LIC Housing Finance Ltd
Directors Reports
To the Members of LIC Housing Finance Limited
Your Directors are pleased to present the Thirty Fourth Annua Report together with the
Audited Financial Statements (standalone and consolidated) for the year ended 31st
March 2023 of LIC Housing Finance Limited (‘the Company').
FINANCIAL HIGHLIGHTS
(Rs. In crore)
Particulars |
For the year ended 31st March, 2023 |
For the year ended 31st March, 2022 |
Profit before Tax |
3557.00 |
2778.15 |
Tax Expense |
(665.97) |
(490.87) |
Profit after Tax |
2891.03 |
2287.28 |
Other Comprehensive Income |
5.03 |
(4.72) |
Total Comprehensive Income |
2896.06 |
2282.56 |
Appropriations |
|
|
Special Reserve u/s 36(1)(viii) of the Income Tax Act,1961 |
984.99 |
859.99 |
Statutory Reserve u/s 29C of NHB Act,1987 |
0.01 |
0.01 |
General Reserve |
850.00 |
700.00 |
Impairment Reserve |
- |
92.72 |
Dividend |
467.55 |
467.55 |
Balance carried forward to next year |
593.51 |
162.29 |
|
2896.06 |
2282.56 |
APPROPRIATION Transfer to Reserves:
The Company has transferred Rs. 984.99 crore to Special Reserve u/s 36(1)(viii) of the
Income-tax, Act., 1961 excluding Rs. 0.01 crore to the Statutory Reserve u/s 29C of NHB
Act; and an amount of Rs. 850 crore to General Reserve.
Hence, the total amount transferred to special reserve is Rs. 985 crore (including Rs.
0.01 crore to Statutory Reserve u/s 29C of NHB Act) and Rs. 850 crore to General Reserves.
DIVIDEND:
The Company has in place a Dividend Distribution Policy formulated in accordance with
the Securities and Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015, which intends to ensure that a rationale decision is
taken, with regard to the amount to be distributed to the shareholders as dividend, after
retaining sufficient funds for the Company's growth, to meet its long-term objective and
other purposes. The Policy also lays down various parameters to be considered by the Board
of Directors of the Company before recommendation of dividend to the Members of the
Company.
Considering the performance of the Company during the financial year 2022-2023, the
Board of Directors felt the need to strike a balance between being prudent and conserving
capital in the Company, while at the same time catering to the expectations of
shareholders, and also considering the Dividend Distribution Policy and in terms of RBI
Circular No. DOR.ACC.REC.No.23/21.02.067/2021-22 dated 24th June, 2021 , have
recommended payment of dividend for the financial year ended 31st March, 2023
of Rs. 8.50 per equity share of face value of Rs. 2/- per share i.e., @ 425 percent . The
total dividend outgo, if declared by the shareholder at the 34th Annual General
Meeting, for the current year would amount to Rs. 467.55 crore, same as for the previous
year. The dividend payable shall be subject to the approval of the Members of the Company
at the ensuing Annual General Meeting.
The dividend declared by the Company for the financial year ended 31st
March, 2023 is in compliance with the Dividend Distribution Policy of the Company. The
Dividend Distribution Policy is available on the website of the Company at
https://www.lichousing.com/static-assets/pdf/ DIVIDEND%20DISTRIBUTION%20POLICY%202021. pdf
Rs. crafterSite=lichfl-corporate-website-cms&embedded=true and link of the same is
provided in Annexure 5.
INDIAN ACCOUNTING STANDARDS
The Company has complied with the applicable Indian Accounting Standards (Ind AS)
notified by the Ministry of Corporate Affairs under Section 133 of the Companies Act,
2013. The financial statements for the year have been prepared in accordance with Schedule
III to the Companies Act, 2013.
PERFORMANCE Income and profit
The Company earned total revenue of Rs. 22674.20 crore for the FY 2022-23 as compared
to Rs. 19953.02 crore in the FY 2021- 2022, registering an increase of 13.64 percent, as
compared to previous year. The percentage of administrative expenses to the housing loans,
which was 0.40 percent in the previous year, has reduced to 0.36 percent during the
financial year2022- 2023, mainly due to arrears of wages given in the previous year which
were included in employee benefits expenses.
Profit before tax and after tax for FY 2022-23 stood at Rs. 3557.00 crore and Rs.
2891.03 crore respectively as against Rs. 2778.15 crore and Rs. 2287.28 respectively, for
the previous year. The variance was on account of increase in Interest income due to
increase in LHPLR by 2.10% till December 2022 which has impacted the Interest Income
during the Quarter. Most of the Loans given are at Floating rate.
LENDING OPERATIONS
The Company is a Housing Finance Company registered with National Housing Bank (NHB)
and is mainly engaged in financing purchase / construction of residential flats / houses
to individuals and project finance to developers, Loan against Property (LAP), Lease
Rental Discounting (LRD) etc. All other activities revolve around the main business of the
Company.
As at 31st March, 2023 the loan book consisted of 83.15 per cent of IHL,
2.61 per cent of NHC, 9.97 per cent of NHI & 4.27 per cent of project portfolio (As
per IND-AS).
INDIVIDUAL HOUSING LOAN (IHL):
During the year the main thrust continued on individual housing loans. The Company has
sanctioned 1,94,398 Individual Housing Loans (IHL) amounting to Rs. 53,140.33 crore and
disbursed 2,00,459 loans aggregating to Rs. 53,458.5 crore during FY 2022-23. IHL
constitute 82.92 percent of the total sanctions and 83.38 percent of the total
disbursements for the FY 2022-23 as compared to 86.61 percent and 86.76 percent
respectively during the FY 2021-22. The gross IHL portfolio grew by 12 percent from Rs.
2,04,230* crore as on 31st March, 2022 to Rs. 2,28,730* crore as on 31st
March, 2023.
NON-HOUSING INDIVIDUAL (NHI)
The company has sanctioned 31,089 Non-Housing Individual Loan (NHI) amounting to Rs.
7,298.54 crore and disbursed 31,975 loans amounting to Rs. 7,458.91 crore during the FY
2022-23. NHI constitute 11.39 percent of the total sanctions and 11.63 percent of the
total disbursement for the FY 2022-23 as compared to 9.93 percent and 10.57 percent
respectively during FY 2021-22. The gross NHI portfolio grew by 7.41 percent from Rs.
25,519 crore as on 31st March, 2022 to Rs. 27,411 crore as on 31st
March, 2023.
NON-HOUSING CORPORATE (NHC)
The company has sanctioned 75 Non-Housing Corporate Loan (NHC) amounting to Rs. 547.44
crore and disbursed 80 loans amounting to Rs. 500.57 crore during the FY 2022-23. NHC
constitute 0.85 percent of the total sanctions and 0.78 percent of the total disbursement
for the FY 2022-23 as compared to 1.01 percent and 0.54 percent respectively during FY
2021-22. The gross NHC portfolio decreased by 14.60 percent from Rs. 8,393 crore as on 31st
March, 2022 to Rs. 7,168 crore as on 31st March, 2023.
The cumulative sanctions and disbursements since incorporation, in respect of IHL, NHI
and NHC are:
Amount sanctioned: Rs. 5,74,305.18 crore
Amount disbursed: Rs. 5,52,270.11 crore
Since inception 35,07,395 customers have been serviced by the Company up to 31st
March, 2023. The number of live customers on 31st March, 2023 were 15,19,771.
Project loans:
The project loans sanctioned and disbursed by the Company during the year were
amounting to Rs. 3,097 crore and Rs. 2,697 crore respectively. Corresponding figures for
the previous year were Rs. 1,563 crore and Rs. 1,311 crore. These loans are generally for
short durations, giving better yields as compared to the individual housing loans.
AWARDS AND RECOGNITIONS:
• Winner of "Financial Inclusion & Future of Financial Services in India
- Vision 2030" Award under Large NBFC class at the 17th Annual Summit
& Awards Banking & Financial Sector Lending Companies by ASSOCHAM
• Winner of "Best Housing Finance Company (Large)" at PMAY Empowering
India Awards 2022
• Kendriya Sainik Board felicitated the Company for CSR contribution towards
education of Veer Naaris & Single Parent Children.
• Hon. Ramesh Bais, Governor of Maharashtra, accorded Best Rural Development
Project to Shri Y Viswanatha Gowd, MD & CEO of the Company
• Indian Chamber of Commerce 5th Social Impact Awards 2022 bestowed to
the Company for Empowering the Rural Population across India.
MARKETING AND DISTRIBUTION
During the year under review, efforts were taken to further strengthen the distribution
network. The distribution network of the Company consists of 281 Marketing Offices and
Customer Service Points. The distribution network also includes 48 offices of LICHFL
Financial Services Ltd., wholly owned subsidiary company engaged in distribution of
various financial products including housing loan. The Company has representative offices
in Dubai.
REPAYMENTS
During the F.Y. 2022-2023, Rs. 38,778.33 crore was received by way of scheduled
repayment of principal through monthly instalments as well as prepayment of principal
ahead of schedule, as compared to Rs. 38,927.64 crore received in the previous year.
NON-PERFORMING ASSETS AND PROVISIONS
The amount of gross Non-Performing Assets (NPAs) as of 31st March, 2023 was
Rs. 12,124.74 crore, which is 4.41 percent of the loan portfolio of the Company, as
against 11,616.40 crore i.e., 4.64 percent Rs. of the loan portfolio as of 31st
March, 2022. The net NPA as of 31st March, 2023 was Rs. 6,743.52 crore i.e.
2.50 percent of the loan portfolio vis-a-vis Rs. 6596.73 crore i.e. 2.69 percent of the
loan portfolio as at 31st March, 2022. The total cumulative provision towards
housing loan portfolio including provision for standard assets as at 31st
March, 2023 is ' 7,230.29 crore as against Rs. 5,839.12 crore in the previous year.
Company has written off Rs. 544.71 crore during the FY 2022-23, in comparison to the
amount of Rs. 23.03 crore which has been written off in the previous year.
RESOURCE MOBILISATION
During the year, the Company mobilised funds aggregating to 1,06,992.66 crore by way of
the Non-Convertible Debentures (NCD), Term Loans / Line of Credit (LoC) / Working Capital
Demand Loan (WCDL) from Banks, NHB refinance, Commercial Paper and Public Deposits. The
Company has availed refinance of Rs. 2975 crore from NHB under affordable housing scheme
at very low rate. The following is a brief about the various sources of fund mobilised
during FY 2022-23:
NON-CONVERTIBLE DEBENTURES (NCD)
During the year, the Company issued NCD amounting to Rs. 29,555.50 crore on a private
placement basis which have been listed on Wholesale Debt Segment of National Stock
Exchange of India Ltd. The NCDs have been assigned highest rating of ‘CRISIL
AAA/Stable' by CRISIL & 'CARE AAA/Stable' by CARE. As at 31st March, 2023,
NCDs amounting to Rs. 1,23,446.40 crore were outstanding. The Company has been regular in
making repayment of principal and payment of interest on the NCDs.
As at 31st March, 2023, there were no NCDs which have not been claimed by
the Investors or not paid by the Company after the date on which the said NCDs became due
for redemption. Accordingly, the amount of NCD remaining unclaimed or unpaid beyond due
date is Nil.
TIER II BONDS
As at 31st March, 2023, the outstanding Tier II Bonds stood at Rs. 1795.77
crore. Considering the balance term of maturity as at 31st March, 2023, Rs.
1795.77 crore of the book value of Tier II Bonds is considered as Tier II Capital as per
the Guidelines issued by NHB for the purpose of Capital Adequacy.
TERM LOANS FROM BANK/ LOC / WCDL, REFINANCE FROM NHB / COMMERCIAL PAPER
The total Term / LOC outstanding from the Banks as at 31st March, 2023 were
Rs. 83,089.07 crore as compared to Rs. 68,143.04 crore as at 31st March, 2022.
The Refinance from NHB as at 31st March, 2023 stood at Rs. 11,303.18 crore as
against Rs. 8,304.18 crore as at 31st March, 2022. During the year, the Company
has availed Rs. 5,200 crore Refinance from NHB under various refinance schemes. As at 31st
March, 2023, Commercial Paper amounting to Rs. 13,513.59 crore were outstanding as
compared to Rs. 8,364.22 crore for corresponding previous year. During the year 2022-23,
the Company issued Commercial Paper amounting to Rs. 17,668.89 crore from market as
compared to Rs. 11,646.42 crore for the previous year.
The Company's long term loan facilities have been assigned the highest rating of
‘CRISIL AAA/STABLE' and short-term debt has been assigned rating of ‘CRISIL A1+
& ICRA A1+' signifying highest safety for timely servicing of debt obligations.
FIXED DEPOSITS (INCLUDING PUBLIC DEPOSIT)
As at 31st March, 2023, the outstanding amount on account of Public Deposits
was '3505.27 crore as against Rs. 4595.48 crore in the previous year and outstanding
amount on account of Corporate Deposits was Rs. 8120.94 crore as against Rs. 13478.02
crore in the previous year. During F.Y. 2022-23, the number of depositors has reduced for
public deposit from 26156 to 21197 and for Corporate Deposit the same number reduced from
1831 to 1180.
Rs. 957.85 crore has been collected as Public Deposits while Rs. 5243.83 crore was
collected as Corporate Deposits. Total aggregate amount collected was Rs. 6201.68 crore.
CRISIL has, for the sixteenth consecutive year, re-affirmed a rating of "CRISIL
AAA/Stable" for the Company's deposits which indicates highest degree of safety
regarding timely servicing of financial obligations and carries the lowest credit risk.
The support of the agents and their commitment to the Company has been vital in
mobilisation of deposits and making the product a preferred investment avenue for
individual households and others.
TRANSFER OF UNCLAIMED DIVIDEND / DEPOSITS AND SHARES TO INVESTOR EDUCATION &
PROTECTION FUND (IEPF)
Pursuant to the provisions of Sections 124 and 125 of the Companies Act, 2013, rules
made thereunder and Investor Education and Protection Fund Authority (Accounting, Audit,
Transfer and Refund) Rules, 2016 read with the relevant circulars and amendments thereto,
the amount of dividend / deposits remaining unclaimed for a period of seven years from the
date of transfer to unpaid dividend account is required to be transferred to IEPF as
constituted by the Central Government. Further, as per the provisions of Section 124(6) of
the Companies Act, 2013 read with the Investor Education & Protection Fund Authority
(Accounting, Audit, Transfer & Refund) Rules 2016, the shares in respect of which the
dividend has not been claimed for seven consecutive years are required to be transferred
by the Company to the designated demat account of the IEPF Authority. The details of the
unclaimed dividend/deposits and the shares transferred to the IEPF, are uploaded on the
website of the Company, as per the requirements. Link for the same is
https://www.lichousing.com/investors-education
UNPAID/UNCLAIMED DIVIDEND
During the financial year under review, after giving due notice to the members, your
Company has transferred unclaimed dividend of Rs. 1.30 crore pertaining to the financial
year 2014-15 to the IEPF, established by the Central Government, on expiry of seven years
from the date of transfer to unpaid dividend account.
TRANSFER OF SHARES TO IEPF
Pursuant to the provisions of Section 124(6) of the Companies Act, 2013 and the Rules
made thereunder, the Company has transferred in aggregate 66,758 equity shares of Rs. 2/-
each to
IEPF in respect of which the dividend remained unclaimed for a period of seven
consecutive years i.e., from 2014-15 till the due date of 29th September, 2022
in respect of which, individual notice had also been sent to concerned Shareholders.
UNCLAIMED DEPOSITS
In total 610 Nos. of Fixed deposits amounting to Rs. 53.62 crore (out of which 589 are
public deposits amounting to Rs. 18.51 crore) which were due for repayment on or before 31st
March, 2023 were not claimed by the depositors. Since then, 110 depositors have claimed or
renewed deposits of Rs. 19.21 crore (out of which 103 are public deposits amounting to Rs.
4.86 crore) as on 30th June, 2023. Depositors were appropriately intimated for
renewal / claim of their deposits. Further, adequate follow-up is initiated in respect of
those cases where Fixed deposits are lying unclaimed.
As per the provisions of Section 125 of the Companies Act, 2013, deposits and interest
thereon remaining unclaimed for a period of seven years from the date they became due for
payment have to be transferred to the Investor Education and Protection Fund (IEPF)
established by the Central Government, accordingly, as on 30th June,2023 Rs.
7.73 lakhs against unclaimed Principal and Rs. 12.78 lakhs against unclaimed interest on
deposits has been transferred to IEPF. Concerned depositors can claim their refunds from
the IEPF authority.
Being a housing finance company registered with the National Housing Bank established
under the National Housing Bank Act, 1987, the disclosures as per Rule 8(5)(v) &(vi)
of the Companies (Accounts) Rules, 2014 read with section 73 and 74 of the Companies Act,
2013 are not applicable to the Company.
Any person who is entitled to claim unclaimed dividend or deposits etc. that have been
transferred to IEPF, can claim the same by making an application directly to IEPF in the
prescribed form under the IEPF Rules which is available on the website of IEPF i.e.,
www.iepf.gov.in
REGULATORY COMPLIANCE
Following the amendment in the Finance Act, 2019 and the subsequent notification by the
Reserve Bank of India (RBI) in August 2019, HFCs are being treated as one of the
categories of Non-Banking Financial Companies (NBFCs) for regulatory purposes and
accordingly come under RBI's direct oversight. The NHB, however, would continue to carry
out supervision of HFCs. In this regard Master Direction - Non-Banking Financial Company -
Housing Finance Company (Reserve Bank) Directions, 2021 was notified on 17th
February, 2021 in supersession of the regulations/ directions as given in Chapter XVII of
these directions.
The Company has been following guidelines, circulars and directions issued by the RBI/
NHB, from time to time. The Company has complied with the Master Direction-NonBanking
Financial Company - Housing Finance Company
(Reserve Bank) Directions, 2021 and other directions/guidelines prescribed by RBI
regarding deposit acceptance, accounting standards, prudential norms, capital adequacy,
credit rating, corporate governance, liquidity, information technology framework, fraud
monitoring, concentration of investments, risk management, capital market exposure norms,
Know Your Customer, Anti-Money Laundering and the Company also adopted the guidelines on
maintenance of Liquidity Coverage Ratio with effect from 1st December, 2021, as
per RBI master directions.
Your Company has been maintaining capital adequacy ratio as prescribed by the RBI. The
capital adequacy ratio was 18.23 percent as at 31st March, 2023, as against
18.08 percent as at 31st March, 2021 (as against the regulatory minimum of 15
percent).
The Company also has been following Directions / Guidelines / Circulars issued by SEBI,
MCA, NHB and RBI from time to time, as applicable to a Listed Company.
During the year, the SBR guidelines have come into effect on and from 1st
October, 2022 and as per the RBI Circular DoR.FIN. S4252/03.10.001/2022-23 dated 4th
October, 2022. The Board of the Company was required to ensure that the stipulations
prescribed in the SBR framework are adhered to within a maximum time-period of 24 months
from the date of the RBI Press Release. Since the press release wherein the RBI had
released the list of NBFCs in the Upper Layer under the SBR Regulations was issued on 30th
September, 2022, which includes the name of the Company, the maximum time period available
to the Board is 30th September, 2024. Accordingly, the Board have already the
year already adopted certain mandatory policies prescribed under the SBR framework. Going
forward the Company under the SBR framework the Company is required to implement Internal
Capital Adequacy Assessment Process (ICAAP) pursuant to which the Company is required to
assess the economic capital in addition to the CRAR through an internal assessment which
shall be on similar lines as ICAAP prescribed for commercial banks under Pillar 2 (Master
Circular - Basel III Capital Regulations dated 01st July, 2015).
DISCLOSURE UNDER HOUSING FINANCE COMPANIES FOR ISSUANCE OF NON-CONVERTIBLE DEBENTURES
ON PRIVATE PLACEMENT BASIS (NHB) DIRECTIONS, 2014 READ WITH MASTER DIRECTION - NON BANKING
FINANCIAL COMPANY - HOUSING FINANCE COMPANY (RESERVE BANK) DIRECTIONS, 2021.
During the financial year under review, the Non-Convertible Debentures issued on
private placement basis, were repaid / redeemed by the Company on their respective due
dates and there were no instances of any 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.
AUDITORS, AUDIT REPORTS AND OBSERVATIONS Statutory Audit
As per the guidelines for appointment of Statutory Central Auditors (SCAs)/Statutory
Auditors (SAs) of Commercial Banks (excluding RRBs), UCBs and NBFCs (including HFCs)
issued by the RBI vide ref. no. DoS.CO.ARG/SEC.01/08.91.001/2021-22 dated 27th
April, 2021, the Company is required to appoint the statutory auditors for a continuous
period of three years, subject to the firms satisfying the eligibility norms (to be
confirmed by the firms in Form B) each year and also to inform RBI (i.e. Central Office of
RBI (Department of Supervision)) about the appointment of SCAs/SAs for each year by way of
a certificate in Form A within one month of such appointment. Accordingly, the Company has
appointed the statutory auditors namely M/s. SGCO & CO LLP, Chartered Accountants
(Firm Registration No.: 112081W/W100184) and M/s. Khandelwal Jain & Co, Chartered
Accountants (Firm Registration No.: 105049W) as Joint Statutory Auditors of the Company
(Hereinafter collectively referred to as 'Joint Statutory Auditors' / JSAs) for a term of
3 consecutive years at Thirty Third AGM held on 29th September, 2022, to hold
office until the conclusion of the Thirty Sixth Annual General Meeting to be held in the
year 2025. The intimation regarding the same was also given to the NHB, RBI & MCA.
The Auditors' Report for FY 2022-23 does not contain any qualification, reservation or
adverse remark on the financial statements for the year ended 31st March, 2023.
The notes on financial statements referred to in the Auditors' Report are self-explanatory
and do not call for any further comments. The Joint Statutory Auditors' Report dated 16th
May, 2023 for the financial year 2022-23 is enclosed with the financial statements in this
Annual Report
INTERNAL AUDIT Internal Audit
The RBI has vide Circular No. RBI/2021-22/53-DoS. CO. PPG.SEC/03/11.01.005/2021-22
dated 11th June, 2021 made the Risk Based Internal Audit (RBIA) Framework
applicable to the Company and the Company is required to put in place a RBIA framework by
30th June, 2022, in accordance with the provisions of the aforesaid circular.
Accordingly, company has put in place a RBIA policy and implemented RBIA.
Internal Audit of Back Offices
The Company has an in-house mechanism for Internal Audit of all its back offices which
are the nodal offices looking after the accounting, sanction and disbursement functions.
Such Audit is conducted by the team(s) of in-house officials of audit department. The
Company maintains an exhaustive checklist/ questionnaire for the purpose of such Audit and
the same is updated regularly. The in-house internal audit team(s) submit quarterly
reports in respect of the Back offices assigned to them and such reports are periodically
reviewed by the Internal Audit Committee at Corporate Office, which is a management level
Committee at the Corporate Office. Detailed deliberations take place in respect of key
points related to Internal Audit Reports and the same are also placed before the Audit
Committee of the Board for their information and guidance.
Internal Audit of Corporate Office
M/s. Borkar & Muzumdar, Chartered Accountants, Mumbai are Internal Auditors for
Internal Audit of the Corporate Office for financial year 2022-23.
Going forward, the Management has decided to develop capabilities internally for the
RBIA Internal Audit of Corporate Office from financial year 2023-24.
Currently, The Company has developed an in-house mechanism for Internal Audit of
Corporate Office. From FY 23-24 and onwards the audit will be conducted by in-house
officials of audit department except certain specific areas which requires special domain
expertise. The appointment of such experts shall be made with prior approval of audit
committee.
Secretarial Audit
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, M/s. N. L. Bhatia
& Associates, Practicing Company Secretaries, undertook the Secretarial Audit of the
Company for the financial year 2022-23.
The Secretarial Auditor's Report for the financial year 2022-23 does not contain any
qualification, reservation or adverse remark. Report of the Secretarial Auditor for the
financial year 2022-23 in Form MR-3 is annexed to this report as Annexure 6.
A certificate from M/s. N. L. Bhatia & Associates, Practicing Company Secretaries,
Mumbai (UIN: P1996MH055800), regarding compliance of the conditions of Corporate
Governance as stipulated under the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 is attached to the Corporate Governance Report, which does not contain
any qualification, reservation or adverse remark.
Cost Records and Cost Audit:
Maintenance of cost records and requirement of cost audit as prescribed under the
provisions of Section 148(1) of the Companies Act, 2013 is not applicable for the business
activities carried out by the Company.
Corporate Governance
Your Company has been complying with the principles of good Corporate Governance over
the years. The Board of Directors supports the broad principles of Corporate Governance.
In addition to the basic governance issues, the Board lays strong emphasis on
transparency, accountability and integrity. The report on Corporate Governance is appended
as a separate section in this Annual Report. The said Report covers in detail the
Company's philosophy on code of governance, board composition, its appointments,
membership criteria, declaration by Independent Directors, Board evaluation,
familiarisation programme, vigil mechanism, etc.
Management Discussion and Analysis Report
Management Discussion and Analysis Report for the year under review, as stipulated
under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is
presented in a separate section forming part of the Annual Report.
Business Responsibility and Sustainability Reporting by listed entities
The Securities and Exchange Board of India (SEBI) introduced new requirements for
sustainability reporting by listed entities. The new reporting called the Business
Responsibility and Sustainability Report (BRSR) has replaced the earlier Business
Responsibility Report (BRR). In terms of the aforesaid amendment, with effect from the
financial year 2022 -2023, filing of BRSR is mandatory for the top 1000 listed companies
(by market capitalisation) and has replaced the existing BRR.
The Company has designated the CSR-ESG Committee* of the Board to oversee the
implementation of the Principles and Policies of Business Responsibility and
Sustainability Report in the Company and delegated the powers to the CSR-ESG Committee to
perform all the acts, deeds and things for implementation of the same. BRSR for the year
under review, as stipulated under SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 is presented in a separate section forming part of the Annual Report.
*Note: Considering the enhanced regulatory provision for Environmental Social and
Governance matters, a separate ESG Committee was constituted and CSR-ESG Committee was
renamed as CSR Committee with effect from 07th June, 2023 on approval at 236th
Meeting of Board of Directors.
Depository system
For transaction of the Company's shares in dematerialised form, the Company has entered
into an agreement with Central Depository Services (India) Ltd. (CDSL) and National
Securities Depository Ltd. (NSDL). The shareholders have a choice to select the Depository
Participant. As at 31st March, 2023, 4300 members of the Company continue to
hold shares in physical form. As per the SEBI circular, the Company's shares have to be
transacted in dematerialised form and therefore, members are requested to convert their
physical holdings to dematerialised form. Members may contact the R&T Agent for any
assistance in the said process of converting physical shares into DEMAT. For the purpose
of various compliances under the SEBI Regulations, NSDL is the designated depository of
the Company.
OUTLOOK FOR FY 2023-2024
During the FY 2023-2024 the focus, resources and logistics of the Company would be
directed towards the following activities:
• Growing portfolio and increasing the share of high-margin products - non-Core
products and Griha Suvidha
• Tapping into newer markets not presently covered by recruiting marketing
intermediaries/connectors and holding camp offices
• Solidifying the base of Direct Marketing Executive (DME) / Direct Marketing
Intermediaries (DMIs) Channel by recruiting new market intermediaries and individuals and
increasing the share of business from this channel
• Reach out to new customers not covered under regular norms with differentiated
products backed by mortgage insurance cover to improve yields
• Customising products to tap into niche segments like HNI and Millennials/Gen Z
segments of customers
• Implementing additional initiatives under Project RED to drive automation in
processing leading to improvement in turn-around time
• Leveraging technology to ease customer onboarding, streamline processes and
expand scope of business potential mapping
• Adopting digital transformation processes to bring personalisation in customer
servicing and enhancing customer experience throughout loan journey
• Strengthening digital processes through e-appraisal and PLO
• Making HomY application more effective and further easing the customer
onboarding process and endeavouring to maximise the customer outreach
• Digital onboarding by more than 50% (including through HomY)
• Making use of data and analytics for segment driven customer acquisition
• Increasing the use of cloud-based office automation and collaboration tool
• Modernising technology in line with growing business needs and automation
• Increasing the emphasis on marketing activities in smart cities to increase
business share
• Implementing and stabilising Lending and Accounting solutions
• Imparting continuous training to intermediaries and marketing officials to
increase productivity
• Cross-selling insurance products by exploring the role of corporate agency and
earning fee-based income
• Assessing Risk-Reward relationship in credit decision making in view of the
overall profitability
• Explore strategic tie-ups which may increase customer touchpoints and also
enable LIC HFL to offer value-added services.
• Increasing presence in social media and augmenting about customer engagement
programs to increase brand visibility.
THE MANAGEMENT PERSPECTIVE ABOUT FUTURE OF THE COMPANY
The improving macro-economic environment and the rapid pace of urbanisation and
affordable mortgages spurred growth of the Indian housing finance market. Inspite of the
peaking interest rates home loan industry showed its resilience, and due to various price
discounts and aggressive marketing strategies adopted by the builder community as well as
by the Banks and Financial Institutions, the demand for real estate increased and
customers returned to the home loan market, the Company fortified its market presence,
enhanced profitability and improved asset quality. The efforts of the Marketing
Intermediaries was also crucial in increasing the demand of the home loans. The Company's
10,000 + strong active agency force is the best among the financial institutions in India
with the widest reach to every nook and corner of the country.
During the year, the Company has always maintained its rate of interest in line with
the market dynamics. Its motto of Home Delivery of Home Loans improved the customer
experience and delighted them with doorstep services. It maintains focus on designing
products that address the emerging needs of customers. During the year, 4 new products
were launched to address the needs of customers in the non-core segment.
As it consolidated its position as the largest housing finance player, the Company
ramped up its presence across Tier 2&3 and smart cities by expanding its reach and tap
the increasing potential with the addition of areas offices. It also expanded presence in
new geographies, increased focus on high-yielding loan against property and intensified
the recovery efforts. It also plans to strengthen its distribution network with more
Direct Marketing Executives (DMEs), and is working on enhancing the business through
digital connectors and strategic tie-ups. It will continue with its journey of Home
Distribution of Home Loan (HDHL).
Known for its strong asset quality, the Company is further strengthening its
underwriting procedures and improving operational flexibility, strengthening digital
outreach and focusing on customer contact. It continuously tracks and analyses the
performance of its loan portfolio to identify potential areas of concern and takes
corrective actions. The Company has adopted an aggressive approach towards recovery
activities, with several follow-up mechanisms such as tele calling, contacting borrowers,
SMS, e-mails and other communication on a regular basis. For chronic cases, action under
SARFAESI / NCLT is initiated to recover the loan.
The Company bolstered its digital initiatives to counter competition and rolled out key
business expansion strategies, and is making effective use of data and analytics for
segment-driven customer acquisition. In recent past various new technology-based
initiatives were launched internally as part of Project RED to enhance customer experience
and to drive automation in processing leading to improvement in turn-around time. It also
leverages technology to further ease customer onboarding, streamline processes and expand
the scope of business potential mapping. Efforts are being taken to make the HomY app even
more effective and maixmise digital onboarding go more than 50%. These efforts are helping
the Company improve upon TAT considerably.
Moving ahead, the Company plans to continue growing in the individual home loan
category. Further, it will also promote its flagship products like Griha Varishta and
Griha Suvidha, serving the requirements of senior individuals covered under the Defined
Pension Benefit Scheme (DPBS). It will also serve the segment with self-employed customers
with less than 600 CIBIL score, with backing of the guarantee of Indian Mortgage Guarantee
Corporation (IMGC).
The Company ensures judicious management of treasury and other aspects of operations to
ensure co-ordinated and result-oriented efforts in its business and to increase market
share. As far as borrowing is concerned, the Company would endeavor to churn its
borrowings to maintain minimum cost of borrowing and have a better impact on the Net
Interest Margin. The Company has also been working on reducing its delinquencies and
bringing down non-performing assets as well as fast-tracking recovery and monitoring.
Through constant review and upgradation of compliance initiatives, it endeavours to put in
place the best corporate governance practices. To further expand its reach and deliver
value to its shareholders, it ensures judicious management of treasury and other aspects
of operations to ensure co-ordinated and result-oriented efforts in its business and to
increase market share.
COMPLIANCE UNDER COMPANIES ACT, 2013
Pursuant to section 134 of the Companies Act, 2013 read with the Companies (Accounts)
Rules, 2014, the Company has complied with the compliance requirements and the details of
compliances under Companies Act, 2013 are enumerated below:
ANNUAL RETURN:
Pursuant to Section 92(3) read with Section 134(3)(a) of the Companies Act, 2013, the
Annual Return as on 31st March, 2023 is available on the website of the Company
in the following link (Please download the document and then try to view):
https://www.lichousing.com/annual-report-companies-act
REPORTING OF FRAUDS BY AUDITORS:
Under Section 143(12) of the Companies Act, 2013, during the year under review, neither
the Joint Statutory Auditors nor the Secretarial Auditor has reported to the Audit
Committee, any instances of fraud committed against the Company by its officers or
employees, outsiders, the details of which was required to be mentioned in the Board's
report.
SECRETARIAL STANDARDS:
The Company complies with all applicable mandatory Secretarial Standards issued by the
Institute of Company Secretaries of India.
47
RATING RATIONALE:
CRISIL had reaffirmed its outstanding rating as 'CRISIL AAA/ Stable' rating to the
non-convertible debentures issue of LIC Housing Finance Limited and has also reaffirmed
its 'CRISIL AAA/Stable/CRISIL A1+' ratings on other debt instruments, bank facilities and
fixed deposit programme of the company.
Total Bank Loan Facilities Rated |
Rs. 130085.88 crore (Enhanced from Rs. 99085.88 crore) |
Long Term Rating |
CRISIL AAA/Stable (Reaffirmed) |
Short Term Rating |
CRISIL A1+ (Reaffirmed) |
Rs. 30000 crore Non-Convertible |
CRISIL AAA/Stable |
Debentures |
(Assigned) |
Rs. 6929 crore Non-Convertible |
CRISIL AAA/Stable |
Debentures |
(Reaffirmed) |
Rs. 11705 crore Non-Convertible |
CRISIL AAA/Stable |
Debentures |
(Reaffirmed) |
Rs. 199 crore Non-Convertible |
CRISIL AAA/Stable |
Debentures |
(Reaffirmed) |
Rs. 15000 crore Non-Convertible |
CRISIL AAA/Stable |
Debentures |
(Reaffirmed) |
Rs. 15000 crore Non-Convertible |
CRISIL AAA/Stable |
Debentures |
(Reaffirmed) |
Rs. 15000 crore Non-Convertible |
CRISIL AAA/Stable |
Debentures |
(Reaffirmed) |
Rs. 5000 crore Non-Convertible |
CRISIL AAA/Stable |
Debentures |
(Reaffirmed) |
Rs. 10000 crore Non-Convertible |
CRISIL AAA/Stable |
Debentures |
(Reaffirmed) |
Rs. 15000 crore Non-Convertible |
CRISIL AAA/Stable |
Debentures |
(Reaffirmed) |
Rs. 25000 crore Non-Convertible |
CRISIL AAA/Stable |
Debentures |
(Reaffirmed) |
Rs. 25000 crore Non-Convertible |
CRISIL AAA/Stable |
Debentures |
(Reaffirmed) |
Rs. 25000 crore Non-Convertible |
CRISIL AAA/Stable |
Debentures |
(Reaffirmed) |
Rs. 25000 crore Non-Convertible |
CRISIL AAA/Stable |
Debentures |
(Reaffirmed) |
Rs. 25000 crore Non-Convertible |
CRISIL AAA/Stable |
Debentures |
(Reaffirmed) |
Rs. 5000 crore Non-Convertible |
CRISIL AAA/Stable |
Debentures |
(Reaffirmed) |
Rs. 5976 crore Non-Convertible |
CRISIL AAA/Stable |
Debentures |
(Reaffirmed) |
Rs. 20000 crore Non-Convertible |
CRISIL AAA/Stable |
Debentures |
(Reaffirmed) |
Rs. 4750 crore Tier II Bond |
CRISIL AAA/Stable (Reaffirmed) |
Fixed Deposits Programme |
CRISIL AAA/Stable (Reaffirmed) |
Rs. 17500 crore Commercial Paper |
CRISIL A1+ (Reaffirmed) |
CARE had reaffirmed its outstanding rating as 'CARE AAA/ Stable' rating to the
non-convertible debentures and Tier II Bond issue of LIC Housing Finance Limited.
Rs. 41000 crore NonConvertible Debentures |
CARE AAA / Stable (Assigned) |
Rs. 212441 crore NonConvertible Debentures |
CARE AAA / Stable (Reaffirmed) |
'3000 crore Tier II Bond |
CARE AAA / Stable (Reaffirmed) |
ICRA Limited had reaffirmed ICRA A1+ rating to the Rs. 17,500 crore commercial paper
issue of LIC Housing Finance Limited and has reaffirmed its ICRA A1+ which is one notch
higher than [ICRA]A1.
BOARD MEETINGS HELD DURING THE YEAR:
During the year under review, nine (9) Board meetings were held. Detailed information
on the meetings of the Board as well as Committee meetings, their composition and
attendance record of the members of respective Committees of the Board are included in the
Report on Corporate Governance which forms part of this Annual Report.
DIRECTORS' RESPONSIBILITY STATEMENT:
The financial statements are prepared in accordance with Indian Accounting Standards
(Ind As) under the historical cost convention on accrual basis except for certain
financial instruments, which are measured at fair values, the provisions of the Companies
Act, 2013 (to the extent modified), guidelines issued by the SEBI, guidelines issued by
the NHB and the RBI (Collectively referred to as 'the Previous GAAP').
The Ind AS are prescribed under Section 133 of the Companies Act, 2013 read with
Companies (Indian Accounting Standards) Rules, 2015, as amended from time to time, and
other accounting principles generally accepted in India. Accounting policies have been
consistently applied except where a newly issued accounting standard is initially adopted
or a revision to an existing accounting standard requires change in the accounting policy
hitherto in use.
In accordance with the provisions of Section 134(3)(c) of the Companies Act, 2013, and
based on the information provided by the management, your Directors state that:
(a) in the preparation of the annual accounts, the applicable accounting standards had
been followed and there are no material departures;
(b) the Directors had 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 as at 31st March, 2023 and of
the profit of the Company for the year ended on that period;
(c) the Directors had taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of this Act for safeguarding the
assets of the Company and for preventing and detecting fraud and other irregularities;
(d) the Directors had prepared the annual accounts on a going concern basis;
(e) the Directors had laid down internal financial controls to be followed by the
Company and that such internal financia controls are adequate and are operating
effectively Note on internal financial control is attached as Annexure ' to this Report
and
(f) the Directors had devised proper systems to ensure compliance with the provisions
of all applicable laws anc that such systems were adequate and operating effectively
STATEMENT ON DECLARATION FROM INDEPENDENT DIRECTORS:
The Company has received necessary declaration from each Independent Director under
Section 149(7) of the Companies Act, 2013 that he / she meets the criteria of independence
laid down in Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015.
COMPANY'S POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION INCLUDING CRITERIA:
The Company endeavours to have an appropriate mix o executive, non-executive and
independent directors to maintair the independence of the Board and separate its functions
of governance and management. As of 31st March, 2023, the Board had Eleven (11)
members, consisting of two (2) Executive Directors nominated by LIC of India ('The
Promoter') which includes the Managing Director & CEO and Chief Operating Officer
('COO')*; two (2) Non-Executive and Non-Independent Directors, while the remaining seven
(7) were Independent Directors including one Independent woman director.
The Nomination and Remuneration Committee had laid down Criteria for determining
Director's Qualification, positive attributes and independence of a Director, remuneration
of Directors, Key Managerial Personnel and also criteria for evaluation of Directors,
Chairperson, Non-Executive Directors and Board as a whole and also the evaluation process
of the same
The performance of the members of the Board, and the Board as a whole were evaluated at
the meeting of Independent Directors held on 9th February, 2023.
We affirm that except Nominee Director (Chairman, LIC Director Managing Director &
CEO and COO), sitting fees were paid to al the other Directors for Board and Committee
Meetings attended by them. However, Managing Director & CEO and COO were paid
remuneration as applicable to an Officer in the cadre ol Zonal Manager (Selection Scale)
of LIC of India and PLI as per the terms laid out in the Nomination and Remuneration
Policy of the Company.
(*) Shri Ashwani Ghai ceased to be the Whole Time Director and COO of the Company on
account of his resignation w.e. 13th June, 2023 due to transfer as Additional
Director to MDC Mumbai by LIC India.
QUALIFICATION, RESERVATION OR ADVERSE REMARK OR DISCLAIMER MADE BY JOINT STATUTORY
AUDITORS AND SECRETARIAL AUDITOR:
There has not been any observations, qualification, reservation or adverse remark in
the Joint Statutory Auditors' Report dated 16th May, 2023 for the financial
year 2022-23.
The management accepts responsibility for establishing and maintaining internal
controls and have evaluated the effectiveness of some internal control system of the
Company which have been disclosed to the Auditors and the Audit Committee, the
deficiencies, of which the management is aware of, in the design or operation of the
internal control systems and have taken the steps to rectify these deficiencies.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:
Pursuant to Section 186(11) of the Companies Act, 2013, loans made, guarantee given or
security provided by the HFC in the ordinary course of its business are exempted from
disclosure in the Annual Report.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO SECTION IN
188(1) OF THE COMPANIES ACT, 2013 READ WITH RULE 8(2) OF COMPANIES (ACCOUNTS) RULES, 2014:
Considering the nature of the industry in which the Company operates, all Related Party
Transactions that were entered during the financial year were in the ordinary course of
the business of the Company and were on an arm's length basis. There were no materially
significant related party transactions entered by the Company with Promoters, Directors,
Key Managerial Personnel or other persons which may have a potential conflict with the
interest of the Company. All such Related Party Transactions are placed before the Audit
committee and Board of Directors for approval, wherever applicable. Prior omnibus approval
as per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 were
obtained from Audit Committee for the Related Party Transactions of repetitive nature as
well as in the ordinary course of business.
The Related Party Transactions Policy and Procedures, as amended from time to time, as
reviewed by the Audit Committee and approved by Board of Directors is uploaded on the
website of the Company and the link of the same is provided in Annexure 5.
The particulars of contracts or arrangements with the 'Related Parties' referred to in
sub-section (1) of Section 188 of the Act, are furnished in Note No. 49 of the Notes
forming part of the Standalone Financial Statements and Note No. 50 of the Notes forming
part of the Consolidated Financial Statements for FY 2022-23, forming a part of the Annual
Report. This apart the same is also referred in Annexure 3 which forms part of the Board's
Report.
Form AOC-2 pursuant to clause (h) of sub-section (3) of Section 134 of the Companies
Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014 is annexed as Annexure 2
to this report.
MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE
COMPANY:
There are no material changes and commitments affecting the financial position of the
Company which has occurred between the end of the financial year of the Company i.e. 31st
March, 2023 and the date of the Board's Report i.e. 24th July, 2023.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:
Since the Company is engaged in financial services activities, its operations are not
energy intensive nor does it require adoption of specific technology and hence information
in terms of Section 134(3)(m) of the Act read with the Companies (Accounts) Rules, 2014 is
not provided in this Board's Report.
A. Technology absorption -
(i) The efforts made towards technology absorption - Various initiatives under Project
RED got implemented. Among them is the most crucial, core lending system. The new lending
system will enable an integrated approach towards digital lending with many peripheral
applications being part of it. Other implementations include:
• Treasury automation
• Customer servicing using digital channels like Bots, whatsapp etc.
• Deposits automation
• Compliance to regulatory framework like AML & KYC
(ii) The benefits derived like product improvement, efforts to reduce cost of fund,
product development or import substitution - The benefits are mainly towards:
• Reduced TAT for customer onboarding
• Digital lending and STP process
• Phygital journey enables lesser paper consumption
• Online payment services
(iii) In case of imported technology (imported during the last three years reckoned
from the beginning of financial year)- Not applicable.
(a) The details of technology imported - Not applicable.
(b) The year of import - Not applicable.
(c) Whether the technology has been fully absorbed
- Not applicable
(d) If not fully absorbed areas where absorption has not taken place and the reason
thereof
- Not applicable
(iv) The expenditure incurred on Research and Development - Not applicable
B. Foreign Exchange Earnings and Outgo-
The foreign exchange earned in terms of actual inflows during the year and the foreign
exchange outgo during the year in terms of actual outflows.
During the year ended 31st March, 2023, the Company does not have any
foreign exchange earnings and the foreign exchange outgo was '1.42 crore. This does not
include foreign currency cash flows in derivatives and foreign currency exchange
transactions.
RISK MANAGEMENT POLICY OF THE COMPANY:
The Board of Directors of the Company has constituted a Risk Management Committee to
frame, implement, monitor, review risk management policy; review of the current status on
the outer limits prescribed in the Risk Management policy and report to the Board; review
the matters on risk management. Under risk management mechanism, risks faced by the
Company are identified and assessed. For each of the risks identified, corresponding
controls are assessed and policies and procedure are in place for monitoring, mitigating
and reporting risk on a periodic basis. In the opinion of the Board, none of the risks
faced by the Company threaten its existence. The Company has appointed Chief Risk Officer
as per the relevant NHB Circular. With effect from 01st May, 2023 Company
appointed Mr. J Sangameswar as the Chief Risk Officer in place of Mr. K Ramesh.
The Company has a Risk Management Policy in place. During the financial year under
review, the Risk Management Policy of the Company was reviewed and put up to the Board of
Directors. The same was approved in the Board Meeting dated 02nd March, 2023.
REMUNERATION POLICY
The Company framed the Remuneration Policy in order to align with various provisions
under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and RBI
Circular DOR.GOV.REC.No.29/18.10.002/2022-23 dated 29th April, 2022.
The Remuneration policy relating to the remuneration of Directors, Key Managerial
Personnel and other employees is as below:
REMUNERATION TO NON-EXECUTIVE DIRECTORS:
The Non-Executive Directors would be paid such amount of sitting fees as decided from
time to time for every Board and Committee Meeting they attend. Apart from sitting fees no
other remuneration / commission would be payable to them.
In future, if Company decides to pay any remuneration / commission to Non-Executive
Independent Directors, then the same will be in compliance with Regulation 17(6) of the
SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended from
time to time.
REMUNERATION TO NON-EXECUTIVE NOMINEE DIRECTORS:
The Non-Executive Nominee Directors would not be paid any sitting fees for the Board
and Committee Meetings they attend. The Non-Executive Nominee Directors are not paid any
salary and / or other benefits by the Company.
REMUNERATION TO EXECUTIVE NOMINEE DIRECTOR:
The Executive Nominee Directors who are designated as Managing Director & CEO and
COO are paid remuneration as applicable to an Officer in the cadre of Executive Director
of LIC of India. This apart, the Executive Nominee Directors are entitled for PLI as per
criteria approved by the Nomination and Remuneration Committee of the Board.
As and when there is any revision in the pay scales of the Executive Nominee Director
as per the charter decided by the LIC of India, then the same is made applicable to the
Executive Nominee Director at par with those of the officials in the similar cadre.
Further, tenure and terms and conditions of appointment of Executive Nominee Director are
as decided by LIC of India from time to time and as approved by the Board of Directors of
the Company.
However, the remuneration payable to Executive Nominee Director at any point of time
shall be within the limits specified as per Regulation 17(6) of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015 as amended from time to time ,
read with the applicable provisions of the Companies Act, 2013.
REMUNERATION TO KEY MANAGERIAL PERSONNEL (OTHER THAN MD & CEO) AND OTHER EMPLOYEES:
In the present set up of the Company, Key Managerial Personnel, other than Managing
Director & CEO, are Company Secretary and Chief Financial Officer. Remuneration
payable to Company Secretary, Chief Financial Officer and other employees is as decided by
the Board of Directors as per Service Terms, Conduct Rules 1990 as amended from time to
time.
Except Managing Director & CEO who is a whole time Executive Director, none of the
Directors of the Company is paid any other remuneration or any elements of remuneration
package under major groups, such as salary, benefits, bonuses, stock options, pension,
performance linked incentive etc.
Corporate Social Responsibility (CSR) Policy:
In compliance with Section 135 of the Companies Act, 2013 read with the Companies
(Corporate Social Responsibility Policy) Rules, 2014, as amended from time to time, the
Company has established Corporate Social Responsibility Committee and the statutory
disclosures with respect to the CSR Committee and an Annual Report on CSR activities is
annexed as Annexure 4 to this report.
COMPOSITION OF THE CORPORATE SOCIAL RESPONSIBILITY COMMITTEE IS AS FOLLOWS:
| Shri Akshay Rout |
Chairman |
Non-executive Director |
| Shri Y.Viswanatha Gowd |
Member |
Managing Director & CEO |
| Ms J. Jayanthi |
Member |
Independent Director |
(#) Shri Ashwani Ghai ceased to be the member of the committee on account of his
resignation w.e.f 13th June, 2023 due to transfer as Additional Director to MDC
Mumbai by LIC India.
ANNUAL EVALUATION MADE BY THE BOARD OF ITS OWN PERFORMANCE:
The Nomination and Remuneration Committee had recommended Criteria for evaluation of
Directors, Chairperson, Non-Executive Directors, Board level committee and Board of
Directors as a whole and the evaluation process of the same.
The Board of Directors, other than the independent directors, carried out an annual
evaluation of its performance, board level committees and Individual Directors pursuant to
the provisions of the Companies Act, 2013 and the Corporate Governance requirements as
prescribed by the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
through circulation. At the Independent Directors meeting held on 9th February
2023, the Independent directors carried out the evaluation of the performance of the rest
of the Board Members.
The performance of the Board was evaluated after seeking inputs from all the Directors
based on criteria such as the Board composition and structure, effectiveness of Board
process, information and functioning, process of disclosure and communication, access to
timely, accurate and relevant information etc.
The performance of the various Board Committee was evaluated by the Board after seeking
inputs from the respective committee members, on the basis of criteria such as the
composition of committee, effectiveness of committee meeting, functioning, etc.
The Board reviewed the performance of the individual Directors on the basis of the
criteria such as the contribution of the individual Director to the Board and Committee
Meetings like preparedness on the issues to be discussed, meaningful and constructive
contribution and inputs in Meetings, presented views convincingly, resolute in holding
views etc. In addition, the Chairman was also evaluated on the key aspects of his role.
In a separate meeting of Independent Directors, performance of Non-Independent
Directors, performance of the Board as a whole and performance of the Chairman were
evaluated.
REPORT ON THE PERFORMANCE AND FINANCIAL POSITION OF EACH OF THE SUBSIDIARIES,
ASSOCIATES AND JOINT VENTURE COMPANIES INCLUDED IN THE CONSOLIDATED FINANCIAL STATEMENT:
Pursuant to Section 129 of the Companies Act, 2013, the Company has prepared a
consolidated financial statement of the Company along with its subsidiaries and
associates, in the same form and manner as that of the Company which shall be laid before
the ensuing Thirty Fourth Annual General Meeting of the Company along with the Company's
Financial Statement under sub-section (2) of Section 129 i.e. Standalone Financial
Statement. Further, pursuant to the provisions of Indian Accounting Standard (Ind AS) 110,
Consolidated Financial Statements notified under Section 133 of the Companies Act, 2013
read with Rule 7 of the Companies (Accounts) Rules, 2014, issued by the Ministry of
Corporate Affairs, the Consolidated Financial Statements of the Company along with its
subsidiaries and associates for the year ended 31st March, 2023 form part of
this Annual Report.
In accordance with the provisions of Section 136 of the Companies Act, 2013, the Annual
Report of the Company, the Annual Financial Statements and the related documents of the
Company's subsidiary and associate companies are hosted on the website of the Company.
THERE HAS BEEN NO CHANGE IN THE NATURE OF BUSINESS OF THE COMPANY DURING THE YEAR UNDER
REVIEW.
Directors:
As on 31st March, 2023, the Board had Eleven members, consisting of two
executive Directors nominated by the promoter, LIC of India which includes the Managing
Director & CEO, Shri Y. Viswanatha Gowd, and the COO Shri Ashwani Ghai(#) . Apart from
these two (2) Nominee Directors, there are two (2) Non-Executive and Non-Independent
Directors namely Shri P Koteswara Rao, and Shri Akshay Kumar Rout. Other seven (7) Board
Members are Independent Directors including one Independent Woman Director namely Ms.
Jagennath Jayanthi. The other Independent Directors are viz., Dr. Dharmendra Bhandari,
Shri Ameet N Patel, Shri V. K. Kukreja , Shri Kashi Prasad Khandelwal, Shri Ravi Krishan
Takkar and Shri Sanjay Kumar Khemani(*).
Shri M. R. Kumar, Chairman and Shri Raj Kumar, Non-Executive Nominee Director resigned
from the Board of the Company on 13th March, 2023 and 09th February,
2023 respectively, consequent upon their superannuation from the services to LIC of India.
The LIC of India nominated Shri Siddhartha Mohanty as Chairman and Shri M Jagannath as
Non-Executive Director with effect from 05th April, 2023.
(#) Shri Ashwani Ghai resigned w.e.f 13th June, 2023 on account of his
transfer as Additional director to MDC Mumbai by LIC India.
(*) The designation of Sri Sanjay Kumar Khemani was re-designated from Non- Executive
Director to Independent Director on 06th February, 2023.
Succession Planning:
In order to ensure stability and effective implementation of long-term business
strategies and for smooth transition at MD & CEO level, the Board decided that new MD
& CEO should be posted in advance, say 4-6 months prior to his/her taking charge as
MD&CEO, as (Chief Operating Officer (COO) who would subsequently take over as MD &
CEO on retirement / elevation / transfer of the existing MD & CEO.
In terms of Article 138(b) of the Articles of Association of Company, LIC of India is
entitled to nominate up to one third of the total number of Directors of the Company and
therefore, the Board after consideration, approved posting of senior official from LIC of
India as Nominee of LIC of India for the post of COO as part of succession plan for MD
& CEO with a view to ensuring stability and effective implementation , within
reasonable time (generally 4 to 6 months) prior to the exit of the serving MD&CEO, of
long term business strategies. . LIC of India had posted Shri Ashwani Ghai as COO of the
Company with effect from 5th September, 2022 (date of Joining LICHFL being 7th
September, 2022) and subsequently was appointed as Whole Time Director on 1st
November, 2022 whose appointment have been approved by the Members through Postal Ballot.
Further on account of transfer of Shri Ashwani Ghai on 13th June, 2023, LIC of
India had posted Shri T Adhikari as COO of the Company with effect from 22nd
June, 2023 who will be appointed as the Managing Director & CEO of the company in
place of Shri Yerur Viswanatha Gowd who will superannuate from the Company on 31st
July, 2023
Further, in terms of the Regulation 17 (4) of the SEBI (LODR), 2015 the Company has
adopted a succession planning policy for its Key Managerial and senior management
personnel which has been hosted on the website of the Company on the below mentioned
link:https://www.lichousing. com/static-assets/pdf/Policy_on_Succession_Planning.
pdf?crafterSite=lichfl-corporate-website-cms&embedded=true
APPOINTMENTS / RESIGNATIONS OF DIRECTORS: Appointments:
Shri Siddhartha Mohanty (DIN 08058830)
On the resignation of Shri M. R. Kumar (DIN 03628755) from the Chairmanship of the
Board of the Company, the Nomination and Remuneration Committee in terms of 'Fit and
Proper' criteria adopted by the Board, after having undertaken process of due diligence,
and after considering Shri Siddhartha Mohanty (DIN 08058830) suitable and eligible based
on evaluation, qualification, expertise, track record, integrity and 'fit and proper'
criteria, recommended his appointment to the Board and the Board appointed him as
Chairman, Additional Director in the capacity of Non-Executive Nominee Director of the
Company with effect from 05th April, 2023. Being appointed as an Additional
Director under Articles 143 of the Articles of Association of the Company pursuant to the
provisions of Section 152, 161 and other applicable provisions, if any, of the Companies
Act, 2013 and the Rules made thereunder, SEBI Listing Regulations, Master Direction -
Non-Banking Financial Company - Housing Finance Company (Reserve Bank)
Directions, 2021 including any amendment, modification, variation or re-enactment
thereof, for the time being in force and in terms of Articles 141, 143 of the Articles of
Association of the Company, the appointment was put for approval of members for voting
through postal ballot. On approval of shareholders through postal ballot, Shri Siddhartha
Mohanty was appointed as Chairman, Director of the Company with effect from 28th
June, 2023.
Shri Jagannath Mukkavilli (DIN 10090437)
On resignation of Shri Raj Kumar (DIN 06627311) as Non-Executive Nominee Director of
the Board of the Company, The Nomination and Remuneration Committee in terms of 'Fit and
Proper' criteria adopted by the Board after having undertaken process of due diligence,
and after considering Shri Jagannath Mukkavilli (DIN 10090437) suitable and eligible based
on evaluation, qualification, expertise, track record, integrity and 'fit and proper'
criteria, recommended his appointment to the Board and the Board appointed him as
Additional Director in the capacity of Non-Executive Nominee Director of the Company with
effect from 05th April, 2023. Being appointed as an Additional Director under
Articles 143 of the Articles of Association of the Company pursuant to the provisions of
Section 152, 161 and other applicable provisions, if any of the Companies Act, 2013 and
the Rules made thereunder, SEBI Listing Regulations, Master Direction - Non-Banking
Financial Company - Housing Finance Company (Reserve Bank) Directions, 2021 including any
amendment, modification, variation or re-enactment thereof, for the time being in force
and in terms of Articles 141, 143 of the Articles of Association of the Company, the
appointment as Director liable to retire by rotation, under the provisions of Articles of
Association of the Company through a resolution to be passed through postal ballot was put
for consideration. On approval of the shareholders through postal ballot, Shri Jagannath
Mukkavilli (DIN 10090437) was appointed as Non-Executive Nominee Director of the Company
with effect from 28th June, 2023.
Shri Ashwani Ghai (DIN 09733798)
Based on the evaluation, qualification, expertise, track record, integrity, due
diligence and the satisfaction of the 'fit and proper criteria', Nomination and
Remuneration committee recommended and thereby Board appointed Shri Ashwani Ghai as Chief
Operating Officer of the Company with effect from 05th September, 2022. He was
inducted on Board of Directors with effect from 01st November, 2022 as
Additional Director in the capacity of Whole Time Director. Subsequently, the appointment
was approved by the shareholders through postal ballot on 18th December, 2022.
Shri Ravi Krishan Takkar (DIN 07734571)
As per the recommendation of the Nomination & Remuneration Committee, which
undertook process of due diligence, and considered the candidature to be suitable and
eligible based on evaluation, qualification, expertise, track record, integrity and 'fit
and proper' criteria, the Board at its meeting held
on 25th July, 2022, approved the appointment of Shri Ravi Krishan Takkar
(DIN 07734571), as an Additional Director (Non Executive-Independent) for a period of five
consecutive years, not liable to retire by rotation. The Shareholders of the Company
approved his appointment in the 33rd Annual General Meeting (AGM).
Resignation/ Superannuation/ Completion of term: Shri M R Kumar
Shri M R Kumar (DIN 05190124) had tendered his resignation from Directorship of the
Company with effect from 13th March, 2023 on attainment of superannuation from
the services of LIC of India.
Shri Raj Kumar
Shri Raj (DIN 06627311) had tendered his resignation from Directorship of the Company
with effect from 09th February, 2023 on attainment of superannuation from the
services of LIC of India.
Shri Jagdish Capoor
The second term of Shri Jagdish Capoor (DIN 00002516) as Independent Director of the
Company came to an end on 23rd May, 2022 in terms of terms of the provisions of
Section 149 (10) and (11) of the Companies Act, 2013.
Resignation of Shri Ashwani Ghai (DIN 09733798)
Shri Ashwani Ghai resigned as the COO and Whole Time Director of the company with
effect from 13th June, 2023 on account of his transfer and appointment as
Additional Director to MDC Mumbai by LIC India.
DIRECTOR RETIRING BY ROTATION:
Shri Akshay Kumar Raut who have been longest in office would be retiring by rotation at
the ensuing Annual General Meeting and is eligible for re-appointment.
APPOINTMENTS / RESIGNATION OF THE KEY MANAGERIAL PERSONNEL:
Shri Yerur Viswanatha Gowd, Managing Director & CEO, Mr. Sudipto Sil, Chief
Financial Officer and Ms. Varsha Hardasani, Company Secretary & Compliance Officer,
are the Key Managerial Personnel (KMP) as per the provisions of the Companies Act, 2013.
During the financial year the following changes took place in the positions of the
KMPs:
Superannuation of Shri Nitin K Jage
Shri Nitin K Jage, General Manager (Taxation) & Company Secretary (Membership no.
FCS8084), superannuated on 31st May, 2022 after completing almost 27 years of
service.
Appointment of Ms. Varsha Hardasani
Ms. Varsha Hardasani (Membership no. ACS50448), who possess around 12 years of
experience in Secretarial Compliances, Legal Matters, Accountancy and Finance field across
different sectors
and who apart from being a Company Secretary is also a Law and Commerce Graduate and
also possesses a Masters in Accountancy & Finance, took charge as Company Secretary
& Compliance officer of the Company w.e.f. 1st June, 2022.
Resignation of Shri Ashwani Ghai (DIN 09733798)
Shri Ashwani Ghai resigned as the COO and Whole Time Director of the company with
effect from 13th June, 2023 on account of his transfer and appointment as
Additional Director to MDC Mumbai by LIC India.
COMMITTEES OF THE BOARD:
The Company has various Committees which have been constituted as a part of the best
corporate governance practices and are in compliance with the requirements of the relevant
provisions of applicable laws and statutes.
The Company has following Committees of the Board:
I) Audit Committee
II) Stakeholders Relationship Committee
III) Nomination and Remuneration Committee
IV) CSR Committee*
V) Risk Management Committee
VI) Executive Committee
VII) Debenture Allotment Committee
VIII) Strategic Investment Committee
IX) IT Strategy Committee
X) Preferential Allotment Committee**
XI) Investment Committee***
XII) Committee for approval of issuance of Duplicate Share Certificate(s)****
XIII) ESG Committee*
*Note: Considering the enhanced regulatory provision for Environmental Social and
Governance matters, a separate ESG Committee which earlier was part of CSR-ESG Committee
was formed and CSR-ESG Committee was renamed as CSR Committee with effect from 07th
June, 2023 on approval at 236th Meeting of Board of Directors.
** Note: The Preferential Allotment Committee is an event based Committee which had
been constituted for the limited purpose of allotment of the Equity Shares on private
placement basis to the promotors on 8th September, 2021.
***Note: The Investment Committee is an event based Committee which has been
constituted to meet only in case any investment proposals needs to be considered. During
the year there were two meetings of the said Committee which were held.
****Note: Committee for approval of issuance of Duplicate Share Certificate(s) has only
been constituted to sign and approve the request for issuance of Duplicate Share
Certificate(s). The approval takes place through circulation of the relevant documents to
the signing authorities based on their availability, no physical meeting of the said
Committee is held.
Composition of Audit Committee is as follows:
• Shri Kashi Prasad Khandelwal |
Chairman |
Independent Director |
• Shri Sanjay Kumar Khemani** |
Member |
Independent Director |
• Smt Jagennath Jayant |
Member |
Independent Director |
** Shri Sanjay Kumar Khemani was inducted in the Committee w.e.f 15th
September, 2021
There has not been any instance during the year when recommendations of Audit Committee
were not accepted by the Board.
The details with respect to the compositions, powers, roles, terms of reference etc. of
relevant committees are given in detail in the Report on Corporate Governance which forms
part of this Report.
SUBSIDIARIES AND GROUP COMPANIES
As on 31st March, 2023, the Company has four Subsidiaries namely, LICHFL
Care Homes Limited, LICHFL Asset Management Company Limited, LICHFL Trustee Company
Private Limited and LICHFL Financial Services Limited. The Consolidated financial
statements incorporating the results of all the subsidiaries of the Company for the year
ended 31st March, 2023, are attached along with the statement pursuant to
Section 129 of the Companies Act, 2013, with respect to the said subsidiaries. Brief write
up including performance and financial position of each of the subsidiaries is provided as
under:
1. LICHFL Care Homes Limited
LICHFL Care Homes Limited, a wholly owned subsidiary of LIC Housing Finance Limited,
was incorporated on 11th September, 2001 with an authorised share capital of
'75 crore. The basic purpose of incorporating the Company was to establish and operate
'assisted living community centres' for the senior citizens.
During the FY 2022-23, the Company reported Losses before Tax of Rs. 26.57 crore and
Losses after Tax stood at Rs. 21.31 crore.
The Company has successfully completed a project at Bangalore in two Phases and Jeevan
Anand Project at Bhubaneswar.
Further, the Company is in process to develop new Care homes project at Jaipur,
Rajasthan and Aluva, Kerala. The Company is also in process to purchase land at various
locations across the Country. Going forward, these projects are likely to further improve
the overall operations and stability of the Company.
2. LICHFL Asset Management Company Limited
The Company was incorporated on 14th February 2008. The Company is in the
business of managing, advising, administering Private Equity Funds including Venture
Capital Fund (VCF) and Alternate Investment Fund (AIF)
The Company was appointed as Investment Manager in 2010 to raise and manage the LICHFL
Sponsored, LICHFL Urban Development Fund (LUDF). The Company has raised total commitments
of '529.35 crore from Banks, Financial Institutions, Corporates and HNIs as against the
targeted size of '500 crore and announced financial closure on 30th March,
2013. The Company has deployed INR 461.30 crore in 9 Portfolio Companies, acquisition or
operation of affordable / mid income housing, related infrastructure and Hospitals. With
receipts from 7 exits, the Fund has so far achieved an IRR of 25.34%.
The Company also launched a new Alternative Investment Fund (AIF) namely LICHFL Housing
& Infrastructure Fund (LHIF), with a total corpus of '1000 crore including Green Shoe
Option (GSO) of Rs. 250 crore and the focus of the Fund is on Affordable Housing and
Property backed Infrastructure in sectors which include Educational Institutions,
Hospitals, Industrial Parks & Warehouses. As on 31st March 2022, the total
Contribution Agreements signed in respect of LICHFL Housing & Infrastructure Fund is
Rs. 812 crore of which the drawable amount is Rs. 765 crore.
The Company has recently registered a New Fund with SEBI - LICHFL Real Estate Debt
Opportunities Fund - I on 30th March, 2021 under AIF Category II of SEBI
Alternate Investment Fund Regulations 2012 (AIF). The Fund is having a target corpus of
Rs. 3,000 Cr (Base corpus of Rs. 2,000 Cr plus Rs. 1,000 Cr as green shoe option). The
Fund is envisaged to be raised from both Domestic and Overseas Investors. The focus sector
of the Fund is Housing. The Fund has received commitment of 300 crore from LIC of India,
Rs. 450 crore from LIC Housing Finance Limited, 65 crore from Indian Bank and IDBI Bank.
During the FY 2022-23, the Company earned a Profit before Tax (PBT) of Rs. 10 crore and
Profit after Tax (PAT) stood at Rs. 7.55 crore. The Company has recommended dividend @ 30%
for FY 2022-23 on its paid up share capital.
3. LICHFL Trustee Company Private Limited
The Company was incorporated on 5th March, 2008. The Company is undertaking
the business of trusteeship services for Venture Capital Funds (VCFs) and Alternative
Investment Funds (AIFs).
The Company was appointed as Trustee in 2010 for LICHFL Fund and further appointed
LICHFL Asset Management Company Limited (LICHFL AMC) as Investment Manager for the Fund.
In 2010 the Company had registered LICHFL Fund with SEBI as Venture Capital Fund (VCF)
under the SEBI (Venture Capital Funds) Regulations, 1996. LICHFL Urban Development Fund
achieved its financial closure with Rs. 529.35 crore on 30th March, 2013.
The Company was appointed as Trustee in 2017 for LICHFL Housing & Infrastructure
Trust (LHIT) and further appointed LICHFL AMC Ltd. as Investment Manager for LICHFL
Housing and Infrastructure Fund (LHIF). The Company had received registration for LHIF
on October 2017 from SEBI under Alternative Investment Fund Regulations, 2012 as Category
- I Infrastructure. LICHFL AMC launched LICHFL Housing & Infrastructure Fund (LHIF) in
October 2017 and achieved initial closing on 31st March, 2018. The Fund
announced its final closing on 31st March, 2021.
The Company is recently appointed as Trustee on 30th March, 2021 for a New
Fund registered with SEBI - LICHFL Real Estate Debt Opportunities Fund - I on 30th
March, 2021 and appointed LICHFL AMC Ltd. as Investment Manager for the Fund.
During the FY 2022-23, the Company earned a Profit before Tax (PBT) of Rs. 0.18 crore
and Profit after Tax (PAT) stood at Rs. 0.16 crore.
4. LICHFL Financial Services Limited
LICHFL Financial Services Limited, a wholly owned subsidiary of LIC Housing Finance
Limited, was incorporated on 31st October, 2007, for marketing of housing loan,
insurance products (Life and General Insurance), mutual funds, fixed deposits, credit
cards. It became operational in March, 2008 and at present has 48 offices spread across
the country.
The vision of the Company is "SARVESHAM POORNAM BHAVATU" - to provide
complete financial solutions" to secure not only the present but also the future of
the customer and his family. In this endeavour, the marketing officials assist at every
step - right from financial planning to manage every aspect of investment, both for the
short & long term.
At present, the Company distributes Life Insurance products of LIC of India, Home Loans
& Fixed Deposits of LIC Housing Finance Limited, Mutual Funds of various fund houses,
General Insurance products of United India Insurance Company Limited, Tata AIG General
Insurance Company Limited and HDFC ERGO General Insurance Company Ltd., Health Insurance
products of Aditya Birla Health Insurance Co. Ltd. and Star Health and Allied Insurance
Co. Ltd., Credit Cards of LIC Cards Services Limited and Point of Presence for National
Pension System (NPS). More business verticals will be added depending on market
opportunities and customer needs.
The Company has earned a Profit before Tax (PBT) of '22.23 crore and Profit after Tax
(PAT) stood at Rs. 16.34 crore for the FY 2022-23 and recommended dividend @ 30% for FY
2022-23 on paid up share capital of Rs. 9.50 crore.
The Company is striving to improve its Performance across all Business verticals in the
coming years.
55
Name/s of Company/ies which have ceased / become subsidiary/joint venture/associate:
None
AS ON 31st MARCH, 2023, THE COMPANY HAS TWO ASSOCIATE COMPANIES NAMELY LIC
MUTUAL FUND ASSET MANAGEMENT COMPANY LIMITED AND LIC MUTUAL FUND TRUSTEE COMPANY PRIVATE
LIMITED.
The Annual Report which consists of the financial statements of the Company on
standalone as well as consolidated financial statements of the group for the year ended 31st
March 2023, has been sent to all the members of the Company. It does not contain Annual
Reports of Company's subsidiaries. The Company will provide Annual Report of all
subsidiaries upon request by any member of the Company. These Annual Reports are also be
available on Company's website viz www.lichousing.com.
No significant and material orders were passed by the regulators or courts or tribunals
impacting the going concern status and Subsidiary Company's operations in future.
1. LIC Mutual Fund Asset Management Company Limited (LICMFAMC)
LIC Mutual Fund was established on 20th April 1989 by LIC of India. LIC
Housing Finance Limited holds 39.30 % equity in this entity. Being an associate company of
India's premier and most trusted brand, LIC Mutual Fund is one of the well-known players
in the asset management sphere. With a systematic investment discipline coupled with a
high standard of financial ethics and corporate governance, LIC Mutual Fund is emerging as
a preferred Investment Manager amongst the investor fraternity.
LIC Mutual Fund endeavours to create value for its investors by adopting innovative and
robust investment strategies, catering to all segments of investors. LIC Mutual Fund
believes in providing delight to its customers and partners by way of superior investment
experience and unparalleled service thereby truly bring them Khushiyaan, Zindagi Ki.
For the FY 2022-23 both the Profit before Tax (PBT) as well as Profit after Tax (PAT)
of LICMFAMC stood at Rs. 1.08 crore, as there was no tax expense.
2. LIC Mutual Fund Trustee Company Private Limited
LIC Mutual Fund Trustee Private Limited (Trustee Company) is the Trustee to the Mutual
Fund, LICMFAMC. LIC Housing Finance Limited holds 35.30 % equity in this entity. LIC of
India is the Sponsor of the Mutual Fund. The AMC either directly or through third party
service providers engaged by the AMC (Service Providers) such as the Registrar and
Transfer agents collects, receives, possesses, stores, deals or handles information
received from investors/client/ customers whether existing or prospective.
The Company has earned a Profit before Tax (PBT) of Rs. 1.59 lakhs and Profit after Tax
(PAT) stood at Rs. 1 lakhs for the FY 2022-23.
FINANCIAL DETAILS OF SUBSIDIARIES
Pursuant to the provisions of Section 129(3) of the Companies Act, 2013 ('the Act'), a
statement containing salient features of the financial statements of subsidiaries, joint
venture and associate companies in Form AOC-1 is attached to the financial statements. The
separate financial statements of the subsidiaries are available on the website of the
Company and can be accessed at https://www.lichousing.com/subsidiary-financials.
INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY:
The Company had laid down internal financial controls to be followed by the Company and
that such internal financial controls are adequate and operating effectively. Note on
Internal Financial Control as Annexure 1 is attached to this report.
VIGIL MECHANISM / WHISTLE BLOWER POLICY:
The Company has a Whistle Blower Policy in place which provides whistle blowers an
opportunity to raise concerns relating to reportable matters as defined in the policy. The
mechanism adopted by the Company encourages the whistle blower to report genuine concerns
or grievances and provides for adequate safeguards against victimisation of whistle blower
who avails of such mechanism and also provides for direct access to the Chairman of the
Audit Committee. The Vigil Mechanism / Whistle Blower Policy is reviewed annually or as
and when the regulators amendments are required to be incorporated therein, as the case
may be.
During the period under review there was no concerns or grievances reported under Vigil
Mechanism/ Whistle Blower Policy.
EMPLOYEE STOCK OPTION:
The company does not have any Employee stock option scheme. EMPLOYEE REMUNERATION:
Disclosure pertaining to remuneration and other details as required under Section
197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 are given below:
a. The ratio of the remuneration of each director to the median remuneration of the
employees of the Company for the financial year:
| Non-Executive Directors (including |
Ratio to median |
| Independent Directors)* |
remuneration |
| Nil |
N.A. |
‘Remuneration is not paid to Non-Executive Directors (including Independent
Directors)
| Executive Director |
Ratio to median remuneration |
| Shri Yerur Vishwanatha Gowd (MD&CEO) |
5:1 |
| Shri Ashwani Ghai (WTD&COO) |
3:1 |
b. The percentage increase in remuneration of each director, Chief Executive Officer,
Chief Financial Officer, Company Secretary in the financial year:
| Non-Executive Directors |
% increase in |
| (including Independent |
remuneration in the |
| Directors)* |
financial year |
| Nil |
N.A. |
*No remuneration is paid to Non-Executive Directors (including Independent Directors)
| KMP |
% Increase in remuneration |
|
in the financial year |
| MD&CEO |
9.22% |
| WTD&COO |
N.A. |
| Chief Financial Officer** |
28.21% |
| Company Secretary*** |
N.A. |
* Shri Ashwani Ghai (WTD&COO) was appointed 05/09/2022 hence no comparable figure
is available for FY 2021-22 ** the increase in remuneration of Chief Financial Officer was
on account of promotion from Joint General Manager Cadre to General Manager Cadre
***As there was change in Company Secretary on account of superannuation of Shri Nitin
Jage and appointment of Smt Varsha Hardasani the increase in remuneration is not
applicable.
c. The percentage increase in the median remuneration of employees in the financial
year:
15.33%
d. The number of permanent employees on the rolls of the Company:
2462
e. Percentage increase over decrease in the market quotations of the shares of the
Company in comparison to the rate at which the Company came out with the last public
offer:
| Particulars |
31st March, |
15th November |
% |
|
2023 |
1994 (IPO) |
Change |
| Market Price (in ') |
328.70** |
12* |
2639.17 |
*Adjusted Issue price on account of sub-division **BSE-closing Price '328.70
f. Average percentile increase already made in the salaries of employees other than
managerial personnel in the financial year and its comparison with the percentile increase
in the managerial remuneration and justification thereof and point out if there are any
exceptional circumstances for increase in the managerial remuneration:
Increase in managerial remuneration for the year was 9.22%. The average annual Increase
in the salaries of the employees other than managerial personnel during the year was
15.33%.
g. Affirmation that remuneration is as per the Remuneration Policy of the Company:
The Company affirms that the remuneration is as per the Remuneration Policy of the
Company.
During the year the Company has not engaged any employee drawing remuneration exceeding
the limit specified under Section 197(12) read with Rule 5(2) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014.
In terms of Section 136(1) of the Companies Act, 2013 read with the Rule 5(2) of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board's
Report is being sent to all the shareholders of the Company excluding the annexure
containing names of the top ten employees in terms of remuneration drawn. Any shareholder
interested in obtaining a copy of the said annexure may write to the Company at: The
Company Secretary, LIC Housing Finance Limited, Corporate Office, 131 Maker Towers, 'F'
Premises, 13th Floor, Cuffe Parade, Mumbai - 400 005.
Prevention, Prohibition & Redressal of Sexual Harassment of women at workplace:
As per the requirements of the Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013, your Company has in place a Policy on Prevention,
Prohibition & Redressal of Sexual Harassment of Women at Workplace and has a robust
mechanism to redress the complaints reported thereunder. An Internal Committee has been
constituted, which comprises of internal members who have experience in the subject field.
Pursuant to the provisions of Section 22 of the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013, the complaints received thereunder and
the details relating thereto are as follows:
(a) Number of complaints received in the year: Nil
(b) Number of complaints disposed of during the year: Nil
(c) Number of cases pending more than ninety days: Nil
(d) Number of workshops or awareness programme against sexual harassment carried out:
Nil
(e) Nature of action taken by the employer or district officer: Nil
Your Company on a regular basis sensitises its employees on prevention of sexual
harassment through various workshops, awareness programmes.
It may be mentioned here that the Company has Zero tolerance towards any action on the
part of any executive / staff which may fall under the ambit of 'Sexual Harassment' at
workplace, and is fully committed to uphold and maintain the dignity of every women
working in the Company.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS/ EXCHANGES
The Company has received the notice for delay of compliance under Regulation 57(1),
60(2), 17(1), 50(1) and 52(7)/(7A) of Listing Regulations from Stock Exchanges total
amounting to ' 8,27,820/- against which waiver application has been filed as the
deviations were beyond the control of the Company. The matter is presently under
consideration of the Stock Exchange(s).
Pursuant to the letter from RBI dated 31/10/2022, in relation to non-compliance to
provisions of relevant directions under Sub-sections (1) & (2) of section 29 B of the
NHB Act. the Company was levied a penalty of ' 5,00,000/-. The Company has paid the
penalty on 07th November ,2022.
The Company confirms that these are not significant or material in nature.
HUMAN RESOURCES
The Company aims to align HR practices with business goals, increase productivity of
Human resources by enhancing knowledge, skills and to provide a conducive work environment
to develop a sense of ownership amongst employees. Productive high performing employees
are vital to the Company's success. The contribution and commitment of the
employees towards the performance of the Company during the year were valued and
appreciated. The Company recruited employees during the year for various positions and
promoted employees to take up higher responsibilities. Apart from fixed salaries,
perquisites and benefits, the Company also has in place performance-linked incentives
which reward outstanding performers, who meet certain performance targets. In pursuance of
the Company's commitment to develop and retain the best available talent, the Company had
organised and sponsored various training programmes / seminars / conferences for upgrading
skill and knowledge of its employees in different operational areas.
Employee relations remained cordial, and the work atmosphere remained congenial during
the year.
ACKNOWLEDGMENTS
The Directors place on record their appreciation for the advice, guidance and support
given by the Life Insurance Corporation of India, the National Housing Bank, the Reserve
Bank of India and all the bankers of the Company. The Directors also place on record their
sincere thanks to the Company's clientele, lenders, investors and members for their
patronage. The Directors express their appreciation for the dedicated services of the
employees and their contribution to the growth of the Company.
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