You are here » Home » Companies » Company Overview » Can Fin Homes Ltd

Can Fin Homes Ltd.

BSE: 511196 Sector: Financials
NSE: CANFINHOME ISIN Code: INE477A01020
BSE 00:00 | 13 Apr 515.50 4.00
(0.78%)
OPEN

535.00

HIGH

535.00

LOW

495.65

NSE 00:00 | 13 Apr 516.10 3.95
(0.77%)
OPEN

510.10

HIGH

518.00

LOW

495.15

OPEN 535.00
PREVIOUS CLOSE 511.50
VOLUME 16809
52-Week high 619.00
52-Week low 264.65
P/E 15.44
Mkt Cap.(Rs cr) 6,864
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 535.00
CLOSE 511.50
VOLUME 16809
52-Week high 619.00
52-Week low 264.65
P/E 15.44
Mkt Cap.(Rs cr) 6,864
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Can Fin Homes Ltd. (CANFINHOME) - Director Report

Company director report

1. FINANCIAL RESULTS

The financial performance for the FY19-20 is summarised here below:

(Rs. in lakhs)

Particulars Year ending March 31 2020 Year ending March 31 2019
Prot before Tax & Provisions 57860.22 47059.70
Less: Impairment on financial instruments 6031.57 109.22
Prot before Tax 51828.65 46950.48
Less: Tax expenses:
(a) Provision for Tax - Current Year 14556.71 17203.91
- Previous Year 461.81 151.54
(b) Deferred Taxation (802.22) (78.67)
Prot after Tax 37612.35 29673.70
Add: Other Comprehensive Income
A. Items that will not be reclassified to Prot or loss
(i) Actuarial (Gain)/ loss 228.55 (4.21)
(ii) Income tax relating to items that will not be reclassified to Prot or loss (57.52) 1.47
B. Items that will be reclassified to Prot or loss
(i) Income tax relating to items that will be reclassified to Prot or loss 0.00 0.00
Other Comprehensive Income 171.03 (2.74)
Total Comprehensive Income for the period 37441.32 29676.44
Balance brought forward from previous year 5937.64 81.71
43378.96 29758.15
Appropriations:
Impact on adoption of Ind AS 116 382.80 -
Transfer to Special Reserve u/s.36(1)(viii) of the Income Tax Act 1961 11682.55 8739.45
Transfer to General Reserve 7488.26 5935.29
Additional Reserve (u/s.29C of the NHB Act) 7488.26 5935.29
Proposed Dividend 2663.08 2663.08
Tax on Distributed Prots 547.45 547.40
Balance carried forward to balance sheet 13126.55 5937.64
43378.96 29758.15

Note: Figures have been regrouped wherever necessary while preparing the statements asper IND-AS requirements.

Note: The proposed dividend of Rs.2/- per equity share is not recognised as liabilityin the annual accounts as at March 31 2020 (in compliance with IND AS 10 events occurringafter the Balance sheet date). The same will be considered as liability on approval ofshareholders at the 33rd Annual General Meeting.

2. SHAREHOLDERS' WEALTH

(Rs. in lakhs)

Particulars Year ending March 31 2020 Year ending March 31 2019
Earnings Per Share (EPS) (Rs.) 28.25 22.29
Dividend Rate 100% 100%
Market Price of shares (Rs.) 279.05 348.85
Market Capitalisation (Rs. in Crore) 3715.67 4645.08

3. BUSINESS PERFORMANCE HIGHLIGHTS

a) Sanctions

During the year the Company has sanctioned loans amounting to Rs.5897 Crore ascompared to Rs. 5952 Crore in the previous year.

During the year as in the previous year thrust was given to retail (housing andnon-housing) loan segment. 90% of fresh loan approvals during the year were for housing5% for Top-up Loans and 5% for Loans Against Property (LAP). The cumulative loan sanctionssince inception of your Company stood at Rs. 43971 Crore at the end of the FY20. Averageticket size of incremental housing loans and non-housing loans are Rs.18 Lakh and Rs.9 Lakh respectively.

b) Disbursements

During the year the Company has disbursed loans amounting to Rs. 5481 Crore ascompared to Rs. 5479 Crore in the previous year. The cumulative loan disbursementsfrom inception to the end of the FY20 was Rs. 39250 Crore.

c) Loans outstanding (Loan Book)

Your Directors are pleased to report that the total loan outstanding as at March 312020 was Rs. 20708 Crore recording a growth of around 13% over last year (previous yearRs. 18381 Crore). During the year non-housing loan portfolio stood at around Rs. 2127Crore.

d) Non-Performing Asset (NPA)

The Gross NPA of your Company as on March 31 2020 was Rs.157.13 Crore (previous yearRs.113.51 Crore). The net NPA as on date was Rs.111.82 Crore with the NPA provisionCoverage Ratio at 37% during the year. The gross NPA percentage as on March 31 2020 stoodat 0.76% compared to 0.62% as on March 31 2019.

e) Prots

Your Directors are happy to inform that during the year under review your Companyrecorded an Operating Prot of Rs.578.60 Crore (previous year Rs.470.60 Crore) Prot BeforeTax (PBT) of Rs.518.29 Crore (previous year Rs.469.50 Crore) and Prot After Tax (PAT) ofRs.376.12 Crore (previous year Rs.296.76 Crore) registering a Year-on-Year increase of26.75% respectively. During the year Company has made provisions for standard assetsamounting to Rs.7.92 Crore (previous year Rs.0.40 Crore) provisions for Non-performingassets amounting to Rs.15.85 Crore (previous year Rs.0.69 Crore) general provision madeas per RBI circular on Covid-19 regulatory package dated April 17 2020 of Rs.36.54 Croreprovisions for Taxation and Deferred Tax Asset amounting to Rs.142.16 Crore (previous yearRs.172.77 Crore).

f) Reserves

For reserves during the year please refer statement of changes in equity for the periodended March 31 2020 forming part of Financial Statements 2020.

g) Dividend

Your Company has been paying dividends continuously. Your directors after giving dueconsideration to Capital Adequacy requirements deferred tax liability uncertainty onaccount of Covid-19 and its impact on the global economy financial markets and theresultant impact on the Company and the dividend policy are happy to recommend a dividendof Rs.2/- per equity share (100%) for the financial year ended March 31 2020 for the 5thsuccessive year. The amount of dividend recommended for payment for the year under reviewis Rs.26.63 Crore. Consequent to amendment made in the budget 2020 DDT u/s 115-O has beenabolished dividend paid on or after 1st April 2020 attracts TDS under section 194 at therate of 10% if the aggregate of the amounts of such dividend distributed or paid duringthe year exceeds Rs.5000/- to a shareholder being an individual for all other cases nothreshold limit. The Dividend Distribution Policy as required under regulation 43A of SEBI(LODR) Regulations 2015 has been provided at the end of this Annual Report and is alsomade available on the website of the Company (web link https://www.can_nhomes.com/pdf/Dividend-Distribution-Policy-31012020.pdf)

Impact of COVID on performance:

Covid-19: The COVID-19 pandemic which has spread rapidly throughout the world hashad an impact on almost all entities either directly or indirectly. WHO has declaredCovid-19 as a pandemic in March 2020.

Impact on business:

The Company's main business is providing loans for construction/ purchase ofhouses/_ats against the security of immovable property.

Due to the lockdown since March 25 2020 the operations of the Company wererestricted. Loan disbursements were not made during April 2020. Business resumed in manyCentres during last week of May 2020. The administrative work of the Company was carriedout through the work from home mode.

The demand for houses/_ats will be impacted in the short run. With bene_cial schemesoffered by Central and/ or State Governments like PMAY CLSS reduction in stamp duty onregistration of properties etc. there may not be much impact on the business of theCompany in the long run.

Since most of the properties of our borrowers are self-occupied and the tenure ofhousing loans are long ranging from 10 to 30 years the reduction of value of thecollateral security if any due to the COVID impact now may not have any materialimpact.

On operations: The Company is fully operational from April 20th with necessaryprecautions for the safety of employees and customers. It has neither downsized itsemployee strength nor effected pay cuts.

On Capital & Financial Resources: The Company is well capitalised and there isno impact on the Company's capital and financial resources.

On Moratorium: Collection of EMIs in about 28% of the accounts have been postponeddue to moratorium offered to borrowers as per RBI guidelines.

On Protability: From 24th March till third week of May lending was impacted.However impact on revenues has been minimum.

The Company is continuously following up stressed assets and there have been goodcollections in such accounts. We do not foresee any major impact in the long run.

On Liquidity and debt servicing: Company's liquidity position is good withsuf_cient un-availed sanction limits lined up from Banks and has not opted for moratoriumoffered by its lending institutions. Future obligations will continue to be serviced.

Impact on internal financial reporting and control: The Company has a properinternal financial control and reporting system and the same is reviewed by the internalauditors periodically and reviewed by the Audit Committee on a quarterly basis.

The Company has apprised the Board of Directors on the operations during the Lockdownperiod and the measures taken to ensure the safety of the customers and the staff.

CSR activity: The Company has contributed Rs 1.50 cr to Prime Minister's CitizenAssistance & Relief in Emergency Situations Fund (PM – CARES) and Rs 1 cr toKarnataka State Disaster Management Authority – Covid 19.

4. EXPANSION OF BRANCH NETWORK

Your Company has been continuously expanding its network of branches. Though ourpresence in Southern states is predominant new branches have been opened in various partsof the country after examining the potential on the basis of surveys conducted.

During FY20 9 new branches were opened. As at the end of FY20 your Company has anexpanded network of 198 outlets spread across 21 states comprising 163 branches 21 AHLCsand 14 Satellite Of_ces.

During the FY21 your Company has plans to open 12 more branches / AHLCs taking thetotal number of outlets to 210. The Branches of your Company as well as the RegisteredOf_ce function in spacious premises situated in good and accessible localities with theobjective of providing a pleasant environment and amenities to our customers.

5. TECHNOLOGY INITIATIVES

All the branches and the Registered Of_ce are connected through a core-banking platform(Integrated Business Suite) with Cloud compute services under the Application ServiceProvider (ASP) Model. The Company is in advanced phase for implementation of MPLS linksfor a higher bandwidth and dedicated uptime.

In order to improve operational ef_ciency your Company has embarked on technologyinitiatives like implementation of web based Application software for Inspection &Audit. Your Company has launched new website to make it interactive and more userfriendly. Online Grievance Redressal portal has been deployed in the new website.

Your Company has introduced digital meetings platform for Board and Committee meetingswhich is paperless secure ef_cient and cost effective further the Company has alsointroduced digital platform for the tracking of Unpublished Price Sensitive Information(UPSI).

Your Company has also introduced Video Conferencing facility to conduct meetingvirtually.

Your Company has introduced online Application Module in its website and a customerportal to access account statements/ certi_cates and online money transfer. The Companyhas set up an in-house team of IT professionals drawn from reputed institutions / _rms toenhance IT capabilities.

6. CUSTOMER-FRIENDLY INITIATIVES

The Company continues to follow transparent fair and impartial practices encompassingall customers across branches. Information related to our Company products schemes andcharges are made available in the website of the Company. As per NHB directions the FairPractices Code (FPC) and Most Important Terms and Conditions (MITC) are regularly updatedand uploaded in the Company's website for disseminating the information to our customersclients and general public.

The customer portal enables customers to access certi_cates and online money transfer.As an environment friendly initiative we have provided cotton cloth bags to our customersacross the country through our branches to discourage the use of plastic.

7. FINANCIAL RESOURCES

a) Re_nance from National Housing Bank (NHB) and borrowings from Banks

During the year your Company had availed fresh re_nance amounting to Rs.1500 Crore(previous year Rs.1000 Crore) under the NHB re_nance scheme. The cumulative NHBborrowings as on March 31 2020 were Rs. 3446.88 Crore (previous year Rs.1971.22 Crore)with the overall cost of borrowing (including the loans under Rural Housing and UrbanHousing Schemes) of 6.92% p.a.

Borrowings from Bank

During the year borrowings were diversi_ed through a combination of short-term andlong-term loans considering the asset liability management position to derive the maximumbenefit of competitive interest rates. The lenders included State Bank of India FederalBank HDFC Bank and Corporation Bank apart from Canara Bank the principal bankers to theCompany. The aggregate bank borrowings (term loans plus overdraft) at the end of thefinancial year stood at Rs. 11084.01 Crore; the overall borrowings are within regulatoryceiling of 14 times of net owned funds.

The overall cost of borrowings from banks was 8.07%p.a. as on March 31 2020. Duringthe year the long-term ‘rating' of the Company for term loans was [ICRA] AA+(Pronounced as ICRA Double A Plus) outlook stable signifying high degree of safetyregarding timely servicing of financial obligations.

b) Debentures

(i) Secured Non-Convertible Debentures

The Company has issued Secured Redeemable Non-Convertible Non-Cumulative TaxableDebentures (SRNCD) during the year of Rs.250 Crores (previous year was NIL). Thedebentures were secured by way of a _oating charge on the assets i.e. loan receivablesspeci_cally earmarked for the purpose in favour of the Debenture Trustees. Most of theinvestors in these debentures comprised major insurance companies public sector bankscorporates PF Trusts & Funds and investors of repute indicating their safetyperception in your Company's fundamentals and prospects.

The tenure of the outstanding debentures is range bound for two to _ve years. Theinterest on these debentures was serviced regularly. The aggregate borrowings by way ofSecured NCDs as on March 31 2020 was Rs. 2562.12 Crore (previous year Rs.3478.57 Crore) while the overall cost was 7.76% p.a. The debentures are rated ‘INDAA' (Outlook Stable) by India Ratings and Research Pvt. Ltd. (FITCH) ‘CARE AAA' byCARE Limited and ‘[ICRA] AA+' by ICRA Limited.

The ratings by India Ratings and Research Pvt. Ltd (FITCH) has been revised to‘IND AA' (Outlook Stable). The rationale for downgrade in credit rating given byFITCH is because of the reason Canara Bank had indicated its intention of selling itsstake in the Company as part of mobilising capital in light of government's direction.

These debentures were listed on the Wholesale Debt Market (WDM) segment of the NationalStock Exchange of India Limited. Your Company plans to raise Non- Convertible Debenturesup to a maximum of Rs. 4000 Crore subject to cost benefit and asset liability managementrequirements and with the approval of members at ensuing Annual General Meeting.

(ii) Unsecured Non-Convertible Debentures

During FY14-15 your Company had issued 8.94% Unsecured Non-Convertible Debentures inthe nature of Tier II Bonds aggregating Rs. 100 Crore for a tenure of 10 years. Thesedebentures are subordinated to present and future senior indebtedness of the Company andqualify as Tier II Capital under the National Housing Bank (NHB) guidelines for assessingCapital Adequacy Requirements. These Tier II Bonds were rated ‘IND AA' (OutlookStable) long-term rating by India Rating & Research Private Limited (FITCH)‘CARE AAA' by CARE Limited and ‘[ICRA] AA+' by ICRA Ltd.

The rating has been revised by India Rating & Research Pvt Limited (FITCH) as‘IND AA' (outlook stable). Your Company has serviced the interest on the abovedebentures on the due date.

The rationale for downgrade in credit rating given by FITCH is because of the reasonCanara Bank had indicated its intention of selling its stake in the Company as part ofmobilising capital in light of government's direction.

c) Commercial Paper

Your Company mobilises funds through commercial paper (CP) also. The outstanding at theend of the March 2020 was Rs. 1247.43 Crore (previous year Rs. 2156.10 Crore). Theeffective cost of funds raised through CP was 7.30% p.a. The CP issued by your Company wasrated at the maximum [ICRA] A1+ rating by ICRA Ltd. and CARE A1+' by CARE Limited INDA1+ by FITCH indicating ‘Instruments with this rating are considered to have verystrong degree of safety regarding timely payment of financial obligations'.

d) Deposits

During the year your Company accepted deposits of Rs.195.23 Crore (Previous yearRs.142.56 Crore). The outstanding balance of deposits (including interest accrued but notdue) as of March 31 2020 was Rs. 305.08 Crore (previous year Rs. 261.09 Crore).The rate of interest on public deposits ranged from 6.75% to 8.10% while the overall cost(average) of deposits was 8.04% p.a. as on March 31 2020.

As on March 31 2020 a sum of Rs. 13.91 Crore relating to 879 accounts of publicdeposits (Rs. 19.94 Crore as on March 31 2019 relating to 891 accounts) remainedunclaimed/ overdue. Of this amount a sum of Rs.11.39 Crore relating to 252 accounts(previous year Rs. 5.75 Crore relating to 373 accounts) were claimed and renewed/settledup to June 30th 2020. Your Company has not defaulted in repayment of deposits or interestduring the year. The Company has complied with the requirements under Chapter V of theCompanies Act 2013 to the extent applicable.

During the year the deposit schemes of your Company have been rated ‘MAAA'(pronounced as M Triple A) with an outlook revised to stable from negative by ICRA Ltd.indicating ‘highest credit- quality' and that the rated deposit programme carried thelowest credit risk. Your Company being a Housing Finance Company registered with NationalHousing Bank (NHB) has complied with the Directions/Guidelines issued by the NHB withregard to deposit acceptance and renewal. Your Company is exempted from the applicabilityof the Companies (Acceptance of Deposits) Rules 2014.

e) Mortgage-backed securities

Your Company did not opt for securitisation during the year under review. There were nosecuritised assets outstanding as on March 31 2020.

8. REGULATORY COMPLIANCES

a) Compliance with Directions/ Guidelines of National Housing Bank (NHB) and otherstatutes

The Government has issued noti_cation communicating transfer of regulation of HFCs fromNational Housing Bank to Reserve Bank of India (RBI) w.e.f. 09/08/2019. Reserve Bank hasissued a Press Release dated 13/08/2019 stating that RBI will carry out a review of theextant regulatory framework applicable to HFCs and come out with revised regulations indue course and till such time HFCs shall continue to comply with the directions andinstructions issued by NHB.

Your Company has complied with the Housing Finance Companies (NHB) Directions 2010 andother directions/ guidelines prescribed by NHB and as amended from time to time. YourCompany has adhered to the prudential guidelines/norms for non- performing assets (NPAs)and directions issued by NHB on withdrawal of pre-closure charges for all loans assetclassification of credit/ investments credit rating acceptance of deposits FairPractices Code (FPC) Most Important Terms and Conditions (MITC) Customer ComplaintsRedressal Mechanism Know Your Customer (KYC) Anti-Money Laundering (AML) GuidelinesAsset Liability Management Capital Adequacy Ratio (CAR) norms Information Technologyframeworks CERSAI Implementation of Indian Accounting Standards (Ind AS) Guidelines onReporting and Monitoring of Frauds in Housing Finance Companies INGRAM softwareconstitution of IT Strategy Committee Guidelines on reporting and monitoring of Frauds inHousing Finance Companies and other related instructions issued by the National HousingBank (NHB) were implemented in letter and spirit with an explicit noti_cation on thewebsite of your Company to the extent applicable.

During the year NHB has issued the following policies circulars guidelines etc. forHousing Finance Companies:

1. Policy-Circular-No.95 dated 29/05/2019: NHB has directed all HFCs with asset size ofmore than Rs. 5000 Crore to appoint Chief Risk of_cer. The Company has appointedMr. H R Narendra as the Chief Risk Of_cer of the Company w.e.f. 22/05/2019.

2. NHB Circular NHB/ND/DRS/ Policy Circular No.96/2019-20 dated July 19 2019 wasissued on "Disbursement of housing loan to individuals linked to the stages ofconstruction" the Company has been following the procedure even prior to the policyCircular.

In terms of the Housing Finance Companies – Corporate Governance (NHB) Directions2016 the Company has attached the Related Party Transactions Policy at the end of thisAnnual Report.

Your Company has complied with requirements as per Para 29 of the Housing FinanceCompanies (NHB) Directions 2010.

During the year the NHB conducted regular inspection of your Company during October2019 for the position as at March 2019. The compliance on the observations were submittedwithin the prescribed time to NHB which were reviewed by the Audit Committee and theBoard.

Your Company has complied with other related statutory Guidelines/Directions/Policiesas applicable to the Company from time to time. Compliance of all Regulatory guidelines ofNHB/RBI other statutes are periodically reviewed by the Audit Committee and the Board.

Your Company has complied with Indian Accounting Standards (Ind AS) as noti_ed underthe Companies (Indian Accounting Standards) Rules 2015 and Companies (Indian AccountingStandard) Amendment Rules 2016 as applicable read with Section 133 of the Companies Act2013 and guidelines issued by National Housing Bank.

b) IRDAI Compliance

The Company is registered with IRDAI for carrying on the Insurance Agency Business andhas complied with the applicable compliances under Insurance Regulatory and DevelopmentAct 1999 and IRDAI (Registration of Corporate Agent) Regulations 2015 as amended fromtime to time.

c) Other Compliances

(i) The Company on 04/04/2018 had obtained the Legal Entity Identi_erNo.335800EJ9Y3XDP5ZDH81 as required under the RBI Circular -No.RBI/2017-18/82 - DBR.No.BP.92/21.04.048/2017-18 dated November 02 2017 and as advised by NHB. Since the sameis required to be renewed on an annual basis on or before 4th April every year we got itrenewed for the year 2020 on February 17 2020. The next renewal due date for the year2021 is April 04 2021.

(ii) As required under Section 215 of the Insolvency and Bankruptcy Code 2016 theCompany has registered itself with National e-governance Services Limited (NeSL)authorized by IBBI obtained registration No.9160743937431514312. Further we have executedan agreement with NeSL on February 28 2019. We are authenticating the request by ourcreditors on NeSL on regular basis.

(iii) The Company has got itself registered on TReDS Platform through ReceivablesExchange of India Limited (RXIL) vide registration No.CA0000876.

(iv) As per RBI/2015-16/96 Master Circular No.15/2015-16 i.e. Master Circular onForeign Investment in India and as per RBI/2017-18/194 A.P (DIR Series) Circular No.30dated June 07 2018 i.e. Foreign Investment in India all types of Companies which haveforeign investment are required to report through FIRMS - Reporting in Single Master Form.For the purpose the Company has completed the registration process for Entity User and forBusiness User.

9. COMPLIANCE UNDER THE COMPANIES ACT 2013

Your Company has complied with the requirements of the applicable provisions of theCompanies Act 2013 and related Rules during the FY 19-20. In accordance with Sec 134 (3)(a) of the said Act amended provision the provisional Annual Return in the prescribedformat has been made available on the website of the Company at https://www.can_nhomes.com/pdf/MGT7.pdf. An extract of Annual Return (MGT-9) is placed as Annexure-1. For moredetails regarding Compliances please refer the Secretarial Audit Report enclosed to thisReport as Annexure-2.

10. CAPITAL ADEQUACY

The Capital Adequacy Ratio (CAR) of your Company as at March 31 2020 was 22.26%(previous year 16.44%). As against the Regulatory benchmark of 13% prescribed by theNational Housing Bank (NHB).

11. DEPRECIATION

Depreciation was calculated on the Written Down Value Method based on useful life inthe manner prescribed in Schedule II to the Companies Act 2013.

12. LEASES

The Company has adopted Ind AS 116 "Leases" with effect from April 1 2019and applied to all lease contracts existing on April 1 2019 using the modi_edretrospective method and has taken the cumulative adjustment to retained earnings on thedate of initial application. Accordingly comparatives for the year ended March 31 2019have not been retrospectively adjusted. On transition the adoption of the new standardresulted in recognition of Right-of-Use asset (ROU) of Rs. 32.12 Crore and a leaseliability of Rs. 37.24 Crore after difference being set off against rent equalisationreserve existing as on April 1 2019. The cumulative effect of applying the standardresulted in Rs. 3.83 Crore net of taxes being debited to retained earnings.

13. DEFERRED TAX ASSET (DTA)

During the year Deferred Tax Asset (net) of Rs 8.02 Crore (previous year Rs 0.78Crore) was considered to the Statement of Prot & Loss on account of variouscomponents of asset & liabilities. The DTA outstanding at the end of the March 2020was Rs.33.89 Crore (previous year Rs.24 Crore).

14. RECOVERY ACTION UNDER SECURITISATION & RECONSTRUCTION OF FINANCIAL ASSETS ANDENFORCEMENT OF SECURITY INTEREST ACT 2002 (SARFAESI ACT)

During the year your Company initiated action against 402 defaulting borrowers underthe Securitisation and Reconstruction of Financial Assets and Enforcement of SecurityInterest ("SARFAESI ") Act 2002 and recovered Rs.49.74 Crore (previous year Rs.36.69 Crore) from borrowers of Non-Performing accounts. Of this Rs.11.66 Crore (previousyear Rs. 9.27 Crore) was recovered by way of sale of assets under SARFAESI. This apartRs.2.35 Crore was recovered in Written off accounts (Previous year Rs. 2.59 Crore).

15. LISTING OF SECURITIES:

The equity shares of the Company continues to be listed on the BSE Limited (BSE)Mumbai and the National Stock Exchange of India Ltd. (NSE) Mumbai.

The non-convertible debentures issued on private placement are listed on National StockExchange of India Ltd.

Also as per SEBI Circular SEBI/HO/DDHS/DDHS/CIR/P/2019/115 dated October 22 2019captioned "Framework for listing of Commercial Paper" the Company has listed itsCommercial Papers (CPs) on BSE Limited (BSE) and National Stock Exchange of India Ltd.(NSE).

16. HUMAN RESOURCES DEVELOPMENT

The total number of employees of the Company was 838 (652 regular and 186 on contract)as on March 31 2020 as against 792 (592 regular and 200 on contract) as at the end of theprevious year.

To upgrade knowledge/skill of the employees select employees were deputed for trainingprogrammes/ seminars organised by the National Housing Bank and other reputedinstitutions. During the year training in credit information technology humanrelations customer service Grievance redressal _nance taxation marketing fraudprevention KYC & AML and other topics of importance was imparted to employees andexecutives. Your Company has put in place a series of HR measures including promotions andappropriate reward schemes. Industrial relations in your Company continued to be cordialduring the year.

Particulars of Employees:

During FY 19-20 the Board of Directors has appointed the Managing Director with aremuneration of Rs.12.50 Lakh per month and no other employees were employed for a part ofthe year with a remuneration of Rs.8.5 Lakh or more per month. The ratio of remunerationof each Director to the median of employee's remuneration and such other details asrequired under Sec 197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 and 2016 are furnishedbelow:

(i) Ratio of remuneration of each director to the median employees' remuneration for FY2020

The ratio of the remuneration of Managing Director to the median remuneration of theemployees (regular employees) of the Company for the FY2019-20 was 17.35 : 1

The ratio of the remuneration of Dy. Managing Director to the median remuneration ofthe employees (regular employees) of the Company for the FY2019-20 was 3.09 : 1

Non-executive Directors and Independent Directors are eligible for sitting fee only.The details of sitting fee paid to the Directors for the meetings of Board and Committeesare given in the `Report of Directors on Corporate Governance'.

(ii) Percentage increase in the remuneration of each Director and Key ManagerialPersonnel in FY 2020

The percentage increase in remuneration in the financial year for the Managing Director& CEO was 233% and that of the Deputy Managing Director was 9.79%. The other Keymanagerial personnel of the Company are the General Manager the Chief Financial Of_cerand the Company Secretary and the percentage increase in their remuneration was 17%11.53% and 10.77% respectively.

(iii) Percentage increase in the median remuneration of employees in FY 2020

The total number of permanent employees of the Company were 652 as on March 31 2020.Apart from the permanent employees there were 186 employees on contract as on March 312020.

The percentage increase in the median remuneration of employees in the financial yearwas 18%.

(iv) Average percentile increase already made in salaries of employees other thanmanagerial personnel in last financial year and its comparison with the percentileincrease in managerial remuneration.

Average% increase in remuneration of the employees other than managerial personnel inthe last financial year was 3.72% and that of Managerial remuneration was 5.89% during theperiod under review.

The average increase in the remuneration of both the managerial and non-managerialpersonnel was determined based on the Annual Performance Evaluation and also based on theremuneration policy as recommended by the Nomination Remuneration & HR Committee ofDirectors and approved by the Board of Directors. There were no exceptional circumstanceswhich warranted an increase in managerial remuneration which was not justi_ed by theoverall performance of the Company. The Company af_rms that the remuneration is as per theremuneration policy of the Company.

(v) Prevention of Sexual Harassment of Women at the Workplace

The Company has a Policy on ‘Prevention of Sexual Harassment of Women atWorkplace' and matters connected therewith or incidental thereto covering all the aspectsas contained under the Sexual Harassment of Women at Workplace (Prohibition Preventionand Redressal) Act 2013. During FY19-20 no cases of sexual harassment were reported.

The Company has in place "Equal Opportunity Policy" as per Section21(1) of Rights of the Persons with Disabilities Act 2018.

The Company has laid down a Code of Conduct for Prevention of Insider Trading inaccordance with the requirements under the Securities and Exchange Board of India(Prevention of Insider Trading) Regulations 2015 and Companies Act 2013 with a view toregulate trading in Securities of the Company by its directors designated persons andemployees. The same is made available on the website of the Company. For related linkplease refer Annexure 7.

17. TRANSFER OF UNCLAIMED AND UNPAID DIVIDEND/ DEPOSIT AMOUNTS TO THE INVESTOREDUCATION AND PROTECTION FUND (IEPF)

In terms of section 124 and 125 of the Companies Act 2013 the amounts (dividenddeposits etc. with interest) that remained unclaimed and unpaid for more than 7 yearsfrom the date they _rst became due for payment should be transferred to IEPF. As aninvestor-friendly measure your Company has been intimating the respective shareholders /depositors / investors to encash their dividend warrant/renew matured deposits or lodgetheir claim for payment of due if any from time to time and claims made are settled. Asper the statutory requirements the details of such amounts are made available on thewebsite of MCA-IEPF as well as on the Company's website. In order to receive promptpayment of dividend the members/ investors are requested to demat the shares held inphysical mode register bank account particulars opt for ECS facility registernomination and intimate change of address if any to the Company/ Depository Participantspromptly.

a) Unclaimed dividends

As at March 31 2020 dividends aggregating to Rs.173.02 Lakh (previous year Rs.163.76Lakh) relating to dividends declared for the years FY12-13 to FY18-19 (of which Rs.26.88Lakh related to dividend for the year 2019) had not been claimed by shareholders. As aninvestor friendly measure your Company has intimated shareholders to lodge their claimsand related particulars were provided in the annual reports each year as well as on thewebsite of your Company. The dividend pertaining to 2011-12 which remainedunclaimed/unpaid amounting to Rs. 9.40 Lakh (in respect of 2021 shareholders) wastransferred to IEPF on September 07 2019 after the settlement of claims by membersreceived in response to the individual reminder letters sent by your Company to therespective members. The dividend pertaining to 2012-13 remaining unclaimed and unpaidamounting to Rs.14.18 Lakh (in respect of 2338 shareholders) as on March 31 2020 wouldbe transferred to IEPF during August 2020 after settlement of the claims received up tothe date of completion of seven years i.e. on August 06 2020.

b) Transfer of shares to IEPF Demat account

Investor Education and Protection Fund Authority (Accounting Audit Transfer andrefund) Amendment Rules 2017 was noti_ed by the Ministry of Corporate Affairs (MCA) onOctober 13 2017. As per Rule 6 of the said Rules the shares in respect of whichdividend amounts have not been paid or claimed for 7 consecutive years are required to betransferred to ‘IEPF demat Account' of IEPF Authority. On veri_cation of records ofunclaimed dividend amounts from 2006 to 2012 which have already been transferred to IEPFon lapse of 7 years (during 2013 to 2019 respectively) 7 shareholders had not claimeddividend for consecutive 7 years and their shares 4000 Nos. have been transferred to IEPFdemat account within the prescribed period and the details are provided on the website ofthe Company. For more details please refer ‘General Information to shareholders' inthis report.

In terms of the above Rules reminder letters were sent by the Company to all theshareholders who had not claimed their dividends for a consecutive period of 7 yearsinforming that their shares will be transferred to IEPF suspense account on the due dateAugust 07 2020 if they do not place their claim for unclaimed dividend amounts beforethe Company. Your Company has provided the related details on its website (Investorspage).

c) Unclaimed deposits

As required under Section 125 of the Companies Act 2013 the unclaimed and unpaiddeposits together with interest for the year 2011-12 amounting to Rs.60000/- (previousyear Rs.5.19 Lakh) that remained unclaimed and unpaid for a period of 7 years weretransferred to IEPF during the year under review.

18. PARTICULARS REGARDING CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGNEXCHANGE EARNINGS AND EXPENDITURE

During the year your Company did not earn any income or incur any expenditure inforeign currency/exchange other than payment of Dividend 2019 to NRIs on repatriationbasis to an extent of Rs.26.34 Lakh through authorised dealers.

Since your Company is a Housing Finance Company and does not own any manufacturingfacility the requirement relating to providing the particulars relating to conservationof energy and technology absorption as per Sec 134 (3) (m) of the Companies Act 2013 readwith Rule 8 of the Companies (Accounts) Rules 2014 are not applicable. Also the Companydoes not use energy intensively. However the Company as its responsibility towards thesociety has taken measures towards optimum energy utilisation and conservation likeinstallation of Solar Power systems including Solar UPS and power saving lamps in some ofits branches use of LED lights instead of conventional CFL & Fluorescent lamps.

As a part of Save Green efforts and leverage of technology a lot of paper work atbranches and the Registered Of_ce has been reduced (also refer para 5).

As a green initiative the Company has started availing the services of "DessDigital Software for sharing the soft copies of agenda papers pertaining to all the Boardand Committee meetings with the Directors and executives.

19. DIRECTORS & KEY MANAGERIAL PERSONNEL APPOINTMENTS / RE- APPOINTMENTS:

The Board of Directors made the following appointments/ re-appointments based on therecommendations of the Nomination Remuneration & HR Committee on _t and propercriteria and performance evaluation of the Directors:

(1) Dr. Yeluri Vijayanand was appointed as an Independent Director at the AnnualGeneral Meeting held on July 17 2019 for a tenure of 3 years up to the conclusion of theAnnual General Meeting of the Company for the financial year 2020-21.

(2) Shri Shankara Narayanan Subramanian (S Subramanian) General Manager of CanaraBank was appointed at the Annual General Meeting held on July 17 2019 as a Director(Non-executive Promoter) liable to retire by rotation.

(3) Shri Debashish Mukherjee Executive Director of Canara Bank was appointed at theAnnual General Meeting held on July 17 2019 as a Director (Non-executive Promoter) liableto retire by rotation.

(4) Shri G Naganathan Independent Director was re-appointed at the Annual GeneralMeeting of the Company held on July 17 2019 for a further period of three years i.e. upto the conclusion of the Annual General Meeting of the Company for the financial year2021-22.

(5) Shri Girish Kousgi has been appointed by the Board as the Managing Director and CEOof the Company w.e.f. September 05 2019 for a tenure of 5 years. The brief pro_le and allother particulars relating to Shri Girish Kousgi the terms and conditions of appointmentincluding remuneration are provided in detail in the Notice of the ensuing Annual GeneralMeeting of the Company for approval of members and all the relevant information in thisregard are provided in the explanatory statement. Shri Girish Kousgi has also beendesignated as the Key Managerial Personnel.

(6) Shri Satish Kumar Kalra has been appointed as an Additional Director (Non-executiveIndependent) by the Board of Directors of the Company on June 15 2020.

(7) Smt Shubhalakshmi Panse has been appointed as an Additional Director (Non-executiveIndependent) by the Board of Directors of the Company on June 15 2020.

(8) Shri Lingam Venkata Prabhakar has been appointed as an additional Director(Non-executive Promoter) by the Board of Directors of the Company on July 30 2020.

The agenda relating to appointment of Shri Satish Kumar Kalra and Smt. ShubhalakshmiPanse as Independent Directors and and Shri Lingam Venkata Prabhakar as a Director liableto retire by rotation are included in the Notice of the ensuing Annual General Meetingand complete particulars of the Directors are provided in the Explanatory Statementsforming part of the said Notice.

The directors had _led their consent(s) and declaration(s) that they are notdisquali_ed to become directors in terms of the provisions of Companies Act 2013 andrelated Rules. The directors have intimated to the Company that they are not holding anyshares or taken any loan(s) from the Company. The agenda relating to appointments /re-appointments of Directors are provided in the Notice of the 33rd Annual General Meetingof the Company seeking approval from the members. The particulars relating to theDirectors and all other relevant information are provided in the explanatory statement(s)forming part of the said Notice for the information of members.

Brief pro_le of all the Directors are provided in page Nos. 22 to 25 of thisAnnual Report.

Key Managerial Personnel:

Shri Prashanth Joishy Assistant General Manager of F & A Department of theCompany who has an experience of 31 years in the Company and about 11 years in Finance& Accounts Department of the Company has been designated as the Chief Financial Of_cerand Key Managerial Personnel of the Company w.e.f. November 04 2019 in the place of ShriAtanu Bagchi Chief Financial Of_cer who attained superannuation w.e.f.

May 31 2019.

Resignation/Vacation of Of_ce:

1. Shri. S K Hota Managing Director resigned on June 27 2019 on his repatriation toCanara Bank consequent to his appointment as the Managing Director & CEO of NationalHousing Bank [vide Government of India (MOF-DFS) Gazette Noti_cation F. No.24/10/2018-IF.II dated June 27 2019].

2. Shri. S Subramanian (Chief General Manager Canara Bank) has laid down his Of_cew.e.f. May 31 2020 on attainment of superannuation. Consequently he has tendered hisresignation as Director (Non-executive Promoter Director) of the Company and hence ceasedto be the director of the Company w.e.f. June 04 2020.

Retirement by rotation and re-appointment:

In terms of Section 152 and all other applicable provisions of the Companies Act 2013and the Articles of Association of the Company Shri Debashish Mukherjee Director(Non-executive and Promoter) retires by rotation at the ensuing Annual General Meetingand being eligible offers himself for re-appointment. The agenda relating tore-appointment of Shri Debashish Mukherjee Director forms part of the notice conveningthe ensuing Annual General Meeting and all other relevant information as per SEBIRegulations are provided in the explanatory statement.

All the appointments and re-appointments of Directors are made by the Board ofDirectors on the recommendations of the Nomination Remuneration & HR Committee on _tand proper criteria and also based on the performance evaluation of the Directors.

All the appointments and re-appointments mentioned above which form part of the Noticeof the ensuing Annual General Meeting of the Company are recommended by your Directors tothe members for appointment/re-appointment/approval..

20. MEETINGS OF THE BOARD

During the Financial year 2019-20 seven meetings of the Board of Directors were heldand the related details including that of various committees constituted by the Boardare made available in the Report of Directors on Corporate Governance forming part of thisannual report placed before the members. Your Company has complied with all therequirements as applicable under Companies Act 2013 and related rules SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 and also HFCs CorporateGovernance (NHB) Directions 2016 in relation to the Board of Directors and theCommittees of the Board.

Committees of the Board:

Currently the Board has seven Committees viz. the Audit Committee the NominationRemuneration & HR Committee the Corporate Social Responsibility Committee theStakeholders Relationship Committee the Risk Management Committee the ManagementCommittee and the IT Strategy Committee.

A detailed note on the composition of the Board and its Committees and other relatedparticulars are provided in the Report of Directors on Corporate Governance forming partof this Annual Report.

21. DIRECTORS' RESPONSIBILITY STATEMENT

In accordance with the provisions of section 134(3)(c) read with Section 134(5) of theCompanies Act 2013 and based on the information provided by the management and review ofthe draft statement by the Audit Committee the Board of Directors report that-

(a) in the preparation of the annual accounts for the year ended on March 31 2020 theapplicable accounting standards had been followed along with proper explanation relatingto material departures if any;

(b) the directors had selected such accounting policies and applied them consistentlyand made judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company for the financial year ended on March 312020 and of the Prot and loss of the Company for that period;

(c) the directors had taken proper and suf_cient 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 accounts on a going concern basis;

(e) this being a listed Company the directors had laid down internal financialcontrols to be followed by the Company and that such internal financial controls areadequate and were operating effectively and

(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

Declaration by Independent Directors:

The Independent Directors have given declarations to the Company in terms of Section149(7) and 149(8) of the Companies Act 2013 and Regulation 25(8) of SEBI (LODR)Regulations 2015 that they meet the criteria of independence as provided in Section149(6) of the Companies Act 2013 and Regulation 16(1)(b) of SEBI (LODR) 2015.

All the Independent Directors of the Company are persons of integrity expertise andexperience and have completed online pro_ciency self assessment tests and obtainedcerti_cates from the Institute noti_ed under Section 150(1) of the Act.

Code of Conduct:

In terms of Regulation 26(3) of the SEBI (LODR) Regulations 2015 all the members ofthe Board and Senior Management Personnel have af_rmed compliance with the Code of Conductof Board of Directors and Senior Management for the FY19-20. As required under Schedule V(D) of the said Regulations a declaration signed by the Managing Director & ChiefExecutive Of_cer of the Company stating that the members of the Board and the SeniorManagement Personnel have af_rmed compliance of their respective Codes of Conduct is anannexure to Corporate Governance Report.

22. NOMINATION REMUNERATION AND HR (NRC) POLICY

Your Company has constituted a `Nomination Remuneration and HR Committee (NRC)' of theBoard in terms of Section 178 of the Act Regulation 19 of the SEBI (Listing Obligations& Disclosure Requirements) Regulations 2015 and Para 3(II) of NHB CorporateGovernance (National Housing Bank) Directions 2016. This Committee identi_es persons whoare quali_ed to become Directors of the Company. The appointment renewal reappointmentre-categorisation and/ or removal of the Directors so identi_ed including extension orcontinuation of the term of appointment will be recommended by the NRC to the Board. ThisCommittee has also laid down the criteria to identify persons who may be appointed to thesenior management of the Company. The NRC has formulated the criteria for determiningquali_cations positive attributes and independence of a Director carrying out evaluationof every Director's performance performance of the Board and that of the Committees. TheNRC Policy of the Company covering all the above aspects is made available on the of_cialwebsite of the Company at https://www.can_nhomes.com/pdf/Nomination-Remuneration-and-HR-Policy-120419.pdf in terms of Section 134(3) of theCompanies Act 2013. The Board ensures the annual evaluation of the performance of theBoard its Committees and of its individual directors through the meeting of independentdirectors the NRC and evaluation by each of the directors independently.

23. CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY

Your Company has constituted a Corporate Social Responsibility (CSR) Committee of theBoard as prescribed under Section 135 of the Companies Act 2013 and has put the CSR policyin place. The Company has focussed in promoting education including special educationsetting up hostels for tribal children Construction of class room blocks for schoolsScholarships for under privileged renovation of schools and anganawadis Sponsorship ofchild education. The Company also focuses on healthcare by donating advanced medicalequipment's to various hospitals. To promote eradicating hunger Company has contributedfor mid-day meals at schools through Akshaya Patra Foundation. The Company has donatedRelief materials to Cyclone and Flood affected areas. To promote EnvironmentalSustainability donation of tree saplings contribution towards "CauveryCalling" a campaign to revitalize the southern Indian river Cauvery by plantingtrees in the river basin was undertaken. Contribution to Prime Minister's CitizenAssistance and Relief in Emergency Situations Fund (PM CARES) Karnataka State DisasterManagement Authority CM Relief Fund Karnataka during COVID-19 pandemic also forms partof its CSR activities.

As a well thought out strategy all CSR projects of the Company are executed throughour own branches with a view to inculcate a sense of social responsibility amongst thestaff. The total amount/ budget under CSR for the FY 2019-20 was Rs.1321 Lakhs(including previous years Rs.456 lakhs) out of which total amount spent under the CSRactivities is Rs.1004 lakhs. The unspent amount of Rs.317 Lakhs is carried forward as perprovisions of Companies Act 2013 with the aim to go in for granular details/ appropriateprojects before spending in FY 20-21. A summary of CSR details as on 31/03/2020 is givenbelow:

Sl. No. Activities undertaken No. of Projects Rupees in Lakh
1 Construction/ repair & renovation of Schools/ Hostels/Hospitals 10 369.42
2 Desks & Benches/ Tables/ Almirah/ Green Board/ Chairs/Bags/Books etc. 1 9.82
3 Drinking water facility/ supply of other articles of necessity etc. 4 2.06
4 Scholarship 7 2.42
5 Medical Equipment to Hospitals 5 105.13
6 Equipment to old age home/Rehabilitation centers 2 15.36
7 Eradicating Hunger 2 86.80
8 Disaster Management 5 276.38
9 Environmental Sustainability 1 15.12
10 Setting up of blood bank 1 47.00
11 Tree planting under environmental protection/ sustainability/ saplings with tree 2 0.09
guards/ pots to the customers.
12 Medical Vans to Hospitals 2 28.17
13 Sponsorship of child education 1 21.60
14 Ecological Balance 1 13.56
15 Promoting Tribal Sports 2 11.06
Total 46 1004.02

The Annual Report on CSR activities including brief contents are provided as Annexure-3to this report

24. RISK MANAGEMENT POLICY

Your Company has constituted a Risk Management Committee with three directors ChiefRisk Of_cer (CRO) and a senior executive of the Company. In terms of Section 134(3)(n) ofthe Act your directors wish to state that your Company has adhered to the Risk ManagementPolicy. The above policy was reviewed during the year. For web link please refer Annexure7.

25. AUDIT AND INTERNAL CONTROL

Your Company strengthened existing internal control systems for loan reviews atperiodical intervals and introduced measures for minimising operational risks commensuratewith the nature of its business and size of operations. Further your Company has revieweddelegation of authorities and streamlined standard operating procedures for all areas ofits business/ operations/ functions strengthened the Offsite Transaction MonitoringSystem (OTMS) to track transactions/ early-warning signals across all branches byintroducing innovative monitoring tools. The National Housing Bank conducts inspection ofyour Company on an annual basis. During the year the NHB conducted regular inspection ofyour Company in October 2019 for the position as at March 31 2019. The compliance on theobservations were submitted within the prescribed time to the NHB which were reviewed bythe Audit Committee and the Board.

Your Company has also put in place a well- Defined policy on Risk Based Internal Audit(RBIA) and as per the said policy 159 branches were audited in the FY19-20. Apart fromthe

RBIA considering the volume of business branches are also subjected to quarterly/half yearly internal audit by empanelled audit _rms. During the year two loan accountsamounting to H 55 lakhs have been suspected to be fraudulent and have been reportedto the authorities/regulators. The Audit Committee reviewed the audit reports/remarks/observations and replies/ compliances including the compliance of KYC norms. ManagementAudit by Canara Bank was conducted during January 2019 for the period January 2017 toDecember 2018.

26. SECRETARIAL AUDIT & SECRETARIAL COMPLIANCE

As required under section 204 of the Companies Act 2013 and Rules thereof the Boardappointed M/s Kedarnath & Associates Practising Company Secretaries for conductingthe ‘Secretarial Audit' of the Company and for submission of the Annual ComplianceReport for the financial year 2019-20. The Secretarial Audit for FY19-20 was conducted asrequired u/s.204 of the Companies Act 2013 Regulation 24A of SEBI(LODR) Regulation 2015and SEBI Circular No. CIR/CFD/CMD1/27/2019 dated February 08 2019 by Shri S.Kedarnath FCS Practising Company Secretary and his team. The report does not contain anyquali_cation reservation or adverse remark. The Secretarial Audit Report issued by thePractising Company Secretaries is enclosed to the Report of Directors (Annexure 2) interms of Section 134(3) (f) read with Section 204(1) of the Act.

In addition to the Secretarial Audit Report Secretarial Compliance Report has alsobeen issued by the PCS as per the SEBI Circular No. CIR/CFD/CMD1/27/2019 dated February02 2019 and the said report has been submitted to the Stock Exchanges.

Secretarial Standards

The Company complies with the mandatory Secretarial Standards i.e. SS-1 and SS-2 issuedby the Institute of Company Secretaries of India and has referred to Secretarial StandardsSS-3 and SS-4 for good governance.

Loans Guarantees or Investments:

There are no particulars of loans guarantees or investments made during the year interms of Section 186(1) and 186(2) of the Act requiring disclosure to be made in thereport of Directors as required under Section 134(3)(g) of the Act. In terms of Section186(11) (a) the requirement relating to the disclosure is not applicable to a loan madeguarantee given or security provided by a Housing Finance Company.

Related Party Transactions:

The particulars of contracts or arrangements with the ‘Related Parties' referredto in sub-section (1) of Section 188 of the Act are furnished in Note No.42 of the Notesforming part of the financial statements for FY19-20 forming a part of the Annual Report.The particulars of Related Party Transactions as required u/s sec 134(3)(h) in theprescribed format (AOC-2) is attached to this Report as Annexure-4.

27. STATUTORY AUDITORS

Pursuant to the provisions of Section 139 142 and all other applicable provisions ofthe Companies Act 2013 and rules made thereunder M/s. Varma & Varma CharteredAccountants (Firm Reg.No.004532S) were appointed by the members as the Statutory Auditorsof the Company to hold of_ce from the conclusion of this 30th Annual General Meeting untilthe conclusion of the 35th Annual General Meeting subject to rati_cation by members everyyear as applicable at such remuneration and out-of-pocket expenses as may be decided bythe Board of Directors of the Company. Pursuant to the provisions of Section 143(8) of theCompanies Act 2013 and rules made thereunder the Members had authorised the Board ofDirectors to appoint any person(s) quali_ed for appointment as auditor(s) of the Companyunder Section 141 and all other applicable provisions of the Companies Act 2013 as BranchAuditors for audit of any of the Branch of the Company present and future from theconclusion of this Annual General Meeting until the conclusion of the 35th Annual GeneralMeeting subject to rati_cation by members every year as applicable on such terms andconditions including remuneration and out of pocket expenses as may be decided by theBoard of Directors of the Company. The requirement for the annual rati_cation of auditors'appointment at the AGM has been omitted pursuant to Companies (Amendment) Act 2017noti_ed on May 7 2018.

In view of the above M/s Varma & Varma Chartered Accountants (FirmReg.No.004532S) appointed by the members at the 30th Annual General Meeting for a tenureup to the conclusion of the 35th Annual General Meeting will continue as the StatutoryAuditors of the Company at such remuneration and out of pocket expenses as may bedecided by the Board of Directors of the Company.

The Statutory Auditors' Report for the FY2019-20 does not contain any quali_cationreservation or adverse remark.

28. COST RECORDS AND COST AUDIT

Maintenance of cost records and requirement of cost audit as prescribed under theprovisions of Section 148(1) of the Companies Act 2013 are not applicable for thebusiness activities carried out by the Company.

29. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In terms of Regulation 34(2) of the SEBI (Listing Obligations & DisclosureRequirements) Regulations 2015 the Management Discussion and Analysis Report forms partof this Annual Report.

30. CORPORATE GOVERNANCE

As required under the Companies Act 2013 Regulation 34 read with Schedule V of theSEBI (LODR) Regulations 2015 and Housing Finance Companies – Corporate Governance(National Housing Bank) Directions 2016 the ‘Report of Directors on CorporateGovernance' for the year FY19-20 is placed in this Annual Report.

The said Report covers in detail the Corporate Governance Philosophy of the CompanyBoard Diversity Directors appointment and remuneration declaration by IndependentDirectors Board evaluation familiarisation programme vigil mechanism etc. The AuditorsCerti_cate on Corporate Governance is provided with this report as Annexure-5.

Business Responsibility Report:

The SEBI (LODR) Regulations 2015 mandates inclusion of Business Responsibility Report(BRR) in the prescribed format as a part of the Annual Report for top 500 listed entitiesbased on the market capitalisation. In compliance with the said Regulations the BRR isprovided as a part of this Report as Annexure 6.

Board Evaluation:

In terms of Regulation 17(10) of the SEBI (LODR) Regulations 2015 read with the SEBICircular No. SEBI/HO/CFD/ CMD/ CIR/P/2017/004 dated January 05 2017 your Company has putin place the ‘Board and Director's Evaluation Policy' laying down a framework forevaluation of the Board its Committees and of the individual directors with Definedattributes for evaluation. The Board has evaluated the performance of the independentdirectors including their independence criteria as speci_ed in the said regulations andtheir independence from the management. The directors who were subject to evaluation didnot participate in their own evaluation. The results of the evaluation exercise wereshared with the Board in subsequent Board Meeting(s).

31. SAVE GREEN EFFORTS & RESPONSIBILITY TOWARDS SOCIETY

In recognition and support to the green initiative taken by the Ministry of CorporateAffairs (MCA) Government of India your Company is sending AGM notices annual reportscorrespondence with the stakeholders etc. to the respective e-mail IDs of stakeholders. Tofacilitate paperless banking initiatives taken by your Company include ECS / NACHfacility for repayment of loans streamlining the systems and procedures for reporting bythe branches and at the Registered Of_ce through Integrated Business Suite (IBS)networking of branches with the Registered Of_ce harnessing solar energy for lighting andcomputer operations in 16 branches. The digital storage of data is being increasinglyadopted and therefore the usage of paper is curtailed to the minimum.

As in the previous years we continue to publish only the statutory disclosures in theprint version of the Annual Report. Electronic copies of the Annual Report Annual GeneralMeeting Notices and such other notices are being sent to all members whose e-mailaddresses are registered with the Company/ Depository participants. Further as per MCAcircular dated 13/04/2020 notices for the General meeting may be given only throughe-mails registered with the Company/DP/RTA. As per SEBI Circular SEBI/HO/CFD/CMD1/CIR/P/2020/79 dated 12/05/2020 the requirements of Reg.36 (1)(b) and (c) and Reg.58(1)(b) &(c) of the LODR are dispensed with for listed entities who conduct their AGMsduring the calendar year 2020 (i.e. till 31/12/2020).

[Regulation 36 (1)(b) and (c) of the LODR prescribes that a listed entity shall send ahard copy of the statement containing salient features of all the documents as prescribedin Section 136 of the Companies Act 2013 to the shareholders who have not registeredtheir email addresses and hard copies of full annual reports to those shareholders whorequest for the same respectively. Regulation 58 (1)(b) &(c) of the LODR extendsimilar requirements to entities which have listed their NCDs and CPs]

Through our CSR activities in the _eld of health care education and empowerment of thedowntrodden we have strived to improve the lives of lakhs of our country men women andchildren. We have sanctioned Rs. 12.38 Crore and spent Rs. 10.04 Crore towards variousactivities which have been detailed in point no. 23 of this report.

32. OUTLOOK FOR 2020-21

In the aftermath of COVID-19 the various schemes and packages provided by the UnionGovernment will be instrumental for revival of the economy and for giving a _llip to thereal estate market. Your Company will continue to lend prudently and concentrate on theAffordable Housing Loan Segment.

Our market expansion in potential locations will continue and we propose to open about10 new branches during the current FY 2020-21. Thrust is given on distribution of generalinsurance products through corporate agencies to provide insurance products to secure thehealth and assets of our customers.

Our focus on Lending to the salaried class will be unabated. However on account of themarket conditions in the current scenario there will be some pressure on performance.Your Company would continue its pursuit of qualitative growth. Your Company is committedto uphold and retain the high standards which have been followed from inception despitethe various challenges encountered in the discharge of its functions.

33. ACKNOWLEDGEMENTS

Your Directors would like to thank Canara Bank the promoter for their continuoussupport.

Your Directors would like to acknowledge the role of all its stakeholders viz.shareholders debenture holders CP holders depositors bankers lenders borrowersmerchant bankers insurance partners Statutory and Branch Auditors Secretarial Auditorspanel advocates panel valuers agents and all others for their continuous support to yourCompany and the con_dence and faith that they have always reposed in your Company.

Your Directors acknowledge and appreciate the guidance and support extended by all theRegulatory authorities including National Housing Bank (NHB) Reserve Bank of India (RBI)Insurance Regulatory and Development Authority of India (IRDAI) Securities Exchange Boardof India (SEBI) Ministry of Corporate Affairs (MCA) Registrar of Companies KarnatakaStock Exchanges NSDL and CDSL.

Your Directors thank the Rating Agencies viz. ICRA CARE India Ratings & ResearchLtd. (FITCH) the Registrars & Share Transfer Agents Debenture Trustees and Trusteesof public deposits of your Company Government(s) local/ statutory authorities and allothers for their whole-hearted support during the year and look forward to their continuedsupport in the years ahead.

Your Directors value the professionalism of all the employees who have provedthemselves in a challenging environment and whose efforts have stood the Company in goodstead and taken it to present level.

(Form No. MGT - 9)

AS ON THE FINANCIAL YEAR ENDED ON MARCH 31 2020

[Pursuant to section 92(3) of the Companies Act 2013 and rule 12(1) of the Companies(Management and Administration) Rules 2014]

I. REGISTRATION AND OTHER DETAILS:

i. CIN L85110KA1987PLC008699
ii. Registration Date 29/10/1987
iii. Name of the Company CAN FIN HOMES LTD
iv. Category/Sub-Category of the Company Financial Institution – Housing Finance
v. Address of the Registered of_ce and contact details No.29/1 1st Floor Sir M N Krishna Rao Road Near Lalbagh West
Gate Basavanagudi Bengaluru – 560 004 Karnataka
vi. Whether listed Company Yes
vii. Name Address and Contact details of Registrar and Canbank Computer Services Ltd.
Transfer Agent if any Unit: Can Fin Homes Ltd. R&T Centre No.218 J P Royale 1st
Floor 2nd Main Sampige Road (Near 14th Cross) Malleshwaram
Bengaluru – 560 003.
Contact Person: Shri Ravi. K Senior Manager
Tel:080-23469661/662/664/665
e-mail: ravi@ccsl.co.in

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

All the business activities contributing 10% or more of the total turnover of theCompany shall be stated:-

Sl. No. Name and Description of main products/ services NIC Code of the Product/ service % to total turnover of the Company
1. Housing Loans 64192 90.00%
2. Non housing Loans 10.00%

III. PARTICULARS OF HOLDING SUBSIDIARY AND ASSOCIATE COMPANIES

Sl. No. Name And Address of the Company CIN/GLN Holding/ Subsidiary /Associate %of shares held Applicable Section
NIL

IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)

i) Category-wise Share Holding

No. of Shares held at the beginning of the year March 31 2019–

No. of Shares held at the end of the year March 31 2020 –

Category of Shareholders Demat Physical Total % of Total Shares Demat Physical Total % of Total Shares % Change during the year
A. Promoter
1) Indian
a) Individual/ HUF -- -- -- -- -- -- -- -- --
b) Central Govt -- -- -- -- -- -- -- -- --
c) State Govt(s) -- -- -- -- -- -- -- -- --
d) Bodies Corp -- -- -- -- -- -- -- -- --
e) Banks / FI 39930365 -- 39930365 29.99 39930365 -- 39930365 29.99 --
f) Any Other -- -- -- -- -- -- -- -- --
(Promoter Group)
Sub-total(A)(1):- 39930365 -- 39930365 29.99 39930365 -- 39930365 29.99 --
2) Foreign -- -- -- -- -- -- -- -- --
a) NRIs-Individuals -- -- -- -- -- -- -- -- --
b) Other-Individuals -- -- -- -- -- -- -- -- --
c) Bodies Corp. -- -- -- -- -- -- -- -- --
d) Banks / FI -- -- -- -- -- -- -- -- --
e) Any Other…. -- -- -- -- -- -- -- -- --
Sub-total(A)(2):- -- -- -- -- -- -- -- -- --
Total Shareholding of 39930365 -- 39930365 29.99 39930365 -- 39930365 29.99 --
Promoter (A) = (A)(1)+(A)(2)
B. Public Shareholding
1. Institutions
a) Mutual Funds 3785280 1000 3786280 2.85 14800380 1000 14801380 11.12 8.27
b) Banks / FI 1023579 -- 1023579 0.77 862383 -- 862383 0.65 (0.12)
c) Central Govt -- -- -- -- -- -- -- --
d) State Govt(s) -- -- -- -- -- -- -- --
e) Venture Capital -- -- -- -- -- -- -- --
f) Insurance Companies 191278 -- 191278 0.14 613873 -- 613873 0.46 0.32
g) FIIs -- -- -- -- -- -- -- -- --
h) Foreign Venture -- -- -- -- -- -- -- -- --
Capital Funds
i) Others (specify) -- -- -- -- -- -- -- -- --
(i) Foreign Financial -- 2000 2000 0.00 -- 2000 2000 0.00 --
Institutions
Sub-total(B)(1)

5000137

3000

5003137

3.76

16276636

3000

16279636 12.23 8.47
2. Non Institutions
a) Bodies Corp. 19408810 44500 19453310 14.61 16892120 44750 16936870 12.72 (1.89)
i) Indian
ii) Overseas
b) Individuals
(i) Individual shareholders holding nominal share capital upto Rs.2 Lakh 29648221 2331296 31979517 24.00 24000230 2068835 26069065 19.57 (4.43)
(ii) Individual shareholders holding nominal share capital in excess of H2 Lakh 7930323 -- 7930323 5.96 6722288 -- 6722288 5.05 (0.91)
c) Quali_ed Foreign -- -- -- -- -- -- -- -- --
Investor

 

d) Others(Specify)
i) Non-Resident 1658806 -- 1658806 1.25 1319811 -- 1319811 0.99 (0.26)
Indians
ii) Clearing 882652 -- 882652 0.66 146004 -- 146004 0.11 (0.55)
Members
iii) Hindu Undivided 728657 -- 728657 0.55 596077 -- 596077 0.45 (0.10)
Families
iv) Employee 13360 8330 21690 0.02 16165 6830 22995 0.02 --
Shareholders
v) Director & their -- -- -- -- -- -- -- -- --
relatives
vi) Custodian - -- -- -- -- -- -- --
vii) Trusts 24841 -- 24841 0.02 17333 -- 17333 0.01 (0.01)
viii) Foreign 25288027 -- 25288027 18.99 24860701 -- 24860701 18.67 (0.32)
Corporate Bodies
ix) Foreign National/ -- -- -- -- 430 -- 430 -- --
Individual
x) IEPF Authority 252800 -- 252800 0.19 252550 -- 252550 0.19 --
Sub-total(B)(2) 85836497

2384126

88220623 66.25 74823709

2120415

76944124 57.78 (8.47)
Total Public Shareholding 90836634

2387126

93223760 70.01 91100345

2123415

93223760 70.01
(B)=(B)(1)+(B) (2)
C. Shares held by Custodian for GDRs&ADRs -- -- -- -- -- -- -- -- --
Grand Total (A+B+C) 130766999

2387126

133154125 100.00 131030710

2123415

133154125 100.00

ii. Shareholding of Promoters

Shareholding at the beginning of the year

Shareholding at the end of the year

Sl. No. Shareholder's Name No. of Shares % of total Shares of the company % of Shares Pledged / encumbered to total shares No. of Shares % of total Shares of the company %of Shares Pledged / encumbered to total shares % change in share holding during the year
1. Canara Bank 39930365 29.99 -- 39930365 29.99 -- --
Total 39930365 29.99 -- 39930365 29.99 -- --

iii. Change in Promoters' Shareholding (please specify if there is no change)

Sl. No. Shareholder's Name

Shareholding at the beginning of the year

Cumulative Shareholding during the year

No. of Shares % of total Shares of the company No. of Shares % of total Shares of the company
At the beginning of the year 39930365 29.99 -- --
Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus/ sweat equity etc): No Change -- -- 39930365 29.99
At the End of the year 39930365 29.99

iv. Shareholding pattern of top ten shareholders (other than Directors PromotersHolders of GDRs and ADRs)

Sl. No. Shareholder's Name

Shareholding at the beginning of the year

Cumulative Shareholding during the year

No. of Shares % of total Shares of the company No. of Shares % of total Shares of the company
1 CALADIUM INVESTMENT PTE LTD.
At the beginning of the year 17904245 13.45
Date wise Increase / Decrease in Shareholding during the year: Sale from April 01 2019 to March 31 2020 (1265493) (0.95) 16638752 12.50
At the End of the year 16638752 12.50
2 CHHATTISGARH INVESTMENTS LIMITED
At the beginning of the year 11979411 9.00
Date wise Increase / Decrease in Shareholding during the year: Sale from April 01 2019 to March 31 2020 (1329890) (1.01) 10649521 7.99
At the End of the year 10649521 7.99
3 AXIS MUTUAL FUND TRUSTEE LIMITED A/C AXIS MUTUAL FUND A/C AXIS SMALL CAP FUND
At the beginning of the year 169674 0.13
Date wise Increase / Decrease in Shareholding during the year: Purchase From April 01 2019 to March 31 2020 2522839 1.89 2692513 2.02
At the End of the year 2692513 2.02
4 NITIN RAOJIBHAI DESAI
At the beginning of the year 2156600 1.62
Date wise Increase / Decrease in Shareholding during the year: No Change From April 01 2019 to March 31 2020 -- -- 2156600 1.62
At the End of the year 2156600 1.62
5 RELIANCE CAPITAL TRUSTEE CO LTD-A/C NIPPON INDIA SMALL CAP FUND
At the beginning of the year -- --
Date wise Increase / Decrease in Shareholding during the year: Purchase From April 01 2019 to March 31 2020 1601174 1.20 1601174 1.20
At the End of the year 1601174 1.20
6 SARDA ENERGY AND MINERALS LIMITED
At the beginning of the year 1500000 1.13
Date wise Increase / Decrease in Shareholding during the year: No Change From April 01 2019 to March 31 2020 -- -- 1500000 1.13
At the End of the year 1500000 1.13
7 AADI FINANCIAL ADVISORS LLP
At the beginning of the year 1302195 0.98
Date wise Increase / Decrease in Shareholding during the year: No change From April 01 2019 to March 31 2020 -- -- 1302195 0.98
At the End of the year 1302195 0.98
8 PINEBRIDGE GLOBAL FUNDS - PINEBRIDGE INDIA EQUITY FUND
At the beginning of the year -- --
Date wise Increase / Decrease in Shareholding during the year: Purchase From April 01 2019 to March 31 2020 1233475 0.93 1233475 0.93
At the End of the year 1233475 0.93
9 AKASH MANEK BHANSHALI
At the beginning of the year 1193392 0.89
Date wise Increase / Decrease in Shareholding during the year: No change From April 01 2019 to March 31 2020 -- -- 1193392 0.89
At the End of the year 1193392 0.89

 

Sl. No.Shareholder's Name

Shareholding at the beginning of the year

Cumulative Shareholding during the year

No. of Shares % of total Shares of the company No. of Shares % of total Shares of the company
10 SBI SMALL CAP FUND
At the beginning of the year -- --
Date wise Increase / Decrease in Shareholding during the year: Purchase From April 01 2019 to March 31 2020 1169720 0.88 1169720 0.88
At the End of the year 1169720 0.88

P.S: The percentage of shareholding is calculated on the paid-up share capital.

V. SHAREHOLDING OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

Sl. No. Shareholder's Name

Shareholding at the beginning of the year

Cumulative Shareholding during the year

No. of Shares % of total Shares of the company No. of Shares % of total Shares of the company
NIL

VI. INDEBTEDNESS

Indebtedness of the Company including interest outstanding/accrued but not due forpayment (Amount in Rupees)

Secured loans excluding deposits Unsecured loans excluding deposits Deposits Total
Opening Balance
Principal 129867113221 34466307274 2610947847 166944368342
interest due but not paid - - - -
Interest accrued but not due for 1827339342 29146586 - 1856485928
payment
Total 131694452563 34495453860 2610947847 168800854270
Change in indebtedness - - - -
Addition 51950000000 13600000000 1888430406 67438430406
Reduction 24847118584 22459153588 1448573276 48754845448
Net Change 27102881416 (8859153588) 439857130 18683584958
Closing Balance
Principal 157682169628 25606316373 3050804977 186339290978
interest due but not paid - - - -
Interest accrued but not due for payment 1115164351 29983899 - 1145148250
Total 158797333979 25636300272 3050804977 187484439228

VII. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Remuneration to Managing Director/Whole Time Director/General Manager

(Amount in Rupees)

Sl. No. Particulars of Remuneration

Name of MD/WTD/ Manager

Total
S.K.Hota Managing Director Shri Girish Kousgi Managing Director Shri Shreekant M Bhandiwad Dy. Managing Director Amount
1 Gross Salary 471019.35 5722219.00 1786842.64 7980080.99
(a) Salary as per provisions contained in Section 17(1) of the Income Tax Act 1961
(b) Value of perquisites u/s 17(2) of the Income Tax Act 1961 -- -- -- --
(c) Prots in lieu of salary under section 17(3) of Income Tax Act1961 -- -- -- --
2 Stock Option -- -- -- --
3 Sweat Equity -- -- -- --
4 Commission
-as% of Prot -- -- -- --
-others Incentive -- -- -- --
5 Others (Company's contribution to PF) 25500 -- 93638 119138
Gratuity 255000 -- -- 255000
Leave Salary 438441.46 -- -- 438441.46
Total (A)* 1189960.81 5722219.00 1880479.64 8792659.45
Ceiling as per the Act 376123477 --

P.S.: Re-imbursement of salary to Canara Bank for the year ended March 31 2020.*excluding incentive pertaining to financial year 2018-19.

B. Remuneration to other Directors

(Amount in Rupees)

Sl. No. Particulars of Remuneration Independent Directors

Name of the Directors

Total Amount
Shri G Naganathan Smt Bharati Rao Dr. Yeluri Vijayanand
Fee for attending board and committee meetings 555000 585000 495000 1635000
Commission -- -- -- --
Others please specify -- -- -- --
Total (1) 555000 585000 495000 1635000

 

Other Non-Executive Directors S Subramanian Shri Debashish Mukherjee --
Fee for attending board and committee meetings 150000 215000 365000
Commission -- -- -- --
Others please specify -- -- -- --
Total (2) 150000 215000 365000
Total (B)=(1+2) 2000000
Total Managerial Remuneration -- -- -- 2000000
Overall Ceiling as per the Act -- -- --

C. Remuneration to Key Managerial Personnel other than Managing Director Whole-timeDirector and/or Manager

(Amount in Rupees)

Sl. No. Particulars of Remuneration

Key Managerial Personnel

Total
Shamila M Atanu Bagchi Prashanth Joishy Veena G Kamath
1 Gross Salary
(a) Salary as per provisions contained in Section 17(1) of the Income Tax Act 1961 1765892 448761 1494788 1451921 5161362
(b) Value of perquisites u/s 17(2) of the Income Tax Act 1961
(c) Prots in lieu of salary under section 17(3) of Income Tax Act 1961
2 Stock Option
3 Sweat Equity
4 Commission 60000 124995 50000 60000 294995
-as% of Prot
-others Incentive/LFC
5 Others (Company's contribution to PF) 192705 23384 191464 129557 537110
Leave Salary 540669 540669
Total (A) 2018597 1137809 1736252 1641478 6534136
Ceiling as per the Act

VIII. PENALTIES/PUNISHMENT/COMPOUNDING OF OFFENCES

There were no penalties/punishments/compounding of offences for the year ending March31 2020

.