

All contracts / arrangements / transactions entered into / by the Company during the financial year under review with related parties were on an arms length basis and in the ordinary course of business.

There were no materially significant related party transactions which could have potential conflict with interest of the Company at large.

During the year, the Company has not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of Company on materiality of related party transactions or which is required to be reported in Form AOC - 2 in terms of Section 134(3) (h) read with Section 188 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014.

All Related Party Transactions were placed before the Audit Committee and also the Board for approval. Prior omnibus approval of the Audit Committee and the Board was obtained for the transactions which were of a repetitive nature. The transactions entered into pursuant to the omnibus approval so granted were reviewed and statements giving details of all related party transactions were placed before the Audit Committee and the Board of Directors on quarterly basis. The policy on Related Party Transactions as approved by the Board

is uploaded on the Companys website at the link https://www. reliancehomefinance.com/corporate-governance/policies. Your Directors draw attention of the members to Note No.46 to the Financial Statement which sets out related party disclosures pursuant to Ind-AS and Schedule V of the Listing Regulations.

Material Changes and Commitments if any, affecting the financial position of the Company

There were no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year and the date of this Report.

Meetings of the Board

A calendar of Meetings is prepared and circulated in advance to the Directors. During the year, ten Board Meetings were held, details of meetings held and attended by each Director are given in the Corporate Governance Report.

Audit Committee

The Audit Committee of the Board consists of Independent Directors viz. Ms. Chhaya Virani, Ms. Rashna Khan, Mr. Sushilkumar Agrawal, Mr. Ashok Ramaswamy and Non-Independent Directors, Mr. Ashish Turakhia and Mr. Sudeep Ghoshal as Members. During the year, all the recommendations made by the Audit Committee were accepted by the Board.

Auditors and Auditors Report

M/s. Tambi & Jaipurkar, Chartered Accountants were appointed as Statutory Auditors of the Company for a term of 3 (three) consecutive years, at the Annual General Meeting of the Company held on September 14, 2021 to hold office as Statutory Auditors for a period of three consecutive years i.e. upto the conclusion of the 16th AGM.

As per the requirements of Guidelines dated April 27, 2021, issued by the Reserve Bank of India (RBI) for Appointment of Statutory Central Auditors (SCAs) / Statutory Auditors (SAs) of Commercial Banks (excluding RRBs), UCBs and NBFCs (including HFCs), the Company has received a declaration from M/s. Tambi & Jaipurkar confirming their eligibility to act as Statutory Auditors of the Company.

The Auditors in their Report to the Members, have given the following qualified opinion and the response of your Directors with respect to it is as follows:-

Opinion that in view of the business transfer, ceased operations of the Company and current cash flow position, a material uncertainty exists to meet substantial probable financial liabilities / exposure and a material uncertainty exists that may cast significant doubt on the Companys ability to continue as a going concern and that the Company has substantially reduced and further discontinued its housing finance activity post the execution of Lenders Implementation Memorandum, this may result in loss / surrender of Housing Finance License.

Response - The Company was under debt resolution in terms of RBI Circular No. RBl/2018-19/203, DBR. No.BPBC.45/21.04.048/2018-19 dated June 7, 2019

on Prudential Framework for Resolution of Stressed Assets. The Resolution Plan as approved by creditors and shareholders of the Company as also by the Honble Supreme Court of India vide its order dated March 3, 2023, was implemented by transfer of the entire undertaking by way of slump sale to Reliance Commercial Finance Limited, a wholly owned subsidiary of Authum Investment & Infrastructure Limited (the "Resolution Applicant"). This would result in substantial reduction or discontinuation of the housing finance activities. Further, Reliance Capital Limited (RCL), the Promoter of the Company is under Corporate Insolvency Resolution Process (CIRP). Accordingly, the future course of business of the Company would be ascertainable upon successful resolution of RCL under CIRP

No fraud has been reported by the Auditors to the Audit Committee or the Board.

Secretarial Audit and Secretarial Compliance Report

Pursuant to the provisions of Section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors had appointed M/s. Aashish K. Bhatt & Associates, Practicing Company Secretaries, to undertake the Secretarial Audit of the Company. The Audit Report of the Secretarial Auditor is attached as Annexure - A.

Pursuant to circular No. CIR/ CFD/ CMD1 / 27/ 2019 dated February 8, 2019, issued by the Securities and Exchange Board of India (SEBI), the Company has obtained Secretarial Compliance Report, from Practicing Company Secretaries on compliance of all applicable SEBI Regulations and circulars / guidelines issued thereunder and copy of the same shall be submitted with the Stock Exchanges within the prescribed due date.

The observations and comments given by the Secretarial Auditor in their Report are self-explanatory and hence do not call for any further comments under Section 134 of the Act.

Secretarial Standards

During the year under review, the Company has complied with the applicable Secretarial Standards issued by The Institute of Company Secretaries of India.

Maintenance of Cost Records

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

Annual Return

As required under Section 134(3)(a) of the Act, the Annual Return for the financial year 2022-23 is put up on the Companys website and can be accessed at https://www.reliancehomefinance.com/investor-relations- Annual Return 2022-23.

Particulars of Employees and related disclosures

(a) Employees Stock Option Scheme

Employees Stock Option Scheme (ESOS Scheme) was

approved and implemented by the Company and Options were granted to the employees in accordance with guidelines applicable to ESOS Scheme.

The Nomination and Remuneration Committee of the Board monitors the Scheme. The existing ESOS Scheme is in compliance with the Act read with Rules made thereunder and the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (SEBI Regulations).

A certificate from the Secretarial Auditors of the Company that the ESOS Scheme have been implemented in accordance with the Act and the SEBI Regulations and as per the resolution passed by the members of the Company authorising issuance of the said Options shall be placed before the Members at the ensuing Annual General Meeting. The details as required to be disclosed under SEBI Regulations are put on the Companys website at https://www.reliancehomefinance.com/investor-relations.

(b) Other Particulars

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 201 4, as amended, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said Rules are provided in the Annual Report, which forms part of this Report.

Disclosures relating to the remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, are also provided in the Annual Report, which forms part of this Report.

However, having regard to the provisions of second proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. The said information is available for inspection up to the date of the Meeting on the website of the Company. Any member interested in obtaining the same may write to the Company Secretary and the same will be furnished on request.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The Company is a Housing Finance Company and does not involve in any manufacturing activity, most of the information as required under Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 are not applicable. However, the information as applicable has been given in Annexure - B forming part of this Report.

Corporate Governance

The Company has adopted Reliance Group - Corporate Governance Policies and Code of Conduct. The report on Corporate Governance as stipulated under Regulation 34(3) read with Para C of Schedule V of the Listing Regulations and the RBI Directions (earlier Housing Finance Companies - Corporate

Governance (National Housing Bank) Directions, 2016) is presented in separate section forming part of this Annual Report.

A Certificate from M/s. Aashish K. Bhatt & Associates, Practicing Company Secretaries, confirming compliance to the conditions of Corporate Governance as stipulated under Para E of Schedule V of the Listing Regulations, is enclosed to this Report.

Ombudspersons & Whistle Blower (Vigil Mechanism)

The Company has formulated an Ombudspersons & Whistle Blower (Vigil Mechanism) Policy to address the genuine concerns, if any, of the Directors and employees of the Company. The policy has been overseen by the Audit Committee. No person has been denied for direct access to the Chairperson of the Audit Committee. The details of the same have been stated in the Report on Corporate Governance and the policy can be accessed on the Companys website.

Risk Management

The Company has laid down a Risk Management Policy, defining Risk profiles involving Strategic, Technological, Operational, Financial, Credit, Organisational, Legal and Regulatory risks within a well-defined framework. The Risk Management Policy acts as an enabler of growth for the Company by helping its businesses to identify the inherent risks, assess, evaluate and monitor these risks continuously and undertake effective steps to manage these risks.

The Risk Management Committee (RMC) comprises of Ms. Chhaya Virani, Ms. Rashna Khan, Mr. Sushilkumar Agrawal, Mr. Ashok Ramaswamy, Mr. Ashish Turakhia and Mr. Sudeep Ghoshal as Members, the Committee periodically reviews the robustness of the Risk Management Policy. The periodical update on the risk management practices and mitigation plan of the Company are presented to the Audit Committee and Board of Directors. The Audit Committee and Board periodically review such updates and findings and suggest areas where internal controls and risk management practices can be improved. More details on Risk Management indicating development and implementation of Risk Management Policy including identification of elements of risk and their mitigation are covered in Management Discussion and Analysis section, which forms part of this Report.

Asset Liability Committee (ALCO) consisting of senior management executives, monitors liquidity and interest rate risks of the Company. The functioning of ALCO is reviewed by the RMC which meets quarterly and reports to the Board of Directors.

To enable resilient models for working and conducting business during times of uncertainty and crisis, the Company has business continuity plan (BCP) in place since 2013. The Company manages risks and build business continuity plans that allow us to focus on resilience in our day-to-day business operations. The Company has invoked BCP from March 18, 2020 after assessing the magnitude of the impact caused by the COVID-1 9 and are providing strategic support to ensure continuation of critical activities. The Company has ensured protecting employees health and safety by implementing work-from-home and at the same time ensuring continuation of business operations. The businesses are greatly adjusting to the changing needs of

its employees, customers and suppliers while navigating the financial, operational and cyber security challenges during and post COVID-19.

Compliance with provisions of the Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company is committed to uphold and maintain the dignity of women employees and it has in place a policy which provides for protection against sexual harassment of women at work place and for prevention and redressal of such complaints. During the year, no such complaints were received. The Company has also constituted an Internal Complaint Committee under the Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013.

Corporate Social Responsibility

The Company has constituted a Corporate Social Responsibility (CSR) Committee in compliance with the provisions of Section 1 35 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014. The CSR Committee has formulated a Corporate Social Responsibility Policy (CSR policy). The CSR policy may be accessed on the Companys website at the link: https://www.reliancehomefinance.com/corporate- governance/policies.

Presently, the CSR Committee consists of Ms. Chhaya Virani, Mr. Ashok Ramaswamy and Mr. Ashish Turakhia as Members. The disclosures with respect to CSR activities is given in Annexure - C.

During the year 2022-23, the Company is not required to spend on CSR expenditure pursuant to the provisions of Section 135 of the Act.

Order, if any, passed by Regulators or Courts or Tribunals

Following Orders were passed by Regulators or Courts or Tribunals:

(a) A common Order was passed on June 21, 2021 by the Honble National Company Law Tribunal, (NCLT) Mumbai Bench, in the matter of C.P. No. 138 of 2020, IDBI Trusteeship Services Limited versus Reliance Home Finance Limited and C.P. No. 139 of 2020, IDBI Trusteeship Services Limited versus Reliance Capital Limited & Ors, allowing the Applications filed under Section 71(10) of the Companies Act, 2013 directing redemption of debentures. The Company had preferred appeals against the said Orders before the Honble National Company Law Appellate Tribunal (NCLAT), New Delhi. In the matter of Appeals i.e. Company Appeal (AT) No.70 of 2021 and Company Appeal (at) No.71 of 2021, the Honble Bench on July 9, 2021 was pleased to direct the parties to maintain status quo on the impugned orders dated June 21, 2021 passed by the NCLT, Mumbai Bench.

Arguments in the matter were completed on April 17, 2023. The Tribunal observed that the NCLT Order dated June 21, 2023 suffered from infirmity as the ICA lenders were not given a proper opportunity to be heard and therefore allowed the appeal remanding the matters back to NCLT, Mumbai. The matter is pending before NCLT.

(b) In the matter of Commercial Suit (Commercial Suit No.27568 of 2021) R. K. Mohatta Family Trust versus Reliance Home Finance Limited & Others the Honble Bombay High Court was pleased to pass an order on March 31, 2022 directing that the meeting of the Debenture Holders be called under all the Debenture Trust Deeds within two weeks of the order. Since there prevailed certain rectifications in the order, the order for speaking to the minutes was passed on April 6, 2022. The notice for conducting the meeting of Debenture Holders on May 13, 2022 has already been issued by IDBI Trusteeship Services Limited (Debenture Trustee).

The Honble High Court rejected the I.A. No. (L) 33514 of 2022 filed by the Company for approval of the resolution plan as done in the case Rajkumar Supra on the ground that its powers under Section 151 of the Civil Procedure Code, 1908 are narrower. The Company had filed an appeal against the said impugned order dated December 16, 2022 passed by Honble High Court of Judicature at Bombay by way of a Special Leave Petition before the Honble Supreme Court of India. The Honble Supreme Court of India was pleased to allow the implementation of the resolution plan proposed by Authum Investment & Infrastructure Limited (the "Resolution Applicant") vide its order dated March 3, 2023. The dissenting debenture holders were granted liberty to stand out of the plan and pursue legal remedies. The resolution plan has been successfully implemented.

A contempt proceeding has been initiated by certain Debenture Holders on the premises that having invested 5 lakhs and below in the debentures of RHFL, they are entitled for repayment of 100% of their principal investment as per the resolution plan that stood approved vide the order dated March 3, 2023 of the Honble Supreme Court of India.

(c) Pursuant to Order dated November 20, 2019 passed by the Honble Delhi High Court in the matter of OMP(I) COMM.419/2019 and OMP(I) COMM. 420/2019 (Always Remember Properties Private Limited (Petitioner) versus Reliance Home Finance Limited & Ors), the Company is prohibited to dispose off, alienate, encumber either directly or indirectly or otherwise part with the possession of any assets.

Further, as per the order dated December 21, 2022, the Honble Delhi High Court directed the Company to deposit 46 crore directly in the account of the Petitioner and 154 crore in the account of the Honble Delhi High Court. Pursuant to the same, all the criminal matters pertaining to Always Remember Properties Private Limited (ARPPL) were withdrawn and ARPPL was made a party to InterCreditor Agreement (ICA).

(d) In the matter of O.A. 478 of 2022 filed by Canara Bank, the Ld. DRT-I Mumbai had passed an order restraining the Company from dealing with or disposing off secured assets or such other assets and properties disclosed, pending hearing and disposal of the present O.A. The matter was listed on March 24, 2023 wherein the matter was withdrawn by Canara Bank with liberty to file fresh O.A.

alongwith liberty on limitation in case payment is not done as per the resolution plan.

(e) The Company had filed writ petition with the Honble Delhi High Court challenging Punjab National Banks wrongful action of classifying the Companys account as a fraud. The Honble Delhi High Court had passed an order restraining Punjab National Bank from taking any coercive action and directed categorization of Company as Fraud be kept in abeyance. Bank of Baroda, State Bank of India, Federal Bank, Indian Bank, Bank of Maharashtra, HDFC Bank, Union Bank of India and Axis Bank Limited had also categorised Companys account as a fraud. The Honble High Court of Delhi also passed similar order(s) and extended the stay on said banks as well. The Company had filed writ petitions against all the abovementioned Bank(s) that had declared Companys account as fraud.

Following the Judgement of Honble Supreme Court of India, the Honble Delhi High Court by an order dated May 1 2, 2023 had set aside the action of classifying Companys account as a fraud account by Punjab National Bank, Federal Bank, Indian Bank, State Bank of India, HDFC Bank, Bank of Maharashtra, Axis Bank and Union Bank of India under the Master Directions on Frauds dated July 1, 2016, issued by the Reserve Bank of India (RBI Master Directions). However, in the matter of Writ Petition No. 5280/2020 Reliance Home Finance Limited versus Bank of Baroda (BoB), BoB submitted that they have complied with the principles of natural justice and the opportunity of heard was provided to BoB.

The Company had also received a communication as regards ICICI Bank Limited classifying the Companys account as Fraud. Similar matter was covered by the above referred orders wherein the matter was sub-judice and with order dated May 12, 2023 had set aside the action of classifying Companys account as a fraud account under said RBI Master Directions.

(f) SEBI had issued an Interim Order cum Show Cause Notice dated February 1 1, 2022 under Sections 11(1), 11(4) and 1 1 B(1) of the SEBI Act, 1992 ("Notice") against the Company, its individual promoter and the then Key Managerial Personnel ("Noticees") and has restrained the Noticees from buying, selling, or dealing in securities, either directly or indirectly, in any manner whatsoever until further notice. Further, Individual Noticees have been restrained from associating themselves with any intermediary registered with SEBI, any listed public company or from acting as a director / promoter of any public company which intends to raise money from the public, till further notice. By the said order, the Noticees have been called upon to show cause as to why suitable directions / prohibitions under Section 11 (4) and 1 1 B of the SEBI Act, and penalty under Sections 11(4A), Section 11B(2) read with Section 1 5HA and/or 15HB of the SEBI Act should not be imposed on them. Given that the order is an interim order, no financial implication can be ascertained at such a premature stage. The Company has engaged a legal advisor in the said matter and in consultation with the legal advisors had filed its response to the said Notice

after taking into consideration the transfer of Companys business undertaking to Reliance Commercial Finance limited, a wholly owned subsidiary of Authum Investment & Infrastructure Limited (Resolution Applicant), pursuant to RBI Circular No. RBl/2018-19/ 203, DBR.No.BP. BC.45/21.04.048/2018-19 dated June 7, 2019 on Prudential Framework for Resolution of Stressed Assets, the order of Supreme Court of India dated March 3, 2023 and the special resolution passed by the shareholders dated March 25, 2023.

Internal Financial Controls and their adequacy

The Company has in place adequate internal financial controls across the organization. The same is subject to review periodically by the internal audit cell for its effectiveness. During the year, such controls were tested and no reportable material weakness in the design or operation were observed.

General

During the year under review there were no reportable events in relation to issue of equity shares with differential rights as to dividend, voting or otherwise, issue of sweat equity shares to the Companys Directors or Employees and proceedings pending under the Insolvency and Bankruptcy Code, 2016.

Acknowledgement

Your Directors would like to express their sincere appreciation for the co-operation and assistance received from shareholders, debenture holders, bankers, financial institutions, regulatory bodies and other business constituents during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the commitment displayed by all executives, officers and staff.

For and on behalf of the Board of Directors

Ashish Turakhia

Sudeep Ghoshal

Director

Director

Mumbai

July 28, 2023