Directors Reports
Directors
To the members
Your Directors have pleasure in presenting the Fifteenth Annual Report of ICICI Home
Finance Company Limited (the Company) with the audited Statement of Accounts for the year
ended March 31, 2014.
MARKET OVERVIEW
The mortgage market continues to grow, especially in Tier III & IV cities, driven
by primary consumption. This has led to increased focus by most organized lenders into
these markets. Absorption and supply in such markets is balanced leading to stable prices.
Our company continues to focus on emerging markets, which provide a reasonable growth
opportunity. It is in these markets we will continue to invest and build competency.
APPROPRIATIONS
The Profit and Loss Account shows profit before taxation of Rs. 3,110.0 million
(previous year Rs. 3,028.7 million) after general provision on standard assets and
provision, write off against non performing asset of Rs. 39.4 million (previous year Rs.
76.2 million), and operating expenses of Rs. 6,224.8 million (previous year Rs. 6,165.1
million), which includes depreciation of Rs. 18.5 million (previous year Rs. 19.1 million)
on fixed assets. The profit after tax for the year ended March 31, 2014 is Rs. 2,228.2
million (previous year Rs. 2,202.2 million). The profit available for distribution is Rs.
2,596.6 million (previous year Rs. 2,562.0 million), it includes profit brought forward
from previous year of Rs. 368.4 million (previous year Rs. 359.8 million).
The Company has paid the interim dividend of 2.85% in the month of June 2013, 3.65% in
September 2013, 3.10% in December 2013 and declared 2.90% in March 2014 and appropriated
the disposable profit as follows: (Rs. in million)
|
Fiscal 2014 |
Fiscal 2013 |
| Special Reserve created and maintained in terms of Section 29 C of National Housing
Bank Act, 1987 |
446.0 |
441.0 |
| General Reserve |
112.0 |
111.0 |
| Dividend |
|
|
| Preference Shares (including tax) |
— |
— |
| Equity Shares (Interim- including tax) |
1,606.9 |
1,545.2 |
| Proposed final dividend @ 0.45% on equity share capital (previous year 0.75%)
including tax |
57.8 |
96.4 |
| Balance profit to be carried forward |
373.8 |
368.4 |
PUBLIC DEPOSITS
As required by National Housing Bank, the details of public deposits unclaimed as on
March 31, 2014, are given below :-
| (i) Number of accounts of unclaimed public deposits |
: 1,341 |
| (ii) Amount of unclaimed deposits |
: Rs. 233.7 million |
The Company has sent reminders to the investors informing them that the deposits have
matured and requested them to claim the same.
In addition, the Company has raised deposits worth Rs. 687.6 million during FY2014. The
Company’s Fixed Deposits have received the highest credit ratings of "MAAA"
by ICRA and "CARE AAA (FD) " by CARE.
The matured deposits with the Company which were unclaimed for more than 7 years from
the date of maturity of Rs. 0.6 million has been transferred to IEPF pursuant to Section
205C of the Companies Act, 1956.
Disclosure under Housing Finance Companies issuance of Non-Convertible Debentures on
private placement basis (NHB) directions, 2014
(i) The total number of non-convertible debentures which have not been claimed by the
investors or not paid by the Company after the date on which the non-convertible
debentures became due for redemption – Nil
(ii) The total amount in respect of such debentures remaining unclaimed or unpaid
beyond the date of such debentures become due for redemption : Nil
OPERATIONAL REVIEW
We have in the course of the year achieved reasonable traction in retail mortgages and
construction finance business. Supported by a strong growth of 55% in retail mortgages
business, the loan assets of the Company grew to Rs. 66.48 billion during the year,
offsetting higher than expected pre-payments experienced over the last few years.
The Property services and Mortgage valuation groups have sustained their growth
momentum, contributing 16 % of the total operating income of the Company.
The Company continues to stay committed and focused on partnering the developers and
end consumers at all stages of the Real Estate Value chain.
DIRECTORS
During the year under review, Jayesh Gandhi resigned as a Director of the Company
effective July 25, 2013. The Board places on record its appreciation for valuable services
rendered by him.
Section 149 of the Companies Act, 2013 (the Act) which defines the composition of the
Board has been notified effective April 1, 2014 and provides that an independent director
shall not hold office for more than two consecutive terms of five years each provided that
the director is re-appointed by passing a special resolution on completion of first term
of five consecutive years.
As per the explanation provided under Section 149 of the Act, any tenure of an
independent Director on the date of commencement of this Section i.e. April 1, 2014 shall
not be counted as a term. The tenure of every independent director to compute the period
of first five consecutive years would be reckoned afresh from April 1, 2014. The
independent directors viz S. Santhanakrishnan and Dileep C. Choksi will hold office for a
consecutive period of five years upto March 31, 2019 after which they will be subject to
re-appointment subject to compliance with applicable provisions of the Companies Act,
2013.
Section 152 of the Act, also notified effective April 1, 2014 provides that independent
directors would need to be excluded from the total number of directors for the purpose of
computing the number of directors whose period of office will be liable to determination
by retirement of directors by rotation.
In terms of the aforesaid provisions, Rajiv Sabharwal would retire by rotation at the
forthcoming AGM and is eligible for re-appointment. Rajiv Sabharwal has offered himself
for re-appointment.
AUDITORS
The Company is in the process of reviewing and appointing the auditors in compliance to
provisions of Section 139 of the Companies Act, 2013 and recommend their appointment at
the ensuing AGM post recommendation of the Audit & Risk Management Committee and
necessary approval from the Board of Directors.
AUDIT & RISK MANAGEMENT COMMITTEE
The Audit & Risk Management Committee comprises of Dileep C. Choksi, S.
Santhanakrishnan and Maninder Juneja as its members. Dileep C. Choksi, an independent
director, is Chairman of the Audit & Risk Management Committee.
The Board in its meeting held on April 21, 2014 had revised the terms of reference of
the Committee. The revised terms of reference are as under
1. The recommendation for appointment, remuneration and terms of appointment of
auditors of the Company;
2. Review and monitor the auditor’s independence and performance, and
effectiveness of audit process;
3. Examination of the financial statement and the auditors’ report thereon;
4. Oversee the Company’s financial reporting process and disclosure of its
financial information to ensure that the financial statements are correct, sufficient and
credible, focusing primarily on :
• Key changes in accounting policies and practices if any.
• Compliance with prevailing accounting standards.
5. Approval or any subsequent modification of transactions of the company with related
parties;
6. Discuss with external auditors, before the audit commences, the nature and scope of
audit as well as have post-audit discussion to ascertain any area of concern.
7. Evaluation of internal financial controls and risk management systems.
8. Review with the Management, external auditors and internal auditors, the adequacy of
internal control systems.
9. Review the adequacy of internal audit function, reporting structure coverage and
frequency of internal audit.
10. Discuss with internal auditors, any significant findings and follow up there on.
11. Review the findings of any internal investigations by the internal auditors into
matters where there is suspected fraud or irregularity or a failure of internal control
systems of a material nature and reporting the matter to the Board.
12. Scrutiny of inter-corporate loans and investments.
13. Monitoring the end use of funds raised through public offers and related matters.
14. Look into the reasons for substantial defaults, if any, in the payment to the
depositors, debenture holders, shareholders (in case of non-payment of declared dividends)
and creditors.
15. Review the risk management policy and oversee the compliance with risk its
management framework.
16. Review key risk indicators covering areas such as credit risk, interest rate risk,
liquidity risk, foreign exchange risk, operational and outsourcing risks and the limits
framework, including stress test limits for various risks.
17. Valuation of undertakings or assets of the company, wherever it is necessary.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
The Board in its meeting held on April 21, 2014 had constituted Corporate Social
Responsibility Committee comprising of Maninder Juneja, S. Santhanakrishnan and Dileep C.
Choksi. Maninder Juneja is Chairman of the Corporate Social Responsibility Committee.
The terms of reference of the Committee are as under:
(a) Formulate and recommend to the Board, a Corporate Social Responsibility Policy
which shall indicate the activities to be undertaken by the company as specified in
Schedule VII of the Act.
(b) Recommend the amount of expenditure to be incurred on the activities undertaken by
the Company as specified in Schedule VII of the Act.
(c) Monitor the Corporate Social Responsibility Policy of the company from time to
time.
NOMINATION AND REMUNERATION COMMITTEE
The Board in its meeting held on April 21, 2014 had constituted Nomination and
Remuneration Committee comprising of Dileep C. Choksi, S. Santhanakrishnan and Maninder
Juneja. Dileep C. Choksi is Chairman of the Nomination and Remuneration Committee.
The terms of reference of the Committee are as under:
a) To identify persons who are qualified to become directors and who may be appointed
in senior management in accordance with the criteria laid down, recommend to the Board
their appointment and removal and to carry out evaluation of every director’s
performance.
b) To formulate the criteria for determining qualifications, positive attributes and
independence of a director and recommend to the Board a policy, relating to the
remuneration for the directors, key managerial personnel and other employees.
FOREIGN EXCHANGE EARNINGS AND EXPENDITURE
During the period under review expenditure in foreign currency was Rs. 1.3 million.
There were no income in foreign currency
PERSONNEL AND OTHER MATTERS
As required by the provisions of Section 217 (2A) of the Companies Act, 1956 read with
the Companies (Particulars of Employees) Rules, 1975 as amended, the names and other
particulars of the employees are set out in the Annexure to the Annual Report.
Since the Company does not own or carry out any manufacturing activity, the disclosure
of information on other matters required to be disclosed in terms of Section 217(1)(e) of
the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report
of Board of Directors) Rules, 1988, are not applicable and hence not given. As per listing
agreement, the disclosures of amount due at the end of financial year under report and the
maximum amount of loans, advances and investments outstanding during the year to/ from the
holding company, ICICI Bank Limited has been reported in the notes forming part of the
audited accounts.
DIRECTORS’ RESPONSIBILITY STATEMENT
The Directors confirm that:
i) in the preparation of the annual accounts, the applicable accounting standards have
been followed along with proper explanation relating to material departures;
ii) they have selected such accounting policies and applied them consistently and made
judgments and estimates that are reasonable and prudent so as to give a true and fair view
of the state of affairs of the Company at the end of the financial year and of the profit
of the Company for that period;
iii) they have taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of the Companies Act, 1956 for
safeguarding the assets of the Company and for preventing and detecting fraud and other
irregularities; and
iv) they have prepared the annual accounts on a going concern basis.
ACKNOWLEDGEMENTS
The Company is grateful to the National Housing Bank and other regulatory authorities
for their support and advice.
The Company would like to express its gratitude for the unstinting support and guidance
received from ICICI Bank Limited and its group companies.
Your Directors would also like to express their sincere thanks and appreciation to all
the employees for their commendable teamwork, exemplary professionalism and enthusiastic
contribution during the year.
|
For and on behalf of the Board |
|
RAJIV SABHARWAL |
| April 21, 2014 |
Chairman |
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