TO THE MEMBERS
The Company's financial performance for the financial year ended March 31 2018 issummarized below:
(Rs in crore)
|Particulars || |
| ||2017-18 ||2016-17 ||2017-18 ||2016-17 |
|Profit Before Tax ||314.29 ||280.17 ||314.29 ||280.17 |
|Less : Provision for Taxation || || || || |
|Current Year ||102.38 ||94.00 ||102.38 ||94.00 |
|Deferred ||5.79 ||3.92 ||5.79 ||3.92 |
|Profit after tax ||206.11 ||182.25 ||206.11 ||182.25 |
|Add : Net share of profit from Associate ||- ||- ||9.20 ||5.40 |
|Add : Balance brought forward from the previous year ||235.95 ||161.26 ||248.27 ||169.66 |
|Less: Utilised during the current year for depreciation charged in accordance with Schedule II Companies Act 2013 ||- ||- ||- ||- |
|Less: Dividend received from Associate credited to carrying value of investment ||- ||- ||2.25 ||1.49 |
|Amount available for appropriations ||442.06 ||343.51 ||461.33 ||355.83 |
|Appropriations || || || || |
|Transferred to additional reserve U/s 29C of the NHB Act 1987 ||41.23 ||36.46 ||41.23 ||36.46 |
|Transferred to Statutory Reserve under ||55.65 ||51.10 ||55.65 ||51.10 |
|Section 36(1)(viii) of the Income Tax Act 1961 read with Section 29C of National Housing Bank Act 1987 || || || || |
|Transferred to General Reserve ||20.00 ||20.00 ||20.00 ||20.00 |
|Dividend for previous year (including dividend distribution tax) ||15.06 ||- ||15.06 ||- |
|Balance carried over to Balance Sheet ||310.12 ||235.95 ||329.39 ||248.27 |
|total ||442.06 ||343.51 ||461.33 ||355.83 |
|earnings Per Share: || || || || |
|Basic (Rs.) ||32.95 ||29.13 ||34.42 ||30.00 |
|Diluted (Rs.) ||32.95 ||29.13 ||34.42 ||30.00 |
Your Directors recommend a dividend of Rs.2.20 per equity share of face value ofRs.10.00 each for the year ended
31 March 2018 as against a dividend of Rs.2 per equity share of face value of Rs.10.00each for the previous year. The dividend payout ratio for the year is 8.04% (amounting toRs.16.57 crore inclusive of Tax on dividend) as against 8.26% (amounting to Rs. 15.06crore inclusive of Tax on dividend) in the previous year. In compliance with requirementsstipulated vide SEBI notification no. SEBI/ LAD-NRO/GN/2016-17/008 datedJuly 8 2016 and Regulation 43A of the SEBI(LODR) Regulations2015; the DividendDistribution Policy of the Company is available on the website of the Company andhas been provided as Annexure - 1 to this report.
TRANSFER TO RESERVES
During the year under review your Company transferred Rs. 20.00 crore to the GeneralReserve Rs. 55.65 crore to the Statutory Reserve under Section 36(1)(viii) of the IncomeTax Act 1961 read with Sec 29 C of NHB Act 1987 and Rs. 41.23 crore to additionalreserve under Sec 29C of NHB Act 1987 out of the amount available for appropriation. Anamount of Rs. 310.12 crore is proposed to be retained in the profit and loss account.
CHANGES IN SHARE CAPITAL
During the financial year there was no change in the Paid up capital of the Company.As at 31st March 2018 the Paid up capital stood at Rs. 625613620 divided into62561362 Equity shares of Rs. 10 each
STATE OF AFFAIRS OF THE COMPANY
The Company endeavors towards adopting the benchmark underwriting practices backed upby robust monitoring and recovery mechanisms. The Company is committed in its effortstowards improving efficiency and service level in its operations.
During the year loan approvals stood at Rs.3079.26 crore as compared to Rs. 2875.75crore in the previous year . The cumulative loan sanctions since inception of the Companystood at Rs. 18682.58 crore at the end of the financial year 2017-18.
During the year under review the Company disbursed loans to the extent of Rs.2806.51crore as against Rs.2642.39 crore in the previous year. The Cumulative disbursementsstood at Rs.17180.95 crore in respect of 135463 accounts at the end of thefinancial year 2017-18.
3) Loans Outstanding
The loan book of the Company at the end of financial year 2017-18 was Rs.9856.78 croreas against Rs.8939.91 crore in the previous year representing a growth of 10.26%.
NON PERFORMING ASSETS
As of 31 March 2018 the gross NPA of the Company was Rs.282.65 crore (previous yearRs. 232.84 crore) constituting 2.87% (previous year 2.60%) of the total loans outstanding.Net NPA of the Company as at March 31 2018 was 1.29% as against 1.39% in thecorresponding period of the previous year. The NPA provision coverage ratio stood at55.61% (previous year 47.29%) as at 31st March 2018. The Company carries a provision ofRs.157.17 crore (previous year Rs. 110.11 crore) towards its Non Performing Assets at theend of the financial year 2017-18. During the period under review the Company has writtenoff Rs.15.77 crore (previous year Rs.0.50 crore) from its books.
The Company is in compliance with the guidelines circulars and directions of NationalHousing Bank. The Company is also in compliance with the Companies Act 2013 guidelinesdirections and circulars of MCA SEBI etc. The Company complied with Mandatory AccountingStandards as prescribed under Section 133 of the Companies Act 2013 read with Rule 7 ofthe Companies (Accounts) Rules 2014 and other related statutory Guidelines / Directionsas applicable to the Company from time to time. The Company is registered with the CentralRegistry of Securitization Asset Reconstruction and Security Interest of India (CERSAI)and furnishes information in respect of its loans. Compliance of all regulatory guidelinesto NHB / other status are periodically reviewed at Audit Committee / Board of the Company.
The Companys capital adequacy ratio as on 31 March 2018 was 23.04% (previous year21.25%) which is well above the prescribed 12% threshold as per NHB Directions. Thisconsisted entirely of Tier 1 capital.
Complying with the provisions of the directions of the National Housing Bank aprovision of Rs2.10 crore (previous year Rs. 5.23 crore) being charged to statement ofProfit & Loss Account of the financial year 2017-18 in respect of standard assets andthe cumulative provision in respect of standard assets stood at Rs.42.33 crore (previousyear Rs. 40.24 crore) as at 31st March 2018.
The company has taken steps to adopt Ind-AS as notified by the MCA.
FINANCIAL RESOURCES REFINANCE FROM NHB
During the year the Company has not availed any refinance facility (previous year Rs.500 crore) from National Housing Bank. The refinance outstanding at the end of the yearwas Rs. 942.31crore (previous year Rs. 1170.10 crore) teRM LOANS FROM BANKS ANDFINANCIAL INStItUtIONS
The outstanding borrowings from Banks and Financial Institutions (terms loans andoverdraft) at the end of the financial year stood at Rs. 5057.70 crore (previous year Rs.5255.33 crore).
SECURED NON CONVERTIBLE DEBENTURES
During the year the company has issued SRNCDs aggregating to Rs. 652 crores (previousyear Rs. 385 crores). The outstanding SRNCDs as on 31st March 2018 was Rs.1337 crores(previous year Rs. 785 crores). These instruments have been rated "ICRA AA-" byM/s. ICRA Ltd. and "CARE AA" by M/s. CARE Ltd.
The Companys commercial paper is rated A1+ by M/s.
ICRA Ltd. and CARE Ltd. implying highest safety. During the financial year 2017-18the Company has raised funds amounting to Rs. 2350 crores (previous year Rs. 1400crores) by way of issuance of commercial paper. After repayments on maturity the netamount outstanding as at 31st March 2018 was Rs.800 crores. (Previous year NIL).
According to section 125 of the Companies Act 2013 NCDs and interest thereonremaining unclaimed and unpaid for a period of seven years from the date they became dueare required to be credited to the Investor Education and Protection Fund (IEPF) set up bythe Government of India. As at 31 March 2018 there are no non convertible debenturesamount or interest thereon remaining unpaid or unclaimed.
DISCLOSURE UNDER HOUSING FINANCE COMPANIES ISSUANCE OF NON CONVERTIBLE DEBENTURES ONPRIVATE PLACEMENT BASIS (NHB) DIRECTIONS 2014.
There are no Non Convertible Debentures which have not been claimed by the Investors orwhich were not paid by the Company after the date on which the Non Convertible Debenturesbecame due for redemption. During the year the company redeemed NCD's amounting Rs. 100crore pursuant to maturity. Further the Company has paid the interest on respective duedates.
As of 31 March 2018 dividend amounting to Rs.135382 (previous year Rs. 46432) hasnot been claimed by the investors. According to section 125 of the Companies Act 2013dividends remaining unclaimed for a period of seven years from the date they became dueare required to be credited to the Investor Education and Protection Fund (IEPF) set up bythe Government of India. In accordance with the Investor Education Fund (Uploading ofinformation regarding unpaid and unclaimed amount lying with the Companies) Rules 2012the Company has uploaded this information on www.iepf.gov.in and www.repcohome.com/new_site/unclaimed_dividend.php.
The Company has not accepted deposits from the public during the financial year2017-18.
The Company has in place a risk management policy framework which has been approved bythe Board of
Directors. The framework identifies various risks faced by the Company and puts inplace appropriate mitigants. The Company has in place a Management & Risk Managementcommittee comprising of Shri K. Sridhar Shri G.R. Sundaravadivel Shri. V.Nadanasabapathy and
Shri R. Varadarajan.
The objective of human resource development in an organization is to enhance humanproductivity through progressive and consistent policies in knowledge & skillupgradation and betterment of employment conditions at all levels. Human ResourceManagement's objective is to maximize the return on investment from the organization'shuman capital. It is the responsibility of human resource/ development department in acorporate context to conduct these activities in an effective legal impartial andcohesive manner.
Your Company worked tirelessly towards the performance upgradation of its employees byintroducing objective performance appraisal mechanism and performance linked incentivestructure. Employees are also nominated regularly to attend various training programmesconducted by NHB ICSI & other capacity building institutions besides in-housetraining programmes for constant skill upgradation. During the financial year the Companyconducted 15 (including online training) in-house training programmes and employees werenominated for 11 external programmes. The Company provides a professional work environmentand maintains a healthy relation with its employees. As on 31 March 2018 the number ofpeople employed by the Company stood at 785.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company has in place an Anti-Sexual Harassment Policy in line with the requirementsof the Sexual Harassment of women at the workplace (Prevention Prohibition and Redressal)Act 2013. Internal Complaints Committee (ICC) has been set up to redress complaintsreceived regarding sexual harassment. All employees (permanent contractual temporarytrainees) are covered under this policy. The following is a summary of sexual harassmentcomplaints received and disposed off during the year 2017-18
No. of complaints received: Nil
No of complaints disposed off: Not Applicable
PARTICULARS OF EMPLOYEES COVERED UNDER COMPANIES (APPOINTMENT AND REMUNERATION OFMANAGERIAL PERSONNEL RULES 2014.
There were no employee who was in receipt of remuneration of Rs 1.02 crore or more perannum.
In accordance with the provisions of section 197 of the Companies Act 2013 read withthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 asamended the name and other particulars of such employees are set out in the annex to theDirectors' Report. However as per the provisions of section 136 of the Companies Act2013 the Directors' Report is being sent to all shareholders of the Company excluding theannex. The annex is available for inspection by the members at the registered office ofthe Company during business hours on working days up to the date of ensuing Annual GeneralMeeting. Any shareholder interested in obtaining a copy of the said annex may write to theCompany Secretary at the registered office of the Company.
CORPORATE SOCIAL RESPONSIBILITY
As per Section 135 of the Companies Act 2013 and the rules framed thereunder theCompany has in place a Corporate Social Responsibility Committee of Directors comprisingof Shri. K. Sridhar Shri. G.R. Sundaravadivel and Shri. V. Nadanasabapathy and hasinter alia formulated a Corporate Social Responsibility Policy.
This Committee envisages the activities to be undertaken in pursuance of CSRinitiatives. During the year the Company spent a sum of Rs.0.14 crore towards CSRinitiatives. The Annual Report on CSR activities forming part of the Directors' Report isfurnished as Annexure-2 to this report.
EMPLOYEE STOCK OPTION SCHEME:
The employee stock options have been granted to the eligible employees and the ManagingDirector in pursuance of "Repco Home Finance Limited Employees Stock Option Scheme-2013". There are no material changes to this scheme and the said scheme is incompliance with the extant regulations prescribed by the Securities and Exchange Board ofIndia in this regard. The disclosures as prescribed by the "Guidance Note onaccounting for employee share based payments" issued by ICAI and the Diluted EPS onissue of shares pursuant to the Scheme in accordance with the Accounting Standard 20-Earnings per share" issued by ICAI are disclosed on the website of the Company. Thedisclosures as required by the Securities and
Exchange Board of India (Share Based Employee Benefits) Regulations 2014 have beenplaced on the website of the Company.
PARTICULARS RELATING TO CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGNEXCHANGE EARNINGS AND EXPENDITURE
Particulars relating to conservation of energy and technology absorption stipulated inthe Companies (Accounts) Rules 2014 are not applicable to the Company and further theCompany has no foreign exchange earnings but incurred foreign exchange expenditure to theextent of Rs.0.004 crore (previous year Rs. 0.04 crore) towards travelling expenses andRs. 2.82 crore towards other borrowing costs.
In accordance with Section 152 of the Companies Act 2013 Smt. R.S. Isabella Directorof the Company is liable to retire by rotation at the ensuing annual general meeting andis eligible for reappointment. The resolution for her re-appointment forms a part of thenotice convening the Annual General Meeting. The details pertaining to the reappointmentare elucidated in the explanatory statement to the notice convening the Annual GeneralMeeting. All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and SEBI(Listing Obligations and Disclosure Requirements) Regulations2015 (ListingRegulations').
The details of familiarization programmes conducted for Independent Directors is put upon the website of the Company.
DETAILS OF MANAGERIAL REMUNERATION AS REQUIRED UNDER COMPANIES (APPOINTMENT ANDREMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014
The particulars of managerial remuneration as required by under Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is given asAnnexure-3.
At the 17th Annual General Meeting held on 21 September 2017 the members had appointedM/s. S.R. Batliboi & Associates LLP Chartered Accountants (Firm Registration No.101049W/ E300004) as Statutory Auditors for a term of five years beginning from theconclusion of the 17th Annual
General Meeting till the conclusion of the 22nd Annual General Meeting. The StatutoryAuditors have not made any adverse comments or given any qualification reservation oradverse remarks or disclaimer in their Audit Report.
DIRECTORS' RESPONSIBILITY STATEMENT
In pursuance of section 134 (3) (C) of the Companies Act 2013 and based on theinformation provided by the Management your Directors hereby confirm that: (a) In thepreparation of the annual accounts the applicable accounting standards have beenfollowed; (b) Accounting policies selected were applied consistently.
Reasonable and prudent judgments and estimates were made so as to give a true and fairview of the state of affairs of the company as at 31 March 2018 and of the profit and lossof the Company for that date; (c) Proper and sufficient care has been taken for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities; (d) The annual accounts of the Company have beenprepared on a going concern basis; (e) Internal financial controls have been followed bythe Company and such internal financial controls are adequate and were operatingeffectively.
(f) Systems to ensure compliance with the provisions of all applicable laws were inplace and that such systems were adequate and operating effectively.
INTERNAL CONTROL SYSTEMS
The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. To maintain its objectivity and independence the InternalAudit function reports to the Chairman of the Audit Committee of the Board.
The Internal Audit Department monitors and evaluates the efficacy and adequacy ofinternal control system in the Company its compliance with operating systems accountingprocedures and policies at all locations of the Company. Significant audit observationsand corrective actions thereon are presented to the Audit Committee of the Board everyquarter or at periodic intervals.
EXTRACTS OF THE ANNUAL RETURN (FORM MGT-9)
In accordance with Sec 134 (3) (a) of the said Act amended provision the provisionalAnnual Return in the prescribed format has been made available on the website of theCompany at www.repcohome.com. The extract of Annual return is annexed to this report asAnnexure-4.
SECRETARIAL AUDIT REPORT
In accordance with Section 204 of the Companies Act 2013 and Rule 9 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 M/s. GRamachandran & Associates Company Secretaries were appointed by the Company toundertake Secretarial Audit of the Company. The Secretarial Audit Report is annexed tothis report as Annexure-5. Explanation on comments by the Board on Every qualificationreservation on adverse remark or disclaimer made by Auditor /Secretarial Auditor. Neitherthe statutory auditor nor the secretarial auditor have made any qualification reservationor adverse remark or disclaimer in their respective reports.
DETAILS OF LOANS GIVEN GUARANTEES GIVEN OR SECURITY PROVIDED
The provisions contained in Section 186(11) of the Companies Act 2013 relating toloans guarantees or securities do not apply to the Company.
The Company has investments in the equity of unlisted associate company Repco MicroFinance Limited to the extent of Rs. 15.60 Crore (15600000 equity shares of Rs.10/- each).
SUBSIDIARY JOINT VENTURES AND ASSOCIATE COMPANIES
Pursuant to the provisions of Section 129(3) of the Companies Act 2013 your Companyhas prepared Consolidated Financial Statements of the Company which forms part of thisAnnual Report. Further a Statement containing salient features of financial statements ofthe Subsidiary joint venture entities and associate Companies in the prescribed formatAOC-1 pursuant to Section 129(3) of the Companies Act 2013 read with the Companies(Accounts) Rules 2014 is annexed as Annexure-6 to this Report.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SECTION188(1)
All the related party transactions entered during the year were in ordinary course ofbusiness and on arm's length basis. The Company has obtained the shareholders' approvalfor material related party transactions as required under Listing Regulations.
The Company presents a statement of all related party transactions before the AuditCommittee. The details of such transactions are given in the accompanying financialstatements.
MATERIAL CHANGES AND COMMITMENTS
AFFECTING FINANCIAL POSITION OF THE COMPANY
BETWEEN 31ST MARCH 2018 AND THE DATE OF
There has been no material changes and commitment affecting the financial position ofthe Company which has occurred between the end of the financial year to which thefinancial statements relate and the date of the report. The Company does not have anysubsidiary. There has been no change in the nature of business of the Company. Nosignificant or material Orders have been passed by the regulators or Courts or Tribunalsimpacting the going concern status of the Company and / or the Company's operations infuture.
MANAGEMENT DISCUSSION AND ANALYSIS
In accordance with the SEBI (LODR) Regulations 2015 Management Discussion andAnalysis Report for the year under review is presented in a separate section which formsa part of this report.
REPORT ON CORPORATE GOVERNANCE
In accordance with the SEBI (LODR) Regulations 2015 the report on corporategovernance for the year under review is presented in a separate section which forms a partof this report.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Board of Directors has approved the vigil mechanism/ whistle blower policy of theCompany which provides a framework to promote a responsible and secure whistle blowing. Itprotects employees wishing to raise a concern about serious irregularities within theCompany. It provides for a vigil mechanism to channelize reporting of such instances/complaints/ grievances to ensure proper governance. The Audit Committee oversees the vigilmechanism. No employee has been denied access to the Audit Committee. The policy is placedon the website of the Company www.repcohome.com/new_site/corporate_ governance.php.
The shares of your Company are listed at National Stock Exchange Limited and BombayStock Exchange Limited. Listing fee has already been paid for the financial year 2018-19.
DETAILS OF NON-COMPLIANCE PENALTIES IMPOSED ON BY ANY STATUTORY AUTHORITY
Pursuant to the inspection observations with reference to the financial position of theCompany as at 31-03-2016 National Housing Bank levied penalty aggregating toRs.35000/- and GST thereon with respect to the contraventions on (i) Income Recognition(Para-22); (ii) Assets Classification (Para-27); (iii) LTV Norms (Para-27A) (iv) Assigningwrong risk-weight resulting in incorrect CAR computation (Para-30); (v) Shortfall inProvisioning (Para-28) of the Housing Finance Companies (NHB) Directions 2010 and also(vi) disbursement of loans on the property for which the approved plan was not available(Policy Circular No.18) (vii) Guidelines on Fair Practices Code.
Related Party transaction Policy
As required by NHB notification no. NHB.HFC.CG-DIR.1/ MD&CEO/2016 dated February 92017 a policy on Transactions with Related Parties is given as Annexure-7' to thisreport.
Business Responsibility Reporting
In accordance with the requirement under Regulation 34(2)(f) of SEBI (ListingObligations and Disclosure Requirements) (LODR) Regulations 2015 Business ResponsibilityReport forms part of the Directors' Report and is annexed as Annexure-8' to thisreport.
The Directors of your Company wish to place on record their sincere gratitude to theNational Housing Bank and its Executives for continuous guidance and support. We alsorecord our gratitude to our bankers financial institutions and insurance companies fortheir continued trust support and assistance given to the Company. The Board places onrecord its sincere gratitude to Ministry of Home Affairs GOI SEBI NSE BSE Departmentof Company Affairs REPCO Bank shareholders Government local/statutory authoritiescustomers and all the other stakeholders for their patronage and support for theachievements by the Company despite the most competitive environment in the market.
Your Directors take this opportunity to thank all the executives and employees of theCompany and wish to place on record their commendable hard work team spirit and dedicatedservice to the customers which enabled the Company to achieve an appreciable level ofbusiness performance during the year.
|performance during the year. || |
|For and on behalf of the Board of Directors || |
|. || |
|Date : August 13 2018 ||t (.S. KrishnaMurthy) |
|Place : Chennai ||Chairman |