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GIC Housing Finance Ltd.

BSE: 511676 Sector: Financials
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OPEN 337.00
VOLUME 10067
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P/E 9.88
Mkt Cap.(Rs cr) 1,822
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Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 337.00
CLOSE 339.05
VOLUME 10067
52-Week high 562.75
52-Week low 329.25
P/E 9.88
Mkt Cap.(Rs cr) 1,822
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

GIC Housing Finance Ltd. (GICHSGFIN) - Director Report

Company director report


Dear Members

The Directors have pleasure in presenting the 27th Annual Report of your Company andthe Audited Accounts for the year ended 31st March 2017.


( 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
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
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


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 wouldamount to Rs. 32.41 crores including dividend distribution tax of Rs. 5.48 crores as inthe previous year.

The dividend payout ratio for the current year inclusive of additional tax on dividendwill be 21.94% as against 26.02% of previous year. As per companies (Accounting Standards)Amendments Rules 2016 Dividend & Tax thereon will be recognised as liability onapproval of shareholders at the ensuing Annual General Meeting (AGM).


Income Profit Loan Approvals and Disbursements: Total income for the year underreview is Rs. 1001.74 crores as against Rs. 876.37 crores for the year 2015-16. Profitbefore tax for the year ended is Rs. 227.10 crores and Profit after tax for the year endedis Rs. 147.73 crores as against Rs. 191.11 crores and Rs. 124.50 crores respectively forthe previous year.

The Company's main thrust continues to be on Individual Loans. New loans approvedduring 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 March2016 respectively. The Retail Loan portfolio as at 31st March 2017 stood at Rs. 9271crores as compared to Rs. 7907 crores as on 31st March 2016. During the year underreview 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.


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 Rs. 2835 crores from banks duringthe year as compared to Rs. 1343 crores during the previous year. The aggregate of termloans 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 availedrefinance amounting to Rs. 1400 crores during the year under review as against Rs. 1000crores in the previous year. The refinance facility outstanding as on 31st March 2017 isRs. 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 Paperand also resorted to short term borrowings from the banks and the outstanding amount as on31st March 2017 is Rs. 897 crores.

D. Non-Convertible Debentures:

Your Company has outstanding balance of Rs. 45 Crores through issue of Non-ConvertibleDebentures (NCD) on private placement as on 31st March 2017.


Your Company had received rating from CRISIL and ICRA for its various borrowingprogrammes 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 ofRs. 100 crores as [CRISIL] AA+(Stable) (Pronounced as CRISIL double A plus/Stable). ForNon-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 qualityrating 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 qualityrating assigned by ICRA to Long Term Debt Instruments. For Non-Convertible DebenturesBorrowing Programme of Rs. 550 crores [ICRA] "AA+" (STABLE) (Pronounced as ICRAdouble A Plus/ stable).


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 on31st March 2017 is 65 (including Corporate Office). Your Company is initiating brandbuilding measures to generate general awareness and improve the image of the Company.


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 freeof cost to the borrowers up to an amount of outstanding loan at any particular point oftime during the term/tenure of the housing loan.

• Mortgaged Property Insurance: The property acquired out of loan for and upto an 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 Insurance Ltd.' "Future Generali India Life Insurance Company Ltd." and "Birla Sun LifeInsurance Company Ltd." for getting insurance cover on the life of the borrower tothe extent of the "Outstanding Home Loan". The said "Group Life Cover"is optional and the Company arranges this insurance on request from the borrower. Theseschemes ensure protection to the families of the borrower in case of un-expectedeventualities like untimely death of borrower due to accident or natural death.


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 31stMarch 2017 is 16.60% as against 17.40% as at 31st March 2016.


Your Company has not accepted any fixed deposits and as such no amount of Principalor interest was outstanding as of Balance sheet date.


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 53295991 equity shares are in dematerialised form(53285785 shares as on 31st March 2016) which is 98.97% (98.95% as on 31st March2016) of the total shares as on 31st March 2017.

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. Shareholdersholding shares in dematerailised form has to send their "Nomination" request tothe respective Depository Participants. The equity shares of the Company continue to belisted on Bombay Stock Exchange Ltd. and The National Stock Exchange of India Ltd. TheAnnual Listing fees for the year 2016-17 have been paid to these Stock Exchanges.


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 theshareholders to lodge their claim for payment due if any from time to time and suchclaims have been settled. In spite of constant and sincere efforts to pay the unclaimeddividend to the respective shareholders certain amount still remains unclaimed.

Unclaimed dividend amounting to Rs. 1087904/- that has not been claimed byshareholders for the financial year 2008-09 has been transferred to Investor Education andProtection Fund (IEPF) during the month of October 2016.

The dividend pertaining to the financial year 2009-10 remaining unclaimed and unpaidamounting to Rs. 1269603/- as on 31st March 2017 would be transferred to IEPF duringSeptember 2017 after settlement of claims received up to the date of completion of 7years from the date of declaration of the dividend. Shareholders who have not claimed thesaid 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) Amendment Rules 2017 Company is required to transfer theshares in respect of which dividend remains unpaid and unclaimed for a period of sevenconsecutive 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 ofshareholders whose shares to be transferred to

IEPF has been updated on the website.

STATUTORY INFORMATION: ener absorption and foreign exchange earnings and expenditureParticularsregardingconservation of

Since the Company does not own any manufacturing facility the particulars relating toconservation of energy and technology absorption stipulated in the Companies (Disclosureof Particulars in the Report of the Board of Directors) Rules 1988 required to befurnished 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 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.


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 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 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 operating were 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 to theconclusion of 29th Annual General Meeting of the Company subject to ratification of theirappointment at every Annual General Meeting. The Company received the requisiteconfirmation from them to the effect that their re-appointment if made would be as perSection 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 28th Annual General Meeting.Suitable resolution for re-appointment requiring approval of the shareholders forms partof 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 2016-17. The Secretarial Audit Report for the financial year ended 31st March 2017is annexed as Annexure A to this report. The Secretarial Audit Report does notcontain any qualification reservations or adverse remark.


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 Shri B. Chakrabarti (CharteredAccountant) Shri M. K. Garg (Chartered Accountant) and Shri A. V. Muralidharan (CharteredAccountant & Company Secretary) is expiring in the 27th Annual General Meeting of theCompany and they are proposed to be re-appointed upto the conclusion of 29th AGM of theCompany. Shri S. Gopakumar was appointed as an Additional Director of the Company pursuantto the Article 111 of Articles of Association of the Company and in terms of Section 161of the Companies Act 2013 with effect from 8th November 2016 who holds office upto theconclusion of 27th AGM of the Company.

Pursuant to the provisions of Sections 196 197 198 203 read with Schedule V of theCompanies Act 2013 and other applicable provisions of the Companies Act 2013 and subjectto approval of the shareholders at their meeting and any other approvals as may beapplicable Shri S. Gopakumar is to be appointed as Managing Director & CEO on andfrom 8th November 2016 for initially two years or up to his extended period of deputationif any at the remuneration he is entitled to in accordance with the Service Regulationsapplicable in the pay scale VII for General Manager cadre of The Oriental InsuranceCompany Ltd. with any modifications revisions thereof if any that might take place fromtime to time and also eligible for perquisites and performance incentives as applicablefor the post of Managing Director & CEO in our Company subject to ceiling limitsprescribed by Schedule V of the Companies Act 2013.

Your Company has received a notice in writing from a shareholder(s) as per Section 160of Companies Act 2013 proposing the candidature of Shri B. Chakrabarti Shri M. K. GargShri A. V. Muralidharan and Shri S. Gopakumar for the office of Director(s) of the Companyat the ensuing Annual General Meeting for their appointment as Director(s) of theCompany. disqualified None of the Directors of the Company are from being appointed asDirectors as specified in Section 164 of Companies Act 2013. The Board of Directorsrecommends their appointment.

The Company has complied according to the provision of Section 149(6) of the CompaniesAct 2013. The Company has also obtained declarations from all the Independent Directorspursuant 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 ofrecommendation of Nomination and Remuneration Committee. While selecting new DirectorsBoard shall ensure that there is appropriate balance of skills experience and knowledgein the Board so as to enable the Board to discharge its functions and duties effectively.



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.


Board met 5 (Five) times during the year. For further details please refer report onCorporate Governance.


Your Company has framed Related Party Transaction Policy pursuant to ListingRegulations 2015 which is available on the website of the Company 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 2017 ( Rs. )
Shri S. Sridharan 2111282/- 2067845/-
Sr. Vice President & Company Secretary

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.


Our Company is having its CSR Policy which is available at the website( of the Company. Company is having total available funds of Rs. 3.187Crores 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. 2.67crores available for F.Y. 2015-16) to Prime Minister's National Relief Fund Swach BharatKosh 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 croresavailable for F.Y. 2014-15) towards its Sanitation Project near Arthur Road NakaChinchpokli (W) Mumbai in the F.Y. 2016-17. The subject project has been completed andinaugurated successfully and is in use by general public.

The total unspent CSR amount as on 31st March 2017 is Rs. 5.327 crores ( Rs. 3.187crores relating to F.Y. 2016-17 Rs. 1.33 crores relating to F.Y. 2015-16 and Rs. 0.81crores relating to F.Y. 2014-15). Your Company could not spend the full amount of CSR dueto no prior experience of CSR activities. Now the Company has completed its first projectsuccessfully and will take up another projects which can be useful to the society.


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 of theCompany.


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 ( of the Company and also enclosed as Annexure D.


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 beencomplying with the principles of good Corporate Governance over the years. The Board ofDirectors supports the broad principles of Corporate Governance. In addition to the basicgovernance issues the Board lays strong emphasis on transparency accountability andintegrity.

(Listing In terms of the provisions of Regulation 34 of SEBI Obligations and DisclosureRequirement) Regulations 2015 entered into with the Stock Exchange(s) the ManagementDiscussion and Analysis Report forms part of this report.


The Company aims to align HR practices with business goals motivate people for higherperformance and build a competitive working environment. Your Company has continuouslybeen working to improve human resource competence and capabilities in the Company todeliver the desired results. Your Company has developed a comprehensive"in-house" induction training module to make sure that new employees understandthe basic focus of the Company in its all operations. Apart from fixed salaries andperquisites we also have in place performance linked incentive scheme to all theemployees which rewards the outstanding performing teams that achieve certain performancetargets. In pursuance of the Company's commitment to develop and retain the best availabletalent the Company has been sponsoring the employees for training programmes conducted byNational Housing Bank for upgrading the skill and knowledge of the employees in differentoperational areas. The work force strength of Your Company as on 31st March 2017 is 256.


Annual Return in Form MGT 9 is enclosed as per Annexure E to the Directors'Report.


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 1 (One)case filed pursuant to The Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) 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 thevaluable contribution of the members of the staff at all levels for the progress of theCompany during the year and look forward to their continued cooperation in realization ofthe 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