Professional Documents
Culture Documents
LIC Housing Finance Ltd. is one of the largest Housing Finance company in India. Incorporated on 19th June
1989 under the Companies Act, 1956, the company was promoted by LIC of India and went public in the year
1994. The Company launched its maiden GDR issue in 2004. The Authorized Capital of the Company is Rs.1500
Million (Rs.150 Crores) and its paid up Capital is Rs.950 Millions (Rs.95 Crores). The Company is recognized by
National Housing Bank and listed on the National Stock Exchange (NSE) & Bombay Stock Exchange Limited (BSE)
and its shares are traded only in Demat format. The GDR's are listed on the Luxembourg Stock Exchange.
The main objective of the Company is providing long term finance to individuals for purchase / construction / repair
and renovation of new / existing flats / houses. The Company also provides finance on existing property for business /
personal needs and gives loans to professionals for purchase / construction of Clinics / Nursing Homes / Diagnostic
Centres / Office Space and also for purchase of equipments.
The Company possesses one of the industry's most extensive marketing network in India : Registered and Corporate
Office at Mumbai, 6 Regional Offices, 13 Back Offices and 181 marketing units across India. In addition the company
has appointed over 773 Direct Sales Agents (DSAs), 3400 Home Loan Agents (HLAs) and 615 Customer
Relationship Associates (CRAs) to extend its marketing reach. Back Offices spread across the country conduct the
credit appraisal and administrative functions.
The Company has set up a Representative Office in Dubai and Kuwait to cater to the Non-Resident Indians in the
GLCC countries covering Bahrain, Dubai, Kuwait, Qatar and Saudi Arabia. Today the Company has a proud group of
over 10,00,000 prudent house owners who have enjoyed the Company's financial assistance.
Mission
Values
It’s my pleasure to welcome you all to the 21 st Annual General Meeting of LIC
Housing Finance Limited. I am indeed honoured to share with you the fruits
of the hard work and dedication, the team at LIC Housing Finance Limited had
put in the year gone by. The year witnessed excellent business growth,
increased profitability and continues to accomplish one milestone after another
in its road map to annihilate defaults and NPA levels. I thank each and every
one of you for reposing your faith in me and in my dedicated team.
Housing Scenario:
India’s housing finance industry comprises of banks and housing finance
companies. The Housing Finance disbursements have grown by 18 percent in
2009-10 to Rs.1,38,200 crore as compared with Rs.1,17,000 crore in 2008-
09. Population growth and changes in socio-demographic factors such as
increasing trend towards urbanization and nuclearisation of families, alongwith
increase in consumers’ affordability levels, would be the key factor impacting
finance penetration and hence volume growth in the long term. Further, rise in
property prices and improvement in loan to value ratios would increase the
average ticket size of loans, supporting value growth in the next five years. It
is estimated that housing finance disbursements would post a 5 year CAGR of
14.2 percent reaching Rs.2,68,900 crore in 2014-15.
Over the last few years, the share of housing finance companies (HFC) has
been increasing mainly due to their specialisation, better customer service,
and increasing focus on urban centres which have higher average ticket size.
The HFCs are expected to further raise their share in total disbursements,
despite the introduction of teaser loan rates by banks. HFCs too have reduced
interest rates to meet competitive pressures from banks. The launch of lower
interest rate schemes on home loans by public sector banks has led other
private banks and HFCs to follow suit. Hence, yields are estimated to have
fallen by around 50 basis points in 2009-10. At the same time, cost of funds
has also reduced because of abundant liquidity in the system.
Due to the volatility in the situations, housing demand could witness phases of
spikes and slowing down, but these should be taken as runs of a cycle and the
comfort point for any lender in the housing industry will be the genuineness of
the demand, the urgency of the demand and the huge market potential. In
fact the intention of the Union Government is to provide enticement for
housing, therefore, there shall be no cause for cynicism so far as the business
expectations are concerned.
Achievements:
A few major achievements influencing the performance of your Company
during the year are worth mentioning here:
1. During the year under review, the Company had sanctioned loans worth
Rs.18043.17 crore and disbursed Rs.14852.92 crore. Individual loans
constitute 78.43 percent of the total sanctions and 83.81 percent of the
total disbursements. The total loan portfolio increased to Rs.38081.38
crore as against Rs.27679.28 crore in the previous year.
2. The Company continues to be rated as ‘AAA’ by the credit rating agency
namely CRISIL for the ninth consecutive year whilst maiden Fixed Deposit
program received an FAAA / stable rating from CRISIL for third
consecutive year. It raised funds aggregating to Rs.17,004.35 crore
through term loans from banks, issuance of Non-Convertible Debentures,
Upper Tier II subordinate bonds, commercial paper, NHB refinance and
public deposit. Efforts were made to re-price the existing borrowings
through either negotiation or entering into Interest Rate Swap.
3. Existing lending rates were reviewed at regular quarterly intervals in view
of the change in interest rate scenario, thereby insulating the
stakeholders of risk of interest fluctuation and passing on the benefits as
applicable to the customer.
4. The Capital Adequacy Ratio of the Company was 14.89 percent as against
prescribed norms of 12 per cent by National Housing Bank.
5. Apart from wide marketing network comprising Direct Selling Agents
(DSAs), Home Loan Agents (HLAs) and Customer Relationship Associates
(CRAs), wholly owned subsidiary, LICHFL Financial Services Limited has
started distributing the Company’s products.
6. The Company with a view to consolidate its financial position and
networth, raised funds through a Qualified Institutional Placement of 10
million equity shares amounting to Rs.658 crore (US$137.10 million).
7. The Company is awaiting RBI guidelines to make possible entry into the
banking sector as Union Budget for F.Y. 2010-11 has proposed banking
licenses to private sector players including NBFCs.
8. The Company is monitoring recovery of dues from customers very
closely. The Company makes regular follow up for recovery of the
outstanding dues from the defaulting customers. During the last year,
the Company had resorted to taking action under the Securitisation and
Reconstruction of Financial Assets and Enforcement of Security Interest
Act, 2002 (SARFAESI Act) and had sold 352 properties for Rs.19.77
crore. In addition, it could collect Rs.46.31 crore from 3895 accounts
after issuance of notice under the SARFAESI Act. Company has been
effective in reducing NPAs through this route and generate considerable
amount in adding to the income.
The Company has reduced the gross NPA during the year to Rs.263 crore from
Rs.297 crore in the last year. The gross NPA ratio has come down to 0.69
percent from 1.07 percent and net NPA ratio has also come down to 0.12
percent from 0.21 per cent.
In view of the fierce competition in the housing finance market, the main
concern of your Company is to protect the interest of all the stakeholders and
also strengthen its brand image of being a professionally managed and leading
housing finance company. Your Company has intensified focus on all critical
areas such as cost of funds, market share, efficient treasury operation,
reduction of NPA, training of front-end officials in sales and servicing areas,
upgradation of information technology and simplification / rationalization of
procedures. As a result, the Company has been able to show an excellent
performance in profit growth and improved its market share despite aggressive
marketing by other competitors.
Performance :
• The revised Direct Tax Code proposals should bring cheer to home
buyers and home owners alike. It has done away with the concept of
presumptive/ notional rent and any house property not let out for any
part of the year will be considered to have nil value.
But I am confident that the Company would ensure not only consolidation of
the gains achieved in the past years but also ensure further growth and
increased profitability.
I wish the Company and all its Shareholders a very happy and prosperous year
of performance and relationship ahead.
T. S. Vijayan
CHAIRMAN
Place: Mumbai
Date: 15th July, 2010
CODE OF CONDUCT FOR BOARD OF DIRECTORS AND SENIOR MANAGEMENT
Preamble:
All Directors and Senior Management must act within the bounds of the authority conferred upon them and with a duty to
make and enact informed decisions and policies in the best interests of the company and its shareholders/stakeholders.
With a view to maintain the high standards that the company requires, the following rules/code of conduct should be
observed in all activities of the board. The Company appoints the Chief Executive as a compliance officer for the purposes
of the code, who will be available to Directors and Senior Management to answer questions and to help them comply with
the code.
For the purpose of this code, the term ‘Senior Management’ shall mean personnel of the Company who are members of its
management team one level below the Executive Director.
All directors and Senior Management shall conduct their activities, on behalf of the company and on their personal
behalf, with honesty, integrity and fairness. All directors and Senior Management will act in good faith, responsibly,
with due care, competence and diligence, without allowing their independent judgment to be subordinated. Directors
& Senior Management will act in the best interests of the company and fulfill the fiduciary obligations.
2. Conflict of Interest
Directors on the board and Senior Management of the company shall not engage in any business, relationship or
activity, which may be in conflict of interest of the COMPANY or the group.
Conflicts can arise in many situations. It is not possible to cover every possible conflict situation and at times, it will
not be easy to distinguish between proper and improper activity. Set forth, are some of the common circumstances
that may lead to a conflict of interest, actual or potential -
a) Directors and Senior Management should not engage in any activity/employment that interferes with the
performance or responsibility to the company or is otherwise in conflict with or prejudicial to the company.
b) Directors and Senior Management and their immediate families should not invest in a company, customer,
supplier, developer or competitor and generally refrain from investments that compromise their responsibility to
the company.
c) Directors and Senior Management should avoid conducting company business with a relative or with a firm /
company in which a relative / related party is associated in any significant role.
If such related party transaction is unavoidable, it must be fully disclosed to the board or to the CFO of the
company.
3. Compliance
Directors and Senior Management are required to comply with all applicable laws, rules and regulations, both in letter
and in spirit. In order to assist the company in promoting lawful and ethical behaviour, directors and Senior
Management must report any possible violation of law, rules, regulation or the code of conduct to the company
secretary.
4. Other Directorships
The COMPANY feels that serving on the boards of directors of other companies may raise substantial concerns about
potential conflict of interest. And therefore, all directors must report/disclose such relationships to the Board on an
annual basis. It is felt that service on the board of a direct competitor is not in the interest of the company.
5. Confidentiality of Information
Any information concerning the company's business, its customers, suppliers etc., which is not in the public domain
and to which the director and Senior Management has access or possesses such information, must be considered
confidential and held in confidence, unless authorized to do so and when disclosure is required as a matter of law. No
director and Senior Management shall provide any information either formally or informally, to the press or any other
publicity media, unless specially authorized.
6. Insider Trading
Any director and Senior Management of the COMPANY shall not derive benefit or assist others to derive benefit by
giving investment advice from the access to and possession of information about the company, not in public domain
and therefore constitutes insider information. All directors and Senior Management will comply with insider trading
guidelines as issued by SEBI as well as the Code of Insider Trading adopted by the Company which form part of this
Code.
No director and Senior Management of the company shall receive or offer, directly or indirectly, any gifts, donations,
remuneration, hospitality, illegal payments and comparable benefits which are intended (or perceived to be intended)
to obtain business (or uncompetitive) favours or decisions for the conduct of business. Nominal gifts of
commemorative nature, for special events may be accepted and reported to the Board.
8. Protection of Assets
Directors and Senior Management must protect the company's assets, labour and information and may not use these
for personal use, unless approved by the Board.
9. Periodic Review
Once in a year or upon revision of this code, every director and Senior Management must acknowledge and execute
an understanding of the code and an agreement to comply. New directors and Senior Management will sign such a
deed at the time when their directorship begins / taking over the charge as Senior Management.
Person shall be eligible for the office of Non-Executive Director so long as the term of office did not exceed nine years
in three terms of three year each, running continuously.
Every Director and Senior Management personnel should give annual declaration for the financial year within 15 days
of close of the financial year to the effect that he has complied with code of conduct including code for prevention of
insider trading.
Subsidiary Companies
To address the crying need of housing for the senior citizens of the
country, the Company had promoted LICHFL Care Homes Limited, to
establish and operate assisted community living centres. LICHFL Care
Homes Limited was incorporate on 11thSeptember, 2001. It launched
its eco-friendly pilot project in Bangalore with cost-effective
independent cottages and all other on-campus amenities, fully
structured and self-contained to address every possible need of
residents. It has library, community centre, home theatre, meditation
centre, and doctors on call and ambulance to take the ailing to the
nearest city Medicare centre – all that would make the lives of senior
citizens comfortable and satisfying. New such projects are planned in
Bhubaneshwar and Jaipur and the company is in the process of
finalising the purchase of land for a few more projects.