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SRG Housing Finance Ltd.

BSE: 534680 Sector: Financials
NSE: N.A. ISIN Code: INE559N01010
BSE LIVE 15:40 | 16 Aug 205.70 -5.45
(-2.58%)
OPEN

200.05

HIGH

219.00

LOW

200.05

NSE 05:30 | 01 Jan Stock Is Not Traded.
OPEN 200.05
PREVIOUS CLOSE 211.15
VOLUME 815
52-Week high 240.00
52-Week low 66.00
P/E 74.53
Mkt Cap.(Rs cr) 267
Buy Price 207.10
Buy Qty 74.00
Sell Price 0.00
Sell Qty 0.00
OPEN 200.05
CLOSE 211.15
VOLUME 815
52-Week high 240.00
52-Week low 66.00
P/E 74.53
Mkt Cap.(Rs cr) 267
Buy Price 207.10
Buy Qty 74.00
Sell Price 0.00
Sell Qty 0.00

SRG Housing Finance Ltd. (SRGHOUSING) - Director Report

Company director report

To

The Members

The Directors have pleasure in presenting before you the Annual Report of the Companytogether with the Audited Statements of Accounts for the year ended 31st March2016.

FINANCIAL SUMMARY/HIGHLIGHTS OPERATIONS & STATE OF AFFAIRS:

(Rs. In Lakhs)

Particulars 2015-16 2014-15
Gross Income 1025.41 687.36
Less: Finance Cost 404.45 239.15
Overheads 332.24 213.44
Depreciation 8.16 7.86
Provision for Investment 3.58 0.00
Profit before Tax & Exceptional Items 276.98 226.91
Add : Exceptional Items 0.00 0.00
Profit before Tax 276.98 226.91
Less : Provision for taxation (Including Deferred tax) 90.24 73.33
Profit after tax 186.74 153.58
Add : Balance b/d from the previous year 212.77 140.19
Surplus available for appropriations 399.51 293.77
Appropriations
Transferred to Special Reserve under Section 36(l)(viii) of the Income Tax Act 1961 37.50 31.00
Provision for Standard Assets 5.78 6.56
Provision for NPA 6.10 4.57
Assets W/o as per Co. Act 2013 0.00 0.28
Def. Tax Liab. on special I.T. Reserve 4.24 4.24
Interim Dividend 0.00 28.28
Dividend Distribution Tax 0.00 5.65
Excess provision 1.35 0.42
Balance carried over to Balance Sheet 344.54 212.77

LENDING OPERATIONS & DISBURSEMENT OF LOANS:

Your Company registered a remarkable growth in its operations. The highlights ofCompany's Performance are as follows:

? The operating profit before charging depreciation and tax amounted to Rs 285.14 lacsin the year 2015-16 as against Rs. 234.77 lacs in the preceding year; representing a riseof 21.46%.

? Profit after Tax (PAT) before extraordinary items went up by 21.59% to Rs. 186.74lacs in the year 2015-16 from Rs.153.58 lacs in the previous year.

? As at 31st March 2016 the loan book stood at Rs. 5328.45 lacs as againstRs. 3867.52 lacs in the previous year marking an increase of 37.77%.

? Disbursements during the year amounted to Rs. 2730.59 lacs in 2015-16 from Rs.2538.64 lacs in 2014-15 .

As part of its liability management your Company endeavors to diversify its resourcebase in order to achieve an appropriate maturity structure and minimize the weightedaverage cost of borrowed funds.

DIVIDEND:

Your Directors felt it prudent to retain the earnings for the year under review to beploughed back in business which shall result in further augmentation of the Company'sgrowth and shareholders' wealth.

CHANGES IN SHARE CAPITAL:

During the year under review there were no changes in the share capital of theCompany.

UNCLAIMED DIVIDEND:

As at March 31st 2016 dividend amounting to Rs. 5025/- has not beenclaimed by shareholders. The Company has been intimating the shareholders to lodge theirclaim for dividend from time to time.

Under the provisions of section 125 of Companies Act 2013 dividends that remainunclaimed for a period of seven years from the date of declaration are required to betransferred to the Investor Education and Protection Fund (IEPF) administered by theCentral Government. As at March 31st 2016 there is no unpaid/UnclaimedDividend to be transferred to Investor Education & Protection Fund.

In terms of the IEPF (Uploading of information regarding unpaid and unclaimed amountslying with companies) Rules 2012 the Company has made the relevant disclosures to theMinistry of Corporate Affairs (MCA) regarding unclaimed dividends. SRGHFL has uploaded theprescribed information on www.iepf.gov.in and www.srghousing.com .

MANAGEMENT DISCUSSION AND ANALYSIS:

Pursuant to SEBI (LODR) Regulations 2015Report on Management Discussion and Analysisis annexed herewith in Annexure IV.

SUBSIDIARY COMPANIES:

The Company does not have any subsidiary.

DIRECTOR'S RESPONSIBILITY STATEMENT:

In pursuance of section 134 (3) (c) of the Companies Act 2013 and based on theinformation provided by the management your Directors hereby confirm that:

(a) In the preparation of the annual accounts the applicable accounting standards hadbeen followed;

(b) Accounting policies selected were applied consistently. Reasonable and prudentjudgments and estimates were made so as to give a true and fair view of the state ofaffairs of the Company as at March 31st 2016 and of the profit of the Companyfor the year ended on that date;

(c) Proper and sufficient care has been taken 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 frauds and otherirregularities;

(d) The annual accounts of the Company have been prepared on a going concern basis.

(e) Internal controls have been laid down to be followed by the Company and suchinternal controls were adequate and were operating effectively.

(f) Systems to ensure compliance with the provisions of all applicable laws were inplace and were adequate and operating effectively.

CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION:

Your Company has taken adequate steps to adhere to all the stipulations laid down inSEBI (LODR) Regulations 2015. A report on Corporate Governance is included as a part ofthis Annual Report in ANNEXURE VI.

Certificate from the Statutory Auditors of the company confirming the compliance withthe conditions of Corporate Governance as stipulated under SEBI (LODR) Regulations 2015is attached to this report.

In terms of Section 136 of the Act the reports and accounts are being sent to themembers and others entitled thereto.

RELATED PARTY TRANSACTIONS:

All contracts/arrangements/transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and on an arm's lengthbasis. During the year the Company had not entered into anycontract/arrangement/transaction with related parties which could be consid ered materialin accordance with the policy of the Company on materiality of related party transactions.

The Policy on materiality of related party transactions and dealing with related partytransactions as approved by the Board may be accessed on the Company's website at thelink: (http://srghousing.com/DataImages/download/RELATED%20PARTY%20TRANSACTION%20POLICY.pdf).

Your Directors draw attention of the members to Note 20 to the financial statementwhich sets out related party disclosures.

RISK MANAGEMENT POLICY:

Pursuant to section 134 (3) (n) of the Companies Act 2013 & SEBI (LODR)Regulations 2015 the company has in place a risk management framework approved by theboard of Directors. SRGHFL's Risk Management framework provides the mechanism for riskassessment and mitigation. Company has in place Risk Management Committee. The details ofthe committee and its terms of reference are set out in the corporate governance reportforming part of the Boards report.

At present the company has not identified any element of risk which may threaten theexistence of the company.

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 on the Company.

DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS:

The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. The scope and authority of the Internal Audit function isdefined by board. To maintain its objectivity and independence the Internal Auditorreports to the Chairman of the Audit Committee of the Board and/or to the ManagingDirector.

The Internal Auditor monitors and evaluates the efficacy and adequacy of internalcontrol system in the Company its compliance with operating systems accountingprocedures and policies of the Company.

Based on the report of internal auditor respective heads undertake corrective actionin their respective areas and thereby strengthen the controls. Significant auditobservations and recommendations along with corrective actions thereon are presented tothe Audit Committee of the Board and/or to the Managing Director.

DIRECTORS:

In accordance with the provisions of the Act and the Articles of Association of theCompany Mr. Rajesh Jain Director is liable to retire by rotation at the ensuing AnnualGeneral Meeting and being eligible offers himself for re-appointment.

Your Directors recommend his re-appointment.

During the year under review the Board of Directors on the recommendation ofNomination and Remuneration Committee had appointed Shri Nishant Badala as an AdditionalDirector to hold office in the capacity of Non-Executive Independent director in theCompany w.e.f. May 14th 2015 and shareholders of the company in their meetingheld on September 10th 2015 regularized his appointment as Non-ExecutiveIndependent Director of the Company.

During the year under review your Directors revised the remuneration of Mr. Vinod K.Jain Managing Director in accordance with the provisions of Companies Act 2013 intheir meeting held on 28.05.2015 and shareholders in their Annual General Meeting held onSeptember 10th 2015 approved the revised remuneration in addition to hisre-appointment as the Managing Director of the Company for a period of three years fromMay 7th 2016 on such terms and conditions as approved by Board in consultationwith Nomination and Remuneration Committee of the Company.

All the directors of the Company have confirmed that they are not disqualified frombeing appointed as directors in terms of Section 164 of the Companies Act 2013.

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

DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS:

The Company has received necessary declaration from each Independent Director of theCompany under Section 149(7) of the Companies Act 2013 that the Independent Directors ofthe Company meet with the criteria of their Independence as laid down in Section 149(6).

AUDITORS:

STATUTORY AUDITORS:

At the 15th Annual General Meeting held on September 18th 2014the members had appointed M/s Valawat Jha Pamecha & Co. Chartered Accountants(registration No. 008265 C) as the statutory auditors of the Company for a period of 3years upto the conclusion of 18th Annual General Meeting to be held in the year2017 subject to them ratifying the said appointment at every AGM. The Company hasreceived a confirmation from M/s Valawat Jha Pamecha & Co. Chartered Accountants tothe effect that their appointment if made at the ensuing AGM would be in terms ofSections 139 and 141 of the Companies Act 2013 and rules made there under. The boardproposes to the members to ratify the said appointment of M/s Valawat Jha Pamecha &Co. Chartered Accountants.

SECRETARIAL AUDITORS:

M/s Deepak Vijaywargey & Associates Practicing Company Secretary Udaipur wasre-appointed as the Secretarial Auditor of the Company for the financial year 2015-16 bythe Board of Directors pursuant to provisions of Companies Act 2013 and rules thereunder. Secretarial audit report as provided by M/s Deepak Vijaywargey & AssociatesPracticing Company Secretary is annexed to this Report as ANNEXURE II.

QUALIFICATIONS IN AUDIT REPORTS:

There are no qualifications reservations or adverse remarks or disclaimer made:

(a) By the statutory auditor in his report; and

(b) By the company secretary in practice in his secretarial audit report.

DISCLOSURES:

BOARD MEETINGS:

The Board of Directors met 11 (Eleven) times during the financial year 2015-16.

COMPOSITION OF AUDIT COMMITTEE:

The Audit Committee consists of adequate composition of Non-Executive IndependentDirectors. The details of which are mentioned in the Corporate Governance Report.

COMPOSITION OF NOMINATION & REMUNERATION COMMITTEE:

The Nomination & Remuneration Committee consists of adequate composition ofNon-Executive Independent Directors. The details of which are mentioned in the CorporateGovernance Report.

COMPOSITION OF STAKEHOLDER'S RELATIONSHIP COMMITTEE:

The Stakeholder's Relationship Committee consist of adequate composition of Non-Executive Directors and Non-Executive Independent Directors. The details of which arementioned in the Corporate Governance Report.

PARTICULARS OF LOANS GAURANTEES 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 provisions ofSection 186 (11) of the Companies Act 2013.

As regards investments made by the Company the details of the same are provided underNote 11 forming part of the annual accounts of the Company for the year ended March 31st2016.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO:

(A) CONSERVATION OF ENERGY:

The Company's operations are not power intensive. Nevertheless your Company is takingevery step to conserve and minimize the use of energy wherever possible such as usingenergy efficient computer terminals purchasing energy efficient equipments etc.

(B) TECHNOLOGY ABSORPTION:

The Company has imported no technology. Indigenous technology available is continuouslyupgraded to improve overall performance.

(C) EXPENDITURE INCURRED ON RESEARCH AND DEVELOPMENT:

The Company has no formal research and development department but the Company iscontinuously making efforts to strengthen research and development activities to improvequality and reduce cost.

(D) FOREIGN EXCHANGE EARNINGS AND OUTGO:

During the year under review there was no earnings and outgo in foreign exchange.

EXTRACT OF ANNUAL RETURN:

As required pursuant to section 92(3) of the Companies Act 2013 and rule 12(1) of theCompanies (Management and Administration) Rules 2014 the details forming part of extractof annual return in MGT 9 is annexed herewith as ANNEXURE III.

PARTICULARS OF EMPLOYEES:

As at March 31st 2016 there was 1 employee employed throughout the yearwho was in receipt of remuneration of Rs. 60 lacs or more per annum.

In accordance with the provisions of Section 197 of the Companies Act 2013 read withthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 asamended the name and other particulars of such employee is set out in the Annexure IX tothe Directors' Report.

EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS:

There are no material changes and commitments affecting financial position of thecompany between 31st March and the date of Board's Report.

CHANGE IN THE NATURE OF BUSINESS:

There are no changes in the Nature of Business.

DETAILS RELATING TO DEPOSITS:

The Company has been granted registration by the National Housing Bank New Delhi as anon-deposit taking Housing Finance Company. Being so the Company has neither accepted inthe past nor has any future plans to accept any public deposits by whatever name called.

SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS:

The Company has been following directions guidelines circulars issued by SEBI BSEMCA NHB etc. from time to time relating to companies and that there are no significant& material orders passed by these regulators so far.

DISCLOSURES ON MANAGERIAL REMUNERATION:

Details of Managerial remuneration as required under Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is given as per"Annexure VIII" to this report.

LISTING WITH STOCK EXCHANGES:

The Company confirms that it has paid the Annual Listing Fees for the year 2016-2017 toBSE where the Company's Shares are listed.

INVESTOR COMPLAINTS AND COMPLIANCE:

During the year company has not received any investor complaints and that as on date nocomplaints are pending.

EARNINGS PER SHARE (EPS):

The Earnings Per Share (EPS) is 1.65 as at March 31st 2016 as against 1.43as at March 31st 2015.

CAPITAL ADEQUACY:

Particulars as on 31st March 2016 2015
Capital Adequacy Ratio 49.91% 50.34%

SRGHFL's capital adequacy in the form of CRAR stood at 49.91% as of March 31st2016 which is well above the NHB's minimum stipulated requirement of 12% and entirely inthe form of Tier I Capital. High Tier I capital shall provide the Company adequateheadroom to raise Tier II capital for future business expansion. This position enables thecompany to expand the loan book significantly by debt route.

NON-PERFORMING ASSETS AND PROVISIONS FOR CONTINGENCY:

Your Company adhered to the prudential guidelines for Non performing Assets (NPAs)issued by the National Housing Bank (NHB) under its Directions of 2010 as amended fromtime to time. As per the prudential norms the income on such NPAs is not to be recognizedif unrealized.

As per the prudential norms prescribed by the NHB the Company has made provision forcontingencies on standard as well as non-performing housing loans and property loans.

A NOTE OF APPRECIATION:

Your Directors place on record their appreciation for the advice guidance and supportgiven by various regulatory authorities including the NHB RBI SEBI MCA the StockExchange (BSE) Depositories and all the bankers of the Company including State Bank ofIndia. The Directors would also like to acknowledge the role of all itsstakeholders-shareholders borrowers key partners and lenders for their continuingsupport to the Company. Your Directors also record their appreciation for the dedicatedservices of the employees and their contribution to the growth of the Company. The Boardwould also like to express its sincere appreciation to all the Company's valuedShareholders RTA Service Providers and Counselors for their continued support andpatronage.

Best Wishes
Sd/- Sd/-
Vinod K. Jain Rajesh Jain
Managing Director Director
DIN: 00248843 DIN:00212393
Date : 12.04.2016
Place: Udaipur