Religare Enterprises Ltd Management Discussions.

1. Macroeconomic Developments & Industry Overview Macroeconomic Overview

Growth of the Indian Economy moderated in 2018-19 with a growth of 6.8%, slightly lower than 7.2% in 2017-18. Yet, India continued to remain the fastest growing major economy in the world. The Indian Economy started the fiscal year 2018-19 with a strong growth of 8.2% in the first quarter. Later, in the second quarter the growth eased back to 7.3% due to rising global volatility, mainly due to financial volatility.

After analyzing the growth pattern of the various quarters of 2018-19, it is clear that there has been a moderation in Real GDP of each quarter of 2018-19. The fourth quarter represented a growth of 5.8%, which came out to be the lowest of all the four quarters.

The Indian economy had to deal with uncontrollable challenges around the second-third quarter of the year. This was set off by a steep increase in the prices of the crude oil, which led to a major depreciation in Rupee along with other emerging market currencies.

"Agriculture and Allied" played a major role in the moderate growth of the Economy. The downtick of food prices persuaded the farmers to produce less. This majorly happened in the fourth quarter of the year 2018-19. The Agriculture and Allied sector declined by 0.3%, due to this there has been an overall fall in consumption over some sectors.


FY2016 FY2017 FY2018 FY2019
Real GDP Growth 8.2% 7.1% 7.2% 6.8%
Real GVA Growth 8.1% 7.1% 6.9% 6.8%

Source: Government oflndia; Press Information Bureau (

Investment growth is recovering since 2017-18. Growth in fixed investment geared up from 8.3% in 2016-17 to 9.3% in the successive yearand furtherto 10% in the year2018-19. The Gross Fixed Capital Formation rate upgraded from 31.4% in 2018 to 32.3% in 2019.

Current Account Deficit (CAD) is manageable at 2.1% of GDP. The latest oil price fall bodes well for India, as it eases the pressure on CAD and provides a probable appreciation in the Indian Rupee. In absolute terms, the CAD stood at US$4.6 Billion in the fourth quarter.

In the year 2018-19, we saw an improvement in the banking sector. The Banking System enhanced, as Non-Performing Accounts (NPA) ratios diminished, credit growth accelerated. As per RBI reports र 50,000 Crores was received by banks from previously Non-Performing Accounts (NPA). The Benchmarking policy was first increased by 50 bps, but later it was cut down by 75 bps.

Inflation contained at 3.4% in 2018-19. The FY2018-19 ended with fiscal deficit at 3.4% of GDP and debt to GDP ratio of 44.5%. We saw a 0.4 percentage point fall in revenue expenditure and 0.1 percentage point rise in capital expenditure.

Growth in service exports and imports in US dollar terms declined to 5.5% and 6.7% respectively, in FY2018-19. Net Foreign Direct Investment inflows grew by 14.2% in 2018-19. FDI inflows have been growing at a high rate since the year 2015-16. The Foreign Exchange Reserves in numerical terms decreased by US$ 11.6 Billion at end of March 2019 over end of March 2018.

Source: Government oflndia; Press Information Bureau (

Industry Overview

The Non-Banking-Financial-Companies sector has been facing challenges regarding the liquidity front in the recent months. The RBI has interfered through different measures to solve these problems.

RBI classifies NBFCs on the basis of:

• Liability structure

• Typeofactivitiesundertaken

• Systematic importance

At an aggregate level, the number of NBFCs registered with RBI has fallen from 11,402 as at 31 March, 2019 to 10,190 as at 30 September, 2018. In recent times, NBFCs have outperformed Scheduled Commercial Banks (SCBs) on growth in advances, asset quality and profitability.

The above chart shows that the total income of the NBFC-ND companies aggregating to र 1.11 Lakh Crores comprise around 80% oftotal income of NBFC sector.

The Total Balance Sheet size of the NBFC-ND comprehend 85.4% of the total balance sheet size of the NBFC sector with the balance 14.6% reckoned by NBFC-D.

Capital Adequacy of the NBFC sector is measured using the capital to risk-weighted asset ratio (CRAR) and this has been introduced for all the categories of NBFCs for the date ended 30 September, 2018.

Infrastructure Finance Company and Loan Companies have the highest outstanding borrowings making a total ofर 12.09 Lakh Crores which is 76.9% ofthe total outstanding borrowing.

The Housing Finance Companiesर (HFCs) share in lending to housing has jumped from 41% in FY2017 to 43.6% in FY2018. The lending of HFCs multiplied at almost twice the rate as compared to Scheduled Commercial Banks (SCBs).

Source: RBI Trends and Progress ofBanking in India, CARE Ratings

2. Overview of our Business

Reliaare Structure and Business Model

Religare Enterprises Limited (REL) is a Core Investment Company (CIC) registered with the Reserve Bank of India (RBI). It is a diversified financial services company with the businesses in - Lending, Health Insurance and Broking. RELs operating businesses are housed in subsidiaries and have independent management teams to conduct their day-to-day operations. REL has provided the operating companies with the requisite capital, governance structures, risk management mechanisms and oversight, and helped the operating businesses attain critical scale.

REL has a three-fold role to play in ensuring the success of the businesses:

1. Allocating Capital - a key factor in production for any enterprise, and indeed, the raw material for financial services businesses - to the operating businesses

2. Determining Governance Structures and Risk Management & Control mechanisms - such that there are checks and balances at every level and the businesses are safeguarded

3. Undertaking Performance Management - to ensure the capital invested is being deployed in a manner that furthers RELs ultimate objective

Capital Raise Efforts at Group and Subsidiary Level

During the year FY18-19, your company has made sustained efforts to raise capital for growth and to repay liabilities.

REL obtained an in-principle approval under the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 from National Stock Exchange of India and BSE Limited (the "Exchanges") to issue and allot 175,224,258 convertible warrants of र 52.30 each exercisable into equal number of Equity Shares ofर 10 each of the Company on preferential basis.

Pursuant to shareholders approval dated March 19, 2018, the Company issued and allotted 111,497,714 convertible warrants on preferential basis on April 19, 2018.

Out of these, 38,487,485 warrants were converted into equity shares during the year FY2018-19 and the balance 73,010,429 warrants (partly paid) are remaining for conversion as on date.

The Company utilized the funds received from the warrant holders, and from subsequent conversion to equity shares, to repay loans and liabilities, and to make investments in subsidiaries for solvency capital requirements.

The Company and its subsidiaries continue to make sustained efforts to raise primary capital for growth of underlying businesses.

Kev Subsidiaries

REL being a Core Investment Company, the businesses are operated out of various subsidiaries. The table below lists our key subsidiaries as at March 31,2019, and their major areas of operation:

Company Status RELs Stake Major Area(s) of Operation
Religare Finvest Limited (RFL) Subsidiary 85.63% • SME Finance
Religare Housing Development Finance Corporation Limited (RHDFC) Subsidiary (held through RFL) 74.93% • Affordable Housing Finance
Health Insurance
Religare Health Insurance Company Limited (RHICL) Subsidiary 89.66% • Health insurance and related products
Religare Broking Limited (RBL) Subsidiary 100% • Retail Equity Broking
• Retail Currency Broking
• Online Investment Portal
• Depository Services
• E-Governance Services
Religare Commodities Limited (RCL) Subsidiary (held through RBL) 100% • Retail Commodity Broking

Religare Comtrade Limited (RCTL)1 has not been in active business since the mid of FY2017-18. During the year FY2018- 19, RCTL has paid out its entire external liabilities. The REL and RCTL Boards have approved a Scheme of Amalgamation, where RCTL (along with another non-operational 100% REL subsidiary) is proposed to be merged into REL. The proposed merger is in execution stage, and will be filed with the NCLT in due course.


1REL holds 73.07% of RCTL, RCL (Religare Commodities Limited) holds 26.93% of RCTL. RCL in turn is 100% held by REL. The shareholding of RCTL is thus held 100% by REL (directly and indirectly).

Lending - SME

Our lending business is operated by RFL and its 87.50%-owned subsidiary, RHDFC. RFL is registered with RBI as a nondeposit taking, systemically important Non-Banking Financial Company (NBFC-ND-SI). RFL is focused on providing debt capital to Small & Medium Enterprises (SMEs) to enable them to enhance their productive capacity and throughput. It is amongst the first NBFCs in India to focus on this segment, having started the business in 2008.


Given its focus on the SME sector, RFLs offerings have been tailor-made to suit the unique requirements of this sector and comprise:

SME-Secured: RFLs SME-Secured product enables its customers to obtain loans against their residential or commercial property. Loans offered under this product may be utilized towards different purposes including business expansion and purchase of plant and machinery.

SME-Unsecured: This product caters to working capital and other financial requirements of small and medium enterprises, self-employed businessmen and professionals. Loans are granted after an in-depth and detailed financial analysis and credit underwriting of the clients.

Short Term Trade Finance: This product empowers our customers to bridge their short term financial gaps. Our short term trade finance gives freedom to SMEs to avail financing against purchase payables.

Presence in SME clusters

SME units tend to be concentrated in clusters in or around large cities to take advantage of the infrastructure and ancillary services that are available in such centers. Nearly 80% of the SME financing opportunity in India is concentrated in 25 such clusters and RFL has systematically built its branch network to cover all these locations - as at March 31, 2019, RFLs network comprised of 30 branches across 13 states and 1 union territory. In addition, RFL conducts business in clusters that are in proximity of those where it has a branch using the hub-and-spoke model and in this manner services markets where it does not have a branch presence. RFL has developed robust and comprehensive infrastructure to ensure that all critical processes - including credit assessment, risk management, collections and recoveries - are performed in-house and has made substantial investments towards building best-in-class infrastructure to support its business operations.

Operational Performance

The company has a total book size ofर 7085 Crores out of which SME book constituted 64% and amounted to र 4503 crores as at March 31, 2019 in accordance with Ind-AS. The GNPAfor SME standard book stands at 28.3% as at March 31, 2019. This high number can be attributed to a declining book and no fresh disbursals for the year 2018-19. Also, this year RFL has made provisions on its entire Corporate Loan Book ofर 2037 Crores. RFL is not making any fresh disbursals as the company has been under the Corrective Action Plan ("CAP") by RBI vide its letter dated January 18, 2018 and has been prohibited from expansion of credit/investment portfolio other than investment in government securities. Hence during the year, the company focused its efforts on collections and recovery.

Balance Sheet and Credit Ratings

Shareholders funds in RFL as at March 31, 2019 (including retained earnings) amounted to र 947 Crores and balance sheet size stood at र 6961 Crore. Shareholders funds take into account the significant provisions made towards nonperforming assets during the year.

The following table lists the ratings on RFLs debt as at March 31,2019:

Instrument Rating by ICRA
Long Term Debt Programme [ICRA] BB@; rating outstanding
Bank Limits [ICRA] BB@/[ICRA] A4@; rating outstanding
Instrument Rating by India Ratings
Lower Tier 2 sub-debt IND B+/RWN
Long-term bank loans IND B+/RWN
Commercial paper IND A4/RWN
Short-term bank loans IND A4/RWN

RWN = Rating Watch Negative

The rating agencies have revised their ratings for RFL keeping in view the stretched liquidity profile, significantly reduced financial flexibility of the company owing to delay in equity infusion and challenges in raising of incremental funding. Further, there has not been any fresh business since FY2017 and there has been significant deterioration in the asset quality of RFL with the entire corporate book being classified as non-performing asset (NPA) and increased slippages in the SME book. Given the mismatch in the asset liabilities (ALM), RFL has proposed to implement a debt resolution plan with its lenders and the same was discussed at the Joint Lenders Meeting ("JLM") on March 7, 2019, where April 1,2019 was decided to be the Reference Date for Holding On Operations. Capital raise discussions are also being undertaken by the management both at subsidiary and group level.

Lending - Affordable Housing

Housing finance is Indias most resilient sector and needs 5.2 Crore units and 10 Lakh Crores investment by year 2022. Religares affordable housing finance arm RHDFC is thus a strategically placed company equipped to leverage this requirement. It is a registered HFC (Non-deposit taking) with a SARFAESI License. The company focuses on providing loans for acquisition, construction and repair of dwelling units in the affordable housing segment. RHDFC operates through 30 branches as at March 31,2019 and has a diversified geographical presence across Delhi NCR, Rajasthan, Maharashtra, Gujarat, Madhya Pradesh, Tamil Nadu, Karnataka, Telangana and Andhra Pradesh. The company has remained profitable in each year of its operations since it became a part of the Religare group in year 2009.

RHDFC envisions itself to be a future ready company and hence it aims to maximize digitization in its processes and work towards enabling an efficient workforce. The company is increasingly using analytics and big data to better understand inventory, migration and pricing trends. The ability to assess the credit worthiness of potential borrowers is crucial for succeeding in this segment; robust credit assessment processes position RHDFC extremely well to capitalize on this opportunity. Customer centricity has also been a forefront vision of the company and company is following ‘Closer to Customer strategy to have a better outreach with the customers.

During FY18-19, RHDFC disbursed loans totaling र 107 Crores and the total book size stands at र 706 Crores as at March 31, 2019. Due to financial challenges at RFL and REL, its ultimate parent, the book size of RHDFC reduced as compared to the previous year. However, with the distribution reach intact and the scale of operations maintained, RHDFC is set to make a meaningful impact in its target segment.

As at March 31, 2019, RHDFCs Long Term and Short Term Bank Limits rating was ‘[ICRA] BBB-@ and ‘[ICRA] A3@ respectively with rating placed on watch with negative implications. The short term debt programme rating was ‘[ICRA] A3@ reaffirmed with rating placed on watch with negative implications. This rating action followed the rating action on RHDFCs parent, RFL, wherein RFLs long-term ratings have been revised to [ICRA]BBB- from [ICRA]BBB and the short-term ratings have been reaffirmed at [ICRA]A3. India Ratings gave long term rating for RHDFC as IND BB- with rating watch maintained.

Health Insurance

Indian health insurance market is a growing market and registered a market size ofर 50,891 Crores in FY 18-19, up by 18.3% from last year. Out of all health insurance service providers in India, that is Public Sector Institutions, Private Institutions and Stand-alone insurers, Public Sector institutions have the lions share having 53% of the market share and Private and Stand-alone insurers stand at par with each other with respect to market share. Though in terms of retail policies, Stand Alone Health Insurance Companies (SAHI) have the biggest share of44%. Our company ‘Religare Health Insurance Company Limitedर (RHICL) is a SAHI and ranks number 6 overall and number 3 in GDP. It registered a Gross Written Premium of र 1843 Crores during the Financial Year 2018-19, a growth of 65% over the previous financial year and reported PBT ofर 57 Crores. RHICL commenced business in 2012 and currently has three major shareholders - Religare Enterprises Limited, Union Bank of India and Corporation Bank. It is servicing over 700 locations across the country with a network of 110 plus branches and 9,450 plus hospitals. It has a product bouquet of 18 products encompassing group, travel, fixed benefit and indemnity categories to serve varied customer needs. The Company has a differentiated service offering w.r.t business from corporate like wellness programs & preventive health check-up thereby helping in negotiating higher premiums & improves customer stickiness. It follows a multi-channel distribution strategy through agency, brokers, corporate agents, online and bancassurance and its majorfocus is on retail and SME customers.

It boasts of an experienced management team with an average vintage of 6 plus years. Company has also made deep investments in technology for comprehensive risk management & digital enablement of all transactions and stakeholders. The company is highly customer centric with a low grievance rate of two complaints per 10,000 policies and has a claim settlement ratio of 93%. The combined ratio of the company stands at 97%. RHICL has also won various awards like - ‘Best Claims Service Provider Of The Year, ‘Bancassurance Leader of the Year 2018 by Insurance India Summit & Awards 2018, ‘Indias Most Preferred Travel Insurance by IMP Travel Brand Awards 2018, etc.

Retail Broking

Religare Broking Limited (RBL) along with its subsidiary Religare Commodities Limited (RCL) operates Religares Retail Broking business and provides trading capabilities across all product segments - cash equities, equity derivatives, currency derivatives and mutual funds - on all major stock and commodities exchanges in India. RBL has more than 1000 points of presence spanning 400 plus towns and cities across the length and breadth of India, that service more than 1 million unique customers. RBLs distribution strategy entails a judicious combination of its own branches and a strong network of sub-brokers and franchisees that help extend RBLs presence and make the Religare brand visible in the far corners of India.

The Retail Broking business facilitates trading and investment in equities and equity derivatives, currencies and commodities for its clients.

Retail Equity Broking: The retail equity broking business is operated by RBL (a wholly owned subsidiary of the company Religare Enterprises Limited). Company is a member of the National Stock Exchange of India Limited (NSE), BSE Limited (BSE, formerly the Bombay Stock Exchange) and Metropolitan Stock Exchange of India Limited (MSEI, formerly MCX Stock Exchange Limited) in cash equities, futures & options and currency derivatives segments. In addition, Religare Securities Limited (RSL) was a Depository Participant with the National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) which facilitates smooth settlement of clients delivery-based transactions.

Retail Currency Broking: Trading in currency futures and options allows clients to hedge the capital and trading exposures they may have in currencies other than the Indian rupee. These products are offered by RBL as a member of the currency segment on NSE, BSE and MSEI. Currently, the exchanges permit futures trading in four currency pairs, viz. US dollar- Indian rupee, Euro-Indian rupee, Pound Sterling-lndian rupee and Japanese yen-lndian rupee, and options trading in the US dollar-lndian rupee pair.

Retail Commodity Broking: RCL, a wholly owned subsidiary of RBL, is a member of the two major electronic commodities futures exchanges in India, viz., Multi-Commodity Exchange of India Limited (MCX) and the National Commodities & Derivatives Exchange Limited (NCDEX). Exchange-based trading of futures in various agricultural products, bullion, metals and oil & gas provides producers, end-users and intermediaries who are exposed to price risks in these commodities, a platform for locking-in future prices and thereby hedging their exposures. Furthermore, commodities have emerged as an alternative investment avenue to investors looking for diversification of their investments. RCL has established a presence in various agricultural markets (‘mandis) and centers where physical trading in other commodities takes place in addition to financial centers where investors are concentrated to facilitate hedging of price risks and to provide a convenient means of investing in an emerging asset class.

Ancillary Services: RBL is also a TIN (Tax Information Network) and PAN (Income Tax Permanent Account Number) facilitation partner of NSDL and offers services relating to PAN, TAN (Tax Deduction and Collection Account Number), and filing ofTDS/TCS (Tax Deduction at Source/Tax Collection at Source) returns at select branches, to help its customers fulfill their major financial services needs under a single roof. RBL is also empaneled with E-mudra as Registering Authority/ Agent for issuance of Digital Signature Certificate and is an AMFI registered mutual fund distributor. RBL is also registered as Point of Presence (POP) with Pension Fund Regulatory Development Authority (‘PFRDA) under PFRDA Point of Presence Regulations, 2015 and with Insurance Regulation & Development Authority as a composite corporate agent to distribute insurance products.

Operational Performance

FY2018-19 was a strong year for the equity market as trading volumes increased each quarter and average daily turnover for FY2019 was र 10.69 Lakh Crores. The share of the lower yielding Futures & Options segment with the overall market turnover was at 97% from 95% during the earlier year and the share of the better yielding cash equities segment was 3% with adverse implications continuing for blended yields. RBLs total traded volume was र 8.71 Lakh Crores in FY19 compared to र 10.03 Lakh Crores in FY18.

During the financial year ended March 31,2019, RBL has entered into partnership with "Future Generali Life Insurance" for selling Life Insurance. During the year RBL has also entered into partnership with ICICI Lombard for conducting general insurance business and My Money Mantra to conduct loans and mortgage business.

During the financial year ended March 31,2019, RBLs credit ratings were stable. Short term rating for RBLs commercial paper programme was same as earlier year which is र 400 Crores and short term bank lines (for an amount of र 600 Crores) are rated ‘[ICRA] A3 and are on watch with developing implications.

3. Review of Financial Performance

The highlights of standalone and consolidated financial results of the Company for the Financial Years 2018-19 and 201718 are as under:

(र in Lakhs)


For the financial year ended 2018-2019

For the financial year ended 2017-2018









Total Income 3,516.57 240,171.81 7,189.44 273,541.77
Total Expenditure 18,127.79 390,516.06 40,529.30 414,261.67
Profit before Tax (14,611.22) (150,344.25) (33,339.86) (140,719.90)
Exceptional Items - (8.96) - (22.98)
Profit / (Loss) before Tax after exceptional items (14,611.22) (150,353.21) (33,339.86) (140,742.88)
Provision for Tax - (258.16) (714.70) (22691.81)
Profit / (loss) After Tax (14,611.22) (150,095.05) (32,625.16) (118,051.07)
Other comprehensive income 16.19 395.34 (10.87) (409.82)
Total Comprehensive Income for the period (14,595.03) (149,699.71) (32,636.03) (118,460.89)
Less: Share of Non- Controlling Interest - (21,347.86) - (13,596.11)
Total Comprehensive Income/ (Loss) (after tax and non-controlling interest) (14,595.03) (128,351.85) (32,636.03) (104,864.78)

Note: This based on the consolidated financial statements that have been prepared and presented in accordance with 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. These financial statements for the year ended March 31,2019 are the Companys first financial statement prepared in accordance with Ind AS. As stipulated last years financials were also prepared in accordance with Ind AS. In last Directors Report year ended March 31, 2018 were prepared and reported in accordance with accounting standards notified under the Section 133 of the Companies Act, 2013, read together with Rule 7 ofthe Companies (Accounts) Rules, 2014 ("Indian GAAP" or "Previous GAAP").

Consolidated Results

We recorded a ‘Loss After Exceptional Items and Before Tax ofर 1,50,353.22 Lakhs, for Financial Year 2018-19 as compared to ‘Loss After Exceptional Items and Before Tax ofर 1,40,742.88 Lakhs, for Financial Year 2017-18. ‘Loss After Tax and Share in Joint Venture was र 1,50,095/06 Lakhs for Financial Year 2018-19 as compared to ‘Loss After Tax and Share in Joint Venture ofर 1,18,051.07 Lakhs for Financial Year 2017-18.

Total Comprehensive Income attributable to the Owner of the Company for the Financial Year 2018-19 is र (1,28,351.86) Lakhs as compared to र (1,04,864.78) Lakhs in Financial Year 2017-18. Basic earnings per share decreased to र (63.32) in Financial Year 2018-19 from र (58.56) in Financial Year 2017-18. One of the major causes the Company has incurred losses on consolidated basis is provision of र 1,092.58 Crores in Financial Year 2018-19 and र 1,025.17 Crores in Financial Year 2017-18 made against corporate loans given by Religare Finvest Limited, a subsidiary ofthe Company.

Standalone Results

We recorded a ‘Loss After Exceptional Items and Before Tax of र (14,611.22) Lakhs, for Financial Year 2018-19 as compared to ‘Loss After Exceptional Items and Before Tax ofर (33,339.86) Lakhs, for Financial Year 2017-18. ‘Loss After Tax was र (14,611.22) Lakhs for Financial Year 2018-19 as compared to ‘Loss After Tax ofर (32,625.16) Lakhs for Financial Year 2017-18. ‘Loss before Exceptional Items was र (14,611.22) Lakhs for Financial Year 2018-19 as compared to ‘Loss before Exceptional Items of र (33,339.86) Lakhs for Financial Year 2017-18. Reported basic earnings per share increased to र (6.93) in Financial Year 2018-19 from र (18.28) in Financial Year 2017-18.

Seament-wise Performance

Our income from operations is comprised of income from lending activities, income from insurance premium, income from broking operations, interest income from fixed deposits with banks, income from non-current investments, income from current investments, interest income from delayed payments, profit on assignment of loans, income from advisory services, investment management and advisory fees and income from arbitrage and trading of securities and derivatives.

A comparison ofthe income from ouroperations in FY 2018-19 and in FY 2017-18 is tabulated below:


As per Ind AS



Amount (र In Crores) % ofTotal income Amount (र In Crores) % of Total income
Income From Lending Activities 788.35 32.82% 1,347.27 49.25%
Interest Income on Fixed Deposits with Banks 24.03 1.00% 30.74 1.12%
Interest Income on Delayed Payments / Charges for Delayed Payments 30.88 1.29% 53.69 1.96%
Income from Investments 92.44 3.85% 45.82 1.68%
Commission Income 59.43 2.47% 101.65 3.72%
Income From Broking Operations 195.18 8.13% 244.48 8.94%
Income From Investment Management and Advisory Fees - 0.00% 2.55 0.09%
Income From Advisory Services 1.05 0.04% 2.67 0.10%
Income From Insurance Premium (Net of Premium on reinsurance ceded) 1,090.10 45.39% 678.42 24.80%
Income From Arbitrage and Trading of Securities and Derivatives (Net) - 0.00% 0.54 0.02%
Other Income 5.45 0.23% 16.63 0.61%
Profit on Sale of Bullion and Art Works - 0.00% - 0.00%
Profit on Assignment of Loans - 0.00% - 0.00%
Total Revenue From Operations 2,286.91 95.22% 2,524.47 92.29%
Other Income 114.80 4.78% 210.95 7.71%
Total Income 2,401.72 100.00% 2,735.42 100.00%

Income from Lending Activities

Our subsidiary RFL, being an NBFC, offers lending products. The core line of business is SME lending, both secured and unsecured. The lending franchise is present across India, with 30 branches covering the SME clusters. The management team brings practical expertise in SME credit. However, due to RBI putting the company on a Corrective Action Plan (CAP), the company has not been able to disburse any fresh loans during the year. The management team and the Board are making efforts to bring in capital and restart the business.

Below is a comparison of the constituents of income from financing activity:

Particulars FY2018-19 Amount (In र Crores) FY2017-18 Amount (In र Crores)
SME Financing 641.49 1,157.01
CMF 27.93 25.26
CLB (6.42) 44.06
Others 0.05 0.06
Total 663.05 1,226.39

SME: Interest Income from SME portfolio decreased by 45% to र 641.49 Crores for FY 2018-19 as compared to र 1157.01 Crores for FY 2017-18 mainly due to decrease in Average Book Size. Total Book size (net of repayments & assignments) as at March 31,2019 was र 4503 Crores as compared to र 6998 Crores as at March 31,2018.

Capital Market Financing: Interest income from our capital market financing activities was र 27.93 Crores for FY 2018-19 as compared to र 25.26 Crores for FY 2017-18 primarily due to recovery from non-performing loans.

CLB: Interest income from our CLB was र (6.42) Crores for FY 2018-19 as compared to र 44.06 Crores for FY 2017-18 primarily due to reversal of Interest income due to loans becoming non-performing.

Others: ‘Others represents the interest income earned from Staff Loan. Interest income from ‘Others was 0.05 Crore for FY 2018-19 as compared to 0.06 Crore for FY 2017-18.

Income from Insurance Premium

Gross Written Premium of Insurance Business was र 1843 Crores for FY2018-19 as compared to र 1111 Crores for FY 2017-18. RHICLs Net Earned Premium increased by 60.4% to र 1091 Crores for FY2018-19 as compared to र 680 Crores for FY2017-18 primarily on account of increase in scale of operations.

Broking Related Operations

Our brokerage business receives commissions for equities, derivatives and commodities traded on the exchanges on behalf of clients; earns fees from distribution of third party products such as mutual funds and insurance; generates income from depository operations; and recovers transaction fees from clients.

The income arising out of our broking activities was 195.18 Crores for FY2018-19 constituting 8.13% of our total income as compared to र 267.19 Crores for FY2017-18, constituting 9.91% of our total income. Tabulated below are the details of constituents of our broking income:


FY 2018-19


Amount ( Crores) % of Total Income Amount (र Crores) % of Total Income
Equities & Currencies 136.17 5.67% 175.05 6.50
Others 7.99 0.33% 34.54 1.28
Recovery of Transaction Fees from Clients 26.05 1.08% 31.36 1.16
Commodities 15.89 0.66% 15.62 0.58
Income from Depository Operations 9.09 0.38% 10.61 0.39
Total 195.18 8.13% 267.19 9.91

Equities & Currencies: Our income from equity & currency broking operations decreased by 22.2% to र 136.17 Crores for FY2018-19 from र 175.05 Crores for FY2017-18 primarily due to a 21.2% decrease in retail average daily turnover.

Commodities: The revenue from our commodities broking activities increased from र 15.62 Crores for FY2017-18 to र 15.89 Crores for FY2018-19 primarily due to an 8.8% increase in average daily volume of trades executed on the exchanges.

Other Income

Other income primarily includes balances written back/bad debts and loans written off recovered, profit on sale/redemption of Investments, interest income on loans and fixed deposits with banks, etc. Our other income decreased to र 114.8 Crores during FY2018-19 constituting 4.78% of our total income for such period as compared to र 210.95 Crores for FY2017-18 constituting 7.71% of our total income for such period. Below is a comparison of the components of our Other Income during FY2018-19with that in FY2017-18:

Particulars (र in Lakhs) For the Year Ended March 31, 2019 For the Year Ended March 31, 2018
Balances Written Back / Bad Debts and Loans Written off Recovered 2,426.72 5,630.09
Income From Support Services 513.68 211.04
Particulars (र in Lakhs) For the Year Ended March 31, 2019 For the Year Ended March 31, 2018
Interest Income From Fixed Deposits With Banks 2,001.00 5,114.34
Net Gain/(Loss) on De-recognition of Property, Plant and Equipment 49.55 34.40
Profit On Sale Of Flats Under Construction Held For Sale (Net) 1.35 166.29
Profit on Sale/Redemption of Investments (Net) 3,978.33 4,283.87
Interest Income From Investments 211.45 3,693.69
Interest Income on Others 1,695.37 1,540.79
Miscellaneous Income 602.98 420.54
Total 11,480.43 21,095.05

Key Ratios

Crores FY2018-19 FY2017-18
Total Income 2,401.72 2,735.42
EBITDA (627.82) (109.54)
Margin % (0.26) (0.04)
Profit Before Exceptional Items and Tax (1,503.53) (1,407.43)
Margin % (0.63) (0.51)
PAT (1,500.95) (1,180.51)
Margin % (0.62) (0.43)

4. Human Resources - Contribution to Business Success

The Human Resource function has been a strategic enabler for the business and is committed to promote an open and meritorious culture in the Company. Our management and employees are strongly aligned towards building an enabling eco-system to restore and strengthen profitability and ensure business growth across the Group. We consider our employees as our vital and most valuable assets. During the year, we have seen a lot of tangible and positive developments that have attracted fresh talent at all levels. As at March 31,2019, we had a team of 11,034 dedicated professionals across our operating subsidiaries.

The organization has been strongly invested in maintaining constant channels of employee communication to develop a strong culture of transparency. Our continued belief in people being key differentiators has guided our functional initiatives towards leveraging potential of employees to take additional responsibilities and help the organization achieve its business goals. The initiatives were spread across areas of talent management, employee reward and recognition and employee engagement. The Company is dedicated to offering its employees favorable work environment and opportunities to navigate through the current period and also influence its future course of direction as planned. In order to boost the employee morale, the organization has recognized the commitment, loyalty and contribution of its internal stakeholders through its robust performance management system facilitated through the online Human Resource management system.

Business and Human Resource leadership team has significantly contributed towards business objectives and ensured adherence to established human resource processes and policies, maintaining transparent and credible communication channels with employees at all levels and further reinforcing and celebrating our culture.