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Sahara Housing Fina Corporation Ltd.

BSE: 511533 Sector: Financials
NSE: N.A. ISIN Code: INE135C01012
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VOLUME 423
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P/E 19.24
Mkt Cap.(Rs cr) 47
Buy Price 67.15
Buy Qty 2.00
Sell Price 68.40
Sell Qty 5.00
OPEN 69.80
CLOSE 66.95
VOLUME 423
52-Week high 121.90
52-Week low 44.05
P/E 19.24
Mkt Cap.(Rs cr) 47
Buy Price 67.15
Buy Qty 2.00
Sell Price 68.40
Sell Qty 5.00

Sahara Housing Fina Corporation Ltd. (SAHARAHOUSING) - Director Report

Company director report

Dear Members

The Board of Directors of your Company take pleasure in presenting the Twenty-fifthAnnual Report along with the Audited Financial Statementsfor thefinancial yearended March312016.

FINANCIAL RESULTS

The Financial Performance ofthe Companyforthe financial yearended March 312016 issummarised below:

(Rs. )

Particulars 2015-16 2014-15
Gross Income 144035625 183333338
Less:
Interest 67900320 97361337
Overheads 46695477 52590146
Depreciation 610126 806762
Profit Before Tax (PBT) 28829702 32575093
Provision for Taxation
- Current Tax 8495765 10606264
- Deferred Tax 1468800 (31929)
- Income Tax related to earlier years 26366 98225
Profit After Tax (PAT) 18838771 21902533
Add: Profit carried from earlier years 109449611 120994022
Profit available for appropriations 128288382 142896555
Appropriations
Transferto Special Reserve u/s 36(1)(viii) ofthe Income Tax Act 1961 read with Sec. 29C ofthe NHB Act 1987 5345138 7730312
Deferred Tax Liability on opening balance of Special Reserve - 25522539
WDV Written Off (Net of DTA) - 194093
Balance carried to Balance Sheet 122943244 109449611
Total 128288382 142896555

PERFORMANCE

Some ofthe key highlights of your company’s performance during the year underreview;

Income & Profit (PBT & PAT)

• The Profit and Loss Account shows a Profit Before Tax (PBT) of ? 288.30 lacs forthe year ended March 31 2016 after making provisions for NPAs and general provision onStandard Loan Assets and taking into account all expenses including depreciation asagainst the PBT of ? 325.75 lacs for the previous year ended March 312015. The provisionfor income tax (net ofdeferred tax) is ? 99.91 lacs and the Profit After Tax (PAT) for theyear is ? 188.39 lacs as against ? 219.03 lacs in the previous year representing adecrease in Net Profit of 13.99 per cent (approx). Taking into account the balance of ?1094.50 lacs brought forward from the previous year the distributable profit as at March31 2016 is ? 1229.43 lacs.

• The Gross Income for the year under review was f 1440.36 lacs as against theprevious financial year's income of f 1833.33 lacs.

Net Owned Fund (NOF) & Assets under Management (AUM)

• Shareholders' Equity (Net Owned Fund) as at March 31 2016 was f 3353.36 lacs asagainst f 3164.98 lacs in the previous year representing an increase of 5.95 per cent.

• The total Assets under Management of the Company as on March 31 2016 was f12238.71 lacs as against f 13731.58 lacs in the previous year.

Transfer to Special Reserve

During the year under review your company transferred f 53.45 lacs to the StatutoryReserve under Section 36(1)(viii) of the Income Tax Act 1961 read with Section 29C of theNHB Act 1987.

Deferred tax liability on the Special reserve for the year under review has beencreated in accordance with the Circular No. NHB(ND)/DRS/Policy Circular No. 65/2014- 15dated August 22 2014 issued by the National Housing Bank (NHB).

Earnings PerShare (EPS)

The Earnings per share (EPS) as at March 31 2016 was f 2.69 as against f 3.13 as atMarch 31 2015.

Share Capital

The paid up equity share capital as on March 31 2016 was f 7 Crores divided into7000000 equity share of facevalueoff 10each.

a. Issue of equity shares with differential rights/ buy back

The Company neither issued equity shares with differential rights during the financialyear 2015-16 nor bought back any of its shares during the year under review.

b. Issue of sweat equity shares

The Company did not issue sweat equity shares during the financial year2015-16.

c. Issue of employee stock options

The Company did not issue any stock options during the financial year2015-16.

d. Provision of money by company for purchase of its own shares by employees or by anytrustees for the benefit of employees

The Company does not have a scheme for purchase of its own shares by employees or bytrustees for the benefit of employees.

Subordinated Debt

Your Company did not raise any fresh money through subordinate debt during the yearunder review. As on March 31 2016 your Company's outstanding subordinated debt was f 25crore. The debt is subordinated to present and future senior indebtedness of your Company.Interest due thereon has been paid within the due date of payment.

Material Changes & Commitments occurring after the end of Financial Year

No material changes and/or commitments affecting the financial position of the Companyoccurred between the end of the financial year to which the attached financial statementsrelate to and upto the date of this report.

Capital Adequacy

As per the Housing Finance Companies (NHB) Directions 2010 every Housing FinanceCompany (HFC) shall maintain a minimum Capital Adequacy Ratio (CAR) of 12 per cent. TheCapital Adequacy Ratio of SHCL as on March 312016 was 78.68 per cent. The following tablesets out our capital adequacy ratios as at March 312014 2015 and 2016.

Particulars As at March 31
2016 2015 2014
Capital Adequacy Ratio (%) 78.68 57.50 48.44

Investment in Subsidiaries Associates and Joint Ventures

Your Company does not have any subsidiary nor has it made any investment in associatesor joint ventures. Consequently the disclosure requirement as stipulated in terms ofsub-section (3) of Section 129 of the Companies Act 2013 read with rule (5) of theCompanies (Accounts) Rules 2014 is not applicable.

Lending Performance

During the year under review the Company disbursed loans aggregating to f 1455.85 lacsas against f 1159.97 lacs in the previous year ending March 312015 thereby registaringan increasing of 25.51%. The overall outstanding loan portfolio as at March 31 2016 stoodat f 12238.71 lacs as against f 13731.58 lacs in the previous year March 312015.

The Cumulative Log-in Sanction and Disbursement as at March 31 2016and 2015are asunder:

Particulars

No. of Accounts

Amount (f in lacs)

2015-16 2014-15 2015-16 2014-15
Cumulative Log-in 6182 6104 58810.27 56750.16
Cumulative Sanction 4002 3931 40144.23 38446.55
Cumulative Disbursement 3799 3741 36978.75 35522.90

Fresh Loans

The year-wise sanction and disbursement details for the previous five years are asunder;

Particulars 31.03.16 31.03.15 31.03.14 31.03.13 31.03.12
Sanction 1697.68 918.50 869.13 4509.49 2119.48
Disbursement 1455.85 1159.97 3893.57 4039.49 1891.46

The Company continues to serve from four regions East (Kolkata) North (Lucknow)South (Hyderabad) & West (Mumbai) and thirteen branches located at Kolkata AsansolSiliguri Ranchi Durgapur Lucknow Gorakhpur Kanpur Mumbai Pune HyderabadVijayawada and Visakhapatnam.

NON-PERFORMING ASSETS AND PROVISIONS FOR CONTINGENCY

Your Company strictly adheres to the prudential guidelines for Non-Performing Assets(NPAs) issued by the National Housing Bank (NHB) under its Directions of 2010 as amendedfrom time to time. As per the prudential norms the Company did not recognise any incomeon such NPAs. The Company has made appropriate provision for contingencies on standard aswell as non-performing housing loans and other loans as per the norms set by NHB.

The amount of Gross Non-Performing Assets (GNPA) on the housing loan portfolio as onMarch 312016was f 620.88 lacs against f 617.32 lacs as at March 312015.

DIVIDEND

The Board of Directors felt it prudent to retain the earnings for the year under reviewto be ploughed back in the lending business which shall result in augmenting theCompany’s growth and consequently shareholders’ wealth.

DEPOSITS

Your Company has been granted Certificate of Registration by National Housing Bank NewDelhi as a non-deposit taking Housing Finance Company. In accordance to the saidstipulation the Company under the current management has neither accepted in the past norhas any future plans to accept any public deposits by whatever name called. There are nounclaimed deposits as on March 312016.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

Since the company is a housing finance Company the disclosure regarding particulars ofloans given guarantees given and security provided is exempt under the provision ofSection 186(11) of the Companies Act 2013.

As regards investments there are no fresh investments made by the Company during thefinancial year ended March 312016.

NATIONAL HOUSING BANK (NHB) GUIDELINES

The Company has complied with the provisions ofthe Housing Finance Companies (NHB)Directions 2010 as prescribed by NHB and has been in compliance with the variousCirculars Notifications and Guidelines issued by National Housing Bank (NHB) from time totime.

OTHER REGULATORY COMPLIANCE

The Company has also been following directions guidelines circulars issued by SEBIStock Exchange (BSE) MCA from time to time pertaining to listed companies.

In order to prevent frauds in loan cases involving multiple lending from differentbanks/ housing finance companies the Government of India has set up the Central Registryof Securitization Asset Reconstruction and Security Interest of India (CERSAI) underSection 20 ofthe SARFAESI Act 2002 to have a central database of all mortgages created bylending institutions. Your Company is registered with CERSAI and the data in respectthereto is being submitted from time to time.

Directors and Key Managerial Personnel

Shri Om Prakash Srivastava (Non-Executive & Non-Independent) Director (DIN:00144000) resigned from the Board with effect from February 15 2016 due to hispre-occupation with other assignments. The Board places on record its appreciation for thecontribution made by Shri Om Prakash Srivastava during his long tenure on the Board of theCompany since August 24 2002.

In accordance with the provisions of Section 152 of the Companies Act 2013 andArticles of Association Shri Seemanto Roy (DIN: 00183666) (Non-Executive &Non-Independent) Director of your Company retires by rotation and is eligible forreappointment at the ensuing Annual General Meeting.

None of the Directors of the company is related to each other. Brief resumes of theDirector proposed to be re-appointed nature of his expertise in specific functional areasand names of other companies in which he holds Directorship along with their Membership /Chairmanship of Committees of the Board as stipulated under Regulation 36(3) ofthe SEBI(Listing Obligations and Disclosure Requirement) Regulations 2015 are provided in theannexure to the Notice of the Twenty Fifth Annual General Meeting being sent to themembers along with the Annual Report.

Based on the confirmations received none ofthe Directors are disqualified for beingappointed / reappointed as Directors in terms of Section 164 the Companies Act 2013.

During the year under review no stock options were issued to the Directors of theCompany.

All Independent Directors have given declarations that they meet the criteriaofindependence as laid down underSection 149(6) of the Companies Act 2013 and theprovisions of Regulation 16(1)(b) of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015.

Shri D J Bagchi Chief Executive Officer and Manager under Section 196 197 198 andas a Key Managerial Personnel under Section 203 of the Companies Act 2013 and rules madethere under continues to serve your company.

Shri Vivek Kapoor continues to serve your company as Chief Financial Officer (CFO) anda Key Managerial Personnel under Section 203 ofthe Companies Act 2013.

BOARD MEETINGS

The Board met five times during the year on May 29 2015 August 14 2015 September28 2015 November 14 2015 and February 12 2016 respectively.

AUDITORS

At the Twenty-third (23rd) Annual General Meeting held on September 29 2014 theMembers had appointed M/s. Chaturvedi & Co. [FRN: 302137E] Chartered Accountants asthe Statutory Auditors of the Company by way of ordinary resolution under section 139 ofthe Companies Act 2013 to hold office from the conclusion of Twenty-third (23rd) AnnualGeneral Meeting until the conclusion ofthe Twenty-sixth (26th) Annual General Meetingofthe Company subject to ratification of the appointment by the members of the Company atevery Annual General Meeting as per the provisions of the Companies Act 2013.

Based on the recommendation of the Audit Committee the Board of Directors at itsmeeting held on August 12 2016 recommended continuation of services of M/s. Chaturvedi& Co. Chartered Accountants as the Statutory Auditors of the Company and that thenecessary resolution in this respect is being included in the notice ofthe Twenty-fifth(25th) Annual General Meeting for the approval of the Members of the Company. The Companyhas received consent from the Statutory Auditor and confirmation to the effect that theyare not disqualified to be appointed as the Statutory Auditor of the Company in terms ofthe provisions of Companies Act 2013 and Rules framed thereunder.

NOTES TO ACCOUNTS AND AUDITORS REPORT

No adverse remark or observation is given by the Statutory Auditors. The observationsmade by the Statutory Auditors in their report read with the relevant notes to accountsare complete transparent and self- explanatory and therefore do not call for any furthercomments by the Board.

SECRETARIAL AUDIT REPORT

Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board of Directorsof the Company had appointed Shri P V Subramanian Practicing Company Secretary (CP: 2077)as the Secretarial Auditor of the Company for the financial year 2015-2016. TheSecretarial Audit Report for the financial year ended March 31 2016 is annexed as "Annexure-2"to this report.

DIRECTORS’ RESPONSIBILITY STATEMENT

Your Directors would like to inform that the audited accounts for the year ended March312016 are in conformity with the requirements of the Companies Act 2013 and theybelieve that the financial statements reflect fairly the form and substance oftransactions carried out during the year and reasonably present the Company’sfinancial condition and results of operations.

These Financial Statements are audited by M/s. Chaturvedi & Co. CharteredAccountants the Statutory Auditors of the Company and pursuant to the provisions ofSection 134(5) of the Companies Act 2013 it is hereby confirmed that;

a. in the preparation of the annual accounts for the year ended March 31 2016 theapplicable Accounting Standards had been followed along with proper explanation relatingto material departures

b. the directors had selected such Accounting Policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company as at March 31 2016 and of the profit ofthe Company for that period;

c. the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

d. the directors had prepared the annual financial statements on a going concern basis;

e. the directors had laid down Internal Financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively; and

f. the directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.

DISCLOSURE UNDER SUB-SECTION (3) OF SECTION 134 OF COMPANIES ACT 2013 READ WITH RULE8(3) OF THE COMPANIES (ACCOUNTS) RULES 2014

Your Company is not engaged in any manufacturing activity and thus its operations arenot energy Intensive and the particulars relating to conservation of energy and technologyabsorption as per Section 134 (3) of the Companies Act2013 read with Rule 8 (3) oftheCompanies (Accounts) Rules 2014 are not applicable. There has been no foreign exchangeearnings and outgo during the year under review.

EMPLOYEE REMUNERATION

I. The ratio of the remuneration of each director to the median employee's remunerationand other details in terms of sub-section 12 of Section 197 of the Companies Act 2013read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 are forming part of this report and is annexed as "Annexure-1" to this Report.

II. Since no employee is in receipt of remuneration in excess of the limits as laiddown under Section 197(12) ofthe Companies Act 2013 read with Rule 5(2) and Rule 5 (3) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 nodisclosures in this regard are applicable.

CORPORATE GOVERNANCE & MANAGEMENT DISCUSSION AND ANALYSIS

Pursuant to Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 a separate section titled ‘Report on CorporateGovernance' and ‘Management Discussion and Analysis' forms part of this AnnualReport. The Report on Corporate Governance also includes certain disclosures that arerequired as per Companies Act 2013.

The certificate by the Statutory Auditors confirming compliance with the conditions ofCorporate Governance as stipulated in Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015forms part ofthis Annual Report.The said certificate for financial year 2015-16 does not contain any qualificationreservation or adverse remark.

INTERNAL CONTROL

The Company has an adequate internal audit system in place whereby the Internal Auditis conducted by the Internal Auditor and reports are submitted on a periodic basis. Theaudit function maintains its independence and objectivity while carrying out itsassignments. It evaluates on a continuous basis the adequacy and effectiveness of internalcontrol mechanism adherence to policies procedures as well as regulatory and legalrequirements. The function also recommends improvement in operational processes andsuggests streamlining of controls against various risks. The Audit Committee of the Boardreviews the internal audit function on a continuous basis.

SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATOR OR COURT OR TRIBUNALS

There were no significant/material orders passed by any Regulator or Court or Tribunalwhich would impact the going concern status of the Company and its future operations.

CHANGE IN THE NATURE OF BUSINESS

There are no changes in the nature of Business.

NOMINATION (INCLUDING BOARDS’ DIVERSITY) REMUNERATION & EVALUATION POLICY

The Board has on the recommendation of the Nomination & Remuneration Committeeframed a Nomination (including Boards' Diversity) Remuneration & Evaluation Policywhich inter-alia lays down the criteria for identifying the persons who are qualified tobe appointed as Directors and/or Key Managerial Personnel of the Company along with thecriteria for determination of remuneration of Directors and KMPs including theirevaluation and includes other matters as prescribed under the provisions of Section 178of Companies Act 2013 and Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015.

During the year under review your Company has amended the subject policy to align thesame with the requirements of Securities and Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015.

The details of the same are provided in Corporate Governance Report forming part ofthis Annual Report.

RELATED PARTY TRANSACTION POLICY & TRANSACTIONS

Related Party Transaction Policy intended to ensure requisite approval reporting anddisclosure of transactions between the Company and its related parties. The said policyalso defines the materiality of related party transactions and lays down the procedures ofdealing with related party transactions.

There were no materially significant related party transactions i.e. transactions ofmaterial nature with its promoters directors or senior management or their relativesetc. that may have potential conflict with the interest of company at large.

During the year the Company has not entered into any material contract arrangement ortransaction with related parties as defined in the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 and Related Party Transaction Policy oftheCompany. None ofthe Directors have any pecuniary relationships or transactions vis-a-visthe Company.

The Related Party Policy is available on the website of the Company at the URL http://www.saharahousingfina.com/annualreport/related-party-transaction-policy.pdf

ANNUAL EVALUATION OF BOARD PERFORMANCE AND PERFORMANCE OF ITS COMMITTEES AND INDIVIDUALDIRECTORS

Pursuant to the provisions of the Companies Act 2013 mandates formal annual evaluationof the Board of Directors and its committees. The provisions of Securities and ExchangeBoard of India (Listing Obligations and Disclosure Requirements) Regulations 2015 alsorequire that the Board shall monitor and review the Board Evaluation Framework.

The annual performance evaluation of the Board as a whole all Directors as well as theevaluation of the Board Committees including Audit Committee Nomination &Remuneration Committee Risk Management Committee and Stakeholders’ RelationshipCommittee of the Company was carried out. The details of evaluation process as carriedout and the evaluation criteria and framework have been explained in the CorporateGovernance Report forming part of this Annual Report.

INSURANCE OF COMPANY’S PROPERTY

Your Company has insured its various financed properties and facilities against therisk offire theft etc. so that financials are not impacted in the unfortunate event ofsuch incidents. However your Company does not offer at present Directors’ andOfficers’ Liability Insurance Policy.

RISK MANAGEMENT POLICY & ASSET LIABILITY MANAGEMENT COMMITTEE (ALCO)

The Company is exposed to various types of risks such as credit risk market risklegal risks interest rate risk liquidity risk and operational risk. The Company isaware of these factors and have given importance on risk management practices to ensure anappropriate balance between risks and returns.

The Company has put in place a comprehensive risk management policy and framework toidentify assess and monitorvarious risks. Risk management is driven by the Board with theoverall responsibility assigned to the Risk Management Committee of the Board ofDirectors. At the operational level risk management is assigned to the Asset LiabilityManagement Committee ("ALCO"). Your Company conducts risk profiling on a regularbasis for the purpose of self-assessment.

The Asset Liability Management Committee ("ALCO") lays down policies andquantitative limits that involve assessment of various types of risks and shifts in assetsand liabilities to manage such risks. ALCO ensures that the liquidity and interest-raterisks are contained within the limits laid down by the Board. The Company has dulyimplemented NHB’s Asset Liability Management Guidelines.

CORPORATE SOCIAL RESPONSIBILITY POLICY

Pursuant to the provisions of section 135 and schedule VII of the Companies Act 2013at present the CSR provisions are not applicable to the Company.

CODES STANDARDS AND POLICIES

‘Know Your Customer & Anti-Money Laundering Measures

Your Company has a Board approved Know Your Customer & Anti Money LaunderingMeasure Policy (KYC & AML Policy) in place which is strictly adhered to. The saidPolicy is in line with the National Housing Bank (NHB) guidelines.

The Company has also adhered to the compliance requirement in terms of the said policyrelating to the monitoring and reporting of cash/suspicious transactions. The Company iscommitted to furnish to Financial Intelligence Unit (FIU) India in the electronicmedium information of all cash transactions of the value of more than Rupees ten lakh orits equivalent in foreign currency and suspicious transactions whether or not made incash in terms of the said Policy.

The said policy is available on website of the Company at the URL http://www.saharahousingfina.com/kycp.html.

Fair Practice Code

Your Company has in place a Fair Practice Code (FPC) which includes guidelines onappropriate staff conduct when dealing with the customers and on the organisation’spolicies vis-a-vis client protection. The FPC is being revised and updated to align thesame with the improved practices in relation to the dealings of the Company with itscustomers and as per the various circulars issued by the National Housing Bank.

The said policy is available on website of the Company at the URL http://www.saharahousingfina.com/fpc.html.

Whistle Blower Policy (Vigil Mechanism)

Your company has pursuant to the provisions of Section 177(9) & (10) of theCompanies Act 2013 read with Rule 7 of Companies (Meetings of Board and its Powers)Rules 2014 and Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 the Company has in place a Whistle Blower Policy whichprovides for a vigil mechanism that encourages and supports its Directors and employees toreport instances of illegal activities unethical behaviour actual or suspected fraud orviolation of the Company’s Code of Conduct or Ethics Policy. It also provides foradequate safeguards against victimisation of persons who use this mechanism and directaccess to the Chairman of the Audit Committee in exceptional cases.

The said policy is available on website of the Company at the URL http://www.saharahousingfina.com/wbp.html.

Code of Conduct for Board of Directors and the Senior Management Personnel

Your Company has in place a Code of Conduct for the Board of Directors and the SeniorManagement Personnel to set forth the guiding principles on which the Company and itsBoard and Senior Management Personnel shall operate and conduct themselves withstakeholders government and regulatory agencies media and anyone else with whom it isconnected in a professional and respectful manner.

The declaration by the CEO of the Company regarding compliance with the Code of Conductfor Board Members and Senior Management Personnel is annexed with the Corporate Governancereport.

The said policy is available on website of the Company at the URLhttp://www.saharahousingfina.com/Code_of_Conduct_Directors_Sr%20Mngmnt_Persl_REVISED_2015.pdf.

Code for Prevention of Insider Trading Practices

Your Company has formulated and adopted a Code for Prevention of Insider TradingPractices in accordance with the model code of conduct as prescribed under the SEBI(Prohibition of Insider Trading) Regulations 1992 and 2015. The code lays downguidelines which includes procedures to be followed and disclosures to be made whiledealing in the shares of the Company. The code is applicable to the promoters directorssenior designated employees and the said persons are restricted from dealing in thesecurities of the Company during the ‘restricted trading periods’ notified bythe Company.

Policy on Disclosure of Material Events and Information

During the year under review your Company has adopted the Policy on Disclosure ofMaterial Events and Information in accordance with Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 to determine theevents and information which are material in nature and are required to be disclosed tothe Stock Exchanges.

The said policy is available on the website of the Company at the URL http://www.saharahousingfina.com/annualreport/Materiality_Policy.pdf.

Policy on Preservation of Documents and Records

During the year under review your Company has adopted the Policy on Preservation ofDocuments and Records in accordance with Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015. The Policy ensures that theCompany complies with the applicable document retention laws preservation of variousstatutory documents and also lays down minimum retention period for the documents andrecords in respect of which no retention period has been specified by anylaw/rule/regulation.

Other Policies as Per NHB Rules/Guidelines

Your Company has framed policies on ‘Policy on Partial / Part- Prepayment’‘Foreclosure / Pre-closure of loan prior to actual/agreed date of closure’‘Code of Conduct for Direct Selling Agents’ ‘Guidelines for RecoveryAgents’ ‘Policy on Refunds of Fees (AF/PF)’ etc in order to upgrade theprocedures of collecting the information from the prospective borrowers and to ensure fairpractices in dealing with the borrowers.

LISTING OF SHARES OF THE COMPANY

The Equity Shares of your Company continue to remain listed (Group-B) on the BSE Ltd.The Company has paid the listing fees as payable to the BSE Ltd. for the financial year2016 -17.

TECHNOLOGY UPDATION

Your Company remains committed to upgrade its existing system software and informationtechnology so as to improve operational effeciency and optimize cost. However thefinancial implications being a constraint the company is steadily progressing to achievethe envisaged goal. During the year under review the dependancy on custom driven reportingincreased with the partial implementation and commissioning of the in-house developedsystem software module and as a result it is expected that the system and proceduresincluding MIS and reports shall be strengthened with its complete commissioning.

In consonance with earlier years the emphasis continues to improve procedures so as toprovide adequate checks and alerts against probable frauds that may arise due tomisrepresentation by applicants and even to ensure fair practice in dealing withborrowers.

DEPOSITORY SYSTEM

The Company has entered into an agreement with CDSL/ NSDL for transaction of shares indematerialized form. As on March 312016 only 3.05 per cent of the Company’s paid upShare Capital consisting of 213888 shares were held in physical form. As per theSecurities and Exchange Board of India’s (SEBI) instructions the Company’sshares have to be transacted in dematerialised form and therefore members are requestedto convert their holdings to dematerialised form.

HUMAN RESOURCES AND TRAINING

Your Company continues its focus to improve human resource competence and capabilitiesin the Company to deliver the desired/better results. The Company aims to align HRpractices with business goals motivate people for higher performance and build acompetitive working environment. Your Company strives to ensure overall employeedevelopment and retention thus making them a core participant to the Company’ssuccess. Rewarding and recognizing high performing employees are vital to thecompany’s success. The Board values and appreciates the contribution and commitmentof the employees towards performance of your Company during the year. In pursuance of theCompany’s commitment to develop and retain the best available talent the Companycontinued to offer in-house training programme to staff members in executive developmentleadership and management skills. The Company continues to sponsor its employees atvarious levels to attend various seminars workshop and programmes conducted under theaegis of various organizations and institutions including training programmes conducted byNational Housing Bank ICAI ICSI & others and firmly believe it to be an investmentin building leadership qualities amongst selected promising employees.

Employee relations remained cordial and the work atmosphere remained congenial duringthe year.

INSURANCE COVERAGE TO BORROWERS

Your Company in tie-up with National Insurance Company Limited offers comprehensiveinsurance cover product called "NATIONAL INSURANCE SAHARA HOME LOANSURAKSHABIMA" offering protection to the borrower/co-borrowers (optional) of theCompany against the following risks/perils/natural calamities:

A Personal Accident Insurance: Death due to accident/ accidental loss of two limbs twoeyes or one limb and one eye; Permanent total disablement from injuries other than namedabove.

B Property Insurance: Fire/Storm / Earthquake/Riot Strike and Maliciousdamage/Lightning/Explosion/Implosion /Aircraft damage Impact damage/Subsidence andLandslide including Rock Slide/Bursting or Overflowing of Water Tanks & Pipes Missiletesting operations/Leakage from Automatic Sprinkler Installations Bush Fire/other naturalcalamities.

The details regarding the product (e.g. Sum insured premium payable etc.) areexplained to the borrowers during personal discussion with them at the time of creditappraisal.

During the year under review your Company filed two accidental death claims in respectof borrowers of the Company. While one claim was settled during the financial year2015-16 the second claim has been settled as on the date of this report.

GO GREEN INITIATIVES

Like previous year the go green initiative to send annual report in electronic formatto the shareholders who have registered their e-mail ID with their Depository Participantshall be continued. The shareholders who have not yet registered their e-mail ID arerequested to do so to enable the Company to effectively comply with this initiative.

EXTRACT OF ANNUAL RETURN

Pursuant to Section 134(3)(a) and Section 92(3) of the Companies Act 2013 read withRule 12 of the Companies (Management and Administration) Rules 2014the extract of theAnnual Return as at March 31 2016 in the prescribed form MGT 9 forms part of thisreport and is annexed as "Annexure - 3".

ACKNOWLEDGEMENTS

The Directors place on record their appreciation for the advice guidance and supportgiven by the National Housing Bank SEBI BSE Limited the National Stock Exchange ofIndia Limited National Securities Depository Limited Central Depository Services (India)Limited and the Credit Rating Agencies the Company’s Borrowers all the Bankers andothers for their continued support and faith reposed in the Company.

The Board also places on record its deep appreciation for the dedication and commitmentof the employees at all levels as their hard work co-operation and support had enabledthe Company to maintain its profitability status.

The Board would also like to express its sincere appreciation to the Company’sRTA Service Providers and Counsellors for their continued co-operation.

For and on behalf of the Board of Directors
(Brijendra Sahay) (Anshu Roy)
Director Director
(DIN 00017600) (DIN 05257404)
Kolkata
August 12 2016

Annexure -1

TO THE DIRECTORS’ REPORT

Requirements Disclosure
I The ratio of the remuneration of each director to the median remuneration ofthe employees for the financial year 2015-16. The Directors are not paid any remuneration apart from the ‘Sitting Fees’. Hence no disclosure is applicable.
II The percentage increase in remuneration of each Director Chief Executive Officer & Company Secretary and Chief Financial Officer in the financial year. There was no increase in the remuneration of CEO/CFO in the financial year 2015-16. The Directors are not paid any remuneration apart from the ‘Sitting Fees’.
III The percentage increase in the median remuneration of employees in the financial year. There was no increase in the median remuneration of employees in thefinancial year2015-16.
IV The number of permanent employees on the rolls of the Company. There were 42 permanent employees on the rolls of the Company as on March 312016.
V The explanation on the relationship between average increase in remuneration and Company’s performance. Not Applicable as there was no increase in remuneration in the financial year 2015-16.
VI Comparison ofthe remuneration ofthe Key Managerial Personnel against the performance of the Company. For the Financial Year 2015-16 the total remuneration paid to the KMPs were approx 29.67% of the net profit for the year.
VII Variations in the market capitalisation of the Company price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase over decrease in the market quotations of the shares of the Company in comparison to the rate at which the Company came out with the last public offer. The market capitalisation of the Company as of March 31 2016 stood at ?25.20 Cr against ? 33.36 Cr as at March 31 2015. Over the same period the price to earnings ratio (P/E ratio) as at March 312016 was 13.38xas compared to 15.22x previous year. The Company’s stock price as at March 31 2016 increased by 260% to ? 36.00 (in BSE) over the last public offering i.e. Public Issue.
VIII Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration. Not Applicable as there was no increase in remuneration in the financial year 2015-16.
IX Comparison of the each remuneration of the Key Managerial Personnel against the performance of the Company. The comparison of remuneration of each ofthe Key Managerial Personnel against the performance of the Company is as under:
Particulars % of Net Profit for FY 2015-16
CEO/Manager/
Company Secretary 21.83
CFO 7.84
X The key parameters for any variable component of remuneration availed by the directors. The Directors are not paid any remuneration apart from the ‘Sitting Fees’. Hence no disclosure is made.
XI The ratio ofthe remuneration ofthe highest paid director to that of the employees who are not directors but receive remuneration in excess ofthe highest paid director during the year. Not applicable
XII Affirmation that the remuneration is as per the remuneration policy of the Company. It is hereby affirmed that the remuneration is as per the Remuneration Policy of the Company.