Moneycontrol Be a Pro
Get App
SENSEX NIFTY
Manappuram Finance Directors Report, Manappuram Fin Reports by Directors
YOU ARE HERE > MONEYCONTROL > MARKETS > FINANCE - LEASING & HIRE PURCHASE > DIRECTORS REPORT - Manappuram Finance

Manappuram Finance

BSE: 531213|NSE: MANAPPURAM|ISIN: INE522D01027|SECTOR: Finance - Leasing & Hire Purchase
SET ALERT
|
ADD TO PORTFOLIO
|
WATCHLIST
LIVE
BSE
Dec 13, 16:00
172.95
-0.2 (-0.12%)
VOLUME 267,311
LIVE
NSE
Dec 13, 15:54
173.00
-0.2 (-0.12%)
VOLUME 4,219,146
Download Annual Report PDF Format 2017 | 2016 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010
Directors Report Year End : Mar '18    Mar 17

Board’s Report

Dear Members,

The Board of Directors of Manappuram Finance Limited have pleasure in presenting before you, the 26th Annual Report of the Company together with the Audited Consolidated and Standalone Statements of Accounts for the financial year ended 31st March, 2018.

1. FINANCIAL SUMMARY/HIGHLIGHTS AND STATE OF AFFAIRS

The standalone and consolidated financial highlights of your Company are as follows:

(Rs, in million)

Description

Standalone

Consolidated

2017-18

2016-17

2015-16

2017-18

2016-17

2015-16

Gross Income

29498.59

30084.33

22148.89

34765.56

34,089.16

23,712.35

Total Expenditure

18833.04

18935.56

16959.77

24595.47

22,431.96

18,228.52

Profit Before Tax

10665.55

11148.77

5189.12

10170.09

11,657.20

5,483.83

Provision for Taxes/Deferred tax

3663.86

3888.43

1816.69

3486.01

4072.3

1932.25

Minority interest

0

0

0

-24.86

26.42

17.9

Net Profit

7001.69

7260.34

3272.43

6708.94

7,558.48

3,533.68

Profit b/f from previous year

7285.07

3098.64

2848.66

7574.79

3,159.29

2,851.54

Amount available for appropriations

14286.76

10358.98

6221.09

14283.73

10,717.77

6,385.22

Appropriations:

Transfer to Statutory Reserve

1400.34

1452.07

674.49

1400.34

1,521.12

722.41

Transfer to General Reserve

0

0

0

0

0

0

Transfer to Debenture Redemption Reserve

-676.68

102.26

169.91

-676.68

102.26

169.91

Interim Dividend on Equity Shares

1683.94

1262.56

1892.74

1683.94

1,262.56

1,892.74

Tax on Interim Dividend

342.81

257.02

385.31

343.27

257.02

385.31

Proposed Equity Dividend

0

0

0

0

0

0

Tax on dividend

0

0

0

0

0

0

Balance carried forward to next year

11536.35

7285.07

3098.64

11532.86

7,574.81

3,159.29

During the Financial Year (FY”) 2017-18 under review, the Company''s consolidated revenue from operations grew 1.10% to Rs, 34,234.00 million and the Profit after Tax fell by 11.2% to Rs, 6,709.00 million. The profitability was impacted by a onetime provisioning of Rs, 120 million towards a legal case where the Company could liquidate only half of the collateral that was handed over to it. The Company liquidated the rest of the collateral in the quarter ended 30th June , 2018, following which, management believes provisions are likely to normalise. The Company''s consolidated AUM grew by 15.4% to Rs, 1,57,648.00 million during the year owing to rapid growth in the microfinance (grew 35.7%), housing finance (grew 20.7%) and vehicle finance (grew 104.5%) AUMs. Gold loan AUMs grew 5.5% during the year. Addition of new customers, increasing branch activation for the non-gold businesses, fall in average cost of borrowing and all-round improvement in asset quality were the key factors driving the Company''s financial performance during the year.

During the year, the Company continued to augment its digital platforms to facilitate customers to avail loans at their convenience. In the gold loan business, the Company introduced doorstep gold loans (pilot stage) and further leveraged its online gold lending platform which accounted for 32% of the total gold loan book. The Company also invested in ramping up safety of the lockers by installing IOT-based keyless e-lockers which offer multiple benefits including monitoring of the lockers by the customer from a remote location. Similarly, a host of other digital initiatives were implemented to drive greater convenience for the customers at every stage of their engagement with us -from applying for the loan to repaying it back. Healthy additions of new customers along with continued branch expansions and investments in branding and marketing activities aided growth of the new businesses in the year. These businesses now form about a fourth of the Company''s consolidated AUMs as compared to 19% in the preceding year.

The Company also implemented multiple campaigns to increase awareness among the customers about the benefits of digital transactions. Through its local marketing initiatives the Company covered individuals belonging to the masses segment and concentrated on getting close and personally relevant to understand the financial needs of the people in these sections. Consistent review and monitoring at field level was also done to ensure business propensity.

During the year, the Company undertook various employee engagement initiatives to motivate them and improve their efficiencies. These efforts played a prominent role in the Company''s growth during the year. The Company will continue to engage in such initiatives in the future to serve its customers better and thereby achieve higher growth.

2. DIVERSIFICATION OF BUSINESS

Since 2014, with its large net worth and access to debt capital on competitive terms, your Company in the verge of diversification its business by leveraging its vast numbers of existing and new customers'' relationship developed through its mainstay Gold Loans business over the years. The objective of this diversification was to build at least 40 to 50% of total Assets under Management from sources other than gold loans, so as to mitigate the risk of being a single-product NBFC.

Your Company''s diversification strategy offered three clear potential advantages: Firstly, it sought to address the regulatory discomfort with mono-line NBFCs perceived as vulnerable to concentration risk. Secondly, it would enable the Company to cater to existing and new customers with new products and services. Finally, your Company would be able to accelerate the government''s agenda for inclusion by addressing the needs of the underprivileged sections of the population.

Accordingly, your Company is focusing on affordable housing finance, vehicle and equipment finance which includes commercial vehicle loans, two-wheeler loans, tractor 8 car loans, microfinance, SME finance, project and industrial finance, corporate finance and insurance broking. The idea was that with home and vehicle and equipment finance, the Company would reach out to the upwardly mobile customers. To cater to the people at the bottom of the pyramid, the Company would take the microfinance route with the collateral-free, joint liability model.

Over the last three years, i.e. FY 2016, FY 2017 8 FY 2018, the new business verticals have been successful in steadily scaling up their operations by leveraging (wherever required) your Company''s customer base, branch network and the goodwill of the Manappuram Brand. During the year under reference, the management was able to stabilize the business processes, scale up the operations (including network), enhance the manpower strength of each vertical and forge synergistic lead generation connections with the Company''s network.

The key achievement for FY 2018 has been that having begun literally from scratch in FY 2015, the Company''s non-gold new businesses now contribute 25.5% of the total assets under management. Over the three two years, Microfinance AUM has grown from Rs, 3,221 million in FY 2015 to Rs, 24,372 million in FY 2018. Your Company''s divisions vehicle and equipment finance and corporate finance have ended the year with an AUM of Rs, 6,254 million and Rs, 5,513 million, respectively. Your Company''s housing subsidiary, Manappuram Home Finance Limited has ended the year with an AUM of Rs, 3,747 million while insurance broking subsidiary has contributed a revenue of Rs, 19.6 million. Importantly, having established a sound footing, home loans, microfinance, corporate loans and vehicle 8 equipment loans are expected to continue to record strong growth in the coming years.

Microfinance

Asirvad Microfinance Limited took steps to consolidate the operations by addressing the issues arising out of demonetization event during November/December 2016. The full financial effect of that event spilled over to this financial year resulting in loss of Rs, 323 million. Most of the geographies, where Asirvad operates bounced back to pre-demonetization repayment levels except for few States like Karnataka and Haryana.

Asirvad is ranked 6th All India as NBFC MFIs. The Company has a network of 832 branches across 20 States with presence in 245 districts and 1,45,394 centres. It pursues the policy of continuing re-assessment of concentration risk 8 diversification. During the year, the Company passed on the reduction in interest rate charged by banks/Financial Institutions by reducing interest rate charged to customers from 23% to 22.25%.

Asirvad AUM grew by 36% to Rs, 24372 million in FY 17-18 from Rs, 17959 million in FY16-17, Active loan accounts grew by 21% to 2.3 million from 1.9 million in March 2017. 1.6 million Loan accounts were disbursed during the financial year and these loans have 99.4% repayment rate.

Total Operational Revenue grew by 28% to Rs, 4372 million for period FY17-18 compared with Rs, 3428 million for period FY 16-17, Pre provisional profit of Rs, 1083 million for period FY 17-18 compared to Rs, 1045 million for corresponding period. Provision for loan loss/Bad debt written off stood at Rs, 1583 million including standard provision of Rs, 205 million made for perioc FY17-18 as per Company policy. Had the Company followed RBI norms provision, Rs, 240 million less provision would have createc during the financial year.

Housing Finance

Manappuram Home Finance Limited (MAHOFIN), is your Company''s dedicated subsidiary that has been set up to cater to the affordable housing space. Its overall objective is to provide options for affordable home finance in the ticket size of about Rs, 8-11 lacs, majorly distributed into the outskirts of metros, tier-II and tier-III cities. Your Company''s customer acquisition strategy focuses on the team''s ability to understand the needs of the customer, his net-worth and financial limits. Its management team is made up of seasoned people with core domain expertise and who possess mature appraisal methodologies and product structuring solutions that are friendly for a customer to manage. In combination with its dedicated 35 branches the growth of the Home Loans business and Loan Against Property will be based on fresh lead generation and on the cross-selling strategies within the Manappuram group''s network of branches and regional points of contacts. Having established its IT backbone and product configurations in the period between FY 2015 to FY 2017, in FY 2018 the management essentially focused on establishing the unit''s manpower strength through recruitment and training in robust business practices for building the business. During the year, it established dedicated human resources and branches in urban and semi-urban locations, both in the South and the West. By the end of FY 2018, MAHOFIN achieved a loan book size of '' 3,746 million. The business grew by 20.8% YoY and the loan portfolio has so far faced minimal delinquencies with NPAs held to 4.8%. Going forward, your Company is now ready with its teams, products and branches to grow the loan book size steadily to touch '' 7,773 million plus in FY 2019. Going forward, with strong demand, professional management and strong brand and network support of the parent, MAHOFIN remains focused on delivering results responsibly and achieving steady growth of business.

Manappuram Insurance Brokers

Manappuram Insurance Brokers Limited (MAIBRO), a 100% Subsidiary of Manappuram Finance Limited has closed the year at Rs, 91 crore of Total Business. The Company has done a new Business of Rs, 84.5 crore. The Company has in 2017-2018 launched various products across protection, health and motor to cater to various sections of the society.

The Company has the distinction of covering 16.7 lakh customers in 2017-2018. The Company covered 50000 families with a Health cover and 15.5 lakh customers through a Death cover. MAIBRO today has presence across the length and breadth of the country. The Company has used the parents brand anc strength to its advantage and provided new products across all Branches of the parent company and the Group companies.

In 2017-2018 MAIBRO has exclusively setup a renewal anc claims team to cater to its customers. The Company has improved its 13 month persistency to 71% and has been able to settle 95% of claims reported. The renewal and claims team regularly call up the customer to either collect the renewal premiums or help the customers get the benefits of the claims. MAIBRO is poised to achieve newer heights in 2018-2019.

Vehicle and Equipment Finance

I n order to diversify and de-risk portfolio, your Company had entered into commercial vehicle financing activity in FY 15 operating from southern and western regions and subsequently into other regions. The vehicle finance portfolio is about Rs, 6.28 billion spread across 116 locations in 20 States as on Mar 31, 18.

The Commercial Vehicle and construction equipment portfolio comprises of approximately 70% pre-owned vehicles and balance new vehicles with portfolio of Rs, 5.33 billion with 10030 live contracts as at the end of Mar 31,18. The two-wheeler finance portfolio is of Rs, 0.64 billion with more than 15000 live contracts and other vehicle loans comprises of a portfolio of around Rs, 0.31 billion.

The team consists of domain specialists and has established marketing channels and networks for lead acquisition, processing and receivable management. The business is supported by strong pre-screening methodologies and credit assessment for a healthy portfolio mix.

Our strategy envisages financing customers who are largely from unorganised sector, the retail clientele that is underservec by the formal banking channels. With the background of gooc monsoon prediction and increased government outlay for infrastructure projects, the growth of vehicle loan portfolio is expected to be robust in FY 19.

Your Company is in the course of building a scorecard model for a quicker customer assessment process and disbursements reducing the end to end turnaround time. With plans to focus on existing customer base for consumer vehicle loans your Company strongly believes that digital technology would be an integral component for the growth of the business in coming years.

MSME Lending

Micro, small and medium enterprise (MSME) sector is a vibrant and dynamic sector promising high growth potential for the Indian Economy. MSME''s play a critical role in the economy by providing large employment opportunities while contributing significantly to the Gross Domestic product (GDP) and exports of India. There are close to 51 million MSME units in the country that employ about 117 million people across various sectors constituting 40% of the workforce. The MSME share to the total GDP is about 37% and they also contribute to 43% of exports based on the data maintained by Ministry of Commerce. Apart from being a key contributor to the Indian economy, the MSME sector also has the fastest growing exposures in the commercial lending space with low delinquency (NPA) rates.

To participate in the robust growth demonstrated by the MSME sector and to address its ever-increasing credit demand, your Company has decided to foray into MSME lending by way of introducing tailored products for meeting working capital demands of MSME''s, which would be different than traditional secured financing options available. A focused approach, customized product offerings and a healthy mix of target geographies, will enable your Company to build a good quality book in this segment.

Corporate Lending

Manappuram corporate lending vertical caters to financing small and mid size NBFC''s which are mainly into housing, micro finance, vehicle and SME lending. It targets transactions ranging from Rs, 2 crore to 40 crore. Borrowers benefit from a range of products at competitive rates, each customizable in terms of repayment schedule and security. The attractiveness of lending to such companies is that they fetch better yield. In corporate loans, Manappuram focuses on providing funds to other NBFC''s for their portfolio origination. Corporate loan portfolio primarily consists of fund based product i.e. Term Loan.

Currently, all such loans are sourced through Northern Arc Capital (earlier known as IFMR Capital) who go beyond what the rating agencies do, they do a lot of field level study and basec on that Manappuram also have its own internal set of criteria for evaluation. Such corporate lenders are typically companies, which have some external private equity investments so that one can be assured of the corporate governance and also good auditors, and a professional promoter, so these are kind of companies which normally Manappuram lends.

Forex and Payments

Your Company has started taking baby steps in the payments landscape. Broadly the Payments division in MAFIL includes Inward Remittances under Money Transfer Service Scheme, Domestic Remittances under Banking Correspondent and Prepaid Instrument, Outward Remittances and Money Changing. The Company has recently raised its profile by becoming an RBI licensed Principal Agent. The Company already offers MTSS services through its network of branches. It has tied up with Western Union as a principal agent to bring in more focus on this business.

Your Company has a PPI license and a digital wallet offering MAKASH” to its customer. The Company is also a Banking Correspondent through its tie up with Yes Bank. Your Company offers this service to its gold loan customers. The Company intends to bring in focus by adding innovative features in its wallet proposition.

Your Company is an AD Category 2 license holder from Reserve Bank of India. RBI had also increased the limit outward remittances by an individual to USD 2,50,000 per annum in Jan 2016 under the LRS scheme. The sub segments of travel abroad” and Studies abroad” have grown the maximum. Your Company intends to enter this market in a focused way by starting this business in a few branches and then growing it in phase-wise manner.

3. SUBSIDIARIES

Your Company holds 90.38% equity shares of Asirvac Microfinance Limited and 100% equity shares of Manappuram Home Finance Limited and 100% equity shares of Manappuram Insurance Brokers Limited as on FY 2017-18.

Asirvad Microfinance Limited

Gross Income of the Company as at 31st March, 2018 is Rs, 4,683.28 million as compared to Rs, 3,634.20 million for the year ended 31st March, 2017 and Loss after Tax 31st March, 2018 with Rs, 323.01 million as compared to Rs, 343.32 million for the year ended 31st March, 2017.

Manappuram Home Finance Limited

Gross Income of the Company as at 31st March, 2018 is Rs, 535.27 million as compared to Rs, 368.36 million for the year ended 31st March, 2017 and net loss is Rs, 8.05 million for the year ended 31st March, 2018 as compared to the net loss of Rs, 10.7 million as at 31st March, 2017. AUM of the Company as at 31st March, 2018 is Rs, 3746.61 million which is 2.43% of consolidated AUM.

Manappuram Insurance Brokers Limited

Gross Income of the Company as at 31st March, 2018 is Rs, 4,97,64,635/- as compared to Rs, 2,02,84,414/- as for the year ended 31st March, 2017 and Profit for the year ended 31st March, 2018 is Rs, 134,79,858/- as compared to the Loss of Rs, 80,98,768/- as at 31st March, 2017.

Salient features of financial statements of the Company''s subsidiaries in form AOC-1 are annexed herewith as Annexure

- I(a) and the highlights of performance of subsidiaries are annexed herewith as Annexure - I(b).

4. RESERVES

During the FY 2017-18, the Company has not transferred any amount to General Reserves and it remains same as last FY, Rs, 3885.08 million. The total reserves and surplus as on March 31, 2018 stands at Rs, 36,459.76 million.

5. DEBENTURE REDEMPTION RESERVE

Pursuant to the provisions of the Companies Act, 2013 (Act”) and the relevant circulars issue by the Ministry of Corporate Affairs, the Company is required to create a Debenture Redemption Reserve (DRR), to which amounts shall be transferred from the profits every year till the debenture is redeemed. The amount of DRR shall be 25% of the NCDs issued through public issue in compliance with SEBI (Issue and Listing of Debt Securities) Regulations, 2008, and no reserve is required in respect of NCDs issued through private placement.

As a matter of policy, your Company creates a reserve on a proportionate basis till the redemption of the debentures. Accordingly, the Company transferred a sum of Rs, 676.68 million from DRR during the year.

Furthermore, the Act stipulates that the Company has to invest, on or before 30th April of each year, in the prescribed manner, a sum equal to 15% of the NCDs maturing during the year ending on the 31st March of the next year The Company hac duly deposited with a Scheduled Bank, Rs, 291.20 million in April

2017 w.r.t debentures matured during FY 2017-18 and has also deposited Rs, 2.62 million in April 2018 w.r.t. debentures maturing in FY 2018-19.

6. RESOURCES

The Company as an NBFC, mobilisation of resources at optimal cost and its deployment in the most profitable and secured manner constitutes the two important functions of the Company. The main source of funding for the Company continues to be credit lines from the banks and financial institutions. Your Company as at March 31, 2018 availed various credit facilities from 20 banks.

Management has been making continuous efforts to broaden the resource base of the Company so as to maintain its competitive edge. The next important source of funding is the issue of privately placed Secured Redeemable Non-Convertible Debentures (NCDs). In addition, the Company also raised funds through the issue of Commercial Papers (CPs).

Your directors are confident that the Company will be able to raise adequate resources for onward lending in line with its business plans.

7. MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis Report is attached and forms an integral part of the Annual Report. The report discusses in detail, the overall industry situation, economic developments, sector wise performance, outlook and state of company''s affairs.

8. REPORT ON CORPORATE GOVERNANCE

The Company has been practicing principle of good Corporate Governance over the years. The endeavour of the Company is not only to comply with the regulatory requirements but also adhere to good Corporate Governance standards that lays strong emphasis on integrity, transparency and overall accountability. The report on corporate governance forms integral part of this annual report.

9. BUSINESS RESPONSIBILITY REPORT

Business Responsibility Report in line with the National Voluntary Guidelines (NVG) on Social, Environmental and Economic Responsibilities of Business, released by the Ministry of Corporate Affairs, Government of India and as stipulated under Regulation 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (''SEBI LODR'') forms integral part of this Annual Report and the same has been hosted on the website of the Company https://manappuram.com/public/uploads/editor-images/files/ Manappuram%20BRR%2014-21%20Pages%20%281%29.pdf

Business Responsibility Report provides information on key initiatives undertaken by the Company, driven by the triple bottom line (people, planet and Profit) aspects and is aligned with the nine principles of NVG. Your Company, together with its subsidiaries viz. Manappuram Home Finance Limited, Asirvad Microfinance Limited and Manappuram Insurance Brokers Limited, serves millions of customers in the financial services space. Your Company has moved towards enhancing the Business Responsibility framework to align them with the Business Responsibility Reporting guidelines/standards as per SEBI.

Your Company''s initiatives of Sustainability, Corporate Social Responsibility (CSR) and Business Responsibility is driven from the top. Board-level CSR Committee is entrusted with formulating, revising and updating our CSR Policy which governs the implementation of all our CSR initiatives in compliance with Section 135 of Companies Act, 2013. Various policies including CSR Policy policies and Business responsibility policy guide our stringent adherence to compliance and governance. The business responsibility performance of the Company is assessed annually by the Board of Directors. Your Company believes in conducting its operations in a fair and transparent manner. Within the organization, your Company works towards integrating community development, responsible governance, stakeholder inclusiveness and environmental responsibility into business practices and operations.

Your Company seeks to differentiate itself by building a new age NBFC to serve the financial needs of all sections of society in India, especially the less privileged/ under privileged sections. This will be achieved by providing a basket of diversifies products and services, backed by state of the art technology, and driven through a culture that values customer service.

10. DIRECTOR''S RESPONSIBILITY STATEMENT

Pursuant to section 134 of the Act the board of directors, to the best of their knowledge and ability, confirm that:

i. I n the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;

ii. they have selected such accounting policies and applies 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;

iii. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities

iv. they have prepared the annual accounts on a going concern basis;;

v. they have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively;

vi. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors and external consultants, including audit of internal financial controls over financial reporting by the statutory auditors, and the reviews performed by management and the relevant board committees, including the audit committee, the board is of the opinion that the Company''s internal financial controls were adequate and effective during FY 2017-18.

11. MEETINGS OF THE BOARD

During the financial year 2017-18, Board of Directors met on seven occasions. For further details of these Board Meetings, please refer to the Corporate Governance Section of this Report.

12. DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS

Your Company has received necessary declarations from all Independent Directors of the Company confirming that they meet criteria as mentioned in Section 149 of the Act anc SEBI LODR. Your Company has also received undertaking and declaration from each director on fit and proper criteria in terms of the provisions of Non-Banking Financial Company

- Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016 (RBI NDSI Master Directions, 2016”).

13. POLICY ON BOARD COMPOSITION COMPENSATION

The Board of Directors has adopted a policy on director''s appointment and remuneration for directors, Key Managerial Personnel and other employees including criteria for determining qualification, positive attributes, and independence of directors as laid down by the Nomination Committee of the board in compliance with the provisions of Section 178 of the Act. The policy can be viewed at https://www.manappuram.com/ public/uploads/edit.or-imaees/files/Policy%20on%20Board%20 composition%20and%20Compensation..pdf and is also annexes to this report as Annexure II.

14. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are provides in Note-12,14, 15 and 33 to the Standalone Financial Statements

15. PARTICULARS OF CONTRACTS OR ARRANGEMENT WITH RELATED PARTIES

contracts / arrangements / transactions entered by the Company during the FY 2017-18 with related parties under Section 188 of the Act were in ordinary course of business and on arm''s length basis. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the provisions of Regulation 23 of SEBI LODR and the Company''s policy on related party transactions. Therefore, particulars of contracts / arrangements with related parties under Section 188 in Form AOC-2 is not annexed with this report.

Your Directors draw attention of the members to Note 25 to the Standalone Financial Statement which sets out related party disclosures.

The Policy on related party transactions as approved by the Board which is annexed to this report as Annexure III may be accessed on the Company''s website at the https:// www.manappuram.com/public/uploads/editor-images/files/ POLICYONRELATEDPARTYTRANSACTIQNS080217.pdf.

16. DIVIDEND

Four interim dividends were declared at the rate of 50 paise per equity share during the financial year 2017-18, on 25th May 2017, 10th August 2017, 7th November 2017 and 08th February, 2018 respectively.

An aggregate of '' 2.00/- per equity share, amounting to 100% of the paid-up value of the shares was paid by the Company during the financial year 2017-18.

The Dividend Distribution Policy as per the SEBI LODR is available at the following link: https://www.manappuram.com/ public/uploads/editor-images/files/Dividend%20Distribution%20 Policy-090816.pdf

17. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO:

These details are provided as Annexure IV to this report.

18. RISK MANAGEMENT POLICY

The Company has a Board of Directors approved Risk Management Policy wherein material risks faced by the Company including Operational Risk, Regulatory Risk, Price, Interest Rate Risk and Credit Risk are identified and assessed. The Risk Management Committee periodically reviews the various risks faced by the Company and advises the Board on risk mitigation plans. Risk Management policy may be accessed on the Company''s website at the link: https://www. manappuram. com/public/uploads/editor-images/files/20-Risk-Management-Policy.pdf

19. CORPORATE SOCIAL RESPONSIBILITY POLICY

The Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company have been formulated by the Board based on the recommendation of the Corporate Social Responsibility Committee (CSR Committee). The CSR Policy may be accessed on the Company''s website at the link: https://www.manappuram.com/public/uploads/edit.or-images/files/CSR%20Policy.pdf

The Corporate Social Responsibility initiatives taken by the Company during the FY 2017-18, is detailed in the Report on CSR activities which is annexed herewith marked as Annexure V.

20. FORMAL ANNUAL EVALUATION

The board of directors have carried out 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 LODR. The following were the performance evaluation parameters during the year;

Board

Committees

Non-Executive Directors (including Independent Director)

Board Composition and Quality

Function and Duties

Participation at Board/ Committee Meetings.

Board Meetings and Procedure

Committee Meetings and Procedures

Relationship, Knowledge and Skill

Board Strategy and Risk Management

Overall rating of Board Committees

Independence

Overall rating of Boarc Performance

The board and the Nomination Committee reviewed the performance of the Non-Executive directors (including Independent Director) on the basis of the criteria such as attendance, level of participation, contribution to the meetings and its decision making, continuity on the board, and performance appraisal questionnaire, etc. In addition, the chairman was also evaluated on the key aspects of his role.

The performance of the board was evaluated by the board after seeking inputs from all the directors on the basis of the criteria such as the board composition and structure, effectiveness of board processes, information and functioning, etc.

The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc.

In furtherance to above performance evaluation parameters pertaining to Non-Executive directors (including Independent Director),Nomination Committee and Board has evaluated performance of Managing Director and Whole-time Director based on the performance of additional criteria as detailed in the Corporate Governance Report. In a separate meeting of independent directors, performance of non-independent directors, performance of the board as a whole and performance of the chairman was evaluated, taking into account the views of executive directors. Performance evaluation of independent directors was done by the entire board, excluding the independent director being evaluated.

The board of Directors has confirmed that all existing Directors are fit and proper to continue to hold the appointment as Directors on the Board, as reviewed and recommended by the Nomination Committee on fit and proper criteria under RBI NDSI Master Directions, 2016.

21. DETAILS OF REMUNERATION / COMMISSION RECEIVED BY MD OR ED FROM SUBSIDIARIES

During the FY 2017-18, Mr. B.N.Raveendra Babu (Executive Director) has received remuneration by way of sitting fee, Rs, 0.32 million for attending Board/Committees meetings of the subsidiary, Manappuram Insurance Brokers Limited and Mr. V. P Nandakumar (Managing Director 8 CEO) has not received any remuneration or commission from any of the subsidiaries of the Company for the FY 2017-18.

22. AUDIT AND AUDITORS REPORT

Deloitte Haskins 8 Sells LLP, Chartered Accountants have been appointed as the Statutory Auditors by shareholders at the 25th AGM, to hold office up to the conclusion of 30th AGM.

The notes annexed to the Standalone and Consolidated financial statements referred in the Independent Auditors'' Reports are self-explanatory and do not call for any further comments.

There were no frauds reported by the statutory auditors to Audit Committee or Board under Section 143 of the Act.

Secretarial Audit

The Board appointed KSR 8 Co. Practicing Company Secretaries LLP, to conduct Secretarial Audit for the financial year 2017-18.

Secretarial audit report for year ended on March 31, 2018 as provided by KSR 8 Co. Practicing Company Secretaries LLP, Indus chambers, Ground floor, No.101, Govt Arts College Road, Coimbatore-641018, is annexed to this Report as Annexure- VI.

The reports issued by Statutory Auditor and Secretarial Auditor does not contain any qualification, reservation adverse remark or disclaimer.

23. DIRECTORS AND KEY MANAGERIAL PERSONNEL, CHANGE, IF ANY

Mr.Gautam Ravi Narayan has been appointed as Additional Director on 08.02.2018. The Board recommends his appointment subject to approval by the Shareholders at the ensuing Annual General Meeting.

There were no other changes in Directors or Key Managerial Personnel during the FY 2017-18.

24. SHARE CAPITAL

During the year 2017-18, the Company has allotted 636126 equity shares of '' 2 each pursuant to exercise of stock options.

Consequently, the paid-up equity share capital of the Company stood as on 31.03.2018 at Rs, 1,685.07 million consisting of 842,535,762 equity shares of Rs, 2 each.

During the year under review, the Company has not issued shares with differential voting rights, bonus shares and sweat equity shares.

25. DEPOSITS

As you are aware, your Company had stopped acceptance of deposits from the public since FY 2009-10. Your Company had converted itself into a non deposit taking Category ''B'' NBFC. During FY 2017-18 the Company has not accepted deposits as per Chapter V of the Act..

The balance unclaimed deposit as on March 31, 2017 was Rs, 0.062 million and the same has been transferred to IEPF in accordance with the provisions of Companies Act, 2013, during FY 2017-18. There is NIL balance unclaimed deposit as on March 31, 2018.

26. COMPLIANCE WITH NBFC REGULATIONS

Your Company has complied with all the regulatory provisions of the Reserve Bank of India applicable to Non-Banking Financial Company - Systemically Important Non-Deposit taking Company. As on March 31, 2018, the Capital Adequacy Ratio of the Company is 26.60%, well above the statutory requirement of 15%. The Company has not issued any Perpetual Debt Instruments.

27. EMPLOYEE STOCK OPTION SCHEME (ESOS)

In order to retain the best available talent, ensure long term commitment to the Company, and encourage individual ownership, Company has instituted employee stock options plans from time to time.

Presently, the Company has Employee Stock Option Scheme 2016 (''ESOS-2016'').

Board at its meeting held on August 10, 2017 has canceled the ESOS 2009 and 448500 lapsed options under ESOS 2009 based on the recommendation of the Nomination Compensation anc Corporate Governance Committee with effect from August 10, 2017 and the same has been intimated to the stock exchanges.

Disclosures in terms of ''Guidance note on accounting for employee share based payments'' issued by ICAI and diluted EPS in accordance with Accounting Standard 20 - Earnings Per Share are provided in note 24 of Standalone Financial Statements in this Annual Report.

Details related to stock option schemes as required under SEBI SBEB Regulations read with Securities and Exchange Board of India circular no. CIR/CFD/POLICY CELL/2/2015 dated June 16, 2015 are provided in Note 24 of the Standalone Financial

Statements in this Annual Report and Annexure VII of this report and are also available on Company''s website at https:// manappuram.com/investors/annual-reports.html

A certificate from Deloitte Haskins and Sells LLP, Statutory Auditors (Firm''s Registration No.117366W/W-100018), Statutory Auditors, confirming that ESOS 2016 has been implemented in accordance with the SEBI SBEB Regulations and that the respective resolutions passed by the Company in General Meetings would be placed in the ensuing Annual General Meeting for inspection by the members.

28. DISCLOSURE

Composition of CSR Committee

Name of the Member

Position

Category of Directors

Mr. Rajiven.V.R

Chairman

Independent, Non-Executive

Mr. V.P.

Nandakumar

Member

Non-Independent, Executive

Adv.V.R.

Ramachandran

Member

Independent, Non-Executive

Dr. Amla Samanta

Member

Independent, Non-Executive

Composition of Audit Committee

Name of the Member

Position

Category of Directors

Mr. P.

Chairman

Independent,

Manomohanan

Non-Executive

Dr. Shailesh J Mehta

Member

Independent, Non-Executive

Mr. E.A. Kshirsagar

Member

Non-Independent Non-Executive

Mr. V.R. Rajiven

Member

Non-Independent Non-Executive

Dr. Amla Samanta

Member

Non-Independent Non-Executive

Whistle Blower Policy and Vigil Mechanism

The Vigil Mechanism of the Company provides adequate safeguards against the victimization of any directors or employees or any other person who avail the mechanism and also provides direct access through an e-mail, or dedicated telephone line or a letter to the Chairperson and a Member (Woman Director) of the Audit Committee.

No person has been denied access to the Chairman and a Member (Woman Director) of the audit committee. Company has ensure that its employees are well aware of the content and procedure of the policy and fully protected. The Whistle Blower Policy anc Vigil Mechanism may be accessed on the Company''s website at the link: https://www.manappuram.com/public/uploads/editor-images/files/22-Whistle-blower-Policy-v2.pdf

29. EXTRACT OF ANNUAL RETURN

Extract of annual return in Form MGT-9 is annexed herewith as Annexure- VIII.

30. DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS AND INTERNAL AUDIT

Your Company has put in place, well defined and adequate Internal Control System and Internal Financial Control (IFC) mechanism commensurate with size, scale and complexity of its operations to ensure control of entire business and assets. The functioning of controls is regularly monitored to ensure their efficiency in mitigating risks. A comprehensive internal audit department functions in house to continuously audit and report gaps if any, in the diverse business verticals and statutory compliances applicable.

During the year, Internal Financial Controls were reviewed periodically by the management and Audit Committee. Key areas were subject to various statutory and internal audits in order to review the adequacy and strength of IFC followed by the Company. As per the assessment, Controls are strong and there are no major concerns. The internal financial controls are adequate and operating effectively so as to ensure orderly and efficient conduct of business operations.

Your Company has an independent internal audit function which carries out regular internal audits to test the design, operations, adequacy and effectiveness of its internal control processes and also to suggest improvements to the management. KPMG was appointed in terms of Section 138, to conduct internal audit of functions. Their observations along with management response are periodically reviewed by Audit Committee and Board anc necessary actions are taken.

31. LISTING WITH STOCK EXCHANGES

Your Company confirms that it has paid the Annual Listing Fees for the financial year 2017-18 to Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) where the Company''s shares are listed..

32. SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

During the year under review, there were 4 cases filed with the Internal Complaints Committee of the Company, pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the same were investigated and resolved. No complaints were pending more than 90 days during FY 2017-18.

33. CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Act, SEBI LODR and Accounting Standard (AS) - 21 on Consolidated Financial Statements, the audited consolidated financial statement is provided in the Annual Report.

34. CREDIT RATING

Your Company holds valid credit rating from Brickwork, CRISIL, ICRA and CARE for Non-Convertible Debentures, Short Term and Long Term Bank Facilities and Commercial Paper as follows:

a. CRISIL rated Bank Loan Facilities amounting to '' 2,500 million as CRISIL AA- / Stable.

b. CRISIL rated Non - Convertible Debentures amounting to '' 25,075 million as CRISIL AA- / Stable.

c. CRISIL rated Commercial Paper of '' 35,000 million as CRISIL A1 Stable

d. I CRA rated Non - Convertible Debentures amounting to 2,701.2 million as [ICRA] AA- (Stable)

e. CARE rated Bank Loan Facilities for Long Term amounting to '' 56,800 million as CARE AA;- Stable (Double A; Stable)

f. CARE rated Bank Loan Facilities for Short Term amounting to '' 33,200 million as CARE A1 (A One Plus)

g. Care rated Non-Convertible Debentures amounting to '' 5,800 million as CARE as AA-;Stable

h. Care rated Commercial Paper of '' 35,000 million as CARE A1 (A 1 Plus)

i. Brickwork rated Non - Convertible Debentures amounting to '' 547 million as BWR AA-

35. DETAILS OF AUCTIONS HELD DURING THE YEAR 2017-18

Additional disclosures as required by RBI NDSI Master Directions, 2016:

Year

Number of Loan Accounts

Principal Amount outstanding at the dates of auctions (A) (Rs, In Millions)

Interest Amount outstanding at the dates of auctions (B) (Rs, In Millions)

Total (A B) (Rs, In Millions)

Value fetched (Rs, In Millions)

March 31, 2017

3,05,439

9289.54

1466.29

10755.83

10704.05

March 31, 2018

3,32,767

9,045.30

1,126.70

10,172.00

10,585.50

Note: No sister concern participated in the auctions during the year ended March 31, 2017 and March 31, 2018

36. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURE

Particulars of employees and related disclosures are annexed herewith as Annexure IX as per Section 197 of the Act.

37. AUDITORS CERTIFICATE ON CORPORATE GOVERNANCE

A certificate from Statutory Auditor in compliance with the conditions of corporate governance by the Company, for the year ended on March 31, 2018 as stipulated in Part E of Schedule V of SEBI LODR is annexed as Annexure - X.

38. SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS

There were no such significant / material orders passed by the Regulators during the financial year 2017-18.

39. MATERIAL EVENT SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENT

There have been no material changes and commitments, affecting the financial position of the Company which occurred between the end of the FY 2017-18 and the date of this report.

40. ACKNOWLEDGEMENT

Your Directors express sincere appreciation and gratitude to the employees of the Company at all levels for their dedicated service and commitments, to the Reserve Bank of India, Rating Agencies, Stock Exchanges, Debenture Trustees, RTA''s, Depositories, Central and State Governments and its statutory bodies for the support, guidance and co-operation. Your Directors wish to thank the Customers, Investors, Shareholders, Debenture holders, Bankers, Auditors, Scrutinizer and other financial institutions and other stakeholders for the whole hearted support and confidence reposed on the Company

For and on behalf of the Board of directors

of Manappuram Finance Limited

Sd/-

Jagdish Capoor

Place: Valapad DIN: 00002516

Date: May 18, 2018 Chairman

Source : Dion Global Solutions Limited
Quick Links for manappuramfinance
Explore Moneycontrol
Stocks     A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z | Others
Mutual Funds     A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z
Copyright © e-Eighteen.com Ltd. All rights reserved. Reproduction of news articles, photos, videos or any other content in whole or in part in any form or medium without express written permission of moneycontrol.com is prohibited.