Repco Home Finance Ltd Directors Report.

TO THE MEMBERS

The Companys financial performance for the financial year ended March 31, 2018, is summarized below:

(Rs in crore)

Particulars

Standalone

Consolidated

2017-18 2016-17 2017-18 2016-17
Profit Before Tax 314.29 280.17 314.29 280.17
Less : Provision for Taxation
Current Year 102.38 94.00 102.38 94.00
Deferred 5.79 3.92 5.79 3.92
Profit after tax 206.11 182.25 206.11 182.25
Add : Net share of profit from Associate - - 9.20 5.40
Add : Balance brought forward from the previous year 235.95 161.26 248.27 169.66
Less: Utilised during the current year for depreciation charged in accordance with Schedule II Companies Act 2013 - - - -
Less: Dividend received from Associate credited to carrying value of investment - - 2.25 1.49
Amount available for appropriations 442.06 343.51 461.33 355.83
Appropriations
Transferred to additional reserve U/s 29C of the NHB Act, 1987 41.23 36.46 41.23 36.46
Transferred to Statutory Reserve under 55.65 51.10 55.65 51.10
Section 36(1)(viii) of the Income Tax Act, 1961 read with Section 29C of National Housing Bank Act, 1987
Transferred to General Reserve 20.00 20.00 20.00 20.00
Dividend for previous year (including dividend distribution tax) 15.06 - 15.06 -
Balance carried over to Balance Sheet 310.12 235.95 329.39 248.27
total 442.06 343.51 461.33 355.83
earnings Per Share:
Basic (Rs.) 32.95 29.13 34.42 30.00
Diluted (Rs.) 32.95 29.13 34.42 30.00

Dividend

Your Directors recommend a dividend of Rs.2.20 per equity share of face value of Rs.10.00 each for the year ended

31 March 2018 as against a dividend of Rs.2 per equity share of face value of Rs.10.00 each for the previous year. The dividend payout ratio for the year is 8.04% (amounting to Rs.16.57 crore, inclusive of Tax on dividend) as against 8.26% (amounting to Rs. 15.06 crore, inclusive of Tax on dividend) in the previous year. In compliance with requirements stipulated vide SEBI notification no. SEBI/ LAD-NRO/GN/2016-17/008 dated July 8, 2016 and Regulation 43A of the SEBI(LODR) Regulations,2015; the Dividend Distribution Policy of the Company is available on the website of the Company and has been provided as Annexure - 1 to this report.

TRANSFER TO RESERVES

During the year under review, your Company transferred Rs. 20.00 crore to the General Reserve, Rs. 55.65 crore to the Statutory Reserve under Section 36(1)(viii) of the Income Tax Act, 1961 read with Sec 29 C of NHB Act, 1987 and Rs. 41.23 crore to additional reserve under Sec 29C of NHB Act, 1987, out of the amount available for appropriation. An amount of Rs. 310.12 crore is proposed to be retained in the profit and loss account.

CHANGES IN SHARE CAPITAL

During the financial year, there was no change in the Paid up capital of the Company. As at 31st March 2018, the Paid up capital stood at Rs. 62,56,13,620 divided into 6,25,61,362 Equity shares of Rs. 10 each

STATE OF AFFAIRS OF THE COMPANY

The Company endeavors towards adopting the benchmark underwriting practices backed up by robust monitoring and recovery mechanisms. The Company is committed in its efforts towards improving efficiency and service level in its operations.

LENDING OPERATIONS

1) Sanctions

During the year, loan approvals stood at Rs.3,079.26 crore as compared to Rs. 2,875.75 crore in the previous year . The cumulative loan sanctions since inception of the Company stood at Rs. 18,682.58 crore at the end of the financial year 2017-18.

2) Disbursements

During the year under review, the Company disbursed loans to the extent of Rs.2,806.51 crore as against Rs.2,642.39 crore in the previous year. The Cumulative disbursements stood at Rs.17,180.95 crore in respect of 1,35,463 accounts at the end of the financial year 2017-18.

3) Loans Outstanding

The loan book of the Company at the end of financial year 2017-18 was Rs.9,856.78 crore as against Rs.8,939.91 crore in the previous year representing a growth of 10.26%.

NON PERFORMING ASSETS

As of 31 March 2018, the gross NPA of the Company was Rs.282.65 crore (previous year Rs. 232.84 crore) constituting 2.87% (previous year 2.60%) of the total loans outstanding. Net NPA of the Company as at March 31, 2018 was 1.29% as against 1.39% in the corresponding period of the previous year. The NPA provision coverage ratio stood at 55.61% (previous year 47.29%) as at 31st March 2018. The Company carries a provision of Rs.157.17 crore (previous year Rs. 110.11 crore) towards its Non Performing Assets at the end of the financial year 2017-18. During the period under review, the Company has written off Rs.15.77 crore (previous year Rs.0.50 crore) from its books.

REGULATORY COMPLIANCE

The Company is in compliance with the guidelines, circulars and directions of National Housing Bank. The Company is also in compliance with the Companies Act 2013, guidelines, directions and circulars of MCA, SEBI etc. The Company complied with Mandatory Accounting Standards as prescribed under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules 2014, and other related statutory Guidelines / Directions as applicable to the Company from time to time. The Company is registered with the Central Registry of Securitization, Asset Reconstruction and Security Interest of India (CERSAI) and furnishes information in respect of its loans. Compliance of all regulatory guidelines to NHB / other status are periodically reviewed at Audit Committee / Board of the Company.

The Company‘s capital adequacy ratio as on 31 March 2018 was 23.04% (previous year 21.25%) which is well above the prescribed 12% threshold as per NHB Directions. This consisted entirely of Tier 1 capital.

Complying with the provisions of the directions of the National Housing Bank, a provision of Rs2.10 crore (previous year Rs. 5.23 crore) being charged to statement of Profit & Loss Account of the financial year 2017-18 in respect of standard assets and the cumulative provision in respect of standard assets stood at Rs.42.33 crore (previous year Rs. 40.24 crore) as at 31st March 2018.

The company has taken steps to adopt Ind-AS as notified by the MCA.

FINANCIAL RESOURCES REFINANCE FROM NHB

During the year the Company has not availed any refinance facility (previous year Rs. 500 crore) from National Housing Bank. The refinance outstanding at the end of the year was Rs. 942.31crore (previous year Rs. 1,170.10 crore) teRM LOANS FROM BANKS AND FINANCIAL INStItUtIONS

The outstanding borrowings from Banks and Financial Institutions (terms loans and overdraft) at the end of the financial year stood at Rs. 5057.70 crore (previous year Rs. 5,255.33 crore).

SECURED NON CONVERTIBLE DEBENTURES

During the year, the company has issued SRNCDs aggregating to Rs. 652 crores (previous year Rs. 385 crores). The outstanding SRNCDs as on 31st March 2018 was Rs.1337 crores (previous year Rs. 785 crores). These instruments have been rated "ICRA AA-" by M/s. ICRA Ltd., and "CARE AA" by M/s. CARE Ltd.,

COMMERCIAL PAPERS

The Company‘s commercial paper is rated A1+ by M/s.

ICRA Ltd., and CARE Ltd., implying highest safety. During the financial year 2017-18, the Company has raised funds amounting to Rs. 2,350 crores (previous year Rs. 1,400 crores) by way of issuance of commercial paper. After repayments on maturity, the net amount outstanding as at 31st March 2018, was Rs.800 crores. (Previous year NIL).

Unclaimed Ncds

According to section 125 of the Companies Act, 2013, NCDs and interest thereon remaining unclaimed and unpaid for a period of seven years from the date they became due are required to be credited to the Investor Education and Protection Fund (IEPF) set up by the Government of India. As at 31 March 2018 there are no non convertible debentures amount or interest thereon remaining unpaid or unclaimed.

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

There are no Non Convertible Debentures which have not been claimed by the Investors or which were not paid by the Company after the date on which the Non Convertible Debentures became due for redemption. During the year, the company redeemed NCDs amounting Rs. 100 crore pursuant to maturity. Further the Company has paid the interest on respective due dates.

UNCLAIMED DIVIDENDS

As of 31 March 2018, dividend amounting to Rs.1,35,382 (previous year Rs. 46,432) has not been claimed by the investors. According to section 125 of the Companies Act, 2013 dividends remaining unclaimed for a period of seven years from the date they became due are required to be credited to the Investor Education and Protection Fund (IEPF) set up by the Government of India. In accordance with the Investor Education Fund (Uploading of information regarding unpaid and unclaimed amount lying with the Companies) Rules 2012, the Company has uploaded this information on www.iepf.gov.in and www.repcohome.com/ new_site/unclaimed_dividend.php.

PUBLIC DEPOSITS

The Company has not accepted deposits from the public during the financial year 2017-18.

RISK MANAGEMENT

The Company has in place a risk management policy framework which has been approved by the Board of

Directors. The framework identifies various risks faced by the Company and puts in place appropriate mitigants. The Company has in place a Management & Risk Management committee comprising of Shri K. Sridhar, Shri G.R. Sundaravadivel, Shri. V. Nadanasabapathy and

Shri R. Varadarajan.

HUMAN RESOURCES

The objective of human resource development in an organization is to enhance human productivity through progressive and consistent policies in knowledge & skill upgradation and betterment of employment conditions at all levels. Human Resource Managements objective is to maximize the return on investment from the organizations human capital. It is the responsibility of human resource/ development department in a corporate context to conduct these activities in an effective, legal, impartial and cohesive manner.

Your Company worked tirelessly towards the performance upgradation of its employees by introducing objective performance appraisal mechanism and performance linked incentive structure. Employees are also nominated regularly to attend various training programmes conducted by NHB, ICSI & other capacity building institutions besides in-house training programmes for constant skill upgradation. During the financial year the Company conducted 15 (including online training) in-house training programmes and employees were nominated for 11 external programmes. The Company provides a professional work environment and maintains a healthy relation with its employees. As on 31 March 2018, the number of people employed by the Company stood at 785.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of women at the workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. The following is a summary of sexual harassment complaints received and disposed off during the year 2017-18

No. of complaints received: Nil

No of complaints disposed off: Not Applicable

PARTICULARS OF EMPLOYEES COVERED UNDER COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL RULES, 2014.

There were no employee who was in receipt of remuneration of Rs 1.02 crore or more per annum.

In accordance with the provisions of section 197 of the Companies Act, 2013, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, the name and other particulars of such employees are set out in the annex to the Directors Report. However, as per the provisions of section 136 of the Companies Act, 2013, the Directors Report is being sent to all shareholders of the Company excluding the annex. The annex is available for inspection by the members at the registered office of the Company during business hours on working days up to the date of ensuing Annual General Meeting. Any shareholder interested in obtaining a copy of the said annex may write to the Company Secretary at the registered office of the Company.

CORPORATE SOCIAL RESPONSIBILITY

As per Section 135 of the Companies Act, 2013 and the rules framed thereunder, the Company has in place a Corporate Social Responsibility Committee of Directors comprising of Shri. K. Sridhar, Shri. G.R. Sundaravadivel and Shri. V. Nadanasabapathy and has inter alia formulated a Corporate Social Responsibility Policy.

This Committee envisages the activities to be undertaken in pursuance of CSR initiatives. During the year the Company spent a sum of Rs.0.14 crore towards CSR initiatives. The Annual Report on CSR activities forming part of the Directors Report is furnished as Annexure-2 to this report.

EMPLOYEE STOCK OPTION SCHEME:

The employee stock options have been granted to the eligible employees and the Managing Director in pursuance of "Repco Home Finance Limited Employees Stock Option Scheme -2013". There are no material changes to this scheme and the said scheme is in compliance with the extant regulations prescribed by the Securities and Exchange Board of India in this regard. The disclosures as prescribed by the "Guidance Note on accounting for employee share based payments" issued by ICAI and the Diluted EPS on issue of shares pursuant to the Scheme in accordance with the Accounting Standard 20- Earnings per share" issued by ICAI are disclosed on the website of the Company. The disclosures as required by the Securities and

Exchange Board of India (Share Based Employee Benefits) Regulations 2014 have been placed on the website of the Company.

PARTICULARS RELATING TO CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND EXPENDITURE

Particulars relating to conservation of energy and technology absorption stipulated in the Companies (Accounts) Rules 2014 are not applicable to the Company and further the Company has no foreign exchange earnings but incurred foreign exchange expenditure to the extent of Rs.0.004 crore (previous year Rs. 0.04 crore) towards travelling expenses and Rs. 2.82 crore towards other borrowing costs.

DIRECTORS

In accordance with Section 152 of the Companies Act, 2013, Smt. R.S. Isabella, Director of the Company is liable to retire by rotation at the ensuing annual general meeting and is eligible for reappointment. The resolution for her re-appointment forms a part of the notice convening the Annual General Meeting. The details pertaining to the reappointment are elucidated in the explanatory statement to the notice convening the Annual General Meeting. All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations,2015 (‘Listing Regulations).

The details of familiarization programmes conducted for Independent Directors is put up on the website of the Company.

DETAILS OF MANAGERIAL REMUNERATION AS REQUIRED UNDER COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

The particulars of managerial remuneration as required by under Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given as Annexure-3.

AUDITORS

At the 17th Annual General Meeting held on 21 September 2017, the members had appointed M/s. S.R. Batliboi & Associates LLP, Chartered Accountants (Firm Registration No. 101049W/ E300004) as Statutory Auditors for a term of five years beginning from the conclusion of the 17th Annual

General Meeting till the conclusion of the 22nd Annual General Meeting. The Statutory Auditors have not made any adverse comments or given any qualification, reservation or adverse remarks or disclaimer in their Audit Report.

DIRECTORS RESPONSIBILITY STATEMENT

In pursuance of section 134 (3) (C) of the Companies Act, 2013, and based on the information provided by the Management, your Directors hereby confirm that: (a) In the preparation of the annual accounts, the applicable accounting standards have been followed; (b) Accounting policies selected were applied consistently.

Reasonable and prudent judgments and estimates were made so as to give a true and fair view of the state of affairs of the company as at 31 March 2018 and of the profit and loss of the Company for that date; (c) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (d) The annual accounts of the Company have been prepared on a going concern basis; (e) Internal financial controls have been followed by the Company and such internal financial controls are adequate and were operating effectively.

(f) Systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively.

INTERNAL CONTROL SYSTEMS

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board.

The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board every quarter or at periodic intervals.

EXTRACTS OF THE ANNUAL RETURN (FORM MGT-9)

In accordance with Sec 134 (3) (a) of the said Act, amended provision, the provisional Annual Return in the prescribed format has been made available on the website of the Company at www.repcohome.com. The extract of Annual return is annexed to this report as Annexure-4.

SECRETARIAL AUDIT REPORT

In accordance with Section 204 of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, M/s. G Ramachandran & Associates, Company Secretaries were appointed by the Company to undertake Secretarial Audit of the Company. The Secretarial Audit Report is annexed to this report as Annexure-5. Explanation on comments by the Board on Every qualification, reservation on adverse remark or disclaimer made by Auditor /Secretarial Auditor. Neither the statutory auditor nor the secretarial auditor have made any qualification, reservation or adverse remark or disclaimer in their respective reports.

DETAILS OF LOANS GIVEN, GUARANTEES GIVEN OR SECURITY PROVIDED

The provisions contained in Section 186(11) of the Companies Act, 2013, relating to loans, guarantees or securities do not apply to the Company.

INVESTMENTS

The Company has investments in the equity of unlisted associate company, Repco Micro Finance Limited to the extent of Rs. 15.60 Crore (1,56,00,000 equity shares of Rs. 10/- each).

SUBSIDIARY, JOINT VENTURES AND ASSOCIATE COMPANIES

Pursuant to the provisions of Section 129(3) of the Companies Act, 2013, your Company has prepared Consolidated Financial Statements of the Company which forms part of this Annual Report. Further, a Statement containing salient features of financial statements of the Subsidiary, joint venture entities and associate Companies in the prescribed format AOC-1, pursuant to Section 129(3) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, is annexed as Annexure-6 to this Report.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SECTION 188(1)

All the related party transactions entered during the year were in ordinary course of business and on arms length basis. The Company has obtained the shareholders approval for material related party transactions as required under Listing Regulations.

The Company presents a statement of all related party transactions before the Audit Committee. The details of such transactions are given in the accompanying financial statements.

MATERIAL CHANGES AND COMMITMENTS

AFFECTING FINANCIAL POSITION OF THE COMPANY

BETWEEN 31ST MARCH 2018 AND THE DATE OF

BOARDS REPORT.

There has been no material changes and commitment, affecting the financial position of the Company which has occurred between the end of the financial year to which the financial statements relate and the date of the report. The Company does not have any subsidiary. There has been no change in the nature of business of the Company. No significant or material Orders have been passed by the regulators or Courts or Tribunals impacting the going concern status of the Company and / or the Companys operations in future.

MANAGEMENT DISCUSSION AND ANALYSIS

In accordance with the SEBI (LODR) Regulations, 2015, Management Discussion and Analysis Report for the year under review, is presented in a separate section which forms a part of this report.

REPORT ON CORPORATE GOVERNANCE

In accordance with the SEBI (LODR) Regulations, 2015, the report on corporate governance for the year under review is presented in a separate section which forms a part of this report.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Board of Directors has approved the vigil mechanism/ whistle blower policy of the Company which provides a framework to promote a responsible and secure whistle blowing. It protects employees wishing to raise a concern about serious irregularities within the Company. It provides for a vigil mechanism to channelize reporting of such instances/ complaints/ grievances to ensure proper governance. The Audit Committee oversees the vigil mechanism. No employee has been denied access to the Audit Committee. The policy is placed on the website of the Company, www.repcohome.com/new_site/corporate_ governance.php.

Listing

The shares of your Company are listed at National Stock Exchange Limited and Bombay Stock Exchange Limited. Listing fee has already been paid for the financial year 2018-19.

DETAILS OF NON-COMPLIANCE, PENALTIES, IMPOSED ON BY ANY STATUTORY AUTHORITY

Pursuant to the inspection observations with reference to the financial position of the Company as at 31-03-2016, National Housing Bank levied penalty aggregating to Rs.35,000/- and GST thereon, with respect to the contraventions on (i) Income Recognition (Para-22); (ii) Assets Classification (Para-27); (iii) LTV Norms (Para-27A) (iv) Assigning wrong risk-weight resulting in incorrect CAR computation (Para-30); (v) Shortfall in Provisioning (Para-28) of the Housing Finance Companies (NHB) Directions 2010 and also (vi) disbursement of loans on the property for which the approved plan was not available (Policy Circular No.18) (vii) Guidelines on Fair Practices Code.

Others

Related Party transaction Policy

As required by NHB notification no. NHB.HFC.CG-DIR.1/ MD&CEO/2016 dated February 9, 2017, a policy on Transactions with Related Parties is given as ‘Annexure-7 to this report.

Business Responsibility Reporting

In accordance with the requirement under Regulation 34(2)(f) of SEBI (Listing Obligations and Disclosure Requirements) (LODR) Regulations, 2015, Business Responsibility Report forms part of the Directors Report and is annexed as ‘Annexure-8 to this report.

Acknowledgements

The Directors of your Company wish to place on record their sincere gratitude to the National Housing Bank and its Executives for continuous guidance and support. We also record our gratitude to our bankers, financial institutions and insurance companies for their continued trust, support and assistance given to the Company. The Board places on record its sincere gratitude to Ministry of Home Affairs, GOI, SEBI, NSE, BSE, Department of Company Affairs, REPCO Bank, shareholders, Government, local/statutory authorities, customers and all the other stakeholders for their patronage and support for the achievements by the Company despite the most competitive environment in the market.

Your Directors take this opportunity to thank all the executives and employees of the Company and wish to place on record their commendable hard work, team spirit and dedicated service to the customers which enabled the Company to achieve an appreciable level of business performance during the year.

performance during the year.
For and on behalf of the Board of Directors
.
Date : August 13, 2018 t (.S. KrishnaMurthy)
Place : Chennai Chairman