Housing Finance
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ICFL/LS/0091/2019-20 lNDOSTAR 30 July 2019 BSE Limited National Stock Exchange of India Limited Listing Department, 15‘ Floor, Exchange Plaza, C—l, Block G P J Towers, Dalal Streets, Fort Bandra Kurla Complex Mumbai -400 001 Bandra (E), Mumbai—400 051 Scrip Code: 541336 Symbol: INDOSTAR Sub.: Annual Report for the Financial Year 2018-19 and Notice convening the 10th Annual General Meeting. Ref: Regulation 30 and 34 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. Dear Sir/ Madam, Pursuant to Regulation 30 and Regulation 34(1) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, please find enclosed the following documents, which are being dispatched / sent to the shareholders of the Company through permitted mode(s): 1, The Annual Report of the Company for the financial year 2018-19; and 2, Notice of the 10m Annual General Meeting of the Company scheduled to be held on Friday, 30 August 2019 at 3:00 pm at Hall of Culture, Nehru Centre Conference Hall, Dr. Annie Besant Road, Worli, Mumbai - 400 018 along with Attendance Slip and Proxy Form. The Annual Report of the Company for the financial year 2018-19 and Notice of the 10‘“ Annual General Meeting of the Company along with Attendance Slip and Proxy Form are also available on the website of the Company at www.indostarcapital.com Request you to kindly take the above on record and disseminate the same on your website. Thanking you, Yours faithfully, For IndoStar Capital Finance Limited SVP — C mp/iance & Secretarial (Membership No. F8937) Encl: as above IndoStar Capital Finance Limited Registered Office : One Indiabulls Centre, 201h Floor, Tower 2A, Jupiter Mills Compound, Senapati Bapat Marg, Mumbai - 400013, lndia T +91 22 4315 7000 | F +91 22 4315 7010 | contact@indostarcapitalcom | www.indostarcapital.com ClN :L65100MH2009PLC268160 Spine to be adjusted by printer GOING LIFE KA TAKE-OFF STRONG. GROWING STRONG. ANNUAL REPORT 2018-19 Cover Design and Concept: Grey Worldwide India Pvt. Ltd. www.grey.com India Pvt. Ltd. Worldwide Grey Design and Concept: Cover dickensonworld.com www. World & Design: Dickenson Inside Content LIFE KA TAKE-OFF REGISTERED & CORPORATE OFFICE: ONE INDIABULLS CENTER, 20TH FLOOR, TOWER 2A, JUPITER MILLS COMPOUND, SENAPATI BAPAT MARG, MUMBAI – 400 013. TEL NO.: +91 22 4315 7000 | FAX NO.: +91 22 4315 7010 E-MAIL: [email protected] | WEBSITE: WWW.INDOSTARCAPITAL.COM Spine to be adjusted by printer Spine to be adjusted by printer CORPORATE INFORMATION BOARD OF DIRECTORS CHIEF FINANCIAL OFFICER CIN: L65100MH2009PLC268160 Mr. Pankaj Thapar Non-Executive Chairman REGISTERED & CORPORATE OFFICE Mr. Dhanpal Jhaveri COMPANY SECRETARY & One Indiabulls Center, COMPLIANCE OFFICER 20th Floor, Tower 2A, Jupiter Mills Compound, Senapati Bapat Marg, Executive Mr. Jitendra Bhati Mumbai – 400 013 Vice-Chairman & CEO Tel No.: +91 22 4315 7000 Mr. R. Sridhar STATUTORY AUDITORS Fax No.: +91 22 4315 7010 S. R. Batliboi & Co. LLP E-mail: [email protected] Website: www.indostarcapital.com Whole-Time Director Mr. Shailesh Shirali INTERNAL AUDITORS (Appointed with effect from June 26, 2019) DEBENTURE TRUSTEE KPMG IDBI Trusteeship Services Limited Asian Building, Ground Floor, Non-Executive Directors 17, R Kamani Marg, Ballard Estate, Mr. Sameer Sain Mumbai - 400 001 (Resigned with effect from June 26, 2019) Tel No.: +91 22 40807000 Mr. Alok Oberoi Fax No.: +91 22 66311776 E-mail: [email protected] Non-Executive Independent Directors REGISTRAR & TRANSFER AGENT Mr. Bobby Parikh Link Intime India Private Limited Mr. Dinesh Kumar Mehrotra C - 101, 247 Park, L.B.S. Marg, Vikhroli (West), Mr. Hemant Kaul Mumbai - 400083 Ms. Naina Krishna Murthy Tel No.: +91 22 49186270 Fax No.: +91 22 49186060 E-mail: [email protected] BANKERS / FINANCIAL INSTITUTIONS Abu Dhabi Commercial Bank Franklin Templeton Mutual Fund Mirae Asset Mutual Fund Allahabad Bank HDFC Bank Limited National Bank for Agriculture and AU Small Finance Bank Limited HDFC Limited Rural Development Axis Bank Limited HDFC Mutual Fund Oriental Bank of Commerce Axis Mutual Fund HSBC Mutual Fund PRINCIPAL Mutual Fund Bank of Baroda ICICI Bank Limited Punjab National Bank Bank of India ICICI Prudential Mutual Fund RBL Bank Limited Bank of Maharashtra IDBI Bank Limited Reliance Mutual Fund BNP Paribas Mutual Fund IDBI Mutual Fund SBI Mutual Fund BOI AXA Mutual Fund IDFC First Bank Small Industrial Development Bank Canara Bank IDFC Mutual Fund of India Catholic Syrian Bank Indian Bank South Indian Bank Corporation Bank Indian Overseas Bank State Bank of India Credit Suisse Securities India Pvt Ltd IndusInd Bank Limited Sundaram Mutual Fund DCB Bank Limited JM Financial Mutual Fund Syndicate Bank Dena Bank Karnataka Bank Limited Tata Capital Financial Services Limited DHFL Pramerica Mutual Fund Karur Vysya Bank Telangana State Co-operative Apex Doha Bank Kotak Mahindra Bank Limited Bank Limited DSP BlackRock Mutual Fund Kotak Mahindra Life Insurance UTI Mutual Fund ECL Finance Limited Company Limited Vijaya Bank Edelweiss Alpha Fund Kotak Mahindra Mutual Fund Yes Bank Limited Federal Bank Limited L&T Mutual Fund LIC Mutual Fund Spine to be adjusted by printer CONTENTS Corporate Overview At IndoStar, we are 01 Going Strong. Growing Strong. How We Create Value 02 10 Message from the Executive 04 Retailisation strategy, Vice-Chairman & CEO well on course in FY2019 Financial Highlights of FY2019 08 Retailisation Strategy 10 well on course in FY2019 Active Liability Management 12 Delivering Calibrated Growth Assimilating an Acquisition, 14 Poised for Further Growth CSR at Indostar 16 Management Discussion Analysis Global Economic Scenario 20 Indian Economic Scenario 21 Industry Overview 23 12 Company Information 27 Active liability Liability Management 36 Financial Review 37 management, Business Outlook 37 Delivering calibrated Internal Control Systems & 37 growth their Adequacy Threats, Risks & Concerns 38 Information Technology 39 Human Resources 39 Cautionary Statement 41 Board’s Report The Board of Directors 42 Message From The Chairman 44 Board’s Report 46 14 Assimilating an Corporate Governance Report Corporate Governance Report 96 acquisition, Poised for further Standalone Financials growth Auditor’s Report 122 Balance Sheet 130 Statement of Profit and Loss 131 Cash Flow Statement 132 Statement of Changes in 134 Equity (SOCIE) Notes to Accounts 136 Consolidated Financials Auditor’s Report 195 Balance Sheet 202 Statement of Profit and Loss 203 To learn more about IndoStar, Cash Flow Statement 204 please visit Consolidated Statement of 206 Changes In Equity (SOCIE) www.indostarcapital.com Notes to Accounts 208 In recent years, the Indian financial services landscape has seen unprecedented transformation, with a sharper focus on financial inclusion, the adoption of new technologies, industry consolidation and regulatory oversight. Despite turbulent conditions in the NBFC sector during FY2019, we remained undeterred in executing our plans, to become the “go-to” NBFC for both, retail and corporate lending. Particularly with respect to Commercial Vehicle (CV) Finance, Corporate Finance, SME Finance & Housing Finance. With accelerating growth and a high-quality loan book in retail lending, propelled by the accretive acquisition of IIFL’s CV Finance business, we have surpassed our retailisation targets much earlier than expected. By the end of FY2019, our retail loan book made up 61% of our total AUM. As a result, we expect higher levels of operating leverage; benefits from more efficient economies of scale; and a rapid improvement in our net earnings. Furthermore, we expect the resultant additions to our physical distribution presence to cause a multiplier effect that will help us achieve a faster than anticipated pace of organic growth. With the smart utilisation of our capital strength, we hope to accelerate our ROE. Our mission is to unshackle middle-India from limited financial choices and help fulfil their aspirations. The strategies we have implemented over the past year have helped us deliver more than expected, and more than promised. At IndoStar, we are GOING STRONG. GROWING STRONG. 1 INDOSTAR CAPITAL FINANCE LIMITED ANNUAL REPORT 2018-19 1 HOW WE CREATE VALUE IndoStar is a Non-Banking Finance Company OUR BUSINESS OBJECTIVE (NBFC) registered with the Reserve Bank of Our objective is to become a leading provider India as a systemically important non-deposit of financing and credit solutions for small taking company. It is a professionally managed and medium CV owners, growing corporates, and institutionally owned organisation, which is emerging SME businesses and catering to the primarily engaged in providing CV Finance, Housing aspirations of of the growing consumer base Finance, loans to small and medium enterprise of Middle-India through Housing Finance. We (SME) borrowers and Corporate Finance. are committed to finding new ways to develop value-based and innovative financial solutions st IndoStar got successfully listed on 21 May, 2018 for our corporate and retail customers, and on the Bombay Stock Exchange and the National deliver greater value to our stakeholders. Stock Exchange. Customer centricity is our “raison d’être”. We are committed to delivering transformational growth in the lives of our customers, by offering them the best solutions that empowers them to realise their aspirations. We’re here to be a catalyst in our customers’ “LIFE