futures. lives.

224 Pages·2017·21.25 MB·English

2016-17
ANNUAL REPORT
TOUCHING
LIVES.
SHAPING
FUTURES.
OF STERLING
PERFORMANCE
Forward-looking statement
In this Annual Report, we have disclosed forward-looking information to enable investors to comprehend our prospects and take investment decisions. This report and
other statements – written and oral – that we periodically make contain forward-looking statements that set out anticipated results based on the management’s plans
and assumptions. We have tried wherever possible to identify such statements by using words such as ‘anticipate’, ‘estimate’, ‘expects’, ‘projects’, ‘intends’, ‘plans’,
‘believes’, and words of similar substance in connection with any discussion of future performance. We cannot guarantee that these forward-looking statements
will be realised, although we believe we have been prudent in our assumptions. The achievements of results are subject to risks, uncertainties and even inaccurate
assumptions. Should known or unknown risks or uncertainties materialise, or should underlying assumptions prove inaccurate, actual results could vary materially from
those anticipated, estimated or projected. Readers should bear this in mind. We undertake no obligation to publicly update any forward-looking statement, whether as
a result of new information, future events or otherwise.
Contents
Section 1 Section 2
01-29 30-121
About Manappuram Governance Reports
01 Tribute to a Visionary 30 Management Discussion and Analysis
02 2 5 Years of Empowerment and 42 Business Responsibility Report
Value Creation 50 Board’s Report
06 Institution of Trust 102 Corporate Governance Report
08 G rowing Our National Prominence
09 Enriching Our Product Diversity Section 3
10 Promising Performance
12 MD & CEO’s Insight
122-219
16 In step with Digital Transformation
20 Building a Customer First Brand Financial Statements
22 Nurturing Team Manappuram 122 Standalone Financial Statements
24 Fulfilling Community Aspirations 175 Consolidated Financial Statements
26 Board of Directors
view this 29 Awards and Accolades
annual report online at
www.manappuram.com
Revenue EBIDTA Profit after tax
43.8% Y-O-Y 54.5% Y-O-Y 113.6% Y-O-Y
Assets Gold loan
Earnings per share under Management (AUM) disbursement
113.8% Y-O-Y 19.5% Y-O-Y 45.4% Y-O-Y
Gold holdings Gold loan customer base Equity share information
2.4% Y-O-Y 11.1% Y-O-Y NSE: MANAPPURAM
BSE: 521213
Y-o-Y: Growth in 2016-17 over 2015-16
Shri V. C. Padmanabhan
Tribute to a visionary
At Manappuram, we commenced our journey with the fundamental
objective of helping and empowering people. In 1949, one man from the impoverished
village of Valapad in Kerala set out on his journey to help poor farmers and fishermen by
providing them with hassle-free loans at affordable rates. Thus, Shri. V. C. Padmanabhan
took the first step towards building an institution of trust. He was a visionary, who
continues to inspire us to this day.
Shri Padmanabhan earned a reputation for his integrity and Manappuram soon became a
haven for the deposits of local people, offering higher returns along with assured safety.
The small business of community financing through gold loans gained strength, and after
decades of building trust, it acquired a new identity in 1992 as Manappuram General
Finance and Leasing Limited.
Over the 25 years since then, we have fortified our position as one of India’s most trusted
gold loan NBFC. Today, we have successfully diversified our offerings to reach a wider
cross-section of customers.
Our business landscape has changed over the years, with new opportunities and
challenges emerging. However, the values of our founder continue to guide us towards
new horizons.
Shri V. C. Padmanabhan
(1916-1986)
25 Years of Empowerment
and Value Creation
1992 2003
Manappuram Finance Limited (MFL) was M anappuram Finance (Tamil Nadu)
incorporated with registered office at Thrissur Ltd. (MAFIT) was established with
to conduct the business of financial services, a registered office in Coimbatore,
especially leasing and hire purchase consequent upon the takeover of
Sterling Gem Finance Pvt. Ltd. MAFIT
was later merged with MAGFIL w.e.f.
April 1, 2008
1994 D eclared Rights issue
Paid maiden dividend in the very first full
year of operations (1994) and has maintained
a track record of uninterupted dividend 2005
payouts thereafter
Attracted institutional funding for the first
time, when ICICI Bank sanctioned working
1995 capital facility of ` 25 crores under a
‘bilateral assignment’ model. Hitherto, MFL
had been largely dependent on deposits
F irst NBFC from Kerala to go for a credit
from the public
rating exercise. ICRA assigns rating of MA
to its fixed deposit programme
A pproaches the capital market with its first
Public Issue of shares for ` 1.75 crore. The
shares are listed on the Bombay, Madras 2006
and Cochin stock exchanges
Singapore government-owned
investment fund Fullerton India/Temasek
enters the picture with initial sanction
1996 of a credit limit of ` 50 crore to MFL.
Within a year, the limits are enhanced
First NBFC in Kerala permitted by the RBI to ` 475 crore
to accept deposits from the public without
restrictions on the limit. The Company is also
permitted to set its own interest rates
2007
F irst NBFC in Kerala to receive
1998 foreign institutional investment with
Sequoia Capital and Hudson Equity
B ecomes the first NBFC in Kerala to be given Holdings investing ` 70 crore
a Certificate of Registration by the RBI
F irst NBFC from Kerala to issue bonus
A major policy change sees MFL shifting its shares in the ratio of 1:1
focus to gold loans
2002
2008
Commences foreign exchange business with
moneychanger’s licence from the RBI. [Later, T otal business volumes of MAGFIL
in 2007, it becomes first NBFC from Kerala to cross the ` 1,000 crore milestone
receive AD - II (Authorised Dealer - II) Licence
M ore FIIs come in and Company
from RBI]. The registered office is shifted to
raises ` 70.75 crore
Valapad, Kerala
2 TOUCHING LIVES. SHAPING FUTURES.
About Manappuram
Governance Reports
25 Years of Empowerment and Value Creation Financial Statements
2009 2014
Manappuram Foundation established at Valapad in P ioneered the introduction of shorter
order to further the CSR mission of the Manappuram tenure loans product (3 to 9 months) with
Group. The first initiative of the Foundation is lower LTV for longer tenure loans
“Janaraksha Manappuram Soujanya Arogya A cquired full ownership of Milestone Home
Insurance Scheme” providing free health insurance Finance Private Limited from Jaypee Hotels
to 20,000 BPL families (covering over one lakh Limited. Name changed to Manappuram
beneficiaries) in the seven panchayats of Nattika Home Finance Private Limited
assembly constituency
E quity shares of the Company listed on the
NSE (Listed on BSE in 1995)
2010 2015
D eclared 1:1 bonus issue for second time D iversified into Home Loans and
T otal business volumes crossed ` 5,000 crore Commercial Vehicle finance
R aised ` 245 crore through the QIP route A cquired the Chennai based MFI,
Asirvad Microfinance Pvt. Ltd.
O pens its 1001st Branch at Thrissur town
I ntroduced online gold loan (OGL)
S uperstars Mohanlal, Vikram, Venkatesh, Puneeth in October becoming the first in the
Rajkumar and Akshay Kumar among others Industry to do so
becomes Manappuram’s brand ambassadors
C elebrated 20 years of listing on the
R aised additional capital of ` 1,000 crore from FIIs
BSE with ceremonial ringing of the
(through QIP)
closing bell by Mr. V.P. Nandakumar
S tock split: Equity share of face value of and Mrs. Sushama Nandakumar
` 10/- split into 5 shares of face value (joint promoters of the Company) on
of ` 2/- each November 6
A ltered object clause in Memorandum
of Association to incorporate diversified
2011 business activities
A ssets under Management (AUM) records three-
fold growth to ` 7,549 crore 2016
A dopts a new name, Manappuram Finance Ltd.,
in place of the earlier name Manappuram General V .P. Nandakumar, MD & CEO, is one of
Finance and Leasing Ltd a select few from India to be shortlisted
D eclared 1:1 bonus issue for the third time for the CNBC Asia Business Leaders
Award 2016 held at Jakarta, Indonesia, on
November 23
2012 A cquired 100% ownership of Manappuram
Insurance Brokers Private Limited
A UM crosses ` 10,000 crore
R BI tightens regulations, stipulates cap on LTV 2017
not to exceed 60%
A warded ‘Best NBFC for Gold Loan
B ranch Network reaches 2,908, with more than Business’ from the India Bullion Jewellery
850 branches added in FY 2012 Association (IBJA), Mumbai, on March 16
at Mumbai
C o-branded Pre-paid Money Card in
2013 tie up with YES Bank and the MaKash
e-Wallet launched on April 15
RBI issued key guidelines to bring stability to
gold lending business, increases LTV for gold T he Company’s shares are included in the
derivative segment (futures & options) at
loans to 75%
NSE, effective June 30
ANNUAL REPORT 2016 -17 3
25
years is a
promising age.
Because it offers both the systems and platforms,
dynamism of youth and the all underpinned
insight of experience. by a collaborative
performance culture.
At Manappuram Finance,
we have enjoyed every Simply put, trust,
moment of this exhilarating technology, talent and
journey. teamwork have played
a pivotal role in shaping
We remain rooted to our 25 years of sterling
our core values, while at performance.
the same time excited to
leverage opportunities
that are emerging on the
horizon.
Over the years, we
have diversified our
products, adopted high-
end technology to reach
out to more customers
and scaled operations
with standardised
About Manappuram
Governance Reports
25 Years of Empowerment and Value Creation Financial Statements
`136.6Bn 26.12% 18.5%
Consolidated Capital adequacy ratio Share of non-gold
Assets under Management (standalone) businesses
6 4,152 33.51Mn
Business verticals Branches across India Total customers
30+ 22,112 61.05 Tonnes
Funding sources across Team Manappuram Gold asset holding
banks and financial
institutions
28 1.7% 10%
States/Union Net Non-performing Borrowing cost
territories coverage Assets (standalone)
` 8,250 Cr ` 1.50 34.5%
Market per share Promoters holding
capitalisation Paid as dividend (standalone)
(Face value ` 2)
ANNUAL REPORT 2016 -17 5
Institution of Trust
Over the preceding 25 years, we have progressed
at a sustainable pace to become one of India’s
leading NBFCs. Our focus has always been on
driving wide-ranging innovations in terms of
products, processes, technologies and branding.
We drive the aspirations of our customers by
offering them easy, hassle-free gold loans and help
them realise their dreams. In recent years, the
Company has diversified into new business areas
like microfinance, vehicle and housing finance and
SME lending to de-risk our business.
Our vision Our core values Our fund sources
Our enduring vision is to energise the CUSTOMER IS Credit lines from 30+ banks
vast stock of privately held gold in ALL-IMPORTANT Healthy pipeline of un-utilised limits
India. India’s households own about 20 Our products aim at delivering value to the with banks and financial institutions
to 25,000 tonnes of gold, the equivalent customer. No matter what his economic
Commercial papers from short-
of two-thirds of the country’s GDP, of status is, we believe that time is precious,
term money markets
which hardly 10% is monetised. We and everyone is entitled to courtesy
hope to unlock the value of this gold to and prompt service with high levels of Privately placed Non-Convertible
the benefit of the common people of transparency. Debentures (NCD) and bonds
India most of whom have savings in the NCD Public Issue
form of gold jewelery. NO COMPROMISE
(%)
ON INTEGRITY
We set great store by ethical values and 1.0
practices in all our dealing. We believe in
transparency and in following the laws of 22.9
the land without ambiguity. We value the
contributions of all our stakeholders and
we take special pride in recognising those
contributions. 50.8
CUTTING
Our mission
EDGE TECHNOLOGY
As a pioneer in the introduction of technology
Our purpose is to bring convenience into the gold loan sector, we believe in
to the lives of the ordinary people of constantly updating our technology to keep 25.2
India, to ‘make life easy’ for them. our costs low and deliver better service to
We provide them with ‘instant’ credit our customers. We have standardised our Bank Finance
at reasonable rates of interest against processes to allow us better and more cost- Commercial Paper
their used gold jewellery to enable effective access to our customers. We believe
them to meet their requirements for in fostering innovation to deliver ever greater NCD
short-term funds. value to our customers. Subordinated Bond
6 TOUCHING LIVES. SHAPING FUTURES.
About Manappuram
Governance Reports
Institution of Trust Financial Statements
Products and
services
ONLINE GOLD LOAN GOLD LOAN SME FINANCE FOREX & MONEY
TRANSFER
COMMERCIAL MICRO FINANCE HOME LOAN INSURANCE
VEHICLE LOANS BROKING
Our credit ratings
MANAPPURAM FINANCE ASIRVAD MICROFINANCE HOUSING FINANCE
Investment grade rating since 1995 Long Term: A+ (Stable) by CRISIL, CARE Long Term: A+ (Stable) by CRISIL
Long Term: AA- (Stable) by CRISIL, Short Term: A1+ by CRISIL Short Term: A1+ by CRISIL
ICRA, CARE
Short Term: A1+ by CRISIL, ICRA
Our business strategy
Strengthen the core gold Addition of synergistic new Leveraging our operational
loan business business segments capability to process large volume,
small ticket-lending transactions
Delinking the gold business from gold Leveraging the strong retail
with semi-urban and rural
prices by offering short-term loans customer base, retail branch
customers
(3 months) network and the strong
Increasing marketing initiatives across Manappuram brand equity build Enhancing the revenue mix and
branches and key markets over the years improve structural return on
equity (RoE)
Enhancing marketing spend with Strengthening synergistic product
growing BTL and ATL activities segments – Microfinance,
Mortgage & Housing Finance and
Focusing on branch activations
Commercial Vehicle loans
through increased incentives and
performance scorecard Utilising surplus capital to build
or acquire new lending products
Consolidating pan-India reach
relevant to the existing retail
customer base
ANNUAL REPORT 2016 -17 7
Growing Our National
Prominence
Jammu & Kashmir 13
6 Himachal Pradesh
Punjab 75
Chandigarh 4
5 Uttarakhand
Haryana 62
Delhi 59 105 Uttar Pradesh
Rajasthan 78 8 Assam
12 Bihar
9 Jharkhand 2 Tripura
Madhya Pradesh 95
92 West Bengal
Gujarat 109
49 Chhattisgarh
Daman and Diu 1 72 Odisha
Maharashtra 193
252 Telangana
331 Andhra Pradesh
Goa 8
Karnataka 569
10 Puducherry
580 Tamil Nadu
Kerala 486
Map not to scale
GOLD AUM – REGION-WISE BREAKUP (%) GOLD AUM – RURAL URBAN MIX (%)
10 25 11
15 64
33
South Rural
11 North Semi-Urban
West 31 Urban
East Metro
8 TOUCHING LIVES. SHAPING FUTURES.