Dear Shareholders,

On behalf of Board of Directors, I present the 30th Annual Report and the consolidated financial statements of PNB Housing Finance Limited for the year ended March 31, 2018. It gives me immense pleasure that the Company is now in the elite list of large housing finance companies in terms of loan assets and deposits. The Company has traversed this journey in a short span of six years, post undertaking a Business Process Re-engineering Project.

The driving force behind this journey has been a single minded thought of bringing people and processes together, achieving operational excellence, use of right technology in the delivery model and foremost, our customers and stakeholders. We are one of significant contributors to the millions of home buyers, bringing them closer to their dream of owning a home. It is indeed our modest endeavour towards adding to the nation's wealth.

The Company has once again delivered a stellar performance under all the parameters and has positioned itself amongst the top players of the sector. The Company has been delivering, what it had promised at the time of IPO. This is possible because PNB Housing is built on strong fundamentals, fuelled by ambition and held together by values and ethics. Our growth is steady, inclusive and an outcome of concentrated efforts by our team members to achieve a larger purpose - that of creating a healthy eco system for mortgage industry such that it benefits the society at large.

Indian economy has remained resilient in the last financial year in somewhat turbulent times. The government implemented tough structural reforms in the tax structure in the form of GST. The GST was implemented barely six months after demonetization. The consistent performance of the economy with a GDP growth of over 6.5%, despite many negative predictions proves that our economy is now matured. Experts anticipate the GDP will be 7.4% in 2018-19 and remain steady at 7.8% in 2019-20 and 2020-21, suggesting that our present repute of being the world's fastest growing economy shall persist even in the times ahead.

Indian Economy continues to move towards the path of macro-economic stability, as evidenced by the improving inflation and fiscal deficit, while being a more compliant economy. The global economy has also performed significantly better than the last fiscal. Almost all the major regions of the world are witnessing an economic growth. This acceleration is welcomed backed by rebound in investment and trade, but it is still subject to substantial risks owing to financial stress and rising geopolitical tensions.

One of the big concerns as of now is the rising crude oil prices. India is one of the largest consumers of crude oil with high dependence on imports. The recent rise is likely to fuel inflation and rise in interest rates. The INR has started depreciating against USD making imports dearer. At present, the situation is not alarming but if the situation does not improve by second quarter, then it might have adverse spiralling effect.

India has stable macro-economic indicators post structural reforms undertaken over the years. The liberal FDI policy has resulted in high foreign capital inflows and has provided the needed impetus to make India a favoured investment destination. There was a 17% surge in FDI inflows in the April-September FY 2017-18 period, which was mostly driven by an open FDI regime and improving business scenario in the country. The success of recent issues in primary market is a precursor of an increase in private investment.

The overall business sentiment has picked up in the last quarter of FY 18 post GST implementation. The Real estate sector, which was till now surrounded by multiple tax regimes, should benefit by a single tax structure. RERA a critical reform for the real estate has also started shaping up with almost all the states implementing it. RERA is gradually infusing transparency and confidence among home buyers. Some of the markets are witnessing better demand and sales growth, which is expected to expand in the current fiscal.

In the last 3 years, the government has announced major programmes to retrofit and develop urban infrastructure, such as 'Smart Cities', 'Housing for all', etc. As India moves towards an urbanised society, these programmes are expected to transform India's urban infrastructure landscape. The Smart Cities mission has witnessed the successful completion of 147 projects, while others are being developed at an appreciable pace. A total of 2,313 projects worth approx. USD14.89 billion are at various stages of select smart cities.

The investor sentiment towards India has improved. Moody's investor services has raised India's sovereign rating for the first time in 14 years. India has jumped 30 places in World Bank's Doing Business Report, 2018 to achieve the 100th rank. India is currently positioned at number 40 in the 2017 Global Competitiveness ranking.

Country's macroeconomic fundamentals are strong with a clear and definitive fiscal structure. India is on a much better footing than other emerging economies. The country's long-term growth potential stands undisputed backed by host of recent reforms undertaken, which have laid down a strong and firm foundation for the economy.

PNB Housing, with its strong and stable structure is poised to take advantage of current situation and deliver strong growth over the years. It has robust systems and processes backed by very good asset quality. We are constantly evolving our products and services to remain contemporary while catering to a niche market which is not only large in volume but also healthy from asset quality perspective. With our business strategy, we are confident that we will continue to deliver value for our stakeholders.

Before I conclude, I extend a warm welcome to the new members, Mr Ashwani Kumar Gupta, Mrs Shubhalakshmi Panse and Mr Jayant Dang on the Board of Directors. They bring with them rich experience to guide the Company forward. The erstwhile members of the Board, Mr Devinjit Singh and Dr Ram S Sangapure have resigned during the year. I take this opportunity to place on record my sincere thanks and appreciation for the contribution made by the outgoing Directors.

I also wish to thank our Regulator - the National Housing Bank, for being a continuous source of support and guidance to us, throughout the year.

I would like to put forth my deepest appreciation for the proficient and vibrant members of PNB Housing family steered by an energetic management team and ably guided by Mr. Sanjaya Gupta. My trust in them is undaunted and I am confident that they will continue to deliver highest level of customer satisfaction, much to the delight of the nation and growth of the economy.

Yours sincerely

Sunil Mehta
Chairman