Mar 31, 2018
Dear Members,
The Directors have pleasure in presenting the 28th Annual Report of your Company and the Audited Accounts for the year ended 31st March, 2018.
FINANCIAL RESULTS
(Rs. in Lacs)
PARTICULARS |
March 31,2018 |
March 31, 2017 |
Total Income |
112840 |
100174 |
Less: Interest expenditure |
71276 |
66784 |
Overheads |
14317 |
10610 |
Depreciation & amortization |
64 |
70 |
Profit Before Tax |
27183 |
22710 |
Provision for Tax |
9450 |
7635 |
Deferred Tax Assets |
(710) |
302 |
Profit After Tax |
18443 |
14773 |
Profit brought forward |
3244 |
6 |
Profit available for appropriation |
21687 |
14779 |
APPROPRIATIONS: |
||
General Reserve |
9680 |
7330 |
Special Reserve under Section 36(1)(viii) of Income Tax Act, 1961 |
5190 |
4205 |
Proposed Equity Dividend |
2962 |
2693 |
Tax on Proposed Dividend |
609 |
548 |
Balance carried over to Balance Sheet |
3576 |
3244 |
IMPORTANT FINANCIAL RATIOS
PARTICULARS |
March 31,2018 |
March 31, 2017 |
Return on Net Worth (%) |
18.62 |
17.62 |
Return on Total Assets (%) |
1.62 |
1.57 |
Book Value per share (Rs.) |
183.89 |
155.65 |
Earnings per share (Rs.) |
34.25 |
27.43 |
Debt Equity Ratio (times) |
10.08 |
9.83 |
Average cost of funds (%) |
7.82 |
8.77 |
Average yield on advances (%) |
10.97 |
11.63 |
Net Interest Margin |
3.15 |
2.86 |
DIVIDEND
Your Directors recommend payment of dividend for the year ended 31st March, 2018 of Rs.5.50/- per equity share of Rs.10/- each. The total dividend outgo for the current year would amount to Rs.35.71 crores including dividend distribution tax of Rs.6.09 Crores, as against Rs.32.41 Crores including dividend distribution tax of Rs.5.48 Crores in the previous year.
The dividend payout ratio for the current year, inclusive of additional tax on dividend will be 16.47% as against 21.94% of previous year. As per Companies (Accounting Standards) Amendments Rules, 2016, Dividend & Tax thereon will be recognized as liability on approval of shareholders at the ensuing Annual General Meeting (AGM).
OPERATIONS - PERFORMANCE
Income, Profit, Loan Approvals and Disbursements: Total income for the year under review is Rs.1128.40 crores as against Rs.1001.74 crores for the year 2016-17. Profit before tax for the year ended is Rs.271.83 crores and Profit after tax for the year ended is Rs.184.43 crores as against Rs.227.10 crores and Rs.147.73 crores respectively for the previous year.
The Companyâs main thrust continues to be on Individual Loans. New loans approved during the year amounted to Rs.3869 crores and loans disbursed during the year are Rs.3621 crores as against Rs.2869 crores and Rs.2761 crores for the year ended 31st March, 2017 respectively. The Retail Loan portfolio as at 31st March, 2018 stood at Rs.11232 crores as compared to Rs.9271 crores as on 31st March, 2017.
During the year under review, your Company has made provision to the extent of Rs.61.32 crores as against Rs.33.40 crores provided for in the year 2017-18.
RESOURCE MOBILISATION:
Your Company takes every effort to tap the appropriate source of funding to minimize the weighted average cost of funds. Your Company has mobilized resources through the following sources:
A. Term Loans from Banks and Insurance Companies.
Your Company has borrowed fresh long term loans of Rs.2167 crores from banks during the year as compared to Rs.2835 crores during the previous year. The aggregate of term loans outstanding at the end of the financial year stood at Rs.6171 crores as against Rs.4611 crores as at the end of the previous year.
B. Refinance from National Housing Bank (NHB):
With the continued support of National Housing Bank (NHB), your Company availed refinance amounting to Rs.631 crores during the year under review as against Rs.1400 crores in the previous year. The refinance facility outstanding as on 31st March, 2018 is Rs.2875 crores as against Rs.2683 crores as at the end of the previous year.
C. Short term Loan and Commercial Paper:
During the year 2017-18, your Company has raised resources by issuing Commercial Paper and also resorted to short term borrowings from the banks and the outstanding amount as on 31st March, 2018 is Rs.893 crores.
D. Non Convertible Debentures:
Your Company has outstanding balance of Rs.45 Crores through issue of Non Convertible Debentures (NCD) on private placement as on 31st March 2018.
CREDIT RATING
Your Company had received rating from CRISIL and ICRA for its various borrowing programmes as follows:
CRISIL Rating:
- For Commercial Paper/short term loan programmes of Rs.1500 crores as [CRISIL] âA1 â (Pronounced as CRISIL A1 plus).
- For Fund Based Long Term Loan Programme of Rs.100 crores as [CRISIL] AA (Stable) (Pronounced as CRISIL double A plus/Stable).
- For Non-Convertible Debentures Borrowing Programme of Rs.550 crores [CRISIL] âAA (Stable)â (Pronounced as CRISIL double A Plus/Stable).
ICRA Rating:
- For Commercial Paper(Rs.1500 crores )/ short term loan (Rs.500 crores) programmes of Rs.2000 crores as [ICRA] âA1 â (Pronounced as ICRA A1 plus). This rating is the highest credit quality rating assigned by ICRA for Short Term Debt Instruments.
- As per the Basel-II requirements - For Fund Based Long Term Loan Programme of Rs.10,000 crores as [ICRA] AA (Stable) (Pronounced as ICRA double A plus/stable). This rating indicates the high credit quality rating assigned by ICRA to Long Term Debt Instruments.
- For Non-Convertible Debentures Borrowing Programme of Rs.550 crores [ICRA] âAA â (STABLE) (Pronounced as ICRA double A Plus/stable).
BRANCH EXPANSION
During the year under review your Company has opened its Branches at Kozhikode (Kerala), Nellore (Andhra Pradesh), Whitefield (Karnataka), HubLi (Karnataka) and Siliguri (West Bengal). The total number of Offices as on 31st March, 2018 is 69. Your Company is initiating brand building measures to generate general awareness and improve the image of the Company.
INSURANCE COVERAGE TO BORROWERS
Your Company had taken âSpecial Contingency Insuranceâ with The New India Assurance Company Ltd., which covers the borrowers of your Company as under:
- Personal Accident Insurance: Personal accident (death only) risk cover, free of cost to the borrowers up to an amount of outstanding loan at any particular point of time during the term/ tenure of the housing loan.
- Mortgaged Property Insurance: The property acquired out of loan, for and up to an extent of the outstanding loan amount, covered free of cost against fire, earthquake and allied perils affecting the mortgaged property.
Your Company has also tied up with âKotak Mahindra Old Mutual Life Insurance Ltd.â, âFuture Generali India Life Insurance Company Ltd.â and âAditya Birla Sun Life Insurance Company Ltd.â (Formerly known as Birla Sun Life Insurance Company Ltd.) for getting insurance cover on the life of the borrower to the extent of the âOutstanding Home Loanâ. The said âGroup Life Coverâ is optional and the Company arranges this insurance on request from the borrower. These schemes ensure protection to the families of the borrower in case of un-expected eventualities like untimely death of borrower due to accident or natural death.
CAPITAL ADEQUACY RATIO (CAR)
The Company has been maintaining the Capital Adequacy Ratio (CAR) above the minimum required level prescribed by National Housing Bank (NHB) from time to time. The CAR prescribed for the present is 16.17%.
The Capital Adequacy Ratio of the Company as at 31st March, 2018 is 16.17% as against 16.60% as at 31st March, 2017.
DEPOSITS
Your Company has not accepted any fixed deposits and as such, no amount of Principal or interest was outstanding as of Balance sheet date.
DEMATERIALISATION OF SHARES AND NOMINATION FACILITY AND LISTING AT STOCK EXCHANGES
As per the Securities & Exchange Board of India directives, the transactions of the Companyâs shares must be compulsorily in dematerialised form. Your Company has signed an agreement with the Central Depository Services (India) Limited and National Securities Depository Limited for transaction of shares in dematerialised form. Shareholders holding shares in physical form are requested to convert their holdings into dematerialised form. Out of 5,38,51,066 equity shares, 5,34,17,582 equity shares are in dematerialised form, (5,32,95,991 shares as on 31st March, 2017) which is 99.19% (98.97% as on 31st March, 2017) of the total shares as on 31st March, 2018.
Shareholders holding shares in physical form may utilise the nomination facility available by sending the prescribed Form No.SH-13 duly filled, to our Registrars and Share Transfer Agents viz. M/s. Karvy Computershare Pvt. Ltd, Karvy Selenium, Tower B, Plot 31-32, Gachibowli, Financial District, Nankramguda, Hyderabad, Telangana-500032. Shareholders holding shares in dematerailised form has to send their âNominationâ request to the respective Depository Participants.
The equity shares of the Company continue to be listed on Bombay Stock Exchange Ltd., and The National Stock Exchange of India Ltd., The Annual Listing fees for the year 2017-18 have been paid to these Stock Exchanges.
UNCLAIMED DIVIDEND TRANSFER TO INVESTORS EDUCATION AND PROTECTION FUND (IEPF)
In terms of the provisions of the Companies Act, 2013, the amount (dividends) that remained unclaimed and unpaid for more than 7 years from the date become first due for payment, shall be transferred to IEPF (Fund).
The Company has been intimating the shareholders to lodge their claim for payment due, if any, from time to time and such claims have been settled. In spite of constant and sincere efforts to pay the unclaimed dividend to the respective shareholders, certain amount still remains unclaimed. The Company has been intimating the shareholders to lodge their claim for dividend from time to time and such information is being mentioned in the Annual Reports every year.
Unclaimed dividend amounting to Rs.12,65,103/- that has not been claimed by shareholders for the financial year 2009-10 has been transferred to Investor Education and Protection Fund (IEPF) during the month of October, 2017.
The dividend pertaining to the financial year 2010-11 remaining unclaimed and unpaid amounting to Rs.17,63,190/- as on 31st March, 2018, would be transferred to IEPF during September, 2018 after settlement of claims received up to the date of completion of 7 years from the date of declaration of the dividend. Shareholders who have not claimed the said dividend may write to Registrars and Share Transfer agents.
In terms of the provisions of Section 124(6) of the Companies Act, 2013 and Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Amendment Rules, 2017, Company is required to transfer the shares in respect of which dividend remains unpaid and unclaimed for a period of seven consecutive years to the Investor Education and Protection Fund (IEPF) Suspense Account. We have transferred total 106402 no. of equity shares to IEPF during the year.
STATUTORY INFORMATION:
Particulars regarding conservation of energy, technology absorption and foreign exchange earnings and expenditure.
Since the Company does not own any manufacturing facility, the particulars relating to conservation of energy and technology absorption as required to be furnished under Section 134(m) of Companies Act, 2013 are not applicable.
The Company did not earn any income in foreign currency during the year under review and also not incurred any expenses in foreign currency.
None of the employees of your company were in receipt of remuneration in excess of the limits as laid down under Section 134 of Companies Act, 2013 read with Companies (Particulars of Employees) Amendment Rules, 2011.
DIRECTORS RESPONSIBILITY STATEMENT
The Board of Directors hereby confirms that:
a. In the preparation of Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures.
b. We have selected such Accounting Policies and applied them consistently and made judgments and estimates that are reasonable and prudent to give a true and fair view of the state of affairs of the Company as at the end of 31st March, 2018 and of the profit /Loss of the Company for the year ended on that date.
c. We have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.
d. We have prepared the annual accounts on a going concern basis.
e. We have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and were operating effectively.
f. We have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
STATUTORY AUDITORS
M/s, CNK & ASSOCIATES LLP Chartered Accountants, Mumbai were re-appointed as Statutory Auditors in the twenty-fourth Annual General Meeting of the Company for the period of Five Years from the conclusion of 24th Annual General Meeting up to the conclusion of 29th Annual General Meeting of the Company subject to ratification of their appointment at every Annual General Meeting.
The Company received the requisite confirmation from them to the effect that their re-appointment, if made, would be as per Section 139 & 141 of Companies Act, 2013.
The Directors of your Company recommend for ratification of appointment of M/s CNK & ASSOCIATES, LLP, Chartered Accountants, Mumbai as Statutory Auditors of the Company from the ensuing Annual General Meeting till conclusion of 29th Annual General Meeting. Suitable resolution for re-appointment requiring approval of the shareholders forms part of the agenda of the Annual General Meeting.
SECRETARIAL AUDITOR
The Board has appointed Shri Makarand Joshi, M/s Makarand M. Joshi & Co., Practicing Company Secretaries as Secretarial Auditor of your Company for the financial year 2017-18. The Secretarial Audit Report for the financial year ended 31st March, 2018 is annexed as Annexure A to this report. The Secretarial Audit Report does not contain any qualification, reservations or adverse remark.
DIRECTORS
In accordance with the requirements of Companies Act, 2013 and Article 125 of the Articles of Associations of the Company, Shri K. Sanath Kumar, Director is due to retire by rotation but is not seeking re-election due to superannuation from the services.
The Directors of your Company wish to place on record their appreciation for the services rendered and contribution made by him during his tenure as Director of the Company.
ShriA. V. Girijakumar was appointed as Additional Director pursuant to Article 111 of Article of Association of the Company with effect from 18th August 2017 and holds office up to 28th Annual General Meeting of the Company in terms of Section 161 of the Companies Act 2013 and is eligible for appointment.
Shri NSR Chandra Prasad was appointed as an Additional Director of the Company pursuant to Article 111 of Articles of Association of the Company with effect from 26th October, 2017 and holds office up to the forthcoming Annual General Meeting of the Company in terms of Section 161 of the Companies Act, 2013 and is eligible for appointment.
Pursuant to the provisions of Sections 149, 152 read with Schedule IV and such other applicable provisions of the Companies Act, 2013 and the Companies (Appointment and Qualification of Directors) Rules, 2014, the term of ShriV. Ramasamy (Chartered Accountant), ShriKamlesh S. Vikamsey (Chartered Accountant) and Smt. Mona Bhide (Legal Practitioner) is expiring in the 28th Annual General Meeting of the Company and they are proposed to be re-appointed upto the conclusion of 30th AGM of the Company.
Company has received notices in writing from Members under Section 160 of the Companies Act 2013, proposing the candidature of Shri A. V. Girijakumar, Shri NSR Chandra Prasad, Shri V. Ramasamy, Shri Kamlesh S. Vikamsey and Smt. Mona Bhide for the Office of Director of the Company.
None of the Directors of the Company are disqualified from being appointed as Directors as specified in Section 164 of Companies Act, 2013. The Board of Directors recommends their appointment. Your Independent Directors meet all the criteria of Independence as provided in Section 149(6) of Companies Act, 2013.
STATEMENT FOR FORMAL ANNUAL EVALUATION MADE BY THE BOARD OF ITS OWN PERFORMANCE, ITS COMMITTEES AND INDIVIDUAL DIRECTORS
Our Company has prescribed required parameters to evaluate the performance of the Board and its Committees. It is always recognized that the Board comprises appropriately qualified and professional people with broad range of experience. While evaluating the performance of the individual Director, it is always seen the Knowledge to perform their role; time and level of participation; performance of duties and level of oversight; and professional conduct and independence etc.
The performance evaluation of the Directors was completed for the year. The performance evaluation of the Chairperson, Non Executive Directors and Independent Directors was carried out by the Board and Nomination and Remuneration Committee. The Board of Directors expressed their satisfaction with the evaluation process.
MEETINGS OF THE BOARD
Board met 4 (âFourâ) times during the year. For further details, please refer report on Corporate Governance. RELATED PARTY POLICY AND TRANSACTIONS
Your Company has framed Related Party Transaction Policy pursuant to Listing Regulations, 2015 which is available on the website of the Company www.gichfindia.com. The same is annexed as Annexure B to the Directorsâ Report.
Your Company is having following related party transactions which are not material in nature but the same are entered at armâs length basis with the prior approval of Audit Committee:
1) Premises taken on Lease from Promoter Insurance Companies for our Registered and Corporate Office and Branch Offices.
2) Insurance Cover taken from Promoter Group Companies.
3) Raising of financial resources and any other service, if any.
During the year, Company has also given the following Housing Loan to the KMP which has been duly approved by Audit Committee:
Name |
Loan Amount |
Outstanding due as on |
(Rs.) |
31st March 2018 |
|
(Rs.) |
||
Shri S. Sridharan, Sr. Vice President & Company Secretary |
21,11,282/- |
18,77,637/- |
Form AOC 2 as required under Companies Act 2013 for related party transaction is annexed as Annexure C to the Directorsâ Report which is having NIL Report.
CORPORATE SOCIAL RESPONSIBILTY (CSR) POLICY U/S 135 OF COMPANIES ACT 2013.
In compliance with Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company has established Corporate Social Responsibility Committee and statutory disclosures with respect to the CSR Committee and an Annual Report on CSR activities is annexed as Annexure D to this report.
VIGILANCE MECHANISM
As a conscious and vigilant organization, your Company has established proper vigilance mechanism for its Directors and employees to report concerns about unethical behaviour, actual or suspected fraud or violation of the Companyâs code of conduct or ethics policy. The Company has framed Whistle Blower Policy and the same is uploaded at the website of the Company.
NOMINATION AND REMUNERATION POLICY
The Board of Directors has framed a policy which lays down a framework for selection and remuneration of Directors, Key Managerial Personal (KMP) and Senior Management of the Company. The Nomination and Remuneration policy is available on the website (www.gichfindia.com) of the Company and also enclosed as Annexure E.
CORPORATE GOVERNANCE
The Auditors Certificate on Corporate Governance issued by the Secretarial Auditor of the Company for the year under review, as required under Companies Act, 2013 and in pursuance of SEBI (Listing Obligations and Disclosure Requirement) Regulations 2015 is annexed to the Report of the Directors on Corporate Governance.
Your Company has been complying with the principles of good Corporate Governance over the years. The Board of Directors supports the broad principles of Corporate Governance. In addition to the basic governance issues, the Board lays strong emphasis on transparency, accountability and integrity.
In terms of the provisions of Regulation 34 of SEBI (Listing Obligations and Disclosure Requirement) Regulations 2015 entered into with the Stock Exchange(s), the Management Discussion and Analysis Report forms part of this report.
HUMAN RESOURCES & INDUSTRIAL RELATIONS.
The work force strength of Your Company as on 31st March, 2018 is 271.
EXTRACT OF ANNUAL RETURN AS PER SECTION 92
Annual Return in Form MGT 9 is enclosed as per Annexure F to the Directorsâ Report.
DISCLSOURE UNDER THE SEXUAL HARASSMENT OF WOMEN
Your Company is committed to provide and promote safe and healthy environment to all its employees without any discrimination. During the year under review, there was no case filed pursuant to The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
ACKNOWLEDGEMENTS
The Directors thank the valued customers, shareholders for their goodwill, patronage and support.
The Directors acknowledge with gratitude the valuable and timely advice, guidance and support received from the Promoter(s) namely General Insurance Corporation of India (GIC Re), The New India Assurance Company Ltd., National Insurance Company Ltd., The Oriental Insurance Company Ltd. and United India Insurance Company Limited.
The Directors also thank the National Housing Bank for their support and continued refinance assistance, Banks for their continued support through term loans. The Directors also thank the Security Exchange Board of India (SEBI); Stock Exchanges; Depositories; Ministry of Corporate Affairs; Credit Rating Agencies; Government(s) local/ statutory authorities; Registrars and Share Transfer agents and the Auditors of the Company for their continued support.
The Directors place on record their deep appreciation of the valuable contribution of the members of the staff at all levels for the progress of the Company during the year and look forward to their continued cooperation in realization of the corporate goals in the years ahead.
Place: Mumbai Date: 24.04.2018
Registered Office: For and on behalf of the Board of Directors
National Insurance Building,
6th Floor, 14, Jamshedji Tata Road, Sd-
Churchgate, S. Gopakumar
Mumbai-400020 Managing Director & CEO
Mar 31, 2017
Dear Members,
The Directors have pleasure in presenting the 27th Annual Report of your Company and the Audited Accounts for the year ended 31st March, 2017.
FINANCIAL RESULTS
(Rs. in Lacs)
PARTICULARS |
March 31, 2017 |
March 31, 2016 |
Total Income |
100174 |
87637 |
Less: Interest expenditure |
66784 |
60065 |
Overheads |
10610 |
8379 |
Depreciation & amortization |
70 |
82 |
Profit Before Tax |
22710 |
19111 |
Provision for Tax |
7635 |
6110 |
Deferred Tax Assets |
302 |
551 |
Profit After Tax |
14773 |
12450 |
Profit brought forward |
6 |
4 |
Profit available for appropriation |
14779 |
12454 |
APPROPRIATIONS: |
||
General Reserve |
7330 |
5835 |
Special Reserve under Section 36(1)(viii) of Income Tax Act, 1961 |
4205 |
3372 |
Proposed Equity Dividend |
2693 |
2693 |
Tax on Proposed Dividend |
548 |
548 |
Balance carried over to Balance Sheet |
3244 |
6 |
MPORTANT FINANCIAL RATIOS |
||
PARTICULARS |
March 31, 2017 |
March 31, 2016 |
Return on Net Worth (%) |
17.62 |
17.28 |
Return on Total Assets (%) |
1.57 |
1.55 |
Book Value per share (Rs.) |
155.65 |
133.77 |
Earnings per share (Rs.) |
27.43 |
23.12 |
Debt Equity Ratio (times) |
9.83 |
9.72 |
Average cost of funds (%) |
8.77 |
9.39 |
Average yield on advances (%) |
11.63 |
12.06 |
Net Interest Margin |
2.86 |
2.67 |
DIVIDEND
Your Directors recommend payment of dividend for the year ended 31st March, 2017 of Rs.5/- per equity share of Rs.10/- each. The total dividend outgo for the current year would amount to Rs.32.41 crores including dividend distribution tax of Rs. 5.48 crores, as in the previous year.
The dividend payout ratio for the current year, inclusive of additional tax on dividend will be 21.94% as against 26.02% of previous year. As per companies (Accounting Standards) Amendments Rules, 2016, Dividend & Tax thereon will be recognized as liability on approval of shareholders at the ensuing Annual General Meeting (AGM).
OPERATIONS - PERFORMANCE
Income, Profit, Loan Approvals and Disbursements: Total income for the year under review is Rs.1001.74 crores as against Rs.876.37 crores for the year 2015-16. Profit before tax for the year ended is Rs.227.10 crores and Profit after tax for the year ended is Rs.147.73 crores as against Rs.191.11 crores and Rs.124.50 crores respectively for the previous year.
The Company''s main thrust continues to be on Individual Loans. New loans approved during the year amounted to Rs.2869 crores and loans disbursed during the year are Rs.2761 crores as against Rs.2636 crores and Rs.2511 crores for the year ended 31st March, 2016 respectively. The Retail Loan portfolio as at 31st March, 2017 stood at Rs.9271 crores as compared to Rs.7907 crores as on 31st March, 2016.
During the year under review, your Company has made provision to the extent of Rs.33.40 crores as against Rs.15.76 crores provided for in the year 2016-17.
RESOURCE MOBILISATION:
Your Company takes every effort to tap the appropriate source of funding to minimize the weighted average cost of funds. Your Company has mobilized resources through the following sources:
A. Term Loans from Banks and Insurance Companies:
Your Company has borrowed fresh long term loans of Rs.2835 crores from banks during the year as compared to Rs.1343 crores during the previous year. The aggregate of term loans outstanding at the end of the financial year stood at Rs.4611 crores as against Rs.4708 crores as at the end of the previous year.
B. Refinance from National Housing Bank (NHB):
With the continued support of National Housing Bank (NHB), your Company availed refinance amounting to Rs.1400 crores during the year under review as against Rs.1000 crores in the previous year. The refinance facility outstanding as on 31st March, 2017 is Rs.2683 crores as against Rs.1630 crores as at the end of the previous year.
C. Short term Loan and Commercial Paper:
During the year 2016-17, your Company has raised resources by issuing Commercial Paper and also resorted to short term borrowings from the banks and the outstanding amount as on 31st March, 2017 is Rs.897 crores.
D. Non-Convertible Debentures:
Your Company has outstanding balance of Rs.45 Crores through issue of Non-Convertible Debentures (NCD) on private placement as on 31st March, 2017.
CREDIT RATING
Your Company had received rating from CRISIL and ICRA for its various borrowing programmes as follows:
CRISIL Rating:
- For Commercial Paper/short term loan programmes of Rs.800 crores as [CRISIL] "A1 " (Pronounced as CRISIL A1 plus).
- For Fund Based Long Term Loan Programme of Rs.100 crores as [CRISIL] AA (Stable) (Pronounced as CRISIL double A plus/Stable).
- For Non-Convertible Debentures Borrowing Programme of Rs.550 crores [CRISIL] "AA (Stable)" (Pronounced as CRISIL double A Plus/ Stable).
ICRA Rating:
- For Commercial Paper/short term loan programmes of Rs.1500 crores as [ICRA] "A1 " (Pronounced as ICRA A1 plus). This rating is the highest credit quality rating assigned by ICRA for Short Term Debt Instruments.
- As per the Basel-II requirements - For Fund Based Long Term Loan Programme of Rs.8500 crores as [ICRA] AA (Stable) (Pronounced as ICRA double A plus/stable). This rating indicates the high credit quality rating assigned by ICRA to Long Term Debt Instruments.
- For Non-Convertible Debentures Borrowing Programme of Rs.550 crores [ICRA] "AA " (STABLE) (Pronounced as ICRA double A Plus/ stable).
BRANCH EXPANSION
During the year under review your Company has opened its Branches at Pitampura (Delhi), Hinjewadi (Maharashtra), Barasat (West Bengal), Mangalore (Karnataka) and Guwahati (Assam). The total number of Offices as on 31st March, 2017 is 65 (including Corporate Office). Your Company is initiating brand building measures to generate general awareness and improve the image of the Company.
INSURANCE COVERAGE TO BORROWERS
Your Company had taken "Special Contingency Insurance" with The New India Assurance Company Ltd., which covers the borrowers of your Company as under:
- Personal Accident Insurance: Personal accident (death only) risk cover, free of cost to the borrowers up to an amount of outstanding loan at any particular point of time during the term/tenure of the housing loan.
- Mortgaged Property Insurance: The property acquired out of loan, for and up to an extent of the outstanding loan amount, covered free of cost against fire, earthquake and allied perils affecting the mortgaged property.
Your Company has also tied up with ''Kotak Mahindra Old Mutual Life Insurance Ltd.'' , "Future Generali India Life Insurance Company Ltd." and "Birla Sun Life Insurance Company Ltd." for getting insurance cover on the life of the borrower to the extent of the "Outstanding Home Loan". The said "Group Life Cover" is optional and the Company arranges this insurance on request from the borrower. These schemes ensure protection to the families of the borrower in case of un-expected eventualities like untimely death of borrower due to accident or natural death.
CAPITAL ADEQUACY RATIO (CAR)
The Company has been maintaining the Capital Adequacy Ratio (CAR) above the minimum required level prescribed by National Housing Bank (NHB) from time to time. The CAR prescribed for the present is 12%.
The Capital Adequacy Ratio of the Company as at 31st March, 2017 is 16.60% as against 17.40% as at 31st March, 2016.
DEPOSITS
Your Company has not accepted any fixed deposits and, as such, no amount of Principal or interest was outstanding as of Balance sheet date. DEMATERIALISATION OF SHARES AND NOMINATION FACILITY AND LISTING AT STOCK EXCHANGES
As per the Securities & Exchange Board of India directives, the transactions of the Company''s shares must be compulsorily in dematerialized form. Your Company has signed an agreement with the Central Depository Services (India) Limited and National Securities Depository Limited for transaction of shares in dematerialized form. Shareholders holding shares in physical form are requested to convert their holdings into dematerialized form. Out of 5,38,51,066 equity shares, 5,32,95,991 equity shares are in dematerialized form, (5,32,85,785 shares as on 31st March, 2016) which is 98.97% (98.95% as on 31st March, 2016) of the total shares as on 31st March, 2017.
Shareholders holding shares in physical form may utilize the nomination facility available by sending the prescribed Form No.SH-13 duly filled, to our Registrars and Share Transfer Agents viz. M/s. Karvy Computershare Pvt. Ltd., Karvy Selenium, Tower B, Plot 31-32, Gachibowli, Financial District, Nankramguda, Hyderabad, Telangana-500032. Shareholders holding shares in dematerialized form has to send their "Nomination" request to the respective Depository Participants.
The equity shares of the Company continue to be listed on Bombay Stock Exchange Ltd., and The National Stock Exchange of India Ltd., The Annual Listing fees for the year 2016-17 have been paid to these Stock Exchanges.
UNCLAIMED DIVIDEND TRANSFER TO INVESTORS EDUCATION AND PROTECTION FUND (IEPF)
In terms of the provisions of the Companies Act, 2013, the amount (dividends) that remained unclaimed and unpaid for more than 7 years from the date become first due for payment, shall be transferred to IEPF (Fund).
The Company has been intimating the shareholders to lodge their claim for payment due, if any, from time to time and such claims have been settled. In spite of constant and sincere efforts to pay the unclaimed dividend to the respective shareholders, certain amount still remains unclaimed.
Unclaimed dividend amounting to Rs.10,87,904/- that has not been claimed by shareholders for the financial year 2008-09 has been transferred to Investor Education and Protection Fund (IEPF) during the month of October, 2016.
The dividend pertaining to the financial year 2009-10 remaining unclaimed and unpaid amounting to Rs.12,69,603/- as on 31st March, 2017, would be transferred to IEPF during September, 2017 after settlement of claims received up to the date of completion of 7 years from the date of declaration of the dividend. Shareholders who have not claimed the said dividend may write to Registrars and Share Transfer agents.
In terms of the provisions of Section 124(6) of the Companies Act, 2013 and Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Amendment Rules, 2017, Company is required to transfer the shares in respect of which dividend remains unpaid and unclaimed for a period of seven consecutive years to the Investor Education and Protection Fund (IEPF) Suspense Account. We have already published a Notice on 10th December, 2016 for the same and a list of shareholders whose shares to be transferred to IEPF has been updated on the website.
STATUTORY INFORMATION:
Particulars regarding conservation of energy, technology absorption and foreign exchange earnings and expenditure
Since the Company does not own any manufacturing facility, the particulars relating to conservation of energy and technology absorption stipulated in the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, required to be furnished under Section 134(m) of Companies Act, 2013 are not applicable.
The Company did not earn any income in foreign currency during the year under review and also not incurred any expenses in foreign currency.
None of the employees of your company were in receipt of remuneration in excess of the limits as laid down under Section 134 of Companies Act, 2013 read with Companies (Particulars of Employees) Amendment Rules, 2011.
DIRECTORS RESPONSIBILITY STATEMENT
The Board of Directors hereby confirms that:
a. In the preparation of Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures.
b. We have selected such Accounting Policies and applied them consistently and made judgments and estimates that are reasonable and prudent to give a true and fair view of the state of affairs of the Company as at the end of 31st March, 2017 and of the profit/ Loss of the Company for the year ended on that date.
c. We have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.
d. We have prepared the annual accounts on a going concern basis.
e. We have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and were operating effectively.
f. We have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
STATUTORY AUDITORS
M/s. CNK & ASSOCIATES LLP Chartered Accountants, Mumbai were re-appointed as Statutory Auditors in the twenty-fourth Annual General Meeting of the Company for the period of Five Years from the conclusion of 24th Annual General Meeting up to the conclusion of 29th Annual General Meeting of the Company subject to ratification of their appointment at every Annual General Meeting.
The Company received the requisite confirmation from them to the effect that their re-appointment, if made, would be as per Section 139 & 141 of Companies Act, 2013.
The Directors of your Company recommend for ratification of appointment of M/s CNK & ASSOCIATES, LLP, Chartered Accountants, Mumbai as Statutory Auditors of the Company from the ensuing Annual General Meeting till conclusion of 28th Annual General Meeting. Suitable resolution for re-appointment requiring approval of the shareholders forms part of the agenda of the Annual General Meeting.
SECRETARIAL AUDITOR
The Board has appointed Shri Makarand Joshi, M/s Makarand M. Joshi & Co., Practicing Company Secretaries as Secretarial Auditor of your Company for the financial year 2016-17. The Secretarial Audit Report for the financial year ended 31st March, 2017 is annexed as Annexure A to this report. The Secretarial Audit Report does not contain any qualification, reservations or adverse remark.
DIRECTORS
Pursuant to the provisions of Sections 149, 152 read with Schedule IV and such other applicable provisions of the Companies Act, 2013 and the Companies (Appointment and Qualification of Directors) Rules, 2014, the term of Shri B. Chakrabarti (Chartered Accountant), Shri M. K. Garg (Chartered Accountant) and Shri A. V. Muralidharan (Chartered Accountant & Company Secretary) is expiring in the 27th Annual General Meeting of the Company and they are proposed to be re-appointed up to the conclusion of 29th AGM of the Company.
Shri S. Gopakumar was appointed as an Additional Director of the Company pursuant to the Article 111 of Articles of Association of the Company and in terms of Section 161 of the Companies Act, 2013 with effect from 8th November, 2016 who holds office up to the conclusion of 27th AGM of the Company.
Pursuant to the provisions of Sections 196, 197, 198, 203 read with Schedule V of the Companies Act, 2013 and other applicable provisions of the Companies Act, 2013 and subject to approval of the shareholders at their meeting and any other approvals, as may be applicable Shri S. Gopakumar is to be appointed as Managing Director & CEO, on and from 8th November, 2016 for initially two years or up to his extended period of deputation if any at the remuneration he is entitled to in accordance with the Service Regulations applicable in the pay scale VII for General Manager cadre of The Oriental Insurance Company Ltd. with any modifications, revisions, thereof, if any that might take place from time to time, and also eligible for perquisites and performance incentives as applicable for the post of Managing Director & CEO in our Company subject to ceiling limits prescribed by Schedule V of the Companies Act, 2013.
Your Company has received a notice in writing from a shareholder(s) as per Section 160 of Companies Act, 2013, proposing the candidature of Shri B. Chakrabarti, Shri M. K. Garg, Shri A. V. Muralidharan and Shri S. Gopakumar for the office of Director(s) of the Company at the ensuing Annual General Meeting, for their appointment as Director(s) of the Company.
None of the Directors of the Company are disqualified from being appointed as Directors as specified in Section 164 of Companies Act, 2013. The Board of Directors recommends their appointment.
The Company has complied according to the provision of Section 149(6) of the Companies Act, 2013. The Company has also obtained declarations from all the Independent Directors pursuant to Section 149(7) of the Companies Act, 2013.
Appointment of any new Director in the Company is done by the Board on the basis of recommendation of Nomination and Remuneration Committee. While selecting new Directors, Board shall ensure that there is appropriate balance of skills, experience and knowledge in the Board so as to enable the Board to discharge its functions and duties effectively.
STATEMENT FOR FORMAL ANNUAL EVALUATION MADE BY THE BOARD OF ITS OWN PERFORMANCE, ITS COMMITTEES AND INDIVIDUAL DIRECTORS
Our Company has prescribed required parameters to evaluate the performance of the Board and its Committees. It is always recognized that the Board comprises appropriately qualified and professional people with broad range of experience. While evaluating the performance of the individual Director, it is always seen the Knowledge to perform their role; time and level of participation; performance of duties and level of oversight; and professional conduct and independence etc.
The performance evaluation of the Directors was completed for the year. The performance evaluation of the Chairperson, Non-Executive Directors and Independent Directors was carried out by the Board and Nomination and Remuneration Committee. The Board of Directors expressed their satisfaction with the evaluation process.
MEETINGS OF THE BOARD
Board met 5 (Five) times during the year. For further details, please refer report on Corporate Governance.
RELATED PARTY POLICY AND TRANSACTIONS
Your Company has framed Related Party Transaction Policy pursuant to Listing Regulations, 2015 which is available on the website of the Company www.gichfindia.com. The same is annexed as Annexure B to the Directors'' Report.
Your Company is having following related party transactions which are not material in nature but the same are entered at arm''s length basis with the prior approval of Audit Committee:
1) Premises taken on Lease from Promoter Insurance Companies for our Registered and Corporate Office and Branch Offices.
2) Insurance Cover taken from Promoter Group Companies.
3) Raising of financial resources and any other service, if any.
During the year, Company has also given the following Housing Loan to the KMP which has been duly approved by Audit Committee:
Name |
Loan Amount |
Outstanding due as on |
|
(Rs.) |
31st March 2017 |
|
|
(Rs.) |
Shri S. Sridharan, Sr. Vice President & Company Secretary |
21,11,282/- |
20,67,845/- |
Form AOC 2 as required under Companies Act, 2013 for related party transaction is annexed as Annexure C to the Directors'' Report which is having NIL Report.
CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY U/S 135 OF COMPANIES ACT, 2013.
Our Company is having its CSR Policy which is available at the website (www.gichfindia.com) of the Company. Company is having total available funds of Rs.3.187 Crores for spending towards CSR Activity for F.Y. 2016-17.
Your Company has contributed Rs.1.34 crores (i.e. 50% from the total fund of Rs. 2.67 crores available for F.Y. 2015-16) to Prime Minister''s National Relief Fund, Swach Bharat Kosh and Clean Ganga Fund in the F.Y. 2016-17.
Your Company has also contributed Rs.28 lacs (from the balance fund of Rs. 1.08 crores available for F.Y. 2014-15) towards its Sanitation Project near Arthur Road Naka, Chinchpokli (W), Mumbai in the F.Y. 2016-17. The subject project has been completed and inaugurated successfully and is in use by general public.
The total unspent CSR amount as on 31st March, 2017 is Rs.5.327 crores (Rs. 3.187 crores relating to F.Y. 2016-17, Rs.1.33 crores relating to F.Y. 2015-16 and Rs.0.81 crores relating to F.Y. 2014-15). Your Company could not spend the full amount of CSR due to no prior experience of CSR activities. Now, the Company has completed its first project successfully and will take up another projects which can be useful to the society.
VIGILANCE MECHANISM
As a conscious and vigilant organization, your Company has established proper vigilance mechanism for its Directors and employees to report concerns about unethical behaviour, actual or suspected fraud or violation of the Company''s code of conduct or ethics policy. The Company has framed Whistle Blower Policy and the same is uploaded at the website of the Company.
NOMINATION AND REMUNERATION POLICY
The Board of Directors has framed a policy which lays down a framework for selection and remuneration of Directors, Key Managerial Personal (KMP) and Senior Management of the Company. The Nomination and Remuneration policy is available on the website (www. gichfindia.com) of the Company and also enclosed as Annexure D.
CORPORATE GOVERNANCE
The Auditors Certificate on Corporate Governance issued by the Secretarial Auditor of the Company for the year under review, as required under Companies Act, 2013 and in pursuance of SEBI (Listing Obligations and Disclosure Requirement) Regulations 2015 is annexed to the Report of the Directors on Corporate Governance.
Your Company has been complying with the principles of good Corporate Governance over the years. The Board of Directors supports the broad principles of Corporate Governance. In addition to the basic governance issues, the Board lays strong emphasis on transparency, accountability and integrity.
In terms of the provisions of Regulation 34 of SEBI (Listing Obligations and Disclosure Requirement) Regulations 2015 entered into with the Stock Exchange(s), the Management Discussion and Analysis Report forms part of this report.
HUMAN RESOURCES & INDUSTRIAL RELATIONS
The Company aims to align HR practices with business goals, motivate people for higher performance and build a competitive working environment. Your Company has continuously been working to improve human resource competence and capabilities in the Company to deliver the desired results. Your Company has developed a comprehensive "in-house" induction training module to make sure that new employees understand the basic focus of the Company in its all operations. Apart from fixed salaries and perquisites, we also have in place performance linked incentive scheme to all the employees which rewards the outstanding performing teams that achieve certain performance targets. In pursuance of the Company''s commitment to develop and retain the best available talent, the Company has been sponsoring the employees for training programmes conducted by National Housing Bank for upgrading the skill and knowledge of the employees in different operational areas. The work force strength of Your Company as on 31st March, 2017 is 256.
EXTRACT OF ANNUAL RETURN AS PER SECTION 92
Annual Return in Form MGT 9 is enclosed as per Annexure E to the Directors'' Report.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN
Your Company is committed to provide and promote safe and healthy environment to all its employees without any discrimination. During the year under review, there was 1 (One) case filed pursuant to The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
ACKNOWLEDGEMENTS
The Directors thank the valued customers, shareholders for their goodwill, patronage and support.
The Directors acknowledge with gratitude the valuable and timely advice, guidance and support received from the Promoter(s) namely General Insurance Corporation of India (GIC Re), The New India Assurance Company Ltd., National Insurance Company Ltd., The Oriental Insurance Company Ltd. and United India Insurance Company Limited.
The Directors also thank the National Housing Bank for their support and continued refinance assistance, Banks for their continued support through term loans. The Directors also thank the Security Exchange Board of India (SEBI); Stock Exchanges; Depositories; Ministry of Corporate Affairs; Credit Rating Agencies; Government(s) local/ statutory authorities; Registrars and Share Transfer agents and the Auditors of the Company for their continued support.
The Directors place on record their deep appreciation of the valuable contribution of the members of the staff at all levels for the progress of the Company during the year and look forward to their continued cooperation in realization of the corporate goals in the years ahead.
Place : Mumbai Date : 26th April, 2017
Registered Office: For and on behalf of the Board of Directors
National Insurance Building,
6th Floor, 14, Jamshedji Tata Road, Sd/-
Churchgate, S. Gopakumar
Mumbai - 400 020 Managing Director & CEO
Mar 31, 2016
Dear Members,
The Directors have pleasure in presenting the 26th Annual Report of
your Company and the Audited Accounts for the year ended 31st March,
2016.
FINANCIAL RESULTS
(Rs, in Lacs)
PARTICULARS March 31, 2016 March 31, 2015
Total Income 87637 73274
Less: Interest expenditure 60065 50893
Overheads 8379 6660
Depreciation & amortization 82 351
Profit Before Tax 19111 15370
Provision for Tax 6110 4860
Deferred Tax Assets 551 214
Profit Afer Tax 12450 10296
Profit brought forward 4 5
Profit available
for appropriation 12454 10301
APPROPRIATIONS:
General Reserve 5835 4200
Special Reserve under
Section 36(1)(viii) of
Income Tax Act, 1961 3372 2856
Proposed Equity Dividend 2693 2693
Tax on Proposed Dividend 548 548
Balance carried
over to Balance Sheet 6 4
IMPORTANT FINANCIAL
RATIOS PARTICULARS March 31, 2016 March 31, 2015
Return on Net Worth (%) 17.28 16.53
Return on Total Assets (%) 1.55 1.53
Book Value per share (Rs,) 133.77 115.65
Earnings per share (Rs,) 23.12 19.12
Debt Equity Rato (times) 9.72 9.30
Average cost of funds (%) 9.39 9.74
Average yield on advances (%) 12.06 12.22
Net Interest Margin 2.67 2.48
DIVIDEND
Your Directors recommend payment of dividend for the year ended 31st
March, 2016 of Rs, 5 per equity share ofRs, 10/- each. The total
dividend outgo for the current year would amount to Rs, 32.41 crores
including dividend distribution tax of Rs, 5.48 Crores, as in the
previous year.
The dividend payout rato for the current year, inclusive of Additional
tax on dividend will be 26.02%.
OPERATIONS - PERFORMANCE
Income, Profit, Loan Approvals and Disbursements: Total income for the
year under review is Rs, 876.37 crores as against Rs, 732.74 crores for
the year 2014-15. Profit before tax for the year ended is Rs, 191.11
crores and Profit after tax for the year ended is Rs, 124.50 crores as
against Rs, 153.70 crores and Rs, 102.96 crores respectively for the
previous year.
The Company''s main thrust continues to be on Individual Loans. New
loans approved during the year amounted to Rs, 2636 crores and loans
disbursed during the year are Rs, 2511 crores as against Rs, 2305
crores and Rs, 2225 crores for the year ended 31st March, 2015
respectively. The Retail Loan portfolio as at 31st March, 2016 stood at
Rs, 7907 crores as compared to Rs, 6593 crores as on 31st March, 2015.
During the year under review, your Company has made provision to the
extent of Rs, 15.76 crores as against Rs, 12.28 crores provided for in
the year 2014-15. The Company is also carrying an Additional provision
of Rs, 83.86 crores in books, beyond what is prescribed under the
guidelines, as a prudential measure. Gross Non-Performing Assets on
retails loans as on 31st March, 2016 is 1.76% as against 1.73% for the
previous year. Net non performing loans as on 31st March, 2016 is NIL
as that of the previous year.
RESOURCE MOBILISATION:
Your Company takes every effort to tap the appropriate source of
funding to minimize the weighted average cost of funds. Your Company
has mobilized resources through the following sources:
A. Term Loans from Banks and Insurance Companies.
Your Company has borrowed fresh long term loans of Rs, 1343 crores from
banks during the year as compared to Rs, 1404 crores during the
previous year. The aggregate of term loans outstanding at the end of
the financial year stood at Rs, 4708 crores as against Rs, 4174 crores
as at the end of the previous year.
B. Refinance from National Housing Bank (NHB):
With the continued support of National Housing Bank (NHB), your Company
availed refinance amounting to Rs, 1000 crores during the year under
review as against Rs, 350 crores in the previous year. The refinance
facility outstanding as on 31st March, 2016 is Rs, 1630 crores as
against Rs, 860 crores as at the end of the previous year.
C. Short-term Loan and Commercial Paper:
During the year 2015-16, your Company has raised resources by issuing
Commercial Paper and also resorted to short-term borrowings from the
banks and the outstanding amount as on 31st March, 2016 is Rs, 626
crores (Gross).
D. Non-Convertible Debentures:
Your Company has outstanding balance of Rs, 45 Crores through issue of
Non-Convertible Debentures (NCDs) on private placement as on 31st
March, 2016.
CREDIT RATING
Your Company had received rating from CRISIL and ICRA for its various
borrowing programmes as follows:
CRISIL Rating:
For Commercial Paper/short-term loan programmes ofRs, 800 crores as
[CRISIL] "A1 " (Pronounced as CRISIL A1 plus).
For Fund Based Long Term Loan Programme of Rs, 100 crores as [CRISIL]
AA (Stable) (Pronounced as CRISIL double A plus/ Stable).
- For Non-Convertible Debentures Borrowing Programme ofRs, 550 crores
[CRISIL] "AA (Stable)" (Pronounced as CRISIL double A Plus/Stable).
ICRA Rating:
For Commercial Paper/short-term loan programmes ofRs, 1200 crores as
[ICRA] "A1 " (Pronounced as ICRA A1 plus). This rating is the highest
credit quality rating assigned by ICRA for Short-Term Debt Instruments.
As per the Basel-II requirements - For Fund Based Long Term Loan
Programme of Rs, 7000 crores as [ICRA] AA (Stable) (Pronounced as ICRA
double A plus/stable). This rating indicates the high credit quality
rating assigned by ICRA to Long-Term Debt Instruments.
- For Non-Convertible Debentures Borrowing Programme of Rs, 550 crores
[ICRA] "AA (Stable)" (Pronounced as ICRA double A Plus/stable).
BRANCH EXPANSION
During the year under review your Company has opened its Branches at
Greater Noida (Utar Pradesh), Raipur (Chhatsgarh), Vijayawada (Andhra
Pradesh), Vasai (Maharashtra) and Patala (Punjab). The total number of
Offices as on 31st March, 2016 is 60. Your Company is imitating brand
building measures to generate general awareness and improve the image
of the Company.
INSURANCE COVERAGE TO BORROWERS
Your Company had taken "Special Contingency Insurance" with The New
India Assurance Company Ltd., which covers the borrowers of your
Company as under:
Personal Accident Insurance: Personal accident (death only) risk cover,
free of cost to the borrowers up to an amount of outstanding loan at
any particular point of time during the term/tenure of the housing
loan.
Mortgaged Property Insurance: The property acquired out of loan, for
and up to an extent of the outstanding loan amount, covered free of
cost against fire, earthquake and allied perils affecting the mortgaged
property.
Your Company has also tied up with ''Kotak Mahindra Old Mutual Life
Insurance Limited'' and "Future Generali India Life Insurance Company
Limited" for getting insurance cover on the life of the borrower to the
extent of the "Outstanding Home Loan". The said "Group Life Cover" is
optional and the Company arranges this insurance on request from the
borrower. These schemes ensure protection to the families of the
borrower in case of un-expected eventualities like untimely death of
borrower due to accident or natural death.
CAPITAL ADEQUACY RATIO (CAR)
The Company has been maintaining the Capital Adequacy Rato (CAR) above
the minimum required level prescribed by National Housing Bank (NHB)
from time to time. The CAR prescribed for the present is 12%.
The Capital Adequacy Rato of the Company as at 31st March, 2016 is
17.40% as against 15.36% as at 31st March, 2015.
DEPOSITS
Your Company has not accepted any fixed deposits and, as such, no
amount of Principal or interest was outstanding as of Balance sheet
date.
DEMATERIALISATION OF SHARES AND NOMINATION FACILITY AND LISTING AT
STOCK EXCHANGES
As per the Securities & Exchange Board of India directives, the
Transactions of the Company''s shares must be compulsorily in
dematerialized form. Your Company has signed an agreement with the
Central Depository Services (India) Limited and National Securities
Depository Limited for transaction of shares in dematerialized form.
Shareholders holding shares in physical form are requested to convert
their holdings into dematerialized form. Out of 5,38,51,066 equity
shares, 5,32,85,785 equity shares are in dematerialized form,
(5,32,61,704 shares as on 31st March, 2015) which is 98.95% (98.91% as
on 31st March, 2015) of the total shares as on 31st March, 2016.
Shareholders holding shares in physical form may utilize the nomination
facility available by sending the prescribed Form No.SH-13 duly filled,
to our Registrars and Share Transfer Agents viz. M/s Karvy
Computershare Pvt. Ltd., Karvy Selenium, Tower B, Plot 31-32,
Gachibowli, Financial District, Nanakramguda, Hyderabad, Telangana -
500 032. Shareholders holding shares in dematerialized form has to send
their "Nomination" request to the respective Depository Participants.
The equity shares of the Company continue to be listed on BSE Ltd. and
The National Stock Exchange of India Ltd. The Annual Listing fees for
the year 2015-16 have been paid to these Stock Exchanges.
UNCLAIMED DIVIDEND TRANSFER TO INVESTORS EDUCATION AND PROTECTION FUND
(IEPF)
In terms of the provisions of the Companies Act, 1956 (which are still
applicable), the amount (dividends) that remained unclaimed and unpaid
for more than 7 years from the date become first due for payment, shall
be transferred to IEPF (Fund). In terms of the applicable statutory
provisions of the Companies Act, 1956, no claim would lie against the
Company or the said Fund after such transfer to IEPF.
The Company has been intimating the shareholders to lodge their claim
for payment due, if any, from time to time and such claims have been
settled. In spite of constant and sincere efforts to pay the unclaimed
dividend to the respective shareholders, certain amount still remains
unclaimed. The Company has been intimating the shareholders to lodge
their claim for dividend from time to time and such information is
being mentioned in the Annual Reports every year.
Unclaimed dividend amounting to Rs, 9,81,280/- that has not been
claimed by shareholders for the financial year 2007-08 has been
transferred to Investor Education and Protection Fund (IEPF) during the
month of October, 2015 wherein no claim would lie against the Company
or the said fund after the transfer.
The dividend pertaining to the financial year 2008-09 remaining
unclaimed and unpaid amounting to Rs, 11,04,952/- as on 31st March,
2016, would be transferred to IEPF during October, 2016 after
settlement of claims received up to the date of completion of 7 years
from the date of declaration of the dividend. The Company has sent
individual reminder Letters to the respective shareholders during the
month of June 2016. Shareholders who have not claimed the said dividend
may write to Registrars and Share Transfer agent.
STATUTORY INFORMATION:
Particulars regarding conservation of energy, technology absorption and
foreign exchange earnings and expenditure Since the Company does not
own any manufacturing facility, the particulars relating to
conservation of energy and technology absorption stipulated in the
Companies (Disclosure of Particulars in the Report of the Board of
Directors) Rules, 1988, required to be furnished under Section 134(m)
of Companies Act, 2013 are not applicable.
The Company did not earn any income in foreign currency during the year
under review and also not incurred any expenses in foreign currency.
None of the employees of your company were in receipt of remuneration
in excess of the limits as laid down under Section 134 of Companies
Act, 2013 read with Companies (Particulars of Employees) Amendment
Rules, 2011.
DIRECTORS RESPONSIBILITY STATEMENT
The Board of Directors hereby confirms that:
a) In the preparation of Annual Accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures.
b) We have selected such Accounting Policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent to give a true and fair view of the state of affairs of the
Company as at the end of 31st March, 2016 and of the Profit/Loss of the
Company for the year ended on that date.
c) We have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the
Act for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities.
d) We have prepared the annual accounts on a going concern basis.
e) We have laid down internal financial controls to be followed by the
Company and such internal financial controls are adequate and were
operating effectively.
f) We have devised proper systems to ensure compliance with the
provisions of all applicable laws and that such systems were adequate
and operating effectively.
STATUTORY AUDITORS
M/s CNK & ASSOCIATES LLP Chartered Accountants, Mumbai were
re-appointed as Statutory Auditors in the twenty-fourth Annual General
Meeting of the Company for the period of Five Years from the conclusion
of 24th Annual General Meeting up to the conclusion of 29th Annual
General Meeting of the Company subject to ratification of their
appointment at every Annual General Meeting.
The Company received the requisite confirmation from them to the effect
that their re-appointment, if made, would be as per Section 139 & 141
of Companies Act, 2013.
The Directors of your Company recommend for ratification of appointment
of M/s CNK & ASSOCIATES LLP Chartered Accountants, Mumbai as Statutory
Auditors of the Company from the ensuing Annual General Meeting till
conclusion of 27th Annual General Meeting. Suitable Resolution for
re-appointment requiring approval of the shareholders forms part of the
agenda of the Annual General Meeting.
SECRETARIAL AUDITOR
The Board has appointed Shri Makarand Joshi, M/s Makarand M. Joshi &
Co., Practicing Company Secretaries as the Secretarial Auditor of your
Company for the financial year 2015-16. The Secretarial Audit Report
for the financial year ended 31st March, 2016 is annexed as Annexure A
to this report. The Secretarial Audit Report does not contain any
qualification, reservations or adverse remark.
DIRECTORS
Shri Y. Ramulu, Smt. Alice G. Vaidyan and Shri K. Sanath Kumar were
appointed as Additional Director (s) of the Company w.e.f. 30th June,
2015, 29th January, 2016 and 21st March, 2016 respectively as per
Section 161 of the Companies Act, 2013, if any and Article 111 of
Articles of Association of the Company.
Your Company has received a notice in writing from a shareholder(s) as
per Section 160 of the Companies Act, 2013, proposing the candidature
of Shri Y. Ramulu, Smt. Alice G. Vaidyan and Shri K. Sanath Kumar for
the office of Director(s) of the Company at the ensuing Annual General
Meeting, for their appointments as Non Executive Directors of the
Company.
None of the Directors of the Company are disqualified from being
appointed as Directors as specified in Section 164 of the Companies
Act, 2013. The Board of Directors recommends their appointments.
The Company has complied according to the provision of Section 149(6)
of the Companies Act, 2013. The Company has also obtained declarations
from all the Independent Directors pursuant to Section 149(7) of the
Companies Act, 2013.
Appointment of any new Director in the Company is done by the Board on
the basis of recommendation of Nomination and Remuneration Committee.
While selecting new Directors, Board shall ensure that there is
appropriate balance of skills, experience and knowledge in the Board so
as to enable the Board to discharge its functions and duets
effectively.
STATEMENT FOR FORMAL ANNUAL EVALUATION MADE BY THE BOARD OF ITS OWN
PERFORMANCE, ITS COMMITTEES AND INDIVIDUAL DIRECTORS
Our Company has prescribed required parameters to evaluate the
performance of the Board and its Committees. It is always recognized
that the Board comprises appropriately qualified and professional
people with broad range of experience. While evaluating the performance
of the individual Director, it is always seen the Knowledge to perform
their role; time and level of participation; performance of dutes and
level of oversight; and professional conduct and independence etc.
The performance evaluation of the Directors was completed for the year.
The performance evaluation of the Chairperson, Non Executive Directors
and Independent Directors was carried out by the Board and Nomination
and Remuneration Committee. The Board of Directors expressed their
satisfaction with the evaluator process.
MEETINGS OF THE BOARD
Board met 6 (Six) times during the year. For further details, please
refer report on Corporate Governance.
RELATED PARTY TRANSACTION U/S 188
Your Company is having following related party Transactions which are
not material in nature but the same are entered at arm''s length basis
with the prior approval of Audit Committee:
1. Premises taken on Lease from Promoter Insurance Companies for our
Registered and Corporate Office and Branch Offices.
2. Insurance Cover taken from Promoter Group Companies.
3. Raising of financial resources.
During the year, Company has also given the following Housing Loans to
the Director''s relatives and KMP which have been duly approved by Audit
Committee:
Name Loan Amount Outstanding due as on
(Rs,) 31st March 2016 (Rs,)
Shri Aniket
Milind Kharat 75,00,000/- 73,90,426/-
(Son of Shri Milind
A. Kharat, CMD of
United India Insurance
Company Ltd. and
Non Executive
Director of the
Company)
Shri S. Sridharan, 21,11,282/- 14,31,713/-
Sr. Vice President
& Company Secretary
Form AOC 2 as required under Companies Act, 2013 for related party
transaction is annexed as Annexure B to the Directors'' Report which is
having NIL Report.
CORPORATE SOCIAL RESPONSIBILTY (CSR) POLICY U/S 135 OF THE COMPANIES
ACT, 2013.
Our Company is having its CSR Policy which is available at the website
(www.gichfndia.com) of the Company. Company is having total available
funds ofRs, 2.67 crores for spending towards CSR Activity. The approved
Acton Plan for financial year 2015-16 towards CSR Programmes was:
1. Contribution to the Prime Minister''s National Relief Fund;
2. Contribution to the "Swach Bharat Kosh" set up by the Central
Govt.;
3. Contribution to the "Clean Ganga Fund" set up by the Central Govt.;
4. Education;
5. Sanitation.
Accordingly, it was proposed to contribute 50% of available fund i.e.,
Rs, 1.34 crores to the 3 funds as stated herein above and balance
available funds will be utilized towards Education and Sanitation
relating CSR Actives. Your Company is in the process of finalizing the
suitable NGO for its sanitation activity and the same will be executed
in the F.Y 2016-17.
Your Company has contributed Rs, 1.08 crores (the carried forward
amount for the F.Y. 2014-15) to Prime Minister''s National Relief Fund,
Swach Bharat Kosh and Clean Ganga Fund in the F.Y. 2015-16.
The total unspent CSR amount as on 31st March, 2016 is Rs, 3.76 crores
(Rs, 2.67 crores relating to F.Y. 2015-16 and Rs, 1.09 crores relating
to F.Y. 2014-15).
VIGILANCE MECHANISM
As a conscious and vigilant organization, your Company has established
proper vigilance mechanism for its Directors and employees to report
concerns about unethical behavior, actual or suspected fraud or
violation of the Company''s code of conduct or ethics policy. The
Company has framed Whistle Blower Policy and the same is uploaded at
the website of the Company.
NOMINATION AND REMUNERATION POLICY
The Board of Directors has framed a policy which lays down a framework
for selection and remuneration of Directors, Key Manageral Personal
(KMP) and Senior Management of the Company. The Nomination and
Remuneration policy is available on the website (www.gichfndia.com) of
the Company and also enclosed as Annexure C.
CORPORATE GOVERNANCE
The Auditors Certificate on Corporate Governance issued by the
Secretarial Auditor of the Company for the year under review, as
required under Companies Act, 2013 and in pursuance of SEBI (Listing
Obligations and Disclosure Requirement) Regulations 2015 is annexed to
the Report of the Directors on Corporate Governance.
Your Company has been complying with the principles of good Corporate
Governance over the years. The Board of Directors supports the broad
principles of Corporate Governance. In addition to the basic governance
issues, the Board lays strong emphasis on transparency, accountability
and integrity.
In terms of the provisions of Regulation 34 of SEBI (Listing
Obligations and Disclosure Requirement) Regulations 2015 entered into
with the Stock Exchange(s), the Management Discussion and Analysis
Report forms part of this report.
HUMAN RESOURCES & INDUSTRIAL RELATIONS.
The Company aims to align HR practices with business goals, motivate
people for higher performance and build a competitive working
environment. Your Company has continuously been working to improve
human resource competence and capabilities in the Company to deliver
the desired results. Your Company has developed a comprehensive
"in-house" induction training module to make sure that new employees
understand the basic focus of the Company in its all operations. Apart
from fixed salaries and perquisites, we also have in place performance
linked incentive scheme to all the employees which rewards the
outstanding performing teams that achieve certain performance targets.
In pursuance of the Company''s commitment to develop and retain the best
available talent, the Company has been sponsoring the employees for
training programmes conducted by National Housing Bank for upgrading
the skill and knowledge of the employees in different operational
areas. The work force strength of Your Company as on 31st March, 2016
is 265.
EXTRACT OF ANNUAL RETURN AS PER SECTION 92
Annual Return in Form MGT 9 is enclosed as per Annexure D to the
Directors'' Report.
DISCLSOUSRE UNDER THE SEXUAL HARASSMENT OF WOMEN
Your Company is committed to provide and promote safe and healthy
environment to all its employees without any discrimination. During
the year under review, there was no case fled pursuant to The Sexual
Harassment of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013.
ACKNOWLEDGEMENTS
The Directors thank the valued customers, shareholders for their
goodwill, patronage and support.
The Directors acknowledge with gratitude the valuable and timely
advice, guidance and support received from the Promoter(s) namely
General Insurance Corporation of India (GIC Re), The New India
Assurance Company Ltd., National Insurance Company Ltd., The Oriental
Insurance Company Ltd. and United India Insurance Company Limited.
The Directors also thank the National Housing Bank for their support
and continued refinance assistance, Banks for their continued support
through term loans. The Directors also thank the Security Exchange
Board of India (SEBI); Stock Exchanges; Depositories; Ministry of
Corporate Affairs; Credit Rating Agencies; Government(s)
local/statutory authorities; Registrars and Share Transfer agent and
the Auditors of the Company for their continued support.
The Directors place on record their deep appreciation of the valuable
contribution of the members of the staff at all levels for the progress
of the Company during the year and look forward to their continued
cooperation in realization of the corporate goals in the years ahead.
Place : Mumbai
Date : 29th April, 2016
Registered Office: For and on behalf of the
Board of Directors
National Insurance Building,
6th Floor, 14, Jamshedji Tata Road, Sd/-
Churchgate, Warendra Sinha
Mumbai - 400 020 Managing Director & CEO
Mar 31, 2015
Dear Members,
The Directors have pleasure in presenting the 25th Annual Report of
your Company and the Audited Accounts for the year ended 31st March,
2015.
FINANCIAL RESULTS
(Rs in Lacs)
PARTICULARS March 31, 2015 March 31, 2014
Total Income 73274 62492
Less: Interest expenditure 50893 41925
Overheads 6660 7036
Depreciation & amortization 351 205
ProfitBefore Tax 15370 13326
Provision for Tax 4860 4450
Deferred Tax Assets (774) (879)
Deferred Tax on Special Reserve 988 -
Profit After Tax 10296 9755
Profit brought forward 5 5
Profit available for appropriation 10301 9760
APPROPRIATIONS:
General Reserve 4200 3115
Special Reserve under Section
36(1)(viii) of Income Tax Act,1961 2856 2860
Proposed Equity Dividend 2693 3231
Tax on Proposed Dividend 548 549
Balance carried over to Balance Sheet 4 5
IMPORTANT FINANCIAL RATIOS
PARTICULARS March 31,2015 March 31,2014
Return on Net Worth (%) 16.53 17.77
Return on Total Assets (%) 1.53 1.77
Book Value per share (Rs.) 115.65 101.97
Earning per share (Rs.) 19.12 18.12
Debt Equity Ratio (times) 9.30 8.47
Average cost of funds (%) 9.74 9.72
Average yield on advances (%) 12.22 12.50
Net Interest Margin 2.48 2.78
DIVIDEND
Your Directors recommend payment of dividend for the year ended 31st
March, 2015 of Rs. 5 per equity share of Rs. 10/- each. The total dividend
outgo for the current year would amount to Rs. 32.41 crores including
dividend distribution tax of Rs. 5.48 crores, as against Rs. 37.80 crores
including dividend distribution tax of Rs. 5.49 crores in the previous
year.
The dividend payout ratio for the current year, inclusive of additional
tax on dividend will be 31.46%.
OPERATIONS - PERFORMANCE
Income, Profit, Loan Approvals and Disbursements: Total income for the
year under review is Rs. 732.74 crores as against Rs.624.92 crores for the
year 2013-14. Profit before tax for the year ended isRs. 153.70 crores
and profit after tax for the year ended is Rs. 102.96 crores as against Rs.
133.26 crores and Rs. 97.55 crores respectively for the previous year.
The Company''s main thrust continues to be on Individual Loans. New
loans approved during the year amounted to Rs. 2305 crores and loans
disbursed during the year are Rs. 2225 crores as against Rs. 1755 crores
and Rs. 1665 crores for the year ended 31st March,
2014 respectively. The Retail Loan portfolio as at 31st March, 2015
stood at Rs. 6593 crores as compared to Rs. 5299 crores as on 31st March,
2014.
During the year under review, your Company has made provision to the
extent of Rs. 12.28 crores as against Rs. 24.76 crores provided for in the
year 2013-14. The Company is also carrying an additional provision of Rs.
58.62 crores in books, beyond what is prescribed under the guidelines,
as a prudential measure. Gross Non Performing Assets on retails loans
as on 31st March,
2015 is 1.73% as against 1.57% for the previous year. Net non
performing loans as on 31st March, 2015 is "NIL" as that of the
previous year.
RESOURCE MOBILISATION:
Your Company takes every effort to tap the appropriate source of
funding to minimize the weighted average cost of funds. Your Company
has mobilized resources through the following sources:
A. Term Loans:
Your Company has borrowed fresh long term loans of Rs. 1404 Crores from
banks during the year as compared to Rs. 1130 crores during the previous
year. The aggregate of term loans outstanding at the end of the
financial year stood at Rs. 4174 crores as against Rs. 3346 crores as at
the end of the previous year.
B. Refinance from National Housing Bank (NHB):
With the continued support of National Housing Bank (NHB), your Company
availed refinance amounting to Rs. 350 crores during the year under
review as against Rs. 100 crores in the previous year. The refinance
facility outstanding as on 31st March, 2015 is Rs. 860 crores as against
Rs. 723 crores as at the end of the previous year.
C. Short term Loan and Commercial Paper:
During the year 2014-15, your Company has raised resources by issuing
Commercial Paper and also resorted to short term borrowings from the
banks and the outstanding amount as on 31st March, 2015 is Rs. 650 crores
(Gross).
D. Non Convertible Debentures:
Your Company has outstanding balance of Rs. 115 Crores through issue of
Non Convertible Debentures (NCD) on private placement as on 31st March,
2015.
CREDIT RATING
Your Company had received rating from CRISIL and ICRA for its various
borrowing programmes as follows:
CRISIL Rating:
- For Commercial Paper/short term loan programmes ofRs. 800 crores as
[CRISIL] "A1 " (Pronounced as CRISIL A1 plus).
- For Fund Based Long Term Loan Programme ofRs. 100 crores as [CRISIL]
AA /Stable (Pronounced as CRISIL double A plus/Stable).
- For Non-Convertible Debentures Borrowing Programme ofRs. 550 crores
[CRISIL] "AA /Stable" (Pronounced as CRISIL double A Plus/Stable).
ICRA Rating:
- For Commercial Paper/ short term loan programmes ofRs. 1000 crores as
[ICRA] "A1 " (Pronounced as ICRA A1 plus). This rating is the
highest credit quality rating assigned by ICRA for Short Term Debt
Instruments.
- As per the Basel-ll requirements - For Fund Based Long Term Loan
Programme ofRs. 5500 crores as [ICRA] AA (Pronounced as ICRA double A
plus). This rating indicates the high credit quality rating assigned by
ICRA to Long Term Debt Instruments.
- For Non Convertible Debentures Borrowing Programme of Rs. 550 crores
[ICRA] "AA " (Pronounced as ICRA double A Plus). BRANCH EXPANSION
During the year under review, Your Company has opened its Branch
Offices at Meerut (Uttar Pradesh), Boisar (Maharashtra), Ghaziabad
(Uttar Pradesh), Margao (Goa), Dwarka (Delhi), Electronic City
(Bengaluru), Garia (Kolkata) and Hadapsar (Maharashtra). The total
number of Offices as on 31st March, 2015 is 56. Your Company is
initiating brand building measures to generate general awareness and
improve the image of the Company.
INSURANCE COVERAGE TO BORROWERS
Your Company had taken "Special Contingency Insurance" with The New
India Assurance Company Ltd., which covers the borrowers of your
Company as under:
- Personal Accident Insurance: Personal accident (death only) risk
cover, free of cost to the borrowers up to an amount of outstanding
loan at any particular point of time during the term/ tenure of the
housing loan.
- Mortgaged Property Insurance: The property acquired out of loan,
for and up to and extent of the outstanding loan amount, covered free
of cost against fire, earthquake and allied perils affecting the
mortgaged property.
Your Company has also tied up with ''Kotak Mahindra Old Mutual Life
Insurance Limited'' for getting insurance cover on the life of the
borrower to the extent of the "Outstanding Home Loan". The said
"Group Life Cover" is optional and the Company arranges this
insurance on request from the borrower. These schemes ensure protection
to the families of the borrower in case of un- expected eventualities
like untimely death of borrower due to accident or natural death.
CAPITAL ADEQUACY RATIO (CAR)
The Company has been maintaining the Capital Adequacy Ratio (CAR) above
the minimum required level prescribed by National Housing Bank (NHB)
from time to time. The CAR prescribed for the present is 12%.
The Capital Adequacy Ratio of the Company as at 31st March, 2015 is
15.36% as against 17.26% as at 31st March, 2014. DEPOSITS
Your Company has not accepted any fixed deposits and, as such, no
amount of Principal or interest was outstanding as of Balance sheet
date.
DEMATERIALISATION OF SHARES AND NOMINATION FACILITY AND LISTING AT
STOCK EXCHANGES
As per the Securities & Exchange Board of India directives, the
transactions of the Company''s shares must be compulsorily in
dematerialised form. Your Company has signed an agreement with the
Central Depository Services (India) Ltd. and National Securities
Depository Ltd. for transaction of shares in dematerialised form.
Shareholders holding shares in physical form are requested to convert
their holdings into dematerialised form. Out of 5,38,51,066 equity
shares, 5,32,61,704 equity shares are in dematerialised form,
(5,32,36,863 shares as on 31st March, 2014) which is 98.91% (98.86% as
on 31st March, 2014) of the total shares as on 31st March, 2015.
Shareholders holding shares in physical form may utilise the nomination
facility available by sending the prescribed Form No.SH-13 duly filled,
to our Registrar and Share Transfer Agent viz. M/s. Sharepro Services
(India) Pvt. Ltd., Mumbai. Shareholders holding shares in
dematerailised form has to send their "Nomination" request to the
respective Depository Participants.
The equity shares of the Company continue to be listed on BSE Ltd., and
The National Stock Exchange of India Ltd., The Annual Listing fees for
the year 2014-15 have been paid to these Stock Exchange.
UNCLAIMED DIVIDEND TRANSFER TO INVESTORS EDUCATION AND PROTECTION FUND
(IEPF)
In terms of the provisions of the Companies Act, 1956 (which are still
applicable), the amount (dividends) that remained unclaimed and unpaid
for more than 7 years from the date become first due for payment, shall
be transferred to IEPF (Fund). In terms of the applicable statutory
provisions of the Companies Act, 1956, no claim would lie against the
Company or the said Fund after such transfer to IEPF.
The Company has been intimating the Shareholders to lodge their claim
for payment due, if any, from time to time and such claims have been
settled. In spite of constant and sincere efforts to pay the unclaimed
dividend to the respective Shareholders, certain amount still remains
unclaimed. The Company has been intimating the Shareholders to lodge
their claim for dividend from time to time and such information is
being mentioned in the Annual Reports every year.
Unclaimed dividend amounting to Rs. 6,91,170/- that has not been claimed
by Shareholders for the financial year 2006-07 has been transferred to
Investor Education and Protection Fund (IEPF) during the month of
November, 2014 wherein no claim would lie against the Company or the
said fund after the transfer.
The dividend pertaining to the financial year 2007-08 remaining
unclaimed and unpaid amounting to Rs. 9,91,880/- as on 31st March, 2015,
would be transferred to IEPF during August, 2015 after settlement of
claims received up to the date of completion of 7 years from the date
of declaration of the dividend. The Company has sent individual
reminder letters to the respective shareholders during the month of
June, 2015. Shareholders who have not claimed the said dividend may
write to Registrars and Share Transfer agents.
Another unpaid amount of Rs. 55,673/- (Rs. 6,000/- pertaining to Right
Issue in the year 2006 and Rs. 49,673/- pertaining to Fixed Deposit in
the year 2000 to 2003) lying in the unpaid account of the Company since
last previous years is to be transferred to Investors Educations and
Protection Fund against which no claim shall lie against the Company
after such transfer.
STATUTORY INFORMATION:
Particulars regarding conservation of energy, technology absorption and
foreign exchange earnings and expenditure
Since the Company does not own any manufacturing facility, the
particulars relating to conservation of energy and technology
absorption stipulated in the Companies (Disclosure of Particulars in
the Report of the Board of Directors) Rules, 1988, required to be
furnished under Section 134(m) of the Companies Act, 2013 are not
applicable.
The Company did not earn any income in foreign currency during the year
under review and also not incurred any expenses in foreign currency.
None of the employees of your company were in receipt of remuneration
in excess of the limits as laid down under Section 134 of the Companies
Act, 2013 read with Companies (Particulars of Employees) Amendment
Rules, 2011.
DIRECTORS RESPONSIBILITY STATEMENT
The Board of Directors hereby confirms that:
a. In the preparation of Annual Accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures.
b. We have selected such Accounting Policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent to give a true and fair view of the state of affairs of the
Company as at the end of 31st March, 2015 and of the profit /Loss of
the Company for the year ended on that date.
c. We have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the
Act for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities.
d. We have prepared the annual accounts on a going concern basis.
e. We have laid down internal financial controls to be followed by the
Company and such internal financial controls are adequate and were
operating effectively.
f. We have devised proper systems to ensure compliance with the
provisions of all applicable laws and that such systems were adequate
and operating effectively.
AUDITORS
M/s. CNK & ASSOCIATES LLP, Chartered Accountants, Mumbai were
re-appointed as Statutory Auditors in the 24th Annual General Meeting
of the Company for the period of Five Years from the conclusion of 24th
Annual General Meeting up to the conclusion of 29th Annual General
Meeting of the Company subject to ratification of their appointment at
every Annual General Meeting.
The Company received the requisite confirmation from them to the effect
that their re-appointment, if made, would be as per Section 139 & 141
of the Companies Act, 2013.
The Directors of your Company recommend for ratification of appointment
of M/s. CNK & ASSOCIATES LLP, Chartered Accountants, Mumbai as
Statutory Auditors of the Company from the ensuing Annual General
Meeting till conclusion of 26th Annual General Meeting. Suitable
resolution for re-appointment requiring approval of the shareholders
forms part of the agenda of the Annual General Meeting.
DIRECTORS
Shri B. Chakrabarti (Chartered Accountant), Shri A. V. Muralidharan
(Chartered Accountant and Company Secretary) and Shri M. K. Garg
(Chartered Accountant) were appointed as Additional Director (s) of the
Company w.e.f. 6th February, 2015 as per Section 161 of the Companies
Act, 2013, if any and Article 111 of Articles of Association of the
Company.
Your Company has received a notice in writing from a shareholder(s) as
per Section 160 of the Companies Act, 2013, proposing the candidature
of Shri B. Chakrabarti, Shri A. V. Muralidharan and Shri M. K. Garg for
the Office of Director(s) of the Company at the ensuing Annual General
Meeting, for their appointment as an Independent Director up to the
conclusion of 27th Annual General Meeting of the Company."
None of the Directors of the Company are disqualified from being
appointed as Directors as specified in Section 164 of the Companies
Act, 2013. The Board of Directors recommends their appointment. Your
Independent Directors meet all the criteria of Independence as provided
in Section 149(6) of the Companies Act, 2013.
Appointment of any new Director in the Company is done by the Board on
the basis of recommendation of Nomination and Remuneration Committee.
While selecting new Directors, Board shall ensure that there is
appropriate balance of skills, experience and knowledge in the Board so
as to enable the Board to discharge its functions and duties
effectively.
STATEMENT FOR FORMAL ANNUAL EVALUATION MADE BY THE BOARD OF ITS OWN
PERFORMANCE, ITS COMMITTEES AND INDIVIDUAL DIRECTORS
Our Company has prescribed required parameters to evaluate the
performance of the Board and its Committees. It is always recognized
that the Board comprises appropriately qualified and professional
people with broad range of experience. While evaluating the performance
of the individual Director, it is always seen the Knowledge to perform
their role; time and level of participation; performance of duties and
level of oversight; and professional conduct and independence etc.
The performance evaluation of the Directors was completed for the year.
The performance evaluation of the Chairman and the Non Executive
Directors was carried out by the Independent Directors. The Board of
Directors expressed their satisfaction with the evaluation process.
RELATED PARTY TRANSACTION U/S 188 OF THE COMPANIES ACT, 2013
Your Company is having following related party transactions which are
not material in nature but the same are entered at arm''s length basis
with the prior approval of Audit Committee:
1) Premises taken on Lease from Promoter Insurance Companies for our
Registered and Corporate Office and Branch Offices.
2) Insurance Cover taken from Promoter Group Companies.
3) Raisingoffinancialresources.
During the year, Company has also given the following Housing Loans to
the Directors & their relatives which have been duly approved by Audit
Committee:
Name Loan Amount Outstanding due
as on
31st March, 2015
Shri Ashok K. Roy
(Chairman) 22,49,659/- 21,60,421/-
Shri Aniket Milind Kharat 75,00,000/- 74,80,742/-
(Son of Shri Milind A. Kharat, CMD of United India Insurance Company
Ltd. and Non Executive Director of the Company)
Form AOC 2 as required under the Companies Act, 2013 for related party
transaction is annexed as Annexure A to the Directors'' Report which is
having nil report.
CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY U/S 135 OF THE COMPANIES
ACT, 2013.
Our Company is having its CSR Policy which is available at the website
of the Company. Company is having total available funds of Rs. 2.17
crores for spending towards CSR Activity. The approved Action Plan for
financial year 2014-15 towards CSR Programmes was:
1. Contribution to the Prime Minister''s National Relief Fund;
2. Contribution to the "Swach Bharat Kosh" set up by the Central
Govt.;
3. Contribution to the "Clean Ganga Fund" set up by the Central
Govt.;
4. Education;
5. Sanitation
Accordingly, it was proposed to contribute 50% of available fund i.e. Rs.
1.08 Crores to the 3 funds as stated herein above and balance available
funds will be utilized towards Education and Sanitation relating CSR
Activities. Since being the first year of activity for the Company and
the process of selecting agency/NGO is being finalised, the balance
funds will be carried forward and will be utilized for the approved
activity in the coming financial year.
VIGILANCE MECHANISM
As a conscious and vigilant organization, your Company has established
proper vigilance mechanism for its Directors and employees to report
concerns about unethical behaviour, actual or suspected fraud or
violation of the Company''s code of conduct or ethics policy. The
Company has framed Whistle Blower Policy and the same is uploaded at
the website of the Company.
CORPORATE GOVERNANCE
The Auditors Certificate on Corporate Governance issued by the
Statutory Auditors of the Company for the year under review, as
required under the Companies Act, 2013 and in pursuance of Clause 49 of
the Listing Agreement is annexed to the Report of the Directors on
Corporate Governance.
Your Company has been complying with the principles of good Corporate
Governance over the years. The Board of Directors supports the broad
principles of Corporate Governance. In addition to the basic governance
issues, the Board lays strong emphasis on transparency, accountability
and integrity.
In terms of the provisions of Clause 49 of the Listing Agreement
entered into with the Stock Exchange(s), the Management Discussion and
Analysis Report forms part of this report.
HUMAN RESOURCES & INDUSTRIAL RELATIONS.
The Company aims to align HR practices with business goals, motivate
people for higher performance and build a competitive working
environment. Your Company has continuously been working to improve
human resource competence and capabilities in the Company to deliver
the desired results. Your Company has developed a comprehensive
"in-house" induction training module
to make sure that new employees understand the basic focus of the
Company in its all operations. Apart from fixed salaries and
perquisites, we also have in place performance linked incentive scheme
to all the employees which rewards the outstanding performing teams
that achieve certain performance targets. In pursuance of the Company''s
commitment to develop and retain the best available talent, the Company
has been sponsoring the employees for training programmes conducted by
National Housing Bank for upgrading the skill and knowledge of the
employees in different operational areas. The work force strength of
your Company as on 31st March, 2015 is 218.
EXTRACT OF ANNUAL RETURN AS PER SECTION 92 OF THE COMPANIES ACT, 2013
Annual Return in Form MGT 9 is enclosed as per Annexure B to the
Directors'' Report.
SECRETARIAL AUDIT REPORT
Secretarial Audit Report is annexed as per Annexure C to the Directors''
Report.
ACKNOWLEDGEMENTS
The Directors thank the valued customers, shareholders for their
goodwill, patronage and support.
The Directors acknowledge with gratitude the valuable and timely
advice, guidance and support received from the Promoter(s) namely
General Insurance Corporation of India (GIC Re), The New India
Assurance Company Ltd., National Insurance Company Ltd., The Oriental
Insurance Company Ltd. and United India Insurance Company Ltd.
The Directors also thank the National Housing Bank for their support
and continued refinance assistance, Banks for their continued support
through term loans. The Directors also thank the Security Exchange
Board of India (SEBI); Stock Exchanges; Depositories; Ministry of
Corporate Affairs; Credit Rating Agencies; Government(s) local/
statutory authorities; Registrar and Share Transfer Agent and the
Auditors of the Company for their continued support.
The Directors place on record their deep appreciation of the valuable
contribution of the members of the staff at all levels for the progress
of the Company during the year and look forward to their continued
cooperation in realization of the corporate goals in the years ahead.
Place : Mumbai
Date : 6th May, 2015
For and on behalf of the Board of Directors
Warendra Sinha
Managing Director & CEO
Registered Office:
Royal Insurance Building,
6th Floor, 14, Jamshedji Tata Road,
Churchgate,
Mumbai-400020
Mar 31, 2014
Dear Shareholders,
The Directors have pleasure in presenting the 24th Annual Report of
your Company and the Audited Accounts for the year ended 31st March,
2014.
FINANCIAL RESULTS
(Rs. in Lacs)
PARTICULARS March 31, 2014 March 31, 2013
Total Income 62492 55390
Less: Interest expenditure 41925 37323
Overheads 7036 6554
Depreciation & amortisation 205 209
Profit Before Tax 13326 11304
Provision for Tax 4450 3710
Deferred Tax Assets (879) (909)
Profit After Tax 9755 8503
Profit Brought Forward 5 2
Profit Available for Appropriation 9760 8505
APPROPRIATIONS:
General Reserve 3115 2805
Special Reserve under Section 36(1)(viii)
of Income Tax Act, 1961 2860 2545
Proposed Equity Dividend 3231 2692
Tax on Proposed Dividend 549 458
Balance carried over to Balance Sheet 5 5
IMPORTANT FINANCIAL RATIOS
PARTICULARS March 31, 2014 March 31, 2013
Return on Net Worth (%) 17.77 17.09
Return on Total Assets (%) 1.77 1.79
Book Value Per Share (Rs.) 101.97 92.36
Earning Per Share (Rs.) 18.12 15.79
Debt Equity Ratio (times) 8.47 7.99
Average Cost of Funds (%) 9.72 9.86
Average Yield on Advances (%) 12.50 12.62
Net Interest Margin 2.78 2.76
DIVIDEND
Your Directors recommend payment of dividend for the year ended 31st
March, 2014 of Rs. 6/- per equity share of Rs.10/- each, including one
time Silver Jubilee dividend of Rs.1/- per equity shar. The total
dividend outgo for the current year would amount to Rs. 37.80 crores
including dividend distribution tax of Rs.5.49 crores, as against
Rs.31.50 crores including dividend distribution tax of Rs.4 .58 crores
in the previous year.
The dividend payout ratio for the current year, inclusive of additional
tax on dividend will be 38.75%.
OPERATIONS - PERFORMANCE
Income, Profit, Loan Approvals and Disbursements: Total Income for the
year under review is Rs.624.92 crores as against Rs.553.90 crores for
the year 2012-13. Profit before tax for the year ended is Rs.133.26
crores and Profit after tax for the year ended is Rs.97.55 crores as
against Rs.113.04 crores and Rs.85.03 crores respectively for the
previous year.
The Company''s main thrust continues to be on Individual Loans. New
loans approved during the year amounted to Rs. 1755 crores and loans
disbursed during the year are Rs. 1665 crores as against Rs. 1424
crores and Rs. 1353 crores for the year ended 31st March, 2013
respectively. The Retail Loan portfolio as at 31st March, 2014 stood at
Rs. 5299 crores, as compared to Rs. 4524 crores as on 31st March, 2013.
During the year under review, your Company has made provision to the
extent of Rs. 24.76 crores as against Rs. 26.93 crores provided for in
the year 2012-13. The Company is also carrying an additional provision
of Rs. 58.62 crores in books, beyond what is prescribed under the
guidelines, as a prudential measure. Gross Non Performing Assets on
retail loans as on 31st March, 2014 is 1.57% as against 1.86% for the
previous year. Net non performing loans as on 31st March, 2014 is
"NIL" as that of the previous year.
RESOURCE MOBILISATION:
Your Company takes every effort to tap the appropriate source of
funding to minimize the weighted average cost of funds. Your Company
has mobilized resources through the following sources:
A. Term Loans:
Your Company has borrowed fresh long term loans of Rs. 1130 crores from
banks during the year as compared to Rs. 254 crores during the previous
year. The aggregate of term loans outstanding at the end of the
financial year stood at Rs. 3346 crores as against Rs. 2640 crores as
at the end of the previous year.
B. Refinance from National Housing Bank (NHB):
With the continued support of National Housing Bank (NHB), your Company
availed refinance amounting to Rs. 100 crores during the year under
review as against Rs.425 crores in the previous year. The refinance
facility outstanding as on 31st March, 2014 is Rs. 723 crores as
against Rs. 823 crores as at the end of the previous year.
C. Short term Loan and Commercial Paper:
During the year 2013-14, your Company has raised resources by issuing
Commercial Paper and also resorted to short term borrowings from the
banks and the outstanding amount as on 31st March, 2014 is Rs. 475
crores (Gross).
D. Non Convertible Debentures:
Your Company has outstanding balance of Rs. 115 crores through issue of
Redeemable Non Convertible Debentures (NCDs) on Private Placement as on
31st March 2014.
CREDIT RATING
Your Company had received rating from CRISIL and ICRA for its various
borrowing programmes as follows:
CRISIL Rating:
. For Commercial Paper/short term loan programmes of Rs. 800 crores as
[CRISIL] "A1 " (Pronounced as CRISIL A1 plus).
. For Fund Based Long Term Loan Programme of Rs. 100 crores as [CRISIL]
AA /Stable (Pronounced as CRISIL double A plus/ Stable).
. For Non-Convertible Debentures Borrowing Programme of Rs.550 crores
[CRISIL] "AA /Stable" (Pronounced as CRISIL double A Plus/Stable).
ICRA Rating:
. For Commercial Paper/ short term loan programmes of Rs. 800 crores as
[ICRA] "A1 " (Pronounced as ICRA A1 plus). This rating is the highest
credit quality rating assigned by ICRA for Short Term Debt Instruments.
. As per the Basel-II requirements - For Fund Based Long Term Loan
Programme of '' 4500 crores as [ICRA] AA (Stable) (Pronounced as ICRA
double A plus). This rating indicates the high credit quality rating
assigned by ICRA to Long Term Debt Instruments.
. For Non Convertible Debentures Borrowing Programme of Rs.550 crores
[ICRA] "AA " (Stable) (Pronounced as ICRA double A Plus).
BRANCH EXPANSION
During the year under review your Company has opened its branches at
Patna (Bihar), Ahmedabad (Gujarat), Yelahanka (Bangalore, Karnataka),
Chandanagar (Hyderabad, Andhra Pradesh), Kalyan & Borivali
(Maharashtra) and Dehradun (Uttarakhand). The total number of Offices
as on 31st March, 2014 is 47. Your Company is initiating brand building
measures to generate general awareness and improve the image of the
Company.
INSURANCE COVERAGE TO BORROWERS
Your Company had taken "Special Contingency Insurance" with The New
India Assurance Company Ltd., which covers the borrowers of your
Company as under:
. Personal Accident Insurance: Personal accident (death only) risk
cover, free of cost to the borrowers up to an amount of outstanding
loan at any particular point of time during the term/ tenure of the
housing loan.
. Mortgaged Property Insurance: The property acquired out of loan, for
and up to and extent of the outstanding loan amount, covered free of
cost against fire, earthquake and allied perils affecting the mortgaged
property.
Your Company has also tied up with ''Kotak Mahindra Old Mutual Life
Insurance Limited'' for getting insurance cover on the life of the
borrower to the extent of the "Outstanding Home Loan". The said "Group
Life Cover" is optional and the Company arranges this insurance on
request from the borrower. These schemes ensure protection to the
families of the borrower in case of un-expected eventualities like
untimely death of borrower due to accident or natural death.
CAPITAL ADEQUACY RATIO (CAR)
The Company has been maintaining the Capital Adequacy Ratio (CAR) above
the minimum required level prescribed by National Housing Bank (NHB)
from time to time. The CAR prescribed for the present is 12%.
The Capital Adequacy Ratio of the Company as at 31st March, 2014 is
17.26% as against 14.04% as at 31st March, 2013.
DEPOSITS
Your Company has not accepted any fixed deposits and, as such, no
amount of Principal or interest was outstanding as of Balance Sheet
date.
DEMATERIALISATION OF SHARES AND NOMINATION FACILITY AND LISTING AT
STOCK EXCHANGES
As per the Securities & Exchange Board of India directives, the
transactions of the Company''s shares must be compulsorily in
dematerialised form. Your Company has signed an agreement with the
Central Depository Services (India) Limited and National Securities
Depository Limited for transaction of shares in dematerialised form.
Shareholders holding shares in physical form are requested to convert
their holdings into dematerialised form. Out of 5,38,51,066 equity
shares, 5,32,36,863 equity shares are in dematerialised form,
(5,32,21,194 shares as on 31st March, 2013) which is 98.86% (98.83% as
on 31st March, 2013) of the total shares as on 31st March, 2014.
Shareholders holding shares in physical form may utilise the nomination
facility available by sending the prescribed Form No. SH-13 duly
filled, to our Registrars and Share Transfer Agents viz. M/s Sharepro
Services (India) Pvt. Ltd., Mumbai. Shareholders holding shares in
dematerailised form has to send their "Nomination" request to the
respective Depository Participants.
The equity shares of the Company continue to be listed on Bombay Stock
Exchange Ltd., and The National Stock Exchange of India Ltd., The
Annual Listing fees for the year 2014-15 have been paid to these Stock
Exchange.
UNCLAIMED DIVIDEND TRANSFER TO INVESTORS EDUCATION AND PROTECTION FUND
(IEPF)
In terms of Section 205C of the Companies Act, 1956, the amount
(dividends) that remained unclaimed and unpaid for more than 7 years
from the date become first due for payment, shall be transferred to
IEPF (Fund). In terms of the applicable statutory provisions of the
Companies Act, 1956, no claim would lie against the Company or the said
Fund after such transfer to IEPF.
The Company has been intimating the shareholders to lodge their claim
for payment due, if any, from time to time and such claims have been
settled. In spite of constant and sincere efforts to pay the unclaimed
dividend to the respective shareholders, certain amount still remains
unclaimed. The Company has been intimating the shareholders to lodge
their claim for dividend from time to time and such information is
being mentioned in the Annual Report every year.
Unclaimed dividend amounting to Rs. 4,19,163/- that has not been
claimed by shareholders for the financial year 2005-06 has been
transferred to Investor Education and Protection Fund (IEPF) during the
month of November, 2013, as per the provisions of the Companies Act,
1956. As per section 205(B) of the Companies Act, 1956, no claim would
lie against the Company or the said fund after the transfer.
The dividend pertaining to the financial year 2006-07 remaining
unclaimed and unpaid amounting to Rs. 7,19,136/- as on 31st March,
2014, would be transferred to IEPF during November, 2014 after
settlement of claims received up to the date of completion of 7 years
from the date of declaration of the dividend. The Company has sent
individual reminder letters to the respective shareholders during the
month of June, 2014.
Shareholders who have not claimed the said dividend may write to
Registrars and Share Transfer Agent.
STATUTORY INFORMATION:
Particulars regarding conservation of energy, technology absorption and
foreign exchange earnings and expenditure
Since the Company does not own any manufacturing facility, the
particulars relating to conservation of energy and technology
absorption stipulated in the Companies (Disclosure of Particulars in
the Report of the Board of Directors) Rules, 1988, required to be
furnished under section 217(1)(e) of the Companies Act, 1956 (Section
134(m) of the Companies Act, 2013) are not applicable.
The Company did not earn any income in foreign currency during the year
under review. The Company has incurred an amount of Rs.55,501/- towards
expenses in foreign currency.
None of the employees of your Company were in receipt of remuneration
in excess of the limits as laid down under Section 217(2A) of the
Companies Act, 1956 (Section 134 of Companies Act, 2013) read with
Companies (Particulars of Employees) Rules, 1975 as amended from time
to time.
DIRECTORS RESPONSIBILITY STATEMENT
The Board of Directors hereby confirms that:
a. In the preparation of Annual Accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures.
b. We have selected such Accounting Policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent to give a true and fair view of the state of affairs of the
Company as at the end of 31st March, 2014 and of the Profit /Loss of
the Company for the year ended on that date.
c. We have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956, for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities.
d. We have prepared the annual accounts on a going concern basis.
AUDITORS
M/s CNK & Associates, LLP, Chartered Accountants, Mumbai were
re-appointed as Statutory Auditors in the twenty-third Annual General
Meeting of the Company and their term is scheduled to end at the
conclusion of the forthcoming Annual General Meeting and is eligible
for re-appointment.
The Company received the requisite confirmation from them to the effect
that their re-appointment, if made, would be as per Section 139 & 141
of the Companies Act, 2013.
The Directors of your Company recommend re-appointment of M/s CNK &
Associates, LLP, Chartered Accountants, Mumbai as Statutory Auditors of
the Company from the ensuing Annual General Meeting till conclusion of
29th Annual General Meeting. Suitable resolution for re-appointment
requiring approval of the shareholders forms part of the agenda of the
Annual General Meeting.
DIRECTORS
Shri A. R. Sekar, Director resigned from Directorship on 31st March,
2014, consequent to his superannuation from the services of The New
India Assurance Company Ltd.
The Directors of your Company wish to place on record their
appreciation for the services rendered and contribution made by Shri A.
R. Sekar during his tenure as Director of the Company.
Mrs. Mona Mukund Bhide (Legal Practitioner), Shri V. Ramasamy (Ex-CMD
of National Insurance Company Limited) and Shri Kamlesh Shivji Vikamsey
(Chartered Accountant) were appointed as Additional Directors of the
Company w.e.f. 17th September, 2013, pursuant to the provisions of
Section 161 of the Companies Act, 2013 if any and Article 111 of
Articles of Association of the Company.
Your Company has received a notice in writing from a shareholder(s) as
per Section 160 of the Companies Act, 2013, proposing the candidature
of Mrs. Mona Mukund Bhide, Shri V. Ramasamy and Shri Kamlesh Shivji
Vikamsey, for the office of Director(s) of the Company at the ensuing
Annual General Meeting, for their appointment as an Independent
Director up to the conclusion of 28th Annual General Meeting of the
Company."
None of the Directors of the Company are disqualified from being
appointed as Directors as specified in Section 164 of Companies Act,
2013. The Board of Directors recommends their appointment. Your
Independent Directors meet all the criteria of Independence as provided
in Section 149(6) of the Companies Act, 2013.
CORPORATE GOVERNANCE
The Certificate on Corporate Governance issued by the Statutory
Auditors of the Company for the year under review, as required under
the Companies Act, 1956 & Companies Act, 2013 and in pursuance of
Clause 49 of the Listing Agreement is annexed to the Report of the
Directors on Corporate Governance.
Your Company has been complying with the principles of good Corporate
Governance over the years. The Board of Directors support the broad
principles of Corporate Governance. In addition to the basic governance
issues, the Board lays strong emphasis on transparency, accountability
and integrity.
In terms of the provisions of Clause 49 of the Listing Agreement
entered into with the Stock Exchange(s), the Management Discussion and
Analysis Report forms part of this report.
HUMAN RESOURCES & INDUSTRIAL RELATIONS.
The Company aims to align HR practices with business goals, motivate
people for higher performance and build a competitive working
environment. Your Company has continuously been working to improve
human resource competence and capabilities in the Company to deliver
the desired results. Your Company has developed a comprehensive
"in-house" induction training module to make sure that new employees
understand the basic focus of the Company in its all operations. Apart
from fixed salaries and perquisites, we also have in place performance
linked incentive scheme to all the employees which rewards the
outstanding performing teams that achieve certain performance targets.
In pursuance of the Company''s commitment to develop and retain the best
available talent, the Company had been sponsoring the employees for
training programmes conducted by National Housing Bank for upgrading
the skill and knowledge of the employees in different operational
areas. The work force strength of Your Company as on 31st March, 2014
is 220.
ACKNOWLEDGEMENTS
The Directors thank the valued customers, shareholders for their
goodwill, patronage and support.
The Directors acknowledge with gratitude the valuable and timely
advice, guidance and support received from the Promoter(s) namely
General Insurance Corporation of India (GIC Re), The New India
Assurance Company Ltd., National Insurance Company Ltd., The Oriental
Insurance Company Ltd. and United India Insurance Company Ltd.
The Directors also thank the National Housing Bank for their support
and continued refinance assistance, Banks for their continued support
through term loans. The Directors also thank the Security Exchange
Board of India (SEBI); Stock Exchanges; Depositories; Ministry of
Corporate Affairs; Credit Rating Agencies; Government(s) local/
statutory authorities; Registrars and Share Transfer Agent and the
Auditors of the Company for their continued support.
The Directors place on record their deep appreciation of the valuable
contribution of the members of the staff at all levels for the progress
of the Company during the year and look forward to their continued
cooperation in realization of the corporate goals in the years ahead.
Place: Mumbai
Date: 7th May, 2014
Registered Office: For and on behalf of the Board of Directors
Royal Insurance Building,
6th Floor, 14,
Jamshedji Tata Road,
Churchgate, Warendra Sinha
Mumbai-400020 Managing Director & CEO
Mar 31, 2013
Dear Members,
The Directors have pleasure in presenting the 23rd Annual Report of
your Company and the Audited Accounts for the year ended 31st March,
2013.
FINANCIAL RESULTS
(Rs.in Lacs)
PARTICULARS March 31,
2013 March 31,
2012 Growth (%)
Total Income 55390 43942 26
Less: Interest expenditure 37323 31125
Overheads 6554 4848
Depreciation & amortisation 209 83
Profi t Before Tax 11304 7886 43
Provision for Tax 3710 2610
Deferred Tax Assets (909) (628)
Profi t After Tax 8503 5904 44
Profi t brought forward 2 4
Profi t available for
appropriation 8505 5908
APPROPRIATIONS:
General Reserve 2805 1270
Special Reserve under Section
36(1)(viii) of Income Tax
Act, 1961 2545 1820
Proposed Equity Dividend 2692 2423
Tax on Proposed Dividend 458 393
Balance carried over to
Balance Sheet 5 2
IMPORTANT FINANCIAL RATIOS
PARTICULARS March 31,
2013 March 31, 2012
Return on Net Worth (%) 17.09 13.05
Return on Total Assets (%) 1.79 1.38
Book Value per share (Rs.) 92.36 84.03
Earning per share (Rs.) 15.79 10.96
Debt Equity Ratio (times) 7.99 7.94
Average cost of funds (%) 9.86 9.32
Average yield on advances (%) 12.62 11.17
Net Interest Margin 2.76 1.85
DIVIDEND
Your Directors recommend payment of dividend for the year ended 31st
March, 2013 of Rs.5/- per equity share of face value of Rs.10/- each.
The total dividend outgo for the current year would amount to Rs.31.50
crores including dividend distribution tax of Rs.4.58 crores, as
against Rs.28.16 crores including dividend distribution tax of Rs.3.93
crores in the previous year.
The dividend payout ratio for the current year, inclusive of additional
tax on dividend will be 37.05%.
OPERATIONS - PERFORMANCE
Income, Profi t, Loan Approvals and Disbursements: Total income for the
year under review is Rs.553.90 crores as against Rs.439.42 crores for
the year 2011-12, registering a growth of 26% over the previous year.
Profi t before tax for the year ended is
Rs.113.04 crores and Profi t after tax for the year ended is Rs.85.03
crores as against Rs.78.86 crores and Rs.59.04 crores respectively for
the previous year.
The Company''s main thrust continues to be on individual loans. New
loans approved during the year amounted to Rs.1424 crores and loans
disbursed during the year are Rs.1353 crores as against Rs.1072 crores
and Rs.992 crores for the year ended 31st March, 2012 respectively. The
Retail Loan portfolio as at 31st March, 2013 stood at Rs.4524 crores,
(refl ecting a growth rate of 17%) as compared to Rs.3864 crores as on
31st March, 2012.
Your Company has adhered to the prudential guidelines for Non
Performing Assets (NPAs); issued by the National Housing Bank (NHB)
under its Directions 2010, as amended from time to time.
During the year under review, your Company has made provision to the
extent of Rs.26.93 Crores as against Rs.19.27 Crores provided for in
the year 2011-12. The Company is also carrying an additional provision
of Rs.55.87 crores in books, beyond what is prescribed under the
guidelines, as a prudential measure. Gross Non Performing Assets on
retails loans as on 31st March, 2013 is 1.86% as against 2.08% for the
previous year. Net Non performing loans as on 31st March, 2013 is "NILÂ
as that of the previous year. During the course of inspection of
accounts for the earlier year 2011-12, an observation had been made by
National Housing Bank (NHB) in regard to the basis of classifi cation
for the purpose of making appropriate provision for Non Performing
Assets (NPA) for that year. The company has duly clarifi ed its
position in that regard and the auditors have reiterated that as on the
year ending 31st March, 2012, company has made adequate provision
towards Non performing Assets, which are in compliance with the NHB
Directions 2010.
RESOURCE MOBILISATION:
Your Company takes every effort to tap the appropriate source of
funding to minimize the weighted average cost of funds. Your Company
has mobilized resources through the following sources:
A. Term Loans:
Your Company has borrowed fresh long term loans of Rs.254 crores from
banks during the year as compared to Rs.795 crores during the previous
year. The aggregate of term loans outstanding at the end of the fi
nancial year stood at Rs.2640 crores as against Rs.2708 crores as at
the end of the previous year.
B. Refi nance from National Housing Bank (NHB):
With the continued support of National Housing Bank (NHB), your Company
availed refi nance amounting to Rs.425 crores during the year under
review as against Rs.265 crores in the previous year. The refi nance
facility outstanding as on 31st March, 2013 is Rs.823 crores as against
Rs.551 crores as at the end of the previous year.
C. Short term Loan and Commercial Paper:
During the year 2012-13, your Company has raised resources by issuing
Commercial Paper and also resorted to short term borrowings from the
banks and the outstanding amount as on 31st March, 2013 is Rs.400
crores (Gross).
D. Non Convertible Debentures:
During the year 2012-13, your Company has raised Rs.115 crores through
issue of Non Convertible Debentures (NCD) on private placement.
CREDIT RATING
Your Company had received rating from ICRA for its various borrowing
programmes as follows:
For Commercial Paper/short term loan programmes of Rs.800 crores as
[ICRA] "A1 Â (Pronounced as ICRA A one plus). This rating is the
highest credit quality rating assigned by ICRA for Short Term Debt
Instruments.
As per the Basel-II requirements - For Fund Based Long Term Loan
Programme of Rs.4500 crores as [ICRA] AA (Pronounced as ICRA double A
plus). This rating indicates the high credit quality rating assigned by
ICRA to Long Term Debt Instruments.
For Non Convertible Debentures Borrowing Programme of Rs.250 crores
[ICRA] "AA Â (Pronounced as ICRA double A Plus).
BRANCH EXPANSION
During the year under review your Company has opened its branch at
"IndoreÂ, Madhya Pradesh. The total number of branches as on 31st
March, 2013 is 33 and also your Company is having 9 out reach and
collection centres spread across the country. Your Company is
initiating brand building measures to generate general awareness and
improve the image of the Company.
INSURANCE COVERAGE TO BORROWERS
Your Company had taken "Special Contingency Insurance with The New
India Assurance Company Ltd., which covers the borrowers of your
Company as under:
Personal Accident Insurance: Personal accident (death only) risk cover,
free of cost to the borrowers up to an amount of outstanding loan at
any particular point of time during the term/ tenure of the housing
loan.
Mortgaged Property Insurance: The property acquired out of loan, for
and up to and extent of the outstanding loan amount, covered free of
cost against fi re, earthquake and allied perils affecting the
mortgaged property.
Your Company has also tied up with ''Kotak Mahindra Old Mutual Life
Insurance Limited'' for getting insurance cover on the life of the
borrower to the extent of the "Outstanding Home LoanÂ. The said "group
Life cover is optional and the Company arranges this insurance on
request from the borrower. These schemes ensure protection to the
families of the borrower in case of un-expected eventualities like
untimely death of borrower due to accident or natural death.
COMPLIANCE WITH GUIDELINES OF NATIONAL HOUSING BANK (NHB) - REGULATORY
GUIDELINES
Your Company has complied with the Guidelines and Directions issued by
NHB on asset classifi cation of credit/ investments, Credit Rating,
Fair Practices Code, Know Your Customer (KYC), Anti Money Laundering
Guidelines, income recognition and provisioning for non performing
loans.
CAPITAL ADEQUACY RATIO (CAR)
The Company has been maintaining the Capital Adequacy Ratio (CAR) above
the minimum required level prescribed by National Housing Bank (NHB)
from time to time. The CAR prescribed for the present is 12%.
The Capital Adequacy Ratio of the Company as at 31st March, 2013 is
14.04% as against 14.80% as at 31st March, 2012.
DEPOSITS
Your Company has not accepted or renewed any fresh deposits during the
year within the meaning of Section 58(A) of the Companies Act, 1956 and
the Companies (Acceptance of Deposits) Rules, 1975. There are no
unclaimed deposits as on 31st March, 2013.
DEMATERIALISATION OF SHARES AND NOMINATION FACILITY AND LISTING AT
STOCK EXCHANGES
As per the Securities & Exchange Board of India directives, the
transactions of the Company''s shares must be compulsorily in
dematerialised form. Your Company has signed an agreement with the
Central Depository Services (India) Limited and National Securities
Depository Limited for transaction of shares in dematerialised form.
Shareholders holding shares in physical form are requested to convert
their holdings into dematerialised form. Out of 5,38,51,066 equity
shares 5,32,21,194 are in dematerialised form, (5,31,91,065 shares as
on 31st March, 2012) which is 98.83% (98.77% as on 31st March, 2012) of
the total shares as on 31st March, 2013.
Shareholders holding shares in physical form may utilise the nomination
facility available by sending the prescribed Form No.2B duly fi lled,
to our Registrars and Share Transfer Agents viz. M/s. Sharepro Services
(India) Private Limited, Mumbai. Shareholders holding shares in
dematerailised form has to send their "nomination request to the
respective Depository Participants.
The Equity shares of the Company continue to be listed on Bombay Stock
Exchange Ltd., and The National Stock Exchange of India Ltd., The
Annual Listing fees for the year 2013-14 have been paid to these Stock
Exchanges.
UNCLAIMED DIVIDEND TRANSFER TO INVESTORS EDUCATION AND PROTECTION FUND
(IEPF)
In terms of Section 205C of the Companies Act, 1956, the amount
(dividends) that remained unclaimed and unpaid for more than 7 years
from the date become fi rst due for payment, shall be transferred to
IEPF (Fund). In terms of the applicable statutory provisions of the
Companies Act, 1956, no claim would lie against the Company or the said
Fund after such transfer to IEPF.
The Company has been intimating the shareholders to lodge their claim
for payment due, if any, from time to time and such claims have been
settled. In spite of constant and sincere efforts to pay the unclaimed
dividend to the respective shareholders, certain amount still remains
unclaimed. The Company has been intimating the shareholders to lodge
their claim for dividend from time to time and such information is
being mentioned in the Annual Reports every year.
Unclaimed dividend amounting to Rs.5,72,766/- that has not been claimed
by shareholders for the fi nancial year 2004-05 has been transferred to
Investor Education and Protection Fund (IEPF) during the month of
November, 2012, as per the provisions of the Companies Act, 1956. As
per section 205(B) of the Companies Act, 1956, no claim would lie
against the Company or the said fund after the transfer.
The dividend pertaining to the fi nancial year 2005-06 remaining
unclaimed and unpaid amounting to Rs.4,31,258.50 as on 31st March,
2013, would be transferred to IEPF during November, 2013 after
settlement of claims received up to the date of completion of 7 years
from the date of declaration of the dividend. The Company has sent
individual reminder letters to the respective shareholders during the
month of July, 2013.
Shareholders who have not claimed the said dividend may write to
Registrars and Share Transfer agents.
STATUTORY INFORMATION:
Particulars regarding conservation of energy, technology absorption and
foreign exchange earnings and expenditure
Since the Company does not own any manufacturing facility, the
particulars relating to conservation of energy and technology
absorption stipulated in the Companies (Disclosure of Particulars in
the Report of the Board of Directors) Rules, 1988, required to be
furnished under section 217 (1) (e) of the Companies Act, 1956 are not
applicable.
The Company did not earn any income in foreign currency during the year
under review. The Company has incurred an amount of Rs.2,37,172/-
towards expenses in foreign currency.
None of the employees of your company were in receipt of remuneration
in excess of the limits as laid down under section 217(2A) of the
Companies Act, 1956 read with Companies (Particulars of Employees)
Rules, 1975 as amended from time to time.
DIRECTORS RESPONSIBILITY STATEMENT
The Board of Directors hereby confi rms that:
a. In the preparation of Annual Accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures.
b. We have selected such Accounting Policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent to give a true and fair view of the state of affairs of the
Company as at the end of 31st March, 2013 and of the profi t /Loss of
the Company for the year ended on that date.
c. We have taken proper and suffi cient care for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956, for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities.
d. We have prepared the annual accounts on a going concern basis.
AUDITORS
M/s. Contractor, Nayak and Kishnadwala, Chartered Accountants [ICAI
Firm Registration No.101961W], Mumbai were re-appointed as Statutory
Auditors in the twenty-second Annual General Meeting of the Company and
their term is scheduled to end at the conclusion of the forthcoming
Annual General Meeting and is eligible for re-appointment.
The Company received the requisite confi rmation from them to the
effect that their re-appointment, if made, would be within the limits
of Section 224(1B) of the Companies Act, 1956.
The Directors of your Company recommend re-appointment of M/s.
Contractor, Nayak & Kishnadwala Chartered Accountants, Mumbai as
Statutory Auditors of the Company from the ensuing Annual General
Meeting till conclusion of twenty-forth Annual General Meeting.
Suitable resolution for re-appointment requiring approval of the
shareholders forms part of the agenda of the Annual General Meeting.
The said appointment attracts provisions of section 224 A of the
Companies Act, 1956.
DIRECTORS
In accordance with the requirements of the Companies Act, 1956, and
Article 125 of the Articles of Association of the Company, S/shri M. K.
Tandon and Manu Chadha Directors, who were appointed as Directors in
the Board in the year 1999 and 2002 respectively are due to retire by
rotation at this Annual General Meeting and are not seeking
re-election.
Dr. R. K. Kaul, Director resigned from Directorship on 31st May, 2012,
consequent to his superannuation from the services of The Oriental
Insurance Company Limited. IFCI Limited withdrew the nomination of Shri
Shivendra Tomar, from the Board of the Company on 20th December, 2012.
Shri M. Sivaraman, Ex-managing Director resigned from Directorship on
31st October, 2012, consequent to his superannuation from the services.
The Directors of your Company wish to place on record their
appreciation for the services rendered and contribution made by Shri M.
K. Tandon, Shri Manu Chadha, Dr. R. K. Kaul, Shri Shivendra Tomar and
Shri M. Sivaraman during their tenure as Director(s) of the Company.
Dr. A. K. Saxena, Chairman Cum Managing Director, The Oriental
Insurance Company Limited, was appointed as an Additional Director of
the company w.e.f. 16th October, 2012 pursuant to the provisions of
section 260 and other applicable provisions of the Companies Act, 1956,
if any and Article 111 of Articles of Association of the Company. Shri
Milind A. Kharat, Chairman cum Managing Director, United India
Insurance Company Limited was appointed as an Additional Director of
the company w.e.f. 8th January, 2013, pursuant to the provisions of
section 260 and other applicable provisions of the Companies Act, 1956,
if any and Article 111 of Articles of Association of the Company.
Shri Warendra Sinha was appointed as an Additional Director of the
Company pursuant to the provisions of section 260 and other applicable
provisions of the Companies Act, 1956, if any and Article 111 of
Articles of Association of the Company. Shri Warendra Sinha, Pursuant
to Article 116, 117, 118 of the Articles of Association of the Company
and pursuant to provisions of sections 198, 269 and 309, Schedule XIII
and all other applicable provisions, if any, of the Companies Act, 1956
and subject to any other approvals, as may be applicable was appointed
as Managing Director of the Company for the period from 31st December,
2012 to 31st December, 2014.
Your Company has received a notice in writing from a shareholder(s),
under Section 257 of the Companies Act, 1956 proposing the appointment
of Dr. A. K. Saxena, Shri Milind A. Kharat and Shri Warendra Sinha as
Director(s) of the Company at the ensuing Annual General Meeting.
None of the Directors of the Company are disqualifi ed from being
appointed as Directors as specifi ed in Section 274 of the Companies
Act, 1956. The Board of Directors recommends their appointment.
CORPORATE GOVERNANCE
The Auditors Certifi cate on Corporate Governance issued by the
Statutory Auditors of the Company for the year under review, as
required under the Companies Act, 1956 and in pursuance of Clause 49 of
the Listing Agreement is annexed to the Report of the Directors on
Corporate Governance.
Your Company has been complying with the principles of good Corporate
Governance over the years.The Board of Directors supports the broad
principles of Corporate Governance. In addition to the basic governance
issues, the Board lays strong emphasis on transparency, accountability
and integrity.
In terms of the provisions of Clause 49 of the listing agreement
entered into with the Stock Exchange(s), the Management Discussion and
Analysis Report forms part of this report.
HUMAN RESOURCES & INDUSTRIAL RELATIONS
The Company aims to align HR practices with business goals, motivate
people for higher performance and build a competitive working
environment. Your Company has continuously been working to improve
human resource competence and capabilities in the Company to deliver
the desired results. Your Company has developed a comprehensive
"in-house induction training module to make sure that new employees
understand the basic focus of the Company in its all operations. Apart
from fi xed salaries and perquisites, we also have in place performance
linked incentive scheme to all the employees which rewards the
outstanding performing teams that achieve certain performance targets.
In pursuance of the Company''s commitment to develop and retain the best
available talent, the Company had been sponsoring the employees for
training programmes organized by reputed professional institutions and
training programmes conducted by National Housing Bank for upgrading
the skill and knowledge of the employees in different operational
areas. Employees'' relations remained cordial and the work atmosphere
remained congenial during the year under review. The work force
strength of your Company as on 31st March, 2013 is 198.
ACKNOWLEDGEMENTS
The Directors thank the valued customers, shareholders for their
goodwill, patronage and support.
The Directors acknowledge with gratitude the valuable and timely
advice, guidance and support received from the Promoter(s) namely
General Insurance Corporation of India (GIC Re), The New India
Assurance Company Limited, National Insurance Company Limited, The
Oriental Insurance Company Limited, United India Insurance Company
Limited and IFCI Limited.
The Directors also thank the National Housing Bank for their support
and continued refi nance assistance, Banks for their continued support
through term loans. The Directors also thank the Security Exchange
Board of India (SEBI); Stock Exchanges; Depositories; Ministry of
Corporate Affairs; Credit Rating Agencies; Government(s) local /
statutory authorities; Registrars and Share Transfer agents and the
Auditors of the Company for their continued support.
The Directors place on record their deep appreciation of the valuable
contribution of the members of the staff at all levels for the progress
of the Company during the year and look forward to their continued
cooperation in realization of the corporate goals in the years ahead.
Place: Mumbai
Date: 10th May, 2013
Registered Office For and on behalf of the Board of
Directors
Universal Insurance Building,
3rd Floor, Sir P. M. Road,
Fort, Mumbai - 400001 Warendra Sinha
Managing Director
Mar 31, 2012
To The members of GIC Housing Finance Ltd.,
The Directors have great pleasure in presenting the Twenty-Second
Annual Report on the business and operations of your Company together
with the Audited Statement of Accounts for the year ended 31st March,
2012.
FINANCIAL RESULTS
(Rs. in Lacs)
PARTICULARS March 31, 2012 March 31,2011
Total Income 43942 33987
Less: Interest expenditure 31125 21483
Overheads 4848 2712
Depreciation & other amortisation 83 73
Profit Before Extraordinary Income 7886 9719
Profit on sale of Long Term Investment NIL 8848
Less: Additional Provision for
Contingencies NIL 4000
Profit Before Tax 7886 14567
Provision for Tax 2610 4510
Deferred Tax Assets (628) (1319)
Profit After Tax- 5904 11376
Profit brought forward 4 5
Adjustment for short Income
Tax provision NIL 1
Profit available for appropriation 5908 11381
APPROPRIATIONS:
General Reserve 1270 6115
Special Reserve under Section 36(1)(viii)
of Income Tax Act, 1961 1820 1820
Proposed Equity Dividend 2423 2962
Tax on Proposed Dividend 393 480
Balance carried over to Balance Sheet 2 4
Note: During the year an amount of Rs.456 lacs has been transferred
from General Reserve to Special Reserve in terms of Section 29C(1) of
the National Housing Bank Act, 1987.
IMPORTANT FINANCIAL RATIOS:
PARTICULARS March 31, 2012 March 31, 2011
Return on Net Worth (%) 12.99 26.45
Return on Total Assets (%) 1.36 3.20
Book Value per share (Rs.) 84.43 79.87
Earning per share (Rs.) 10.96 21.13
Debt Equity Ratio (times) 7.91 7.18
Average cost of funds (%) 9.32 7.52
Average yield on advances (%) 11.17 10.11
DIVIDEND
Your Directors recommend payment of dividend for the year ended 31st
March, 2012 of Rs.4.50 per equity share of face value of Rs.10 each.
The total dividend outgo for the current year would amount to Rs.28.16
crores including dividend distribution tax of
Rs.3.93 crores, as against Rs.34.42 crores (inclusive of onetime
special dividend of Rs.1 per share declared in view of profit on sale
of investments amounting to Rs.88.48 crores during the previous year)
including dividend distribution tax of Rs.4.80 crores in the previous
year.
The dividend payout ratio for the current year, inclusive of additional
tax on dividend will be 47.70%.
OPERATIONS - PERFORMANCE
Income, Profit, Loan Approvals and Disbursements: Total income for the
year under review is Rs.439.42 crores as against Rs.339.87 crores for
the year 2010-11, registering a growth of 29% over the previous year.
Profit before tax for the year ended is Rs.78.86 crores and Profit
after tax for the year ended is Rs.59.04 crores as against Rs.145.67
crores and Rs.113.76 crores respectively for the previous year. Your
Company had profit on sale of long term investments amounting to
Rs.88.48 crores in the previous year.
The Company's main thrust continues to be on individual loans. New
loans approved during the year amounted to Rs.1073 crores and loans
disbursed during the year are Rs.992 crores as against Rs.1069 crores
and Rs.969 crores for the year ended 31st March, 2011 respectively. The
Retail Loan portfolio as at 31st March, 2012 stood at Rs.3864 crores,
(reflecting a growth rate of 13.45%) as compared to Rs.3406 crores as
on 31st March, 2011.
Your Company has adhered to the prudential guidelines for Non
Performing Assets (NPAs); issued by the National Housing Bank (NHB)
under its Directions 2010, as amended from time to time. During the
year, the National Housing Bank (NHB) has made upward revision in the
provisioning requirements for doubtful assets up to 100%; increase in
provisioning requirements in different slabs of default bucket ranging
from 5% to 50% and also introduced for the first time provisioning
requirement of 0.4% of the outstanding loan portfolio of standard
housing loan assets and 1% on standard non housing loans. The impact on
profitability is due to newly introduced provisioning requirements for
"standard assets" and upward provisioning requirements for all
categories of NPA assets. The additional provision charged during the
year for the purpose of complying with the said newly introduced
provision for "standard assets" and for NPA accounts are Rs.19.27
crores. National Housing Bank has also during the year mandated not to
levy "foreclosure charges" on closure of home loans sanctioned under
floating interest basis which your Company has complied with.
During the year under review, your Company has made provision to the
extent of Rs.19.27 Crores as against Rs.38.73 Crores provided for in
the year 2010-11. The Company is also carrying an additional provision
of Rs.26.39 crores in books, beyond what is prescribed under the
guidelines, as a prudential measure. The total cumulative provision
towards individual housing loan portfolio inclusive of the additional
provision of Rs.26.39 crores as on 31st March, 2012 is Rs.80.28 crores.
Gross Non Performing Assets on retails loans as on 31s1 March, 2012 is
2.08% as against 2.78% for the previous year. Net Non-performing loans
as on 31s' March, 2012 is "NIL" as against 0.41% for the previous year.
RESOURCE MOBILISATION:
Your Company takes every effort to tap the appropriate source of
funding to minimize the weighted average cost of funds. During the year
under review, due to prevailing inflationary pressures, Reserve Bank of
India has increased the "Key rates" in the first quarter and continued
with the same rates in the rest of the quarter for the purpose of
controlling the inflation. Hence there is increase in average cost of
funds during the year. Your Company has mobilized resources through the
following sources:
A. Term Loans:
Your Company has borrowed fresh long term loans of Rs.795 crores from
banks during the year as compared to Rs.620 crores during the previous
year. The aggregate of term loans outstanding at the end of the
financial year stood at Rs.2808 crores (including short term loans
amounting to Rs.100 crores) as against Rs.2677 crores as at the end of
the previous year (including short term loans amounting to Rs.300
crores).
B. Refinance from National Housing Bank:
With the continued support of National Housing Bank (NHB), Your Company
availed refinance amounting to Rs.265 crores during the year under
review as against Rs.210 crores in the previous year. The refinance
facility outstanding as on 31st March, 2012 is Rs.551 crores as against
Rs.410 crores as at the end of the previous year.
C. Commercial Paper:
During the year 2011-12, your Company has raised resources by issuing
Commercial Paper to the extent of Rs.675 crores. The outstanding
Commercial Paper as on 31st March, 2012 is Rs.245 crores (Gross).
CREDIT RATING
Your Company had received rating from ICRA for its various borrowing
programmes as follows:
- For Commercial Paper Programme of Rs.800 crores as [ICRA] "A1 "
(Pronounced as ICRA A one plus). This rating is the highest credit
quality rating assigned by ICRA for Short Term Debt Instruments.
- For Fund Based Short Term Loan Programme of Rs.800 crores as [ICRA]
"A1 " (Pronounced as ICRA A one plus). This rating is the highest
credit quality rating assigned by ICRA for Short Term Debt Instruments.
- As per the Basel-ll requirements - For Fund Based Long Term Loan
Programme of Rs.3500 crores as [ICRA] AA (Pronounced as ICRA double A
plus). This rating indicates the high credit quality rating assigned by
ICRA to Long Term Debt Instruments.
BRANCH EXPANSION:
During the year under review your Company has opened its branch at
"Nere Panvel". The total number of branches as on 31st March, 2012
stood at 31.
INSURANCE COVERAGE TO BORROWERS:
Your Company had taken "Special Contingency Insurance" with The New
India Assurance Company Ltd., which covers the borrowers of your
Company as under:
- Personal Accident Insurance: Personal accident (death only) risk
cover, free of cost to the borrowers up to an amount of outstanding
loan at any particular point of time during the term/ tenure of the
housing loan.
- Mortgaged Property Insurance: The property.acquired out of loan, for
and up to and extent of the outstanding loan amount, covered free of
cost against fire, earthquake and allied perils affecting the mortgaged
property.
Your Company has also tied up with 'Kotak Mahindra Old Mutual Life
Insurance Limited' for getting insurance cover on the life of the
borrower to the extent of the "Outstanding Home Loan". The said "group
Life cover is optional" and the Company arranges this insurance on
request from the borrower. These schemes ensure protection to the
families of the borrower in case of un- expected eventualities like
untimely death of borrower due to accident or natural death.
COMPLIANCE WITH GUIDELINES OF NATIONAL HOUSING BANK (NHB) - REGULATORY
GUIDELINES
Your Company has complied with the Guidelines and Directions issued by
NHB on asset classification of credit/ investments, credit rating, Fair
Practices Code, Know Your Customer (KYC), Anti Money Laundering
Guidelines, income recognition and provisioning for non-performing
loans.
During the year under review, the National Housing Bank (NHB) has
revised upward the provisioning requirements for Non Performing Assets
vide its circular No NHB (ND)/DRS/1241 dated 8th September, 2011 as
under:
Default in Interest/Principal Old Rule Provision (%) New Rule
Provision
(%)
3 to 15 months 10 15
16 to 27 months 20 25
28 to 51 months 30 40
52 and above 50 100
Loss Assets 100 100
In addition to the above, National Housing Bank also introduced
Provision on Standard Assets at 0.4% in respect of Individual Housing
Loans.
CAPITAL ADEQUACY RATIO (CAR)
The Company has been maintaining the Capital Adequacy Ratio (CAR) above
the minimum required level prescribed by National Housing Bank (NHB)
from time to time. The CAR prescribed for the present is 12%.
The Capital Adequacy Ratio of the Company as at 31st March, 2012 is
14.80% as against 15.42% as at 31st March, 2011.
DEPOSITS
Your Company has not accepted or renewed any fresh deposits during the
year within the meaning of Section 58(A) of the Companies Act, 1956 and
the Companies (Acceptance of Deposits) Rules, 1975. There are no
unclaimed deposits as on 31st March, 2012.
DEMATERIALISATION OF SHARES AND NOMINATION FACILITY AND LISTING AT
STOCK EXCHANGES
As per the Securities & Exchange Board of India directives, the
transactions of the Company's shares must be compulsorily in
dematerialised form. Your Company has signed an agreement with the
Central Depository Services (India) Limited and National Securities
Depository Limited for transaction of shares in dematerialised form.
Shareholders holding shares in physical form are requested to convert
their holdings into dematerialised form. Out of 5,38,51,066 equity
shares 5,31,91,065 are in dematerialised form, ( 5,31,52,348 shares as
on 31st March, 2011) which is 98.77% (98.70% as on 31st March, 2011) of
the total shares as on 31st March, 2012.
Shareholders holding shares in physical form may utilise the nomination
facility available by sending the prescribed Form No.2B duly filled, to
our Registrars and Share Transfer Agents viz. M/s. Sharepro Services
(India) Private Limited, Mumbai. Shareholders holding shares in
dematerailised form has to send their "nomination" request to the
respective Depository Participants.
The Equity shares of the Company continue to be listed on Bombay Stock
Exchange Ltd., and The National Stock Exchange of India Ltd., The
Annual Listing fees for the year 2012-13 have been paid to these Stock
Exchanges.
UNCLAIMED DIVIDEND TRANSFER TO INVESTORS EDUCATION AND PROTECTION FUND
(IEPF)
In terms of Section 205C of the Companies Act, 1956, the amount
(dividends) that remained unclaimed and unpaid for more than 7 years
from the date become first due for payment,' shall be transferred to
IEPF (Fund). In terms of the applicable statutory provisions of the
Companies Act, 1956, no claim would lie against the Company or the said
Fund after such transfer to IEPF
The Company has been intimating the shareholders to lodge their claim
for payment due, if any, from time to time and such claims have been
settled. In spite of constant and sincere efforts to pay the unclaimed
dividend to the respective shareholders, certain amount still remains
unclaimed. The Company has been intimating the shareholders to lodge
their claim for dividend from time to time and such information is
being mentioned in the Annual Reports every year.
Unclaimed dividend amounting to Rs.5,47,812/- that has not been claimed
by shareholders for the financial year 2003-04 has been transferred to
Investor Education and Protection Fund (IEPF) during the month of
November, 2011, as per the provisions of the Companies Act, 1956. As
per section 205(B) of the Companies Act, 1956, no claim would lie
against the Company or the said fund after the transfer.
The dividend pertaining to the financial year 2004-05 remaining
unclaimed and unpaid amounting to Rs.5,92,690/- as on 31st March, 2012,
would be transferred to IEPF during November, 2012 after settlement of
claims received up to the date of completion of 7 years from the date
of declaration of the dividend. The Company has sent individual
reminder letters to the respective shareholders during the month of
May, 2012.
Shareholders who have not claimed the said dividend may write to
Registrars and Share Transfer agents.
STATUTORY INFORMATION:
Particulars regarding conservation of energy, technology absorption and
foreign exchange earnings and expenditure
Since the Company does not own any manufacturing facility, the
particulars relating to conservation of energy and technology
absorption stipulated in the Companies (Disclosure of Particulars in
the Report of the Board of Directors) Rules, 1988, required to be
furnished under section 217 (1) (e) of the Companies Act, 1956 are not
applicable.
The Company did not earn any income in foreign currency during the year
under review. The Company has incurred an amount of Rs.2,69,238/-
towards expenses in foreign currency.
None of the employees of your company were in receipt of remuneration
in excess of the limits as laid down under section 217(2A) of the
Companies Act, 1956 read with Companies (Particulars of Employees)
Rules, 1975 as amended from time to time.
DIRECTORS RESPONSIBILITY STATEMENT
In accordance with the provisions of sub-section (2AA) of Section 217
of the Companies Act, 1956, and based on the information provided by
the Management, Board of Directors report that:
a. In the preparation of Annual Accounts, the applicable accounting
standards have been followed together with proper explanation;
b. The Accounting Policies selected were applied consistently.
Reasonable and prudent judgements and estimates were made so as to give
a true and fair view of the state of affairs of the Company as at the
end of 31st March, 2012 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, 1956, for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities; and
d. The annual accounts have been prepared on a going concern basis.
AUDITORS
M/s. Contractor, Nayak and Kishnadwala, Chartered Accountants, Mumbai
(ICAI Firm Registration No. 101961W) were appointed as Statutory
Auditors in the twenty-first Annual General Meeting of the Company and
their term is scheduled to end at the conclusion of the forthcoming
Annual General Meeting and is eligible for re-appointment.
The Company received the requisite confirmation from them to the effect
that their re-appointment, if made, would be within the limits of
Section 224(1 B) of the Companies Act, 1956.
The Directors of your Company recommend re-appointment of M/s.
Contractor, Nayak & Kishnadwala Chartered Accountants, Mumbai as
Statutory Auditors of the Company from the ensuing Annual General
Meeting till conclusion of twenty-third Annual General Meeting.
Suitable resolution for re-appointment requiring approval of the
shareholders forms part of the agenda of the Annual General Meeting.
The said appointment attracts provisions of section 224 A of the
Companies Act, 1956.
DIRECTORS
In accordance with the requirements of the Companies Act, 1956, and
Article 125 of the Articles of Association of the Company, Shri. G.
Srinivasan and Shri. N.S.R. Chandraprasad, Directors are liable to
retire by rotation and are eligible for re-appointment. Shri.
GSrinivasan and Shri. N.S.R. Chandraprasad offer themselves for
re-appointment. The Board of Directors recommends their re-appointment.
Shri.Yogesh Lohiya, Chairman of the Board resigned from Directorship on
1st January, 2012, consequent to his superannuation from the services
of General Insurance Corporation of India (GIC Re). Shri. M. Ramadoss,
resigned from Directorship on 29th March, 2012. Shri. Ashok Kumar Roy
was appointed as Chairman of the Board consequent to his elevation to
the position of Chairman Cum Managing Director of General Insurance
Corporation of India.
The Directors of your Company wish to place on record their
appreciation for the services rendered and contribution made by Shri.
Yogesh Lohiya and Shri M. Ramadoss during their tenure as Director(s)
of the Company.
Shri. A. R. Sekar, Officiating Chairman Cum Managing Director, The New
India Assurance Company Ltd., was appointed as an Additional Director
of the company w.e.f. 29th March, 2012 pursuant to the provisions of
section 260 and other applicable provisions of the Companies Act, 1956,
if any and Article 111 of Articles of Association of the Company. Shri.
N. Mohan, General Manager, General Insurance Corporation of India (GIC
Re) was appointed as an Additional Director of the company w.e.f. 30th
April, 2012, pursuant to the provisions of section 260 and other
applicable provisions of the Companies Act, 1956, if any and Article
111 of Articles of Association of the Company.
Your Company has received a notice in writing from a shareholder(s),
under section 257 of the Companies Act, 1956 proposing the appointment
of Shri. A. R. Sekar and Shri. N. Mohan as Director(s) of the Company
at the ensuing Annual General Meeting.
None of the Directors of the Company are disqualified from being
appointed as Directors as specified in Section 274 of the Companies
Act, 1956. The Board of Directors recommends their appointment.
CORPORATE GOVERNANCE
The Auditors Certificate on Corporate Governance issued by the
Statutory Auditors of the Company for the year under review, as
required under the Companies Act, 1956 and in pursuance of Clause 49 of
the Listing Agreement is annexed to the Report of the Directors on
Corporate Governance.
Your Company has been complying with the principles of good Corporate
Governance over the years. The Board of Directors supports the broad
principles of Corporate Governance. In addition to the basic governance
issues, the Board lays strong emphasis on transparency, accountability
and integrity.
In terms of the provisions of Clause 49 of the listing agreement
entered into with the Stock Exchange(s), the Management Discussion and
Analysis Report forms part of this report.
HUMAN RESOURCES & INDUSTRIAL RELATIONS.
Your Company has continuously been working to improve human resources
competencies and capabilities in the Company to deliver the desired
results. Your Company has developed a comprehensive "in-house"
induction training module to make sure that new employees understand
the basic aspect of the Company in its all operations. In pursuance of
the Company's commitment to develop and retain the best available
talent, the Company had been sponsoring the employees for training
programmes organized by reputed professional institutions and training
programmes conducted by National Housing Bank for upgrading the skill
and knowledge of the employees in different operational areas. The
Company continues to focus on various initiatives in training and
developing employees across levels to improve productivity, service
quality, personal effectiveness and supervisory quality. Employees'
relations remained cordial and the work atmosphere remained congenial
during the year under review. The work force strength of Your Company
as on 31st March, 2012 is 195.
OUTLOOK FOR THE YEAR 2012-13.
Gross Domestic Product (GDP) growth likely to be 6.9% for 2011-12.
Going forward into 2012-13, assuming a normal monsoon, agricultural
growth could stay close to the trend level, the overall domestic growth
outlook for 2012-13 looks a little better than in 2011-12 and the
baseline GDP growth for 2012-13 is projected at 7.3% by Reserve Bank of
India. (Source: Reserve Bank of India Monetary Policy Statement
2012-13/April 17, 2012.),The projected growth for the 2012-13 is
reasonably at a good level for the emerging economies like us.
Housing is a basic need that provides a place "home" to the individual
and is a valuable asset which can enable him to access credit from the
financial market. India is witnessing increasing levels of urban
population. India's urban population is expected to increase from 400
million in 2011 to about 600 million or more by 2030 (Source: Issues
for approach to 12th Five year Plan - Planning Commission). Nearly 30%
of the country's population lives in cities and urban areas. Within the
urban population, there is a rapidly growing informal sector whose
ability to borrow from the formal sector is not adequately recognized.
Mortgage penetration levels mortgage loans as a percentage of Gross
Domestic Product (GDP) which is around 7.25% of India's GDP only
compared with China (12 per cent), Thailand (17 per cent) and Malaysia
(29 per cent) (Source: Report on trend and progress of Housing in India
2011 by National Housing Bank). Hence there is lot of scope for Housing
Finance industry to penetrate and grow. An effective housing finance
system improves affordability through institutional and product
innovation. Availability of long term housing loans enables the
individuals a greater flexibility in allocating their savings and other
sources across their different needs.
Government of India in its Budget for the year 2012-13 extended the
scheme of interest subvention of 1% on housing loans up to Rs.15,00,000
where the cost of the house does not exceed Rs. 25,00,000 for period of
one more year is a welcome measure; which gives relief to the home loan
borrowers of eligible category. In the said Budget to address the
shortage of housing for low income groups, proposal is also announced
for allowing "External Commercial Borrowings" for low cost housing
projects.
In the first month of the current quarter of the financial year
2012-13, we have witnessed a positive trigger for growth; Reserve Bank
of India announcing 50 basis points reduction in "repo rate". Majority
of the Banks have announced reduction in their "Base Lending Rate"
which will give your Company a marginal relief in cost of borrowing.
The inflationary pressures, which started moderating from March, 2012
are again showing upward trend, especially in food prices, is a
worrying factor. However, with the forecast of "normal monsoon" for the
current year, which will boost the prospects of farm production, we
expect the inflationary pressures to come down earliest and with
interest rates moderating, your Company is expecting to maintain the
momentum in loan disbursements in the financial year 2012-13.
ACKNOWLEDGEMENTS
Your Board place on record their sincere appreciation for the
cooperation and support received from the Promoter(s) namely, General
Insurance Corporation of India, The New India Assurance Company Ltd.,
National Insurance Company Ltd., The Oriental Insurance Company Ltd.,
United India Insurance Company Ltd. and IFCI Ltd.
Your Board acknowledges and appreciates the guidance and co-operation
extended by various regulatory authorities including National Housing
Bank (NHB), SEBI, Stock Exchanges and Depositories.
Your Board wishes to place on record their thanks to National Housing
Bank for their continued refinance assistance and also to all the banks
for their continued support through term loans.
Your Board wishes to place on record their sincere appreciation for the
cooperation and support received from shareholders and customers.
Your Board thanks the Registrars and Share Transfer Agents of the
Company, Credit Rating Agencies, Government(s), local/ statutory
authorities and all others for their whole hearted support.
Your Board would like to thank all the employees of the Company whose
efforts made the Company to reach greater heights and wish them all the
best for achieving even greater heights in the future.
For and on behalf of the Board of Directors
Place: Mumbai M. Sivaraman
Date: 29th May, 2012. Managing Director
Mar 31, 2011
The Directors are pleased to present the Twenty-first Annual Report
together with the Audited Statement of Accounts for the year ended 31st
March, 2011.
FINANCIAL RESULTS (Rs. In Lakhs)
PARTICULARS 31st March, 2011 31st March, 2010
Total Income 33,987 31,111
Less: Interest expenditure 21,483 18,862
Overheads 2,712 2,999
Depreciation & other amortisation 73 62
Profit Before Extraordinary Income 9,719 9,188
Profit on sale of Long Term Investment 8,848 Nil
Less : Additional Provision for Contingencies 4,000 Nil
Profit Before Tax 14,567 9,188
Provision for Tax 4,510 2,825
Deferred Taxation (1319) (346)
Profit after Tax 11,376 6,709
Profit brought forward 5 21
Adjustment for short income tax provision 1 1
Profit available for appropriation 11,382 6,731
APPROPRIATIONS:
General Reserve 6,115 2,000
Special Reserve under Section 36(l)(viii)
of Income 1,820 1,900
Tax Act, 1961
Proposed Equity Dividend 2,962 2,423
Tax on Proposed Dividend 480 403
Balance carried over to Balance Sheet 5 5
IMPORTANT FINANCIAL RATIOS:
PARTICULARS 31st March, 2011 31st March, 2010
Return on Net Worth (%) 26.45 18.44
Return on Total Assets (%) 3.20 2.23
Book Value per share (Rs.) 79.87 67.58
Earning per share (Rs.) 21.13 12.46
Debt Equity Ratio 7.18 7.22
Average cost of funds 7.52 7.39
Average yield on advances 10.11 10.17
DIVIDEND
Considering the good performance during the year 2010-11 and fund
requirement in the near future, Your Directors are pleased to recommend
a dividend of 55% i.e. Rs.5.50 per equity share, inclusive of one time
special dividend of Rs.1.00 per
equity share (i.e. 10%) in view of profit on sale of investments as
against 45% for the previous year. The total dividend outgo for the
current year would amount to Rs.34.42 crores including dividend
distribution tax of Rs.4.80 cores, as against Rs.28.26 crores including
dividend distribution tax of Rs.4.03 crores in the previous year.
PERFORMANCE
Income and Profit: Total income for the year under review is Rs.428.35
crores as against Rs.311.11 crores for the year 2009-10. During the
year Your Company had investment income by way of "Profit on sale of
Long term investment" amounting to Rs.88.48 crores, being sale of Your
Companys holding in LIC Asset Management Company Ltd. and LIC Asset
Management Trustee Company Ltd.
The Companys main thrust continues on individual loans. New loans
approved during the year amounted to Rs.1069 crores and loans disbursed
during the year are Rs.969 crores as against Rs.777 crores and Rs.673
crores for the year ended 31st March, 2010 respectively. The Retail
Loan portfolio as at 31st March, 2011 stood at Rs.3406 crores,
(reflecting a growth rate of 17%) as compared to Rs.2920 crores on 31st
March, 2010.
Your Company scrupulously adhered to the prudential guidelines for Non
Performing Assets (NPAs); issued by the National Housing Bank (NHB)
under its Directions of 2001, as amended from time to time. During the
year under review your Company has made provision to the extent of
Rs.38.73 Crores as against Rs.10.38 Crores provided for in the year
2009-10, including provision of Rs.21.03 crores required for Housing
Loans under differential rate of interest. The Company is also
carrying an additional provision of Rs.41.63 crores in books, beyond
what is prescribed under the guidelines, as a prudential measure. The
total cumulative provision towards individual housing loan portfolio as
on 31st March, 2011 is Rs.80.84 crores. Net Non-performing loans as on
31st March, 2011 amounted to Rs.13.96 crores (0.41%) as against
Rs.42.89 Crores on 31st March, 2010. The Securitization and
Reconstruction of Financial Assets and Enforcement of Security Interest
Act, 2002 has proved to be a very useful tool and the Company has been
successful in initiating recovery action under the Act in case of
willful defaulters.
RESOURCE MOBILISATION :
Your Company constantly monitors its resource base and taps the
appropriate source in its every endeavor to minimize the weighted
average cost of funds. During the year under review, Your Company has
mobilized resources through the following sources:
A. Term Loans:
Your Company has borrowed fresh long term loans of Rs.830 crores from
banks during the year as compared to Rs.528 crores during the previous
year. The aggregate of term loans outstanding at the end of the
financial year stood at Rs.2,677 crores (including short term loans
amounting to Rs.300 crores) as against Rs.2,344 crores as at the end of
the previous year (including short term loans amounting to Rs.400
crores).
B. Refinance from National Housing Bank:
With the continued support of National Housing Bank (NHB), Your Company
availed refinance amounting to Rs.210 crores during the year under
review as against Rs.75 crores in the previous year. The refinance
facility outstanding as on 31st March, 2011 is Rs.410 Crores as against
Rs.283 crores as at the end of the previous year.
C. Commerical Paper:
During the year 2010-11, your Company has issued Commercial Paper to
the extent of Rs. 500 crores and placed them with the investors at the
most Competitive rates of interest. The outstanding Commercial Paper as
on 31st March, 2011 is "Nil".
CREDIT RATING
Your Company had received rating from ICRA for its various borrowing
programmes as follows:
- For Commercial Paper Programme of Rs.800 crores as "A1+" (Pronounced
as A one plus). This rating is the highest credit quality rating
assigned by ICRA for Short Term Debt Instruments.
- For Fund Based Short Term Loan Programme of Rs.800 crores as "A1+"
(Pronounced as A one plus). This rating is the highest credit quality
rating assigned by ICRA for Short Term Debt Instruments.
- As per the Basel-II requirements - For Fund Based Long Term Loan
Programme of Rs.3000 crores as "LAA+" (Pronounced as L Double A plus).
This rating indicates the high credit quality rating assigned by ICRA
to Long Term Debt Instruments.
BRANCH EXPANSION:
During the year under review your Company has opened its branches in
tier II/III cities namely Durgapur in West Bengal, Jodhpur in Rajasthan
and Kolhapur in Maharashtra. The total number of branches as on 31st
March, 2011 stood at 30.
INSURANCE COVERAGE TO BORROWERS:
Your Company had taken "Special Contingency Insurance" with The New
India Assurance Company Ltd., which covers the borrowers of your
Company as under:
- Accidental Insurance: Personal accident (death only) risk cover, free
of cost to the borrowers up to an amount of outstanding loan at any
particular point of time during the term/ tenure of the housing loan.
- Mortgaged Property Insurance: The property acquired out of loan, for
and up to and extent of the outstanding loan amount, covered free of
cost against fire, earthquake and allied perils affecting the mortgaged
property.
Your Company has also tied up with Kotak Mahindra Old Mutual Life
Insurance Limited for getting insurance cover on the life of the
borrower to the extent of the "Outstanding Home Loan". The said "group
Life cover is optional" and the applicable premium are given as loan.
These schemes ensure protection to the families of the borrower in case
of un-expected eventualities like untimely death of borrower due to
accident or natural death.
COMPLIANCE WITH GUIDELINES OF NATIONAL HOUSING BANK (NHB)-REGULATORY
GUIDELINES
Your Company has complied with the Guidelines and Directions issued by
NHB on asset classification of credit/ investments, credit rating, Fair
Practices Code, Know Your Customer (KYC), Anti Money Laundering
Guidelines, income recognition and provisioning for non-performing
loans.
CAPITAL ADEQUACY
The Company has been maintaining the Capital Adequacy Ratio (CAR) above
the minimum required level prescribed by National Housing Bank (NHB)
from time to time. The rate prescribed for the present is 12%. During
the year under review, the Risk weight on housing loans was changed as
follows:
- Housing loans sanctioned to individuals above Rs.30 lacs but below
Rs.75 lacs secured by mortgage of immoveable property which are
classified as standard assets with LTV ratio is = < or 75% - Risk
weight assigned is 75% as against previous risk weight of 50%.
- Housing loans sanctioned to individuals above Rs.30 lacs but below
Rs.75 lacs secured by mortgage of immoveable property which are
classified as standard assets with LTV ratio is = < or 75% - Risk
weight assigned is 100% as against previous risk weight of 75%.
- Housing loans of Rs.75 lacs and above sanctioned to individuals
irrespective of LTV ratio, secured by mortgage of immoveable property,
which are classified as standard assets - Risk weight assigned is 125%
as against previous risk weight of 100%.
- Loans given for the purpose of insurance of the property/borrower in
case of individual housing loans - Risk weight assigned - same as
applicable to respective housing loan as against previous risk weight
of "nil" %.
The Capital Adequacy Ratio of the Company as at 31st March, 2011 was
15.42% as against 18.03% as at 31st March, 2010.
DEPOSITS
Your Company has not accepted or renewed any fresh deposits during the
year within the meaning of Section 58(A) of the Companies Act, 1956 and
the Companies (Acceptance of Deposits) Rules, 1975. There are no
unclaimed deposits as on 31st March, 2011.
DEMATERIALISATION OF SHARES AND NOMINATION FACILITY AND LISTING AT
STOCK EXCHANGES
As per the Securities & Exchange Board of India directives, the
transactions of the Companys shares must be compulsorily in
dematerialised form. Your Company has signed an agreement with the
Central Depository Services (India) Limited and National Securities
Depository Limited for transaction of shares in dematerialised form.
Shareholders holding shares in physical form are requested to convert
their holdings into dematerialised form. Out of 5,38,51,066 equity
shares 5,31,52,348 are in dematerialised form, which is 98.70% (98.63%
as on 31st March, 2010) of the total shares as on 31st March, 2011.
Shareholders may utilise the nomination facility available by sending
the prescribed Form No.2B duly filled, to our Registrars and Share
Transfer Agents viz. M/s. Sharepro Services (India) Private Limited,
Mumbai.
The Equity shares of the Company continue to be listed on Bombay Stock
Exchange Ltd., and The National Stock Exchange of India Ltd. The Annual
Listing fees for the year 2011-12 have been paid to these Stock
Exchanges.
UNCLAIMED DIVIDEND TRANSFER TO INVESTORS EDUCATION AND PROTECTION FUND
(IEPF)
In terms of Section 205C of the Companies Act, 1956, the amount
(dividends) that remained unclaimed and unpaid for more than 7 years
from the date become first due for payment, shall be transferred to
IEPF (Fund). In terms of the applicable statutory provisions of the
Companies Act, 1956, no claim would lie against the Company or the said
Fund after such transfer to IEPF.
The Company has been intimating the shareholders to lodge their claim
for payment due, if any, from time to time and such claims have been
settled. In spite of constant and sincere efforts to pay the unclaimed
dividend to the respective shareholders, certain amount still remains
unclaimed. The Company has been intimating the shareholders to lodge
their claim for dividend from time to time and such information is
being mentioned in the Annual Reports every year.
Unclaimed dividend amounting to Rs.4,76,854/- that has not been claimed
by shareholders for the financial year 2002-03 has been transferred to
Investor Education and Protection Fund (IEPF) during the month of
November, 2010, as per the provisions of the Companies Act, 1956. As
per section 205(B) of the Companies Act, 1956, no claim would lie
against the Company or the said fund after the transfer.
The dividend pertaining to the financial year 2003-04 remaining
unclaimed and unpaid amounting to Rs.5,63,937/- as on 31st March, 2011,
would be transferred to IEPF during October, 2011 after settlement of
claims received up to the date of completion of 7 years from the date
of declaration of the dividend. The Company has sent individual
reminder letters to the respective shareholders during the month of
May, 2011.
Shareholders who have not claimed the said dividend may write to
Registrars and Share Transfer agents.
STATUTORY INFORMATION:
Particulars regarding conservation of energy, technology absorption and
foreign exchange earnings and expenditure
Since the Company does not own any manufacturing facility, the
particulars relating to conservation of energy and technology
absorption stipulated in the Companies (Disclosure of Particulars in
the Report of the Board of Directors) Rules, 1988, required to be
furnished under section 217 (1) (e) of the Companies Act, 1956 are not
applicable.
The Company did not earn any income in foreign currency during the year
under review. The Company has incurred an amount of Rs.62,102/- towards
expenses in foreign currency.
None of the employees of your company were in receipt of remuneration
in excess of the limits as laid down under section 217(2A) of the
Companies Act, 1956 read with Companies (Particulars of Employees)
Rules, 1975 as amended from time to time.
DIRECTORS RESPONSIBILITY STATEMENT
In accordance with the provisions of sub-section (2AA) of Section 217
of the Companies Act, 1956, and based on the information provided by
the Management, Board of Directors report that:
a. In the preparation of Annual Accounts, the applicable accounting
standards have been followed together with proper explanation;
b. The Accounting Policies selected were applied consistently.
Reasonable and prudent judgements and estimates were made so as to give
a true and fair view of the state of affairs of the Company as at the
end of 31st March, 2011 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, 1956, for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities; and
d. The annual accounts have been prepared on a going concern basis.
AUDITORS
M/s. Contractor, Nayak and Kishnadwala, Chartered Accountants, were
appointed as Statutory Auditors in the twentieth Annual General Meeting
of the Company and their term is scheduled to end at the conclusion of
the forthcoming Annual General Meeting and is eligible for
re-appointment.
The Company received the requisite confirmation from them to the effect
that their appointment, if made, would be within the limits of Section
224(1B) of the Companies Act, 1956.
The Directors of your Company recommend re-appointment of M/s.
Contractor, Nayak & Kishnadwala Chartered Accountants, Mumbai as
Statutory Auditors of the Company from the ensuing Annual General
Meeting till conclusion of next Annual General Meeting. Suitable
resolution for re-appointment requiring approval of the shareholders
forms part of the agenda of the Annual General Meeting. The said
appointment attracts provisions of section 224 A of the Companies Act,
1956.
DIRECTORS
In accordance with the requirements of the Companies Act, 1956, and
Article 125 of the Articles of Association of the Company, S/shri. M.
K.Tandon and Manu Chadha, Directors are liable to retire by rotation
and are eligible for re-
appointment. S/shri. M. K. Tandon and Manu Chadha offer themselves for
re-appointment. The Board of Directors recommends their re-appointment.
Shri. M. Ramaprasad, resigned from Directorship on 25th October, 2010
consequent to his resignation from the services of General Insurance
Corporation of India. IFCI Ltd. withdrew nomination of Shri. Javed
Yunus from the Directorship of the Board w.e.f. 21st January, 2011. The
Directors of your Company wish to place on record their appreciation
for the services rendered and contribution made by Shri. M. Ramaprasad
and Shri. Javed Yunus during their tenure as Director(s) of the
Company.
Shri. Ashok Kumar Roy, General Manager, General Insurance Corporation
of India (GIC Re) was appointed as an Additional Director of the
company w.e.f. 25th October, 2010, pursuant to the provisions of
section 260 and other applicable provisions of the Companies Act, 1956,
if any and Article 111 of Articles of Association of the Company.
Shri. Shivendra Tomar Vice President, IFCI Ltd., presently on
deputation to IFCI Infrastructure Development Ltd. (IIDL), as Managing
Director, was appointed as an Additional Director of the Company w.e.f.
29th January, 2011, pursuant to the provisions of section 260 and other
applicable provisions of the Companies Act, 1956, if any and Article
111 of Articles of Association of the Company.
Your Company has received a notice in writing from a shareholders),
under section 257 of the Companies Act, 1956 proposing the appointment
of Shri. Ashok Kumar Roy and Shri. Shivendra Tomar as Directors) of the
Company at the ensuing Annual General Meeting.
None of the Directors of the Company are disqualified from being
appointed as Directors as specified in Section 274 of the Companies
Act, 1956.
CORPORATE GOVERNANCE
The Auditors Certificate on Corporate Governance issued by the
Statutory Auditors of the Company for the year under review, as
required under the Companies Act, 1956 and in pursuance of Clause 49 of
the Listing Agreement is annexed to the Report of the Directors on
Corporate Governance.
The Board of Directors fully supports and endorses Corporate Governance
practices in accordance with the provisions of Clause 49 of the listing
agreements, as amended. Your Company has complied with all the
mandatory requirements of the said clause.
In terms of the provisions of Clause 49 of the listing agreement
entered into with the Stock Exchange(s), the Management Discussion and
Analysis Report forms part of this report.
HUMAN RESOURCES & TRAINING
The nature of Your Companys business requires trained employees. A
Housing/ Financial service is a knowledge intensive sector where
employee skills form a critical aspect in proper service delivery. Your
Company has developed a comprehensive "in-house" induction training
module to make sure that new employees understand the basic aspect of
the Company in its all operations. In pursuance of the Companys
commitment to develop and retain the best available talent, the Company
had been sponsoring the employees for training programmes organized by
reputed professional institutions and training programmes conducted by
National Housing Bank for upgrading the skill and knowledge of the
employees in different operational areas. The Company rewarded its
employees during the year under review by suitably revising the scales
of pay. The Board values and appreciates the contribution and
commitment of the employees towards performance of the Company during
the year under review. Employees relations remained cordial and the
work atmosphere remained congenial during the year under review. Your
Company has augmented the human resources sizably during the year. The
work force strength of Your Company as on 31st March, 2011 was 199.
OUTLOOK FOR THE YEAR 2011-12
Gross Domestic Product (GDP) growth likely to average 8.2% over the
11th Plan period i.e. from 2007 to 2012 which is remarkable given the
present global crisis. GDP is expected to grow by 9% during the 12th
Plan period i.e. from 2012 to 2017. Indias urban population is
expected to increase from 400 million in 2011 to about 600 million or
more by 2030 (Source: Issues for approach to 12th Five year Plan -
Planning Commission) With changing socio demographic factors like
nuclearisation, urbanization and shifting population in the lower age
bracket would still drive underlying asset demand and growth in the
housing finance market. Housing being one of the low risk asset classes
for financiers would continue to be the major contributor for their
retail lending portfolio. The year 2011-12 will be more challenging
year for Housing Finance Companies and Banks, due to raising interest
rates and peaking of property rates; affecting the affordability of the
individuals. However, taking into consideration the continuation of
concessions allowed in the income tax for repayment of principal and
interest up to specified limit; the net interest burden will be still
within the affordable limits and as a result the demand is expected to
continue.
Your Company would continue to give a more and focused attention to
lending to individual loan segment keeping in view the encouragement
received in the form of enhanced business performance during the year
under review. Various strategies are put in place to enhance its
marketing share in the housing loan segment. Your Company is expecting
a significant improvement in business performance for the year 2011-12.
However, given the situation of increase in interest rates resulting in
increase in the cost of funds, the margins are expected to be under
pressure
ACKNOWLEDGEMENTS
Your Directors wish to place on record with thanks for the consistent
support and guidance given by the Promoterî namely, General Insurance
Corporation of India (GIC Re), The New India Assurance Company Ltd.,
National Insurance Company Ltd., The Oriental Insurance Company Ltd.,
United India Insurance Company Ltd., and IFCI Ltd.
Your Directors acknowledge and appreciate the guidance and co-operation
extended by various regulatory authorities including National Housing
Bank (NHB), SEBI, Stock Exchanges and Depositories.
Your Directors wish to place on record their thanks to National Housing
Bank for their continued refinance assistance and also to all the banks
for their continued support through term loans.
Your Directors wish to place on record their sincere gratitude to
customers and members for their continued patronage.
Your Directors thank the Registrars and Share Transfer Agents of the
Company, Credit Rating Agencies, Government(s), local/statutory
authorities and all others for their whole hearted support.
Your Directors also appreciate and acknowledge the contribution made by
the employees whose efforts made the Company to reach greater heights
and look forward for valuable sustained support and encouragement from
all the stakeholders
For and on behalf of the Board of Directors
Place: Mumbai Yogesh Lohiya
Date: 31st May, 2011. Chairman
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