shubham housing development finance company … report 2015-16.pdf · shubham housing development...

SHUBHAM HOUSING DEVELOPMENT FINANCE COMPANY LIMITED (Formerly known as Shubham Housing Development Finance Company Private Limited)

Annual Report 2015-16

CONTENTS OF ANNUAL REPORT FOR FINANCIAL YEAR 2015-16

S.

No.

Particulars Page Nos

1. Notice 1-5

2. Explanatory Statement to Notice 6-14

3. Directors’ Report 15-26

4. Annexure I to Directors’ Report - Secretarial Audit Report 27-29

5. Annexure II to Directors’ Report - AOC-2 30-31

6. Annexure III to Directors’ Repot - MGT-9 32-40

7. Independent Auditor’s Report 41-50

8. Balance Sheet, Profit and Loss along with Significant Accounting Policies

and Notes

51-89


Annual Report 2015-16 NOTICE

Notice is hereby given that the SEVENTH ANNUAL GENERAL MEETING of the Company will be held at the registered office of the Company at D-305, Ground Floor, Sarvodaya Enclave, New Delhi - 110017 on Monday the 8th day of August, 2016 at 11.00 A.M. at to transact the following business:

ORDINARY BUSINESS:

1. To receive, consider and adopt the audited Accounts of the Company for the year ended 31st

March, 2016, together with the Directors’ and Auditor's Reports.

2. To appoint a Director in place of Mr. Sandeep Marian Farias, Nominee Director of the Company, who retires by rotation and being eligible, offers himself for re-appointment.

3. To appoint a Director in place of Mr. Rahul Chandra, Nominee Director of the Company, who retires by rotation and being eligible, offers himself for re-appointment.

4. To ratify the appointment of auditors and to fix their remuneration and if thought fit to pass,

with or without modification(s), the following resolution as an Ordinary Resolution:

“RESOLVED THAT, subject to approval of shareholders, M/s B S R & Associates LLP, Chartered Accountants, FRN-116231 W/ W-100024, from whom certificate pursuant to section 139 of the Companies Act, 2013 has been received, be and hereby appointed as the Statutory Auditors of the Company to hold office from the conclusion of this Annual General Meeting till the conclusion of the next Annual General Meeting of the Company at such remuneration plus service tax, out-of-pocket, travelling and living expenses, etc., as may be mutually agreed between the Board of Directors of the Company and the Auditors.”

SPECIAL BUSINESS:

5. To approve the Appointment of Mr. Ajay Oak as Whole Time Director of the Company:

To consider and if thought fit to pass, with or without modification(s), the following resolution as a Special Resolution:

“RESOLVED THAT pursuant to Section 196, 197 and 203 read with Schedule V of the Companies Act, 2013 and other applicable provisions, if any, (“including any statutory

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modification(s) or re-enactment thereof) and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and subject to approval of the Central Government and such other consents and permission as may be required, the consent of the member be and is hereby accorded to approve the appointment of Mr. Ajay Oak (holding DIN 01779000) as the Whole-Time Director of the Company for a period of 5 years commencing from July 27, 2016 till July 26, 2021 at a consolidated remuneration not exceeding Rs. 150,00,000 /- (Rupees one crore and fifty lacs) per annum inclusive of remuneration(s) payable directly or otherwise or by way of salary and perquisites, performance based rewards/ incentives, on the terms and conditions as decided by the Board and/or Recruitment, Compensation and Nomination Committee with the power to alter and vary the terms and conditions of the said appointment in such manner as may be agreed between the Board and/or Recruitment, Compensation and Nomination Committee and Mr. Ajay Oak.”

“RESOLVED FURTHER THAT, in the event of no profits or inadequacy of profits in any financial year during the currency of term of Mr. Ajay Oak, the Company shall pay Mr. Ajay Oak, the existing remuneration as minimum remuneration by way of salary, perquisites and / or allowance, performance based rewards/ incentives exceeding the limit laid down in Schedule V to the Companies Act, 2013, as applicable to the Company or such other limits, as may be prescribed by the Central Government from time to time as to minimum remuneration and in compliance with provisions stipulated therein.” “RESOLVED FURTHER THAT the Board of Directors be and are hereby authorized to do and perform all such acts, deeds, matters and things, as may be considered necessary, desirable or expedient to give effect to this resolution, including to delegate this power.”

6. To approve the Appointment of Mr. Sanjay Chaturvedi as Whole Time Director of the Company:

To consider and if thought fit to pass, with or without modification(s), the following resolution as a Special Resolution: “RESOLVED THAT pursuant to Section 196, 197 and 203 read with Schedule V of the Companies Act, 2013 and other applicable provisions, if any, (“including any statutory modification(s) or re-enactment thereof) and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and subject to approval of the Central Government and such other consents and permission as may be required, the consent of the member be and is hereby accorded to approve the appointment of Mr. Sanjay Chaturvedi (holding DIN 01636432) as the Whole-Time Director of the Company for a period of 5 years commencing from July 27, 2016 till July 26, 2021 at a consolidated remuneration not exceeding Rs. 150,00,000 /- (Rupees one crore and fifty lacs) per annum inclusive of remuneration(s) payable directly or otherwise or by way of salary and perquisites, performance based rewards/ incentives, on the terms and conditions as decided by the Board and/or Recruitment, Compensation and Nomination Committee with the power to alter and vary the terms and conditions of the said appointment in such manner as may be agreed between the Board and/or Recruitment Compensation and Nomination Board Committee and Mr. Sanjay Chaturvedi.” “RESOLVED FURTHER THAT, in the event of no profits or inadequacy of profits in any financial year during the currency of term of Mr. Sanjay Chaturvedi, the Company shall pay Mr. Sanjay Chaturvedi, the existing remuneration as minimum remuneration by way of

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salary, perquisites and / or allowance, performance based rewards/ incentives exceeding the limit laid down in Schedule V to the Companies Act, 2013, as applicable to the Company or such other limits, as may be prescribed by the Central Government from time to time as to minimum remuneration and in compliance with provisions stipulated therein.” “RESOLVED FURTHER THAT the Board of Directors be and are hereby authorized to do and perform all such acts, deeds, matters and things, as may be considered necessary, desirable or expedient to give effect to this resolution, including to delegate this power.”

7. To approve the Related Party Transaction:

To consider and if thought fit, to pass with or without modification(s), the following

resolution as a Special Resolution: “RESOLVED THAT pursuant to the provisions of Sections 188(1) of the Companies Act, 2013 and other applicable provisions, if any, including statutory modification or re-enactment thereof, the consent of the Company be and is hereby accorded to Ms. Rupa Basu, who is a relative of Mr. Ajay Oak, Director, to be appointed as an employee of the Company (i.e., to hold an office or place of profit under the Company) from November 6, 2015, with such designation as the Board of Directors of the Company may, from time to time, decide, on the following terms and conditions:

1) Salary Rs. 70,00,000 (Rupees seventy lacs only) per annum for the period 06.11.2015 to 31.03.2016 and Rs. 73,50,000 /- (Rupees Seventy Three Lacs Fifty Thousand only) per annum for the period 01.04.2016 to 31.03.2017 and be broken into various components as per HR policy of the Company, from time to time.

2) Statutory perquisites and other benefits like gratuity, contribution to provident fund, bonus and leave encashment etc., as per the applicable provision of relevant statutes and/or policies of the Company will be in addition to the aforesaid remuneration.

3) The Company will reimburse telephone and/or mobile phone(s) bills, conveyance, fuel expenses or other out of pocket expenses incurred in the course of official duties which will not be included in the aforesaid remuneration.

RESOLVED FURHTER THAT the Board of Directors shall have the authority from time to time -

(a) to make applicable to Ms. Rupa Basu such revisions in the aforesaid salary scale or grade together with revisions in such allowances, benefits, amenities, facilities and other perquisites including contribution to provident fund, gratuity fund, superannuation fund, if any, etc. as are introduced from time to time in respect of employees of the Company in equivalent salary scale or grade; and

(b) to promote/change her position/designation or salary scale or grade in due course together with such allowances.

RESOLVED FURTHER THAT the Board of Directors and/or Company Secretary of the Company be and they are hereby severally authorised to take, perform and execute such further steps, acts, deeds and matters, as may be necessary, proper or expedient to give effect to this resolution.”

Page 3 of 89


Annual Report 2015-16 8. Fixation of the term of Mr. Vinod Rai, Independent Director of the Company

To consider and if thought fit to pass, with or without modification(s), the following resolution as

an Ordinary Resolution: “RESOLVED that, pursuant to the provisions of sections 149, 152 of the Companies Act, 2013 (Act) and the Rules framed thereunder, read with Schedule IV to the Act and other applicable provisions, if any, as amended from time to time, consent of the Members be and is hereby accorded to vary the terms of appointment of Mr. Vinod Rai (DIN 01119922), Independent Director in such a way that he shall not be liable to retire by rotation and shall hold office for a consecutive term of five years commencing from July 27, 2016.

9. Fixation of the term of Mr. Rakesh Rewari, Independent Director of the Company

To consider and if thought fit to pass, with or without modification(s), the following resolution as an Ordinary Resolution: “RESOLVED that pursuant to the provisions of sections 149, 152 of the Companies Act, 2013 (Act) and the Rules framed thereunder, read with Schedule IV to the Act and other applicable provisions, if any, as amended from time to time, consent of the Members be and is hereby accorded to vary the terms of appointment of Mr. Rakesh Rewari (DIN 00286853), Independent Director in such a way that he shall not be liable to retire by rotation and shall hold office for a consecutive term of five years commencing from July 27, 2016.

10. Fixation of the term of Ms. Ranjana Agarwal, Independent Director of the Company

To consider and if thought fit to pass with or without modification(s) the following resolution as an Ordinary Resolution:

“RESOLVED that pursuant to the provisions of sections 149, 152 of the Companies Act, 2013 (Act) and the Rules framed thereunder, read with Schedule IV to the Act and other applicable provisions, if any, as amended from time to time, consent of the members be and is hereby accorded to vary the terms of appointment of Ms. Ranjana Agarwal (DIN 03340032), Independent Director in such a way that she shall not be liable to retire by rotation and shall hold office for a consecutive term of five years commencing from July 27, 2016.

11. To consider and if thought fit, to pass the following resolution, with or without modification, as a Special Resolution:

“RESOLVED THAT pursuant to section 14 of the Companies Act, 2013 and the rules made there under, consent of the Members be and is hereby accorded to alter the Articles of Association of the Company by substitution of the existing clause 56.9 of the Article of Association of Company with the following:

56.9. Reserved Matter - Investor Super Majority Item Any appointment, engagement, removal, termination or increase in compensation of directors, chief executive officer, chief operating officer and other employees whose remuneration is in excess of INR 50,00,000 (Fifty lacs) per annum.

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FURTHER RESOLVED THAT Mr. Ajay Mukund Oak and Mr. Sanjay Chaturvedi, Directors of the Company and Ms. Neeta Kamra, Company Secretary of the Company, be and are hereby severally authorized, on behalf of the Company, to do all acts, deeds, matters and things as deem necessary, proper or desirable and to sign and execute all necessary documents, applications and returns for the purpose of giving effect to the aforesaid resolution along with filing of necessary E-form as return of appointment with the Registrar of Companies, NCT of Delhi and Haryana.” By Order of the Board

For Shubham Housing Development Finance Company Limited

Sd/- (Neeta Kamra)

Company Secretary Membership No. : ACS 22892 Add: Shubham House, 425, Udyog Vihar,

Phase IV, Gurgaon-1220015 Place: Gurgaon Date: 27.07.2016

NOTES:

1. EVERY MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF AND SUCH A PROXY NEED NOT BE A MEMBER OF THE COMPANY.

2. THE PROXY IN ORDER TO BE EFFECTIVE SHOULD BE RECEIVED BY THE COMPANY NOT LESS THAN 48 HOURS BEFORE THE COMMENCEMENT OF THE MEETING.

3. AN EXPLANATORY STATEMENT PURSUANT TO PROVISIONS OF SECTION 102 OF THE COMPANIES ACT, 2013, IS ANNEXED AND FORMS PART OF THE NOTICE.

4. THE ROAD MAP TO THE VENUE OF THE ANNUAL GENERAL MEETING IS ENCLOSED HEREWITH.

By Order of the Board


Sd/- (Neeta Kamra) Company Secretary

Membership No. : ACS 22892 Add: Shubham House, 425, Udyog Vihar,

Phase IV, Gurgaon-1220015 Place: Gurgaon Date: 27.07.2016

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EXPLANATORY STATEMENT PURSUANT TO SECTION 102 OF THE COMPANIES ACT,

2013Special Business

Item No. 5

Your Board recommends to re-appoint Mr. Ajay Oak as Key Managerial Personnel of the Company as

per Section 203 of the Companies Act, 2013. The Board of Directors at its meeting held on July 27, 2016, has recommended to re-appoint Mr. Ajay Oak as Whole-Time Director of the Company on the remuneration as recommended by the Appointment, Recruitment, Compensation and Nomination Committee for a further period of 5 years, commencing from July 27, 2016 up to July 26, 2021, subject to necessary approvals. The Board has further authorised Recruitment, Compensation and Nomination Committee to approve the revision in the remuneration from time to time within the limit as approved by the Board of Directors. In terms of Rule 7 (2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company, being Debt listed, is required to obtain the approval of the Central Government, Ministry of Corporate Affairs, if the remuneration paid to its Whole Time Director/ Executive Director exceeds the limits specified under Section 196 and 197 read with Schedule V and applicable rules of the Companies Act, 2013.

The appointment of Mr. Ajay Oak is in the best interest of the Company. Thus, the Board of Directors recommends the resolution set out at Item No. 5 of the Notice for your approval.

The remuneration payable to the above mentioned Director is given below:

(i) Fixed Compensation: Up to a maximum of Rs. 70,00,000/- (Rupees Seventy Lacs) excluding Performance Linked Variable Remuneration (PLVR) for the FY 2016-17 (subject to changes made from time to time) and going upto the maximum of Rs 150,00,000/- (One Crore and Fifty Lacs) for the FY 2020-21 (subject to changes made from time to time).

Performance Linked Variable Remuneration (PLVR):

Performance Linked Variable Remuneration according to the Scheme of the Company for each of the financial years as may be decided by the Recruitment, Compensation and Nomination Committee and/or Board of Directors of the Company, based on the performance of the above mentioned Director for each year subject to a maximum of Rs. 30,00,000/- (Rupees Thirty Lacs) for the FY 2016-

17 (subject to changes made from time to time) and going upto the maximum of Rs 45,00,000/- (Rs. Forty Five Lacs) for the FY 2020-21 (subject to changes made from time to time).

The following additional detailed information as per Section - II of Schedule V is as follows:

I. General Information

a) Nature of Industry Housing Finance Sector

b) Date or expected date of commencement of commercial production.

The Company was incorporated in 2010 and has been operative since then

c) In case of new companies, expected date of Not Applicable

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commencement of activities as per project approved by financial institutions appearing in the prospectus.

d) Financial performance based on given indicators

Financial year 2015-16 Gross Revenue : 106.90 Crs. Profit after Tax : 6.92 Crs. Rate of Dividend : Nil Earnings per Share: 83.92 per share

e) Foreign investments or collaborators, if any The Company has not made any foreign investments and neither entered into any foreign collaborations.

II. Information about the appointee:

a) Background Details Mr. Ajay Oak holds a Master Degree in Management. Mr. Ajay has over 19 years of corporate experience, with proven expertise in consumer lending, general management, sales & distribution, P&L Management, strategy and business development. In his previous role, Mr. Ajay was the Consumer Lending Head at Reliance Retail Finance Ltd. In this role he successfully implemented the model to deliver small ticket consumer finance to the mass market across urban and rural centres. Prior to this, Mr. Ajay worked for Citibank Global Consumer Group in India for 10 years till 2006.

b) Past Remuneration The remuneration drawn by Mr. Ajay Oak during the past two years is as follows:

Year Remuneration (In Rs.)

2015-2016 60,58,154/-p.a.

2014-2015 52,40,000/- p.a.

c) Recognition or awards NIL

d) Job profile and his suitability He is the Executive Director of the Company and devotes whole time attention to the management of the affairs of the Company and exercises powers under the supervision and superintendence of the Board of the Company

e) Remuneration proposed It is proposed to pay consolidated remuneration to Mr. Ajay Oak up to Rs. 150,00,000 /- per annum (Rupees One Crore Fifty Lacs) per annum by way of salary and perquisites, performance based rewards/ incentives etc.

f) Comparative remuneration profile with respect to industry, size of the Company, profile of the position and person

Considering the responsibility shouldered by him of the enhanced business activities of the Company, proposed remuneration is Commensurate with Industry standards and Board level positions held in similar sized and similarly positioned businesses.

g) Pecuniary relationship directly or indirectly with the Company, or relationship with the managerial personnel, if any

Beside the remuneration paid/payable to Mr. Ajay Oak, he is the promoter of the Company and holds 250000 equity shares in the Company. Apart from

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this he does not have any other pecuniary

relationship with the Company or with any managerial personnel except Mrs Rupa Basu, his wife.

III. Other Information a) Reasons of loss or inadequate profits Not Applicable

b) Steps taken or proposed to be taken for improvement

Not Applicable

c) Expected increase in Productivity and profits in measurable terms

Not Applicable

Information pursuant to 1.2.5 of the Secretarial Standard on General Meetings (SS- 2) regarding

Director seeking appointment / re-appointment

Age 43 years

Qualifications MBA from Jamnalal Bajaj Institute of Management Studies

Experience More than 19 Years

Terms and conditions of appointment or re- appointment

a) Tenure of this appointment shall be five years with effect from July 27, 2016.

b) The Whole Time Director of the Company shall not be liable to retire by rotation. The Whole Time Director would be employed on a whole-time basis and will not be permitted to undertake any other business, work or public office, honorary or remunerative, except with the written permission of the Competent Authority in each case.

c) The Whole Time Director shall be entitled to such other privileges, allowance, facilities and amenities in accordance with rules and regulations as may be applicable to other employees of the Company and as may be decided by the Board, within the overall limits prescribed under the Act

d) Whole Time Director will cease to be Director on cessation of his employment with the Company

e) The appointment shall be governed by Section 196, 197, 203 read with Schedule V of the Companies Act, 2013 and rules made thereunder

Last drawn remuneration Rs. 60,58,154 /- p.a. Date of first appointment on the Board 23rd February 2010

No. of share held 250000 Equity Shares

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Relationship with Directors, Managers & KMP Not Related

Number of Board Meeting attended during FY 2015

4

Other Directorship Nil Chairman/ Member of the Committees of Boards of other companies

Shubham Housing Development Finance Company Limited

Member Credit Committee Banking & Borrowing Committee Risk Management Committee

Permanent Invitee Recruitment, Compensation and Nomination Committee

Except, Mr. Ajay Oak, no Directors, Key Managerial Personnel or their relatives are interested or concerned in the resolution relating to appointment of Mr. Ajay Oak.

Item No. 6

Your Board proposes to re-appoint Mr. Sanjay Chaturvedi as Key Managerial Personnel of the Company as per Section 203 of the Companies Act, 2013 The Board of Directors at its meeting held on July 27, 2016, have recommended to re-appoint Mr. Sanjay Chaturvedi as Whole-Time Director of the Company on the remuneration as recommended by the Recruitment, Compensation and Nomination Committee for a further period of 5 years, commencing from July 27, 2016 up to July 26, 2021 subject to necessary approvals. The Board had further authorised Recruitment, Compensation and Nomination Committee to approve the revision in the remuneration from time to time within the limit as approved by the Board. In terms of Rule 7 (2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company, being Debt listed, is required to obtain the approval of the Central Government, Ministry of Corporate Affairs, if the remuneration paid to its Whole Time Director/ Executive Director exceeds the limits specified under Section 196, 197 read with Schedule V and applicable rules of the Companies Act, 2013.

The appointment of Mr. Sanjay Chaturvedi is appropriate and in the best interest of the Company. Thus, the Board of Directors recommends the resolution set out at Item No. 6 of the notice for your approval

The remuneration payable to the abovementioned Director is given below:

(i) Fixed Compensation: Up to a maximum of Rs. 70,00,000 /- (Rupees Seventy Lacs) excluding Performance Linked Variable Remuneration (PLVR) for the FY 2016-17 (subject to changes made from time to time) and going upto the maximum of Rs 1,50,00,000 (One Crore and Fifty Lacs) for the FY 2020-21 (subject to changes made from time to time).

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Annual Report 2015-16 Performance Linked Variable Remuneration (PLVR): Performance Linked Variable Remuneration according to the Scheme of the Company for each of the financial years as may be decided by the Recruitment, Compensation and Nomination Committee /Board of Directors of the Company based on the performance of the above mentioned Director for each year subject to a maximum of Rs. 30,00,000 /- (Rupees Thirty Lacs)for the FY 2016-17 (subject to changes made from time to time) and going upto the maximum of Rs 45,00,000 (Rs. Forty Five Lacs) for the FY 2020-21 (subject to changes made from time to time).

The following additional detailed information as per Section - II of Schedule V is as follows:

IV. General Information

a) Nature of Industry Finance Sector

b) Date or expected date of commencement of commercial production.

The Company was incorporated in 2010 and has been operative since then

c) In case of new companies, expected date of commencement of activities as per project approved by financial institutions appearing in the prospectus.

Not Applicable

d) Financial performance based on given indicators

Financial year 2015-16 Gross Revenue : 106.90 Crs. Profit after Tax : 6.92 Crs. Rate of Dividend : Nil Earnings per Share: 83.92 per share

e) Foreign investments or collaborators, if any The Company has not made any foreign investments and neither entered into any foreign collaborations.

f) Information about the appointee:

h) Background Details Mr. Sanjay Chaturvedi holds a Master Degree in Business Administration. Mr. Sanjay has over 26 years of proven expertise in general management, sales & distribution, new category development, brand management and backend operations including collections across large, blue chip financial services organisations. He has successfully launched and led new business lines for the consumer business of Citibank, HSBC and GE Consumer Finance in India and First Gulf Bank in the UAE. Prior to this, his role was to set up and manage the Lending and Payments business for Reliance Retail.

i) Past Remuneration The remuneration drawn by Mr. Sanjay Chaturvedi during the past two years is as follows:

Year Remuneration (Rs.)

2015-2016 60,29,414/- p.a.

2014-2015

j) Recognition or awards NIL

k) Job profile and his suitability He is the Executive Director of the Company and devotes whole time attention to the management of the affairs of the Company and

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exercises powers under the supervision and

superintendence of the Board of the Company

l) Remuneration proposed It is proposed to pay consolidated remuneration to Mr. Sanjay Chaturvedi up to Rs. 150,00,000 /- per annum (Rupees One Crore Fifty Lacs) per annum by way of salary and perquisites, performance based rewards/ incentives etc.

m) Comparative remuneration profile with respect to industry, size of the Company, profile of the position and person

Considering the responsibility shouldered by him of the enhanced business activities of the Company, proposed remuneration is Commensurate with Industry standards and Board level positions held in similar sized and similarly positioned businesses.

n) Pecuniary relationship directly or indirectly with the Company, or relationship with the managerial personnel, if any

Beside the remuneration paid/payable to Mr. Sanjay Chaturvedi, he also holds 250000 equity shares in the Company and apart from this he does not have any other pecuniary relationship with the company or with any managerial personnel

g) Other Information

d) Reasons of loss or inadequate profits Not Applicable

e) Steps taken or proposed to be taken for improvement

Not Applicable

f) Expected increase in Productivity and profits in measurable terms

Not Applicable

Information pursuant to 1.2.5 of the Secretarial Standard on General Meetings (SS- 2) regarding

Director seeking appointment / re-appointment

Age

Qualifications MBA from Lucknow University

Experience More than 26 Years Terms and conditions of appointment or re- appointment

f) Tenure of this appointment shall be five years with effect from July 27, 2016.

g) The Whole Time Director of the Company shall not be liable to retire by rotation. The Whole Time Director would be employed on a whole-time basis and will not be permitted to undertake any other business, work or public office, honorary or remunerative, except with the written permission of the Competent Authority in each case.

h) The Whole Time Director shall be entitled to such other privileges, allowance, facilities and amenities in accordance with rules and regulations as may be applicable to other

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employees of the Company and as may be

decided by the Board, within the overall limits prescribed under the Act

i) Whole Time Director will cease to be Director on cessation of his employment with the Company

j) The appointment shall be governed by Section 196, 197, 203 read with Schedule V of the Companies Act, 2013 and rules made thereunder

Last drawn remuneration Rs. 60,29,414/- p.a.

Date of first appointment on the Board 23rd February 2010 No. of share held 250000 Equity Shares

Relationship with Directors, Managers & KMP Not Related

Number of Board Meeting attended during FY 2015

4

Other Directorship Nil

Chairman/ Member of the Committees of Boards of other companies


Member Assets Liability Management Committee Credit Committee Banking & Borrowing Committee

Permanent Invitee Recruitment, Compensation and Nomination Committee

Except, Mr. Sanjay Chaturvedi, No Directors, Key Managerial Personnel or their relatives are

interested or concerned in the resolution relating to appointment of Mr. Sanjay Chaturvedi. Item No. 7 Ms. Rupa Basu’s contribution towards the enhancement in the risk control measures of the Company is significant. It is in the interest of the Company to retain her services in the highly competitive employment market. The Recruitment, Compensation and Nomination Committee and Board of Directors are of the opinion that the compensation paid to the aforesaid person should be revised, more or less in line with the remuneration drawn by their counterparts in the country.

The remuneration proposed to be paid to Ms. Rupa Basu is commensurate with her experience and is in line with industry standards prevalent in India.

Ms. Rupa Basu is a Member of Institute of Chartered Accountants of India. She has the rich

experience in Finance industry.

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Since, she is wife of Mr. Ajay Oak, Director of the Company and this appointment is covered under Section 188(1) of the Companies Act, 2013, and therefore, approval of the shareholders by way of special resolution at their General Meeting is required. The Board recommends this special resolution. The monetary value of this transaction is embodied in the resolution and be construed accordingly.

The particulars of the transaction pursuant to para 3 of Explanation (1) to Rule 15 of Companies (Meeting of Board and its Powers) Rules, 2014 are as under:

Name of the related party Ms. Rupa Basu

Name of the director or Key Managerial personnel who is related

Mr. Ajay Oak

Nature of relationship Ms. Rupa Basu is wife of Mr. Ajay Oak

Remuneration As provided in the Resolution

Payment Schedule NA

Nature, material terms and particulars of the Arrangement

Ms. Rupa Basu has been appointed as an employee of the Company on remuneration and terms & conditions as embodied in the resolution given in item No. 7 and his remuneration is proposed to be revised annually as per terms set out in the said item No. 7.

Duration of the contract Ms. Rupa Basu has been appointed under a contract of employment pursuant to which he may function according to directions as may be given by the Company from time to time. Contract will continue as long as he remains an employee as per the contract of employment

Except Mr. Ajay Oak being his relatives, none of the Directors and Key Managerial Personnel of the Company and their relatives is concerned or interested, financial or otherwise, in the resolution.

Item No. 8, 9 & 10 As per section 149(5) of the Companies Act 2013, read with Schedule IV of the Companies Act 2013 and Rules made there under the Independent Directors are not liable to retirement by rotation. Since the provisions of the Act have recently become applicable to the Company, the Company proposes to vary the terms of appointment of Mr. Vinod Rai, Mr. Rakesh Rewari and Ms. Ranjana Agarwal as Non-Executive Independent Directors w.e.f. 06.11.2015, 06.11.2015 and 20.01.2015 respectively. The Board also recommends to fix the tenure of 5 (five) consecutive years with effect from 27 July 2016 in accordance with the aforesaid provisions. The fixation of the tenure of the Independent Director is appropriate and in the best interest of the Company. A copy of the Letter of appointment of Independent Director, setting out terms and condition of their appointment, is available for inspection.

None of the Director, Key Managerial Persons and their relatives are deemed to be interested or concerned in the proposed resolution except Mr. Vinod Rai, Mr. Rakesh Rewari and Ms. Ranjana Agarwal, respectively.

Item No. 11

Pursuant to the existing Clause 56.9 of the Articles of Association of the Company, any appointment, engagement, removal, termination or increase in compensation of directors, chief executive officer,

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chief operating officer and other employees whose remuneration is in excess of INR 25,00,000/- (Twenty Five lacs) per annum is considered to be a reserved matter and requires specific approval of the shareholders. Keeping in view the growth of the Company and present size of the organization, it is proposed to raise the limit of INR 25,00,000/- to INR 50,00,000/- and therefore, the alteration in Articles is proposed accordingly.

The Board recommends the resolution set forth in Item 11 above for approval of the members by way of Special Resolution. None of the Directors / Key Managerial Personnel of the Company / their relatives are, in any way, concerned or interested, financially or otherwise, in the Special Resolution set out at Item No. 11 of the notice.

By Order of the Board


Sd/- (Neeta Kamra)

Company Secretary Membership No. : ACS 22892

Add: Shubham House, 425, Udyog Vihar, Phase IV, Gurgaon-1220015

Place: Gurgaon Date: 27.07.2016

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DIRECTORS’ REPORT The Members,

Shubham Housing Development Finance Company Limited D-305, Ground Floor, Sarvodaya Enclave,

New Delhi - 110017

Your Directors have pleasure in presenting Annual Report and Audited Statement of Accounts of the Company for the year ended on 31st March 2016.

1. FINANCIAL RESULT: (Figures in Rs. Crores)

Particulars Current Year Previous Year

Revenue from Operations 102.12 51.99

Other Income 4.63 4.85

Total Income 106.75 56.84

Profit before Depreciation 7.59 1.77

Less: Depreciation 0.80 0.73 Profit after depreciation 6.79 1.04

Provision for Tax including Deferred Tax 1.05 0.42

MAT credit entitlement 0.15 -0.42

Total Tax Expense 1.20 -

Profit after Tax 5.59 1.04

2. STATE OF COMPANY’S AFFAIRS: During the year under review, the Company has earned an income from operations of Rs. 102.12 crores as against Rs. 51.99 crores during the previous year. The Company has earned a net profit after taxes amounting of Rs. 5.59 crores during the year (Rs. 1.04 crores during the previous year).

3. MATERIAL CHANGES AND COMMITMENTS: No material change / commitment has occurred between the ends of financial year to which the financial statements relate till the date of this report, which have any adverse effect on the financial position of the Company.

4. TRANSFER TO RESERVES:

The Company has transferred an amount of Rs. 1.11 crores to special reserve in accordance with the NHB regulations in this regard, thereby reducing the tax impact.

5. DIVIDEND:

No dividend has been recommended by the Board of Directors for the year.

Page 15 of 89



6. DEPOSITS:

The Company has not accepted any deposit(s) under section 73 of the Companies Act, 2013 and Companies (Acceptance of Deposits) Rules, 2013.

7. DIRECTORS:

Mr. Sanjay Chaturvedi and Mr. Ajay Mukund Oak are the founder directors of the Company. The Company’s Board also has Mr. Sandeep Marian Farias, Mr. Ashit Ranjit Lilani, Mr. Rahul Chandra and Mr. Vishal Kumar Gupta as Nominee Directors for foreign investors on the Board of the Company. Ms. Ranjana Agarwal is an Independent Director on the Board of the Company.

Ms. Monica Brand Engel resigned from the directorship of the Company on July 31, 2015 and on the same day Mr. Ganesh Rengaswamy was appointed as Nominee Director on the Board of the Company.

Mr. Ganesh Rengaswamy resigned from the directorship on November 6, 2015.

Mr. Vinod Rai and Mr. Rakesh Rewari were appointed as Independent Directors on 6 th

November, 2015.

Ms. Neeta Kamra is the Company Secretary of the Company since 3rd September, 2012.

8. RE-APPOINTMENT:

As per the provisions of section 152(6) of the Companies Act, 2013, Mr. Sandeep Marian Farias and Mr. Rahul Chandra retire at the ensuring Annual General Meeting and being eligible, seek re-appointment. The Board recommends their re-appointment.

9. ANNUAL DECLARATION FROM INDEPENDENT DIRECTORS:

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

10. MEETING OF THE BOARD OF DIRECTORS:

Details of the Board Meetings held during the year are as follow:

S. No. Date of the Meetings Total No. of Directors as on Meeting

No. of Director Attended

1 28.04.2015 8 8

2 31.07.2015 8 6

3 06.11.2015 8 8 4 19.02.2016 9 9

Page 16 of 89



Details of Directors as on March 31, 2016 and their attendance at the Board during the financial year ended March 31, 2016 are given below:

Name of Director No. of Board Meetings held during the tenure of the director

No. of Board Meeting attended

Sanjay Chaturvedi 4 4

Ajay Oak 4 4

Sandeep Marian Farias 4 4

Ashit Ranjit Lilani 4 4 Rahul Chandra 4 3

Vishal Kumar Gupta 4 4

Vinod Rai *1 1 1

Rakesh Rewari *2 1 1

Ranjana Agarwal 4 4

Monica Brand Engel *3 2 1 Ganesh Rengaswamy *4 1 1

*1 Mr. Vinod Rai was appointed as Additional Director (Independent) on Nov. 6, 2015. *2 Mr. Rakesh Rewari was appointed as Additional Director (Independent) on Nov. 6, 2015. *3 Ms. Monica Brand resigned from the Directorship of the Company on July 31, 2015. *4 Mr. Ganesh Rengaswamy was appointed as Director on the Board on July 31, 2015 and resigned from the directorship on November 6, 2015.

11. COMMITTEES OF THE BOARD: Currently, the Board has the following seven committees:

1. Audit Committee,

2. Risk Management Committee,

3. Asset Liability Management Committee,

4. Recruitment Compensation and Nomination Committee,

5. Banking & Borrowing Committee,

6. Credit Committee and

7. Sexual Harassment Committee.

Audit Committee The role of the Audit Committee is in accordance with the provisions of Section 177 of the Act. The terms of reference for the Audit Committee include:

• Examination of Financial Statement and Statutory Auditors’ report thereon and discussion of any related issues with the Internal & Statutory Auditors and the management of the Company.

• Review of Financial Statement before their submission to the Board, including changes

in accounting policies and practices, statutory compliances and qualification in draft

Page 17 of 89


Annual Report 2015-16 audit report.

• Approval or any subsequent modification of transactions of the Company with related

parties.

• Evaluation of internal financial controls.

• Evaluation of risk management system.

• Monitoring end use of funds raised through public offers and related matters.

• Review of Company’s financial reporting processes and the disclosure of financial information to ensure that the Financial Statement is correct, sufficient and credible.

• Look into reasons for substantial defaults in payments to stakeholders.

• Approval of appointment of CFO or any other person heading Finance function after assessing the qualifications, experience, background etc. of the candidate.

• Recommendation for appointment, remuneration and terms of appointment of the

Statutory Auditors of the Company.

• Review and monitor the Auditor’s independence and performance, effectiveness of audit process and adequacy of internal control systems.

• Call for comments of the Statutory Auditors about internal control systems, the scope

of audit, including the observations of the Statutory Auditors.

• Reviewing the adequacy of the Internal Audit function including the structure of the Internal Audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of Internal Audit.

• Discussion with statutory auditors before the audit commences, about nature and scope of audit as well as post audit discussion to ascertain any area of concern.

• Reviewing findings of any internal investigation into matters where there is suspected fraud or irregularity or failure of internal control systems of a material nature and reporting the matter to the Board.

• Establish a vigil mechanism for directors and employees to report genuine concerns in such manner as may be prescribed

During the period under review, the Audit Committee met 4 times on 28/04/2015,

31/07/2015, 06/11/2015 and 19/02/2016.

Constitution of the Audit Committee and attendance details during the financial year ended March 31, 2016 are given below:

Name of the Director No. of Meetings held

No. of Meetings attended

Mr. Sanjay Chauturvedi *1 4 4

Mr. Rahul Chandra *2 4 3

Mr. Vishal Kumar Gupta 4 4

Ms. Ranjana Agarwal *3 0 0 Mr. Rakesh Rewari*4 0 0

Page 18 of 89



*1 Mr. Sanjay Chaturvedi ceased to be the member of the Audit

Committee w.e.f 19/02/2016.

*2

Mr. Rahul Chandra ceased to be the member of the Audit Committee w.e.f 19/02/2016. *3

Ms. Ranjana Agarwal was appointed as member of the Audit Committee w.e.f 19/02/2016.

*4

Mr. Rakesh Rewari was appointed as member of the Audit Committee w.e.f 19/02/2016.

Risk Management Committee

The terms of reference for the Risk Management Committee include:

• The purpose of the committee is to assist the Board in fulfillment of its Corporate

Governance with regards to the identification, evaluation and mitigation of various risks efficiently and effectively.

During the period under review, the Risk Management Committee met 2 times on 06/11/2015 and 19/02/2016.

Constitution of the Risk Management Committee and attendance details during the financial

year ended March 31, 2016 are given below:

Name of the Director/Member No. of Meetings No. of Meetings attended

Mr. Ajay Oak 2 2

Mr. Ashit Ranjit Lilani *1 1 1

Mr. Sandeep Marian Farias 2 2

Mr. Vinod Rai *2 0 0

Mr. Sanjay Chaturvedi *3 0 0

*1

Mr. Ashit Ranjit Lilani ceased to be a member of the Committee w.e.f 6th

November, 2015

*2 Mr. Vinod Rai appointed as member of the Committee on 19/02/2016.

*3 Mr. Sanjay Chaturvedi appointed as member of the Committee on 19/02/2016.

Recruitment, Compensation and Nomination Committee

The terms of reference for the Recruitment, Compensation and Nomination Committee

include: • To review and approve goals and objectives relevant to the compensation of the Chief

Executive Officer/ Chief Operations Officer.

• To evaluate the performance of the Chief Executive Officer/ Chief Operations Officer.

Page 19 of 89



• To recommend the compensation of the Chief Executive Officer/Chief Operation

Officer. • To recommend the compensation of employees having compensation above than the

threshold prescribed in Article of Association of the Company.

During the period under review, the Recruitment, Compensation and Nomination Committee met 2 times on 28/04/2015 and 06/11/2015.

Constitution of the Recruitment, Compensation and Nomination Committee and attendance details during the financial year ended March 31, 2016 are given below:


Mr. Sandeep Marian Farias 2 1 Mr. Ashit Ranjit Lilani 2 2

Mr. Sanjay Chaturvedi 2 2

Mr. Ajay Oak 2 2

Assets Liability Management Committee

The terms of reference for the Assets Liability Management Committee include:

• To assess of various types of risks and altering the asset-liability portfolio in a dynamic

way in order to manage risks.

During the period under review, the Assets Liability Management Committee met 4 times on

28/04/2015, 15/07/2015, 06/11/2015 and 19/02/2016.

Constitution of the Assets Liability Management Committee and attendance details during the financial year ended March 31, 2016 are given below:



Mr. Monica Brand Engel *1 2 1

Mr. Rahul Chandra *2 4 4

Mr. Ganesh Rengaswamy *3 2 2

Mr. Rakesh Rewari *4 0 0

Mr. Ajay Oak *4 0 0

*1 Ms. Monica Brand resigned from the directorship of the Company w.e.f 31 st July,

2015. *2

Mr. Rahul Chandra ceased to be the member of the Committee w.e.f 19th

February, 2016.

Page 20 of 89


Annual Report 2015-16 *3

Mr. Ganesh was appointed as director and member of the Committee w.e.f 31st

July, 2015. *4

Mr. Rakesh and Mr. Ajay were appointed as member of the Committee w.e.f 19th

February, 2016. Banking & Borrowing Committee

The terms of reference for the Banking & Borrowing Committee include:

• To provided operational assistance to the Company at the time of taking loans or

borrowings of any nature from bank/institution within the overall limits set by the board of directors and to do other banking operation activities.

During the period under review, the Banking & Borrowing Committee met 15 times on 01/05/2015, 02/06/2015, 17/06/2015, 30/06/2015, 31/07/2015, 21/08/2015, 26/08/2015, 16/09/2015, 28/10/2015, 16/11/2015, 25/01/2016, 23/02/2016, 22/03/2016, 28/03/2016 and 31/03/2016.

Constitution of the Banking & Borrowing Committee and attendance details during the

financial year ended March 31, 2016 are given below:

Name of the Director/Member No. of Meetings held during the tenure



Mr. Rahul Chandra 15 12

Mr. Vishal Kumar Gupta *1 9 4

Mr. Ajay Oak *2 4 4 *1

Mr. Vishal Kumar Gupta has ceased to be the member of the Committee w.e.f 6th

November, 2015. *2 Mr. Ajay Oak was appointed as member of the Committee w.e.f 19 th February,

2016.

Credit Committee The terms of reference for the Credit Committee include: • To provide establishment of policies and guidelines.

• To oversee management’s administration of the Company’s credit portfolio,

including management’s responses to trends in credit risk, credit concentration and

asset quality.

During the period under review, the Credit Committee met 4 times on 28/04/2015, 31/07/2015, 28/09/2015 and 19/02/2016.

Constitution of the Credit Committee and attendance details during the financial year ended March 31, 2016 are given below:

Page 21 of 89



Name of the Director/Member No. of Meetings held during the tenure


Mr. Ajay Oak 4 4

Mr. Sandeep Marian Farias 4 4

Ms. Monica Brand Engel *1 2 1 Mr. Ganesh Rengaswamy *2 2 1

Mr. Sanjay Chaturvedi *3 0 0

*1

Ms. Monica Brand has resigned from the directorship of the Company w.e.f 31st

July, 2015. *2

Mr. Ganesh has been appointed as director and member of the Committee w.e.f

31st July, 2015. *3 Mr. Sanjay Chaturvedi was appointed as member of the committee w.e.f 19th

February, 2016

Sexual Harassment Committee The Company has in place an Anti-Sexual Harassment policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Sexual Harassment Committee has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

The following is the summary of sexual harassment complaints received and disposed off

during each calendar year.

• No. of Complaints received: 1

• No. of Complaints disposed off: 1

During the period under review, the Sexual Harassment Committee met 2 time on 29th July,

2015 and 31st March 2016.

Constitution of the Sexual Harassment Committee and attendance details during the

financial year ended March 31, 2016 are given below:

Name of the Members No. of Meetings No. of Meetings attended


Mr. Ajay Oak 2 2

Ms. Manjari Jhingran 2 1

Ms. Neeta Kamra 2 2

Ms. Neetu Gujral 2 2

Ms. Latika Thukral*1 2 2

Page 22 of 89


Annual Report 2015-16 *1 Ms. Latika Thukral is an Independent NGO Member of the Committee.

12. DIRECTOR’S RESPONSIBILITY STATEMENT:

In compliance to the provisions of Section 134 (3)(c) of the Companies Act, 2013, your

Directors wish to place on record - (a) in the preparation of the annual accounts, the applicable accounting standards were followed along with proper explanation relating to material departures;

(b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;

(c) the Directors took proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the Directors have prepared the annual accounts on a going concern basis;

(e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

(f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

13. AUDITORS: Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014, M/s. B S R & Associates LLP, Chartered Accountants, the Statutory Auditors of the Company have been appointed for a term of 5 years. However, their appointment as Statutory Auditors of the Company shall be required to be ratified by the Members at the ensuing Annual General Meeting. The Company has received a confirmation from the said Auditors that they are not disqualified to act as the Auditors and are eligible to hold the office as Auditors of the Company.

Necessary resolution for ratification of appointment of the said Auditors is included in the

Notice of AGM for seeking approval of members.

14. SECRETARIAL AUDITORS:

The Board of Directors appointed Naveen Narang & Associates, Practicing Company Secretaries as Secretarial Auditor to conduct Secretarial Audit of the Company for Financial Year 2016-17 and their report is annexed to this Board report.

15. AUDITOR’S QUALIFICATION/RESERVATION /ADVERSE REMARK: There is no adverse qualification/ reservation/ remark in the Auditor’s Report. However for other notes Directors would like to state that notes are self-explanatory and there is no need to give any further explanation/ comments.

Page 23 of 89



16. SECTERIAL AUDITOR’S QUALIFICATION/RESERVATION /ADVERSE REMARK: There is no adverse qualification/ reservation/ remark in the Secretarial Auditor’s Report.

17. LOAN / GUARANTEE / INVESTMENTS:

The Company is a housing finance company registered with the National Housing Board and

therefore, the provisions of section 186 except section 186(1) are not applicable on it. 18. CONTRACTS / ARRANGEMENT WITH RELATED PARTIES:

The details of Contract and Arrangement under Section 188 of the Companies Act, 2013 in

prescribed Form AOC 2 have been annexed herewith and forms part of this report.

19. PARTICULARS OF REMUNERATION OF EMPLOYEES:

Disclosures pertaining to remuneration and other details under Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are not required to be given since none of the employee of the Company is in receipt of remuneration exceeding the limits prescribed therein.

20. ESOP

Disclosure required under Rule 12 of Companies (Share Capital and Debentures) Rules, 2014

is as follow:

Particulars Employee Stock Option Plan

Options Granted during the year 29,529

Options Vested during the year 0

Options Exercised during the year 0

Total number of shares arising out of exercise of options

0

Options lapsed during the year 0

Exercised Price 10

Variation of Terms of Options Nil

Money realized by exercise of options Nil

Total number of option in force 29,529 Employees wise Details of Options Granted

Key Managerial Person:

Any other employee receiving grant in any one year of option amounting to five percent or more of options granted during that year:

NIL

Employees who were granted option, during any one year, equal to or exceeding one percent of the issued capital (excluding outstanding warrants and conversions) of the company at the time of grant.

NIL

Page 24 of 89



21. CONSERVATION OF ENERGY, TECHNOLOGY & FOREIGN EXCHAANGE EARNING & OUTGO:

Information in accordance with the provision of Section 134 (3) (m) of the Companies Act, 2013, read with Rule 8 of Companies (Account) Rules 2014 regarding conservation of energy technology absorption and foreign exchange earnings and outgo is as under:

a. Conservation of Energy

Your Company is engaged in trading activity. As the Company has not undertaken manufacturing activity, the disclosure under the applicable rules is not required to be provided. However, your Company has generally taken all reasonable efforts to conserve energy.

b. Technology Absorption

The Company has not imported any technology and hence, the requirement of technology absorption is not applicable.

c. Foreign Exchange Earnings and Outgo

The Foreign Exchange earnings and outgo of the company is as follows:

(a) Foreign Exchange Earnings: Rs Nil (b) Foreign Exchange Outgo: Rs. Nil

22. COMPANY’S POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF

REMUNERATION AND DISCHARGE OF THEIR DUTIES:

The current policy is to have an appropriate mix of executive and non-executive and Independent Directors to maintain the independence of the Board, and separate its functions of governance and management. As on March 31, 2016, the Board consists of nine members, two of whom are executive and four are non-executive nominee directors and three are Independent Directors.

The Policy of the Company on directors’ appointment and remuneration, independence of a director and other matters, as required under sub-section (3) of the Section 178 of the Companies Act, 2013, is available on our website (http://:shubham.co). We affirm that the remuneration paid to the directors is as per the terms laid out in the Recruitment Compensation and Nomination Committee’s policy of the Company.

23. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES:

The Company does not have any Subsidiary, Joint Venture or Associate Companies.

24. RISK MANAGEMENT:

The Company has constituted a Risk Management Committee to identify and minimize the internal and external risks associated with the business of the Company.

Page 25 of 89



25. VIGIL MECHANISM:

The Company has constituted a Vigil Mechanism for employees and directors to report

concerns about unethical behavior, actual or suspected fraud or violation of the

Company’s Code of Conduct and ethics. The purpose of the mechanism to promote the highest ethical standards, the Company will maintain a workplace that facilities the reporting of potential violations of Company policies and applicable laws.

26. CORPORATE SOCIAL RESPONSIBILITY:

The provisions relating to Corporate Social Responsibility are not applicable on the Company and therefore no policy in this regard has been developed / implemented by the Company during the financial year.

27. INTERNAL FINANCIAL CONTROL: The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed.

28. EXTRACT OF ANNUAL RETURN:

The extract of Annual return in prescribed Form MGT 9 has been annexed herewith and

forms part of this report.

29. APPRECIATION:

Your Directors wish to place on record their deep sense of appreciation of the devoted

services rendered by the executives of the company and bank etc.

For and on behalf of the Board of


Sanjay Chaturvedi Ajay Mukund Oak Director Director DIN: 01636432 DIN: 01779000 D-305, Ground Floor, S-10A, Windsor Court, DLF Phase IV Sarvodaya Enclave, Gurgaon, Haryana New Delhi

Place: Gurgaon Date: 27.07.2016

Page 26 of 89



ANNEXURE I TO DIRECTORS’ REPORT SECRETARIAL AUDIT REPORT

For the financial year ended 31st March, 2016

To,

The Members, Shubham Housing Development Finance Company Limited

D-305, Ground Floor, Sarvodaya Enclave, New Delhi 110017 We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by Shubham Housing Development Finance Company Limited (hereinafter called the Company). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing my opinion thereon.

Based on our verification of the Company’s books, papers, minute books, forms and returns filed and other records maintained by the company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, We hereby report that in our opinion, the company has, during the audit period covering the financial year ended on 31st March, 2016 complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on 31st March 2016 according to the provisions of:

(i) The Companies Act, 2013 (the Act) and the rules made there under;

(ii) The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules made there under;

(iii) The Depositories Act, 1996 and the Regulations and Bye Laws framed thereunder;

(iv) Foreign Exchange Management Act, 1999 and the rules and regulations made there under to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings; and

(v) National Housing Bank Act, 1987

We have also examined compliance with the applicable clauses of the following:

(i) Secretarial Standards issued by The Institute of Company Secretaries of India.

During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. as mentioned above.

Page 27 of 89


Annual Report 2015-16 We further report that

The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act. Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

Majority decision is carried through while the dissenting members’ views are captured and recorded

as part of the minutes.

We further report that there are adequate systems and processes in the company commensurate with the size and operations of the company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

We further report that during the audit period the Company has:

(a) Issued 200 Non Convertible Debentures of Rs. 10,00,000.00 (Rupees Ten Lac) each aggreagting to Rs. 200,00,00,000.00 (Rupees Two Hundred Crores) in the meeting of Board

of Directors of the Company held on 28th day of March 2016;

(b) Passed special resolution under section 14 of the Companies Act, in the Extra Ordinary General Meeting held on March 28, 2016, for alteration of its Articles having the effect of conversion of private company into public company and consequently for change in name of the Company to Shubham Housing development Finance Company Limited. Therefore, pursuant to aforesaid provisions of the Companies Act 2013, the status of the Company was changed to Public Limited effective from 28th March 2016.

For Naveen Narang & Associates Company Secretaries

(Naveen Narang) Partner

Membership No. 6193, C.P. No. 6621 Place: Delhi

Date: 06.06.2016

(This report is to be read with our letter of even date, which is annexed as Annexure A and forms an integral part of this report.)

Page 28 of 89



‘Annexure A’

To, The Members,

Shubham Housing Development Finance Company Private Limited D-305, Ground Floor, Sarvodaya Enclave,

New Delhi 110017 Our report of even date is to be read along with this letter.

1. Maintenance of secretarial record is the responsibility of the management of the company.

Our responsibility is to express an opinion on these secretarial records based on our audit. 2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the Secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. We believe that the processes and practices, we followed provide a reasonable basis of our opinion.

3. We have not verified the correctness and appropriateness of financial records and Books of

accounts of the Company.

4. Wherever required, we have obtained the Management representation about the

compliance of laws, rules and regulations and happening of events etc.

5. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of management. Our examination was limited to the verification of procedures on test basis.

6. The Secretarial Audit report is neither an assurance as to the future viability of the company nor of the efficacy or effectiveness with which the management has conducted the affairs of the company.

For Naveen Narang & Associates

Company Secretaries

(Naveen Narang) Partner

Membership No. 6193, C.P. No. 6621 Place: Delhi

Date: 06.06.2016

Page 29 of 89



ANNEXURE II TO DIRECTORS’ REPORT FORM NO. AOC -2

(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies

(Accounts) Rules, 2014.

Form for Disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in sub section (1) of section 188 of the Companies Act, 2013 including certain arms length transaction under third proviso thereto.

1. Details of contracts or arrangements or transactions not at Arm’s length basis.

Sl. No. Particulars Details

a) Name (s) of the related party & nature of relationship NIL

b) Nature of contracts/arrangements/transaction NIL

c) Duration of the contracts/arrangements/transaction NIL

d) Salient terms of the contracts or arrangements or

transaction including the value, if any

NIL

e) Justification for entering into such contracts or

arrangements or transactions’

NIL

f) Date of approval by the Board

g) Amount paid as advances, if any NIL

h) Date on which the special resolution was passed in

General meeting as required under first proviso to

section 188

NIL

2. Details of contracts or arrangements or transactions at Arm’s length basis.

Sl. No. Particulars Details

a) Name (s) of the related party & nature of relationship Ms. Rupa Basu & Director’s

Wife

b) Nature of contracts/arrangements/transaction Employment Contract

c) Duration of the contracts/arrangements/transaction Continuing

d) Salient terms of the contracts or arrangements or Appointed as Chief Risk

Page 30 of 89



transaction including the value, if any Officer at an anuual salary

of Rs. 73,50,000/- plus

perquisites as per the policy

of the Company

e) Date of approval by the Board 06.11.2015

f) Amount paid as advances, if any NIL

For and on behalf of the Board of Shubham Housing Development Finance Company Limited

Sanjay Chaturvedi Ajay Mukund Oak Director Director DIN: 01636432 DIN: 01779000 D-305, Ground Floor, S-10A, Windsor Court, DLF Phase IV Sarvodaya Enclave, Gurgaon, Haryana New Delhi

Place: Gurgaon

Date: 08.08.2016

Page 31 of 89



ANNEXURE III TO DIRECTORS’ REPORT Form No. MGT-9

EXTRACT OF ANNUAL RETURNAS ON THE FINANCIA L YEAR ENDED ON 31. 03.2016

[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 U65921DL2010PLC199469

ii. Registration Date 23/02/2010

iii. Name of the Company Shubham Housing Development Finance

Company Limited

iv. Category / Sub-Category of the Company Public

v. Address of the Registered office and contact

details

D-305 Ground Floor, Sarvodaya Enclave,

New Delhi-110017

vi. Whether listed company No

vii. Name, Address and Contact details of Registrar

and Transfer Agent, if any

Skyline Financial Services Pvt. Ltd. D-153A,

1st Floor, Okhla Industrial Area, Phase-I, New

Delhi-110020

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

All the business activities contributing 10 % or more of the total turnover of the company shall be

stated:-

Sr.

No.

Name and Description of main

products / services

NIC Code of

the Product/

service

% to total turnover of the

company

1 Housing and Non- Housing Loan 64920 91.46%

Page 32 of 89



III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES

Sr.

No.

Name And Address Of

The Company

CIN/GLN Holding/

Subsidiary

/Associate

% of

shares

held

Applicable

Section

1. NA NA NA NA NA

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

i. Category-wise Share Holding

Category of

Shareholders

No. of Shares held at the

beginning of the year

No. of Shares held at the end of

the year

%

Change

during

the

year

Demat Physical Total % of

Total

Shares

Demat Physical Total % of

Total

Shares

A. Promoter

1) Indian

a) Individual/

HUF - 500000 500000 52.98

%

- 500000 500000 52.98

% -

b) Central Govt - - - - - - - - -

c) State Govt(s) - - - - - - - - -

d) Bodies Corp - - - - - - - - -

e) Banks / FI - - - - - - - - -

f) Any Other - - - - - - - - -

Sub-total(A)(1):-

- 500000 500000 52.98

%

- 500000 500000 52.98

%

-

2) Foreign

g) NRIs-

Individuals

- - - - - - - - -

h) Other-

Individuals

- - - - - - - - -

i) Bodies Corp. - - - - - - - - -

j) Banks / FI - - - - - - - - -

k) Any Other…. - - - - - - - - -

Sub-total (A)(2):-

- - - - - - - - -

B. Public

Shareholding

1. Institutions

a)Mutual Funds - - - - - - - - -

b) Banks / FI - - - - - - - - -

Page 33 of 89



c) Central Govt - - - - - - - - -

d) State Govt(s) - - - - - - - - -

e) Venture Capital

Funds

- - - - - - - - -

f) Insurance

Companies

- - - - - - - - -

g) FIIs - - - - - - - - -

h) Foreign

Venture

Capital Funds

- - - - - - - - -

i) Others (specify) - - - - - - - - -

Sub-total (B)(1)

- - - - - - - - -

2. Non

Institutions

a) Bodies Corp.

(i) Indian

(ii) Overseas

21377

38895

19

264348

21396

303243

2.27

32.13

21377

38895

19

264348

21396

303243

2.27

32.13

-

-

b) Individuals

(i) Individual

shareholders

holding nominal

share capital upto

Rs. 1 lakh

(ii) Individual

shareholders

holding nominal

share capital in

excess of Rs 1

lakh

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

c) Others(Shubha

m’s Trust)

0 119051 119051 12.62 0 119051 119051 12.62 -

Sub-total (B)(2) 60272 383418 443690 47.02 60272 383418 443690 47.02 -

Total Public

Shareholding

(B)=(B)(1)+

(B)(2)

60272

383418

443690

47.02

60272

383418

443690

47.02

-

C. Shares held by

Custodian for

GDRs & ADRs

- - - - - - - - -

Grand Total

(A+B+C)

60272 883418 943690 100 60272 883418 943690 100 -

Page 34 of 89


Annual Report 2015-16 ii.Shareholding of Promoters

Sr.

No

Shareholder’s

Name

Shareholding at the beginning of

the year

Shareholding at the end of the

year

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

shareholding

during the

year

1. Sanjay

Chaturvedi

250000 26.49% - 250000 26.49% - -

2. Ajay Oak 250000 26.49% - 250000 26.49% - -

Total 500000 52.98% - 500000 52.98% - -

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

There has been no change in the Promoters’ Shareholding during the year.

Sr.

no

Shareholding at the beginning

of the year

Cumulative Shareholding

during the year

No. of shares % of total

shares of the

company


shares of the

company

At the beginning of the year 500000 52.98% 500000 52.98%

Date wise Increase / Decrease

in Promoters Shareholding

during the year specifying the

reasons for increase

/ decrease (e.g. allotment /

transfer / bonus/ sweat equity

etc):

- - - -

At the End of the year 500000 52.98% 500000 52.98%

iv.Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of

GDRs and ADRs):

The list of top 10 equity shareholders of the company is as follows. There has been no change in their

shareholding during the year.

Sl. No. Name of Shareholder No. of Shares held % Shareholding

1 Shubham Employees Welfare 119407 12.65%

Page 35 of 89


Annual Report 2015-16 Trust

2 Helion Venture Partners II

LLC

93763 9.94%

3 Elever Equity Mauritius 93763 9.94%

4 IBEF- IIA 38899 4.12%

5 ACCION Africa Asian

Investment Company

38409 4.07%

6 Saama Capital II Ltd. 38409 4.07%

7 Motilal Oswal Securities

Limited

21381 2.27%

8 MOPE Investment Advisors 15 0.00%

9 Shubhmo Employee Trust 4 0.00%

v. Shareholding of Directors and Key Managerial Personnel:

Sl.

no


of the year


during the year

Sanjay Chaturvedi No. of shares % of total

shares of the

company


shares of the

company



in Shareholding during the

year specifying the reasons for

increase



etc):

- - - -


Sl.

no


of the year


during the year

Ajay Oak No. of shares % of total

shares of the

company


shares of the

company



in Shareholding during the year

specifying the reasons for

increase



etc):

- - - -


Page 36 of 89



V. INDEBTEDNESS

Indebtedness of the Company including interest outstanding/accrued but not due for payment

Secured Loans

excluding

deposits

Unsecured

Loans

Deposits Total

Indebtedness

Indebtedness at the beginning

of the financial year

i) Principal Amount

ii) Interest due but not paid

iii) Interest accrued but not

29,62,249,287/-

-

-

-

-

-

-

-

-

29,62,249,287/-

-

-

Total (i+ii+iii) 29,62,249,287/- - - 29,62,249,287/-

Change in Indebtedness

during the financial year

- Addition

- Reduction

14,32,346,970/-

-

30,00,00,000/-

-

-

-

17,32,346,970/-

Net Change 14,32,346,970/- 30,00,00,000/- - 17,32,346,970/-

Indebtedness at the

end of the financial year

i) Principal Amount

ii) Interest due but not paid

iii) Interest accrued but not

due

43,94,596,257/-

-

-

30,00,00,000/-

-

-

-

-

-

46,94,596,257/-

-

-

Total (i+ii+iii) 43,94,596,257/- 30,00,00,000/- - 46,94,596,257/-

Page 37 of 89



VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Remuneration to Managing Director, Whole-time Directors and/or Manager

Sl. No. Particulars of Remuneration Name of MD/WTD/

Manager

Total

Amount

1.

Gross salary

(a) Salary as per provisions contained in

section 17(1) of the Income-tax Act,

1961

(b) Value of perquisites u/s

17(2) Income-tax Act,

1961

(c) Profits in lieu of salary under section

17(3) Income- tax Act, 1961

Sanjay Chaturvedi

Rs. 60,29,414

-

-

Ajay Oak

Rs. 60,58,154

-

-

Rs.120,87,568

-

-

2. Stock Option - - -

3. Sweat Equity - - -

4. Commission

- as % of profit

- others, specify…

- - -

5. Others, please specify - - -

6. Total (A) 60,29,414 60,58,154 120,87,568

Ceiling as per the Act The Company being a private limited company till

28th March 2016, the ceiling under section 197 was

not applicable on it.

Page 38 of 89


Annual Report 2015-16 B. Remuneration to other directors:

Sl. No. Particulars of Remuneration Name of MD/WTD/ Manager

Total

Amount

Independent Directors

· Fee for attending board

committee meetings

· Commission

· Others, please specify

Ranjana

Agarwal

2,00,000

Vinod Rai

50,000

Rakesh Rewari

50,000

3,00,000

Total (1)

Other Non-Executive Directors

· Fee for attending board

committee meetings

· Commission

· Others, please specify

- - - -

Total (2) - - - -

Total (B)=(1+2) 2,00,000 50,000 50,000 3,00,000

Total Managerial Remuneration 123,87,568

Overall Ceiling as per the Act The Company being a private limited company till 28th March

2016, the ceiling under section 197 was not applicable on it.

C. Remuneration to Key Managerial Personnel Other Than MD /Manager /WTD

Sl.

no.

Particulars of

Remuneration

Key Managerial Personnel

CEO Company

Secretary

CFO Total

1.

Gross salary

(a) Salary as per

provisions contained in

section 17(1) of the

Income-tax Act, 1961

(b) Value of

perquisites u/s

17(2) Income-tax

Act, 1961

(c) Profits in lieu of salary

under section

Neeta Kamra

11,30,630

-

-

11,30,630

Page 39 of 89



17(3) Income-tax

Act, 1961

2. Stock Option -

3. Sweat Equity -

4. Commission

- as % of profit

- others, specify…

-

5. Others, please specify -

6. Total 11,30,630 11,30,630

VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:

Type Section of

the

companies

Act

Brief

description

Details of

Penalty/

Punishment/

Compounding

fees imposed

Authority[RD

/NCLT/Court]

Appeal

made. If

any(give

details)

A. Company

Penalty - - - - -

Punishment - - - - -

Compounding - - - - -

B. Directors

Penalty - - - - -



C. Other Officers In Default

Penalty - - - - -



For and on behalf of the Board of


Sanjay Chaturvedi Ajay Mukund Oak

Director Director

DIN: 01636432 DIN: 01779000

D-305, Ground Floor, S-10A, Windsor Court, DLF Phase IV

Sarvodaya Enclave, Gurgaon, Haryana

New Delhi

Place: Gurgaon

Date: 27/07/2016

Page 40 of 89



Independent Auditor’s Report

To the Members of Shubham Housing Development Finance Company Limited (formerly known as

Shubham Housing Development Finance Company Private Limited) Report on the Financial Statements

We have audited the accompanying financial statements of Shubham Housing Development Finance

Company Limited (formerly known as Shubham Housing Development Finance Company Private

Limited) (‘the Company’), which comprise the Balance Sheet as at 31 March 2016, the Statement of

Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of significant

accounting policies and other explanatory information (collectively referred to as ‘financial

statements’).

Management’s Responsibility for the Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the

Companies Act, 2013 (“the Act”) with respect to the preparation of these financial statements that

give a true and fair view of the financial position, financial performance and cash flows of the Company

in accordance with the accounting principles generally accepted in India, including the Accounting

Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules,

2014. This responsibility also includes maintenance of adequate accounting records in accordance

with the provisions of the Act for safeguarding the assets of the Company and for preventing and

detecting frauds and other irregularities; selection and application of appropriate accounting policies;

making judgments and estimates that are reasonable and prudent; and design, implementation and

maintenance of adequate internal financial controls, that were operating effectively for ensuring the

accuracy and completeness of the accounting records, relevant to the preparation and presentation

of the financial statements that give a true and fair view and are free from material misstatement,

whether due to fraud or error. Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and

matters which are required to be included in the audit report under the provisions of the Act and the

Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10)

of the Act. Those Standards require that we comply with ethical requirements and plan and perform

the audit to obtain reasonable assurance about whether the financial statements are free from

material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the

disclosures in the financial statements. The procedures selected depend on the auditor’s judgment,

including the assessment of the risks of material misstatement of the financial statements, whether

due to fraud or error. In making those risk assessments, the auditor considers internal financial control

relevant to the

Page 41 of 89



Company’s preparation of the financial statements that give a true and fair view in

order to design

audit procedures that are appropriate in the circumstances. An audit also includes evaluating the

appropriateness of the accounting policies used and the reasonableness of the accounting estimates

made by the Company’s Directors, as well as evaluating the overall presentation of the financial

statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis

for our audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the

aforesaid financial statements give the information required by the Act in the manner so required

and give a true and fair view in conformity with the accounting principles generally accepted in India,

of the state of affairs of the Company as at 31 March 2016, and its profit and its cash flows for the

year ended on that date.

Report on Other Legal and Regulatory Requirements

1 As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the

Central Government of India in terms of sub-section (11) of Section 143 of the Act, we enclose

in the ‘‘Annexure A’’ a statement on the matters specified in the paragraph 3 and 4 of the

said Order, to the extent applicable.

2 As required by Section 143 (3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the best

of our knowledge and belief were necessary for the purposes of our audit;

(b) In our opinion, proper books of account as required by law have been kept by the

Company so far as it appears from our examination of those books; (c) The Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt

with by this Report are in agreement with the books of account;

(d) In our opinion, the aforesaid financial statements comply with the Accounting

Standards specified under Section 133 of the Act, read with Rule 7 of the Companies

(Accounts) Rules, 2014;

(e) On the basis of the written representations received from the directors as at

31 March 2016 taken on record by the Board of Directors, none of the directors, is

disqualified as on 31 March 2016 from being appointed as a director in terms of Section

164 (2) of the Act; (f) With respect to the adequacy of the internal financial controls over financial reporting

of the Company and the operating effectiveness of such controls, refer to our separate

report in “Annexure B”; and

Page 42 of 89



(g) With respect to the other matters to be included in the Auditor’s Report in accordance

with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to

the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial

position in its financial position - Refer note 10 of the financial statements;

ii. The Company has made provision, as required under the applicable law or

accounting standards, for material foreseeable losses, if any, on long-term

contracts. The Company does not have any derivative contracts for which there

were any material foreseeable losses - Refer note 9 to the financial statements;

and

iii. There were no amounts which were required to be transferred to the Investor

Education and Protection Fund by the Company.

For B S R & Associates LLP

Chartered Accountants

Firm Registration No: 116231W /W-100024

Manish Gupta

Place: Gurgaon Partner

Date: 27 July 2016 Membership No.: 095037

Page 43 of 89


Annual Report 2015-16 Annexure A to the Independent Auditor’s Report

(Referred to in our report of even date) i. (a) According to the information and explanations given to us, the Company has maintained

proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) According to the information and explanations given to us, the Company has a regular programme of physical verification of its fixed assets by which all fixed assets are verified annually. In our opinion, the periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its fixed assets. As explained to us, no material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and on the basis of our examination of books of accounts, no immovable properties are owned by the Company. Hence, the provisions of paragraph 3(i) (c) of the Order is not applicable.

ii. The Company is a housing finance company, engaged in the business of providing loans.

Accordingly, it does not hold any physical inventories. Thus, paragraph 3(ii) of the Order is not applicable.

iii. According to information and explanations given to us, the Company has not granted any

loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Act. Accordingly, paragraph 3(iii) of the Order is not applicable.

iv. According to the information and explanations given to us and on the basis of our examination

of the records of the Company, the Company has not undertaken any transactions in respect of loans, guarantees and securities covered under section 185 of the Companies Act, 2013. The Company has not made any investment as referred in section 186(1) of the Act, other requirements relating to section 186 of the Act do not apply to the Company.

v. According to the information and explanations given to us, the Company has not accepted any deposits covered under of Section 73 to 76 of the Act.

vi. According to the information and explanations given to us, the Central Government has not

prescribed the maintenance of cost records under section 148(1) of the Act, for any of the business activities carried out by the Company.

vii. (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues of Provident Fund, Employees’ State Insurance, Income-tax, Service tax and other statutory dues have generally been regularly deposited with the appropriate authorities. As explained to us, the provisions of Sales-tax, Duty of Customs, Duty of Excise and Value added tax are not applicable to the Company.

Page 44 of 89



According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Employees’ State Insurance, Income-tax, Service tax and other statutory dues were in arrears as at 31 March 2016 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues in respect of Income-tax and Service tax which have not been deposited with the appropriate authorities on account of any dispute. As mentioned above, the Company did not have any dues on account of Sales-tax, Duty of Customs, Duty of Excise and Value added tax during the year.

viii. In our opinion and according to the information and explanations given to us, the Company

has not defaulted in repayment of dues to its bankers, financial institutions and debenture holders during the year. The Company did not have not outstanding dues to Government during the year.

ix. In our opinion and according to the information and explanations given to us, the term loans obtained and money raised through debt instruments during the year were applied for the purpose for which they were raised. Also, the Company did not raise any money by way of initial public offer or further public offer.

x. According to the information and explanations given to us, no fraud by the Company or on

the Company by its officers or employees has been noticed or reported during the course of

our audit.

xi. According to the information and explanations given to us, the managerial remuneration has

been paid/ provided in accordance with the provisions of section 197 read with Schedule V of the Act.

xii. According to the information and explanations given to us, the Company is not a Nidhi Company, hence paragraph 3(xii) of the Order is not applicable.

xiii. According to the information and explanations given to us, and on the basis of our

examination of the records of the Company, there are no transactions with the related parties which are not in compliance with Section 177 and 188 of the Companies Act, 2013 and the details have been disclosed in the financial statements, as required, by the applicable accounting standards.

xiv. According to the information and explanations given to us, the Company has not made any

preferential allotment or private placement of shares or fully or partly convertible debentures

during the year. xv. According to the information and explanations given to us and based on our examination of

the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.

Page 45 of 89


Annual Report 2015-16 xvi. The Company is not required to be registered under Section 45-1A of the Reserve Bank of

India Act, 1934, and accordingly, paragraph 3(xvi) of the Order is not applicable.

For B S R & Associates LLP Chartered Accountants

Firm Registration No.: 116231W /W-100024

Manish Gupta

Place: Gurgaon Partner Date: 27 July 2016 Membership No.: 095037

Page 46 of 89


Annual Report 2015-16 Annexure B to the Independent Auditor’s Report of even date on the financial statements of Shubham Housing Development Finance Company Limited (formerly known as Shubham Housing Development Finance Company Private Limited)

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

We have audited the internal financial controls over financial reporting of Shubham Housing

Development Finance Company Limited (formerly known as Shubham Housing Development Finance

Company Private Limited) (“the Company”) as of 31 March 2016 in conjunction with our audit of the

financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internal financial controls

based on the internal control over financial reporting criteria established by the Company considering

the essential components of internal control stated in the Guidance Note on Audit of Internal Financial

Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (‘ICAI’).

These responsibilities include the design, implementation and maintenance of adequate internal

financial controls that were operating effectively for ensuring the orderly and efficient conduct of its

business, including adherence to Company’s policies, the safeguarding of its assets, the prevention

and detection of frauds and errors, the accuracy and completeness of the accounting records, and the

timely preparation of reliable financial information, as required under the Act.

Auditor’s Responsibility

Our responsibility is to express an opinion on the Company's internal financial controls over financial

reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit

of Internal Financial Controls over Financial Reporting (the “Guidance Note”) and the Standards on

Auditing, issued by ICAI and deemed to be prescribed under Section 143(10) of the Act, to the extent

applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial

Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the

Guidance Note require that we comply with ethical requirements and plan and perform the audit to

obtain reasonable assurance about whether adequate internal financial controls over financial

reporting was established and maintained and if such controls operated effectively in all material

respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal

financial controls system over financial reporting and their operating effectiveness. Our audit of

internal financial controls over financial reporting included obtaining an understanding of internal

financial controls over financial reporting, assessing the risk that a material weakness exists, and

testing and evaluating the design and operating effectiveness of internal control based on the

assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment

of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis

for our audit opinion on the Company’s internal financial controls system over financial reporting.

Page 47 of 89



Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designed to provide

reasonable assurance regarding the reliability of financial reporting and the preparation of financial

statements for external purposes in accordance with generally accepted accounting principles. A

company's internal financial control over financial reporting includes those policies and procedures

that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect

the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that

transactions are recorded as necessary to permit preparation of financial statements in accordance

with generally accepted accounting principles, and that receipts and expenditures of the company are

being made only in accordance with authorisations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection of unauthorised

acquisition, use, or disposition of the company's assets that could have a material effect on the

financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the

possibility of collusion or improper management override of controls, material misstatements due to

error or fraud may occur and not be detected. Also, projections of any evaluation of the internal

financial controls over financial reporting to future periods are subject to the risk that the internal

financial control over financial reporting may become inadequate because of changes in conditions,

or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls

system over financial reporting and such internal financial controls over financial reporting were

operating effectively as at 31 March 2016, based on the internal control over financial reporting

criteria established by the Company considering the essential components of internal control stated

in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the

Institute of Chartered Accountants of India.


Chartered Accountants Firm Registration No.: 116231W/W-100024

Manish Gupta

Place: Gurgaon Partner Date: 27 July 2016 Membership No.: 095037

Page 48 of 89


Annual Report 2015-16 To the Board of Directors of

Shubham Housing Development Finance Company Limited (formerly known as Shubham Housing Development Finance Company Private Limited)

Dear Sirs,

Subject: Report under paragraph 33 of Chapter IV of the 'Housing Finance Companies (NHB) Directions, 2010' In addition to our audit report issued under Section 143 of the Companies Act, 2013 (“the Act”) on the financial statements of Shubham Housing Development Finance Company Limited (formerly known as Shubham Housing Development Finance Company Private Limited) (“the Company”) for the year ended 31 March 2016 and as required by The Housing Finance Companies (NHB) Directions, 2010 (“the Directions”), we report as under on the matters specified in paragraph 34 and 35 of the Directions. This report is based on such checks and procedures as we considered appropriate and as per the information and explanations made available to us by the management: 1 The Company was incorporated on 23 February 2010 and was registered as a non-deposit taking housing finance company with the National Housing Bank ('NHB') vide certificate of registration dated 24 January 2011. During the current year, the Company was converted into a public limited company dated 28 March 2016, and accordingly, a fresh certificate was issued by NHB vide certificate no. 06.136.16 dated 23 June 2016 (issued in lieu of earlier certificate no. 01.0090.11 dated 24 January 2011). 2 According to the information and explanations given to us, the requirements of Section 29B of the National Housing Bank Act, 1987 ('NHB Act') are not applicable to the Company since it has not accepted/ held any public deposits during the year ended 31 March 2016;

3 During the year ended 31 March 2016, the Company has apportioned Rs. 11,181,605 towards the

statutory reserve in accordance with Section 29C of the NHB Act;

4 According to the information and explanations given to us, the Company has complied with the provisions of the Directions, in all material respects, to the extent applicable to it;

5 In our opinion the capital adequacy ratio as disclosed in the return submitted to the National Housing Bank as at 31 March 2016 was correctly determined in all material aspects based on the unaudited results of the Company. Further, such ratio is in compliance with the minimum capital to risk weighted asset ratio as prescribed by the National Housing Bank in the Directions.

6 According to the information and explanations given to us, the Company has not accepted any

public deposits during the current year and does not have any outstanding public deposit as on 31 March 2016. The Board of Directors passed a resolution on 28 April 2015 for non-acceptance of public deposits.

7 The Company has complied with the prudential norms, prescribed in the directions, in all material

respects, to the extent applicable to it.

Page 49 of 89


Annual Report 2015-16 This report has been prepared by B S R & Associates LLP as required under paragraph 33 of Chapter IV of the Housing Finance Companies (NHB) Directions 2010 in respect of Housing Finance Companies. This report is not intended for general circulation or publication and is not to be duplicated for any purpose without our prior written consent.


Chartered Accountants Firm registration no.: 116231W /W-100024

Manish Gupta Place: Gurgaon Partner Date: 27 July 2016 Membership No.: 095037

Page 50 of 89


(formerly known as Shubham Housing Development Finance Company Private Limited)

Balance Sheet as at 31 March 2016

(All amounts are in Indian Rupees)

Note As at As at

31 March 2016 31 March 2015

EQUITY AND LIABILITIES

Shareholders' funds

Share capital 2.1 342,93,300 342,93,300

Reserves and surplus 2.2 17566,72,643 16861,37,380

17909,65,943 17204,30,680

Non-current liabilities

Long-term borrowings 2.3 36096,83,766 23206,96,628

Long-term provisions 2.4 595,07,275 427,55,733

36691,91,041 23634,52,361

Current liabilities

Short-term borrowings 2.5 1000,00,000 1000,00,000

Trade payable 2.6

Total outstanding due of micro and small enterprises 1,29,667 -

Total outstanding due of creditors other than micro and small enterprises 221,29,561 124,17,357

Other current liabilities 2.7 13244,15,471 8672,67,651

Short-term provisions 2.4 94,04,943 53,30,002

14560,79,642 9850,15,010

TOTAL 69162,36,626 50688,98,051

ASSETS

Non-current assets

Fixed assets

Tangible fixed assets 2.8 183,69,689 148,92,385

Intangible fixed assets 2.8 1,75,103 1,01,730

Capital work-in-progress 125,88,248 -

Non-current investments 2.9 - 5,00,000

Deferred tax asset (net) 2.10 93,64,980 -

Long-term loans and advances 2.11 56231,25,557 37390,78,234

Other non-current assets 2.12 633,83,907 506,49,921

57270,07,484 38052,22,270

Current assets

Current investments 2.13 5,00,000 -

Trade receivables 2.14 264,78,356 89,47,178

Cash and bank balances 2.15 5984,02,427 9257,94,298

Short-term loans and advances 2.16 4422,45,413 2638,48,076

Other current assets 2.17 1216,02,946 650,86,229

11892,29,142 12636,75,781

TOTAL 69162,36,626 50688,98,051

Significant accounting policies 1

Notes to the financial statements 2 to 13

The notes referred to above form an integral part of the financial statements

As per our report of even date attached

For B S R & Associates LLP For and on behalf of the Board of Directors of

Chartered Accountants Shubham Housing Development Finance Company

Firm registration number: 116231W /W-100024 Limited (formerly known as Shubham Housing

Development Finance Company Private Limited)

Manish Gupta Ajay Mukund Oak Sanjay Chaturvedi

Partner Director Director

Membership number: 095037 DIN No.: 01779000 DIN No.: 01636432

Neeta Kamra Shashank Jain

Company Secretary Chief Financial Officer

Place: Gurgaon Place: Gurgaon

Date: 27 July 2016 Date: 27 July 2016

Page 51 of 89



Statement of Profit and Loss for the year ended 31 March 2016


Note For the year ended For the year ended

31 March 2016 31 March 2015

Revenue

Revenue from operations 2.18 10211,61,641 5199,45,315

Other income 2.19 463,42,644 485,07,855

Total revenue 10675,04,285 5684,53,170

Expenses

Employee benefits 2.20 3072,17,231 1784,82,164

Finance costs 2.21 4736,45,790 2359,25,206

Depreciation and amortization expense 2.8 79,64,946 72,70,207

Other expenses 2.22 2107,52,096 1363,77,404

Total expenses 9995,80,063 5580,54,981

Profit before tax 679,24,222 103,98,189

Tax expense

Current tax 212,97,641 -

Current tax: Minimum alternative tax (MAT) - 41,89,590

Income tax charge (for earlier years) 83,535 -

MAT credit entitlement - -41,89,590

Deferred tax credit -93,64,980 -

Profit after tax 559,08,026 103,98,189

Earning per share (face value of Rs. 10 each)

Basic earnings per share 67.80 13.79

Diluted earnings per share 16.30 3.56

Significant accounting policies 1

Notes to the financial statements 2 to 13

The notes referred to above form an integral part of the financial statements



Chartered Accountants Shubham Housing Development Finance Company

Firm registration number: 116231W /W-100024 Limited (formerly known as Shubham Housing

Development Finance Company Private Limited)



Membership Number: 095037 DIN No.: 01779000 DIN No.: 01636432





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Cash Flow Statement for the year ended 31 March 2016


For the year ended For the year ended

31 March 2016 31 March 2015

Cash flow from Operating activities

Profit before tax 679,24,222 103,98,189

Adjustments for:

Depreciation and amortization expense 79,64,946 72,70,207

Housing Loans:

Contingent provision against standard assets 33,18,691 70,80,699

Provision for non-performing assets 168,43,988 246,07,286

Non Housing Loans:



Interest on fixed deposits (131,08,875) (111,68,104)

Profit on redemption of mutual funds (net) (314,60,865) (90,10,160)

Dividend income - (261,66,770)

Finance cost -

Capital work-in-progress written off - 20,000

Provision for loss on stock of acquired property 20,06,093 3,99,266

Employee stock option compensation expense -

Loss on sale of fixed assets 44,596 14,366

Loan assets written-off 336,00,755 -

Employee stock option compensation expense 146,27,237 -

Discount on Commercial Papers 60,53,538 -

Operating profit before working capital changes 1143,06,901 80,64,059

Adjustments for :

(Increase)/decrease in long term loans and advances (19270,95,210) (22867,93,207)

(Increase)/decrease in other non-current assets (157,33,986) (184,67,768)

(Increase)/decrease in short-term loans and advances (1793,80,912) (1658,87,471)

(Increase)/decrease in other current assets (526,69,126) (343,02,393)

(Increase)/decrease in trade receivables (175,31,178) (49,44,856)

Increase/(decrease) in trade payables 98,41,871 57,69,891

Increase/(decrease) in current liabilities 70,12,647 2506,96,432

Increase/(decrease) in long-term and short-term provisions 32,21,099 21,19,911

Cash used in operations (20580,27,894) (22437,45,402)

Income taxes paid (net of tax refund amounting to Rs. 856,693 (previous year Rs. Nil) (188,29,575) (46,84,288)

Net cash used in operating activities (A) (20768,57,469) (22484,29,690)

Cash flow from Investing activities

Purchase of mutual funds (28195,00,006) (14753,55,280)

Sale of mutual funds 28509,60,871 15843,65,440

Dividend income - 261,66,770

Purchase of fixed assets and increase in capital work-in-progress (net of payable for capital goods) (185,52,291) (134,99,506)

Sale of fixed assets 8,400 17,221

(Increase)/ decrease in fixed deposit with a maturity more than 90 days (29,38,033) (326,58,169)

Interest received on fixed deposits 126,78,153 97,38,570

Net cash used in investing activities (B) 226,57,094 987,75,046

Cash flow from Financing activities

Proceeds from borrowings 25110,23,500 21100,00,000

Repayment of borrowings (7901,53,029) (3847,85,369)

Proceeds from issue of shares (including securities premium(net) {current year Rs. Nil (previous - 12053,84,677

year amounting to Rs. 1,190,932,927)}

Net cash generated from financing activities (C) 17208,70,471 29305,99,308

Net increase/ (decrease) in cash and cash equivalents (A+B+C) (3333,29,904) 7809,44,664

Cash and cash equivalents as at the beginning of the year 8498,95,048 689,50,384

Cash and cash equivalents as at the end of the year 5165,65,144 8498,95,048

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Cash Flow Statement for the year ended 31 March 2016



31 March 2016 31 March 2015

Notes:

Cash and bank balance include

Cash in hand 93,68,654 21,99,131

Cheques in hand 68,74,301 97,29,904

Balances with bank

- on current accounts 1503,22,189 3729,66,013

- on deposit accounts (with original maturity of 3 months or less) 3500,00,000 4650,00,000

Cash and cash equivalents at the end of the year 5165,65,144 8498,95,048

Other bank balance

Fixed deposits (with remaining maturity within 12 months from the reporting date) 818,37,283 758,99,250

Other non-current assets

Fixed deposits (due to mature after 12 months from the reporting date) 200,00,000 230,00,000

Cash and bank balance 6184,02,427 9487,94,298

Notes:

a) The cash flow statement has been prepared in accordance with the 'Indirect Method' as set out in the Accounting Standard (AS)-3 on 'Cash Flow Statement', specified

under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014.

b) Cash and cash equivalents consists of cash in hand and balances with scheduled banks. (Refer note 2.15)

c) Negative figures have been shown in brackets.



Chartered Accountants Shubham Housing Development Finance Company Limited

Firm registration number: 116231W /W-100024 (formerly known as Shubham Housing Development Finance

Company Private Limited)



Membership Number: 095037 DIN No.: 01779000 DIN No.: 01636432





Page 54 of 89



Significant Accounting Policies and Notes forming part of Financial Statements 1A. Background

Shubham Housing Development Finance Company Limited (formerly known as Shubham housing Development Finance Company Private Limited) (the ‘Company’) was incorporated in India on 23 February 2010 as a private limited company under the Companies Act 1956. The Company is registered with the National Housing Bank (NHB) as a Housing Finance Company vide Certificate No. 06.136.16 dated 23 June 2016 (issued in lieu of earlier Certificate No.

01.0090.11 dated 24 January 2011). The Company is in the business of providing housing and

non-housing loans.

During the current year, the Company was converted into a public limited company pursuant to approval of the Shareholders in an extra-ordinary general meeting held on 28 March 2016 and consequently the name of the Company was changed to Shubham Housing Development Finance Company Limited and a fresh certificate of incorporation consequent upon conversion to Public Limited Company was issued by the Registrar of Companies on 24 May 2016. The corporate identification number of the Company is: U65921DL2010ELC199469.

1B. Significant accounting policies

a) Basis of preparation and presentation of financial statements The financial statements have been prepared and presented under the historical cost convention on the accrual basis of accounting, in accordance with the Indian Generally Accepted Accounting Principles (GAAP), Accounting Standards specified under Section 133 of the Companies Act, 2013 (‘the Act’), read with Rule 7 of the Companies (Accounts) Rules, 2014 and the provisions of the Companies Act, 2013, as adopted consistently by the Company. The Company complies with the prudential norms relating to income recognition, accounting standards, asset classification and the minimum provisioning for standard assets, substandard assets, doubtful assets and loss assets, specified in the directions issued by the NHB in terms of The Housing Finance Companies (NHB) Directions, 2010, as applicable to it.

b) Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Actual results could differ from these estimates. Any changes in estimates are adjusted prospectively.

c) Current/ Non-current classification

All assets and liabilities are classified into current and non-current. Assets

An asset is classified as current when it satisfies any of the following criteria:

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a. it is expected to be realised in, or is intended for sale or consumption in, the

company’s normal operating cycle; b. it is held primarily for the purpose of being traded; c. it is expected to be realised within 12 months after the reporting date; or d. it is cash or cash equivalent unless it is restricted from being exchanged or used to

settle a liability for at least 12 months after the reporting date.

Current assets include the current portion of non-current financial assets. All other assets are

classified as non-current. Liabilities

A liability is classified as current when it satisfies any of the following criteria:

a. it is expected to be settled in the company’s normal operating cycle; b. it is held primarily for the purpose of being traded; c. it is due to be settled within 12 months after the reporting date; or d. the company does not have an unconditional right to defer settlement of the liability

for at least 12 months after the reporting date.

Current liabilities include current portion of non-current financial liabilities. All other liabilities are classified as non-current.

Operating cycle Operating cycle is the time between the acquisition of assets for processing and their

realisation in cash or cash equivalents. d) Revenue recognition

The Company follows the Housing Finance Companies (NHB) Directions, 2010 issued by the NHB and Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 for income recognition. Reversal of income on non-performing assets necessitated by these guidelines, are netted-off from the income from operations.

Interest is accounted on accrual basis except for non-performing assets in respect of which income is recognised on receipt. No income is accrued on accounts delinquent for more than 90 days. Payment received on delinquent accounts is applied first towards principal and then towards interest and other charges.

Income from loan transactions

i. Interest income on loans disbursed is accounted for by applying the Internal Rate of

Return (IRR), implicit in the agreement, on the diminishing balance of the financed amount, over the period of the agreement so as to provide a constant periodic rate of return on the net amount outstanding on the contracts.

Processing fee and other charges

i. Loan processing fees is recognized on upfront basis.

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ii. Other charges (penal interest, cheque bouncing charges etc.) are recognised on receipt

basis. Interest income on fixed deposits

i. Interest on fixed deposits is recognized on a time proportion basis taking into account

the amount outstanding and the rate applicable on the fixed deposit.

Other income i. Income on account of excess interest spread arising from securitisation and income from

assignment transaction is recognised on accrual basis, net of any related losses.

ii. Profit or loss on sale of investments is determined based on the weighted average cost of the investment sold.

iii. Dividend income is recognised when the right to receive payment is established.

e) Provision for standard and non-performing assets

Provision for standard assets and non-performing assets are created in accordance with prudential norms and guidelines issued by NHB. Also, specific provisions in respect of standard assets and non-performing assets are created based on the management’s best estimates, which are determined having regard to overall loan portfolio quality, asset growth, economic conditions and other risk factors.

In accordance with Para 29 of The Housing Finance Company (NHB) Directions, 2010, the Company has separately shown provision for loans under short-term/ long-term provisions (as applicable) without netting off from loans.

During the current year and previous year, the Company has followed the following policy for identification and provisioning in respect of standard assets and provision for non-performing assets:

Asset classification

Criteria Rate of provision for the year ended 31 March 2016 (% of total loan outstanding) ##

Standard assets Standard assets An asset, in respect of which, no default in repayment of

principal or payment of interest is perceived. 0.4

Non-performing assets (NPA) - An asset, in respect of which, principal/interest has remained overdue for a period of more than 90 days.

Sub-standard assets

NPA for less than or equal to 12 months 15

Doubtful assets # NPA for more than 12 months

Doubtful for up to 1 year * 25

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Doubtful for more than 1 year but less than or equal to 3

years ** 40

Doubtful for more than 3 years 100

Loss assets As identified Written off from books

If the assets are permitted to remain in the books for any reason

100

Asset classification

Criteria Rate of provision for the year ended 31 March 2015 (% of total loan outstanding)###

Standard assets

Standard assets An asset, in respect of which, no default in repayment of principal or payment of interest is perceived.

0.4

Non-performing assets (NPA) - An asset, in respect of which, interest has remained overdue for a period of more than 90 days.

Sub-standard assets

NPA for less than or equal to 360 days 15

Doubtful assets # NPA for more than 360 days but less than or equal to 720 days

40

NPA for more than 720 days 100

Loss assets As identified Written off from books

# In respect of doubtful assets, an additional 100% provision is recorded to the extent to which the loan is not covered by the realisable value of the security to which the Company has a valid recourse.

During the current year, the Company has changed the policy of assets classification and provisioning to comply with the classification and provisioning guidance as per Master circular - The Housing Finance Company (NHB) Directions, 2010. Also, the Company has taken additional provision for doubtful assets on the basis of Company’s estimates made in the current/ earlier years as detailed below:

* Doubtful up to 1 year: additional provision of 15% (i.e. total 40% of outstanding asset in such asset class)

** Doubtful for more than 1 year but less than or equal to 3 years: additional provision of 60% (i.e. total 100% of outstanding asset in such asset class)

##The change in estimate is a result of management evaluation/ expectations of future performance of the portfolio, measures taken by the Company and the actual performance of the related portfolio. Had the Company continued to apply the earlier provisioning percentages, considering the net impact of above changes, the profit would have been lower by Rs. 1,348,728.

### During the previous year, the Company had changed the percentages of provisioning to be applied for doubtful assets (NPA for more than 360 days but less than or equal to 720 days)

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from 50% to 40%. Had the Company continued to apply the earlier provisioning percentages as in the year ended 31 March 2014, profit would have been lower by Rs. 1,183,541 in the year ended 31 March 2015.

f) Expenditure

Interest expense

Interest on borrowings is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable on the borrowing.

Processing fees on borrowings

The Company pays processing fees and arranger fees to obtain borrowings from Banks and other companies. Fee so incurred is recognised as expense over the tenor. The unamortised balance is disclosed as part of other current/ non-current assets.

g) Securitised/Assigned assets

Securitised/Assigned assets are derecognised in the books of the Company based on the principle of transfer of ownership interest over the assets. De-recognition of such assets and recognition of gain or loss arising on such securitisation is based on the Guidance Note on Accounting for Securitisation issued by the Institute of Chartered Accountants of India.

h) Tangible fixed assets

Tangible fixed assets are stated at cost of acquisition less accumulated depreciation. The cost of an item of tangible fixed assets comprises its purchase price, including import duties and other non-refundable taxes or levies and any directly attributable cost of bringing the asset to its working condition for its intended use.

i) Depreciation

With effect from 1 April 2014, tangible fixed assets are depreciated on written down value method basis useful life specified in Part ‘C’ of Schedule II to the Act, except for Computer and data processing unit, where the management’s estimate of the useful life of such fixed asset is higher than the life arrived at on the basis of Schedule II of the Act.

Accordingly, based on the internal technical evaluation conducted during the previous year, the Company had depreciated computers and data processing units over a period of 5 years. The management believes that the said useful lives best represent the period over which management expects to use these assets.

As consequence of revision in the useful life of the assets in the previous year, depreciation

charge during the previous year was higher by Rs. 1,670,605. Depreciation on additions is being provided on pro rata basis from the date of such additions. Similarly, depreciation on assets sold / disposed off during the year is being provided up to the dates on which such assets are sold / disposed off. Modification or extension to an existing asset, which is of capital nature and which becomes an integral part thereof is depreciated prospectively over the remaining useful life of that asset.

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j) Impairment

Management periodically assesses, using external and internal sources, whether there is an indication that an asset may be impaired. Impairment occurs where the carrying value exceeds the present value of the future cash flows expected to arise from the continuing use of the asset and its eventual disposal. The impairment loss to be expensed is determined as the excess of the carrying amount over the higher of the assets net selling price and present value as determined above. An impairment loss is reversed if there has been a change in the estimate used to determine the recoverable amount. An impairment loss is recorded only to the extent that assets carrying cost does not exceed the carrying amount that would have been determined net of depreciation and amortisation, if no impairment loss has been recognised.

k) Earnings per share

The basic earnings per share is computed by dividing the net profit attributable to equity shareholders for the year by the weighted average number of equity shares outstanding during the year. Dilutive earnings per share is computed and disclosed after adjusting the effects of all dilutive potential equity shares, if any, except when the results will be anti-dilutive.

l) Leases Assets acquired under leases other than finance leases are classified as operating leases. The total lease rentals (including scheduled rental increases) in respect of an asset taken on operating lease are charged to the Statement of Profit and Loss on a straight line basis over the lease term.

m) Income taxes

Income-tax expense comprises current tax (i.e. amount of tax for the year determined in accordance with the income-tax laws) and deferred tax charge or credit (reflecting the tax effect of timing differences between accounting income and taxable income for the year). Current tax is measured at the amount expected to be paid to (recovered from) the taxation authorities, using the applicable tax rates and tax laws. Deferred tax is recognised in respect of timing differences between taxable income and accounting income i.e. differences that originate in one period and are capable of reversal in one or more subsequent periods. The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognised using the tax rates and tax laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets are recognised only to the extent there is reasonable certainty that the assets can be realised in future; however, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognised only if there is a virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be realised. Deferred tax assets are reviewed as at each balance sheet date and written down or written-up to reflect the amount that is reasonably/virtually certain (as the case may be) to be realised.

In accordance with the provisions of Section 115JAA of the Income-tax Act, 1961, the Company is allowed to avail credit equal to the excess of Minimum Alternate Tax (MAT) over normal income tax for the assessment year for which MAT is paid. MAT credit so determined can be carried forward for set-off for ten succeeding assessment years from the year in which such

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credit becomes allowable. MAT credit can be set-off only in the year in which the Company is liable to pay tax as per the normal provisions of the Income-tax Act, 1961 and such tax is in excess of MAT for that year. Accordingly, MAT credit entitlement is recognised only to the extent there is convincing evidence that the Company will pay normal tax during the specified period.

n) Transactions in foreign exchange

Foreign currency transactions are accounted for at the exchange rate prevailing on the date of the transaction. Exchange differences arising due to the differences in the exchange rate between the transaction date and the date of settlement of any monetary items is recognised in the Statement of Profit and Loss.

Monetary assets and monetary liabilities denominated in foreign currency are translated at the exchange rate prevalent at the date of the Balance Sheet and resultant gain/ loss, if any, is recorded as an income or any expense in the period in which they arise.

o) Investments

Investments that are readily realisable and intended to be held for not more than a year from the date of acquisition are classified as current investments. All other investments are classified as long-term investments. However, that part of long-term investments which is expected to be realised within 12 months after the reporting date is also presented under ‘current assets’ as “current portion of long-term investments” in consonance with the current/ non-current classification scheme of Schedule III of the Companies Act, 2013.

Current investments are carried at the lower of cost and fair value. The comparison of cost and fair value is done separately in respect of each category of investments i.e., equity shares, mutual funds, preference shares, convertible debentures etc. Long-term investments (including current portion thereof) are carried at cost less any other-than-temporary diminution in value, determined separately for each individual investment.

p) Employee benefits

The Company’s obligation towards various employee benefits has been recognised as follows:

Short-term employee benefits All employee benefits payable/ available within twelve months of rendering the service are classified as short-term employee benefits. Benefits such as salaries, wages and bonus etc., are recognised in the Statement of Profit and Loss in the period in which the employee renders the related service.

Post-employment benefits

Defined contribution plans

A defined contribution plan is a post-employment benefit plan under which an entity pays specified contributions to a separate entity and has no obligation to pay any further amounts. The Company makes specified monthly contributions towards employee provident fund to Government administered provident fund scheme which is a defined contribution plan. The

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Company’s contribution is recognised as an expense in the Statement of Profit

and Loss during the period in which the employee renders the related service.

Defined benefit plans The Company’s gratuity scheme is a defined benefit plan. The present value of the obligation under such defined benefit plan is determined based on actuarial valuation carried by an independent actuary at the year-end using the Projected Unit Credit Method at the Balance Sheet date, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation is measured at the present value of the estimated future cash flows. The Company has taken a policy from Birla Sun Life Insurance Company Limited to cover its liabilities towards employees’ gratuity. Net unfunded / funded obligation is disclosed in the Balance Sheet as the case may be.

Compensated absences The employees can carry-forward a portion of the unutilised accrued compensated absences and utilise it in future service periods or receive cash compensation on termination of employment. Since the compensated absences do not fall due wholly within twelve months after the end of the period in which the employees render the related service and are also not expected to be utilised wholly within twelve months after the end of such period, the benefit is classified as a long-term employee benefit. The Company records an obligation for such compensated absences in the period in which the employee renders the services that increase this entitlement. The obligation is measured on the basis of independent actuarial valuation using the Projected Unit Credit Method. The obligation is measured at the present value of estimated future cash flows. The discount rates used for determining the present value of obligation under defined benefit plans, is based on the market yields on Government securities as at the Balance Sheet date, having maturity periods approximating to the terms of related obligations.

Treatment of actuarial gains and losses Actuarial gains and losses are recognised immediately in the Statement of Profit and loss. Gains or losses on the curtailment or settlement of any defined plan are recognised when the curtailment or settlement occurs.

q) Share-based payments

The Company accounts for equity settled stock options as per the accounting treatment prescribed by guidance note issued by The Institute of Chartered Accountants of India. The Employee Stock Option Scheme (‘the Scheme’) provides for the grant of options to acquire equity shares of the Company to its employees. The options granted to employees vest in a graded manner and these may be exercised by the employees within a specified period. The Company follows the fair value method to account for its stock-based employee compensation plan. Compensation cost is measured by the excess, if any, of the fair value of the underlying stock over the exercise price as determined under the option plan. The fair value is considered

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on the basis of valuation report. Compensation cost, if any, is amortised

over the vesting

period.

r) Provisions

A provision is recognised if, as a result of a past event, the Company has a present obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are recognised at the best estimate of the expenditure required to settle the present obligation at the Balance Sheet date. The provisions are measured on an undiscounted basis.

s) Contingent liabilities and contingent assets

A contingent liability exists when there is a possible but not probable obligation, or a present obligation that may, but probably will not, require an outflow of resources, or a present obligation whose amount cannot be estimated reliably. Contingent liabilities do not warrant provisions, but are disclosed unless the possibility of outflow of resources is remote.

Contingent assets are neither recognised nor disclosed in the financial statements. However, contingent assets are assessed continually and if it is virtually certain that an inflow of economic benefits will arise, the asset and related income are recognised in the period in which the change occurs.

t) Cash and cash equivalents Cash and cash equivalents comprises of cash balance with bank and highly liquid investments with maturity period of three months or less from the date of investment.

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Notes to financial statements for the year ended 31 March 2016


As at 31 March 2016 As at 31 March 2015

Number of shares Amount Number of shares Amount

2.1 Share capital

Authorised

Equity shares of Rs. 10 each 20,00,000 200,00,000 20,00,000 200,00,000

Preference shares of Rs. 10 each 40,00,000 400,00,000 40,00,000 400,00,000

60,00,000 600,00,000 60,00,000 600,00,000

Issued, subscribed and fully paid up

Equity shares of Rs. 10 each 9,43,690 94,36,900 9,43,690 94,36,900

Compulsorily convertible preference shares of Rs. 10 each-Series A 5,71,328 57,13,280 5,71,328 57,13,280

Compulsorily convertible preference shares of Rs. 10 each-Series B 5,29,424 52,94,240 5,29,424 52,94,240

Compulsorily convertible preference shares of Rs. 10 each-Series C 13,84,888 138,48,880 13,84,888 138,48,880

34,29,330 342,93,300 34,29,330 342,93,300

(a) (i) Reconciliation of equity shares outstanding at the beginning and at the end of the reporting period



Outstanding at the beginning of the year 9,43,690 94,36,900 6,19,187 61,91,870

Add: Shares issued on conversion of compulsorily convertible preference - - 2,64,216 26,42,160

shares during the year

Add: Share issued during the year - - 60,287 6,02,870

Outstanding at the end of the year 9,43,690 94,36,900 9,43,690 94,36,900

(ii) Rights, preference and restrictions attached to equity shares

The Company has only one class of equity shares having the par value of each share is Rs.10. Each shareholder shall have voting right equal to shareholding percentage of the

total of the shares issued including compulsorily convertible preference shares on an as if converted basis. The dividend proposed by the Board of Directors is subject to the

approval of the shareholders. In the event of liquidation, the equity shareholders are eligible to receive the remaining asse ts of the Company, after distribution of all

preferential amount, in proportion to their shareholdings.

(iii) Details of equity shares held by shareholders holding more than 5% of the aggregate shares in the Company


Number of shares % holding in Number of shares % holding in

the class the class

Sanjay Chaturvedi 2,50,000 26.49 2,50,000 26.49

Ajay Mukund Oak 2,50,000 26.49 2,50,000 26.49

Shubham Employees Welfare Trust 1,19,047 12.62 1,19,047 12.62

Helion Venture Partners II LLC 93,763 9.94 93,763 9.94

Elevar Equity Mauritius 93,763 9.94 93,763 9.94

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Shubham Housing Development Finance Company Limited (formerly known as Shubham Housing Development Finance Company Private Limited)

Notes to financial statements for the period ended 31 March 2016


(b) (i) Reconciliation of Compulsorily convertible preference shares ('CCPS') outstanding at the beginning and at the end of the reporting period



Series A


Add: Shares issued during the year - - - -

Less: Converted into equity shares during the year - - - -


Series B


Add: Shares issued during the year - - - -

Less: Converted into equity shares during the year - - 2,64,216 26,42,160


Series C

Outstanding at the beginning of the year 13,84,888 138,48,880 - -

Add: Shares issued during the year - - 13,84,888 138,48,880

Less: Converted into equity shares during the year - - - -


(ii) Rights, preference and restrictions attached to Compulsorily convertible preference shares ('CCPS')

The Company has issued its compulsorily convertible preference shares in series A, B and C having a par value of Rs. 10 per share. Each shareholder of the Company is entitled to vote in proportion of the share

of paid-up capital of the Company held by the Shareholder. The shares will carry a non-cumulative dividend right of 0.01% per annum on the subscription amount in preference to other class of shares as and when

and if declared by the Board. The shares are convertible in ratio of 1 equity share for 1 CCPS.

For series A shares, the shares will be automatically converted into equity shares either 2 days prior to filing of the draft red herring prospectus in connection with the occurrence of the qualified Initial Public

Offer (IPO) or 31 July 2029, whichever is earlier.

For series B shares, the shares will be automatically converted into equity shares either 2 days prior to filing of the draft red herring prospectus in connection with the occurrence of the qualified IPO or 25 July

2032, whichever is earlier. Also, refer to note below.

For series C shares, the shares will be automatically converted into equity shares either 2 days prior to filing of the draft red herring prospectus in connection with the occurrence of the qualified IPO or 25 July

2032, whichever is earlier.

Note: During the year, Nil (previous year: 264,216) Compulsory convertible preference shares were converted into equity shares, after taking consent of existing shareholders.

(iii) Details of preference shares held by shareholders holding more than 5% of the aggregate shares in the Company


Series-A Series-B Series-C % holding in Series-A Series-B Series-C % holding in

the class the class

Helion Venture Partners II LLC 2,85,664 1,04,701 2,52,066 25.85% 2,85,664 1,04,701 2,52,066 25.85%

Elevar Equity Mauritius 2,85,664 1,04,701 2,52,066 25.85% 2,85,664 1,04,701 2,52,066 25.85%

Accion Africa Asia Investment Company - 1,60,011 1,03,305 10.59% - 1,60,011 1,03,305 10.59%

Saama Capital II Limited - 1,60,011 1,03,305 10.59% - 1,60,011 1,03,305 10.59%

India Business Excellence Fund- IIA - - 4,34,933 17.50% - - 4,34,933 17.50%

Motilal Oswal Securities Limited - - 2,39,213 9.62% - - 2,39,213 9.62%

Total 5,71,328 5,29,424 13,84,888 5,71,328 5,29,424 13,84,888

Page 65 of 89





As at As at

31 March 2016 31 March 2015

2.2 Reserves and surplus

(i) Securities premium account

Balance as at the beginning of the year 16964,01,655 5054,68,728

Add: Received during the year - 12055,50,600

Less: Adjustment on account of expenses at the time of issue of shares - 146,17,673

Balance as at the year end 16964,01,655 16964,01,655

(ii) Special reserve {refer note (a) and (b) below}

Balance as at the beginning of the year 23,68,583 2,88,945

Add: Transferred during the year 111,81,605 20,79,638

Balance as at the year end 135,50,188 23,68,583

(iii) Employees Share Options Outstanding {refer to Note 1B(q)}

Balance as at the beginning of the year - -

Add: Transferred from Statement of Profit and Loss 146,27,237 - Balance as at the year end 146,27,237 -

(iii) Deficit in the Statement of Profit and Loss

Balance as at the beginning of the year (126,32,858) (209,51,409)

Add: Profit during the year 559,08,026 103,98,189

Less: Transfer to special reserve {refer note (a) and (b) below} (111,81,605) (20,79,638) Balance as at the year end 320,93,563 (126,32,858)

17566,72,643 16861,37,380

Notes:

(a) As per Section 29C(i) of the National Housing Bank, Act 1987 (NHB Act), the Company is required to transfer at least 20% of its net profit every year to a

reserve before any dividend is declared. For this purpose, any Special reserve created by the Company under Section 36(1)(viii) of the Income-tax Act, 1961 is

considered to be an eligible transfer.

Accordingly, during the year ended 31 March 2016, the Company has appropriated Rs. 11,181,605 (previous year Rs. 2,079,638) towards the special reserve in

terms of Section 29C of the National Housing Bank, Act 1987 (NHB Act).

As at As at

(b) Disclosure in term of Circular no. NHB(ND/DRS/Pol Circular 61/2013-14 dated 07 April 2014 31 March 2016 31 March 2015

Balance at the beginning of the year

Statutory Reserve under Section 29C of the NHB Act,1987 23,68,583 2,88,945

Amount of special reserve under section 36(1)(viii) of Income-tax Act, 1961, taken into account for the - -

purposes of statutory reserve under Section 29C of the NHB Act, 1987

Total 23,68,583 2,88,945

Addition / appropriation/ withdrawal during the year

Add: -Amount transferred Section 29C of the NHB Act, 1987 - 20,79,638

-Amount of special reserve under Section 36(1)(viii) of Income-tax Act 1961, taken into 111,81,605 -

account for the purposes of statutory reserve under Section 29C of the NHB Act, 1987

Total 111,81,605 20,79,638

Less -Amount appropriated from statutory reserve under section 29C of the NHB Act, 1987 - -

-Amount withdrawn from the special reserve under section 36(1)(viii) of Income-tax Act, - -

1961, taken into account for the purposes of statutory reserve under Section 29C of the

NHB Act, 1987

Balance at the end of the year

Statutory reserve under section 29C of the NHB Act, 1987 23,68,583 23,68,583

Amount of special reserve under section 36(1)(viii) of Income-tax Act, 1961, taken into account for the 111,81,605 -

purposes of Statutory reserve under Section 29C of the NHB Act, 1987

Total 135,50,188 23,68,583

Page 66 of 89





2.3 Long-term borrowings

Footnote Non-current Current maturities* Total As at

31 March 2016

As at 31 March 2015

As at 31 March 2016

As at 31 March 2015

As at 31 March 2016

As at 31 March 2015

Secured 1) Term loans

- From banks

- From other parties

2) Others loans

- From National housing bank

(refinance)

Unsecured

1) Debentures

- Redeemable Non Convertible

Debentures

2.3 (1)(i)

2.3 (1)(ii)

2.3 (2)

2.3 (3)

20655,86,152

13058,97,614

382,00,000

2000,00,000

16777,27,270

5968,69,358

461,00,000

-

5912,03,874

3885,08,617

52,00,000

-

3792,89,299

1583,63,360

39,00,000

-

26567,90,026

16944,06,231

434,00,000

2000,00,000

20570,16,569

7552,32,718

500,00,000

-

36096,83,766 23206,96,628 9849,12,491 5415,52,659 45945,96,257 28622,49,287

*Current portion of long-term borrowings amounting to Rs. 984,912,491 (previous year Rs.541,552,659) have been disclosed under 'Other current liabilit ies'.

Nature of security and terms of repayment for secured borrowings

Note No. 2.3 (1)(i): Security and terms of repayment for term loans from banks

No. Lender Terms of repayments Loan outstanding as on 31 Loan outstanding as on 31 Details of security /guarantee

March 2016 March 2015

1 Central Bank of India (Term loan ● Repayment terms: Monthly instalments 609,69,577 752,01,556 (1) Exclusive charge over the receivables arising out of Home Loan

I) ● Date of maturity : 14 July 2020 receivables with 1.10 times.

● Number of instalments : 84 Balance (2) Personal Guarantee of Promoters (Mr. Ajay Oak and Mr. Sanjay

instalments: 52 Chaturvedi) to the full extent of the loan amount.

● Amount of instalment: Rs. 1,186,000

{principal (51 instalments and Rs. 483,577 in

last instalment)}

● Rate of interest : Bank base rate plus 1.90%

per annum. ● Moratorium period : 18 months

2 Central Bank of India (Term loan ● Repayment terms: Monthly instalments 2214,28,584 2607,14,292 (1) Exclusive charge over the receivables arising out of Home Loan

II) ● Date of maturity :30 April 2021 receivables with 1.10 times.


instalments: 62 Chaturvedi) to the full extent of the loan amount.


{principal (61 instalments and last instalment

for Rs. 3,571,476)


per annum.

3 Yes Bank Limited (Term Loan I) ● Repayment terms: Monthly instalments

● Date of maturity :23 August 2018

● Number of instalments : 60 Balance

instalments: 29


(principal)


per annum.

● Moratorium period : 13 months

483,33,334 683,33,334 (1) Primary security: Hypothecation of book debts both present and future

with a minimum cover of 1.25 times of the outstanding loan amount. Personal

Guarantee of Promoters (Mr. Ajay Oak and Mr. Sanjay Chaturvedi) to the full

extent of the loan amount.

(2) Additional security : Agreement to assign mortgage on housing units to the

extent of loan amount in favor of the Yes Bank Limited in case of default.

4 Yes Bank Limited (Term Loan ● Repayment terms: Monthly instalments 575,75,758 939,39,382 (1) Exclusive charge on all the Book Debts of the borrower having minimum 575,75,758

II) ● Date of maturity : 31 October 2017 security cover of 1.11 times

● Number of instalments : 33 Balance (2) Unconditional and irrevocable Personal Guarantee of Promoters (Mr.

instalments: 19 Ajay Oak and Mr. Sanjay Chaturvedi) to the full extent of the loan amount.


(principal)


per annum.


5 Ratnakar Bank Limited (Term ● Repayment terms: Quarterly instalments 315,00,000 455,00,000 (1) Exclusive first charge on portfolio of receivables including underlying

Loan-I) ● Date of maturity : 30 June 2018 security to the extent of 1.10 times.


instalments: 9 Chaturvedi).


(principal)


per annum.


6 Ratnakar Bank Limited ● Repayment terms: Quarterly instalments 360,00,000 480,00,000 (1) Exclusive first charge on portfolio of receivables including underlying

(Term Loan-II) ● Date of maturity : 30 January 2019 security to the extent of 1.10 times.




(principal)


per annum.


7 Ratnakar Bank Limited ● Repayment terms: Quarterly instalments 1750,00,000 2250,00,000 (1) Exclusive first charge on portfolio of receivables including underlying

(Term Loan III) ● Date of maturity : 28 July 2019 security interest as acceptable to bank from to time covering 1.10 times of the

● Number of instalments : 20 Balance principal at any point of time during the currency of the facility

instalments: 14 (2) Personal Guarantee of Promoters (Mr. Ajay Oak and Mr. Sanjay

● Amount of instalment: Rs. 12,500,000 Chaturvedi).

(principal)


per annum.


Page 67 of 89





No. Lender Terms of repayments Loan outstanding as on Loan outstanding as on 31 Details of security /guarantee

31 March 2016 March 2015

8 Development Credit Bank ● Repayment terms: Monthly instalments 50,00,010 150,00,006 (1) Exclusive hypothecations charge on the Company's home loan receivables 50,00,010

Limited (Term Loan -I) ● Date of maturity : 10 September 2016 and book debts created out of loan cover of 1.10 times and Mortgage of

● Number of instalments : 36 Balance housing units to be extent of 1.00 times

instalments: 6 (2) Cash Collateral 10% of loan amount in form of Fixed deposit Rs.

● Amount of instalment: Rs. 833,333 3,000,000 with bank.

{principal (5 instalments and last instalment (3) Personal Guarantee of Promoters (Mr. Ajay Oak and Mr. Sanjay

for Rs. 833,345) Chaturvedi).


per annum.


9 Development Credit Bank ● Repayment terms: Monthly instalments 727,27,300 1000,00,000 (1) Exclusive hypothecations charge on the Company's home loan receivables 727,27,300

Limited (Term Loan -II) ● Date of maturity : 31 March 2018 and book debts created out of loan with cover of 1.10 times.





for Rs. 3,030,400)


i.e. 13% per annum.

● Moratorium period : 3 month

10 Canara Bank ● Repayment terms: Quarterly instalments 1584,00,000 1866,66,666 (1) Exclusive charge over receivables arising out of home loan with 1.11

● Date of maturity :23 July 2021 times.



● Amount of instalment: Rs.7,200,000 May

2015 onward (Rs.6,666,667 till 31 March

2015) {principal 22 instalments}


per annum.


11 The South Indian Bank Limited ● Repayment terms: Monthly instalments 533,24,000 733,28,000 (1) Exclusive charge over underlying receivables both present and future of

● Date of maturity :30 November 2018 borrowers with 1.10 times coverage on standard asset portfolio.





for Rs. 1,647,000)}


per annum.


12 HDFC Bank I ● Repayment terms: Quarterly instalments 560,00,000 720,00,000 (1) Hypothecation against book debts/Loans for which the loan is to be

● Date of maturity :8 July 2019 availed, security cover of 1.10 times on book debts /loans not overdue for

● Number of instalments : 20 Balance more than 30 days



(principal)


per annum.


13 HDFC Bank II ● Repayment terms: Quarterly instalments 750,00,000 - (1) Hypothecation against book debts/Loans for which the loan is to be 750,00,000

● Date of maturity :19 May 2018 availed, security cover of 1.10 times on book debts /loans not overdue for

● Number of instalments : 12 Balance more than 30 days



(principal)


per annum.


14 Vijaya Bank ● Repayment terms: Quarterly instalments

● Date of maturity :29 July 2021


instalments: 22


(principal)


per annum.


916,66,667 1000,00,000 (1) Exclusive charge by way of hypothecation/assignment of specific book

debts created out of Housing assets finance by the company out of term loan or

on the unencumbered book debts which are identified by the company from

time to time covering 1.10 times of term loan. Book debts/Receivable

pertaining to standard regular underlying assets are only eligible as security to

exposure from Vijaya Bank. Book Debts shall be of the principal amount of

the underlying assets. (2)Personal Guarantee of

promoters (Mr. Ajay Oak and Mr. Sanjay Chaturvedi).

15 ICICI Bank ● Repayment terms: Monthly instalments 430,55,556 500,00,000 (1) The list of book debts /loan receivables of clients and accounts (along with

● Date of maturity :31 May 2021 the amount receivable from them) hypothecated to ICICI Bank (minimum of

● Number of instalments : 72 Balance 1.10 times of the facility outstanding)


● Amount of instalment: Rs. 694,444 Chaturvedi).

(principal)


per annum.


16 Kotak Mahindra Bank Limited ● Repayment terms: Monthly instalments 533,33,333 933,33,333 (1) Exclusive charge on all the Book Debts of the borrower having minimum 533,33,333

● Date of maturity : 15 July 2017 security cover of 1.11 times.

● Number of instalments : 30 Balance (2) Unconditional and irrevocable Personal Guarantee of promoters (Mr. Ajay

instalments: 16 Oak and Mr. Sanjay Chaturvedi) to the full extent of the loan amount.


(principal)


per annum.

Page 68 of 89





No. Lender Terms of repayments Loan outstanding as on 31

March 2016

Loan outstanding as on 31

March 2015

Details of security /guarantee

17 Bank of Maharashtra ● Repayment terms: Monthly instalments

● Date of maturity :31 March 2022


instalments: 73

● Amount of instalment: : Rs. 5,770,000


for Rs. 5,710,000)}


per annum.


4211,50,000 4500,00,000 (1) Pari passu charge on Hypothecation of Receivables created out of bank

finance with minimum cover of 1.11 times of the outstanding exposure.

(2) Personal Guarantee of Promoters (Mr. Ajay Oak and Mr. Sanjay

Chaturvedi).

18 Dena Bank ● Repayment terms: Monthly instalments

● Date of maturity :30 March 2022


instalments: 72

● Amount of instalment: : Rs. 1,388,889


for Rs. 1,388,881)


per annum.


1000,00,000 1000,00,000 (1) Exclusive charge by way of hypothecation / assignment of specific book

debt created out of housing assets financed by the company out of our term

loan or on the unencumbered book debts which are identified by the company

from time to time covering 1.10 times of our term loan at any point of time

during the currency of the facility.

(2) Personal Guarantees of Promoters (Mr. Ajay Oak and Mr. Sanjay

Chaturvedi).

19 Andhra Bank • Repayment Terms: Monthly instalments

• Date of Maturity: 28 Feb 2023

• Number of instalments: 72 Balance

instalments: 72

• Amount of instalment: Rs. 2,777,778

(principal)

• Rate of Interest: Base Rate+ 2%

+TP(0.50%) per annum.

• Moratorium period: 12 months

2000,00,000 - (1) Exclusive charge by way of hypothecation / assignment of specific book

debt created out of housing assets financed by the company out of bank' term

loan or on the unencumbered book debts which are identified by the company

from time to time covering 1.11 times of bank' loan at any point of time

during the currency of the facility.


Chaturvedi).

20 Oriental Bank Of Commerce • Repayment Terms: Monthly Instalments

• Date of Maturity: 30 June 2023


Instalments: 84

• Amount of instalment: : 2,380,953 {principal

(83 instalments and last instalment for Rs.

2,278,254)}

• Rate of Interest: Base rate plus 2.75% per

annum.


1998,97,353 - (1) Exclusive first charge over specific loan receivable of the company arising

out of housing loans extended by it out of the term loan availed by the

company from our bank. with value of such receivables being equivalent to

1.10 times of the outstanding (standard) term loan exposure of our bank.


Chaturvedi).

21 Tamilnad Mercantile Bank • Repayment Terms: Monthly Instalment

• Date of Maturity: 21 March 2021


Instalment: 60


(principal)

• Rate of Interest: Base rate plus 1.40% per

annum.


1500,00,000 - (1) Exclusive charge by way of hypothecation of housing loan receivables

created out of bank finance with minimum cover of 1.10 times of the

outstanding exposure. (finance charges and non-performing assets shall be

excluded).


Chaturvedi).

22 State Bank of India • Repayment Terms: Monthly instalment

• Date of Maturity: 30th Sep 2023


Instalment:- 84



for Rs. 2,460,000)}

• Rate of Interest: Base rate + 2.70% per

annum.


• Sanctioned amount: Rs. 200,000,000

• Disbursal amount: Rs. 50,000,000

500,00,000 - (1) Hypothecation of pool of receivables amounting to 1.10 times of loan

value within the stipulated time with irrevocable power of attorney to fall

back in case of default.


Chaturvedi).

23 IDBI Bank Limited • Repayment Terms: Monthly instalments

• Date of Maturity: 2nd Feb, 2023


Instalment: 83

• Amount of instalment:Rs. 3,571,428

{(principal) (82 installment and last

installment Rs. 3,571,459)}

• Rate of Interest: Bank Basr rate plus 2.75%

per annum.


2964,28,554 - (1) First and exclusive charge by way of hypothecation of receivables as

specified in the deed of hypothecation (including principal, interest,

additional/penal interest, service fee and any other charges that may have

been received by the borrower on the underlying pool) upto 1,10 times of the

loan amount as to maintain the 110% cover at all times.

(2) Personal Guarantee of Promoters (Mr. Ajay Oak and Mr. Sanjay

Chaturvedi).

Total 26567,90,026 20570,16,569

Page 69 of 89





Note No. 2.3 (1)(ii): Security and terms of repayment for term loans from other parties

No. Lender Terms of repayments Loan outstanding as on Loan outstanding as on 31 Details of security /guarantee

31 March 2016 March 2015

1 Religare Housing Development ● Repayment terms: Monthly instalments 114,09,692 350,83,918 (1) Mortgage of dwelling units financed. The mortgage of property will be

Finance Corporation Limited ● Date of maturity : 01 November 2018 held by the company on behalf of Religare to the extent of 1.10 times.

(Term loan -I) ● Number of instalments : 61 Balance (2) Personal Guarantee of Promoters (Mr. Ajay Oak and Mr. Sanjay


● Amount of instalment: : Rs. 435,547

{instalment (31 instalments and last

instalment for Rs. 384,861)}

● Rate of interest : 15.20% per annum.

2 Religare Housing Development ● Repayment terms: Monthly instalments 149,95,328 433,41,587 (1) Mortgage of dwelling units financed. The mortgage of property will be

Finance Corporation Limited ● Date of maturity :01 April 2019 held by the company on behalf of Religare.

(Term loan-II) ● Number of instalments : 60 Balance (2) Personal Guarantee of Promoters (Mr. Ajay Oak and Mr. Sanjay


● Amount of instalment: : Rs. 506,119

{instalment (31 instalments and last

instalment for Rs. 420,893)}



3 IFMR Capital Finance Private ● Repayment terms: Monthly instalments 90,52,672 140,97,155 (1) The borrower will provide sufficient book debts to ensure an asset cover 90,52,672

Limited (Term Loan-I) ● Date of maturity :25 September 2017 of 1.00 times on the outstanding facility.

● Number of instalments : 48 Balance (2) Facility shall be secured by creating a first charge on the receivables

instalments: 18 meeting the portfolio origination criteria up to a value of required to meet the

● Amount of instalment: Rs. 562,000 security cover.

(instalment) (3) Cash collateral amounting to Rs. 1,215,400 deposit against borrowings.


4 IFMR Capital Finance Private ● Repayment terms: Monthly instalments 306,29,337 418,19,442 (1) The Facility is secured by a first and exclusive charge over the portfolio 306,29,337

Limited (Term Loan-II) ● Date of maturity : 16 May 2018 (Charged Assets ) created by a deed of hypothecation.

● Number of instalments : 48 Balance (2) The borrower will provide sufficient book debts to ensure an asset cover

instalments: 26 of 1.00 times on the outstanding facility.


(instalment)


5 IFMR Capital Finance Private ● Repayment terms: Monthly instalments 306,29,337 418,19,442 (1) The Facility is secured by a first and exclusive charge over the portfolio 306,29,337

Limited (Term Loan-III) ● Date of maturity : 22 May 2018 (Charged Assets) created by a deed of hypothecation.


instalments: 26 of 1.00 time on the outstanding facility.


(instalment)


6 IFMR Capital Finance Private ● Repayment terms: Monthly instalments 1107,15,805 1300,00,000 (1) The Facility is secured by a first and exclusive charge over the portfolio

Limited (Term Loan-IV) ● Date of maturity :23 March 2020 (Charged Assets) created by a deed of hypothecation.




(instalment)

● Rate of interest : 13.90% per annum. ●

Moratorium period : Nil

7 IFMR Capital Finance Private ● Repayment terms: Monthly instalments 439,23,821 - (1) The Facility is secured by a first and exclusive charge over the portfolio

Limited (Term Loan-V) ● Date of maturity : 26th May, 2020 (Charged Assets) created by a deed of hypothecation.





for Rs. 1,225,985)}




Limited (Term Loan-VI) ● Date of maturity : 15th June, 2020 (Charged Assets) created by a deed of hypothecation.





for Rs. 1,527,056)}




Limited (Term Loan-VII) ● Date of maturity : 19 Oct 2020 (Charged Assets) created by a deed of hypothecation.





for Rs.2,455,794)}



10 MAS Capital Financial Services ● Repayment terms: Monthly instalments 260,41,659 385,41,663 (1) Exclusive charge on portfolio created out of this term loan as per selection 260,41,659

Limited (Term Loan- I) ● Date of maturity :30 April 2018 criteria to the extent of 1 times for the loan outstanding.



● Amount of instalment: Rs. 1,441,667 (3) Cash collateral amounting to Rs. 2,500,000 deposit against borrowings.


for Rs. 1,041,651)

● Rate of interest : MAS PLR minus 1.00%

per annum. ● Moratorium period : 3 months

Page 70 of 89







11 MAS Financial Services Limited ● Repayment terms: Monthly instalments 312,49,994 437,49,998 (1) Exclusive charge on portfolio created out of this term loan as per selection 312,49,994

(Term Loan- II) ● Date of maturity :30 April 2018 criteria to the extent of 1 times for the loan outstanding.





for Rs. 1,041,651)


per annum.


12 MAS Financial Services Limited ● Repayment terms: Monthly instalments 322,91,661 447,91,665 (1) Exclusive charge on portfolio created out of this term loan as per selection 322,91,661

(Term Loan- III) ● Date of maturity : 10 October 2018 criteria to the extent of 1 times for the loan outstanding.





for Rs. 1,041,651)


per annum.

13 MAS Financial Services Limited ● Repayment terms: Monthly instalments 649,99,997 - (1) Exclusive charge on portfolio created out of this term loan as per selection 649,99,997

(Term Loan- IV) ● Date of maturity : 10 June 2019 criteria to the extent of 1 times for the loan outstanding.





for Rs. 1,041,651)


per annum.

14 MAS Financial Services Limited ● Repayment terms: Monthly instalments 1191,66,668 - (1) Exclusive charge on portfolio created out of this term loan as per selection 1191,66,668

(Term Loan- V) ● Date of maturity : 30 Nov 2019 criteria to the extent of 1 times for the loan outstanding.





for Rs. 2,708,349)


per annum.

15 AU Financiers (India) Limited ● Repayment terms: Monthly instalments 290,64,404 391,66,685 (1) Exclusive hypothecation of present and future home loan of standard

(Term Loan I) ● Date of maturity :23 February 2019 receivable(net of financial charge, NPA's & other charges etc.) as per

● Number of instalments : 60 Balance selection criteria to the extent of 1.10 times for the loan outstanding.


● Amount of instalment: As per repayment Chaturvedi).

schedule (3) Cash collateral amounting to Rs. 2,500,000 deposit against borrowings.



16 AU Financiers India Limited ● Repayment terms: Monthly instalments 332,30,977 433,33,328 (1) Exclusive hypothecation of present and future home loan of standard

(Term Loan- II) ● Date of maturity :5 July 2019 receivable(net of financial charge, NPA's & other charges etc.) as per

● Number of instalments : 60 Balance selection criteria to the extent of 1.10 times for the loan outstanding.


● Amount of instalment: As per repayment Chaturvedi).

schedule (3) Cash collateral amounting to Rs. 2,500,000 deposit against borrowings.



17 AU Financiers India Limited ● Repayment terms: Monthly instalments 433,33,328 (1) Exclusive hypothecation of present and future loan receivables as per

(Term Loan- IV) ● Date of maturity : 15 July 2020 selection criteria of AU Financiers India Limited to the extent of 1.10 times

● Number of instalments : 60 Balance for the loan outstanding on the basis of Secured Home loans.


● Amount of instalment: : Rs. 833,334 Chaturvedi).


for Rs. 833,294)



18 AU Financiers India Limited ● Repayment terms: Monthly instalments 1350,00,000 (1) Exclusive hypothecation of present and future loan receivables as per

(Term Loan- V) ● Date of maturity : 5 Sep 2020 selection criteria of AU Financiers India Limited to the extent of 1.10 times




● Rate of interest : 15% per annum.

● Moratorium period : Nil

19 AU Financiers India Limited ● Repayment terms: Monthly instalments 1000,00,000 - (1) Exclusive hypothecation of present and future loan receivables as per

(Term Loan- VI) ● Date of maturity : 05 April 2021 selection criteria of AU Financiers India Limited to the extent of 1.05 times






20 Hinduja Leyland Finance ● Repayment terms: Monthly instalments

Limited (Term Loan I) ● Date of maturity : 7 July 2019


instalments: 40


(instalment)

● Rate of interest : 14% XIRR per annum.

736,79,173 901,61,015 (1) Exclusive first charge (floating) on portfolio of receivables as acceptable

to Hinduja Leyland Finance Limited from time to time covering 1.00 time of the

principal at any point of time during the currency of the facility.

Page 71 of 89







21 Hinduja Leyland Finance ● Repayment terms: Monthly instalments

Limited (Term Loan II) ● Date of maturity : 07 February 2020


instalments: 47


(instalment)

● Rate of interest : 14% XIRR per annum.

839,76,331 993,26,820 (1) Exclusive first charge (floating) on portfolio of receivables as acceptable

to Hinduja Leyland Finance Limited from time to time covering 1.10 times of the

principal at any point of time during the currency of the facility.

22 Sundaram BNP Paribas Home ● Repayment terms: Monthly instalments 437,50,000 500,00,000 (1) Exclusive first charge on the existing standard asset portfolio of

Finance Limited (I) ● Date of maturity :01 April 2023 company's housing loan and asset cover should be maintained at 1.10 times.



● Amount of instalment: Rs. 520,833

(principal)

● Rate of interest : Sundaram PLR minus

2.85% i.e., 12.75% per annum.


23 Sundaram BNP Paribas Home ● Repayment terms: Monthly Instalments 477,27,273 - (1) Exclusive first charge on the existing standard asset portfolio of

Finance Limited (II) ● Date of maturity : 1 April 2013 company's housing loan and asset cover should be maintained at 1.10 times.



● Amount of instalment: Rs. 568,182



24 Reliance Capital Limited ● Repayment terms: Quarterly instalments 833,30,856 - 1. Exclusive first charge (floating) on portfolio of receivables including 833,30,856

● Date of maturity : 15 Sep 2018 underlying security interests as acceptable to bank, from time to time

● Number of instalments : 12 Balance covering 1.10 times of the principal at any point of time during the currency

instalments: 10 of the facility.



for Rs.8,293,295)}



25 Capital First Limited ● Repayment terms: Quarterly instalments 2500,00,000 - 1.First exclusive charge (floating) over loan receivables of the borrower to

● Date of maturity : 23 Sep 2023 provide a security (Principal amount) cover of 1.10 time of the facility

● Number of instalments : 30 Balance outstanding and over-dues if any at all times.

instalments: 30




26 HDFC Limited ● Repayment terms: Monthly instalments 963,61,501 - (1) First and exclusive charge, by way of deed of hypothecation in favor of

● Date of maturity : 31st Dec 2020 HDFC on book debts/receivables to be received from existing and

● Number of instalments : 60 Balance prospective customers of your company, who have availed/will be availing

instalments: 57 loans form your company, by way of onward lending of this loan facility from

● Amount of instalment: Rs. 2,262,531 HDFC to the extent of 1.10 times the loan amount.

(instalment) (2) Personal Guarantee of Promoters (Mr. Ajay Oak and Mr. Sanjay

● Rate of interest : 12.75% per annum. Chaturvedi).


Total 16944,06,231 7552,32,718

Note No. 2.3 (2): Security and terms of repayment for other loans from National Housing Bank

No. Lender Terms of repayments Loan outstanding as on 31

March 2016

Loan outstanding as on 31

March 2015

Details of security /guarantee

1 National Housing Bank ● Repayment terms: Quarterly instalments

● Date of maturity :1 January 2025


instalments: 33



for Rs. 500,000)



434,00,000 500,00,000 (1) Exclusive first charge by way of hypothecation in the book debts financed

out of refinance assistance together with securities thereof.

(2) Additionally, first exclusive mortgage/ hypothecation of the portfolio to

the extent of 25% of the amount stated above in point (1), thus total coverage

available would be to the extent of 1.25 times of the amount refinanced.

(3) Irrevocable and unconditional guarantee to the extent of Rs. 200,000,000.

Total 434,00,000 500,00,000

Note No. 2.3 (3): Unsecured Redeemable Non Convertible Debentures

No. Particular Terms of repayments As at 31 March 2016 As at 31 March 2015 Remark

1 200 Non Convertible Debenture

of Rs. 1,000,000 each

Date of allotment: 28 March 2016

First redemption: 15 April 2022

Rate of Interest: 13%

2000,00,000 - 1.Unsecured

2. Bullet payment on 15 April 2022

3. Gross Non Performing Assets should be less than 5%

4. Off balance sheet portfolio to total assets ratio should be 35% or less

Total 2000,00,000 -

Page 72 of 89





Long-term Short-term

As at As at As at As at

31 March 2016 31 March 2015 31 March 2016 31 March 2015

2.4 Provisions

Provision for employee benefits

- Gratuity (refer to note 2.4.1) 9,54,023 3,11,418 1,91,529 1,41,350

- Compensated absences (refer to note 2.4.1) 39,33,769 23,92,883 21,08,546 11,21,116

Other provisions (refer to note 2.11.1)

Housing loans:

Contingent provision against standard assets 144,29,873 118,30,442 12,91,497 9,58,322

Provision for non-performing assets 300,36,805 233,07,328 46,20,002 27,00,840

Non housing loans:

Contingent provision against standard assets 79,93,620 27,17,113 7,72,946 2,50,922

Provision for non-performing assets 21,59,185 21,96,549 3,63,451 1,57,452

Provision for income-tax - - 56,972 -

(net of advance tax and tax deducted at source amounting to

Rs.19,729,849 and MAT credit utilised amouting to Rs. 1,510,820)

595,07,275 427,55,733 94,04,943 53,30,002

2.4.1 Employee benefits

The following table sets out the disclosures as required under AS-15 (revised), “Employee Benefits” as at 31 March 2016 and as at 31 March 2015:

a) Defined Contribution Plan: For the year ended For the year ended

31 March 2016 31 March 2015

Contribution to Provident Fund 122,91,811 82,47,108

Contribution to Employee State Insurance 20,76,726 20,93,581

Contribution to Labour Welfare Fund 52,354 15,220

144,20,891 103,55,909

(Also refer to note 2.20)

b) Defined benefit plan:

i) General description of defined benefit plan:

Gratuity Plan

The Company operates gratuity plan wherein every employee is entitled to the benefit equivalent to 15 days (for a month of 26 days) of total basic salary last drawn for each

completed year of service. Gratuity is payable to all eligible employees of the Company on retirement, separation, death or permanent disablement, in terms of the provisions of the Payment

of Gratuity Act, 1972 with a maximum ceiling of Rs. 1,000,000.

ii. The changes in the present value of obligation representing reconciliation of opening and closing balances thereof are as follows:

As at As at

31 March 2016 31 March 2015

Present value of obligation as at the beginning of the year 19,50,266 14,07,294

Interest cost 1,50,367 1,26,412

Current service cost 10,18,432 12,88,889

Actuarial (gain)/ loss on obligation 1,25,491 (8,72,329)

Present value of obligation as at the end of year 32,44,556 19,50,266

iii. The change in fair value of plan assets:

As at As at

31 March 2016 31 March 2015

Fair value of plan assets at the beginning of the year 14,97,498 7,04,567

Expected return on plan assets 1,34,775 95,034

Contributions 4,52,768 7,02,727

Actuarial gain/loss on plan asset 13,963 (4,830)

Fair value of plan assets at the end of the year 20,99,004 14,97,498

Page 73 of 89





iv. The amounts recognised in Balance Sheet are as follows:

As at As at

31 March 2016 31 March 2015

Present value of obligation as at the end of the year 32,44,556 19,50,266

Funded status (20,99,004) (14,97,498)

Net liability recognised in Balance Sheet 11,45,552 4,52,768

v. The amounts recognised in Statement of Profit and Loss are as follows:


31 March 2016 31 March 2015

Current service cost 10,18,432 12,88,889

Interest cost 1,50,367 1,26,412

Expected return on plan asset (1,34,775) (95,034)

Net actuarial (gain)/ loss recognised in the year 1,11,528 (8,67,499)

Expenses recognised in the Statement of Profit and Loss 11,45,552 4,52,768

vi. Principal actuarial assumptions at the Balance Sheet date are as follows:

Particulars For the year For the year ended

ended

31 March 2016 31 March 2015

Discount rate 7.75% per annum 8.00% per annum

Salary escalation rate 9.00% per annum 7.00% per annum

Return on assets 9.00% per annum 9.00% per annum

Attrition rate Functional head and above : 5.00% Functional head and above : 10.00%

Executive level: 55% Executive level: 40%

Manager level: 24% Manager level: 20%

Retirement age 60 years 60 years

Morality age IALM (2006-2008) Modified Ult. IALM (2006-2008) Ultimate

Economic assumptions

The principal assumptions are the discount rate and salary growth rate. The discount rate is based upon the prevailing market yield of government bonds as at the Balance Sheet date

for the estimated term of the obligation and the estimates of future salary increases considered taking into account the inflation, seniority, promotion and other relevant factors.

vii. Experience on actuarial gain/ (loss) for Projected benefit obligation (PBO):

Particulars

31 March 2016 31 March 2015 31 March 2014 31 March 2013 31 March 2012

On plan assets (losses)/gain 13,963 (4,830) 21,567 (29,535) -

On plan liability (gain)/losses 4,96,502 (3,14,251) (2,64,397) (2,70,771) 40,369

viii. General description of other long term benefit plan:

Compensated absences plan

The Company operates compensated absences plan, where in every employee is entitled to the benefit equivalent to 21 days leave salary for every completed year of service subject to

maximum 42 accumulation of leaves. The salary for calculation of earned leave is last drawn salary. The same is payable during the service, early retirement, withdrawal of scheme,

resignation by employee and upon death of employee.

An actuarial valuation of compensated absences has been carried out by an independent actuary on the basis of the following assumptions:

Assumptions For the year ended For the year ended

31 March 2016 31 March 2015

Discount rate 7.75% per annum 8.00% per annum

Salary escalation rate 9.00% per annum 7.00% per annum

The defined benefit obligation of compensated absences in respect of employees of the Company as at 31 March 2016 amounts to Rs. 6,042,315 (previous year Rs. 3,513,999).

Further the same has been classified into non-current portion amounting to Rs. 3,933,769 (previous year Rs. 2,392,883) and current portion amounting to Rs. 2,108,546 (prev ious

year Rs. 1,121,116).

Page 74 of 89





As at As at

31 March 2016 31 March 2015

2.5 Short-term borrowings

Secured

Overdraft facilities with scheduled banks* - -

Working capital loan from other parties# - 1000,00,000

Unsecured

Commercial Papers ## 1000,00,000 -

1000,00,000 1000,00,000

*The overdraft facilities with Schedules Banks are secured against the fixed deposits maintained with bank. Also refer to note 2.15

# During the previous year the company has taken a working capital loan, which carries an interest rate of 12.50% per annum and is repaid on 9 June 2015. Loan is secured by the way of

hypothecation of book debts and personnel guarantees of the promoters.

## Detail of repayment, interest rate and installment due for the year ended 31 March 2016:

Particular Date of issue Date of redemption Rate of Interest As at 31 March 2016 As at 31 March 2015

Commercial Paper 21-Sep-15 19-Sep-16 13% 1000,00,000 -

Note:- Discounted value of above Commercial paper is Rs. 88,523,500

As at As at

2.6 Trade payables ** 31 March 2016 31 March 2015

Trade payables

- Total outstanding due of micro and small enterprises 1,29,667 -

- Total outstanding due of creditors other than micro and small enterprises 221,29,561 124,17,357

222,59,228 124,17,357

**The Company had sought confirmation from its vendors on their status under Micro, Small and Medium Enterprises Development Act, 2006 ('MSMED Act') which came into force from

2 October 2006. Based on the confirmations received till date, the disclosure as required by Section 22 of the MSMED Act are given below:-

Particulars As at As at

31 March 2016 31 March 2015

Principal amount remaining unpaid to supplier as at the end of the year 1,29,667 -

Interest due on the principal remaining outstanding as at the end of the year - -

Interest paid under the MSMED Act beyond the appointed day during the year - -

Interest due and payable for the period of delay in making payment (which have been paid but - -

beyond the appointed day during the year) but without adding the interest specified under the

MSMED Act

Interest accrued and remaining unpaid at the end of the year - -

Amount of further interest remaining due and payable even in the succeeding years, until such date - -

when the interest dues as above are actually paid to the small enterprise, for the purpose of

disallowance as a deductible expenditure under the MSMED Act

As at As at

31 March 2016 31 March 2015

2.7 Other current liabilities

Current portion of long term borrowings (refer to note 2.3)

- From banks 5912,03,874 3792,89,299

- From other parties 3885,08,617 1583,63,360

- National Housing Bank 52,00,000 39,00,000

Loans pending disbursement 2665,82,891 3013,41,638

Employee benefits payable 230,65,186 50,89,887

Statutory dues payable 84,78,063 58,97,294

Interest accrued but not due

-on term loan from bank 167,48,270 81,40,475

-on term loan from other parties 64,12,318 45,34,796

-on refinance from National Housing Bank 9,75,632 -

-on Non Convertible Debentures 2,13,115 -

Amount payable under securitisation 38,44,086 7,10,902

Amount payable under assignment 64,08,078 -

Payable for capital goods 67,75,341 -

13244,15,471 8672,67,651

Page 75 of 89





2.8 Fixed Assets

For the year ended 31 March 2016

Description

Gross block Accumulated depreciation Net block

As at 1 April

2015

Additions during

the year

Deletions during

the year

As at 31 March

2016

As at 1 April

2015

For the year On deletions As at 31 March

2016

As at 31 March

2016

Tangible fixed assets

Computer

Furniture and fixtures

Office equipment

Intangible fixed assets

Software

148,75,467

69,56,361

51,61,898

1,31,429

79,70,900

15,60,908

19,16,153

1,20,657

51,566

70,810

81,130

-

227,94,801

84,46,459

69,96,921

2,52,086

67,35,522

31,56,232

22,09,587

29,699

47,46,724

12,36,170

19,34,768

47,284

44,040

41,870

64,601

-

114,38,206

43,50,532

40,79,754

76,983

113,56,595

40,95,927

29,17,167

1,75,103

Total 271,25,155 115,68,618 2,03,506 384,90,267 121,31,040 79,64,946 1,50,511 199,45,475 185,44,792


Description

Gross block Accumulated depreciation Net block

As at 1 April

2014

Additions during

the year

Deletions during

the year

As at 31 March

2015

As at 1 April

2014

For the year On deletions As at 31 March

2015

As at 31 March

2015

Tangible fixed assets

Computer

Furniture and fixtures

Office equipment

Intangible fixed assets*

Software

71,90,659

45,71,217

24,07,851

-

76,84,808

23,85,144

28,09,935

1,31,429

-

-

55,888

-

148,75,467

69,56,361

51,61,898

1,31,429

27,19,362

16,42,621

5,23,151

-

40,16,160

15,13,611

17,10,737

29,699

-

-

24,301

-

67,35,522

31,56,232

22,09,587

29,699

81,39,945

38,00,129

29,52,311

1,01,730

Total 141,69,727 130,11,316 55,888 271,25,155 48,85,134 72,70,207 24,301 121,31,040 149,94,115 * Regrouped during the current year from computer

Page 76 of 89





As at As at

31 March 2016 31 March 2015

2.9 Non-current investments

Investment in Mutual fund (valued at cost) un-quoted - 5,00,000

{Nil (previous year 50,000) units of Canara Robeco Capital Protection Oriented Fund- Series 2 (Plan A)}

- 5,00,000

Aggregate book value of un-quoted investment is Rs. Nil (previous year Rs. 500,000)

2.10 Deferred tax asset (net)# As at As at

31 March 2016 31 March 2015

Deferred tax asset

Provision against

Housing Loans:



Non Housing Loans:



Provision for gratuity 3,78,754 1,46,901

Provision for compensated absences 19,97,770 11,40,117

Provision for bonus 37,60,290 -

Employee stock option compensation expenses 48,36,203 -

Provision for bad and doubtful assets 6,63,275 1,29,542

Unabsorbed business loss and depreciation under Income-tax Act, 1961 - 77,30,061

Less: Deferred tax liability

Difference between written down value of fixed assets as per Companies Act, 2013 and Income-tax (1,40,347) (15,225)

Act, 1961

Un-amortised processing fees on borrowings (refer note 1B(f)) (188,23,077) (114,99,170)

Special reserve u/s 36(1)(viii) of The Income-tax Act, 1961 (36,96,974) -

93,64,980 119,46,626

# In the previous year, deferred tax asset was not recorded by the Company on the timing differences as the Company believed that there was no virtual certainty that they will

generate sufficient future taxable income to realize such deferred tax assets except to the extent of Rs. 11,514,395 corresponding to which there existed reversible temporary

differences for set off.

Non-current portion Current portion*

As at As at As at As at

31 March 2016 31 March 2015 31 March 2016 31 March 2015

2.11 Long term loans and advances (refer note 2.11.4)

(Unsecured, considered good unless stated otherwise)

To parties other than related parties

Housing loans - secured

Individuals

- Considered good 35400,14,669 29671,29,407 2574,50,240 1998,71,919

- Considered doubtful 300,44,355 232,91,294 46,12,452 26,51,060

Housing loans - unsecured

Individuals

- Considered good 62,69,445 82,89,811 7,03,750 12,03,463

- Considered doubtful - 16,034 - 49,780

Non Housing loans - secured

Individuals

- Considered good 19525,37,910 6891,87,352 1531,41,157 531,06,715

- Considered doubtful 21,59,185 21,96,549 3,63,451 1,57,453

Non Housing loans - unsecured

Individuals

- Considered good 2,304 44,195 52,845 1,37,549

- Considered doubtful - - - -

Minimum retention requirement (against securitization transaction) 230,18,612 230,18,612 - -

(also refer note 2.11.2)

Minimum retention requirement (against assignment transaction) 330,68,950 - 18,87,424 -


Security deposits 101,35,771 57,12,668 78,20,670 34,93,892

Advances to suppliers for capital assets 16,58,956 4,88,190 - -

Cash collateral against borrowings 242,15,400 137,15,400 - 6,03,171

Advance tax and tax deducted at source - 9,83,588 - -

(net of provision for tax for previous year Rs. 5,005,134)

Minimum alternative tax (MAT) recoverable - 50,05,134 34,94,314 -

56231,25,557 37390,78,234 4295,26,303 2612,75,002

* Amount disclosed under " Short-term loans and

advances"

Page 77 of 89


(formerly known as Shubham Housing Development Finance Company Private Limited) Notes to financial statements for the year ended 31 March 2016


2.11.1 Classification of loans and advances and provisions thereon

(in accordance with the directions issued by the NHB in terms of The Housing Finance Companies (NHB) Directions, 2010)

As at 31 March 2016

Loans and advances Provisions

Particulars Housing loans Non Housing loans Housing loans Non Housing loans

Individuals Individuals Individuals Individuals

Standard assets 37223,88,304 21012,58,350 157,21,371 87,66,566

Sub standard assets 585,61,714 51,31,483 99,55,059 7,70,176

Doubtful assets 581,44,894 1,94,763 247,01,748 77,905

Doubtful assets-II - 16,72,258 - 16,74,555

Loss assets - - - -

38390,94,912 21082,56,854 503,78,178 112,89,202

As at 31 March 2015

Loans and advances Provisions

Particulars Housing loans Non Housing loans Housing loans Non Housing loans

Individuals Individuals Individuals Individuals

Standard assets 30541,82,075 7319,58,171 127,88,764 29,68,034

Sub standard assets 1381,78,307 111,78,621 219,51,214 16,76,792

Doubtful assets 101,42,385 16,93,022 40,56,954 6,77,209

Loss assets - - - -

32025,02,767 7448,29,814 387,96,932 53,22,035

2.11.2 Securitized assets are derecognised in the books of the Company based on the principle of transfer of ownership interest over the assets. De-recognition of gain or loss arising

on such securitisation is based on the guidance note on Accounting for Securitisation issued by the Institute of Chartered Accountants of India.

During the year ended 31 March 2014, the Company on 27 March 2014 and on 31 March 2014 has securitised portion of its loan portfolio amounting to Rs.165,347,839 and Rs.

108,063,819 respectively at par. Pursuant to the said securitisation arrangements, the Company has derecognised such loan ass ets from its books of account. Also, in

accordance with the terms and conditions of the securitisation agreements, the Company has retained loan assets amounting to Rs. 23,018,612 as minimum retention

requirement (‘MRR’) and has also given cash collateral in the form of fixed deposits amounting to Rs. 8,456,249. MRR has been disclosed under note 2.11 and fixed deposits have

been disclosed under note 2.15 of the financial statements. Further, the Company will continue to act on a non-recourse basis to collect and service the monthly EMI collection

on the said securitised portfolio. In lieu of rendering the aforesaid services, the Company will charge 0.1% of the total collections for the respective month (the charging of fees

is applicable only for the securitisation agreement pertaining to Rs. 165,347,839 portfolio).

Nature of transaction Date of Transaction Minimum retention Pool Outstanding Pool Outstanding

requirement (MRR) As at 31 March 2016 As at 31 March 2015

Securitization transaction 1 27-Mar-14 165,34,784 945,24,010 1222,12,173

Securitization transaction 2 31-Mar-14 64,83,829 654,52,686 853,92,885

2.11.3 Assigned assets are derecognised in the books of the Company based on the principle of transfer of ownership interest over the Assets. De-recognition of gain or loss arising on

such direct assignment is based on the guidance note on Accounting for Securitisation issued by the Institute of Chartered Accountants of India.

During the year ended 31 March 2016, the Company on 29 June 2016 has assigned portion of its loan portfolio amounting to Rs. 441,980,568 at par. Pursuant to the said

assignment arrangements, the Company has derecognised such loan assets from its books of account. Also, in accordance with the terms and conditions of the assignment

agreements, the Company has retained loan assets amounting to Rs. 44,198,057 as minimum retention requirement (‘MRR’). MRR has been disclosed under note 2.11. Further,

the Company will continue to act on a non-recourse basis to collect and service the monthly EMI collection on the said assigned portfolio. In lieu of rendering the aforesaid

services, the Company will charge 0.05% of the total outstanding at beginning of respective month.

Nature of transaction Date of Transaction Minimum retention Pool Outstanding Pool Outstanding

requirement (MRR) As at 31 March 2016 As at 31 March 2015

Direct assignment 29-Jun-15 441,98,057 3438,78,949 Nil

2.11.4 Loans to borrowers are secured by:

a) Equitable mortgage of property and/or

b) Undertaking to create a security by way of equitable mortgage of property.

Page 78 of 89





As at As at

31 March 2016 31 March 2015

2.12 Other non-current assets

(Unsecured, considered good)

Fixed deposits (due to mature after 12 months from the reporting date) (refer note 2.15) 200,00,000 230,00,000

Unamortised processing fees on borrowings (refer note 1B(f)) 433,83,907 276,49,921

633,83,907 506,49,921

2.13 Current investments As at As at

31 March 2016 31 March 2015

Investment in mutual funds un-quoted

50,000 (previous year Nil) units of Canara Robeco Capital Protection Oriented Fund- Series 2 (Plan A) 5,00,000 -

Aggregate book value of un-quoted investment is Rs. 500,000 (previous year Rs. Nil)

5,00,000 -

2.14 Trade receivables

(Outstanding not exceeding six months)

Secured

- Considered good 263,55,314 88,49,422

- Considered doubtful - 3,60,822

Less:- Provision for bad and doubtful debts - (3,60,822)

Unsecured

- Considered good 1,23,042 97,756

- Considered doubtful - 38,444

Less:- Provision for bad and doubtful debts - (38,444)

264,78,356 89,47,178

2.15 Cash and bank balances

Cash and cash equivalents

Cash on hand 93,68,654 21,99,131

Cheques in hand 68,74,301 97,29,904

Balances with bank

- on current accounts 1503,22,189 3729,66,013

- on deposit accounts (with original maturity of 3 months or less) 3500,00,000 4650,00,000

Other bank balances

Fixed deposits (with remaining maturity within 12 months from the reporting date) 818,37,283 758,99,250

5984,02,427 9257,94,298

Details of bank balances/ deposits

Fixed deposits with original maturity of 3 months or less included 3500,00,000 4650,00,000

under "Cash and cash equivalents"

Fixed deposits due to mature within 12 months of the reporting date 818,37,283 758,99,250

included under "Other bank balances" #

Fixed deposits due to mature after 12 months of the reporting date 200,00,000 230,00,000

included under "Other non-current assets" #

4518,37,283 5638,99,250

# Fixed deposit with bank are under lien and are not available for free use. The details of the same are as follows:-

Pledge with bank for obtaining bank overdraft facilities 696,00,528 674,43,000

Pledge with bank as Cash Collateral for securitization transactions 92,36,755 84,56,249

For obtaining bank guarantee for National Housing Bank (Refinance) 200,00,000 200,00,000

Deposit against term loans 30,00,000 48,18,571

1018,37,283 1007,17,820

Page 79 of 89





As at As at

31 March 2016 31 March 2015

2.16 Short term loans and advances

(Unsecured, considered good unless stated otherwise)

To parties other than related parties

Housing loans - secured

-Considered good 2574,50,240 1998,71,919

-Considered doubtful 46,12,452 26,51,060

Housing loans - unsecured

-Considered good 7,03,750 12,03,463

-Considered doubtful - 49,780

Non Housing loans - secured

-Considered good 1531,41,157 531,06,715

-Considered doubtful 3,63,451 1,57,453

Non Housing loans - unsecured

-Considered good 52,845 1,37,549

-Considered doubtful - -

Minimum retention requirement (against assignment transaction) 18,87,424 -


Minimum alternative tax (MAT) recoverable 34,94,314 -

Security deposits 78,20,670 34,93,892

Cash collateral against borrowings - 6,03,171

Service tax receivable 15,46,674 11,03,510

Prepaid expenses 20,44,525 11,67,471

Advances to employees 14,19,237 1,11,524

Advances to suppliers 37,87,104 1,90,569

Other advances 39,21,570 -

4422,45,413 2638,48,076

2.17 Other current assets

Stock of acquired properties (held for sale or disposal) 88,27,224 - (Net of provision for dimunition in the value of acquired properties

amounting to Rs. 2,006,093 (previous year Rs. Nil))

Interest accrued but not due on loans 890,08,609 529,27,714

Interest accrued but not due on:

- Fixed deposits 34,22,115 35,13,998

- Cash collateral against borrowings 13,75,003 8,52,397

Unamortised processing fees on borrowings (refer note 1B(f)) 135,47,033 77,92,120

Unamortised discounted cost of Commercial paper 54,22,962 -

1216,02,946 650,86,229

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31 March 2016 31 March 2015

2.18 Revenue from operations

Interest on housing and non housing loans 8703,72,524 4174,57,139

Processing fees and other charges 1215,99,715 897,90,110

Excess interest spread on securitization 108,19,278 126,98,066

Income under assignment transaction 183,70,124 -

10211,61,641 5199,45,315

2.19 Other income

Profit on redemption of mutual funds (net) 314,60,865 90,10,160

Interest income on fixed deposits 131,08,875 111,68,104

Dividend income from current investments - 261,66,770

Miscellaneous income 17,72,904 21,62,821

463,42,644 485,07,855

2.20 Employee benefits

Salaries, bonus and allowances 2674,04,616 1600,92,038

Contribution to provident and other funds 144,20,891 103,55,909

Gratuity 11,45,552 4,52,768

Compensated absences 40,63,340 31,27,295

Employee stock option compensation expense 146,27,237 -

Staff welfare 55,55,595 44,54,154

3072,17,231 1784,82,164

2.21 Finance costs

Interest on

- Term loan 4566,97,355 2307,59,278

- Bank overdraft 3,72,929 4,24,812

- Non Convertible Debentures 2,13,115 -

Processing fees on loans (refer note 1B(f)) 103,08,853 47,41,116

Discount on commercial papers 60,53,538 -

4736,45,790 2359,25,206

2.22 Other expenses

Housing Loans:



Non Housing Loans:



Legal and professional 168,75,617 231,41,539

Information technology support 81,66,480 68,86,360

Customer acquisition cost 365,09,821 136,44,161

Advertisement 112,87,665 8,30,761

Brokerage and commission 8,76,938 4,10,500

Repair and maintenance - others 97,90,329 67,79,298

Travelling and conveyance 93,69,306 69,19,701

Training and development 11,52,383 7,90,400

Printing and stationery 42,46,348 30,54,940

Storage Charges 6,35,465 3,66,166

Electricity 24,38,971 14,96,128

Communication 64,52,840 48,82,676

Office supplies 5,40,035 6,76,362

Postage and courier 51,63,480 37,13,139

Rent ## 290,33,624 217,62,483

Rates and taxes 10,28,823 17,61,040

336,00,755 -

Capital work-in-progress written off - 20,000

Loss on sale of fixed assets 44,596 14,366

Insurance 9,61,557 4,02,722

Donation 4,51,773 2,68,000

Bank charges 20,10,252 15,35,558

Provision for loss on stock of acquired property 20,06,093 3,99,266

14,53,691 3,14,773

2107,52,096 1363,77,404

Note 2.22 (a)- Payment to auditors*

As auditor

- Statutory audit 15,50,000 11,50,000

- Tax audit # 60,000 25,000

- Certification charges 1,95,000 1,20,000

- Outlays 1,33,770 1,48,729

19,38,770 14,43,729

* excluding service tax

# paid to another auditor

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Miscellaneous

## The Company has taken various office premises on operating lease. The office premises are generally rented for a term between 1 to 3 years on a

cancellable basis. Lease payments during the year are charged to Statement of Profit and Loss.


Loan asset written off {Net of provisions no longer required written back amounting to

Rs. 9,106,842 (previous year Rs. Nil)}



Significant Accounting Policies and Notes forming part of Financial Statements 2. Segment reporting

The Company provides Housing loans and Non-Housing loans and the entire services are governed by same set of risk and returns. Hence, the Company has been considered to have only one primary segment. The said treatment is in accordance with the guiding principles enunciated in the Accounting Standard-17 on Segment Reporting as specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014. The Company provides services only within India and does not have any operations in economic environments with different risks and returns. Hence, it is considered operating in a single geographical segment.

3. Stock Option Plan

During the financial year 2011-12, the Company issued 119,047 equity shares to the Shubham Employees Welfare Trust for granting the options to employees. A resolution was passed in the Board Meeting of the Company dated 31 October 2013 authorizing the Board/ Compensation Committee to issue 119,047 Employee Stock Options to employees. Each option is exercisable for one (1) equity share or security convertible to one (1) equity share of face value of Rs. 10/ - each fully paid up on payment to the Trust for such shares at a price to be determined in accordance with Employee Stock Option Plan 2013 (‘ESOP 2013’). If an Employee Stock Option expires or becomes un-exercisable without having been exercised in full, such options, would be available to the Compensation Committee for granting to other employees.

The Employee Stock Options granted under ESOP 2013 shall vest for a minimum period of one

(1) year and a maximum of four (4) years from the date of grant of the option. The exact period for which the options would vest shall be determined by the Compensation Committee, subject to the aforesaid limits regarding the minimum and maximum vesting period. There shall be a minimum period of one year between the grant of options and vesting of option.

During the year the company has granted 29,529 option to employees under the ESOP 2013, detail is as under:

Date of Grant Date of Vesting No. of Options Fair Value (Rs.)

Exercise price (Rs.)

1 May 2015 1 May 2016 8,065 955.28 10

24Aug 2015 24Aug 2016 3,594 955.32 10

24Aug 2015 24 Feb 2017 1,194 955.64 10

1 May 2015 1 May 2017 4,934 955.87 10

1 May 2015 1 Aug 2017 265 956.00 10

24Aug 2015 24 Feb 2018 2,394 956.23 10 1 May 2015 1 May 2018 3,870 956.34 10

1 May 2015 1 Aug 2018 224 956.47 10

1 May 2015 1 Jan 2019 2,596 956.71 10

24Aug 2015 24 Feb 2019 2,393 956.74 10

Total 29,529 The Activity in the ESOP 2013 during the year ended 31 March 2016 is as follow:

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Particular Year ended 31 March 2016

Shares arising out of options (Nos.)

Weighted average exercise price (Rs.)

Outstanding at the beginning of the year - -

Granted during the year 29,529 10

Forfeited and expired during the year - -

Exercised during the year - -

Outstanding at the end of the year 29,529 10

Exercisable at the end of the year 29,529 10

The fair value of above options is estimated on the date of grant using the Black-Scholes- Merton model with the following assumptions:

Particular Option Granted during the year

Grant date 1 May 2015 24 August 2015

Weighted Average option price (Rs.) 955.84 955.94 Exercise price (Rs.) 10.00 10.00

Expected volatility (%) 13.95 15.74

Expected life of Option (years) 1 - 7 1 - 7

Expected dividend Nil Nil

Risk-free interest rate (%) 7.90 - 8.03 8.05 - 8.30

Fair value of share on grant date (Rs.) 962.56 962.56

The expected volatility for grant on 1 May 2015 has been calculated based on stock price of BSE 500 for the period 2 May 2014 to 1 May 2015 and for grant on 24 August 2015 has been calculated based on stock price of BSE 500 for the period 22 August 2014 to 25 August 2015.

During the year ended 31 March 2016, the Company recorded an employee compensation

expense of Rs. 14,627,237 in the Statement of Profit and Loss.

4. Commitments As at As at

Particulars 31 March 2016 31 March 2015 Commitments Other commitments- Undisbursed amount of loans sanctioned 427,714,429 722,186,130 Committed amount against capital assets 6,926,833 -

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5. Earnings per share

Basic and diluted earnings per equity share have been computed by dividing net profit after tax by the weighted average number of equity shares outstanding for the year.

Particulars Units Year ended 31 March 2016

Year ended 31 March 2015

Basic earnings per share

a. Profit after tax attributable to equity shareholders Rs. 55,908,026 10,398,189

Computation of weighted average number of Equity shares of Rs. 10 each

Number of shares at the beginning of the year 943,690 619,187

Number of shares issued during the year - 324,503

Total number of equity shares outstanding at the end of the year

943,690 943,690

Weighted number of equity shares outstanding at the end of the year

943,690 872,960

b. Less: - shares issued ESOP trust (reduced in accordance with paragraph 46 of ‘Guidance Note on Accounting for Employee Share-based Payments issued by the Institute of Chartered Accountants of India’ in computation of EPS and considered as dilutive potential equity shares)

119,047 119,047

c. Weighted average of number of equity shares used in computing basic earnings per share

824,643 753,913

d. Basic earnings per equity share of face value of Rs. 10 each (a/c)

67.80 13.79

Diluted earnings per share

Computation of weighted average number of CCPS of Rs. 10 each

Number of preference shares at the beginning of the year

2,485,640 1,364,968

Number of preference shares issued during the year

- 1,384,888

Total number of preference shares outstanding at the end of the year

2,485,640 2,485,640

e. Number of potential equity shares arising out of conversion of CCPS.

2,485,640 2,049,569

f. Diluted weighted average number of equity shares outstanding during the year (based on the date of issue of shares) (f=b+c+e)

3,429,330 2,922,529

Page 84 of 89



g. Diluted earnings per equity share of face value of Rs. 10 each (a/f)

16.30 3.56

6. Related party transactions Nature of relationship Key management personnel (KMP)

Relative of Key management personnel Entities over which Directors of the Company and their relatives are able to exercise significant influence Shareholders who are able to exercise significant influence

a) Transaction with related parties

Name of the party Mr. Ajay Mukund Oak (Director) Mr. Sanjay Chaturvedi (Director)

Mrs. Rupa Basu (wife of Mr. Ajay Oak)

Shubham Employees’ Welfare Trust Helion Venture Partners II LLC Elevar Equity Mauritius

Description Key management personnel Shareholder who are able to exercise significant influence





Share capital issued during the year (including security premium)

Helion Venture Partners II LLC

- - - 212,791,596

Elevar Equity Mauritius - - - 212,791,596

Total - - - -

Managerial remuneration

Ajay Mukund Oak 5,620,436 5,209,359 - -

Sanjay Chaturvedi 5,640,376 5,156,019 - -

Relative of Key management personnel

Rupa Basu 3,330,901 - - -

Total 14,591,713 10,365,378 - -

Guarantee given to obtain loan during the year

Ajay Mukund Oak 730,000,000 1,470,000,000 - -

Sanjay Chaturvedi 730,000,000 1,470,000,000 - -

Total 1,460,000,000 2,940,000,000 - -

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b) Balances outstanding with related parties

Description Key management personnel Shareholder who are able to exercise significant influence





#Guarantee outstanding at year end

Ajay Mukund Oak 1,742,706,273 1,247,512,706 - -

Sanjay Chaturvedi 1,742,706,273 1,247,512,706 - -

Total 3,485,412,546 2,495,025,412 - - #Net of the guarantee released on borrowings repaid during the year. During the year the company has not incurred any expenditure on capital and revenue nature in foreign currency therefore there is no foreign currency liability due on Company as on 31 March 2016.

7. Disclosure pursuant to NHB circular no. NHB/ND/DRS/Pol-No. 35/2010-11 dated 11 October 2010

I Capital to Risk Assets Ratio (CRAR)

Items Year ended 31 March 2016


CRAR (%) 43.94% 58.96% CRAR - Tier I capital (%) 43.32% 58.41%

CRAR - Tier II Capital (%) 0.62% 0.55%

II Exposure to Real Estate Sector

Category Year ended 31 March 2016


A Direct exposure

(i) Residential Mortgages

(a) Individual housing loans up to Rs.15 lakh

3,640,231,392 3,163,593,386

(b) Individual housing loans greater than Rs.15 lakh

273,961,985 90,116,463

(c) Other loans 2,148,645,354 754,880,200

Total 6,062,838,731 4,008,590,049

Lending fully secured by mortgages on residential property that is or will be occupied by the borrower or that is rented;

(ii) Commercial Real Estate - Lending secured by mortgages on

- -

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commercial real estates (office buildings,

retail space, multipurpose commercial premises, multi-family residential buildings, multi-tenanted commercial premises, industrial or warehouse space, hotels, land acquisition, development and construction, etc.). Exposure would also include non-fund based (NFB) limits;

(iii) Investments in Mortgage Backed Securities (MBS) and other securitised exposures -

(a) Residential - -

(b) Commercial Real Estate - -

B Indirect exposure

(i) Fund based exposures

(a) on National Housing Bank (NHB) - - (b) on Housing Finance Companies

(HFCs) - -

(ii) Non -fund based exposures

(a) on National Housing Bank (NHB) - -

(b) on Housing Finance Companies (HFCs)

- -

Page 87 of 89



III Asset Liability Management: Maturity pattern of certain items of assets and liabilities as at 31 March 2016

Assets and Liabilities are classified in the maturity buckets as per the guidelines issued by National Housing Bank. (amount in crores)

Maturity Buckets


Liabilities Assets Liabilities Assets

Borrowings from Banks

Market Borrowings*

Advances** Investments*** Borrowings from Banks

Market Borrowings*

Advances** Investments***

1 day to 30-31 days (One month)

6.31

2.64

3.37

-

4.15

4.60

1.76

-

Over 1 to 2 months 4.06 2.72 2.97 - 1.53 4.61 1.82 -

Over 2 to 3 months 3.81 3.67 2.72 - 1.95 4.62 1.64 -

Over 3 to 6 months 14.66 20.57 8.70 - 8.67 4.04 5.27 - Over 6 months to 1 year 29.45 21.56 19.24 0.05 21.64 8.35 11.62 -

Over 1 to 3 years 99.18 85.13 86.26 - 84.20 36.84 53.15 0.05

Over 3 to 5 years 70.16 43.10 105.91 - 52.68 23.05 63.92 -

Over 5 to 7 years 37.23 23.82 105.56 - 30.89 2.29 65.79 -

Over 7 to 10 years 0.82 0.57 130.92 - - 2.12 77.21 -

Over 10 years - - 125.38 - - - 109.71 -

Total 265.68 203.78 591.03 0.05 205.71 90.52 391.89 0.05 *Market borrowings includes Long-term borrowings from parties other than banks, Non-convertible debentures and Commercial paper. **Advances includes housing and non-housing loans net off provisions for non-performing assets.

***Investment includes investment in mutual funds.

Page 88 of 89



8. Long-term contracts The Company has a process whereby periodically all long-term contracts are assessed for material foreseeable losses. At the year end, the Company has reviewed and ensured that adequate provision as required under any law / accounting standards for material foreseeable losses on such long-term contracts has been made in the books of account.

9. The Company is subject to certain legal proceedings and claims by customers, which have arisen in the ordinary course of business. The Company's management does not expect that these legal actions, when ultimately concluded and determined, will have a material and adverse effect on the Company's results of operations or financial conditions.

10. During the year, the Company has written-off loans amounting to Rs. 33,600,755 (net of provision no longer required written-back amounting to Rs. 9,106,842) pertaining to 54 borrowers as the recovery possibility for these borrowers seems remote, despite legal remedies and other actions taken by the Company.

11. During the year, the Company identified four cases involving disbursement amount of Rs. 3,520,000, wherein post disbursement of loans, the properties were forged/ multiple loans were obtained on same properties by the borrowers. The Company has not been able to recover any amounts back from such loans except for amount of Rs. 113,037. Further, the entire amount outstanding (net of recovery) in books has been written-off (included in note 11 above).

12. Disclosure regarding penalty or adverse comments as per Housing Finance Companies (NHB) Directions, 2010. During the current year ended 31 March 2016:

a. There has been no penalty imposed by National Housing Bank. b. There has been no adverse comments in writing from National Housing Bank on regulatory compliances, which require a specific communication by the Company to the public.


For B S R & Associates LLP Chartered Accountants Firm registration number: 116231W /W-100024

Manish Gupta Partner Membership No.: 095037 Place: Gurgaon Date: 27 July, 2016

For and on behalf of the Board of Directors of Shubham Housing Development Finance Co. Ltd.

Ajay Mukund Oak Sanjay Chaturvedi Director Director DIN No.: 01779000 DIN No.: 01636432

Neeta Kamra Shashank Jain Company Secretary Chief Financial Officer Place: Gurgaon Date: 27 July 2016

Page 89 of 89

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