The Directors have pleasure in presenting the 28th Annual Report of yourCompany and the Audited Accounts for the year ended 31st March 2018.
| || ||(Rs in Lacs) |
|PARTICULARS ||March 312018 ||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 312018 ||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 |
Your Directors recommend payment of dividend for the year ended 31st March2018 of Rs5.50/- per equity share of Rs10/- each. The total dividend outgo for the currentyear would amount to Rs35.71 crores including dividend distribution tax of Rs6.09 Croresas against Rs32.41 Crores including dividend distribution tax of Rs5.48 Crores in theprevious year.
The dividend payout ratio for the current year inclusive of additional tax on dividendwill 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 onapproval of shareholders at the ensuing Annual General Meeting (AGM).
OPERATIONS - PERFORMANCE
Income Profit Loan Approvals and Disbursements: Total income for the year underreview is Rs1128.40 crores as against Rs1001.74 crores for the year 2016-17. Profit beforetax for the year ended is Rs271.83 crores and Profit after tax for the year ended isRs184.43 crores as against Rs227.10 crores and Rs147.73 crores respectively for theprevious year.
The Company's main thrust continues to be on Individual Loans. New loans approvedduring the year amounted to Rs3869 crores and loans disbursed during the year are Rs3621crores as against Rs2869 crores and Rs2761 crores for the year ended 31stMarch 2017 respectively. The Retail Loan portfolio as at 31st March 2018stood at Rs11232 crores as compared to Rs9271 crores as on 31st March 2017.
During the year under review your Company has made provision to the extent of Rs61.32crores as against Rs33.40 crores provided for in the year 2017-18.
Your Company takes every effort to tap the appropriate source of funding to minimizethe weighted average cost of funds. Your Company has mobilized resources through thefollowing sources:
A. Term Loans from Banks and Insurance Companies.
Your Company has borrowed fresh long term loans of Rs2167 crores from banks during theyear as compared to Rs2835 crores during the previous year. The aggregate of term loansoutstanding at the end of the financial year stood at Rs6171 crores as against Rs4611crores 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 availedrefinance amounting to Rs 631 crores during the year under review as against Rs1400 croresin the previous year. The refinance facility outstanding as on 31st March 2018is Rs2875 crores as against Rs2683 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 Paperand also resorted to short term borrowings from the banks and the outstanding amount as on31st March 2018 is Rs893 crores.
D. Non Convertible Debentures:
Your Company has outstanding balance of Rs45 Crores through issue of Non ConvertibleDebentures (NCD) on private placement as on 31st March 2018.
Your Company had received rating from CRISIL and ICRA for its various borrowingprogrammes as follows:
For Commercial Paper/short term loan programmes of Rs1500 crores as [CRISIL]"A1+" (Pronounced as CRISIL A1 plus).
For Fund Based Long Term Loan Programme of Rs100 crores as [CRISIL] AA+(Stable)(Pronounced as CRISIL double A plus/Stable).
For Non-Convertible Debentures Borrowing Programme of Rs550 crores [CRISIL]"AA+(Stable)" (Pronounced as CRISIL double A Plus/Stable).
For Commercial Paper('1500 crores )/ short term loan ('500 crores) programmes ofRs2000 crores as [ICRA] "A1+" (Pronounced as ICRA A1 plus). This rating is thehighest credit quality rating assigned by ICRA for Short Term Debt Instruments.
As per the Basel-II requirements - For Fund Based Long Term Loan Programme ofRs10000 crores as [ICRA] AA+ (Stable) (Pronounced as ICRA double A plus/stable). Thisrating indicates the high credit quality rating assigned by ICRA to Long Term DebtInstruments.
For Non-Convertible Debentures Borrowing Programme of Rs550 crores [ICRA]"AA+" (STABLE) (Pronounced as ICRA double A Plus/stable).
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. YourCompany is initiating brand building measures to generate general awareness and improvethe image of the Company.
INSURANCE COVERAGE TO BORROWERS
Your Company had taken "Special Contingency Insurance" with The New IndiaAssurance Company Ltd. which covers the borrowers of your Company as under:
Personal Accident Insurance: Personal accident (death only) risk cover free ofcost to the borrowers up to an amount of outstanding loan at any particular point of timeduring the term/ tenure of the housing loan.
Mortgaged Property Insurance: The property acquired out of loan for and up toan extent of the outstanding loan amount covered free of cost against fire earthquakeand allied perils affecting the mortgaged property.
Your Company has also tied up with RsKotak Mahindra Old Mutual Life Insurance Ltd.'"Future Generali India Life Insurance Company Ltd." and "Aditya Birla SunLife Insurance Company Ltd." (Formerly known as Birla Sun Life Insurance CompanyLtd.) 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 andthe Company arranges this insurance on request from the borrower. These schemes ensureprotection to the families of the borrower in case of un-expected eventualities likeuntimely 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 minimumrequired level prescribed by National Housing Bank (NHB) from time to time. The CARprescribed 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.
Your Company has not accepted any fixed deposits and as such no amount of Principal orinterest 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 theCompany's shares must be compulsorily in dematerialised form. Your Company has signed anagreement with the Central Depository Services (India) Limited and National SecuritiesDepository Limited for transaction of shares in dematerialised form. Shareholders holdingshares in physical form are requested to convert their holdings into dematerialised form.Out of 53851066 equity shares 53417582 equity shares are in dematerialised form(53295991 shares as on 31st March 2017) which is 99.19% (98.97% as on 31stMarch 2017) of the total shares as on 31st March 2018.
Shareholders holding shares in physical form may utilise the nomination facilityavailable by sending the prescribed Form No.SH-13 duly filled to our Registrars and ShareTransfer Agents viz. M/s. Karvy Computershare Pvt. Ltd Karvy Selenium Tower B Plot31-32 Gachibowli Financial District Nankramguda Hyderabad Telangana-500032.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 year2017-18 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) thatremained unclaimed and unpaid
for more than 7 years from the date become first due for payment shall be transferredto IEPF (Fund).
The Company has been intimating the shareholders to lodge their claim for payment dueif any from time to time and such claims have been settled. In spite of constant andsincere efforts to pay the unclaimed dividend to the respective shareholders certainamount still remains unclaimed. The Company has been intimating the shareholders to lodgetheir claim for dividend from time to time and such information is being mentioned in theAnnual Reports every year.
Unclaimed dividend amounting to Rs1265103/- that has not been claimed by shareholdersfor the financial year 2009-10 has been transferred to Investor Education and ProtectionFund (IEPF) during the month of October 2017.
The dividend pertaining to the financial year 2010-11 remaining unclaimed and unpaidamounting to Rs1763190/- as on 31st March 2018 would be transferred to IEPFduring September 2018 after settlement of claims received up to the date of completion of7 years from the date of declaration of the dividend. Shareholders who have not claimedthe 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 InvestorEducation and Protection Fund Authority (Accounting Audit Transfer and Refund) AmendmentRules 2017 Company is required to transfer the shares in respect of which dividendremains unpaid and unclaimed for a period of seven consecutive years to the InvestorEducation and Protection Fund (IEPF) Suspense Account. We have transferred total 106402no. of equity shares to IEPF during the year.
Particulars regarding conservation of energy technology absorption and foreignexchange earnings and expenditure.
Since the Company does not own any manufacturing facility the particulars relating toconservation of energy and technology absorption as required to be furnished under Section134(m) of Companies Act 2013 are not applicable.
The Company did not earn any income in foreign currency during the year under reviewand also not incurred any expenses in foreign currency.
None of the employees of your company were in receipt of remuneration in excess of thelimits 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 beenfollowed along with proper explanation relating to material departures.
b. We have selected such Accounting Policies and applied them consistently and madejudgments and estimates that are reasonable and prudent to give a true and fair view ofthe state of affairs of the Company as at the end of 31st March 2018 and ofthe 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 accountingrecords in accordance with the provisions of the Act for safeguarding the assets of theCompany 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 suchinternal financial controls are adequate and were operating effectively.
f. We have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
M/s CNK & ASSOCIATES LLP Chartered Accountants Mumbai were re-appointed asStatutory Auditors in the twenty- fourth Annual General Meeting of the Company for theperiod of Five Years from the conclusion of 24th Annual General Meeting up tothe conclusion of 29th Annual General Meeting of the Company subject toratification of their appointment at every Annual General Meeting.
The Company received the requisite confirmation from them to the effect that theirre-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 Companyfrom the ensuing Annual General Meeting till conclusion of 29th Annual GeneralMeeting. Suitable resolution for re-appointment requiring approval of the shareholdersforms part of the agenda of the Annual General Meeting.
The Board has appointed Shri Makarand Joshi M/s Makarand M. Joshi & Co.Practicing Company Secretaries as Secretarial Auditor of your Company for the financialyear 2017-18. The Secretarial Audit Report for the financial year ended 31stMarch 2018 is annexed as Annexure A to this report. The Secretarial Audit Report does notcontain any qualification reservations or adverse remark.
In accordance with the requirements of Companies Act 2013 and Article 125 of theArticles of Associations of the Company Shri K. Sanath Kumar Director is due to retireby 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 theservices rendered and contribution made by him during his tenure as Director of theCompany.
ShriA. V. Girijakumar was appointed as Additional Director pursuant to Article 111 ofArticle of Association of the Company with effect from 18th August 2017 andholds office up to 28th Annual General Meeting of the Company in terms ofSection 161 of the Companies Act 2013 and is eligible for appointment.
Shri NSR Chandra Prasad was appointed as an Additional Director of the Company pursuantto Article 111 of Articles of Association of the Company with effect from 26thOctober 2017 and holds office up to the forthcoming Annual General Meeting of the Companyin 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 otherapplicable provisions of the Companies Act 2013 and the Companies (Appointment andQualification of Directors) Rules 2014 the term of ShriV. Ramasamy (CharteredAccountant) ShriKamlesh S. Vikamsey (Chartered Accountant) and Smt. Mona Bhide (LegalPractitioner) is expiring in the 28th Annual General Meeting of the Company andthey are proposed to be re-appointed upto the conclusion of 30th AGM of theCompany.
Company has received notices in writing from Members under Section 160 of the CompaniesAct 2013 proposing the candidature of Shri A. V. Girijakumar Shri NSR Chandra PrasadShri V. Ramasamy Shri Kamlesh S. Vikamsey and Smt. Mona Bhide for the Office of Directorof the Company.
None of the Directors of the Company are disqualified from being appointed as Directorsas specified in Section 164 of Companies Act 2013. The Board of Directors recommendstheir appointment. Your Independent Directors meet all the criteria of Independence asprovided in Section 149(6) of Companies Act 2013.
STATEMENT FOR FORMAL ANNUAL EVALUATION MADE BY THE BOARD OF ITS OWN PERFORMANCE ITSCOMMITTEES AND INDIVIDUAL DIRECTORS
Our Company has prescribed required parameters to evaluate the performance of the Boardand its Committees. It is always recognized that the Board comprises appropriatelyqualified and professional people with broad range of experience. While evaluating theperformance of the individual Director it is always seen the Knowledge to perform theirrole; time and level of participation; performance of duties and level of oversight; andprofessional conduct and independence etc.
The performance evaluation of the Directors was completed for the year. The performanceevaluation of the Chairperson Non Executive Directors and Independent Directors wascarried out by the Board and Nomination and Remuneration Committee. The Board of Directorsexpressed their satisfaction with the evaluation process.
MEETINGS OF THE BOARD
Board met 4 (Four') times during the year. For further details please referreport on Corporate Governance. RELATED PARTY POLICY AND TRANSACTIONS
Your Company has framed Related Party Transaction Policy pursuant to ListingRegulations 2015 which is available on the website of the Company www.gichfindia.com. Thesame is annexed as Annexure B to the Directors' Report.
Your Company is having following related party transactions which are not material innature but the same are entered at arm's length basis with the prior approval of AuditCommittee:
1) Premises taken on Lease from Promoter Insurance Companies for our Registered andCorporate 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 hasbeen duly approved by Audit Committee:
|Name ||Loan Amount (Rs) ||Outstanding due as on 31st March 2018 (Rs) |
|Shri S. Sridharan Sr. Vice President & Company Secretary ||2111282/- ||1877637/- |
Form AOC 2 as required under Companies Act 2013 for related party transaction isannexed as Annexure C to the Directors' 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 establishedCorporate Social Responsibility Committee and statutory disclosures with respect to theCSR Committee and an Annual Report on CSR activities is annexed as Annexure D to thisreport.
As a conscious and vigilant organization your Company has established proper vigilancemechanism for its Directors and employees to report concerns about unethical behaviouractual 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 ofthe Company.
NOMINATION AND REMUNERATION POLICY
The Board of Directors has framed a policy which lays down a framework for selectionand remuneration of Directors Key Managerial Personal (KMP) and Senior Management of theCompany. The Nomination and Remuneration policy is available on the website(www.gichfindia.com) of the Company and also enclosed as Annexure E.
The Auditors Certificate on Corporate Governance issued by the Secretarial Auditor ofthe Company for the year under review as required under Companies Act 2013 and inpursuance of SEBI (Listing Obligations and Disclosure Requirement) Regulations 2015 isannexed to the Report of the Directors on Corporate Governance.
Your Company has been complying with the principles of good Corporate Governance overthe years. The Board of Directors supports the broad principles of Corporate Governance.In addition to the basic governance issues the Board lays strong emphasis ontransparency accountability and integrity.
In terms of the provisions of Regulation 34 of SEBI (Listing Obligations and DisclosureRequirement) Regulations 2015 entered into with the Stock Exchange(s) the ManagementDiscussion 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 Directors' Report.
DISCLSOURE UNDER THE SEXUAL HARASSMENT OF WOMEN
Your Company is committed to provide and promote safe and healthy environment to allits employees without any discrimination. During the year under review there was no casefiled pursuant to The Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.
The Directors thank the valued customers shareholders for their goodwill patronageand support.
The Directors acknowledge with gratitude the valuable and timely advice guidance andsupport received from the Promoter(s) namely General Insurance Corporation of India (GICRe) The New India Assurance Company Ltd. National Insurance Company Ltd. The OrientalInsurance Company Ltd. and United India Insurance Company Limited.
The Directors also thank the National Housing Bank for their support and continuedrefinance assistance Banks for their continued support through term loans. The Directorsalso thank the Security Exchange Board of India (SEBI); Stock Exchanges; Depositories;Ministry of Corporate Affairs; Credit Rating Agencies; Government(s) local/ statutoryauthorities; Registrars and Share Transfer agents and the Auditors of the Company fortheir continued support.
The Directors place on record their deep appreciation of the valuable contribution ofthe members of the staff at all levels for the progress of the Company during the year andlook forward to their continued cooperation in realization of the corporate goals in theyears 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 |