Indiabulls Housing Finance Ltd
Chairman Speech
Dear Shareholders and friends,
The year gone by has been one of many milestones. In May 2018,
Indiabulls Housing Finance was ranked as the 13th largest consumer finance company in the
world by Forbes. The list is based on a composite score factoring in sales, profits,
assets and market value. We are one of only two Indian companies on the list.
The year was momentous for your Company as CRISIL, an S&P Company,
and ICRA, a Moody's Company, upgraded the Company's long-term credit rating to
the highest AAA. With this rating upgrade, all four leading rating agencies in India rate
IBHFL at the highest long-term rating of AAA. IBHFL is only the second private non-bank
lender to be upgraded to this level in 19 years, and only the fifth private lending group
[banks and non-banks] to be rated AAA by CRISIL.
~70 Mn Houses
Total expected opportunity over the next 7 years
The tailwinds from the rating upgrades helped us negotiate the
increasing rate environment and we were comfortably able to maintain our spreads as our
incremental funding costs were appreciably lower than our cost on the stock of borrowings.
We now have an optimally diversified borrowing profile and a wide base of 507 borrowing
Coordinated policy measures aimed at all sections of the housing market
| Home buyers |
• Incentiv es from PMAY subsidy and
tax deductions |
|
• H ome loan rates in affordable
housing at 0.42% |
|
• RERA in place: transparency and
delivery visibility to buyers |
|
• 90% of government-run pension fund
EPFO can be withdrawn for house purchase |
| Real Estate Developers |
• 100% corporate tax exemption on
profits from affordable housing construction |
|
• Quick er building permissions |
|
• RERA in place: transparency and
delivery visibility to buyers will aid sales |
| Housing Finance Companies |
• Infr astructure status for
affordable housing, easing to institutional credit |
|
• RBI, SEBI and IRDAI have coordinated
policies to ease access to funding |
|
• R eduction in risk weights and
easing of LTV caps |
relationships which affords us many levers to keep our funding
efficient and cost-effective.
The India Opportunity
Housing continues to benefit both from inherent demand driven by
socio-economic and demographic factors, and from specific government policy focus. Housing
shortfall in the country is estimated at about 41 million units. Demographic factors like
population growth and nuclearisation of traditional joint-family structures, along with
rising income and aspirations is giving rise to incremental housing demand estimated at
~10 million houses per annum.
The housing sector has the ability to propel rural and urban economic
activity. It is the country's 4th largest employment provider, employing both
semi-skilled and unskilled labour. Housing and the larger real estate sector has a high
growth multiplier effect on the economy with linkages to over 250 ancillary industries,
thereby accounting for ~5% of GDP. The housing sector's socio-economic importance has
made housing the centrepiece of the government's economic policy. In coordination
with sectoral regulators, the government has unveiled many specific policies and fiscal
incentives for the sector.
eHome Loans: The Next and the Most Important Focus of Indiabulls
Housing Finance
Retail lending landscape in India is rapidly changing as
‘Digital' has started to play a key role in loan fulfillment. A recent report by
BCG and Google, notes that 61% of Home Loan customers are influenced by digital platforms
and channels. The report also highlights the large digital lending opportunity in India
and estimates that the Total Retail Loans which could be disbursed digitally in the next 5
years could be over $1 Tn. Annual digital disbursements in 5 years would now be nearly 5X
of present levels.
We have the first mover's advantage here through the eHome Loans
platform that we launched two years ago. We have already started to reap the benefits of
this platform with it contributing to 27% of our incremental home loans disbursed. During
the course of FY 2018-19, our eHome Loan product will evolve into a comprehensive
Indiabulls Digital Home Loans Platform. This platform will be driven by strong analytics
engines, and also brings on developer and external channel partners like DSAs and
developers into the interconnected network. We aim to automate a large proportion of
credit underwriting for salaried customers, and tie up access to GST filing database,
providing credit teams with authentic revenue information on small businesses for
underwriting of LAP and home loans to self-employed customers. Analytics and social media
integration will give us a means to stay engaged with our customers helping us better
anticipate their needs opening up cross-sell and resultant fee generation opportunities.
We will have the ability to process home loans on construction sites as
the buyer concludes his purchase and we will be able to immediately disburse to
developers, crunching developer working capital cycles. We aim to be preferred financiers
for developers in our target home loan segment, significantly increasing our loans per
project.
A few clear financial outcomes that we target through this technology
initiative are:
• Long -term sustained loan earnings growth of between 20% and 25%
• Enhanced fee generation opportunities taking fee to disbursals
past 2% from the present 1.6% of disbursals
• Oper ating efficiencies resulting cost-to-income of under 10.0%
• R educed credit costs of under 0.5%
Enabling Regulatory and Macroeconomic Environment
The housing sector is also benefitting from two major reform measures:
RERA and GST. RERA has led to consolidation in the industry and has boosted buyer
confidence as there is now visibility of delivery of purchased houses as RERA requires
developers to communicate and bind to delivery timelines. The year under review saw an
uptick in housing demand, particularly in the affordable segment. Disbursal growth in this
segment was at 33% in FY 2016-17, since then, the PMAY credit-linked subsidy scheme has
been extended to include the mid-income group, our core customer segment, leading to
sustained, robust demand uptick. HFCs continue to steadily gain home loan market share
from banks and now account for 42% of the country's home loans market (55%
incrementally), up from 33% in FY 2009-10. An indication of very strong near-term growth
is a comparison with China's individual mortgage market which at $ 3.5 Tn is 14x than
that of India's
$ 245 Bn, while China's GDP is only 5x that of India. With India
again slated to overtake China's GDP growth this year, it is my strong belief that
we'll see very strong 30% level growth in the near term.
Performance Overview
The first phase of Indiabulls housing's growth was equity fuelled.
As our ratings improved through this period, we firmly established ourselves as a prime,
low-risk, mass market home loan provider. Today we have the highest long-term rating of
AAA from all four leading Indian rating agencies. Our strong liability franchise spread
across diversified funding sources and an optimal mix of loan products give us the
best-in-class spreads that have sustained within our guided range of between 300-325 bps.
We have grown strongly across all key parameters. Our balance sheet
size at the end of FY 2017-18 stood at Rs 1,31,903 and Crores, up 27.2% over last year.
Our total loan assets are at Rs 1,22,578 Crores up
34.3% from Rs 91,301 Crores at the end of FY 2016-17. Profit after tax
for the year at Rs 3,847 Crores, up 32.4% from Rs 2,906 Croresin for FY 2016-17. Our top
line has registered healthy growth with revenue for FY 2017-18 at Rs 14,640 Crores, a
growth of 25.1% over FY 2016-17 revenue of Rs 11,702 Crores
The NII for FY 2017-18 stood at Rs 5,785 Crores, a growth of 21.3% over
FY 2016-17 NII of Rs 4,768 Crores Operating expenses for the year stood at Rs 853 Crores
up from Rs 713 Crores the previous year.
With increasing penetration of eHome Loans and increasingly digitised
sourcing and underwriting model, our cost to income ratio is rapidly declining. Cost to
income ratio for FY 2017-18 stood at an all-time low of 12.5% as compared to 13.3% in FY
2016-17 and 14.3% in FY 2015-16. The cost-to-income ratio will continue to decline. Both
the decline in Opex as a percentage of loan assets, and credit costs as a percentage of
loan assets have supported ROAs and sustained our topline spreads.
NPAs continue to remain within the guided range of 0.7% to 0.9% for
Gross NPA and 0.3% to 0.5% for Net NPAs. Gross NPA and Net NPA were down to 0.77% and
0.34% respectively from 0.85% and 0.36% a year ago. Including standard asset provisions
and counter-cyclical provisions that are not deducted while computing Net NPA, our total
provisions stood at Rs 1,758 Crores, translating to a total provision to GNPA cover of
185%.
Total Capital adequacy adjusted for investments in mutual funds stood
at 20.68%, with tier I at 14.96%. An important risk mitigation strategy is the healthy
level of liquidity that we maintain. Cash and bank balances and current investment of the
Company added up to over Rs 16,500 Crores at the end of FY 2017-18. The Company's
earnings per share (EPS) stood at Rs 90.51 for this year compared to Rs 68.80 for FY
2016-17. The Company has registered a return on equity (RoE) of 30% for the current year
up from 26% previous year.
Unlocking value
In November 2015, IBHFL acquired 39.76% stake in OakNorth Bank for $
100 Mn. Within two years of operations, OakNorth Bank's deposits have risen to $ 825
Mn and loan assets crossed the $ 1 Bn milestone to stand at $ 1.06 Bn. In Q3 FY 2017-18,
IBHFL sold about one-third of its stake to GIC – sovereign wealth fund of Singapore,
for $ 121 Mn [Rs 768 Crores]; with this partial divestment, IBHFL has recovered its entire
investment in OakNorth Bank made two years ago, also making a profit of Rs 542 Crores on
the transaction. Post this sale and other prior dilutions as OakNorth Bank raised equity,
Indiabulls holds 18.67% in the UK Bank and is the single largest shareholder with two
nominees on the board. Thus, in two years of investment the value of our holding
appreciated 380%. We shall stay invested as a significant shareholder in the bank to
participate in the future growth of the bank.
Rewarding shareholders
Our shareholders have been our steadfast allies at every step of our
journey and in keeping with our philosophy of rewarding them for their loyalty and
support, the Company, during FY 2017-18 made a dividend pay-out of Rs 41/- per equity
shares (with a total outflow of Rs 2,099 Crores, including Corporate Dividend Tax). The
Company ranks amongst the top 15 dividend paying private companies in India.
Optimally Diversified Funding Mix
With the upgrade to the highest long-term credit rating of
‘AAA' from CRISIL and ICRA, we now have the highest credit ratings from all four
major Indian rating agencies, namely ICRA, CARE, CRISIL and Brickworks.
The year was marked by many firsts on the funding front. In December
2017, your Company issued India's first Social Affordable Housing Bond of used
towards financing requirement of the Affordable Housing sector. The Social Affordable
Housing Bond will conform to the Social Bond Principles 2017 issued by the International
Capital Market Association (ICMA). The Company has also setup a $1.5 Bn MTN programme
through which we will tap the offshore market from time to time, to optimally diversify
our funding sources and further increase funding efficiencies. With RBI permitting raising
ECBs under the automatic route in April 2018, your Company was the first HFC in the
country to raise $ 240 Mn of ECBs under the automatic route. In all, the Company has
raised Rs 26,059 Crores of debentures and securities in FY 2017-18 as compared with Rs
21,321 Crores the previous year.
For the first time the Company's loan sell downs crossed Rs 10,000
Crores in a year, this compares with Rs 4,200 Crores in the previous year. We sold down an
equivalent of a third of incremental loan assets that we added in the year. At first hand
we see strong traction for loan sell downs and this very efficient source of funding makes
our funding outlook all that much stronger. Bank borrowings now form 34% of our funding
mix, down from 37% last year. Debentures and securities along with ECBs contribute 55% to
the funding mix and sell downs contributed the remainder. Capital market sources along
with ECB and sell downs have contributed to 75% of the net incremental funding of Rs
21,636 Crores for the financial year.
Corporate Social Responsibility
As responsible corporate citizens we are aim to positively contribute
to the society and leverage on our reach and resources to effect beneficial change. This
year we have been further able to extend the reach and impact of our CSR activities
through Indiabulls Foundation. The foundation works for the betterment of the lives of the
weaker sections of the society. This year, through our fleet of 30 mobile vans we provided
medical treatment to nearly 8,60,000 patients. The Foundation's free Dialysis
Facility has benefitted 3,499 persons so far. The monthly health camps conducted by
Indiabulls Foundation have benefitted 5,787 individuals till date.
The Foundation also has an emphasis on providing clean and renewable
energy. Towards this, Indiabulls Foundation has set up solar electricity plants to
facilitate free of cost round-the-clock seamless electricity to 6 tribal ashram schools
benefiting about 4,000 students every year. The Foundation has provided free nutrition
supplements to the undernourished children. This initiative has seen 4,29,485
beneficiaries since its inception. In a step towards women empowerment, the Company
through Indiabulls Foundation has provided skills training to 600 rural women, spanning
seven states.
The Path ahead
The Company has successfully transformed itself into a world-class
mortgage lender with a diversified product offering. Backed by a strong management team,
and cutting edge technology initiatives, we shall strive to expand RoE further as the
Company achieves economies of scale and gains market share. I believe that India, and
particularly the housing sector, will continue to remain on a high growth trajectory due
to supportive demographics, macroeconomic factors and government initiated reforms. We are
well-positioned in the huge opportunity that the Indian housing market provides to create
continuous value for all our stakeholders in a predictable manner as is demonstrated by
our track record of growth for past many years. I would like to re-iterate the very strong
focus on providing eHome Loans, we think of this as the future of Indiabulls Housing
Finance.
Before I conclude, I wish to place on record the sincere dedication and
hard work of our employees. I am also grateful to our regulators, bankers, business
associates and shareholders for supporting us in our continuing journey.
| Thank you! |
| Sameer Gehlaut |
| Founder and Executive Chairman |
  Â
Indiabulls Housing Finance Ltd
Directors Reports
Dear Shareholders,
Your Directors have pleasure in presenting the Thirteenth Annual Report
together with the audited statement of accounts of the Company for the financial year
ended March 31, 2018.
Financial Highlights
The financial highlights of the Company, for the financial year ended
March 31, 2018, are as under -
Amount (in Rs)
| Particulars |
Year ended March 31, 2018 |
Year ended March 31, 2017 |
| Profit before Depreciation and amortisation expense |
46,170,515,557 |
37,014,925,722 |
| Less: Depreciation and amortisation expense |
269,656,957 |
207,100,504 |
| Profit before Tax |
45,900,858,600 |
36,807,825,218 |
| Less: Total Tax expense |
10,235,618,503 |
8,383,998,238 |
| Profit for the Year |
35,665,240,097 |
28,423,826,980 |
| Add: brought forward balance |
4,721,910,742 |
1,133,086,433 |
| Add: Transitional Adjustment on account of Interest Rate
Swaps |
- |
121,991,338 |
| Amount available for appropriation |
40,387,150,839 |
29,678,904,751 |
| Appropriations: |
|
|
| Interim Dividend paid on Equity Shares (Rs 41.00 Per Share |
17,442,036,536 |
11,421,235,467 |
| (Previous Year Rs 27.00 Per Share)) |
|
|
| Corporate Dividend Tax on Interim Dividend paid on Equity
Shares |
3,550,788,237 |
2,318,905,265 |
| Transferred to Reserve III (Reserve U/s 36(1)(viii),
Considered as eligible transfer |
4,400,000,000 |
3,350,000,000 |
| to Special Reserve U/s 29C of the National Housing Bank Act,
1987) |
|
|
| Transferred to Reserve I (Special Reserve U/s 29C of the
National Housing |
|
|
| Bank Act, 1987) |
2,733,048,019 |
2,334,765,396 |
| Transferred to Additional Reserve (U/s 29C of the National
Housing Bank Act, 1987) |
1,500,000,000 |
2,500,000,000 |
| Transferred to General Reserve |
2,200,000,000 |
1,330,000,000 |
| Transferred to Debenture Redemption Reserve |
3,322,257,094 |
1,702,087,881 |
| Balance of Profit Carried Forward |
5,239,020,953 |
4,721,910,742 |
KEY FINANCIAL HIGHLIGHTS: FY17-18 (Consolidated)
| Particulars |
FY 17-18 |
FY 16-17 |
| Total Revenues (Rs crore) |
14,640.4 |
11,701.7 |
| NII (Rs crore) |
5,785.3 |
4,767.6 |
| PAT (Rs crore) |
3,847.4 |
2,906.4 |
| EPS (Rs) |
90.51 |
68.80 |
| CRAR% (Standalone) |
18.61 |
18.28 |
FINANCIAL AND OPERATIONAL HIGHLIGHTS Rating Upgrades
During the year the Company's rating was upgraded to the highest
long-term credit rating of AAA by CRISIL, a Standard & Poor's company and ICRA, a
Moody's company.
The Company now enjoys the highest long-term credit rating of AAA from
all four leading credit rating agencies in India - CRISIL, ICRA, CARE and Brickwork
Ratings.
Business Update
In FY 2017-18, the Company's balance sheet size crossed Rs
1,30,000 crore to close the year at Rs 1,31,903 crore.
The Company continues to be focused on mid-income affordable housing
and propelled by the growth in this segment, the Company's total loan assets grew to
Rs 1,22,578 crore, up 34.3% from Rs 91,301 crore as at the end of FY
2016-17.
Total sold down loan assets stood at Rs 12,418 crore at the end of FY
2017-18. Sell down increases the Company's operational flexibility enabling efficient
utilization of capital and is also RoE accretive.
The Company's cost to income ratio declined to 12.5% for FY 2017
from 13.3% for the previous year. Increasing -18 share of home loans through the online
eHome Loan platform will further hasten the decline in cost to income ratio.
During the year the Company sold about one-third of its holding in
OakNorth Bank booking a profit of Rs 543 crore.
The Profit after Tax of the company for the year 2017-18 stood at Rs
3,847 crore growing 32.4% over Rs 2,906 crore for the year 2016-17. The profit included
one-off gains of
Rs 543 crore from sale of stake in OakNorth Bank.
Indiabulls Digital Home Loans Platform and ISO Certifications
The Company plans to launch a comprehensive ‘Indiabulls Digital
Home Loan Platform' in the second half of FY 2018-19. The platform aims to:
– Provide a single app for customers to apply for and manage their
home loan
– Provide real time loan approvals by integrating with a credit
scoring engine
– Bring developers and channel partners onto the platform to
improve operational efficiency for all stakeholders
– Open up cross-sell opportunities through social media
integration and big-data analytics
– Improve efficiency of self-employed underwriting through access
to GST data
The Digital Home Loans Platform aims to have the following definite
operational impact:
– Vastly improved customer experience through reduced TAT and ease
of access
– Enhanced productivity and operating efficiencies
– Share of self-employed segment maintained
– Increased customer engagement and touch points
– Reduced developer working capital cycles
– Enhanced DSA productivity and earning opportunities
The above in turn will lead to specific financial outcomes:
– Long-term sustained loan book growth: 20% - 25%
– S ustained earnings growth: 20% - 25%
– Increased fee generation: 2%+ from present 1.6% of disbursals
– Reduced credit costs: <= 0.50% of loan assets
– Low cost-to-income ratio: < 8.0%
– Greater developer loyalty: 20% more loans/project
The k customer facing departments and workflow ey process are ISO
certified ensuring superior and standardized customer experience.
– ISO 10002:2014 - Customer care and complaint resolution
– ISO 9001:2015 - Lending Operations; credit underwriting;
administration; human resources and Corporate Secretarial
– ISO 14001:2015 - Environmental management services
– ISO 27001:2015 - IT infrastructure operations, network
operations, data centre, application development and maintenance
Stable Asset Quality
Gross non-performing loans as at March 31, 2018 amounted to Rs 948
crore. This is equivalent to 0.77% of the portfolio.
Net non-performing loans as at March 31, 2018 amounted to Rs 420 crore.
This is equivalent to 0.34% of the portfolio.
The Company has a prudent approach to creating loan provisions and
carries total provisions across standard assets provision, sub-standard asset provisions
and counter-cyclical provisions of Rs 1,758 crore.
Total provision to gross NPAs was 185%.
An e xperienced underwriting team and the in-house sourcing and
collection teams ensure control over loan sourcing, credit appraisal and portfolio
quality.
Strengthening Liability Profile
During the year, the Company was upgraded to AAA by CRISIL, a Standard
& Poor's company and ICRA, a M oody's company. With these upgrade IBHFL has
attained the highest long term credit rating of AAA from all four leading rating agencies
in India. The highest AAA ratings enjoyed by the Company have reduced the cost of new
borrowings, and has also enabled the Company to refinance the existing debt at lower
rates.
Total borrowings of the Company grew by 29% to Rs 1,10 cr ,257 at the
end of FY 2017-18 from ore Rs 85,301 crore at the end of FY 2016-17.
The Company has issued Rs 2,750 crore of Tier II Bonds which forms part
of Tier II capital. During 2017-18, the
Company issued India's first Social Affordable Housing
Offshore (Masala) Bonds amounting to Rs 315 crore. A total of Rs 1,540
crore of Social Affordable Housing Bonds were issued in FY 18.
In J 2018, the Company raised USD 240 Mn through une the ECB route from
a Syndicate of banks in Singapore,
Korea, J and Taiwan. The Company was also able to apan refinance USD
250 Mn of existing ECBs.
In k with eeping IBHFL's philosophy of maintaining adequate and
healthy levels of liquidity, the Company had Rs 16,535 crore of liquid funds in the form
of cash, cash equivalent and investment in liquid schemes of mutual funds.
Through the year, the Company expanded its lender base and b the end of
FY 2017-18 the Company has 507 strong y relationships: 21 PSU banks, 22 Private and
Foreign banks and 464 M Funds, Provident Funds, Pension Funds, utual
Insurance Companies and others.
Bank Borrowings
As on M 31, 2018, the Company's outstanding bank loans arch stood
at Rs 41,711 crore vis--vis Rs 34,659 crore as on March 31, 2017 Bank .borrowings'
contribution to funding mix continued its downward trajectory with only 25% of total
funding coming from bank term loans. The Company's bank borrowings continue to enjoy
a rating of AAA, signifying the highest degree of safety regarding timely servicing of
financial obligations. AAA rated instruments carry lowest credit risk.
Debentures and Securities
FY 2017 saw a marked shift in the Company's funding -18 sources
with debentures and securities contributing 61% of the Company's incremental funding
for the fiscal year. This represents a source of stable, long term, regular, recurring and
expanding source of funds.
As at M 31, 2018, the Company's consolidated outstanding arch
borrowings from debentures and securities stood at Rs 65,619 crore vis--vis Rs 48,048
crore as at March 31, 2017. The Company's secured NCDs have been listed on the
Wholesale Debt Market segment of NSE / BSE and have been assigned ‘AAA' r from
ICRA, CARE and Brickwork Ratings and ating CRISIL.
As at M 31, 2018, the Company's outstanding subordinated arch debt
and perpetual debt stood at Rs 4,571 crore and Rs 100 crore respectively. The debt is
subordinate to present and future senior indebtedness of the Company and has been assigned
the ‘ AAA' r by ICRA, CARE and Brickwork Ratings and ating
CRISIL. Based on the balance term to maturity, as at March 31, 2018, Rs
4,375.73 crore of the book value of subordinated and perpetual debt is considered as Tier
II under the guidelines issued by the Reserve Bank of India (RBI) and National Housing
Bank (NHB) for the purpose of capital adequacy computation. There are no NCDs which have
not been claimed by the investors or not paid by the Company after the date on which the
NCD became due for redemption.
Regulatory Guidelines / Amendments
National housing Board (NHB) is the regulator for housing finance
companies. Also, the Company has to comply with Reserve Bank of India norms. In accordance
with this, the Company is in compliance with all regulations pertaining to Accounting
Standards, Prudential norms for asset classification, income recognition, provisioning,
capital adequacy and credit ratings.
Risk Management Framework
As a housing finance Company, the Company is exposed to various risks
like credit risk, market risk (interest rate and currency risk), liquidity risk and
operational risk (technology, employee, transaction and reputation risk). To identify and
mitigate these risks the Company has an effective Risk
Management Control Framework that has been developed encompassing all
the above areas.
IBHFL has a Risk Management Committee (RMC) that comprises of its
directors and members of its senior management team, who have rich experience in the
industry in various domains. The RMC met multiple times during the year and kept an active
watch on the emergent risks the Company was exposed to. The Company has a robust mechanism
to ensure an ongoing review of systems, policies, processes and procedures to contain and
mitigate risk that arise fr time to time. IBHFL has a process in place for om conducting
audits of various processes to ensure 100% adherence. The Company also has a system for
evaluating Grievance Redressal Mechanism and undertaking complete Root Cause Analysis
(RCA) to ensure recurring grievances are avoided in future leading to improved customer
service standards. Continuous evaluation of existing controls and requisite
improvement/strengthening based on the assessment is carried out to contain these risks.
The Company encourages sound risk management culture within the organization.
Codes and Standards
The Company adheres to the Fair Practices Code (FPC) recommended by the
regulator, the National Housing Bank (NHB) as well as the RBI, to promote good and fair
practices by setting minimum standards in dealing with customers. The NHB has also issued
comprehensive Know Your Customer (KYC) Guidelines and Anti Money Laundering Standards in
the conte of recommendations made by the Financial Action xt Task Force on Anti Money
Laundering Standards.
Cross Selling and Distribution of Financial Products and Services
With the goal of serving maximum number of customers and maximizing
customer satisfaction, the Company has witnessed a large increase in the number of
branches across all regions.
Moreover, the digitization of workflow integrates the different
components of the loan application and underwriting process. State-of-the-art Customer
Care set up helps speedy resolution of customer queries and to promptly attend to any loan
requirements. Survey calling, where feedback is taken from existing and new customers,
also helps in continuous process improvement and in the generation of new leads.
Training and Human Resource Management
Learning and Development is encouraged by way of training. The
trainings focus on a variety of aspects ranging from operational efficiency, customer
satisfaction, credit risk analysis, etc. The trainings have been conducted for 7,304
employees covering various aspects such as customer relationship management, credit risk
analysis, operational efficiency, fraud prevention and others.
DIVIDEND
The Company has consistently worked towards shareholders' wealth
maximization. With regard to this, the Company has declared four interim dividends
amounting to Rs 41 per share on share of face value Rs 2 each (Rs9/-, Rs9/-, Rs9/- and
Rs14/-) for the year 2017-18 and total outflow amounting to Rs 2,099.28 crore (inclusive
of Corporate Dividend Tax). The Board of Directors of the Company, had, in its meeting
held on April 20, 2018, declared an interim dividend of Rs 10/- per share of face value of
Rs 2/- each, for the Financial Year 2018-19. F the Board of Directors of the Company, had,
urther, in its meeting held on August 2, 2018, declared second interim dividend of Rs 10/-
per share of face value of Rs 2/- each, for the
Financial Year 2018-19.
During the year, the unclaimed dividend pertaining to the
Financial Y 2009-10 and 2010-11, got transferred to Investor ear
Education and Protection Fund after giving due notice to the members. Those members who
have not so far claimed their dividend for the subsequent financial years are also advised
to claim it from the Company or Karvy Computershare Private
Limited. F in compliance with the requirements, in urther, terms of the
notification issued by the Ministry of Corporate Affairs (MCA) regarding the
"Investor Education and
Protection Fund Authority (Accounting, Audit, Transfer and
Refund) Rules, 2016" ("the Rules") which have come into
force from 7th September, 2016 and The Investor Education and
Protection Fund Authority (Accounting, Audit, Transfer and
Refund) Amendment Rules, 2017 and the Investor Education and Pr
otection Fund Authority (Accounting, Audit, Transfer and Refund) Second Amendment Rules,
2017 which have been notified b MCA on 28th February, 2017 and 13th October, y2017
respectively ("the Amended Rules"), the Company has transferred 11,511 equity
shares in respect of which dividend has not been received or claimed for seven consecutive
years from the Financial Year 2008-09 onwards to Demat Account of IEPF A in respect of
which, individual notice had uthority, also been sent to concerned Shareholders.
Further pursuant to the requirements of SEBI Circular no. SEBI/
LAD-NRO/GN/2016-17/008 dated July 8, 2016, the
Dividend Distribution Policy of the Company is available on the website
of the Company i.e. www.indiabullshomeloans.com.
DIRECTORS
During the FY 2017-18, the Members of the Company at its 12th
Annual General Meeting held on September 8, 2017, have re-appointed Mr.
Sameer Gehlaut (DIN: 00060783) as a Whole Time Director and Key Managerial Personnel,
designated as Executive Chairman of the Company, Mr. Gagan Banga (DIN: 00010894) as a
Whole-Time Director and Key Managerial
Personnel, designated as Vice-Chairman, Managing Director & CEO of
the Company, Mr. Ajit Kumar Mittal (DIN: 02698115) as a Whole-time Director and Key
Managerial Personnel designated as Executive Director of the Company, and Mr.
Ashwini Omprakash Kumar (DIN: 03341114) as a Whole-time
Director and Key Managerial Personnel, designated as Deputy Managing
Director of the Company, for a further period of five years, with effect from March 19,
2018 since their existing tenure came to an end on March 18, 2018. The Members have also
approved the appointment of Mr.
Sachin Chaudhary (DIN: 02016992) as a Director and a Whole-time
Director & Key Managerial Personnel of the Company, for a period of five years, with
effect from October 21, 2016, since Mr. Sachin Chaudhary was appointed as an Additional
Director and a Whole-Time Director and Key Managerial
Personnel of the Company designated as its Executive Director w.e.f.
October 21, 2016, for a period of five years as his appointment being as an Additional
Director on the Board of the Company, was up to the date of 12th Annual General Meeting
held on September 8, 2017.
To ensur continuity of guidance from Justice Gyan Sudha e Misra (R
Justice Supreme Court of India) (DIN: 07577265) etd. the existing Independent Director of
the Company, the Board has recommended her re-appointment as Independent Director of the
Company for another term of 5 years from September 29, 2018 up to September 28, 2023.
Keeping in view, the v experience and knowledge of Justice Misra, ast the Board is of the
view that her appointment as Independent Director, on the Board, will be in the interest
of the Company. Upon approval of the shareholders to her appointment as
Independent Directors her appointment shall be formalized by issuing a
letter of appointment to her, which shall be open for inspection by the members at the
registered office of the Company, in terms of applicable provisions of the Act.
In accordance with the provisions of Section 152 of the Companies Act,
2013 (Act) and in terms of the Memorandum and Articles of Association of the Company, Mr.
Gagan Banga (DIN: 00010894), Executive Director, designated as Vice-Chairman, Managing
Director and CEO of the Company, retire by rotation at the ensuing Annual General Meeting
of the Company and being eligible offer himself for reappointment. All the present
Independent Directors of the Company have given declaration that they meet the criteria of
independence laid down under Section 149(6) of the Companies Act, 2013. The present
composition of the Board along with the brief resume of the Directors proposed to be
appointed/ reappointed, nature of their expertise in specific functional areas, terms of
appointment and names of companies in which they hold directorships and
memberships/chairmanships of Board Committees, are provided in the Corporate Governance
Report, forming part of this Annual Report and in the Notice convening the 13th Annual
General Meeting of the Company.
SHARE CAPITAL / ESOP SCHEMES
The paid up equity share capital of the Company as on March 31, 2018,
was Rs 853,071,572 comprising of 426,535,786 equity shares of Rs 2/- each. Subsequently,
from April 1, 2018 till date, the Company had allotted 57,035 equity shares of face value
Rs 2/- each against exercise of equivalent number of stock options under various ESOP
Schemes of the Company. As a result the paid up equity share capital of the Company stands
increased to Rs 85,31,85,642 comprising of 42,65,92,821 equity shares of Rs 2/- each.
Presently, stock options granted to the employees operate under the
schemes namely; "IBHFL-IBFSL Employees Stock Option Plan 2006",
"IBHFL-IBFSL Employees Stock Option Plan II 2006", "IBHFL-IBFSL Employees
Stock Option 2008" and "Indiabulls Housing Finance Limited Employees Stock
Option Scheme-2013". Under "Indiabulls Housing Finance Limited
Employees Stock Option Scheme-2013", during the year under review,
an aggregate of 10,600,000 Stock Options (10,500,000 Stock Options at an exercise price of
Rs 1156.50 per option and 100,000 Stock Options at an exercise price of Rs 1200.40 per
option) had been granted to certain eligible employees. The exercise price was determined
in accordance with the pricing formula approved by the members i.e. at the latest
available closing price of the equity share on the NSE, prior to the date of the meetings
of the Compensation Committee at which these options were granted. The options granted as
aforesaid are exercisable over a period of five years from the date of their respective
vesting and none of the options granted as aforesaid have vested during the year and
consequently, no options have been exercised. There has been no material variation in the
terms of the options granted under any of these schemes and all the schemes are in
compliance with the SEBI (Share Based Employee Benefits) Regulations, 2014. The
disclosures as required under these regulations have been placed on the website of the
Company https://www. indiabullshomeloans.com/.
RETAIL AND MASALA BOND
(a) Issuance of INR 3,150,000,000 7.80 per cent. Secured Synthetic INR
Notes due 2021 by the Company, listed on Singapore Exchange Securities Trading Limited
During the FY 2017-18, the Company has successfully raised
INR 315 Cr by issue of Secured Rupee denominated Social Affordable
Housing Masala Bonds bearing a coupon of 7.80% and having a tenor of 3 years. These bonds
have been assured by KPMG and are listed on Singapore Stock Exchange (SGX-ST).
(b) Issuance of Secured and Unsecured NCDs, by way of Private Placement
basis
During the FY 2017-18, the Company has successfully raised, by way of
private placement, Rs 20,214.20 crore of Secured NCDs having a face value of Rs 10,00,000
each, Rs 500 crore of secured NCDs having a face value of Rs 10,00,000 each {paid-up value
Rs 25 crore, i.e. Rs 50,000 per NCD paid-up(Initial Subscription
Amount)} and Rs 2,500 crore Unsecured NCDs having a face value of Rs 1, 00,000 each. The
said NCDs are listed on WDM segment of BSE Limited (BSE) and National Stock Exchange of
India Limited (NSE).
(c) Details of NCDs which have not been claimed by the Investors
There are nil NCDs which have not been claimed by the Investors or not
paid by the Company after the date on which these NCDs become due for redemption
PUBLIC DEPOSITS
During the year under review, the Company has not accepted any deposits
from the public, falling within the ambit of Chapter V of the Companies Act, 2013 and the
Companies (Acceptance of Deposits) Rules, 2014.
LISTING WITH STOCK EXCHANGES
The Equity Shares (ISIN INE148I01020) of the Company, continue to
remain listed at BSE Limited (BSE) and National Stock Exchange of India Limited (NSE). The
listing fees payable to both the exchanges for the financial year 2018-19 have been paid.
The GDRs issued by the Company continue to remain listed on Luxembourg Stock Exchange. The
Secured Synthetic INR Notes are listed on Singapore Stock Exchange (SGX-ST). The NCDs
issued under IPO and on Private
Placement basis are listed on WDM segment of NSE and BSE.
AUDITORS
(a) Statutory Auditors
M/s. S.R. Batliboi & Co. LLP, Chartered Accountants (ICAI
Registration No.: 301003E/E300005), (an Indian Firm of
Ernst & Young), were appointed as the Statutory Auditors of the
Company at the Twelfth Annual General Meeting of the Company held on 8th September, 2017,
for a period of five years i.e. until the conclusion of the Seventeenth Annual General
Meeting of the Company, subject to ratification of their appointment by the Members at
every intervening Annual General Meeting, on such remuneration as may be mutually agreed
upon between the Board of Directors of the Company and the Statutory Auditors. The
Ministry of Corporate Affairs (MCA) vide its notification no. S.O. 1833(E) dated May 7,
2018 has done away with the requirement of getting the appointment of the Statutory
Auditors ratified at every intervening Annual General Meeting. Accordingly, the Company
has received a certificate from the Auditors to the effect that their continuation as such
from the conclusion of this Annual General Meeting until the conclusion of Seventeenth
Annual General Meeting is in accordance with the provisions of the Section 141(3)(g) of
the Companies Act, 2013. The Board recommends the ratification of their appointment as
Statutory Auditors of the Company till the conclusion of Seventeenth Annual General
Meeting of the Company.
The N to the Accounts referred to in the Auditors' Report otes are
self – explanatory and therefore do not call for any further explanation. No frauds
have been reported by the Auditors of the Company in terms of Section 143(12) of the
Companies Act, 2013.
(b) Secretarial Auditors & Secretarial Audit Report
Pursuant to the provisions of Section 204 of the Companies Act, 2013
read with the rules made thereunder, the Company has appointed M/s Neelam Gupta &
Associates, a firm of Company Secretaries in practice as its Secretarial Auditors, to
conduct the secretarial audit of the Company, for the FY
2017-18. The Company has provided all assistance, facilities,
documents, records and clarifications etc. to the Secretarial Auditors for conducting
their audit. The Report of Secretarial
Auditors for the FY 2017-18, is annexed as "Annexure 1" and
forming part of this Report. The Report is self – explanatory and therefore do not
call for any further explanation.
(c) Cost Records
The Company is not required to make and maintain cost records pursuant
to Section 148(1) of the Companies Act, 2013.
CORPORATE SOCIAL RESPONSIBILITY
As part of its initiatives under "Corporate Social Responsibility
(CSR)", the Company has undertaken projects in the areas of Health, Education,
Sanitation, Rural Development & Safe
Drinking W Flora & Fauna , as per its CSR Policy (available ater,
on y Company's website http://www.indiabullshomeloans. our com/)
and the details are contained in the Annual Report on CSR Activities given in
"Annexure 2", forming part of this Report. These projects are in accordance with
Schedule VII of the Companies Act, 2013 read with the relevant rules.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Pursuant to Regulation 34 of the SEBI LODR Regulations,
Management's Discussion and Analysis Report, for the year under
review, is presented in a separate section forming part of this Annual Report.
CORPORATE GOVERNANCE REPORT
Pursuant to Regulation 34 of the SEBI LODR Regulations, a separate
section on Corporate Governance Practices followed by the Company, together with a
certificate from a practicing Company Secretary confirming compliance, is presented in a
separate section forming part of this Annual Report.
BUSINESS RESPONSIBILITY REPORT
Pursuant to Regulation 34 of the SEBI LODR Regulations a separate
section on Business Responsibility Report (BRR) is presented in a separate section forming
part of this Annual Report.
DIRECTORS' RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the
information and explanations obtained by them, your Directors make the following statement
in terms of Section 134 of the Companies Act, 2013: a) that in the preparation of the
annual financial statements for the year ended March 31, 2018, the applicable accounting
standards had been followed along with proper explanation relating to material departures,
if any; b) that such accounting policies as mentioned in the Notes to the Financial
Statements have been selected and applied consistently and judgments and estimates have
been made that are reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company, as at March 31, 2018 and the profit and loss of the Company for
the year ended on that date; c) that proper and sufficient care has been the maintenance
of adequate accounting records in accordance with the provisions of the Companies Act,
2013, for safeguarding the assets of the Company and for preventing and detecting fraud
and other irregularities; d) that the annual financial statements have been prepared on a
going concern basis; e) that proper internal financial controls were in place that such
financial controls were adequate and were operating effectively; and f ) that systems to
ensure compliance with the provisions of all applicable laws were in place and were
adequate and operating effectively.
INFORMATION PURSUANT TO SECTION 134 AND SECTION 197 OF THE COMPANIES
ACT, 2013 READ WITH THE RELEVANT RULES AND SEBI LODR REGULATIONS
The information required to be disclosed pursuant to Section 134 and
Section 197 of the Companies Act, 2013 read with the relevant rules (to the extent
applicable) and SEBI LODR Regulations, not elsewhere mentioned in this Report, are given
in "Annexure A" forming part of this Report.
GREEN INITIATIVES
The Company's Environmental Management System (EMS) focuses on
assessing the environmental cost of the Company's services and activities, and seeks
to reduce or eliminate the negative impact and increase their positive effects.
The ISO 14001:2015 specifies the requirements for EMS such that the
negative environmental impact is minimized and overall environmental performance improves.
ISO 14001 is an systematic framework that checks adherence to environmental performance
standards and also seeks to continuously improve it.
Environmental sustainability is important to the Company and is one of
the reasons behind the Company's push to digitize its processes. Amongst its peers,
the Company has taken the lead in introducing an end-to-end online home loan application
and fulfillment platform, doing away with the traditional pen and paper process which also
involved physical transfer of loan application files. The ISO 14001:2015 certification
helps the Company document its process from an environmental perspective and importantly,
gives it a means to measure and minimize the environmental impact of its operations.
Electronic copies of the Annual Report 2018 and Notice of the 13th AGM
are sent to all the members whose email addresses are registered with the Company /
Depository Participant(s).
For members who have not registered their email addresses, physical
copies of the Annual Report 2018 and Notice of the 13th AGM are sent in the permitted
mode.
The Company is providing e-voting facility to all members to enable
them to cast their votes electronically on all resolutions set forth in the Notice of the
13th AGM. This is pursuant to section 108 of the Companies Act, 2013 and Rule 20 of the
Companies (Management and Administration) Rules, 2014 as substituted by Companies
(Management and Administration) Amendment Rules, 2015 and Regulation 44 of the SEBI LODR
Regulations. The instructions for remote e-voting are provided in the Notice.
ACKNOWLEDGEMENT
Your Company has been able to operate efficiently because of the
culture of professionalism, creativity, integrity and continuous improvement in all
functional areas and the efficient utilization of all its resources for sustainable and
profitable growth. Your Directors wish to place on record their appreciation of the
contributions made and committed services rendered by the employees of the Company at
various levels. Your Directors also wish to express their gratitude for the continuous
assistance and support received from the investors, clients, bankers, regulatory and
government authorities, during the year.
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For and on behalf of the |
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Board of Directors |
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Sd/- |
Sd/- |
| Date: August 2, 2018 |
Gagan Banga |
Ajit Kumar Mittal |
| Place: Mumbai |
Vice-Chairman, |
Executive Director |
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Managing |
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Director & |
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CEO |
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(DIN: 00010894) |
(DIN: 02698115) |
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