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LIC Housing Finance Ltd.

BSE: 500253 Sector: Financials
NSE: LICHSGFIN ISIN Code: INE115A01026
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OPEN 375.00
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VOLUME 96788
52-Week high 542.35
52-Week low 321.20
P/E 9.12
Mkt Cap.(Rs cr) 20,869
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Sell Price 0.00
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OPEN 375.00
CLOSE 373.80
VOLUME 96788
52-Week high 542.35
52-Week low 321.20
P/E 9.12
Mkt Cap.(Rs cr) 20,869
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

LIC Housing Finance Ltd. (LICHSGFIN) - Director Report

Company director report

To the Members of LIC Housing Finance Limited

Your Directors are pleased to present the Thirty Second Annual Report together with theAudited Financial Statements for the year ended 31st March 2021 of LIC HousingFinance Limited (‘the Company').

FINANCIAL RESULTS

Particulars For the year ended 31st March 2021 For the year ended 31st March 2020
Profit before Tax 3348.57 3268.99
Tax Expense 614.23 867.15
Profit after Tax 2734.34 2401.84
Other Comprehensive Income (2.40) (6.85)
Total Comprehensive Income 2731.94 2394.99
Appropriations
Special Reserve u/s 36(l)(viii) of the Income Tax Act1961 829.99 749.99
Statutory Reserve u/s 29C of N H B Act1987 0.01 0.01
General Reserve 700.00 600.00
Dividend 403.73 383.54
Final Tax on Dividend pertaining to the previous year paid during the year 77.61
Balance carried forward to next year 798.21 583.83
2734.34 2401.84

The Board of Directors has assessed the performance of the Company during the yearunder review and also taken cognisance of the impact of the coronavirus disease (COVID-19)which has been declared as a pandemic. As the COVID-19 continues to spread around theworld many companies are facing unprecedented challenges which have adversely impactedtheir operations. Consequently there is a great deal of uncertainty and it has affectedglobal economy financial markets lives and livelihoods and the resultant impact has beenfelt by the Company.

DIVIDEND

The Company has in place a Dividend Distribution Policy formulated in accordance withthe Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 which intends to ensure that a rational decision istaken with regard to the amount to be distributed to the shareholders as dividend afterretaining sufficient funds for the Company's growth to meet its long-term objective and

other purposes. The Policy also lays down various parameters to be considered by theBoard of Directors of the Company before recommendation of dividend to the Shareholders ofthe Company.

Considering the performanceof the Company during thefinancial year 2020-2021 the Boardof Directors felt the need to strike a balance between being prudent and conservingcapital in the Company while at the same time catering to the expectations ofshareholders also considering the Dividend Distribution Policy and also after assessingthe capital buffers and liquidity levels of the Company have recommended payment ofdividend for the financial year ended 31st March 2021 of ? 8.50 per equityshare of face value of ? 2/- per share i.e. @ 425 percent as against ? 8.00 per equityshare of face value of ? 2/- per share for the previous year i.e. @ 400 percent. The totaldividend outgo for the current year would amount to ? 428.96 crore as against ? 403.73crore for the previous year. The dividend payable shall be subject to the approval of theMembers of the Company at the ensuing Annual General Meeting.

Following the amendment in the Finance Act 2020 the imposition of the DividendDistribution Tax has been abolished. Accordingly the dividend amount received by theshareholders of the Company for the financial year ended 31st March 2020onwards is taxable in the hands of the shareholders for which the Company is required todeduct tax at source under Section 194K from dividend paid to the shareholders at theprescribed rates.

The Dividend Distribution Policy is available on the website of the Company athttps://www.lichousing.com/downloads/ DIVIDEND%20DISTRIBUTION%20POLICY%202021.pdf andforms part of this Board's report as Annexure - 8.

INDIAN ACCOUNTING STANDARDS

The Company has complied with the applicable Indian Accounting Standards (Ind AS)notified by the Ministry of Corporate Affairs under Section 133 of the Companies Act2013. The financial statements for the year have been prepared in accordance with ScheduleIII to the Companies Act 2013.

PERFORMANCE Income and profit

The Company earned total revenue of ? 19847.69 crore marginally higher than theprevious year. The percentage of administrative expenses to the housing loans which was0.29 percent in the previous year has slightly increased to 0.30 percent during thefinancial year 2020-21.

Profit before tax and after tax stood at ? 3348.57 crore and ? 2734.34 crorerespectively as against ? 3268.99 crore and ? 2401.84 crore respectively for theprevious year. Profit before tax increased by 2.43 percent over the previous year whileprofit after tax showed an increase of 13.84 percent over that of the previous year.

LENDING OPERATIONS

LIC Housing Finance Limited is a housing finance company registered with NationalHousing Bank (NHB) and is mainly engaged in financing purchase / construction ofresidential flats / houses to individuals and project finance to developers Loan againstProperty (LAP) Lease Rental Discounting (LRD) etc. All other activities revolve aroundthe main business of the Company. The business of the Company was impacted in the firsthalf of the financial year due to the imposition of a strict national lockdown. The growthtrajectory improved gradually as restrictions were lifted and from September 2020 onwardsgrowth trends normalised. Subsequently the demand for home oans surpassed expectations.These factors impacted the overall performance of the loan book.

As at 31st March 2021 the loan book constituted of 93.12 per cent of retailportfolio and 6.88 per cent of project portfolio.

Individual loans:

During the year the main thrust continues on individual housing loans. The Company hassanctioned 245543 individual housing loans for X 62869.21 crore and disbursed 222285oans for X 52211.91 crore (inclusive of Non Core Non-Housing Individual) during FY2020-21. Housing loan to Individual i.e. retail loans constitute 96.77 percent of thetotal sanctions and 94.54 percent of the total disbursements for the FY 2020-21 ascompared to 92.92 percent and 94.42 percent respectively during the FY 2019-20. The grossretail loan portfolio grew by over 10.17 percent from X 196340 crore as on 3?:March 2020 to X 216047 crore as on 3Y: March 2021.

The cumulative sanctions and disbursements since incorporation in respect ofindividual housing loans are:

Amount sanctioned: X 451461.39 crore

Amount disbursed: X 430198.80 crore

3038002 customers have been serviced by the Company up to 31st March 2021since inception.

Project loans:

The project loans sanctioned and disbursed by the Company during the year amounted to X2096.77 crore and X 3011.25 crore respectively. Corresponding figures for the previousyear were X 3693.19 crore and X 2618.35 crore. These loans are generally for shortdurations giving better yields as compared to individual housing loans.

AWARDS AND RECOGNITIONS:

• Featured amongst 'India's Top 500 Companies 2020' by Dun & Bradstreet

• Awarded Top Home Loan Provider' at Times Real Estate Icon Awards .

MARKETING AND DISTRIBUTION

During the year under review efforts were taken to further strengthen the distributionnetwork. The distribution network

of the Company consists of 282 Marketing Offices and 1 Customer Service Point. Thedistribution network also includes 50 offices of LICHFL Financial Services Ltd. a whollyowned subsidiary of the Company engaged in distribution of various financial productsincluding housing loans. The Company has representative offices in Dubai and Kuwait.

REPAYMENTS

During the F.Y. 2020-2021 X 32151.50 crore was received by way of schedule repaymentof principal through monthly instalments as well as prepayment of principal ahead ofschedule as compared to X 28895.38 crore received in the previous year.

NON-PERFORMING ASSETS AND PROVISIONS

The amount of gross Non-Performing Assets (NPA) as at 3?: March 2021 was X9659.13 crore which is 4.23 percent of the loan portfolio of the Company as against?6316.16 crore i.e. 3.04 percent of the loan portfolio as at 31st March 2020.The net NPA as at 31st March 2021 was X 5913.94 crore i.e. 2.59 percent of theloan portfolio vis-a-vis X 3703.96 crore i.e. 1.78 percent of the loan portfolio as at 31stMarch 2020. The total cumulative provision towards housing loan portfolio includingprovision for standard assets as at 31st March 2021 is X 2758.93 crore asagainst X 2631.62 crore in the previous year.

During the year the Company has written off X 356.91 crore provision as against anamount of X 35.05 crore provision written off in respect of retail & non retailduring the previous year.

RESOURCE MOBILISATION

During the year the Company mobilised funds aggregating to X 132946.17 crore by wayof the Non-Convertible Debentures (NCD) Term Loans / Line of Credit (LoC) / WorkingCapital Demand Loan (WCDL) from banks NHB refinance Commercial Paper and PublicDeposits. The Company raised an amount of X 1800 crore through issuance of Tier II Bondswhich would enable the company to increase its Capital Adequacy Ratio. Funds were alsomobilised from NHB under its refinancing facilities. The following is a brief about thevarious sources of fund mobilised during FY 2020-2021:

NON-CONVERTIBLE DEBENTURES (NCD)

During the year the Company issued NCD amounting to X 18760 crore on a privateplacement basis which have been listed on Wholesale Debt Segment of National StockExchange of India Ltd. The NCD have been assigned highest rating of ‘CRISILAAA/Stable' by CRISIL & ‘CARE AAA/Stable' by CARE. As at 31st March2021 NCD amounting to X 113367.71 crore were outstanding. The Company has been regularin making repayment of principal and payment of interest on the NCD.

As at 31st March 2021 there were no NCD which have not been claimed by theInvestors or not paid by the Company after the date on which the said NCD became due forredemption. Accordingly the amount of NCD remaining unclaimed or unpaid beyond due dateis Nil.

TIER II BONDS

During the year the Company has issued Tier II Bonds amounting to ? 1800 crore. As at3?: March 2021 the outstanding Tier II Bonds stood at ? 1795.12/- crore.Considering the balance term of maturity as at 3?: March 2021 ? 1795.12/-crore of the book value of Tier II Bonds is considered as Tier II Capital as per theGuidelines issued by NHB for the purpose of Capital Adequacy.

TERM LOANS FROM BANK/ LOC / WCDL REFINANCE FROM NHB / OTHER FINANCIAL INSTITUTIONS /COMMERCIAL PAPER

The total loans / LOC outstanding from the Banks and Other Financial institution as at3T: March 2021 are ? 52013.20 crore as compared to ? 43188.28 crore as at 31stMarch 2020. The Refinance from NHB as at 31st March 2021 stood at ? 10119.54Crore as against? 1882.17 Crore as at 31st March 2020. During the year theCompany has availed ? 9600 crores Refinance from NHB under various refinance schemes. Asat 31st March 2021 Commercial Paper amounting to ? 12230.25 Crore wereoutstanding as compared to ? 7628.71 Crore for corresponding previous year. During theyear 2020-21 the Company issued Commercial Paper amounting to ? 12758.59 Crore frommarket as compared to ? 19152.23 Crore for the previous year.

The Company's long term loan facilities have been assigned the highest rating of'CRISIL AAA/STABLE' and short term loan has been assigned rating of ‘CRISIL A1+ &ICRA A1+' signifying highest safety for timely servicing of debt obligations.

TRANSFER OF UNCLAIMED DIVIDEND /DEPOSITS AND SHARES TO INVESTOR EDUCATION &PROTECTION FUND (IEPF)

Pursuant to the provisions of Sections 124 and 125 of the Companies Act 2013 rulesmade thereunder and Investor Education and Protection Fund Authority (Accounting AuditTransfer and Refund) Rules 2016 read with the relevant circulars and amendments theretothe amount of dividend / deposits remaining unclaimed for a period of seven years from thedate of transfer to unpaid dividend account is required to be transferred to the InvestorEducation and Protection Fund (IEPF) as constituted by the Central Government. Further asper the provisions of Section 124(6) of the Companies Act 2013 read with the InvestorEducation & Protection Fund Authority (Accounting Audit Transfer & Refund) Rules2016 the shares in respect of which the dividend has not been claimed for sevenconsecutive years are required to be transferred by the Company to the designated demataccount of the IEPF Authority. The details of the unclaimed dividend/deposits and theshares transferred to the IEPF are uploaded as per the requirements on the website ofthe Company i.e. www.lichousing.com.

UNPAID/UNCLAIMED DIVIDEND

During the financial year under review your Company has transferred unclaimed dividendof ? 10735998 /- pertaining to the financial year 2012-13 to the Investor Education andProtection Fund (IEPF) established by the Central Government on expiry of seven yearsfrom the date of transfer to unpaid dividend account.

TRANSFER OF SHARES TO IEPF

Pursuant to the provisions of Section 124(6) of the Companies Act 2013 and the Rulesmade thereunder the Company has transferred in aggregate 162502 equity shares of ? 2/-each to IEPF in respect of which the dividend remained unclaimed for a period of sevenconsecutive years i.e. from 2012-13 till the due date of 4th September 2020after following the prescribed procedure.

Any person who is entitled to claim unclaimed dividend or deposits etc. that have beentransferred to IEPF can claim the same by making an application directly to IEPF in theprescribed form under the IEPF Rules which is available on the website of EPF i.e.www.iepf.gov.in

PUBLIC DEPOSITS

As at 31st March 2021 the outstanding amount on account of Public Depositswas ? 7510.52 crore as against ? 6384.09 crore in the previous year and outstandingamount on account of corporate deposits was ? 10825.15 crore as against ? 6224.91 crorein the previous year. During F.Y. 2020-21 the number of depositors has reduced for publicdeposit from 42427 to 37804 and for corporate deposit increased from 1099 to 1856.

? 3381.15 crore has been collected as public deposits while ? 886.61 crore was ascorporate deposits. Total aggregate amount collected ? 12167.76 crore.

CRISIL has for the fourteenth consecutive year re-affirmed aratingof"CRISILFAAA/Stable"forthe company's deposits which indicates highestdegree of safety regarding timely servicing of financial obligations and carries thelowest credit risk.

The support of the agents and their commitment to the Company has been vital inmobilization of deposits and making the product most preferred investment for individualhouseholds and others.

1065 deposits amounting to ? 198.57 Crore which were due for repayment on or before 31stMarch 2021 were not claimed by the depositors. Since then 209 depositors have claimed orrenewed amounting to deposits of ? 40.43 crore as on 20th August 2021 of thisreport. Depositors are appropriately intimated for renewal / claim of their depositsthrough an authorised agency. Further adequate follow-up is made in respect of thosecases where deposits are lying unclaimed.

As per the provisions of Section 125 of the Companies Act 2013 deposits and interestthereon remaining unclaimed for a period of seven years from the date they became due forpayment have to be transferred to the Investor Education and Protection Fund (IEPF)established by the Central Government accordingly as on 20th August 2021 ?664000/- against unclaimed principal and ? 481207/- against unclaimed interest ondeposits have been transferred to IEPF.

Being a housing finance company registered with the National Housing Bank establishedunder the National Housing Bank Act 1987 the disclosures as per Rule 8(5)(v)&(vi) ofthe Companies

(Accounts) Rules 2014 read with section 73 and 74 of the Companies Act 2013 are notapplicable to the Company.

REGULATORY COMPLIANCE

Following the amendment in the Finance Act 2019 and the subsequent notification by theReserve Bank of India (RBI) in August 2019 HFCs would be treated as one of the categoriesof non-banking financial companies (NBFCs) for regulatory purposes and accordingly wouldcome under RBI's direct oversight. NHB however would continue to carry out supervisionof HFCs. In this regard Non-Banking Financial Company - Housing Finance Company (ReserveBank) Directions 2021 has been notified on February 17 2021 in supersession of theregulations/ directions as given in Chapter XVII of these directions.

The Company has been following guidelines circulars and directions issued by NationalHousing Bank (NHB) from time to time. In fact the Company has complied with the HousingFinance Companies (NHB) Directions 2010 and other directions/ guidelines prescribed byNHB regarding deposit acceptance accounting standards prudential norms capitaladequacy credit rating corporate governance information technology framework fraudmonitoring concentration of investments risk management capital market exposure normsand Know Your Customer and Anti-Money Laundering and thereafter with the Non-BankingFinancial Company - Housing Finance Company (Reserve Bank) Directions 2021 which has beennotified on February 17 2021 in supersession of the regulations/ directions as given inChapter XVII of these directions.

Your Company has been maintaining capital adequacy as prescribed by the NHB. Thecapital adequacy was 15.28 percent as at 31st March 2021 after consideringthe loan to value ratio for deciding risk weightage.

The Company also has been following directions / guidelines / circulars issued by SEBIand MCA from time to time applicable to a listed company.

DISCLOSURE UNDER HOUSING FINANCE COMPANIES ISSUANCE OF NON-CONVERTIBLE DEBENTURES ONPRIVATE PLACEMENT BASIS (NHB) DIRECTIONS 2014 READ WITH MASTER DIRECTION - NON BANKINGFINANCIAL COMPANY - HOUSING FINANCE COMPANY (RESERVE BANK) DIRECTIONS 2021.

During the financial year under review the Non-Convertible Debentures issued onprivate placement basis were repaid / redeemed by the Company on their respective duedates and there were no instances of any Non-Convertible Debentures which have not beenclaimed by the investors or not paid by the Company after the date on which theNon-Convertible Debentures became due for redemption.

AUDIT REPORTS AND AUDITORS

Audit Reports and observations

Statutory Audit Auditor and Statutory Audit Report

The statutory auditors namely M/s. Gokhale & Sathe Chartered Accountant (FirmRegistration No.: 103264W) and

M/s. M. P. Chitale&Co. Chartered Accountant (Firm Registration No.: 101851W) wereappointed as Joint Statutory Auditors of the Company for a term of 5 consecutive years at30th AGM and to hold office until the conclusion of the Thirty Fifth AnnualGeneral Meeting to be held in the year 2024. However as per the guidelines for appointmentof Statutory Central Auditors (SCAs)/Statutory Auditors (SAs) of Commercial Banks(excluding RRBs) UCBs and NBFCs (including HFCs) issued by the Reserve Bank of India videref. no. DoS.CO.ARG/ SEC.01/08.91.001/2021-22 dated 27th April 2021 theStatutory Auditors are required to be appointed on annual basis and the intimation of theappointment has to be given to RBI for every year accordingly the Board proposes andrecommends to the members of the Company the appointment of Statutory Auditors till theconclusion of 33rd Annual General Meeting (AGM) of the Company to be held inthe year 2022.

M/s. Gokhale & Sathe Chartered Accountant (Firm Registration No.: 103264W) andM/s. M. P. Chitale & Co. Chartered Accountant (Firm Registration No.: 101851W) haveconfirmed to the Company that they continue to satisfy the eligibility criteria asmentioned in Section 141 of the Companies Act 2013.

The remuneration payable to each of the Joint Statutory Auditors will be ? 6572700/-per annum plus applicable taxes / cess and out of pocket expenses on actual basis (being ?3286350/- per annum per firm plus applicable taxes / cess and out of pocket expenses onactual basis ) for financial year 2021-22 as determined by the Board of Directors inconsultation with them for the purpose of audit of the Company's accounts at the CorporateOffice along with consolidated accounts as well as at all Back Offices to be allottedequally between them in consultation with the management subject to approval of themembers of the Company at an ensuing AGM.

In terms of the guidelines issued by RBI vide circular No.DoS.CO.ARG/SEC.01/08.91.001/2021-22 dated April 27 2021 the Joint Statutory Auditorscontinue to satisfy the eligibility norms as prescribed and have submitted theireligibility certificate in the prescribed manner to the Company.

For qualification reservation or adverse remark it may be referred to the JointStatutory Auditors' Report dated 15th June 2021 for the financial year 2020-21alongwith Annexure B note on IFC and the same is enclosed with the financial statements inthis Annual Report.

Internal Audit Auditor and Audit Report

Internal Audit of Back Offices

The Company has an in-house mechanism for Internal Audit of all its back offices whichare the nodal offices looking after the accounting sanction and disbursement functions.Such Audit is conducted by the team(s) of in-house officials of audit department. TheCompany maintains an exhaustive checklist/ questionnaire for the purpose of such Audit andthe same is updated regularly. The In-house internal audit team(s) submit quarterlyreports in respect of the back offices assigned to them and such reports are periodicallyreviewed by the Internal Audit Committee at Corporate Office which is a management level

Committee at the Corporate Office. Detailed deliberations take place in respect of keypoints related to Internal Audit Reports and the same is also placed before the AuditCommittee of the Board for their information and guidance.

Internal Audit of Corporate Office

M/s. Borkar & Muzumdar Chartered Accountants Mumbai are Internal Auditors forInternal Audit of the Corporate Office for financial year 2020-21 and their term wasfurther extended for two year for FY 2021-22 and FY 2022-23. No adverse remark orobservation has been cited by them in their four (4) quarterly Audit Reports for thefinancial year 2020-21.

Systems and procedures are being upgraded from time to time to provide checks andalerts for avoiding fraud arising out of misrepresentation if any made by borrower/swhile availing the housing loans and non-housing loans.

Secretarial Audit Auditor and Secretarial Audit Report

Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 M/s. N. L. Bhatia& Associates Practicing Company Secretaries conducted the secretarial audit oftheCompany for the financial year 2020-21.

The Secretarial Auditor's Report for the financial year 2020-21 does not contain anyqualification reservation or adverse remark. Report of the Secretarial Auditor for thefinancial year 2020-21 in Form MR-3 is annexed to this report as Annexure 9.

Cost Records and Cost Audit:

Maintenance of cost records and requirement of cost audit as prescribed under theprovisions of Section 148(1) of the Companies Act 2013 are not applicable for thebusiness activities carried out by the Company.

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. The report on Corporate Governance is appendedas a separate section in this Annual Report.

A certificate from Shri Bhaskar Upadhyay (FCS 8663 and Certificate of PracticeNo.:9625) Partner of M/s. N. L. Bhatia & Associates Practicing Company SecretariesMumbai (UIN: P1996MH055800) regarding compliance of the conditions of CorporateGovernance as stipulated under the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 is attached to the Corporate Governance Report which does not containany qualification reservation or adverse remark.

Management Discussion and Analysis Report

Management Discussion and Analysis Report for the year under review as stipulatedunder SEBI (Listing Obligations and

Disclosure Requirements) Regulations 2015 is presented in a separate section formingpart of the Annual Report.

Business Responsibility Report

In terms of Regulations 34(2)(f) of the SEBI(Listing Obligation and DisclosureRequirements) Regulations 2015 the top 1000 listed entities based on the marketcapitalization (calculated as on 31st March of every financial year) businessresponsibility report describing the initiatives taken by these listed entities from anenvironmental social and governance perspective in the format as specified by SEBI fromtime to time has been included as part of the Annual Report. Accordingly BusinessResponsibility Report in accordance with the Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 and the NationalVoluntary guidelines (NVG) on Social Environmental and Economic Responsibilities ofBusiness released by the Ministry of Corporate Affairs Govt of India. is presented in aseparate section forming part of the Annual Report.

Depository System

For transaction of the Company's shares in dematerialised form the Company has enteredinto an agreement with Central Depository Services (India) Ltd. (CDSL) and NationalSecurities Depository Ltd. (NSDL). The shareholders have a choice to select the DepositoryParticipant. As at 31st March 2021 5108 members ofthe Company continue tohold shares in physical form. As per the Securities and Exchange Board of India's (SEBI)circular the Company's shares have to be transacted in dematerialised form and thereforemembers are requested to convert their holdings to dematerialised form.

OUTLOOK FOR 2021-2022

• Focus on growth of Retail Flome Loans along with that of Non Flousing Loans forbetter margins.

• Continued focus on PMAY-CLSS in alignment with Government Initiatives ''Flousingfor all by 2022" from time to time & thus ensuring achievement of targets innumbers since it being last year of subsidy scheme.

• Augmentation of distribution network and activation in line with the initiativeof Paradigm Shift.

• Penetration into under-represented geographies by utilizing connector model.

• Making use of builders / developers as distribution channel / Connectors.

• Continuous relation building with Builders and synergy between project andretail loans.

• To create brand LICPIFL as a source of trusted partner exuding consumerconfidence.

• Understanding the inherent risks to the business and managing it effectively.

• Widespread market studies assisting modelling of loan products to suit customerneeds.

• Making use of information provided by marketing offices about ground marketconditions.

• Continued focus on Business Potential Mapping for sustained business growth.

• Focus on Advance Processing Facility (APF) approvals as a core activity togenerate bulk business.

• Leveraging alternate business channels viz. Direct Marketing Executive (DME)channel LICHFL Financial Services Ltd. for generating additional business.

• Making Homy App/Online loan application more effective.

• Adoption of e-Appraisal for minimizing Turn Around Time (TAT).

• Implementation of various initiatives under Project RED

• Achievement of Term Targets- Monthly Quarterly by all Units.

• Overseas Offices to be made more effective and productive.

• Continuous ‘Training' to intermediaries and Marketing Officials to increaseproductivity.

• Monitoring of TAT at different levels.

• Training / workshops for Project Finance Teams at ROs.

• Identification of 22 centres apart from Metros to have business contribution inProject Finance segment.

• Introduction of the concept of Digital Office to achieve competitiveness and tapinto millennial customers.

• Tie up with various lead aggregators and property portals for business.

• Outreach to customers by strengthening the Camp Office concept for Sanction& Disbursement at select locations.

• Positioning as a thought leader in industry through placement of relatedarticles across media including digital.

THE MANAGEMENT PERSPECTIVE ABOUT FUTURE OF THE COMPANY

While the recent times have been tough due to the onslaught of the second wave of theCOVID-19 pandemic due to various unlock initiatives by the Government the localauthorities the Ives seems to have been returning to normalcy. Further the variousinitiatives by the Reserve Bank of India including that of providing the One TimeRestructuring for the stressed loans have immensely helped both the lenders as well as theborrowers to come out of the stressed times and recover from the same. Also the infusionof liquidity by the RBI and other development banks have eased the liquidity situation andhave made lending cheaper. While all these remains supply side interventions it isexpected that there would be more initiatives going forward to boost the demand forhousing loans. The return of the migrated labour force to their work places has also keptthe

construction activities rolling and slowly as the vaccination initiatives further picksup the economic activities are expected to return in full swing.

Although the Company has experienced a surge in the delinquencies in the recent timesand had restrictions in carrying out the business activities in full capacity the Companyhas developed parallel alternatives through digitization of its processes and workflows byits digitization initiative under project RED. The initiatives such as E-KYC V-KYC PennyDrop Video PD etc. have contributed towards continuance of the Company's businessactivities even during the period where travel restrictions were in force. The managementwould continue to focus on digitization of its processes while augmenting the same withthe efficient motivated and trained work force so that to convert this adverse situationto the advantage of the Company through its re-engineered business processes.

The Company not only intends to focus on underwriting and disbursement activities butit very well understand the need of being agile in the fronts of loan servicingmonitoring and recovery. All these fronts are constantly being reviewed in the light ofthe digitised initiatives.

The Company in order to make best use of its operational advantages intends tosynergise its customer base by connecting the builders/developers with property buyers bycreating a property market place though web portal and is working towards introducing thisinitiative and for making it a profitable venture.

With the dynamic regulatory and compliance environment in which the Company operatesthe management would endeavour to put in place all the best governance practices throughconstant review and upgradations of its compliance initiatives judicious management ofits treasury and other aspects of its operations for ensuring co-ordinated and resultoriented efforts in its business as well as in expanding its reach market share as wellas market capitalization in order to ensure maximum Shareholders wealth.

COMPLIANCE UNDER COMPANIES ACT 2013

Pursuant to Section 134 of the Companies Act 2013 read with the Companies (Accounts)Rules 2014 the Company complied with the compliance requirements and the detail ofcompliances under Companies Act 2013 are enumerated below:

ANNUAL RETURN:

Pursuant to Section 92(3) read with Section 134(3)(a) of the Companies Act 2013 theAnnual Return as on 31st March 2020 is available on the website of the Companyin the following link: www.lichousing.com/annual_general_meeting.php.

REPORTING OF FRAUDS BY AUDITORS:

During the year under review neither the joint statutory auditors nor the secretarialauditor has reported to the Audit Committee under Section 143(12) of the Companies Act2013 any instances of fraud committed against the Company by its

officers or employees the details of which was required to be mentioned in the Board'sreport.

SECRETARIAL STANDARDS:

The Company complies with all applicable mandatory secretarial standards issued by TheInstitute of Company Secretaries of India.

RATING RATIONALE:

CRISIL had reaffirmed its outstanding rating as 'CRISIL AAA/ Stable' rating to thenon-convertible debentures issue of LIC Housing Finance Limited and has also reaffirmedits ‘CRISIL AAA/ FAAA/Stable/CRISIL A1+' ratings on other debt instruments bankfacilities and fixed deposit programme of the company.

Total Bank Loan Facilities Rated X 40059.88 crore
Long Term Rating CRISIL AAA/ Stable (Reaffirmed)
Short Term Rating CRISIL A1+ (Reaffirmed)
X 25000 Crore CRISIL AAA/
Non-Convertible Debentures Stable (Assigned)
X 3000 Crore Tier II Bond CRISIL AAA/ Stable (Reaffirmed)
X 25000 crore CRISIL AAA/
Non-Convertible Debentures Stable (Reaffirmed)
X 25000 crore CRISIL AAA/
Non-Convertible Debentures Stable (Reaffirmed)
X 25000 crore CRISIL AAA/
Non-Convertible Debentures Stable (Reaffirmed)
X 5000 crore CRISIL AAA/
Non-Convertible Debentures Stable (Reaffirmed)
X 15000 crore CRISIL AAA/
Non-Convertible Debentures Stable (Reaffirmed)
X 10000 crore CRISIL AAA/
Non-Convertible Debentures Stable (Reaffirmed)
X 5000 crore CRISIL AAA/
Non-Convertible Debentures Stable (Reaffirmed)
X 5976 crore CRISIL AAA/
Non-Convertible Debentures Stable (Reaffirmed)
X 15000 crore CRISIL AAA/
Non-Convertible Debentures Stable (Reaffirmed)
X 15000 crore CRISIL AAA/
Non-Convertible Debentures Stable (Reaffirmed)
X 20000 crore CRISIL AAA/
Non-Convertible Debentures Stable (Reaffirmed)
X 33833 crore CRISIL AAA/
Non-Convertible Debentures Stable (Reaffirmed)
X1600 crore Upper Tier II Bond CRISIL AAA/ Stable (Reaffirmed)
X 1750 crore Tier II Bond CRISIL AAA/ Stable (Reaffirmed)
Fixed Deposits Programme FAAA/ Stable (Reaffirmed)
X 17500 crore Commercial Paper CRISIL A1+ (Reaffirmed)

: CARE Ratings had reaffirmed its ‘CARE AAA; Stable' rating

X 35.842.90 crore for non-convertible debenture issue of LIC Housing Finance Limited.

Also CARE Ratings had assigned its ‘CARE AAA; Stable'

rating to the tune of X 3000 crore for Tier II Bonds issue of LIC

Housing Finance Limited and reaffirmed its ‘CARE AAA; Stable'. The unutilisedamount as on 28.07.2021 was X 1200 crore.

ICRA Limited had reaffirmed ICRA A1+ rating to the? 17500 crore commercial paperissue of LIC Housing Finance Limited and has " reaffirmed its ICRAA1+ which is onenotch higherthan [ICRAJA1.

BOARD MEETINGS HELD DURING THE YEAR:

During the year under review 7 Board meetings were held. Detailed information on themeetings of the Board as well as Committee meetings their composition and attendancerecord of the members of respective Committees of the Board are included in the Report onCorporate Governance which forms part of this Annual Report.

DIRECTORS' RESPONSIBILITY STATEMENT:

The financial statements are prepared in accordance with Indian Accounting Standards(Ind As) under the historical cost convention on accrual basis except for certainfinancial instruments which are measured at fair values the provisions of the CompaniesAct 2013 (to the extent modified) guidelines issued by the Securities and Exchange Boardof India (SEBI) guidelines issued by the National Housing Bank (‘NHB') and theReserve Bank of India (‘RBI') (Collectively referred to as ‘the Previous GAAP').

The Ind AS are prescribed under Section 133 of the Companies Act 2013 read withCompanies (Indian Accounting Standards) Rules 2015 as amended from time to time andother accounting principles generally accepted in India. Accounting policies have beenconsistently applied except where a newly issued accounting standard is initially adoptedor a revision to an existing accounting standard requires change in the accounting policyhitherto in use.

In accordance with the provisions of Section 134(3)(c) of the Companies Act 2013 andbased on the information provided by the management your Directors state that:

(a) in the preparation of the annual accounts the applicable accounting standards hasbeen followed and there are no material departures;

(b) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit of the company for that period;

(c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in

accordance with the provisions of this Act for safeguarding the assets of the companyand for preventing and detecting fraud and other irregularities;

(d) the Directors have prepared the annual accounts on a going concern basis:

(e) the Directors have laid down internal financial controls to be followed by thecompany and that such Internal Financial controls are adequate and were operatingeffectively. Note on Internal Financial control is attached as Annexure 1 to this Reportand

(f) the Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

STATEMENT ON DECLARATION FROM INDEPENDENT DIRECTORS:

The Company has received necessary declaration from each Independent Director underSection 149(7) of the Companies Act 2013 that he / she meets the criteria of independencelaid down in Section 149(6) of the Companies Act 2013 and Regulation 25 of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.

COMPANY'S POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION INCLUDING CRITERIA:

It is an endeavour of the Company to have an appropriate mix of executivenon-executive and independent directors to maintain the independence of the Board andseparate its functions of governance and management. As of 31st March 2021the Board had Twelve members consisting of two non-executive directors nominated by LICof India including Chairman and one executive director who is Managing Director & CEOnominated by LIC of India: three non-executive and non-independent directors while restsix are independent directors including one independent woman director.

The Nomination and Remuneration Committee at its meeting had laid down Criteria fordetermining Director Qualification positive attributes and independence of a Directorremuneration of Directors Key Managerial Personnel and also criteria for evaluation ofDirectors Chairperson Non-Executive Directors and Board as a whole and also theevaluation process of the same.

The performance of the members of the Board and the Board as a whole were evaluated atthe meeting of Independent Directors held on T: March 2021.

We affirm that except nominee director (Chairman LIC Director and Managing Director& CEO) were paid sitting fees for Board and Committee (other than for Corporate SocialResponsibility Committee) meetings attended by them. Flowever Managing

Director & CEO is paid remuneration as applicable to an Officer in the cadre ofExecutive Director of LIC of India and PLI as per the terms laid out in the Nomination andRemuneration Policy of the Company.

QUALIFICATION RESERVATION OR ADVERSE REMARK OR DISCLAIMER MADE BY JOINT STATUTORYAUDITORS AND SECRETARIAL AUDITOR:

For qualification reservation or adverse remark it may be referred to the JointStatutory Auditors' Report dated 15th June 2021 for the financial year 2020-21alongwith Annexure B note on IFC.

The management accepts responsibility for establishing and maintaining internalcontrols and have evaluated the effectiveness of some internal control system of theCompany which have been disclosed to the auditors and the Audit Committee thedeficiencies of which the management is aware of in the design or operation of theinternal control systems and have taken the steps to rectify these deficiencies.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:

Pursuant to Section 186(11) of the Companies Act 2013 loans made guarantee given orsecurity provided by a housing finance company in the ordinary course of its business areexempted from disclosure in the Annual Report.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO SECTION IN188(1) OF THE COMPANIES ACT 2013 READ WITH RULE 8(2) OF COMPANIES (ACCOUNTS) RULES 2014:

Considering the nature of the industry in which the Company operates all Related PartyTransaction that were entered during the financial year were in the ordinary course of thebusiness of the Company and were on arm's length basis. There were no materiallysignificant related party transaction entered by the Company with Promoters Directorskey managerial personnel or other persons which may have a potential conflict with theinterest of the Company. All such Related Party Transactions are placed before the Auditcommittee for approval wherever applicable. Prior omnibus approval as per SEBI (LODR) isalso obtained from Audit Committee for the Related Party Transactions which are ofrepetitive nature as well as in ordinary course of business.

The Related Party Transactions Policy and Procedures as reviewed by Audit Committee andapproved by Board of Directors are uploaded on the website of the Company and is annexedas Annexure 2 to this report.

Form AOC-2 pursuant to clause (h) of sub-section (3) of Section 134 of the CompaniesAct and Rule 8(2) of the Companies (Accounts) Rules 2014 is annexed as Annexure 3 tothis report.

AMOUNTS IF ANY WHICH IT PROPOSES TO CARRY TO ANY RESERVES:

The Company has transferred X 829.99 crore to Special Reserve u/s 36(1)(viii) of theIncome-tax Act 1961 and X 0.01 crore to the Statutory reserve u/s 29C of NHB Act; and anamount of X 700 crore to General Reserve.

AMOUNT IF ANY WHICH IT RECOMMENDS SHOULD BE PAID BY WAY OF DIVIDEND:

X 428.96 crore is proposed to be paid by way of dividend to shareholders of the Companyi.e. X 8.50 per equity share of face value of? 2/- each.

MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY:

There are no material changes and commitments affecting the financial position of theCompany which has occurred between the end of the financial year of the Company i.e. 31stMarch 2021 and the date of the Board's Report i.e. 20'" August 2021

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO:

A. Conservation of energy -

(i) The steps taken and impact on conservation of energy-

The Company has replaced models of computers printers and other equipment which wereconsuming between 50 to 90 percent more energy than energy-efficient models. This hasensured reduction in energy consumption and resultant saving in costs.

Air conditioning equipment is cleaned and serviced on routine basis thereby savingenergy and costs and giving required cooling.

The office has LED lights and after office hours only the required lights and airconditioning is used thereby saving energy and minimizing energy wastage.

(ii) The steps taken by the Company for utilizing alternate sources of energy-

The Company is in the process of exploring use of alternate source of energy.

(iii) The capital investment on energy conservation equipments-

None

B. Technology absorption -

(i) The efforts made towards technology absorption - Initiated a digital transformationProject RED to automate and digitize various processes of the company. Also implementedonline services for customer on boarding etc.

(ii) The benefits derived like product improvement efforts to reduce cost of fundproduct development or import substitution - The benefits are mainly towards:

• Reduced TAT for customer onboarding

• Online payment services

• Online rewriting

(iii) In case of imported technology (imported during the last three years reckonedfrom the beginning of financial year)- Not applicable.

(a) The details of technology imported - Not applicable.

(b) The year of import - Not applicable.

(c) Whetherthe technology has been fully absorbed - Not applicable

(d) If not fully absorbed areas where absorption has not taken place and the reasonthereof - Not applicable.

(iv) The expenditure incurred on Research and Development - Not applicable.

C. Foreign Exchange Earnings and Outgo-

The foreign exchange earned in terms of actual inflows and the foreign exchange outgoduring the year in terms of actual outflows.

During the year ended 31st March 2021 the Company does not have anyforeign currency earning and the foreign currency spent is X 1.98 crore. This does notinclude foreign currency cash flows in derivatives and foreign currency exchangetransactions.

RISK MANAGEMENT POLICY FOR THE COMPANY:

The Board of the Company has constituted a Risk Management Committee to frameimplement monitor review risk management policy; review of the current status on theouter limits prescribed in the Risk Management policy and report to the Board; review thematters on risk management. Risks faced by the Company are identified and assessed. Foreach of the risks identified corresponding controls are assessed and policies andprocedure are in place for monitoring mitigating and reporting risk on a periodic basis.In the opinion of the Board none of the risks faced by the Company threaten itsexistence.

The Company has a Risk Management Policy in place. During the financial year underreview the Risk Management Policy of the Company was reviewed and put up to the Board inthe Board Meeting dated 3rd March 2021.

REMUNERATION POLICY

The Company framed the Remuneration Policy in order to align with various provisionsunder "SEBI LODR REGULATIONS" vide its circular no.CIR/CFD/Policy Cell/2/2014dated

17th April 2014 and circular no.CIR/CFD/Policy Cell/7/2014 dated 15'"September 2014.

The Nomination & Remuneration Committee recommends to the Board a policy relatingto the remuneration for the Directors Key Managerial Personnel and other employees as persub-section (3) of Section 178 and based on the functions of the Board of Directors asindicated under Schedule IV (as per section 149) annexed to the Companies Act 2013 andthe Rules made thereunder.

Accordingly the Remuneration policy relating to the remuneration of Directors KeyManagerial personnel and other employees is as below:

REMUNERATION TO NON-EXECUTIVE DIRECTORS:

The Non-Executive Directors would be paid such amount of sitting fees as decided fromtime to time for every Board and Committee Meeting they attend. Apart from sitting fees noother remuneration / commission would be payable to them.

In future if Company decides to pay any remuneration / commission to Non-ExecutiveIndependent Directors then the same will be in compliance with Regulation 17(6)(ca) ofthe "SEBI LODR REGULATIONS" as amended from time to time.

REMUNERATION TO NON-EXECUTIVE NOMINEE DIRECTORS:

The Non-Executive Nominee Directors would not be paid any sitting fees for the Boardand Committee Meetings they attend. The Non-Executive Nominee Directors are not paid anysalary and / or other benefits by the Company.

REMUNERATION TO EXECUTIVE NOMINEE DIRECTOR:

The Executive Nominee Director who is designated as Managing Director & CEO is paidremuneration as applicable to an Officer in the cadre of Executive Director of LIC ofIndia. This apart the Executive Nominee Director is entitled for PLI as per criteriaapproved by the Nomination and Remuneration Committee of the Board.

As and when there is any revision in the pay scales of the Executive Nominee Directoras per the charter decided by the LIC of India then the same is made applicable to theExecutive Nominee Director at par with those of the officials in the similar cadre.Further tenure and terms and conditions of appointment of Executive Nominee Director areas decided by LIC of India from time to time and as approved by the Board of Directors ofthe Company.

However the remuneration payable to Executive Nominee Director at any point of timeshall be within the limits specified as per Regulation 17(6)(e) of the "SEBI LODRREGULATIONS" LODR REGULATIONS") as amended from time to time.

REMUNERATION TO KEY MANAGERIAL PERSONNEL (OTHER THAN MD & CEO) AND OTHER EMPLOYEES:

In the present set up of the Company key managerial personnel other than ManagingDirector & CEO are Company Secretary

and Chief Financial Officer. Remuneration payable to Company Secretary Chief FinancialOfficer and other employees is as decided by the Board of Directors as per Service TermsConduct Rules 1990 as amended from time to time.

Except Managing Director & CEO who is a whole time Executive Director none of theDirectors of the Company is paid any other remuneration or any elements of remunerationpackage under major groups such as salary benefits bonuses stock options pensionperformance linked incentive etc.

CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY:

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 4 to thisreport.

COMPOSITION OF THE CORPORATE SOCIAL RESPONSIBILITY COMMITTEE IS AS FOLLOWS:

Shri Jagdish Capoor Chairman Independent Director
Dr. Dharmendra Bhandari Member Independent Director
Shri Y.Viswanatha Gowd Member Managing Director & CEO

ANNUAL EVALUATION MADE BY THE BOARD OF ITS OWN PERFORMANCE:

The Nomination and Remuneration Committee at its meeting had recommended Criteria forevaluation of Directors Chairperson Non-Executive Directors Board level committee andBoard as a whole and also the evaluation process of the same.

The Board of Directors carried out an annual evaluation of its performance Board levelcommittees and Individual Directors pursuant to the provisions of the Act and theCorporate Governance requirements as prescribed by the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 at the meeting of Independent Directors heldon 1st March 2021.

The performance of the Board was evaluated after seeking inputs from all the Directorson the basis of criteria such as the Board composition and structure effectiveness ofBoard process information and functioning process of disclosure and communicationaccess to timely accurate and relevant information etc.

The performance of the various Board Committee was evaluated by the Board after seekinginputs from the respective committee members on the basis of criteria such as thecomposition of committee effectiveness of committee meeting functioning etc.

The Board reviewed the performance of the Individual Directors on the basis of thecriteria such as the contribution of the Individual Director to the Board and committeemeetings like preparedness on the issues to be discussed meaningful and constructivecontribution and inputs in meetings presented views convincingly resolute in holdingviews etc.

In addition the Chairman was also evaluated on the key aspects of his role.

In a separate meeting of Independent Directors performance of Non-IndependentDirectors performance of the Board as a whole and performance of Chairman was evaluated.

Report on the performance and financial position of each of the subsidiariesassociates and joint venture companies included in the consolidated financial statement:

Pursuant to Section 129 of the Companies Act 2013 the Company has prepared aconsolidated financial statement of the Company and also of its subsidiaries andassociates in the same form and manner as that of the Company which shall be laid beforethe ensuing Thirty Second Annual General Meeting of the Company alongwith the Company'sFinancial Statement under sub-section (2) of Section 129 i.e. Standalone FinancialStatement. Further pursuant to the provisions of Accounting Standard (‘AS') 21Consolidated Financial Statements notified under Section 133 of the Companies Act 2013read with Rule 7 of the Companies (Accounts) Rules 2014 issued by the Ministry ofCorporate Affairs the Consolidated Financial Statements of the Company alongwith itssubsidiaries and associates for the year ended 31st March 2021 form part ofthis Annual Report.

In accordance with the provisions of Section 136 of the Companies Act 2013 the annualreport of the Company the annual financial statements and the related documents of theCompany's subsidiary and associate companies are hosted on the website of the Company.

THERE HAS BEEN NO CHANGE IN THE NATURE OF BUSINESS OF THE COMPANY DURING THE YEAR UNDERREVIEW.

DIRECTORS:

As of 31st March 2021 the Board had Twelve members consisting of twonon-executive directors nominated by the promoter LIC of India which includes theChairman Shri M.R Kumar and Director Shri Vipin Anand. The Managing Director & CEOShri Y.Viswanatha Gowd who is the only executive director in the Board is also a Nomineeof the LIC of India. Apart from these three (3) nominee directors there are three (3)non-executive and non-independent directors namely Shri P Koreswara Rao Shri Sanjay KumarKhemani and Shri Akshay Kumar Rout. Other 6 board members are independent directorsincluding one independent woman director namely Ms. Jagennath Jayanthi. The otherindependent Directors are Shri Jagdish Capoor Dr. Dharmendra Bhandari Shri Ameet NPatel Shri V. K. Kukreja Shri Kashi Prasad Khandelwal.

SUCCESSION PLANNING:

In order to ensure stability and effective implementation of long term businessstrategies and for smooth transition at MD & CEO level the Board decided that new MD& CEO should be posted in advance say 4-6 months as COO who would subsequently takeover as MD & CEO on retirement / elevation / transfer of the existing MD & CEO.

In terms of Article 138(b) of the Articles of Association of Company LIC of India isentitled to nominate upto one third of the total number of directors of the Company andtherefore the Board after consideration approved posting of senior official from LIC ofIndia as Nominee of LIC of India for the post of COO as part of succession plan for MD& CEO with a view to ensure stability and effective implementation of long termbusiness strategies.

APPOINTMENTS / RESIGNATIONS OF DIRECTORS:

Nomination and Remuneration Committee after considering the profile qualificationsetc. of Shri Akshay Rout (DIN-08858134) and in terms of ‘Fit and Proper' criteriaadopted by the Board on 10th March 2017 pursuant to NHB notification No.NFIB.HFC.CG-DIR.1/MD&CEO/2016 dated 9th February 2017 also in accordance withthe SEBI(LODR) Regulations 2015 as well as after undertaking the process of duediligence recommended to the Board of Directors of the Company Shri Akshay Rout(DIN-08858134) to be suitable and eligible for the appointment of Non-Executive NonIndependent Director of the Company with effect from 28th September 2020liable to retire by rotation. Based on the recommendation of Nomination and RemunerationCommittee the Board considered and after having thought fit pursuant to the provisions ofthe SEBI(LODR) Regulations 2015 Sections 152 161 and other applicable provisions ifany of the Companies Act 2013 and the Rules made thereunder including any amendmentmodification variation or re-enactment thereof read with Schedule IV to the CompaniesAct 2013 for the time being in force and ‘fit and proper' criteria adopted by theBoard approved the appointment of Shri Akshay Rout (DIN-08858134) as Additional NonExecutive Director of the Company liable to retire by rotation.

Nomination and Remuneration Committee after considering the profile qualificationsetc. of Ms Jagennath Jayanthi (DIN 09053493) and in terms of ‘Fit and Proper'criteria adopted by the Board on 10th March 2017 pursuant to NHB notificationNo.NFIB.FIFC.CG-DIR.1/MD&CEO/2016 dated

9th February 2017 also in accordance with the SEBI(LODR) Regulations 2015as well as after undertaking the process of due diligence recommended to the Board ofDirectors of the Company Ms Jagennath Jayanthi (DIN 09053493) to be suitable andeligible for the appointment of Additional Non-Executive Independent Director of theCompany for a period of five consecutive years with effect from 5th February2021 not liable to retire by rotation subject to the approval of the shareholders in theforthcoming 32nd Annual General Meeting (AGM). Based on the recommendation byNomination and Remuneration Committee the Board considered and after having thought fitpursuant to the provisions of the SEBI(LODR) Regulations 2015 Sections 149152161 andother applicable provisions of the Companies Act 2013 the Rules made thereunderincluding any amendment modification variation or re-enactment thereof read withSchedule IV to the Companies Act 2013 Article 141 of the Articles of Association of theCompany Ms Jagennath Jayanthi (DIN 09053493) as an Additional Non-Executive IndependentDirector of the Company for a period of five consecutive years with

effect from 5th February 2021 not liable to retire by rotation subject tothe approval of the shareholders in the forthcoming 32nd Annual General Meeting(AGM).

On the recommendation of the Nomination and Remuneration Committee the Boardconsidered and accorded its consent in its Board Meeting held on 2nd February2021 and further recommended the appointment of Shri Yerur Viswanatha Gowd (DIN 09048488)Managing Director and Chief Executive Officer (MD & CEO) as a Director and MD &CEO as also Key Managerial Personnel (KMP) for a period of 3 years and beyond maximumupto 5 years effective from 1st February 2021 or as decided by LIC of Indiafrom time to time on payment of remuneration and PLI for the aforesaid period to theshareholders / members of the Company for approval in the forthcoming Annual GeneralMeeting of the company based on terms of Notification No.NFIB.HFC.CG-DIR.1/MD&CEO/2016 dated 09.02.2017 issued by NHB and other applicableprovisions of the Companies Act 2013 and SEBI (LODR) 2015 NHB Directions and any othernotification(s)circular(s)order(s) etc. made under the said statute(s) and consideringthe process of due diligence and scrutiny of the declarations undertaken by the Nominationand Remuneration Committee. The appointment of Shri Yerur Viswanatha Gowd (DIN 09048488)as MD & CEO and also as Key Managerial Personnel (KMP) is pursuant to the provisionsof Sections 2(78) 2(94) 196 197 203 and other applicable provisions if any of theCompanies Act 2013 the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 and any other Rules framed thereunder read with Schedule V to the CompaniesAct 2013 including any amendment modification variation or re-enactment thereof for thetime being in force and the Articles 138161 and 194(c) of Articles of Association of theCompany subject to approval of the members in the 32" Annual General Meeting andsuch other consents and permission as may be necessary and subject to such modificationsvariations as may be approved and acceptable to the appointee the consent of the Board ofDirectors be and is hereby accorded forthe appointment of Shri Yerur Viswanatha Gowd (DIN09048488) as Managing Director & CEO as also KMP of the Company for a period of 3years and beyond maximum upto 5 years effective from 1st February 2021 or asdecided by LIC of India from time time on payment of remuneration and PLI for theaforesaid period.

The terms and conditions of his service shall be determined from time to time by LIC ofIndia and the Board of LIC Flousing Finance Limited and that the remuneration payable tohim shall be within the limit as per the Companies Act 2013. His appointment as ManagingDirector & CEO as also Key Managerial Personnel shall be without prejudice to hiscontinuing service in LIC of India.

The Nomination and Remuneration Committee after considering the profilequalifications etc. of Shri Raj Kumar (DIN: 06627311) and in terms of ‘Fit andProper' criteria adopted by the Board on 10th March 2017 pursuant to NHBnotification NO.NHB.HFC.CG-DIR.1/MD&CE0/2016 dated 9th February 2017 alsoin accordance with "SEBI LODR REGULATIONS"

as well as after undertaking the process of due diligence recommended to the Board ofDirectors of the Company Shri Raj Kumar (DIN: 06627311) to be suitable and eligible forthe appointment of Non-Executive Non Independent (Nominee) Director of the Company witheffect from 13th August 2021 liable to retire by rotation. Based on suchrecommendation the Board considered and after having thought fit pursuant to theprovisions of the "SEBI LODR REGULATIONS" Sections 152161 of the CompaniesAct 2013 and read with Schedule IV approved appointment of Shri Raj Kumar (DIN:06627311) as Additional Non Executive (Nominee) Director of the Company liable to retireby rotation.

Ms. Savita Singh (DIN 01585328) Independent director had tendered her resignation fromDirectorship of the Company with effect from 9th November 2020 on account ofpersonal reason.

Shri Siddhartha Mohanty (DIN: 08058830) Executive - Nominee Director had tendered hisresignation from Directorship of the Company with effect from 1st February2021 on account of repatriation to LIC of India.

Shri Vipin Anand (DIN 05190124) had tendered his resignation from Directorship of theCompany with effect from 30th July 2021 on attainment of superannuation fromthe services of LIC of India.

Thus as on 13st August 2021 the Board of Directors of the Company consistsof twelve members five of them are non-executive directors including Chairman and one LICDirector while other three are non-executive non-independent directors. Managing Director& CEO is executive whole time director. Remaining six directors are independentdirectors including one independent woman director.

DIRECTOR RETIRING BY ROTATION:

Shri Pottimutyala Koteswara Rao retires by rotation at the ensuing Annual GeneralMeeting and is eligible for re-appointment

APPOINTMENTS / RESIGNATION OF THE KEY MANAGERIAL PERSONNEL:

Shri Yerur Viswanatha Gowd Managing Director & CEO Mr. Nitin K. Jage GeneralManager & Company Secretary and Mr. Sudipto Sil CFO are the Key Managerial Personnel(KMP) as per the provisions of the Companies Act 2013.

During the Financial year 2020-2021 Shri Yerur Viswanatha Gowd had been appointed inthe place of Shri Siddhartha Mohanty who had been transferred back to LIC of India witheffect from 1st February 2021.

COMMITTEES OF THE BOARD:

The Company has various committees which have been constituted as a part of the bestcorporate governance practices and are in compliance with the requirements of the relevantprovisions of applicable laws and statutes.

The Company has following Committees of the Board:

• Audit Committee

• Stakeholders Relationship Committee

• Nomination and Remuneration Committee

• Corporate Social Responsibility Committee

• Risk Management Committee

• Executive Committee

• Debenture Allotment Committee

• Strategic Investment Committee

• IT Strategy Committee

Composition of Audit Committee is as follows:

• Shri Jagdish Capoor Chairman Independent Director

• Dr. Dharmendra Bhandari Member Independent Director

• Shri Arneet Patel Member Independent Director

• Shri Kashi Prasad Khandelwal Member Independent Director

There has not been any instance during the year when recommendations of Audit Committeewere not accepted by the Board.

The details with respect to the compositions powers roles terms of reference etc. ofrelevant committees are given in detail in the Report on Corporate Governance which formspart of this Report.

SUBSIDIARIES AND GROUP COMPANIES

As on 31st March 2021 the Company has four Subsidiaries namely LICHFLCare Homes Limited LICHFL Asset Management Company Limited LICHFL Trustee CompanyPrivate Limited and LICHFL Financial Services Limited. The Consolidated financialstatements incorporating the results of all the subsidiaries of the Company for the yearended 31st March 2021 are attached along with the statement pursuant toSection 129 of the Companies Act 2013 with respect to the said subsidiaries. Brief writeup including performance and financial position of each of the subsidiaries is provided asunder:

1. LICHFL Care Homes Limited (LICHFL CHL)

LICHFL CHL a wholly owned subsidiary of LIC Housing Finance Limited was incorporatedon 11th September 2001. Authorised share capital of the Company is ? 75 Crore.The basic purpose of incorporating the Company was to establish and operate ‘assistedliving community centres' for the senior citizens.

During the FY 2020-2021 the Company earned a Profit before Tax (PBT) of ? 38.05 Lakhsand Profit after Tax (PAT) stood at ^ 37.29 Lakhs.

The Company has successfully completed a project at Bangalore in two Phases and JeevanAnand Project at Bhubaneswar.

Further the Company is in process to develop new Carehomes project at JaipurRajasthan and Aluva Kerala. The Company is also in process to purchase land at variouslocations across the Country. Going forward these projects are likely to further improvethe overall operations and stability of the Company.

With life expectancy going up and number of elderly citizens rising year after yearthe Company is set on a growth trajectory keeping LIC & LIC HFLs' vision forfulfilment of Corporate Social Responsibility at the forefront.

2. LICHFL Asset Management Company Limited (LICHFL AMC)

LICHFL AMC was incorporated on 14th February 2008. The Company is in thebusiness of managing advising administering Private Equity Funds including VentureCapital Fund (VCF) and Alternate Investment Fund (AIF)

The Company was appointed as Investment Manager in 2010 to raise and manage the LICHFLSponsored LICHFL Urban Development Fund (LUDF). The Company has raised total commitmentsof ? 529.35 Crore from Banks Financial Institutions Corporates and HNIs as against thetargeted size of ? 500 Crore and announced financial closure on 30th March2013. The Company has deployed ? 461.30 Crore in 9 Portfolio Companies acquisition oroperation of affordable / mid income housing related infrastructure and Hospitals. Withreceipts from 6 exits the Fund has so far achieved an IRR of 27.29%.

The Company also launched a new Alternative Investment Fund (AIF) namely LICHFL Housing& Infrastructure Fund (LHIF) with a total corpus of ? 1000 Crore including GreenShoe Option (GSO) of ? 250 Crore and the focus of the Fund is on Affordable Housing andProperty backed Infrastructure in sectors which include Educational InstitutionsHospitals Industrial Parks & Warehouses. As on 31st March 2021 theCompany has already received total Commitment of ? 812 crore out of which ContributionAgreement was signed.

The Company has recently registered a New Fund with SEBI - LICHFL Real Estate DebtOpportunities Fund - I on 30th March 2021 under AIF Category II of SEBIAlternate Investment Fund Regulations 2012 (AIF). The Fund is having a target corpus of ?3000 crore (Base corpus of ? 2000 crore plus ? 1000 crore as green shoe option). TheFund is envisaged to be raised from both Domestic and Overseas Investors. The focus sectorof the Fund is Housing.

During the FY 2020-21 the Company earned a Profit before Tax (PBT) of ? 1136.52 Lakhand Profit after Tax (PAT) stood at ? 769.47 Lakh. The Company has

recommended dividend @ 27.50% for FY 2020-21 on its paid up share capital.

3. LICHFL Trustee Company Private Limited (LICHFL TCPL)

LICHFL TCPL was incorporated on 5th March 2008. The Company is undertakingthe business of trusteeship services for Venture Capital Funds (VCFs) and AlternativeInvestment Funds (AIFs).

The Company was appointed as Trustee in 2010 for LICHFL Fund and further appointedLICHFL Asset Management Company Limited (LICHFL AMC) as Investment Manager for the Fund.In 2010 the Company had registered LICHFL Fund with SEBI as Venture Capital Fund (VCF)under the SEBI (Venture Capital Funds) Regulations 1996. LICHFL Urban Development Fundachieved its financial closure with ? 529.35 Crore on 30:' March 2013.

The Company was appointed as Trustee in 2017 for LICHFL Housing & InfrastructureTrust (LHIT) and further appointed LICHFL AMC Ltd. as Investment Manager for LICHFLHousing and Infrastructure Fund (LHIF). The Company had received registration for LHIF onOctober 2017 from SEB under Alternative Investment Fund Regulations 2012 as Category - IInfrastructure. LICHFL AMC launched LICHFL Housing & Infrastructure Fund (LHIF) inOctober 2017 and achieved initial closing on 31st March 2018. The Fundannounced its final closing on 31st March 2021.

The Company is recently appointed as Trustee on 30th March 2021 for a NewFund registered with SEBI - LICHFL Real Estate Debt Opportunities Fund - I and appointedLICHFL AMC Ltd. as Investment Manager for the Fund.

During the FY 2020-21 the Company earned a Profit before Tax (PBT) of ? 15.21 Lakh andProfit after Tax (PAT) of? 11.56 Lakh.

4. LICHFL Financial Services Limited (LICHFL FSL)

LICHFL FSL a wholly owned subsidiary of LIC Housing Finance Limited was incorporatedon 31st October 2007 for marketing of housing loan insurance products (Lifeand General Insurance) mutual funds fixed deposits credit cards. It became operationalin March 2008 and at present has 47 offices spread across the country.

The vision of the Company is "SARVESHAM POORNAM BHAVATU" - to providecomplete financial solutions" to secure not only the present but also the future ofthe customer and his family. In this endeavour the marketing officials assist at everystep - right from financial planning to manage every aspect of investment both for theshort & long term.

At present the Company distributes Life Insurance products of LIC of India Home Loans& Fixed Deposits

of LIC Housing Finance Limited Mutual Funds of various fund houses General Insuranceproducts of United India Insurance Company Limited Tata AIG General Insurance CompanyLimited and HDFC ERGO General Insurance Company Ltd. Health Insurance products of AdityaBirla Health Insurance Co. Ltd. and Star Health and Allied Insurance Co. Ltd. CreditCards of LIC Cards Services Limited and Point of Presence for National Pension System(NPS). More business verticals will be added depending on market opportunities andcustomer needs.

The Company has earned a Profit before Tax (PBT) of ? 1892.97 Lakhand Profit after Tax(PAT) of ?1295.90 Lakh for the FY 2020-21 and recommended dividend @ 25% for FY 2020-21on paid up share capital of ? 9.50 Crores.

The Company is striving to improve its Performance across all Business verticals in thecoming years.

Name/s of Company/ies which have ceased / become subsidiary/joint venture/associate:None

As on 31st March 2021 the Company has two associate companies namely LICMutual Fund Asset Management Company Limited and LIC Mutual Fund Trustee Company PrivateLimited.

The Annual Report which consists of the financial statements of the Company onstandalone as well as consolidated financial statements of the group for the year ended 31stMarch 2021 has been sent to all the members of the Company. It does not contain AnnualReports of Company's subsidiaries. The Company will provide Annual Report of subsidiariesupon request by any member of the Company. These Annual Reports are also be available onCompany's website viz www.lichousing.com.

No significant and material orders were passed by the regulators or courts or tribunalsimpacting the going concern status and Company's operations in future.

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company had laid down internal financial controls to be followed by the company andthat such internal financial controls are adequate and operating effectively. Note onInternal financial control as Annexure 1 is attached to this report.

VIGIL MECHANISM / WHISTLE BLOWER POLICY:

The Company has a Whistle Blower Policy in place which provides whistle blowers toraise concerns relating to reportable matters as defined in the policy. The mechanismadopted by the Company encourages the whistle blower to report genuine concerns orgrievances and provides for adequate safeguards against victimisation of whistle blowerwho avails of such mechanism and also provides for direct access to the Chairman of theAudit Committee.

EMPLOYEE STOCK OPTION:

No stock options were issued to the Directors or any employees of the Company as theCompany does not have any such scheme.

EMPLOYEE REMUNERATION:

Disclosure pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are given below:

a. The ratio of the remuneration of each director to the median remuneration of theemployees of the Company for the financial year:

Non-Executive Directors (including Independent Directors)* Ratio to median remuneration
Nil N.A.

'Remuneration is not paid to Non-Executive Directors (including Independent Directors)

Executive Director (MD&CEO) Ratio to median remuneration
Shri Yerur Viswanatha Gowd 8:1

b. The percentage increase in remuneration of each director Chief Executive OfficerChief Financial Officer Company Secretary in the financial year:

Non-Executive Directors (including Independent Directors)* % increase in remuneration in the financial year
Nil N.A.

*No remuneration is paid to Non-Executive Directors (including Independent Directors)

KMP % increase in remuneration in the financial year
Executive Director (MD&CEO)* -2.55%
Company Secretary 2.08%
Chief Financial Officer** -19.06%

'Remuneration of MD & CEO includes Salary for the month from Apr-20 to Jan-21 &PLI which was given during F. Y. 2020-21 to the MD & CEO who has been repatriated toLIC of India. "Remuneration of CFO includes Salary for the month of Apr-19 & PLIwhich was given for F. Y. 2019-20 to the CFO who has been repatriated to LIC of India.

c. The percentage increase in the median remuneration of employees in the financialyear:

11.37%

d. The number of permanent employees on the rolls of the Company:

2427

e. Percentage increase over decrease in the market quotations of the shares of theCompany in comparison to the rate at which the Company came out with the last publicoffer:

Particulars Market Price 31 March 2021 428.10" 15 November 1994 12* % Change 3467.5
(in?)

'Adjusted Issue price on account of sub-division "BSE-closing Price ? 428J0

f. Average percentile increase already made in the salaries of employees other thanmanagerial personnel in the financial year and its comparison with the percentile increasein the managerial remuneration and justification thereof and point out if there are anyexceptional circumstances for increase in the managerial remuneration:

Decrease in managerial remuneration for the year was -2.55%. The average annualIncrease in the salaries of the employees other than managerial personnel during the yearwas 11.37% on account of increase in DA and scale at which new recruitment at officerlevel was made.

g. Affirmation that remuneration is as per the Remuneration policy of the Company:

The Company affirms that the remuneration is as per the Remuneration Policy of theCompany.

During the year the Company has not engaged any employee drawing remuneration exceedingthe limit specified under Section 197(12) read with Rule 5(2) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014.

In terms of Section 136(1) of the Companies Act 2013 read with the Rule 5(2) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board'sReport is being sent to all the shareholders of the Company excluding the annexurecontaining names of the top ten employees in terms of remuneration drawn. Any shareholderinterested in obtaining a copy of the said annexure may write to the Company at: TheCompany Secretary LIC Housing Finance Limited Corporate Office 131 Maker Towers‘F' Premises 13th Floor Cuffe Parade Mumbai - 400 005.

Prevention Prohibition & Redressal of Sexual Harassment of women at workplace:

As per the requirements of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 your Company has in place a Policy on PreventionProhibition & Redressal of Sexual Harassment of Women at Workplace and has a robustmechanism to redress the complaints reported thereunder. An Internal Committee has beenconstituted which comprises of internal members who have experience in the subject field.

Pursuant to the provisions of Section 22 of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 the complaints received thereunder andthe details relating thereto are as follows:

(a) Number of complaints received in the year: 1

(b) Number of complaints disposed of during the year: 1

(c) Number of cases pending more than ninety days: Nil

(d) Number of workshops or awareness programme against sexual harassment carried out:Your Company on a regular basis sensitizes its employees on prevention of sexualharassment through various workshops awareness programmes.

(e) Nature of action taken by the employer or district officer: Nil

It may be mentioned here that the Company has zero tolerance towards any action on thepart of any executive / staff which may fall under the ambit of 'Sexual Harassment' atworkplace and is fully committed to uphold and maintain the dignity of every womenworking in the Company.

HUMAN RESOURCES

The Company aims to align HR practices with business goals increase productivity ofHuman Resource by enhancing knowledge skills and to provide conducive work environmentfor develop a sense of ownership amongst employees. Productive high performing employeesare vital to the

Company's success. The Board values and appreciates the contribution and commitment ofthe employees towards performance of the Company during the year. The Company inductedemployees during the year for various positions and also promoted employees to take uphigher responsibilities. Apart from fixed salaries perquisites and benefits the Companyalso has in place performance-linked incentives which reward outstanding performers whomeet certain performance targets. In pursuance of the Company's commitment to develop andretain the best available talent the Company had organised and sponsored various trainingprogrammes / seminars / conferences for upgrading skill and knowledge of its employees indifferent operational areas.

Employee relations remained cordial and the work atmosphere remained congenial duringthe year.

ACKNOWLEDGMENTS

The Directors place on record their appreciation for the advice guidance and supportgiven by Life Insurance Corporation of India National Housing Bank and all the bankers ofthe Company. The Directors also place on record their sincere thanks to the Company'sclientele lenders investors and members for their patronage. The Directors express theirappreciation for the dedicated services of the employees and their contribution to thegrowth of the Company.

For and on behalf of the Board
Place: Mumbai Chairman
Date: 20th August 2021

.