My dear fellow Shareowners,
It gives me great pleasure to share with you the highlights of our Company''''s performance during 2015 - 16.
Reliance Capital made significant progress during the year towards improving operational performance across its core businesses, and is fully geared to capitalize on its growth aspirations.
We continue to move forward in fulfilling the vision of our legendary founder and my father, late Shri Dhirubhai Ambani, to attain financial empowerment for millions of ordinary Indians, and, in the process, enable Reliance Capital to become one of India''''s leading financial services'''' players.
Today, our Company is one of India''''s largest non-banking financial services companies. We have diversified interests in asset management, mutual funds, pension funds, life and general insurance, commercial and home finance, stock broking, wealth management services, financial products distribution, asset reconstruction and other activities in the financial services arena.
Our Company is an integral part of the Reliance Group. Reliance Group is amongst India''''s leading business houses with an 8 million strong shareholders'''' base. We have a strong presence across the wide array of high growth, consumer facing businesses of telecom, financial services, power, infrastructure and defense.
Today, each of us can claim with pride and humility that the Reliance Group touches the life of one in every five Indians, every single day. This proud association defines our vision and values. It defines who we are, what we stand for and what we aspire to achieve.
The key financial highlights on a consolidated basis are:
- Total income of Rs, 9,998 crore (US$ 1.5 billion), against Rs, 8,929 crore in the previous year, an increase of 12 per cent
- Net profit of Rs, 1,101 crore (US$ 167 million), against Rs, 1,001 crore in the previous year, an increase of 10 per cent
- Earnings Per Share (EPS) of Rs, 43.6 (US$ 0.7), against Rs, 40.7 in the previous year
- Total assets of Rs, 67,112 crore (US$ 10.2 billion), against Rs, 47,440 crore in the previous year, an increase of 41 per cent
- Total net worth of Rs, 15,390 crore (US$ 2.3 billion) as against Rs, 13,762 crore in the previous year, an increase of 12 per cent
These robust financial numbers have enabled us to recommend a dividend of Rs, 10.00 per share against Rs, 9.00 per share in the previous year,
Highest credit ratings
Our Company’s short term debt programme has been assigned a rating of "A 1 " by ICRA and CRISIL, the highest credit quality rating assigned by the respective agency to short-term debt instruments. Instruments rated in this category carry the lowest credit risk in the short term. A third agency, CARE, assigned our long term debt paper a rating of "CARE AAA". Instruments with this rating are considered to have the best credit quality and offer investors the highest degree of safety for timely servicing of debt obligations. Such instruments carry lowest credit risk.
Achievements during the year across key operating businesses
Reliance Nippon Life Asset Management managed over Rs, 2,87,431 crore (US$ 43.6 billion) across its mutual funds, pension funds, managed accounts and hedge funds. The income from operations rose by 38 per cent to Rs, 1,314 crore (US$ 199 million), and profit before tax was at Rs, 502 crore (US$ 76 million) as against Rs, 455 crore in the previous year. Post completion of the stake sale to Nippon Life Insurance Company in March 2016, the company has been renamed as ''''Reliance Nippon Life Asset Management'''',
Reliance Mutual Fund (RMF) maintained its position amongst the top asset managers in the country with a market share of12 per cent. The Average Assets Under Management (AAUM) for RMF rose by 16 per cent to Rs, 1,58,408 crore (US$ 24.0 billion).
Reliance Nippon Life Insurance (RNLI) is amongst the leading private sector life insurers with a market share of4 per cent in the private sector. RNLI''''s total premium was Rs, 4,371 crore (US$ 662 million) in the year. Renewal premium for the year rose by 11 per cent to Rs, 2,840 crore (US$ 430 million). RNLI''''s New Business Achieved Profit (NBAP) margin was at 28.8 per cent for the year, as against 27.7 per cent for the previous year. The total funds under management stood at Rs, 15,970 crore (US$ 2.4 billion). After Nippon Life InsuranceCompany acquired an additional 23 per cent stake in March 201 6, the company has been renamed as ''''Reliance Nippon Life Insurance''''.
Reliance General Insurance (RGI) is amongst the leading private sector general insurance companies in India with a market share of
7 per cent. RGI''''s gross written premium for the year ended March 31, 2016, increased by 4 per cent to Rs, 2,868 crore (US$ 435 million). RGI''''s profit before tax was at Rs, 99 crore (US$ 15 million) as against a profit of Rs, 81 crore in the previous year.
The broking business consists of Reliance Securities, one of the leading retail broking houses in India, and provides customers with access to equities, options and futures products, wealth management, portfolio management services and mutual funds. We had nearly 7,75,000 broking accounts as on March 31, 2016. The average daily equity broking turnover was Rs, 1,894 crore (US$ 287 million).
Reliance Money - the distribution business of Reliance Capital, is a comprehensive financial services and solutions provider, providing customers with access to mutual funds, life and general insurance products, and other financial products. It has a pan-India distribution network of over 150 branches.
Reliance Commercial Finance is amongst the leading SME lenders in the Indian non banking finance space. It offers a wide range of products which include SME loans, Loans Against Property (LAP), Infrastructure financing, Agriculture loans and Supply chain financing. The focus in this business continues to be on asset backed lending and productive asset creation. As on March 31, 2016, 100 per cent of the loan book was secured. With rise in disbursements to over Rs, 8,100 crore (US$ 1.2 billion), the Assets Under Management grew by 7 per cent to Rs, 15,157 crore (US$ 2.3 billion) as on March 31, 2016. This loan book is spread across 55,600 customers from top 44 Indian cities.
Reliance Home Finance (RHF) provides a wide range of loan solutions like home loans, LAP, construction finance, flexi LAP, and affordable housing. RHF also provides property solutions'''' services that help customers find their dream homes / property, along with financing. The Assets Under Management increased by 27 per cent to Rs, 7,358 crore (US$ 1.1 billion) as on March 31, 2016. The total income increased by 59 per cent to Rs, 815 crore (US$ 124 million), while profit before tax rose by 29 per cent to Rs, 137 crore (US$ 21 million).
We have drawn up exciting growth plans for the next three to five years:
- Increase our customer base - from 20 million to 50 million
- Increase the distribution reach - from 5 thousand to 25 thousand cities and towns
- Increase the numberof business partners - from half a million to one million
Together, these initiatives will further accelerate our growth and lead to substantial value creation for all.
Reliance Capital has always maintained the highest governance standards and practices by adopting, as is the norm for all constituent companies of the Group, the "Reliance Group -Corporate Governance Policies and Code of Conduct". These Policies and Code prescribe a set of systems, processes and principles, which conform to the highest international standards and are reviewed periodically to ensure their continuing relevance, effectiveness and responsiveness to the needs of investors, both local and global, and all other stakeholders.
The Company continued to contribute actively to community welfare activities and took up several initiatives and measures related to education and healthcare.
Our founder, the legendary Shri Dhirubhai Ambani, gave us a simple mantra: to aspire to the highest global standards of quality efficiency, operational performance and customer care. We remain committed to upholding that vision. Dhirubhai exhorted us to think big. With your continued support, we will think bigger. Indeed not just bigger but better, creating ever greater value for all our stakeholders.