Directors Reports
DIRECTORS
TO THE SHAREHOLDERS
Your Directors have pleasure in presenting their Seventh Report together with the
audited accounts of your Company for the year ended 31st March, 2014.
FINANCIAL RESULTS Amount in Lacs
| Particulars |
March 2014 |
March 2013 |
| Income |
21,252.10 |
14,040.02 |
| Less: Finance Costs |
8,898.96 |
5,555.86 |
| Expenditure |
8,529.71 |
5,635.36 |
| Depreciation and Amortisation Expenses |
143.22 |
108.26 |
| Total Expenses |
17,571.89 |
11,299.48 |
| Profit Before Tax |
3,680.21 |
2,740.54 |
| Less: Provision for Tax |
|
|
| Current Tax |
1,309.67 |
870.34 |
| Deferred Tax |
(337.31) |
(161.58) |
| Profit/(Loss) for the year |
2,707.85 |
2,031.78 |
| Profit/(Loss) brought forward from previous year |
1,837.09 |
899.57 |
| Amount available for Appropriation |
4,544.94 |
2,931.35 |
| Appropriations: |
|
|
| Special Reserve |
820.00 |
555.00 |
| Additional Special Reserve (u/s 29C of NHB Act, 1987) |
5.00 |
5.00 |
| General Reserve |
68.00 |
- |
| Proposed dividend on Equity Shares |
612.98 |
457.14 |
| Income-tax on proposed dividend |
104.18 |
77.12 |
| Surplus carried to Balance Sheet |
2,934.78 |
1,837.09 |
OPERATIONS
During the year under review the total income was Rs. 212.52 crores as against Rs.
140.40 crores for the financial year 2012-13, registering a growth of 51% over the
previous year. Profit before tax was 34% higher at Rs. 36.80 crores as compared to Rs.
27.41 crores for the previous year. Profit after tax was 33% higher at Rs. 27.08 crores as
compared to Rs. 20.32 crores for the previous year.
Your Company has disbursed loans aggregating Rs. 630.56 crores (previous year Rs.
432.85 crores) achieving a growth of 45% over the previous year. The outstanding loan
portfolio as at 31st March, 2014 stood at Rs. 1,354.97 crores.
Your Company continued its focus on serving customers in rural India. Majority of the
loans disbursed were to customers in villages with an average annual household income of
less than Rs. 1.5 lakhs. During the year under review, around 57,000 households were given
home loans (in addition to around 1,25,000 existing households as on 31st
March, 2013).
Your Company has been expanding its geographical presence, to provide affordable
services for rural households. During the year under review, operations were strengthened
in the states of Maharashtra, Gujarat, Rajasthan, Tamilnadu, Andhra Pradesh, Kerala,
Karnataka, Madhya Pradesh and Bihar.
DIVIDEND
Your Directors recommend a dividend of Re. 1.10 per Equity Share on 6,57,37,137 Equity
Shares of Rs.10 each, aggregating Rs. 6.13 crores (including proportionate dividend on
2,00,22,857 Equity Shares allotted during the year). The above dividend, if approved, will
be paid to those Members whose names appear in the Register of Members as on the Record
Date fixed for this purpose. The dividend including dividend distribution tax, surcharge
and education cess will absorb a sum of Rs. 7.17 crores (as against Rs. 5.35 crores
(including tax) on account of dividend of Re. 1 per Equity Share, paid for the previous
year).
GOLDEN JUBILEE RURAL HOUSING FINANCE SCHEME
During the year under review, your Company has disbursed Rs. 410.83 crores in respect
of 55,680 dwelling units under the Golden Jubilee Rural Housing Finance Scheme ("the
Scheme") of Government of India. The cumulative disbursements by the Company at the
end of the year under the Scheme stood at Rs. 1,405.10 crores in respect of 1,78,038
dwelling units.
FINANCE
During the year under review, your Company has been sanctioned Refinance Assistance of
Rs. 125 crores from National Housing Bank (NHB). As on 31st March, 2014 the
outstanding borrowings from NHB cumulatively amounted to Rs. 297.64 crores.
During the year under review, your Company has been sanctioned Term loans of Rs. 200
crores from banks for tenures of three to five years. As on 31st March, 2014
the outstanding borrowings from Banks amounted to Rs. 737.52 crores.
SHARE CAPITAL
During the year under review, your Company has issued 2,00,22,857 Equity Shares of Rs.
10 each at a premium of Rs. 15 per share on rights basis envisaging capital infusion of
Rs. 50.06 crores. An amount of Rs. 12.5 per share (including premium of Rs. 7.5 per share)
on 2,00,22,857 equity shares aggregating to Rs. 25.03 crores has been called and paid-up
during the year out of the said rights issue.
CREDIT RATING
During the year under review, CRISIL has upgraded its rating on the long-term bank
facilities of the Company to 'CRISIL AA-/Stable' from 'CRISIL A+/Stable' and reaffirmed
the rating on short term debt programme (including commercial paper) of the Company at
'CRISIL A1+'.
OUTLOOK FOR THE FINANCIAL YEAR 2014-15
The business potential for the Housing Finance Industry in India is large. According to
a World Bank report of 2008, Housing Loans outstanding, as a percentage of the country's
GDP were just 9% for India as compared to 88% in the U.K., 81% in the U.S.A. and 20% in
China. According to the 2011 census, close to 69% of the Indian population lives in rural
areas. Your Company's strategic decision to focus on Rural Housing Finance stems from the
low overall penetration of the housing finance industry and the even lower penetration in
rural India.
The Government of India has been taking steps directly and through the NHB to bridge
the housing shortage and increase access to housing finance in rural areas. These steps
will help the Company to boost its growth.
ACHIEVEMENTS
During the year under review, your Company was awarded for various prestigious
recognitions at National & International level. A few of those were:
• Awarded Bronze for "Product Excellence" in the "Global CSR Summit
& Awards 2013" in April 2013, held in Davao, Philippines.
• Won the Skoch 'Order of Merit' for qualifying amongst 'India's best - 2013' for
corporate contribution to India's growth post liberalization in November 2013.
• Awarded the "Gold" award in the Housing category at the Skoch Awards
for Corporate Leadership 2013.
• Awarded the 'Most Admired Service Provider in Financial Sector' by the Banking,
Financial Services & Insurance Awards presented by ABP News on 14th
February, 2014.
CAPITAL ADEQUACY
Consequent upon the allotment of Equity Shares issued on a Rights basis, the paid-up
share capital of the Company has increased to Rs. 55.73 crores as on 31st
March, 2014 from Rs. 45.71 crores as on 31st March, 2013. The securities
premium account has also been credited with Rs. 14.97 crores. As a result of the increased
net worth, your Company was able to enhance the Capital to Risk Assets Ratio (CRAR) to
16.05 per cent as on 31st March, 2014 well above 12 per cent CRAR prescribed by
the NHB.
NON-PERFORMING ASSETS AND PROVISIONS FOR CONTINGENCY
Your Company scrupulously adheres to the prudential guidelines for Non-Performing
Assets (NPAs), issued by NHB under its Housing Finance Companies (NHB) Directions, 2010,
as amended from time to time. Your Company has made adequate provision for the assets on
which installments are overdue for more than 90 days and on other assets, as required.
NATIONAL HOUSING BANK GUIDELINES
Your Company has complied with all the applicable regulations of NHB. Your Company has
scrupulously adhered to various Circulars, Guidelines and Notifications issued by NHB from
time to time. The Circulars and the Notifications issued by NHB are also placed before the
Board at regular intervals. NHB carries out inspections of various Housing Finance
Companies at regular intervals. The Inspection Reports received by the Company from NHB
are also placed before the Board.
INSURANCE PROTECTION TO BORROWERS
Your Company has tied up with Kotak Mahindra Old Mutual Life Insurance Limited and
Cholamandalam MS General Insurance Company Limited for insurance of its housing loan
products alongwith life insurance called Sampoorna Suraksha Plan which covers the
borrowers of the Company.
HUMAN RESOURCES AND TRAINING
Your Company took a number of initiatives to strengthen human resources during the
year.
In pursuance of the Company's commitment to develop and retain the best available
talent, the Company has been sponsoring the employees for training programmes organized by
reputed professional institutions and training programmes conducted by NHB for building
capabilities thereby upgrading the skill and knowledge of the employees in different
operational areas. Constant endeavors are being made to offer professional growth
opportunities and recognitions, apart from imparting training to employees.
The Company has also conducted various engagement surveys to understand the engagement
levels across employees for devising various policies which has helped in boosting
employees morale and engagement levels.
Your Company strongly believes in maintaining the dignity of all its employees,
irrespective of their gender or seniority. Discrimination and harrassment of any type are
strictly prohibited. The Company has taken the necessary steps to enhance awareness
amongst its employees in respect of the provisions of the Sexual Harrassment of Women at
Workplace (Prevension, Prohibition and Redressal) Act, 2013 and the Rules framed
thereunder. During the year, the Company has received two complaints of sexual harassment
which were duly resolved.
DIRECTORS
Mr. V. Ravi retires by rotation at the forthcoming Annual General Meeting and, being
eligible, offers himself for re-appointment.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to section 217(2AA) of the Companies Act, 1956, your Directors, based on the
representation received from the Operating Management, and after due enquiry, confirm
that:
i) i n the preparation of the annual accounts, the applicable accounting standards have
been followed;
ii) they have, in the selection of the accounting policies, consulted the Statutory
Auditors and these have been applied consistently and reasonable and prudent judgments and
estimates have been made so as to give a true and fair view of the state of affairs of the
Company as at 31st March, 2014 and of the profit of the Company for the year
ended on that date;
iii) proper and sufficient care has been taken 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;
iv) the annual accounts have been prepared on a going concern basis.
AUDIT COMMITTEE
The Audit Committee of the Board presently comprises of Mr. Ramesh Iyer (Chairman of
the Committee), Mr. Uday Y. Phadke and Mr. V. Ravi. The Audit Committee met twice during
the year under review.
NOMINATION AND REMUNERATION COMMITTEE
The Board at its Meeting held on 15th April, 2014 has extended the scope of
terms of reference of Remuneration/Compensation Committee in accordance with the section
178 of the Companies Act, 2013 and renamed it as the 'Nomination and Remuneration
Committee'. The Nomination and Remuneration Committee of the Board presently comprises of
Mr. Ramesh Iyer, Mr. K. Chandrasekar and Mr. V. Ravi. The Committee met once during the
year under review.
ASSET LIABILITY COMMITTEE
The Asset Liability Committee (ALCO) of the Board presently comprises of Mr. Ramesh
Iyer(Chairman of the Committee), Mr. K. Chandrasekar and Mr. V. Ravi. The ALCO Committee
met twice during the year under review. The Company submits periodic reports to NHB on the
management of the Company's risks and assets and liabilities.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
The Company has constituted a Corporate Social Responsibility (CSR) Committee on 5th
March, 2014 comprising Mr. Ramesh Iyer, Mr. K. Chandrasekar, Mr. V. Ravi and Mr. Anuj
Mehra. The Committee met once during the year under review and framed the CSR Policy of
the Company in accordance with the Companies Act, 2013 ('the Act') read with the Companies
(Corporate Social Responsibility Policy) Rules, 2014. The CSR Committee shall, inter alia,
allocate the amount of expenditure to be incurred by the Company on CSR activities as
enumerated in Schedule VII to the Act and monitor the CSR Policy of the Company
periodically. The CSR Policy of the Company is displayed on the website of the Company.
During the year under review, your Company has spent Rs. 22 lacs towards CSR activities
for promotion of education and improvement of health of the underprivileged section of the
society.
AUDITORS
Messrs. B. K. Khare & Co., Chartered Accountants, retire as Auditors of the Company
at the forthcoming Annual General Meeting, and have given their consent for
re-appointment. The shareholders would be required to elect Auditors from the conclusion
of this Annual General Meeting upto the conclusion of the next Annual General Meeting and
fix their remuneration.
As required under the provisions of section 224(1B) of the Companies Act, 1956 and
Sections 139(1) read with 141 of the Companies Act, 2013, the Company has obtained a
written certificate from Messrs. B.K. Khare & Co., Chartered Accountants, proposed to
be re-appointed to the effect that their re-appointment, if made, would be in conformity
with the criteria specified in the said sections.
PUBLIC DEPOSITS AND LOANS/ADVANCES
The Company has not accepted deposits from the public or its employees during the year
under review.
The Company has not made any loans/advances in the nature of loans which are otherwise
required to be disclosed in the annual accounts of the Company pursuant to Clause 32 of
the Listing Agreement of the parent company - Mahindra & Mahindra Financial Services
Limited and the ultimate parent company -Mahindra & Mahindra Limited, with the Stock
Exchanges.
CODES OF CONDUCT FOR CORPORATE GOVERNANCE
The Company has adopted Codes of Conduct for Corporate Governance ("the
Codes") for its Directors and Senior Management and Employees. These Codes enunciate
the underlying principles governing the conduct of the Company's business and seek to
reiterate the fundamental precept that good governance must and would always be an
integral part of the Company's ethos.
The Company has for the year under review, received declarations under the Codes from
the Board Members and the Senior Management and Employees of the Company affirming
compliance with the respective Codes.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The particulars relating to the energy conservation, technology absorption and foreign
exchange earnings and outgo, as required under 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 given in Annexure I to this Report.
PARTICULARS OF EMPLOYEES AS REQUIRED UNDER SECTION 217(2A) OF THE COMPANIES ACT, 1956
AND RULES MADE THEREUNDER
As required under section 217(2A) of the Companies Act, 1956 and Rules thereunder, a
statement containing particulars of the Company's employee who was in receipt of
remuneration of not less than Rs.60,00,000 during the year ended 31st March,
2014 or not less than Rs.5,00,000 per month during any part of the said year is given in
Annexure II to this Report. The Company had no employee who was employed for a part of the
Financial Year and was in receipt of remuneration of not less than Rs.5,00,000 per month
during any part of the year.
ACKNOWLEDGEMENT
Your Directors take this opportunity to place on record their sincere appreciation to
National Housing Bank, the Company's customers, bankers, shareholders and employees for
the support received from them during the year under review.
For and on behalf of the Board
Ramesh Iyer
Chairman
Mumbai, 15th April, 2014
Registered Office:
Mahindara Towers,
P K. Kurne Chowk, Worli,
Mumbai - 400018.
CIN: U65922MH2007PLC169791
Tel.: 91 22 6652 3500 Fax: 91 22 2497 2741
E-mail: customercare.mrhfl@mahfin.com
Website: www.mahindrahomefinance.com
ANNEXURE I TO THE DIRECTORS' REPORT FOR THE FINANCIAL YEAR ENDED 31st MARCH,
2014
PARTICULARS AS PER THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF
DIRECTORS) RULES, 1988 AND FORMING PART OF THE DIRECTORS' REPORT FOR THE YEAR ENDED 31st
MARCH, 2014.
A. Conservation of Energy
a) Energy Conservation measures taken: The operations of your Company are not
energy-intensive. However, adequate measures have been initiated to reduce energy
consumption.
b) Additional investments and proposals, if any, being implemented for reduction of
consumption of energy: Nil
c) Impact of the measures taken/to be taken at (a) & (b) above for reduction of
energy consumption and consequent impact on the cost of production of goods: These
measures are expected to reduce the energy consumption.
d) Total energy consumption and energy consumption per unit of production as per Form-A
of the Annexure to the Rules in respect of Industries specified in the Schedule: Not
Applicable
B. Technology Absorption
| Research & Development (R & D) |
|
| 1. Areas in which R & D is carried out |
: None |
| 2. Benefits derived as a result of the above efforts |
: Not applicable |
| 3. Future plan of action |
: None |
| 4. Expenditure on R & D |
: Nil |
| 5. Technology absorption, adaptation and innovation |
: None |
| 6. Imported Technology for the last 5 years |
: None |
C. Foreign Exchange Earnings And Outgo
The Information on Foreign Exchange Outgo is furnished in Notes to Accounts. There were
no foreign exchange earnings during the year under review.
|
For and on behalf of the Board |
|
Ramesh Iyer |
|
Chairman |
| Mumbai, 15th April, 2014 |
|
ANNEXURE II TO THE DIRECTORS' REPORT FOR THE FINANCIAL YEAR ENDED 31st
MARCH, 2014
ADDITIONAL INFORMATION AS REQUIRED UNDER SECTION 217(2A) OF THE COMPANIES ACT, 1956,
READ WITH THE COMPANIES (PARTICULARS OF EMPLOYEES) RULES, 1975 AND FORMING PART OF
DIRECTORS' REPORT FOR THE YEAR ENDED 31st MARCH, 2014.
| Name of Employee |
Designation/ Nature of Duties |
Gross Remuneration (subject to income-tax) (Rs. Lacs) |
Qualifications |
Experience (Years) |
Age (Years) |
Date of Commencement of Employment |
Last Employment held, Designation and Organisation |
| Mr. Anuj Mehra |
Managing Director |
120.64 |
Bachelor in Economics PG.D.M., I.I.M. (Ahmedabad) |
30 |
53 |
1st March, 2009 |
Vice President -Marketing Mahindra Lifespace Developers Limited |
Notes:
1. Nature of employment is contractual, subject to termination on one month's notice on
either side.
2. The above employee is not a relative of any Director of the Company.
3. The above employee does not hold by himself or along with his spouse and dependent
children 2% or more of the equity shares of the Company.
4. Terms and conditions of employment are as per Company's Rules/contract.
5. Gross remuneration received as shown in the statement includes Salary, Bonus, House
Rent Allowance or value of perquisites for accommodation, car perquisites value/allowances
applicable, employer's contribution to Provident Fund, Superannuation scheme and Gratuity
Fund including group insurance premium, leave travel facility, reimbursement of medical
expenses and all allowances/perquisites and terminal benefits as applicable.
|
For and on behalf of the Board |
|
Ramesh Iyer |
|
Chairman |
| Mumbai, 15th April, 2014 |
|