The Directors have pleasure in presenting the 29th Annual Report of yourCompany and the Audited Financial Statements for the year ended 31st March2019.
(*Rs* in Lacs)
|PARTICULARS ||March 31 2019 ||March 31 2018 |
|Total Income ||122766 ||111186 |
|Less: Interest expenditure ||86528 ||71276 |
|Overheads ||11460 ||12417 |
|Depreciation & amortization ||72 ||64 |
|Profit Before Tax ||24706 ||27429 |
|Provision for Tax ||7840 ||9450 |
|Deferred Tax Assets ||(315) ||(2585) |
|Profit After Tax ||17181 ||20564 |
|Other Comprehensive Income ||(45) ||55 |
|Total Comprehensive Income ||17136 ||20619 |
|Profit brought forward ||5753 ||3244 |
|Profit available for appropriation ||22889 ||23863 |
IMPORTANT FINANCIAL RATIOS
|PARTICULARS ||March 31 2019 ||March 31 2018 |
|Return on Net Worth (%) ||15.16 ||20.55 |
|Return on Total Assets (%) ||1.32 ||1.84 |
|Book Value per share (`) ||210.49 ||185.85 |
|Earnings per share (`) ||31.90 ||38.19 |
|Debt Equity Ratio (times) ||10.29 ||9.98 |
|Average cost of funds (%) ||8.00 ||7.82 |
|Average yield on advances (%) ||10.35 ||11.12 |
|Net Interest Margin ||1.25 ||1.59 |
Your Directors recommend payment of dividend for the year ended 31st March2019 of *Rs* 5.50/- per equity share of `10/- each. The total dividend outgo for thecurrent year would amount to ` 35.71 crores including dividend distribution tax of *Rs*6.09 Crores as against ` 35.71 Crores including dividend distribution tax of *Rs* 6.09Crores in the previous year.
The dividend payout ratio for the current year inclusive of additional tax on dividendwill be 23.42% as against 16.47% 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).
Income Profit Loan Approvals and Disbursements:
Total income for the year under review is `1227.66 crores as against *Rs* 1111.86crores for the year 2017-18. Profit before tax for the year ended is *Rs* 247.06 croresand Profit after tax for the year ended is *Rs* 171.81 crores as against
*Rs* 274.29 crores and *Rs* 205.64 crores respectively for the previous year
The Company's main thrust continues to be on Individual Loans. New loans approvedduring the year amounted to ` 3641 crores and loans disbursed during the year are ` 3502crores as against *Rs* 3869 crores and ` 3621 crores for the year ended 31stMarch 2018 respectively. The Retail Loan portfolio as at 31st March 2019stood at *Rs* 12747 crores as compared to *Rs* 10934 crores as on 31st March2018 as per IND-AS.
During the year under review your Company has made provision to the extent of ` 33crores as against *Rs* 61.32 crores provided for in the year 2018-19
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 ` 3218 crores from banks during theyear as compared to
*Rs* 2167 crores during the previous year. The aggregate of term loans outstanding atthe end of the financial stood at ` 8060 crores as against `6171 crores as at the end ofthe previous year.
B. Refinance from National Housing Bank (NHB):
With the continued support of National Housing Bank (NHB) your Company availedrefinance amounting to
*Rs* 519 crores during the year under review as against *Rs* 631 crores in the previousyear. The refinance facility outstanding as on 31st March 2019 is *Rs* 2358crores as against *Rs* 2875 crores as at the end of the previous year.
C. Short term Loan and Commercial Paper:
During the year 2018-19 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 2019 is *Rs* 1241 crores.
D. Non-Convertible Debentures:
Your Company has not issued any Non-Convertible Debentures (NCD) on private placementbasis during the year as on 31st March 2019.
Your Company had received rating from CRISIL and ICRA for its various borrowingprogrammes as follows:
For Commercial Paper programmes of *Rs* 1500 crores as [CRISIL] "A1+"(Pronounced as CRISIL A1 plus).
For Fund Based Long Term Loan Programme of `100 crores as [CRISIL] AA+(Stable)(Pronounced as CRISIL double A plus/Stable).
For Non-Convertible Debentures Borrowing Programme of `550 crores [CRISIL]"AA+(Stable)" (Pronounced as CRISIL double A Plus/Stable).
For Commercial Paper(*Rs* 1500 crores )/ short term loan (*Rs* 500 crores) programmesof *Rs* 2000 crores as [ICRA] "A1+" (Pronounced as ICRA A1 plus). This rating isthe 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*12500 crores as [ICRA] AA+ (Stable) (Pronounced as ICRA double A plus/stable).
For Non-Convertible Debentures Borrowing Programme of *Rs* 550 crores [ICRA]"AA+" (STABLE) (Pronounced as ICRA double A Plus/stable).
During the year under review your Company has opened its Branches at Thrissur(Kerala) Surat (Gujarat) Suchitra
(Hyderabad) Kengari (Karnataka) and Varanasi (Uttar Pradesh). The total number ofOffices as on 31 st March 2019 is 75. Your Company is initiating brandbuilding 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 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 Kotak Mahindra Old Mutual Life InsuranceLtd.' "Future Generali India Life Insurance Company Ltd." and "AdityaBirla Sun Life Insurance Company Ltd." for getting insurance cover on the life of theborrower to the extent of the "Outstanding Home Loan". The said "Group LifeCover" is optional and the Company arranges this insurance on request from theborrower. These schemes ensure protection to the families of the borrower in case ofun-expected eventualities like untimely death of borrower due to accident or naturaldeath.
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 12%.
The Capital Adequacy Ratio of the Company as at 31st March 2019 is 16.55%as against 16.17% as at 31st March 2018.
Your Company has not accepted any fixed deposits and as such no amount of Principal orinterest was as of Balance sheet date.
DEMATERIALISATION OF SHARES AND NOMINATION FACILITY AND LISTING AT STOCK EXCHANGES
As per the Securities & Exchange Board of India ("SEBI") directives thetransactions of the Company's shares must be compulsorily in dematerialised form. YourCompany has signed an agreement with the Central Depository Services (India) Limited andNational Securities Depository Limited for transaction of shares in dematerialised form.Shareholders holding shares in physical form are requested to convert their holdings intodematerialised form. Out of 53851066 equity shares 53489704 equity shares are indematerialised form (53417582 shares as on 31st March 2018) which is99.32% (99.19% as on 31st March 2018) of the total shares as on 31stMarch 2019.
Shareholders holding shares in physical form may utilise the nomination facilityavailable by sending the prescribed
Form No.SH-13 duly filled to our Registrar and Share Transfer Agent viz. M/s. KarvyFintech Pvt. Ltd Karvy Selenium
Tower B Plot 31-32 Gachibowli Financial District Nankramguda HyderabadTelangana-500032. Shareholders holding shares in dematerailised form has to send their"Nomination" request to the respective Depository Participants. The equityshares of the Company continue to be listed on BSE Ltd. and The National Stock Exchangeof India Ltd. The Annual Listing fees for the year 2018-19 were paid to these StockExchanges well in advance.
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 forpayment shall be transferred to 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 *Rs* 1769598/- that has notbeen claimed by shareholders for the financial year
2010-11 has been transferred to Investor Education and Protection Fund (IEPF) duringthe month of October 2018.
The dividend pertaining to the financial year 2011-12 remaining unclaimed and unpaidamounting to`1699875 as on 31st March 2019 would be transferred to IEPFduring September 2019 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 Registrar and Share Transfer Agent.
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
Investor Education and Protection Fund (IEPF) Suspense Account. We have transferredtotal 15795 no. of equity shares to IEPF during the year and as on 31st March2019 total no. of 122197 shares stands in the name of IEPF Authority.
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 inforeign currency during the year under review and also not incurred any expenses inforeign 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 Accountsthe applicable accounting standards have been followed along with proper explanationrelating to material departures. b. We have selected such Accounting Policies and appliedthem consistently and made judgments and estimates that are reasonable and prudent to givea true and fair view of the state of affairs of of 31st March 2019 and of theprofit /Loss of the Company for the year ended on that date. c. We have taken proper andsufficient care for the maintenance of adequate accounting with the provisions of the Actfor safeguarding the assets of the Company and for preventing and detecting fraud andother 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 havedevised proper systems to ensure compliance with the provisions of all applicable laws andthat such systems were adequate and operating effectively.
In terms of Section 139 of the Companies Act 2013 ("the Act") and theCompanies (Audit and Auditors) Rules 2014 the present Statutory Auditors of the CompanyM/s. CNK & ASSOCIATES LLP Chartered Accountants Mumbai will hold office until theconclusion of the ensuing 29 th Annual General Meeting and will be completing10 years tenure in our Company hence will not seek re-appointment.
Accordingly the Board of Directors at its meeting held on 24th May 2019after considering the recommendations of the Audit Committee had recommended theappointment of M/s. M.P. Chitale & Company Chartered Accountants (Registration No.101851W) as the Statutory Auditors of the Company for approval of the members. Theproposed
Auditors shall hold officefor one term of 5 consecutive years from the conclusion ofthe 29 th Annual General Meeting till the conclusion of 34th AnnualGeneral Meeting of the Company. Suitable resolution for re-appointment requiring approvalof the shareholders forms part of the agenda of the Annual General Meeting.
The Board has appointed M/s. Makarand M. Joshi & Co. Practicing CompanySecretaries as Secretarial Auditor of your
Company for the financial year 2018-19. The Secretarial Audit Report for the financialyear ended 31 st March 2019 is annexed as Annexure A to this report.The Secretarial Audit Report does not contain any qualification reservations or adverseremark except the noting of show cause Notice from NHB.
In accordance with the requirements of Companies Act 2013 and Article 125 of theArticles of Associations of the Company Shri A. V. Girijakumar (DIN 02921377)Director is due to retire by rotation and being eligible offers himself forreappointment.
Smt. Sashikala Muralidharan (DIN 08036523) Non-Executive Director who wasappointed as Additional Director of the Company pursuant to Article 111 of Article ofAssociation of the Company with effect from 28 th June 2018 and who holdsoffice up to the forthcoming 29 th Annual General Meeting of the Company interms of Section 161 of the Companies Act 2013 and is eligible for appointment as aNon-Executive Director of the Company whose period of
Office shall be liable to retire by rotation.
Smt. Tajinder Mukherjee (DIN 08227563) and Shri Girish Radhakrishnan (DIN No.08268834) who were appointed as an Additional Directors of the Company pursuant toArticle 111 of Articles of Association of the Company with effect from 26th November 2018and who holds office up to the forthcoming 29 th Annual General Meeting of theCompany in terms of Section 161 of the Companies Act 2013 and are eligible forappointment as a Non-Executive
Directors of the Company whose period of Office shall be liable to retire by
Shri Atul Sahai (DIN No 07542308) who was appointed as an Additional Director ofthe Company pursuant to Article
111 of Articles of Association of the Company with effect from 1 stFebruary2019andwhoholdsofficeup to the forthcoming 29th Annual General Meetingof the Company in terms of Section 161 of the Companies Act 2013 and is eligible forappointment as a Non-Executive Director of the Company liable to retire by rotation.
Company has received notices in writing from Members under Section 160 of the CompaniesAct 2013 proposing the candidature of Smt. Sashikala Muralidharan Smt. TajinderMukherjee Shri Girish Radhkarishnan and Shri Atul Sahai for the Office of Director of theCompany. None of the Directors of the Company are disqualified from being appointed asDirectors as specified in Section 164 of Companies Act 2013. The Board of Directorsrecommends for the appointment of the above named Directors. We also place a Certificate(as Annexure B) from Shri Makrand M. Joshi M/s Makarand M. Joshi & Co.Practicing
Company Secretaries regarding Non-disqualification of Directors from being appointedfor the office of Director in our Company.
Your Independent Directors meet all the criteria of Independence as provided in Section149(6) of Companies Act 2013 and SEBI (LODR) Regulations 2015.
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 7 (Seven') 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 C to the Directors' Report. Your Company is havingfollowing related party transactions which are not material in nature but the same areentered at arm's length basis with the prior approval of Audit Committee:
1) Premises taken on Lease from Promoter Insurance Companies for our Registered andCorporateOfficeand 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 (`) ||Outstanding due as on 31st March 2019 (`) |
|Shri S. Sridharan ||2111282/- ||1663516/- |
|Sr. Vice President & Company Secretary || || |
Form AOC 2 as required under Companies Act 2013 for related party transaction isannexed as Annexure D 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 a report on CSR expenditure is annexed as Annexure E 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 (www.gichfindia.com).
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 asAnnexure F.
CORPORATE GOVERNANCE issued by the Secretarial Auditor of the Company for the yearTheAuditorsCertificate 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 2019 is 287.
EXTRACT OF ANNUAL RETURN AS PER SECTION 92
Annual Return in Form MGT 9 is enclosed as per Annexure G to the Directors'Report and copy of the said Annual
Return is available on the website of the company www.gichfindia.com.
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.
|Number of Complaints filed during the financial year 2018-19 ||Nil |
|Number of Complaints disposed off during the financial year 2018-19 ||Nil |
|Number of Complaints pending as on end of the financial 19 year 2018- ||Nil |
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/ statutory authorities; Registrar and Share Transfer Agent and theAuditors of the Company for their 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 : 24.05.2019
Registered Office: For and on behalf of the Board of Directors
National Insurance Building Sd/-6th Floor 14 Jamshedji Tata Road NeeraSaxena
Churchgate Managing Director & CEO