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GRUH Finance Ltd.

BSE: 511288 Sector: Financials
NSE: GRUH ISIN Code: INE580B01029
BSE 15:43 | 16 Mar 547.25 -11.60






NSE 15:57 | 16 Mar 546.65 -13.90






OPEN 558.95
VOLUME 14903
52-Week high 713.55
52-Week low 363.05
P/E 58.40
Mkt Cap.(Rs cr) 20,013
Buy Price 547.25
Buy Qty 1270.00
Sell Price 0.00
Sell Qty 0.00
OPEN 558.95
CLOSE 558.85
VOLUME 14903
52-Week high 713.55
52-Week low 363.05
P/E 58.40
Mkt Cap.(Rs cr) 20,013
Buy Price 547.25
Buy Qty 1270.00
Sell Price 0.00
Sell Qty 0.00

GRUH Finance Ltd. (GRUH) - Director Report

Company director report


Your directors are pleased to present the Thirty first Annual Report of your Companywith the audited accounts for the year ended March 31 2017.


(Rs. in crores)

For the year ended March 31 2017 For the year ended March 31 2016
Profit Before Tax 442.00 361.70
Provision for Tax
(Net of deferred tax ) 145.35 118.12
Profit After Tax 296.65 243.58
Balance brought forward from last year 184.14 161.11
Amount available for appropriation 480.79 404.69
Statutory Reserve u/s 29C of NHB Act & u/s 36(1)(viii) of I.T. Act 84.00 69.85
General Reserve 65.00 50.00
Proposed Dividend - 83.65
Additional Tax on Proposed Dividend - 17.03
Dividend pertaining to previous year paid during the year - 0.02
Balance carried to Balance Sheet 331.79 184.14
480.79 404.69


The Board of Directors had approved the Dividend Distribution Policy in line with theSEBI Listing Regulations. The Policy is provided as ‘Annexure A' to this report.

In line with the said Policy your directors recommend payment of dividend of Rs. 2.80per equity share of face value of Rs. 2 each amounting to Rs. 122.86 crores (including taxthereon of Rs. 20.78 crores) for the year ended March 31 2017 as against a dividend ofRs. 2.30 per share of face value of Rs. 2 each for the previous year. The dividend payoutratio for the year inclusive of additional tax on dividend will remain at 41%. As perCompanies (Accounting Standards) Amendment Rules 2016 dividend and tax thereon will berecognised as liability on approval of shareholders at the ensuing Annual General Meeting(AGM). Changes in Share Capital During the year the paid up equity share capitalincreased as a result of allotment of 882744 equity shares of the face value of Rs. 2/-each upon exercise of stock options under ESOS-2011 and ESOS-2015. As at March 31 2017the equity share capital stood at Rs. 729128968 divided into 364564484 equity sharesof Rs. 2/- each.


Loan disbursements during the year were Rs. 4125 crores as against Rs. 3857 crores inthe previous year. GRUH continued to focus mainly on the retail segment and disbursed Rs.3654 crores to 42525 families. Cumulative disbursements as at March 31 2017 were Rs.23197 crores. Rural Housing During the year GRUH disbursed Rs. 1979 crores in respectof 22854 loans in the rural areas. Cumulative disbursement under the rural housing hasbeen Rs. 10671 crores in respect of 202221 loans. Rural area as defined by the NationalHousing Bank (NHB) is a location where population is less than 50000 as per the 1991census. Under the Rural Housing Fund scheme of NHB GRUH branded a special loan product -Shubh Lakshmi aimed at financing women applicants and disbursed Rs. 458 crores in respectof 4751 loans during the year. Affordable Housing The Ministry of Housing and UrbanPoverty Alleviation (MHUPA) - The Government of India under "Housing For All by2022" mission announced the Pradhan Mantri Awas Yojana (PMAY) which has 4 componentsaimed at addressing the housing requirement of the Affordable Housing segment. One of thecomponents viz. the Credit Linked Subsidy Scheme (CLSS) under the PMAY offers interestsubsidy for the EWS/LIG and MIG segments for families having annual family income upto Rs.18.00 lacs p.a. A maximum subsidy upto Rs. 2.67 lacs can be claimed under the schemedepending on the segment and loan amount.

GRUH signed MOU with NHB to promote the CLSS scheme and received interest subsidyaggregating Rs. 123 crores in respect of 6149 beneficiaries so far and credited thesubsidy to the respective customers' loan accounts.

Loan Assets

As at March 31 2017 the loan assets increased to Rs. 13244 crores recording a growthof 19%. Loan assets in respect of the retail segment grew by 18% and stood at Rs. 12649crores.

Non-Performing Loans

As per the prudential norms of NHB GRUH's gross non-performing loans stood at Rs.40.58 crores as at March 31 2017 constituting 0.31% of the total outstanding loans ofRs. 13244 crores. The gross non-performing loans as at March 31 2016 were Rs. 35.55crores constituting 0.32% of the total outstanding loans of Rs. 11115 crores.

GRUH is required to carry a provision of Rs. 53.87 crores on standard individual homeloans of Rs. 12205 crores and a provision of Rs. 9.02 crores on standard loans other thanindividual home loans of Rs. 999 crores as at March 31 2017. GRUH also carries provisionof Rs. 0.22 crore on Instalments Due from Borrowers of Rs. 40 crores and Rs. 0.02 crore onLoan Against Deposit and interest accrued thereon of Rs. 1.57 crores. GRUH has made therequired provisions and carries a total provision of Rs. 63.13 crores in respect ofstandard assets.

GRUH is required to carry a provision of Rs. 11.50 crores towards non-performing loansas per NHB norms. However as a measure of prudence your directors have decided to carryprovision of Rs. 23.95 crores towards NPAs. GRUH also carries provision of Rs. 16.63crores as contingencies. GRUH therefore carries a total provision of Rs. 103.71 crores onits total assets including standard assets and non-performing loans. Net Non-PerformingLoans were Nil on outstanding loans of Rs. 13244 crores.

During the year GRUH has written off Rs. 0.51 crore in respect of individual loanswhere the recovery was difficult in the near future. However GRUH continued the recoveryefforts in respect of written off loans of earlier years and could effect recoveries ofRs. 0.31 crore during the year in respect of such written off loans. GRUH also tookpossession of properties of the defaulting borrowers under the SARFAESI Act and has soldfew of such acquired properties. Borrowings NHB Refinance GRUH availed refinanceaggregating to Rs. 515 crores during the year. The entire refinance was drawn under theRural Housing Fund (RHF) Scheme. The refinance outstanding as at March 31 2017 was Rs.3771 crores.

Bank Term Loans

GRUH received fresh sanctions from banks amounting to Rs. 1800 crores of which GRUHavailed loans aggregating to Rs. 1423 crores. The outstanding bank term loans as at March31 2017 were Rs. 4320 crores. Subordinated Debt As at March 31 2017 GRUH's outstandingsubordinated debt stood at Rs. 35 crores. The debt is subordinated to present and futuresenior indebtedness of the company and has been assigned rating of "ICRA AAA"and "CRISIL AAA" indicating highest degree of safety regarding timely payment offinancial obligations. Based on the balance term to maturity as at March 31 2017 Rs. 35crores of the book value of subordinated debt is considered as Tier – II capitalunder the guidelines issued by NHB for the purpose of computation of Capital AdequacyRatio.

Non-Convertible Debentures (NCDs)

During the year GRUH raised NCDs amounting to Rs. 1940 crores on a private placementbasis. The outstanding NCDs as at March 31 2017 stood at Rs. 2387 crores. NCDs are rated"ICRA AAA" and "CRISIL AAA" indicating highest degree of safetyregarding timely payment of financial obligations.

Commercial Paper

GRUH's commercial paper is rated "ICRA A1+" and "CRISIL A1+"indicating very strong degree of safety regarding timely payment of financial obligations.As at March 31 2017 outstanding commercial paper was Nil.


GRUH mobilised deposits of Rs. 521 crores and experienced a renewal ratio of 42.89%during the year. The outstanding balance of deposits as at March 31 2017 was Rs. 1505crores.

GRUH's Deposit programme is rated "MAAA" by ICRA and "FAAA" byCRISIL. These ratings indicate very strong degree of safety as regards timely repayment ofprincipal and interest.

There has been no default in repayment of deposits or payment of interest during theyear. All the deposits accepted by the Company are in compliance with the requirements ofNHB guidelines and Chapter V of the Companies Act 2013.


GRUH continues to maintain its Statutory Liquidity Ratio (SLR) as stipulated by NHB.Accordingly GRUH carried investments in approved securities aggregating to Rs. 220 croresas at March 31 2017 to meet the requirement of the SLR. GRUH has classified itsinvestments as long-term and valued them at cost. Adequate provision towards loss ifany to be experienced on redemption of investments on maturity has been made.

Unclaimed Deposits and Unclaimed NCDs

As at March 31 2017 deposits amounting to Rs. 26 crores had not been claimed by 2423depositors. Depositors were intimated regarding the maturity of deposits with a request toeither renew or claim their deposits and subsequent reminders have been sent. As per theprovisions of section 125 of the Companies Act 2013 deposits NCDs and/or interestthereon remaining unclaimed and unpaid for a period of seven years from the date theybecame due for payment are required to be credited to Investor Education and ProtectionFund (IEPF) established by the Government of India. Accordingly an amount of Rs. 4.79lacs in respect of unclaimed deposits and interest thereon was transferred to the IEPFduring the year. As at March 31 2017 there was no NCDs amount or interest thereonremaining unclaimed and unpaid.

Unclaimed Dividends

As at March 31 2017 dividend amounting to Rs. 1.55 crores has not been claimed byshareholders. GRUH has been intimating the shareholders to lodge their claim for dividendfrom time to time. As per the provisions of section 125 of the Companies Act 2013dividends remaining unclaimed for a period of seven years from the date of transfer to theunpaid dividend account are required to be credited to the IEPF. Accordingly unclaimeddividend amount of

Rs. 7.43 lacs in respect of the financial year 2008-09 was transferred to IEPF duringthe year. Unclaimed dividend amounting to Rs. 9.71 lacs in respect of the financial year2009-10 is due for transfer to IEPF in August 2017.

In terms of the IEPF (Uploading of information regarding unpaid and unclaimed amountslying with companies) Rules 2012 GRUH has made the relevant disclosures to the Ministryof Corporate Affairs (MCA) regarding unclaimed dividends and unclaimed matured depositsalong with interest accrued thereon. GRUH has uploaded the prescribed information on Risk Management Framework GRUH has a Risk Management frameworkapproved by the Board of Directors. GRUH's Risk Management framework provides themechanism for risk assessment and mitigation. The Board has delegated responsibility ofoverseeing Risk Management framework to the Audit Committee. The Risk Management Committee(RMC) of GRUH comprises the Managing Director the Executive Director and members ofSenior Management.

During the year the RMC reviewed the risks associated with the business of GRUH itsroot causes and the efficacy of the measures taken to mitigate the same. Thereafter theAudit Committee and the Board of Directors also reviewed the key risks associated with thebusiness of the Company the procedures adopted to assess the risks efficacy andmitigation measures.

GRUH has an Asset Liability Management (ALM) policy approved by the board. The task ofoverseeing the ALM has been entrusted to the Audit Committee which overseas and reviewsthe ALM position every quarter. The ALM Committee (ALCO) comprises of the ManagingDirector and members of Senior Management.

During the year the ALCO reviewed the risk arising from the gaps in the liquidity andinterest rate sensitivity statements and took decisions in mitigating the risk by ensuringadequate liquidity and profitability through competitive pricing of loan and depositproducts.

The observations of the Audit Committee if any on the ALM are reported to the board.

Regulatory Guidelines

GRUH continues to comply with the guidelines issued by NHB regarding accountingguidelines prudential norms for asset classification income recognition provisioningcapital adequacy concentration of credit credit rating Know Your Customer (KYC)guidelines and Anti Money Laundering (AML) standards fair practices code and real estateand capital market exposures. The details of compliances are outlined in the ManagementDiscussion and Analysis Report.

GRUH's Capital Adequacy Ratio stood at 18.32% as against the minimum requirement of12%. Tier – I capital was 16.82% against the minimum requirement of 6%.

The Government of India has set up the Central Registry of Securitisation AssetReconstruction and Security Interest of India (CERSAI) under section 21 of the SARFAESIAct 2002 to have a central database of all mortgages created by lending institutions. Theobject of this registry is to compile and maintain data relating to all transactionssecured by mortgages. Accordingly GRUH is registered with CERSAI and has been submittingdata in respect of its loans. Human Resource Development At GRUH human resourcedevelopment is considered vital for effective implementation of business plans. Constantendeavours are being made to offer professional growth opportunities and recognitionsapart from imparting training to employees. During the current year in-house trainingprogrammes were provided to employees inter alia in lending operationsrecoveries KYC IT system & security and accounts. Employees were also nominated fortraining programmes conducted by NHB and other institutions. 222 employees underwentdifferent training programmes.

GRUH's staff strength as at March 31 2017 was 664. Particulars of Employees

GRUH had 2 employees as at March 31 2017 employed throughout the year who were inreceipt of remuneration of Rs. 1.02 crore or more per annum or Rs. 8.50 lakh or more permonth if employed for part of the year. In accordance with the provisions of section 197of the Companies Act 2013 read with the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 as amended the name and other particulars of suchemployees are set out in the annex to the Directors' Report. However as per theprovisions of section 136 of the Companies Act 2013 the Directors' Report is being sentto all shareholders of the Company excluding the annex. The annex is available forinspection by the members at the registered office of the Company during business hours onworking days up to the date of ensuing Annual General Meeting. Any shareholder interestedin obtaining a copy of the said annex may write to the company secretary at the registeredoffice of the Company.

Employees Stock Option Schemes

The stock options granted to directors and employees operate under the schemesESOS-2011 and ESOS-2015. There has been no material variations in the terms of the optionsgranted under any of the schemes and all the schemes are in compliance with the SEBI(Share Based Employee Benefits) Regulations 2014. The disclosures as required underRegulation 14 of the said regulations have been placed on the website of the Company.

Prevention Prohibition and Redressal of Sexual Harassment of Women at Workplace TheCompany is an equal opportunity employer and consciously strives to build a work culturethat promotes dignity of all employees. As required under the provisions of the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 andRules framed thereunder the Company has implemented a policy on Prevention of SexualHarassment of Women at Workplace. An Internal Complaints Committee has been set up toreceive complaints investigate the matter and report to the management.

During the year no complaint was received by the committee. Awards and RecognitionsGRUH has won the Silver Trophy of The Financial Express CFO of the Year Award 2017 in theLarge Enterprises – Services Category. Auditors Statutory Auditors In accordance withthe requirement of the Companies Act 2013 the current Statutory Auditors M/s. Sorab S.Engineer & Co. Chartered Accountants (Firm Registration No. 110417W) hold office upto the conclusion of the ensuing AGM. As per the provisions of section 139 of theCompanies Act 2013 M/s. Sorab S. Engineer & Co. Chartered Accountants are noteligible for re-appointment for a fresh term. The Board of Directors places on record itsappreciation for the services rendered by M/s. Sorab S. Engineer & Co. as theStatutory Auditors of the Company.

The Board of Directors of the Company on the recommendation of the Audit Committeehas considered and recommended the appointment of M/s. Deloitte Haskins & Sells LLPChartered Accountants (Firm Registration No. 117366W/W-100018) as Statutory Auditors for aterm of five years beginning from the conclusion of the 31st AGM till theconclusion of the 36th AGM subject to approval of members at the ensuing AGM.

The Statutory Auditors have not made any adverse comments or given any qualificationreservation or adverse remarks or disclaimer in their Audit Report.

Secretarial Audit

Pursuant to the provisions of section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 GRUH has appointed Mr.M.C. Gupta of M/s M.C. Gupta & Co. a firm of Company Secretaries in practice toundertake the Secretarial Audit of the company. The Report of the Secretarial Audit isannexed herewith as ‘Annexure B' to this report. The Secretarial Auditor has not madeany adverse comments or given any qualification reservation or adverse remarks ordisclaimer in their Audit Report.

Directors and Key Managerial Personnel

In accordance with Articles 134 and 135 of the Articles of Association of the Companyand the provisions of the Companies Act 2013 Mr. Kamlesh Shah Executive Director of theCompany is liable to retire by rotation at the ensuing AGM and is eligible forre-appointment. Mr. Rohit C. Mehta and Mr. S. M. Palia Independent Directors of theCompany have completed their term on March 31 2017 and they have stepped down from theBoard of the Company thereafter on completion of their term. The Board of directors placeson record its appreciation for the valuable advice given and contributions made by Mr.Rohit C. Mehta and Mr. S. M. Palia during their association with the Company.

During the year the Board of directors on the recommendations of the Nomination andRemuneration Committee (NRC) had appointed Mr. Pankaj Patel as an Additional Independentdirector w.e.f. March 16 2017 for a period of five years upto March 15 2022 subject tothe approval of the members in the ensuing AGM. The Board of directors on therecommendations of the NRC had appointed Mr. Rajesh N Gupta as an Additional Independentdirector w.e.f. April 17 2017 for a period of five years upto April 16 2022 subject tothe approval of the members in the ensuing AGM.

Mr. Prafull Anubhai and Mr S. G. Mankad Independent Directors of the Company havecompleted their term on March 31 2017. The Board of directors had on the recommendationsof the NRC and subject to the approval of the members in the ensuing AGM re-appointed Mr.Prafull Anubhai as Independent Director for a second term w.e.f. April 1 2017 for aperiod of two years upto March 31 2019 and Mr S. G. Mankad as Independent Director for asecond term w.e.f. April 1 2017 for a period of five years upto March 31 2022.

The existing tenure of Mr. Sudhin Choksey as Managing Director and Mr. Kamlesh Shah asExecutive Director came to an end on March 31 2017. The Board of directors had on therecommendations of the NRC and subject to the approval of the members in the ensuing AGMre-appointed Mr. Sudhin Choksey as a whole-time director designated as Managing Directorand Mr. Kamlesh Shah as a whole-time director designated as Executive Director w.e.f.April 1 2017 for a period of three years upto March 31 2020 as per the terms specifiedin the draft agreement to be placed before the ensuing AGM.

Necessary resolutions for the appointment / re-appointment of the aforesaid directorsand their detailed profiles have been included in the notice convening the ensuing AGM anddetails of the proposal for appointment / reappointment are mentioned in the explanatorystatement of the notice.

Your directors commend their appointment / re-appointment. All the directors of theCompany have confirmed that they are not disqualified from being appointed as directors interms of section 164 of the Companies Act 2013.

There was no other change in the Key Managerial Personnel during the year.

Details of managerial remuneration as required under Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 are given as per‘Annexure C' to this report. Directors' Responsibility Statement In accordance withthe provisions of section 134(3)(c) of the Companies Act 2013 and based on theinformation provided by the management your directors state that: i. In the preparationof annual accounts the applicable accounting standards have been followed; ii. Accountingpolicies selected were applied consistently.

Reasonable and prudent judgements and estimates were made so as to give a true and fairview of the state of affairs of the Company as at the end of March 31 2017 and of theprofit of the Company for the year ended on that date; iii. Proper and sufficient care hasbeen taken for the maintenance of adequate accounting records in accordance with theprovisions of the Companies Act 2013 for safeguarding the assets of the Company and forpreventing and detecting frauds and other irregularities; iv. The annual accounts of theCompany have been prepared on a going concern basis; v. Internal financial controls havebeen laid down to be followed by the Company and such internal financial controls areadequate and operating effectively; vi. Systems to ensure compliance with the provisionsof all applicable laws are in place and operating effectively. Corporate SocialResponsibility Initiatives In accordance with the provisions of section 135 of theCompanies Act 2013 and the rules framed thereunder the Company has a Corporate SocialResponsibility Committee of Directors comprising Mr. Prafull Anubhai - chairman Mr. S. G.Mankad Mr. Pankaj Patel and Mr. Sudhin Choksey and has inter alia also formulateda CSR Policy.

The role of the CSR Committee is to review the CSR policy indicate activities to beundertaken by the Company towards CSR activities and formulate a transparent monitoringmechanism to ensure implementation of projects and activities undertaken by the Companytowards CSR activities.

GRUH was required to spend Rs. 6.04 crores towards CSR activities during the year. GRUHhas approved CSR proposals aggregating to

Rs. 2.71 crores and incurred CSR expenditure of Rs. 3.36 crores during the year.Cumulatively GRUH has incurred CSR expenditure of Rs. 7.55 crores. GRUH has approved CSRproposals in the field of providing education promoting health care sanitationeducation for differently abled children promoting vocational skills empowerment ofwomen and gender equality and promotion of sports.

The Annual Report on CSR Activities which forms part of the Directors' Report isannexed as ‘Annexure D' to this report.

Business Responsibility Reporting

As required under Regulation 34(2)(f) of SEBI (Listing Obligations and DisclosureRequirements) (LODR) Regulations 2015 Business Responsibility Report forms part of theDirectors' Report and is annexed as ‘Annexure E' to this report.

Extract of Annual Return [Form No. MGT-9]

The details forming part of the extract of the Annual Return in Form MGT 9 is providedas ‘Annexure F' to this report.


Particulars of loans guarantees or investments made

Since the Company is a housing finance company provisions of section 186 of theCompanies Act 2013 relating to loans made guarantees given or securities provided are notapplicable to the company. As regards investments made by the Company the details of thesame are provided under Note to Accounts forming part of the annual accounts of theCompany for the year ended March 31 2017. Particulars of Contracts or arrangementsentered into with related parties: In accordance with the provisions of section 188 of theCompanies Act 2013 and rules made thereunder the transactions entered into with relatedparties are in the ordinary course of business and on an arm's length pricing basis thedetails of which are included in the notes forming part of the financial statements. Thereare no material related party transactions entered during the year. Accordinglyinformation in form AOC - 2 is not annexed. As required by NHB notification no.NHB.HFC.CG-DIR.1/MD&CEO/2016 dated February 9 2017 a policy on Transactions withRelated Parties is given as ‘Annexure-G' to this report.

Material Changes details of Subsidiaries Litigations

There has been no material changes and commitments affecting the financial position ofthe company which has occurred between the end of the financial year to which thefinancial statements relate and the date of the report.

The Company does not have any subsidiary. There has been no change in the nature ofbusiness of the Company.

No significant or material Orders have been passed by the regulators or Courts orTribunals impacting the going concern status of the Company and / or the Company'soperations in future.

Particulars regarding Conservation of Energy Technology Absorption and ForeignExchange Earnings and Expenditure Particulars relating to conservation of energy andtechnology absorption stipulated in the Companies (Accounts) Rules 2014 are notapplicable. GRUH does not have any foreign exchange earnings. GRUH has paid dividend ofRs. 0.29 crore in foreign currency.

Management Discussion and Analysis Report and Report of the Directors on CorporateGovernance In accordance with the SEBI (LODR) Regulations 2015 and NHB Directions datedFebruary 9 2017 the Management Discussion and Analysis Report and the Report of theDirectors on Corporate Governance form part of this report.


Your directors take this opportunity to place on record their appreciation to allemployees for their hard work spirited efforts dedication and loyalty to GRUH. Theemployees have worked based on principles of honesty integrity and fair play and this hashelped GRUH in maintaining its growth. The directors also wish to place on record theirappreciation to shareholders depositors referral associates NHB financial institutionsand banks for their continued support.

On behalf of the Board of Directors
Mumbai Keki M. Mistry
April 17 2017 Chairman
DIN : 00008886