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Company Information

Home » Market » Company Information

LIC Housing Finance Ltd.

Dec 13
438.45 +4.90 (+ 1.13 %)
 
VOLUME : 138625
Prev. Close 433.55
Open Price 436.85
TODAY'S LOW / HIGH
436.00
 
 
 
442.65
Bid PRICE (QTY.) 0.00 (0)
Offer PRICE (Qty.) 0.00 (0)
52 WK LOW / HIGH
354.00
 
 
 
586.80
Dec 13
439.00 +4.65 (+ 1.07 %)
 
VOLUME : 2536431
Prev. Close 434.35
Open Price 436.10
TODAY'S LOW / HIGH
435.50
 
 
 
442.60
Bid PRICE (QTY.) 0.00 (0)
Offer PRICE (Qty.) 0.00 (0)
52 WK LOW / HIGH
353.85
 
 
 
587.00
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Market Cap. ( ₹ ) 22154.71 Cr. P/BV 1.36 Book Value ( ₹ ) 323.60
52 Week High/Low ( ₹ ) 587/354 FV/ML 2/1 P/E(X) 9.10
Bookclosure 28/08/2019 TTM EPS ( ₹ ) 53.11 Div Yield (%) 1.73
DIRECTOR'S REPORT
You can view full text of the latest Director's Report for the company.
Year End :2019-03 

BOARD’S REPORT

To the Members of LIC Housing Finance Limited

The Directors are pleased to present the Thirtieth Annual Report together with the Audited Financial Statements for the year ended 31st March, 2019 of LIC Housing Finance Limited ('the Company').

FINANCIAL RESULTS

(Rs, in crore)

Particulars

For the year ended 31st March, 2019

For the year ended 31st March, 2018

Profit before Tax

3,379.55

2,765.50

Tax Expense

948.58

763.00

Profit after Tax

2,430.97

2,002.50

Other Comprehensive Income

(0.46)

2.62

Total Comprehensive Income

2,430.51

2,005.12

Appropriations

Special Reserve & Statutory Reserve u/s 29C of NHB Act, 1987

750.00

560.00

General Reserve

600.00

500.00

Dividend

343.17

312.89

Tax on Dividend

69.25

63.00

Balance carried forward to next year

668.09

569.23

2,430.97

2,002.50

DIVIDEND

The Company has in place a Dividend Distribution Policy formulated in accordance with 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 declaration / recommendation of dividend to the Members of the Company.

Considering the performance during the financial year 201819, your Directors, in terms of the Dividend Distribution Policy have recommended payment of dividend for the financial year ended 31st March, 2019 of 7.60 per equity share of face value of Rs,2/- per share i.e. @ 380 percent, as against Rs,6.80/- per equity share of face value of Rs,2/- per share for the previous year i.e. @ 340 percent. The total dividend outgo for the current year would amount to Rs,461.15 crore including Dividend Distribution Tax of Rs,77.61 crore, as against Rs,412.42 crore including dividend distribution tax of Rs,69.25 crore, 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 Distribution Policy is available on the website of the Company at http://www.lichousing.com/dividend_dist_ policy.php and forms part of this Board's report as Annexure - 8.

INDIAN ACCOUNTING STANDARDS

The Company has adopted Indian Accounting Standards ('Ind AS') notified by the Ministry of Corporate Affairs (MCA) vide its notification published in the Official Gazette on 16th February, 2015 applicable to certain classes of companies under Section 133 of the Companies Act 2013 ('the Act') read with the Companies (Indian Accounting Standards) Rules, 2015 from April 01, 2018 and the effective date of transition is April 01, 2017. The said transition has been carried out from the erstwhile Accounting Standards notified under the Act, read with relevant rules issued there under and guidelines issued by the National Housing Bank ('NHB') (Collectively referred to as 'the Previous GAAP').

Ind AS has replaced the existing Indian GAAP prescribed under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014.

PERFORMANCE Income and profit

The Company earned total revenue of Rs,17,361.72 crore, registering an increase of 17 percent. The percentage of administrative expenses to the housing loans, which was 0.26 percent in the previous year, has come down to 0.24 percent during the financial year 2018-19.

Net Profit before tax and after tax stood at Rs,3,379.55 crore and Rs,2,430.97 crore respectively as against Rs,2,765.50 crore and Rs,2,002.50 crore, respectively, for the previous year. Profit before tax increased by 22.20 percent over the previous year while profit after tax showed growth of 21.40 percent over that of the previous year.

LENDING OPERATIONS Individual loans:

The main thrust continues on individual housing loans with a disbursement growth of 6.82 percent during the year. The Company has sanctioned 2,05,702 individual housing loans for Rs,50,276.67 crore and disbursed 2,04,690 loans for Rs,48,187.40 crore during FY 2018-19. Housing loan to Individuals i.e. retail loans constitute 84.60 percent of the total sanctions and 87.11 percent of the total disbursements for the FY 2018-19 as compared to 84.23 percent and 91.37 percent respectively during the FY 2017-18. The gross retail loan portfolio grew by over 13.94 percent from Rs,1,59,350.29 crore as on 31st March, 2018 to Rs,1,81,569.21 crore as on 31st March, 2019.

The cumulative sanctions and disbursements since incorporation, in respect of individual housing loans are:

Amount sanctioned: Rs,3,48,571.20 crore Amount disbursed: Rs,3,35,074.98 crore 26,14,593 customers have been serviced by the Company up to 31st March, 2019 since inception.

PROJECT LOANS:

The project loans sanctioned and disbursed by the Company during the year amount to Rs,9,154 crore and Rs,7,128 crore respectively. Corresponding figures for the previous year were Rs,8,736 crore and Rs,4,266 crore. These loans are generally for short durations, giving better yields as compared to individual housing loans.

AWARDS AND RECOGNITIONS:

During the year under review, the Company was awarded on various counts by renowned institutions some of which are listed below:

- Best Private Issuer on Electronic Bidding Platform by NSE;

- Awarded 'Outstanding Global Leadership AwardRs,2018 by The Institute of Economic Studies (IES);

- 'Best Housing Finance Company' at Banking Financial Services & Insurance Awards by ABP News;

- Awarded 'Brand of the Decade 2019' by BARC Asia.

- Recognized as one of the 'The Economic Times Best Brands 2019'

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 273 Marketing Offices and 1 Customer Service Point. These marketing offices work through Direct Sales Agents, Home Loan Agents and dedicated Team of Direct Marketing Executives, totaling more than 13500. The distribution network also includes 50 offices of LICHFL Financial Services Ltd., wholly owned subsidiary company engaged in distribution of various financial products including housing loans. The Company has representative offices in Dubai and Kuwait.

REPAYMENTS

During F.Y. 2018-19, Rs,26,242.99 crore was received by way of scheduled repayment of principal through monthly installments as well as prepayment of principal, as compared to Rs,25,851.01 crore received during the previous year

NON-PERFORMING ASSETS AND PROVISIONS

The amount of gross Non-Performing Assets (NPA) as at 31st March, 2019 was Rs,2,971.69 crore, which is 1.54 percent of the housing loan portfolio of the Company, as against Rs,1,303.61 crore i.e. 0.78 percent of the housing loan portfolio as at 31st March, 2018. The net NPA as at 31st March 2019 was Rs,2,081.20 crore i.e. 1.08 percent of the housing loan portfolio vis-a-vis Rs,711.66 crore i.e. 0.43 percent of the housing loan portfolio as at 31st March, 2018. The total cumulative provision towards housing loan portfolio including provision for standard assets as at 31st March, 2018 is Rs,1,693.89 crore as against Rs,1,248.80 crore in the previous year. During the year, the Company has written off Rs,265.66 crore of housing loans which includes nonretail loan as against Rs,23.29 crore during the previous year

The aforesaid figures are as per IGAAP. As per IND-AS, the provision as per ECL is Rs,1,659.48 crore as at 31st March, 2019 as against Rs,1,309.13 crore as at 31st March, 2018.

RESOURCE MOBILISATION

During the year, the Company raised long term funds aggregating to Rs,45,913.12 crore through Non - Convertible Debentures (NCDs), Term Loans and Deposits in addition to short term borrowings.

NON-CONVERTIBLE DEBENTURES (NCDs)

During the year, the Company issued NCDs amounting to Rs,35,112.10/- 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 and 'CARE AAA/ Stable' by CARE. As at 31st March, 2019, NCDs amounting to Rs,1,27,475.56/- crore were outstanding. The Company has been regular in making repayment of principal and payment of interest on the NCDs. Also the amounts of NCDs were utilized for the purposes for which these were raised.

As at 31st March, 2019, 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. Hence, the amount of NCDs remaining unclaimed or unpaid beyond due date is 'Nil'.

SUBORDINATE BONDS AND UPPER TIER II BONDS

During the year, the Company has not issued any Subordinate Bonds and Upper Tier II Bonds. As at 31st March, 2019, the outstanding Subordinate Bonds and Upper Tier II Bonds stood at Rs,2,000/- crore. Considering the balance term of maturity as at 31st March, 2019, Rs,1,500/- crore of the book value of the Subordinate Bonds and Upper Tier II Bonds is considered as Tier II Capital as per the Guidelines issued by NHB for the purpose of Capital Adequacy.

TERM LOANS, FCNR (B) LOAN FROM BANKS / LOC / WCDL, REFINANCE FROM NHB / OTHER FINANCIAL INSTITUTIONS / COMMERCIAL PAPER

The total loans / LOC outstanding from the Banks as at 31st March, 2019 were Rs,24,873.23 crore as compared to Rs,14,358.81 crore as at 31st March, 2018. Loans and advances outstanding from Other Financial Institutions were Rs,200 crore as at 31st March, 2019 and 31stMarch, 2018. The Refinance from NHB as at 31st March, 2019 stood at Rs,1,310.68 crore as against Rs,1,958.24 Crore as at 31st March, 2018. During the year, the Company has not availed any Refinance from NHB under regular Refinance scheme. As at 31st March, 2019, Commercial Paper amounting to Rs,7,140.11 crore were outstanding as compared to Rs,4,050.22 crore for the previous year. During the year 2018-19, the Company issued Commercial Paper amounting to Rs,38,339.48 crore as compared to Rs,17,976 crore for the corresponding previous year.

The Company's long term loan facilities have been assigned the highest rating of 'CRISIL AAA/STABLE' and short term loan facilities have been assigned a rating of 'CRISIL A1 & ICRA A1 ' signifying highest safety for timely servicing of debt obligations.

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 there under 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 including interest thereon remaining unclaimed for a period of seven years from the due date is required to be transferred to the Investor Education and Protection Fund (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 as per the requirements, on the website of the Company i.e. www.lichousing.com.

UNPAID/UNCLAIMED DIVIDEND

During the financial year under review, your Company has transferred unclaimed dividend of Rs,82,10,045/- pertaining to the financial year 2010-11 to the Investor Education and Protection Fund (IEPF) established by the Central Government, after the 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 97,169 equity shares of Rs,2/- each to Investor Education and Protection Fund (IEPF) established by the Central Government in respect of which the dividend remained unclaimed for a period of seven consecutive years i.e. from 2010-11 till the due date of 30th August, 2018 after following the prescribed procedures.

Any person who is entitled to 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

PUBLIC DEPOSITS

As at 31st March, 2019, the outstanding amount on account of public deposits was Rs,3,932.17 crore as against Rs,3,430.83 crore in the previous year and outstanding amount on account of corporate deposits was Rs,3,735.26 crore as against Rs,3,340.84 crore in the previous year. During F.Y. 2018-19, the number of depositors for public deposits has decreased from 35528 to 35005 and increased for Corporate deposits from 521 to 567 Rs,1,370.51 crore has been collected as public deposits and Rs,3,085.51 crore as corporate deposits. Total aggregate amount collected was Rs,4,455.71 crore.

CRISIL has for the twelfth consecutive year, re-affirmed a rating of “CRISIL FAAA/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 mobilization of deposits and making the product most preferred investment for individual households and others. 1,083 deposits amounting to Rs,86.15 crore which were due for repayment on or before 31st March, 2019 were not claimed by the depositors. Since then, 152 depositors have claimed or renewed deposits of Rs,38.61 crore as on date of this report. Depositors are appropriately intimated about renewal / claim of their deposits through an authorized agency. Further, adequate follow-up is made in respect of those cases where 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 date Rs,1,79,000/- against unclaimed principal and Rs,2,58,624/- against unclaimed interest on deposits has been transferred to IEPF.

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 Sections 73 and 74 of the Companies Act, 2013 are not applicable to the Company.

REGULATORY COMPLIANCE

The Company has been following guidelines, circulars and directions issued by National Housing Bank (NHB) from time to time.

Your Company has been maintaining capital adequacy as prescribed by the NHB. Which was 14.36 percent (as against 12 percent prescribed by the NHB) as at 31st March, 2019 after considering the loan to value ratio for deciding risk weightage.

The Company has adopted Know Your Customer (KYC) Guidelines, Anti Money Laundering Standards, Fair Practices Code, Model Code of Conduct for Direct Selling Agents and Guidelines for Recovery Agents engaged by the Company as prescribed by NHB from time to time. During the year, NHB has prescribed that HFCs shall provide 'Most Important Terms and Conditions' (MITC) of housing loans, which the Company has implemented with the objective of ensuring a better understanding of the major terms and conditions of the loan agreed upon between the Company and its borrowers.

The Company also has been following directions / guidelines / circulars issued by SEBI and MCA from time to time, applicable to a listed company.

DISCLOSURE UNDER HOUSING FINANCE COMPANIES ISSUANCE OF NON-CONVERTIBLE DEBENTURES ON PRIVATE PLACEMENT BASIS (NHB) DIRECTIONS, 2014

During the financial year under review, 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.

AUDIT REPORTS AND AUDITORS Audit Reports

The Auditors' Report for the financial year 2018-19 does not contain any qualification, reservation or adverse remark. The Auditors' Report is enclosed with the financial statements in this Annual Report.

The Secretarial Auditor's Report for the financial year 201819 does not contain any qualification, reservation or adverse remark. Report of the Secretarial Auditor for the financial Year 2018-19 in Form MR-3 is annexed to this report as Annexure 10.

A certificate from Shri. P. S. Gupchup, Practising Company Secretary, Mumbai (Membership No.: ACS 4631 and Certificate of Practice No.:9900), regarding compliance of the conditions of Corporate Governance as stipulated under 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.

AUDITORS Statutory Auditors

Under Section 139 of the Companies Act, 2013 and the Rules made thereunder, it is mandatory to rotate the statutory auditors on completion of the maximum term permitted under the said Section . The present Joint Statutory Auditors complete their term as per the said Section. The Audit Committee of the Company has proposed and on 1st July, 2019, the Board of Directors of the Company has recommended the appointment of M/s. Gokhale & Sathe, Chartered Accountant (Firm Registration No.: 103264W) and M/s. M. P. Chitale & Co., Chartered Accountant (Firm Registration No.: 101851W) as Joint Statutory Auditors of the Company and they will hold office for a period of five consecutive years from the conclusion this Thirtieth Annual General Meeting of the Company scheduled to be held on 28th August, 2019 till the conclusion of the Thirty Fifth Annual General Meeting to be held in the year 2024, subject to the approval of the shareholders of the Company. The second quarterly limited review for financial year 2019-20 as on 30th September, 2019 will be done by the proposed Joint Statutory Auditors. The first year of audit for the proposed Joint Statutory Auditors will be for the year ending 31st March, 2020.

The remuneration payable to each of the proposed Joint Statutory Auditors will be Rs,26,20,000/- as determined by the Board of Directors in consultation with them and applicable taxes / cess on the said remuneration, for the purpose of audit of the Company's accounts at the Corporate Office along with consolidated accounts as well as at all Back Offices to be allotted equally between them in consultation with the management.

The Board recommend to the Members for approval at the Thirtieth Annual General Meeting, the appointment of M/s. Gokhale & Sathe, Chartered Accountant (Firm Registration No.: 103264W) and M/s. M. P. Chitale & Co., Chartered Accountant (Firm Registration No.: 101851W) as Joint Statutory Auditors of the Company to hold the office from the conclusion of this Thirtieth Annual General Meeting until the conclusion of the Thirty Fifth Annual General Meeting subject to ratification by the members of the Company at each subsequent Annual General Meeting on a remuneration as mentioned above and applicable taxes / cess on the said remuneration, for the purpose of audit of the Company's accounts at the Corporate Office along with consolidated accounts at all Back Offices to be allotted equally between them in consultation with the management.

SECRETARIAL AUDITOR:

Pursuant to Section 204 of the Companies Act, 2013, the Company had appointed M/s. N. L. Bhatia & Associates, Practicing Company Secretary as its Secretarial Auditor to conduct the secretarial audit of the Company for the Financial Year 2018-19. The Company has provided all assistance and facilities to the Secretarial Auditor for conducting their audit.

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 are 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.

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 REPORT

In terms of Regulations 34(1)(f) of the SEBI(Listing Obligation and Disclosure Requirements) Regulations, 2015, the top 500 listed entities, based on the market capitalization (calculated as on 31st March of every financial year), business responsibility report describing the initiatives taken by these listed entities from an environmental, social and governance perspective, in the format as specified by SEBI from time to time shall be included as part of the Annual Report. Accordingly, Business Responsibility Report is presented in a separate section forming part of this Annual Report.

DEPOSITORY SYSTEM

For transaction of the Company's shares in dematerialized 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, 2019, 6176 members of the Company continue to hold shares in physical form. As per the Securities and Exchange Board of India's (SEBI) circular, the Company's shares have to be transacted in dematerialized form only and therefore, such members are requested to convert their holdings to dematerialized form.

AUDITORS’ OBSERVATIONS

No adverse remark or observation has been made by the Joint Statutory Auditors in their report dated 4th May, 2019.

The Company has an in-house mechanism for Internal Audit of all its back offices conducted by the team of in-house auditors. The Company maintains an exhaustive checklist for the purpose of Audit. The Company has also appointed M/s. Borkar & Muzumdar, Chartered Accountants, as Internal Auditor for Internal Audit of its Corporate Office for financial year 2019-20 to financial year 2020-21.

Systems and procedures are being upgraded from time to time to provide checks and alerts for avoiding fraud arising out of misrepresentation made by borrower/s while availing the housing loans and non-housing loans.

OUTLOOK FOR 2019-20

The initiatives taken by the Company during the financial year 2018-19 are expected to improve its operational and financial performance. During F.Y. 2019-20, the Company proposes:

- Focus on growth of Retail Housing Loans to continue at all levels.

- PMAY-CLSS to be given additional thrust and marketing activities to be in alignment with Government Initiatives from time to time and thus ensuring achievement of targets in both numbers and amount.

- Direct Marketing Executive (DME) channel to be made a separate unit. Business Development Center (BDCs) to be opened at all BO centers. Metro centers like Mumbai, Pune, Delhi, Hyderabad, Chennai, Bangalore, Kolkata, Lucknow to have minimum 2 BDCs. In other major cities having more than 2 area offices, one office to be converted as BDC.

- Leveraging our relationship with the Builders to whom Project Finance has been provided, for retail business as well. DME channel to be given responsibility of procuring retail housing loans from these projects.

- Creation of separate cell at Regional Offices (ROs) to handle high value loans of more than Rs,10 crore with post disbursement monitoring. This cell will be on similar lines to Project Finance Department in ROs.

- Creation of cluster of area offices (say 5 area offices) within (BO) jurisdiction to handle sanction and disbursement with the aim to reduce Turn Around Time (TAT).

- Business Potential Mapping exercise to procure more and more retail business

- Advance Processing Facility (APF) approval to be made core activity at Area Office levels

- Corporate tie ups with builders for mass business procurement

- Making use of builders / developers as distribution channel.

- Making online loan application more effective and enhance its contribution towards the incremental business.

- Ensuring achievement of Term Targets- Monthly, Quarterly by all Units.

- Strengthening of new area offices opened in FY 2018-19 by bringing their performance achievement in alignment with to budget and Growth above Region's average.

- To make both the Overseas Offices more effective and productive and increasing their share to the Company's Business.

- To come up with new Incentive or privilege schemes for Intermediaries and Marketing Officials as additional tool of motivation.

- Continuous 'training' to intermediaries and Marketing Officials to increase productivity

- To grow business qualitatively by consolidating position and strengthening the competitiveness on service delivery.

- To create brand LIC HFL as a source of trusted partner exuding consumer confidence.

- Understand the inherent risks to the business and managing it effectively.

- Focus on winning and retaining customers.

- Pursue new skills and expand knowledge aimed at managing competition effectively.

- Expand its operations by establishing new business centers.

- Increase its distribution by appointing new agents and activating more agents. Explore new avenues of distribution channel.

- Incentivizing and motivating the marketing intermediaries systematically for improving productivity and imbibing a sense of loyalty, professionalism.

- Raising funds through various sources at attractive terms.

- Making efforts towards reducing overall cost of funds.

- Steps to improve the recovery ratio and ensuring lowest NPA level. Improving receivable management through IT support system.

- Timely review of credit appraisal system to improve the loan asset quality.

- Continuous efforts to upgrade Information Technology platform to ensure prompt and effective service to the clientele.

- Ensuring achievement of term targets - monthly, quarterly by all units.

- Procurement of business under Pradhan Mantri Awas Yojana / Affordable housing and to have a continuous focus in alignment with Government initiatives from time to time.

THE MANAGEMENT PERSPECTIVE ABOUT FUTURE OF THE COMPANY

The convergence of on-going reforms and political stability have led to growth in the residential real estate market in the first half of 2019 and with the continuity of erstwhile political regime ensuring an undeterred process of reforms and speedy infrastructure growth, markets are set to continue along path of growth. During the first quarter of current year, the government lowered Goods and Services Tax (GST) rates on affordable homes to 1% from the earlier 8%, without input tax credit. GST on projects under construction, which are not under the affordable housing segment, was reduced to 5% from 12%. Real Estate (Regulation and Development) Act 2016 (RERA) have now been notified in most states and union territories. Though much is yet to be done in terms of implementation, the Act has definitely ensured greater transparency and efficiency in residential markets. Apart from regulatory reforms, the government has focused on enhancing economic growth and improving liquidity (the RBI has cut interest rates thrice since the beginning of 2019). The home buyer has benefitted from both - ongoing reforms as well as lowering of borrowing costs.

It may be mentioned here that there is a liquidity challenge in the market, driven more by a crisis of confidence in the Non-Banking Finance Companies (NBFC) more specifically Housing Finance Companies ecosystem, rather than an actual impairment on balance sheets. In the last three years, debt mutual funds had become the de-facto bankers to the fast-growing NBFCs. They accounted for the bulk of the industry's growth capital as public sector banks pulled away from lending due to lack of capital. As a result a number of NBFCs started facing liquidity crunch after a sharp rise in interest cost, thereby resulting a hit in their repayment ability. Housing Finance Companies (HFCs) though regulated by National Housing Bank (NHB) are basically NBFCs which are India's shadow banking sector, well known for aggressive lending practices, especially for small and medium enterprises, home buyers and real estate developers, who have difficulty in borrowing from banks. Credit from the NBFC sector grew by 21 per cent year-on-year in the financial year 2018, when bank credit growth was around 10 per cent. But the inherent problem with NBFCs has been their reliance on short-term funding routes like commercial papers and resorting to rollovers to meet their long-term lending requirements.

The problems with the NBFC sector began in September

2018 when the infrastructure finance company namely, IL&FS Ltd defaulted on repayments to banks, mutual funds, term deposits and failed to meet the commercial paper redemption obligations. It caused panic in the markets as it impacted banks, mutual funds as well as retail investors. Since then, the source of funding for NBFCs has been drying up and they are finding it increasingly difficult to service repayment of existing obligations. Asset quality is viewed seriously and fund managers are no more chasing only numbers and therefore, the availability of liquidity may go down.

In India, there is an estimated shortage of around 4 crore houses (urban and rural). In addition, population growth of 1.3 percent per annum, favorable demographics, 'nuclearisation' of families, migration to urban areas, fiscal benefits, rising income / aspirations, all that could lead to another one crore per annum demand for houses. Affordability to buy houses has increased over the past three years (especially in urban areas), even as property prices have remain flat, incomes have risen and mortgage interest rates have fallen by around 250 bps from five-year peak leading to 15 percent reduction in EMI payments.

With developers focusing on delivery of already launched projects, new launches of residential units decreased by 11% on a y-o-y basis across the top seven cities (Delhi NCR, Bengaluru, Mumbai, Kolkata, Chennai, Hyderabad and Pune). With the General Elections in H1 2019, developers also adopted a wait and watch approach and focused on clearing their unsold inventory. Apart from Mumbai and Delhi NCR, all other cities saw a dip in new launches during the H1 2019. Mumbai, Delhi NCR and Bengaluru continued to dominate launches and formed three-fourth of the overall launches during this period. Interestingly, since 2016 Pune which is merely 1/4th the size of Delhi NCR in terms of population witnessed a higher new launches declining by 11% on a y-o-y basis. Going ahead, new unit launches across the seven cities are expected to remain modest as developers realign their product mix to suit market demand.

COMPLIANCE UNDER COMPANIES ACT, 2013

Pursuant to section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, the Company complied with the compliance requirements and the details of compliances under Companies Act, 2013 are enumerated below:

EXTRACT OF ANNUAL RETURN:

Pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of Annual Return in Form MGT-9 as on 31st March, 2019 is attached as Annexure 1 to this Report.

Extract of Annual Return is also displayed at Company's website at the given link - www.lichousing.com/annual_ general_meeting.php.

REPORTING OF FRAUDS BY AUDITORS:

During the year under review, neither the statutory auditors nor the secretarial auditor has reported to the Audit Committee, under Section 143(12) of the Companies Act, 2013 any instances of fraud committed against the Company by its officers or employees, the details of which would need 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.

RATING RATIONALE:

CRISIL had assigned its outstanding rating as 'CRISIL AAA/ Stable' rating to the Rs,25000 crore non-convertible issue of LIC Housing Finance Limited and has reaffirmed its 'CRISIL AAA/ FAAA/Stable/CRISIL A1 ' ratings on other debt instruments, bank facilities and fixed deposit programme of the Company.

Total Bank Loan Facilities

Rs,40059.88 crore

Rated

Long Term Rating

CRISIL AAA/Stable

(Reaffirmed)

Short Term Rating

CRISIL A1 (Reaffirmed)

Rs,25000 crore Non-

CRISIL AAA/Stable

Convertible Debentures

(Assigned)

Rs,25000 crore Non-

CRISIL AAA/Stable

Convertible Debentures

(Reaffirmed)

Rs,25000 crore Non-

CRISIL AAA/Stable

Convertible Debentures

(Reaffirmed)

Rs,5000 crore Non-

CRISIL AAA/Stable

Convertible Debentures

(Reaffirmed)

Rs,15000 crore Non-

CRISIL AAA/Stable

Convertible Debentures

(Reaffirmed)

Rs,10000 crore Non-

CRISIL AAA/Stable

Convertible Debentures

(Reaffirmed)

Rs,5000 crore Non-

CRISIL AAA/Stable

Convertible Debentures

(Reaffirmed)

Rs,5976 crore Non-

CRISIL AAA/Stable

Convertible Debentures

(Reaffirmed)

Rs,15000 crore Non-

CRISIL AAA/Stable

Convertible Debentures

(Reaffirmed)

Rs,15000 crore Non-

CRISIL AAA/Stable

Convertible Debentures

(Reaffirmed)

Rs,20000 crore Non-

CRISIL AAA/Stable

Convertible Debentures

(Reaffirmed)

Rs,33833 crore Non-

CRISIL AAA/Stable

Convertible Debentures

(Reaffirmed)

Rs,1600 crore Upper Tier II

CRISIL AAA/Stable

Bond

(Reaffirmed)

Rs,1750 crore Tier II Bond

CRISIL AAA/Stable

(Reaffirmed)

Fixed Deposits Programme

FAAA/Stable (Reaffirmed)

Rs,17500 crore Commercial

CRISIL A1 (Reaffirmed)

Paper

CARE Ratings had assigned its 'CARE AAA; Stable' rating to the Rs,25000 crore Non-Convertible Debenture issue of LIC Housing Finance Limited and reaffirmed its 'CARE AAA; Stable'. The unutilized amount as on 30.04.2019 was Rs,9477.90 crore.

ICRA Limited had assigned ICRA A1 rating to the Rs,17,500 crore commercial paper issue of LIC Housing Finance Limited and has reaffirmed its ICRA A1 rating.

BOARD MEETINGS HELD DURING THE YEAR:

During the year under review, 6 Board meetings were held. Detailed information on the meetings 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 Act (to the extent modified), guidelines issued by the Securities and Exchange Board of India (SEBI) and guidelines issued by the National Housing Bank ('NHB') (Collectively referred to as 'the Previous GAAP').

The Company has adopted Indian Accounting Standards ('Ind AS') notified under Section 133 of the Companies Act 2013 ('the Act') read with the Companies ( Indian Accounting Standards) Rules, 2015 from April 01, 2018 and the effective date of transition is April 01, 2017. The said transition has been carried out from the erstwhile Accounting Standards notified under the Act, read with relevant rules issued there under and guidelines issued by the National Housing Bank ('NHB') (Collectively referred to as 'the Previous GAAP') and the adoption was carried out in accordance with applicable transition guidance.

The Ind AS are prescribed under Section 133 of the Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Amendment Rules, 2016. 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 has been followed and there are no material departures;

(b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit of the Company for that period;

(c) the Directors have 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 have prepared the annual accounts on a going concern basis;

(e) the Directors have laid down internal financial controls to be followed by the Company and that such Internal Financial controls are adequate and were operating effectively. Note on Internal Financial control is attached as Annexure 2 to this Report and

(f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and 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 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

COMPANY’S POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION INCLUDING CRITERIA:

It is Endeavour of the Company to have an appropriate mix of executive, non-executive and independent directors to maintain the independence of the Board, and separate its functions of governance and management. As of 31st March, 2019, the Board had nine members, two of them are non-executive directors including Chairman and one LIC Director, one executive director who is Managing Director & CEO, one non-executive and no independent director, while rest five are independent directors including one independent woman director

The Nomination and Remuneration Committee at its meeting had laid down Criteria for determining Directors Qualifications, 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 28th March, 2019.

We affirm that except Chairman, LIC Director and Managing Director & CEO all other Directors were paid sitting fees for Board and Committee (other than Corporate Social Responsibility Committee) meetings attended by them. However, Managing Director & CEO is paid remuneration as applicable to an Officer in the cadre of Executive Director of LIC of India and is as per the terms laid out in the Nomination and Remuneration Policy of the Company.

QUALIFICATION, RESERVATION OR ADVERSE REMARK OR DISCLAIMER MADE BY JOINT STATUTORY AUDITORS AND SECRETARIAL AUDITOR:

No adverse remark or reservation or qualification has been made by Joint Statutory Auditors or Secretarial Auditor.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

Pursuant to Section 186(11) of the Companies Act, 2013 loans made, guarantee given or security provided by a housing finance company 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) READ WITH RULE 8(2) OF COMPANIES (ACCOUNTS) RULES, 2014:

All Related Party Transaction that were entered during the financial year were in the ordinary course of the business of the Company and were on arm's length basis. There were no materially significant related party transaction 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 for approval, wherever applicable. Prior omnibus approval as per SEBI (LODR) is also obtained from Audit Committee for such transactions which are of repetitive nature as well as in the ordinary course of business.

The Related Party Transactions Policy and Procedures as reviewed by Audit Committee and approved by Board of Directors is uploaded on the website of the Company and is annexed as Annexure 3 to this report.

Form AOC-2 pursuant to clause (h) of sub-section (3) of Section 134 of the Companies Act, and Rule 8(2) of the Companies (Accounts) Rules, 2014 is annexed as Annexure 4 to this report.

STATE OF THE COMPANY’S AFFAIRS:

The Company earned total revenue of Rs,17,362 crore, registering an increase of 17 percent. The percentage of administrative expenses to the housing loans, which was 0.26 percent in the previous year, has come down to 0.24 percent during the financial year 2018-19.

Net Profit before tax and after tax stood at Rs,3379.55 crore and Rs,2430.97 crore respectively as against Rs,2,765.50 crore and Rs,2,002.50 crore, respectively, for the previous year. Profit before tax increased by 22.20 percent over the previous year while profit after tax showed growth of 21.40 percent over that of the previous year.

AMOUNTS, IF ANY, WHICH IT PROPOSES TO CARRY TO ANY RESERVES:

The Company has transferred Rs,750 crore to Special Reserve and Statutory reserve u/s 29C of NHB Act, and Rs,600 crore to General Reserve.

AMOUNT, IF ANY, WHICH IT RECOMMENDS SHOULD BE PAID BY WAY OF DIVIDEND:

Rs,383.54 crore is proposed to be paid by way of dividend to shareholders of the Company i.e. Rs,7.60 per equity share of face value of Rs,2/- per share.

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 have occurred between the end of the financial year i.e. 31st March, 2019 and the date of the Board's Report i.e. 1st July, 2019.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO: A. Conservation of energy -

(i) The steps taken and impact on conservation of energy-

The Company has replaced models of computers, printers, and other equipment which were consuming between 50 to 90 percent more energy than energy-efficient models. This has ensured reduction in energy consumption and resultant saving in costs.

Electronics such as computers and copy machines are plugged out at the end of day or after office hours in order to save energy as mere turning off or shutting down does not save energy completely.

Air conditioning equipment is cleaned and serviced on regular basis thereby saving energy and costs and giving required cooling.

The office have LED lights and after office hours, only the required lights and air conditioning is used thereby saving energy and minimizing energy wastage.

(ii) The steps taken by the Company for utilizing alternate sources of energy-

The Company is in the process of exploring use of alternate source of energy.

(iii) The capital investment on energy conservation equipments-

None

B. Technology absorption -

(i) The efforts made towards technology absorption - Not applicable.

(ii) The benefits derived like product improvement, efforts to reduce cost of fund, product development or import substitution - Not applicable.

(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.

C. 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, 2019, the Company earned Rs,25.11 lakh and spent Rs,243.94 lakh in foreign currency. This does not include foreign currency cash flows in derivatives and foreign currency exchange transactions.

RISK MANAGEMENT POLICY FOR THE COMPANY:

The Board 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. 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 Risk Management Policy of the Company is in accordance with the directives issued by National Housing Bank. During the financial year under review, the Risk Management Policy of the Company was reviewed by the Risk Management Committee and put up to the Board. The same was approved in the Board Meeting dated 5th March, 2019.

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, the Company has established Corporate Social Responsibility Committee and statutory disclosures with respect to the CSR Committee and an Annual Report on CSR activities is annexed as Annexure 5 to this report.

COMPOSITION OF THE CORPORATE SOCIAL RESPONSIBILITY COMMITTEE IS AS FOLLOWS:

Shri Jagdish

Member

Independent

Capoor

Director

Dr. Dharmendra

Member

Independent

Bhandari

Director

Shri Vinay Sah

Member

Managing Director

& CEO

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 as a whole and also the evaluation process of the same.

The Board of Directors carried out an annual evaluation of its own performance, Board committees and Individual Directors pursuant to the provisions of the Act and the Corporate Governance requirements as prescribed by SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, at the meeting of Independent Directors held on 28th March, 2019.

The performance of the Board was evaluated by the Board after seeking inputs from all the Directors on the basis of 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 Board committees was evaluated by the Board after seeking inputs from the committee members on the basis of criteria such as the composition of committee, effectiveness of committee meeting, functioning, etc.

The Board and the Nomination and Remuneration Committee 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 Chairman was evaluated, taking into account the views of Executive Directors and Non-Executive Directors. The same was discussed in the Board meeting that followed the meeting of the Independent Directors , at which the performance of the Board, its committees and individual Directors was also discussed.

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 and also of its subsidiaries and associates, in the same form and manner as that of the Company which shall be laid before the ensuing Thirtieth Annual General Meeting alongwith the Company's Financial Statement under subsection (2) of Section 129 i.e. Standalone Financial Statement. Further, pursuant to the provisions of Accounting Standard ('AS') 21, 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 alongwith its subsidiaries and associates for the year ended 31st March, 2019 form part of this Annual Report.

THERE HAS BEEN NO CHANGE IN THE NATURE OF BUSINESS OF THE COMPANY DURING THE YEAR UNDER REVIEW.

DIRECTORS:

As of 31st March, 2019, the Board had nine members, two of them are non-executive directors including Chairman and one LIC Director, one executive director who is Managing Director & CEO, one non-executive and non-independent director, while rest five are independent directors including one independent woman director.

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 as Chief Operating Officer (COO) who would subsequently take over as MD & CEO on retirement / elevation / transfer of the existing MD & CEO. This would form part of succession planning.

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 ensure stability and effective implementation of long term business strategies. LIC of India has posted Shri Siddhartha Mohanty as COO of the Company.

APPOINTMENTS / RESIGNATIONS OF DIRECTORS:

Shri M.R. Kumar was appointed as Additional Director and Chairman of the Company by the Board with effect from 25th March, 2019 under Sections 161 of the Companies Act, 2013, and holds Office up to the date of the Thirtieth Annual General Meeting of the Company. The Company has received from Shri M.R. Kumar his consent to act as Director. As required under Section 160 of the Companies Act, 2013, a notice has been received from a member of the Company proposing the name of Shri M.R. Kumar for the office of a Director

The terms and conditions of his appointment shall be determined from time to time by LIC of India and the Board subject to limit as prescribed by the Companies Act, 2013. His appointment as Chairman shall be without prejudice to his continuing service in LIC of India.

In terms of Article 176(a) & (b) of the Articles of Association of the Company read with Article 138(a) & (b) which authorizes LIC of India to nominate Directors and one of such director has to be appointed as Chairman of the Company. Accordingly, LIC of India had nominated Shri Hemant Bhargava, in addition to, he being Managing Director of LIC of India, to the Board of LIC Housing Finance Limited as Director. Thus, the Board of the Company had appointed Shri Hemant Bhargava, Ex-Chairman (Additional In-Charge), of LIC of India and Director on the Board of LIC Housing Finance Limited as Chairman of the Board of LIC Housing Finance Limited in place of Shri V. K. Sharma with effect from 7th January, 2019 till the period as decided by LIC of India i.e. till the period Shri M.R. Kumar was appointed as Additional Director and Chairman of the Company by the Board of Directors with effect from 25th March, 2019.

The Nomination and Remuneration Committee which had considered the performance evaluation report of Dr. Dharmendra Bhandari (DIN-00041829 and 'Fit and Proper' criteria adopted by the Board on 10th March, 2017 as per NHB notification No.NHB.HFC.CG-DIR.1/MD&CEO/2016 dated 9th February, 2017, had undertaken process of due diligence in the case of Dr. Dharmendra Bhandari (DIN-00041829) and found Dr. Bhandari to be suitable and eligible based on evaluation, qualification, expertise, track record, integrity 'fit and proper' criteria, for recommendation to the Board to continue Dr. Bhandari as Independent Director of the Company for a further period of five consecutive years with effect from 19th August, 2019 not liable to retire by rotation. Based on the recommendation of the Nomination and Remuneration Committee, the Board considered and after having thought fit pursuant to the provisions of the Sections 149, 152, 161 of the Companies Act, 2013 and the Rules made thereunder, read with Schedule IV, approved appointment of Dr. Bhandari as Independent Director of the Company to hold office for a period of five consecutive years, not liable to retire by rotation.

The Nomination and Remuneration Committee after considering the profile, qualifications, etc., of Shri Kashi Prasad Khandelwal (DIN-00748523) and in terms of 'Fit and Proper' criteria adopted by the Board on 10th March, 2017 pursuant to NHB notification No.NHB.HFC.CG-DIR.1/MD&CEO/2016 dated 9th February, 2017 also in accordance with SEBI(LODR) Regulations, 2015 as well as after undertaking the process of due diligence, recommended to the Board of Directors of the Company, Shri Kashi Prasad Khandelwal (DIN-00748523), to be suitable and eligible for the appointment of Independent Director of the Company for a period of five consecutive years with effect from 1st July, 2019 not liable to retire by rotation. Based on the recommendation by Nomination and Remuneration Committee, the Board considered and after having thought fit pursuant to the provisions of the SEBI(LODR) Regulations, 2015, Sections 149, 152, 161 of the Companies Act, 2013 and the Rules made thereunder, read with Schedule IV and 'fit and proper' criteria adopted by the Board, approved appointment of Shri Khandelwal as Additional Independent Director of the Company to hold office for a period of five consecutive years, not liable to retire by rotation.

Similarly, the Nomination and Remuneration Committee after considering the profile, qualifications, etc., of Shri Sanjay Kumar Khemani (DIN-00072812) and in terms of 'Fit and Proper' criteria adopted by the Board on 10th March, 2017 pursuant to NHB notification No.NHB.HFC.CG-DIR.1/MD&CEO/2016 dated 9th February, 2017 also in accordance with SEBI(LODR) Regulations, 2015 as well as after undertaking the process of due diligence, recommended to the Board of Directors of the Company, Shri Khemani, to be suitable and eligible for the appointment as Non-Executive Non Independent Director of the Company effect from 1st July, 2019 liable to retire by rotation. Based on the recommendation by Nomination and Remuneration Committee, the Board considered and after having thought fit pursuant to the provisions of the SEBI(LODR) Regulations, 2015, Sections 152, 161 of the Companies Act, 2013 and the Rules made hereunder, read with Schedule IV and 'fit and proper' criteria adopted by the Board, approved appointment of Shri Khemani as Additional Non Independent Director of the Company to hold office, liable to retire by rotation.

Shri V.K. Sharma had tendered his resignation from Chairmanship as well as Directorship of the Company with effect from 31st December, 2018 on attainment of superannuation from the services of LIC of India.

Ms Usha Sangwan, Director of the Company had tendered her resignation from Directorship of the Company on attainment of superannuation from the services of LIC of India. Consequent upon resignation of Ms Usha Sangwan, the Board of the Company had appointed Shri Hemant Bhargava, Managing Director, LIC of India, as Additional Director (Non-Executive) of the Company in place of Ms. Usha Sangwan with effect from 4th October, 2018 till the period he took over as Chairman of the Company from 7th January, 2019.

Shri Debabrata Sarkar, Director of the Company and Chairman of the Audit Committee had tendered his resignation from Directorship of the Company with effect from 12th November, 2018, on account of his other professional commitments.

On completion of term of office of five years, Shri T V Rao tendered his resignation with effect from 31st July 2018.

Thus as on the date of this report, the Board of Directors of the Company consists of eleven members, four of them are nonexecutive directors including Chairman and one LIC Director, while other two are non-executive non-independent Directors. Managing Director & CEO is executive whole time Directors. Remaining six Directors are Independent Directors including one Independent Woman Director..

CONTINUANCE OF DIRECTORSHIP OF SHRI JAGDISH CAPOOR, NON-EXECUTIVE INDEPENDENT DIRECTOR OF THE COMPANY AGED ABOVE 75 YEARS

Pursuant to the provisions of Regulation 17(1A) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018 (Amendment Regulations) and other applicable provisions, if any, of the Companies Act, 2013 consent of the Members was sought by way of Postal Ballot and remote e-Voting which was duly assented by Members on 20th February, 2019 with requisite majority for continuance of the Directorship of Shri Jagdish Capoor, as Non-Executive Independent Director of the Company, who is above the age of 75 years and is aged about 80 years at present, till the expiry of his term i.e., 23rd May, 2022 in the office of Director of the Company on the existing terms and conditions, subject to provisions, rules and regulations of the Act and / or Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and / or any other appropriate authorities , as may be applicable, from the effective date of the said Amendment Regulations i.e., April 01, 2019.

CHANGE IN DESIGNATION:

The Board considered and thought fit to approve change in the designation of Ms. Savita Singh with effect from 1st April, 2019, from Non-Executive Non Independent Director to Non-Executive Independent Director in order to align with the Regulation 17(1)(a) of the SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2015 inserted vide SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018 dated 9th May, 2018, not liable to retire by rotation with effect from 1st April, 2019.

Similarly, the Board also considered change in the designation of Shri P. Koteswara Rao, from Non-Executive Independent Director to Non-Executive Non Independent Director liable to retire by rotation with effect from 4th May, 2019 in order to comply with the provisions of Section 152(6)(a) of the Companies Act, 2013.

DIRECTOR RETIRING BY ROTATION:

Shri P. Koteswara Rao, retires by rotation at the ensuing Annual General Meeting and is eligible for re-appointment.

APPOINTMENTS / RESIGNATION OF THE KEY MANAGERIAL PERSONNEL:

Shri Vinay Sah, Managing Director & CEO, Mr. Nitin K. Jage, General Manager & Company Secretary and Mr. Sudipto Sil, CFO are the Key Managerial Personnel as per the provisions of the Companies Act, 2013.

Shri P Narayanan tendered his resignation as CFO and Key Managerial Personnel w.e.f. 10th May, 2019 consequent upon his transfer to LIC of India and in his place Mr. Sudipto Sil was appointed as CFO and Key Managerial Personnel of the Company with effect from 10thMay, 2019 until the Board considers it fit.

COMMITTEES OF THE BOARD:

The Company has various committees which have been established as a part of the best corporate governance practices and is in compliance with the requirements of the relevant provisions of applicable laws and statutes.

The Company has following Committees of the Board:

- Audit Committee

- Stakeholders Relationship Committee

- Nomination and Remuneration Committee

- Corporate Social Responsibility Committee

- Risk Management Committee

- Executive Committee

- Debenture Allotment Committee

- HR Committee

- Strategic Investment Committee

- IT Strategy Committee

Composition of Audit Committee is as follows:

-

Shri Jagdish Capoor

Chairman

Independent

Director

-

Dr

Member

Independent

Dharmendra

Director

Bhandari

-

Shri Ameet

Member

Independent

Patel

Director

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, 2019, 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, 2019, 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 having an authorized share capital of Rs,75 Crore. The basic purpose of establishing the Company was to establish & operate assisted living community centres for the senior citizens.

During the fiscal 2018-19, the Company earned a Profit Before Tax (PBT) of Rs,0.86 crore and Profit After Tax (PAT) of Rs,0.63 crore.

The Company has successfully completed a project at Bangalore in two Phases and its project at Bhubaneswar is at near completion stage. The Company is also exploring possibilities to develop Senior Living Care Homes project at Aluva, Kerala and Jaipur subject to viability of the projects.

Further, the Company is also in process to evaluate Senior Living Care Homes projects at various locations across the Country With life expectancy going up and number of elderly citizens rising year after year, the Company is set on a growth trajectory keeping LIC & LIC HFLs' vision for fulfillment of Corporate Social Responsibility at the main focus.

2. LICHFL ASSET MANAGEMENT COMPANY LIMITED.

The Company is in the business of managing, advising, administering Venture Capital and Alternative Investment Funds.

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 Rs,529.35 Crore from Banks, Financial Institutions, Corporate and HNIs as against the targeted size of Rs,500 Crore and announced financial closure on 30th March, 2013. The Company has deployed Rs,461.3 Crore in 9 Portfolio Companies engaged in development, acquisition or operation of affordable / mid income housing, related infrastructure and Hospitals. With receipt from 6 exits, the Fund has so far achieved a multiple of 1.66X on investments with an IRR of 26.43%.

The Company also launched a new Alternative Investment Fund namely LICHFL Housing & Infrastructure Fund (LHIF) with a total corpus of Rs,1,000 crore including Green Shoe Option 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. The Company has already received total Commitment of Rs,700 crore out of which Contribution Agreement was signed for Rs,650 crore as on 31st March, 2019.

3. LICHFL TRUSTEE COMPANY PRIVATE LIMITED.

The Company is in the business of undertaking the business of trusteeship services for Venture Capital Funds and Alternative Investment Funds.

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.

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 50 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 - from financial planning to manage every aspect of right investment, both for the short and long term.

At present, the Company distributes Life Insurance products of LIC of India, Home Loans and Fixed Deposits of LIC Housing Finance Limited, Mutual Funds of various fund houses, General Insurance products of United India Insurance Company Limited and Tata AIG General Insurance Company Limited, 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 Rs,19.01 crore and Profit After Tax (PAT) stood at Rs,13.10 crore for the FY 2018-19 and recommended dividend @ 40 % for FY 2018-19. FINANCIAL HIGHLIGHTS FOR FY 2018-19 IN COMPARISON WITH PREVIOUS YEAR:

Sr. No.

Particulars

FY 2018-19 in Rs, (crore)

FY 2017-18 in Rs, (crore)

1.

Total Income

52.82

52.95

2.

Profit Before Tax

19.01

24.14

3.

Profit After Tax

13.10

17.25

4.

Dividend (Declared)

3.80

4.28

The Company is striving to improve its performance across all business verticals in the coming years.

Name/s of Company/ies which have ceased / become subsidiary/joint venture/associate: None

As on 31st March, 2019, 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, 2019 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 Company's operations in future.

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 2 is annexed to this report.

VIGIL MECHANISM / WHISTLE BLOWER POLICY:

The Company has a Whistle Blower Policy in place which provides whistle blowers 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 victimization of whistle blower who avails of such mechanism and also provides for direct access to the Chairman of the Audit Committee.

EMPLOYEE STOCK OPTIONS:

No stock options were issued to the Directors or any employees of the Company.

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

Ratio to median

(including Independent

remuneration

Directors)*

Nil

N.A.

*No remuneration is paid to Non-Executive Directors (including Independent Directors)

Executive Director

Ratio to median

(MD&CEO)

remuneration

Shri Vinay Sah

7:1

b. The percentage increase in remuneration of each director, Chief Executive Officer, Chief Financial Officer, Company Secretary in the financial year:

Non-Executive Directors (including Independent Directors)*

% increase in remuneration in the financial year

Nil

N.A.

*No remuneration is paid to Non-Executive Directors (including Independent Directors)

Executive Director and Key Managerial Personnel

% increase in remuneration in the financial year

Executive Director (MD&CEO)

16.39%

Company Secretary

24.63%(on account of perquisite in respect of lease accommodation)

Chief Financial Officer

-0.48%

c. The percentage increase in the median remuneration of employees in the financial year:

-6.23%

d. The number of permanent employees on the rolls of the Company:

2,309

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

31 March,

15 November

% Change

2019

1994 (IPO)

Market Price

558.85**

12*

4557.08

(in Rs, )

‘Adjusted Issue price value on account of sub-division **BSE-closing. price

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 16.93%. The average annual decrease in the salaries of the employees other than managerial personnel during the year was -6.23% on account of new recruitment at lower cadre.

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, 13thFloor, Cuffe Parade, Mumbai - 400 005.

SIGNIFICANT AND MATERIAL ORDERS:

There are no significant and material orders passed by the regulator or courts or tribunals impacting the going concern status and the Company's operations in future.

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 hereunder. 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 hereunder 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: Your Company on a regular basis sensitizes its employees on prevention of sexual harassment through various workshops, awareness programmes.

(e) Nature of action taken by the employer or district officer: Nil

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 upholding and maintaining the dignity of every women executive / staff working in the Company.

HUMAN RESOURCES

The Company aims to align HR practices with business goals, increase productivity of Human Resource by enhancing knowledge, skills and to provide conducive work environment to develop a sense of ownership amongst employees. Productive high performing employees are vital to the Company's success. The Board values and appreciates the contribution and commitment of the employees towards performance of your Company during the year. The Company inducted employees for various positions and also promoted employees to take up higher responsibilities during the year. 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 organized 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 Life Insurance Corporation of India, National Housing Bank and all the bankers of the Company. The Directors express their sincere thanks to the Company's clientele, lenders, investors and members for their patronage. The Directors appreciate the dedicated services of the employees and their contribution to the growth of the Company.

For and on behalf of the Board

Place: Mumbai Chairman

Date: July 1, 2019