Notes to Accounts of GRUH Finance Ltd.

Mar 31, 2019

1 COMPANY OVERVIEW

GRUH Finance Limited (‘GRUH’ or ‘the Company”) incorporated in 1986 as a specialised Housing Finance Company domiciled in India as a limited company having its registered office at Ahmedabad. The principal business is to provide loans for purchase or construction of residential houses. The business is conducted through its branches in India and is supported by a network of Referral Associates for sourcing loans as well as deposits. The Company is a public limited company and its shares are listed in India on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).

2 SIGNIFICANT ACCOUNTING JUDGMENT, ESTIMATES AND ASSUMPTIONS

2.1 Critical accounting Judgments

The preparation of the financial statements in conformity with Ind AS requires the management to make estimates and assumptions considered in the reported amounts of assets and liabilities and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialise.

2.2 Expected Credit Loss

When determining whether the risk of default on other loans (i.e. developer loans) portfolio has increased significantly since initial recognition, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Company’s historical experience and credit assessment and including forward-looking information. In certain cases, the assessment based on past experience is required for future estimation of cash flows which requires significant judgment.

The inputs used and process followed by the Company in determining the increase in credit risk has been detailed in note to accounts on Impairment.

2.3 Fair Valuation of Investments

Some of the Company’s assets and liabilities are measured at fair value for financial reporting purposes. In estimating the fair value of an asset and liability, the Company uses market observable data to the extent it is available. When Level 1 inputs are not available, the Company has applied appropriate valuation techniques and inputs to the valuation model.

Information about the valuation techniques and inputs used in determining the fair value of various assets and liabilities are disclosed in Note 37.

2.4 Income Taxes

The Company’s tax jurisdiction is in India. Significant judgments are involved in determining the provision for income taxes, including amount expected to be paid/recovered for uncertain tax positions.

3 FIRST TIME ADOPTION OF IND AS (IND AS 101)

The Company has prepared financial statements for the year ended March 31, 2019, in accordance with Ind AS for the first time. For the periods upto and including the year ended March 31, 2018, the Company prepared its financial statements in accordance with the accounting standards notified under Section 133 of the Companies Act, 2013, read together with the Companies (Accounting Standards) Rules, 2006, as amended (Previous GAAP). Accordingly, the Company has prepared its financial statements to comply with Ind AS for the year ending March 31, 2019, together with comparative information as at and for the year ended March 31, 2018, as described in the summary of significant accounting policies. In preparing these financial statements, the Company’s opening Balance Sheet was prepared as at April 1, 2017 i.e. the transition date to Ind AS for the Company. Previous GAAP financials statements as on April 1, 2017 being transition date and for previous year ended March 31, 2018 have been restated as per Ind AS.

This note explains the principal adjustment made by the Company in restating its Previous GAAP financial statements, including the Balance Sheet as at April 1, 2017, and the financial statements as at and for the year ended March 31, 2018.

3.1 Exemptions availed :

3.1.1 Deemed Cost for Property, Plant and Equipment and Intangible Assets :

The Company has elected to continue with the carrying value of all of its property, plant and equipment and intangible assets recognised as of April 1, 2017 (the transition date), measured as per the Previous GAAP and use that carrying value as its deemed cost as of the transition date under Ind AS.

3.1.2 Classification and Measurement of Financial Assets :

The Company has classified the financial assets in accordance with Ind AS 109 on the basis of facts and circumstances that exist at the date of transition to Ind AS.

3.1.3 Fair Value of Financials Assets and Liabilities :

As per Ind AS exemption, the Company has not fair valued the financial assets and liabilities retrospectively and has measured the same prospectively.

3.1.4 Investments :

Under Previous GAAP, the transaction cost incurred on acquisition, of Investments in Government Securities, were valued at Amortised Cost on Straight Line Method while under Ind AS such cost are included in the initial recognition amount of Investments in Government Securities and recognised against Interest Income using Effective Interest Method. Consequently, Investment in Government Securities on the date of transition has decreased by Rs. 0.17 crore and for the year ended March 31, 2018 has decreased by Rs. 0.03 crore.

Further, for the Investments in Mutual Funds the fair value changes are recognised in the Statement of Profit and Loss. On transitioning to Ind AS, these financial assets have been measured at their fair values which is higher than cost as per Previous GAAP. Consequently, Investments in Mutual Funds on the date of transition has increased by Rs. 0.01 crore and for year ended March 31, 2018 has increased by Rs. 2,600.00.

Above has led to decrease in profit before tax of Rs. 0.03 crore and profit after tax of Rs. 0.02 crore for the year ended March 31, 2018.

3.1.5 Deferred Tax :

The Previous GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes using the Balance Sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the Balance Sheet and its tax base.

The application of Ind AS 12 approach has resulted in the various transitional adjustments being temporary differences. Accordingly, the Company has accounted for such differences. These adjustments are recognised in co-relation to the underlying transaction either in retained earnings, OCI or profit and loss respectively.

3.1.6 Effective Interest Rate (EIR) :

a. Under Previous GAAP, transaction costs charged to customers was recognised upfront while under Ind AS, such costs are included in the initial recognition amount of financial asset and recognised as interest income using the effective interest method. Consequently loan to customers on date of transition have decreased by Rs. 43.68 crore and interest income for the year ended March 31, 2018 has increases by Rs. 11.56 crore and consequently Loan Assets has been increased by Rs. 11.56 crore.

b. Under Previous GAAP, transaction costs incurred on borrowings was charged to statement of profit and loss/securities premium upfront while under Ind AS, such costs are included in the initial recognition amount of financial liabilities and recognised as interest expense using the effective interest method. Consequently, Non-Convertible Debentures and Subordinated Liabilities on date of transition date have decreased by Rs. 4.80 crore and Rs. 0.21 crore respectively and interest expense for the year ended March 31, 2018 has increased by Rs. 3.43 crore. Non-Convertible Debentures as at March 31, 2018 has been increased by Rs. 0.39 crore and Subordinated Liabilities has been increased by Rs. 0.03 crore.

3.1.7 Share-Based Payments :

Under Previous GAAP, the cost of equity-settled employee share-based payments was recognised using the intrinsic value method.

Under Ind AS, the cost of equity-settled employee share-based payments is recognised based on the fair value of the options as on the grant date. The change does not affect total equity, but there is a decrease in profit before tax as well as profit after tax for the year ended March 31, 2018 by Rs. 3.36 crore and Rs. 2.18 crore respectively.

3.1.8 Defined Benefit Obligation :

Both under Previous GAAP and Ind AS, the Company recognised costs related to its post-employment defined benefit plan on an actuarial basis. Under Previous GAAP, the entire cost, including actuarial gain and losses, are charged to profit or loss. Under Ind AS, remeasurements (comprising of actuarial gains and losses, the effect of assets ceiling, excluding amounts included in net interest on the net defined benefit liability and return on plan assets excluding amount included in net interest on the net defined benefit liability) are recognised in Other Comprehensive Income (OCI). Thus, employee benefit expense is reduced by Rs. 0.30 crore and is recognised in OCI during the year ended March 31,2018.

The current tax amounting to Rs. 0.11 crore is also regrouped from profit or loss to OCI for the year ended March 31, 2018. The above change does not affect total equity as at March 31, 2018. However, profit before tax and profit for the year ended March 31, 2018, is increased by Rs. 0.30 crore and Rs. 0.19 crore respectively.

3.1.9 Other Comprehensive Income (OCI) :

Under Previous GAAP, there was no concept of OCI. Re-measurement of defined benefit plan liability is recognised in OCI.

4.1 Loans includes Rs. 44.30 crore (Previous Year Rs. 36.70 crore) in respect of properties held for disposal under Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

4.2 Loans includes Rs. 0.23 crore (Previous Year Rs. 0.25 crore) given to the related party of GRUH under the Staff Loan Scheme.

4.3 Collateral and Other Credit Enhancements :

The amount and type of collateral required depends on an assessment of the credit risk of the counterparty.

Loans granted by GRUH are secured or partly secured by one or combination of following securities :

a) Equitable mortgage of property and / or

b) Pledge of shares, Units, Other Securities, assignments of Life Insurance policies and / or

c) Hypothecation of assets and / or

d) Bank guarantees, Company guarantees or Personal guarantees and / or

e) Undertaking to create a security.

The Company monitors the value of collateral and will request additional collateral in accordance with the loan agreement.

In its normal course of business, the Company does not physically repossess properties or other assets. Property acquisition is a last recourse which company exercise in case recovery become very difficult. Any surplus funds after settlement of outstanding loan are returned to the customers. As a result of this practice, the residential properties under legal repossession processes are not treated as non-current assets held for sale.

The tables below is the most informative and includes the total value of all collateral, any surplus collateral (i.e. the extent to which the value of collateral held is greater than the exposure to which it relates) and the net exposure to credit risk.

The information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of Information available with the Company. The amount of principal and interest outstanding during the year is given below.

5.1 Non-Convertible Debentures includes Rs. 1,314.42 crore (As At March 31, 2018 Rs. 1,313.75 crore and As At April 1, 2017 Rs. 1,313.08 crore) from a related party.

5.2 Redeemable Non-Convertible Debentures are secured by the mortgage of specific immovable property created in favour of Debenture Trustees and by a negative lien on all the assets of the Company excluding the Statutory Liquid Assets having floating charge in favour of the Public Deposit Trustees against the Public Deposits.

5.3 Terms of repayment, nature of security & rate of interest in case of Debt Securities.

Nature of Security : mortgage of specific immovable property created in favour of Debenture Trustees and by a negative lien on all the assets of the Company excluding the Statutory Liquid Assets having floating charge in favour of the Public Deposit Trustees against the Public Deposits.

NCDs are not listed on any stock exchange.

6.1 Public deposits as defined in paragraph 2(1)(y) of the Housing Finance Companies (NHB) Directions, 2010, are secured by floating charge and Lien in favour of the Trustees for Depositors on the Statutory Liquid Assets maintained in terms of sub-sections (1) & (2) of Section 29B of the National Housing Bank Act, 1987.

7.1 Unsecured Non-Convertible Subordinated Debentures

Redeemable unsecured Non-Convertible Subordinated Debentures, for value aggregating to Rs. 35 crore are subordinated debt to present and future senior indebtedness of the Company and qualify as Tier II Capital under National Housing Bank’s (NHB) guidelines for assessing capital adequacy. These NCDs are redeemable at par on March 22, 2023 (Rs. 10 crore) and on March 25, 2023 (Rs. 25 crore).

These debentures are subordinated to present and future senior indebtedness of the Company and qualify as Tier II capital under National Housing Bank’s (NHB) guidelines for assessing capital adequacy. Based on the balance term to maturity as at March 31, 2019, 60% (Previous Year 80%) of the face value of the subordinated debt is considered as Tier II capital for the purpose of capital adequacy computation.

As required under Section 125 of the Companies Act 2013, the Company has transferred Rs. 0.20 crore (Previous Year Rs. 0.16 crore) to the Investor Education and Protection Fund (IEPF) during the year. As of March 31, 2019, no amount was due for transfer to the IEPF.

Aggregate number of shares allotted as fully paid-up by way of Bonus Shares (During 5 years immediately preceding March 31, 2019) :

During the year 2018-19, pursuant to approval of shareholders at the 32nd Annual General Meeting (AGM) of GRUH held on May 30, 2018, GRUH allotted 36,57,20,011 Bonus Equity Shares of Rs. 2 each as fully paid-up shares in the proportion of 1 : 1. In order to facilitate issue of bonus shares, the authorised share capital of the Company has been increased from Rs. 100 crore to Rs. 200 crore.

During the year 2014-15, pursuant to approval of shareholders at the 28th Annual General Meeting (AGM) of GRUH held on May 28, 2014, GRUH allotted 18,01,31,150 Bonus Equity Shares of Rs. 2 each as fully paid-up shares in the proportion of 1 : 1. In order to facilitate issue of bonus shares, the authorised share capital of the Company has been increased from Rs. 50 crore to Rs. 100 crore.

Terms/Rights attached to Equity Shares :

GRUH has one class of share referred to as equity shares having a face value of Rs. 2 each. Each shareholder is entitled to one vote per share held and dividends, if any, proposed by the Board of Directors subject to the approval of the shareholders at the ensuing Annual General Meeting.

The Board of Directors at its meeting held on March 14, 2019, upon the recommendation of the Nomination and Remuneration Committee of Directors of the Company, approved the issue of additional 90,00,000 equity shares of Rs. 2 each of the Company to eligible employees under existing Employee Stock Option Scheme 2015, in terms of SEBI (Share Based Employee Benefits) Regulations, 2014 and amendment of the Employee Stock Option Scheme 2015 by increasing the number of stock options to be granted to eligible employees. Subsequently, members of the Company with requisite majority have, on April 22, 2019, passed the said special resolution through postal ballot/e-voting.

8.1 Securities Premium Reserve : Securities premium reserve is credited when shares are issued at premium. It can be used to issue bonus shares, to provide for premium on redemption of shares or debentures, write-off equity related expenses like underwriting costs, etc.

8.2 General Reserve : It is a free reserve which is created by appropriation from profits of the current year and/or undistributed profits of previous years, before declaration of dividend duly complying with any regulations in this regard.

8.3 As per section 29C of the National Housing Bank Act, 1987, GRUH is required to transfer at least 20% of its net profit every year to reserve before any dividend is declared. For this purpose any Special Reserve created by GRUH under section 36(1)(viii) of the Income Tax Act, 1961 is considered to be an eligible transfer. GRUH has transferred an amount of Rs. 105.00 crore (Previous Year Rs. 106.25 crore) to Statutory Reserve in terms of section 36 (1)(viii) of the Income Tax Act, 1961. GRUH doesn’t anticipate any withdrawal from Statutory Reserve in foreseeable future.

8.4 Additional Reserve has been created over the years in terms of section 29C of the NHB Act, 1987 out of the distributable profits of the Company.

8.5 Employee Stock Option Reserve : The Company has a share option scheme under which options to subscribe for the Company’s shares have been granted to employees including key management personnel. The share-based payment reserve is used to recognise the value of equity-settled share-based payments provided to employees, as part of their remuneration.

9.1 Interest Income on Investments are Interest on Long-Term SLR Investments which are held-to-maturity.

9.2 Surplus from deployment in Cash Management Schemes of Mutual Funds is in respect of Investments held as Current Investments.

10.1 In accordance with the Indian Accounting Standard on ‘Leases’ (Ind AS 17), the following disclosure in respect of operating leases are made :

GRUH has taken office premises under operating lease for a period ranging from 11 months to 180 months. These are cancellable and have no specific obligation for renewal. The total lease payments for current year amounts to Rs. 7.31 crore (Previous year Rs. 6.50 crore) which is recognised in the Statement of Profit and Loss under ‘Rent Expenses’.

10.2 Expenditure incurred for Corporate Social Responsibility are Rs. 6.23 crore (Previous Year Rs. 4.37 crore)

Disclosure on Corporate Social Responsibility (CSR) activities u/s 135 of the Companies Act, 2013 is as under :

(a) Gross amount required to be spent by GRUH during the year : Rs. 9.11 crore (Previous year Rs. 7.36 crore)

(b) Amount spent, utilised and charged during the year on :

11 The Board of Directors of the Company, at its meeting held on January 7, 2019, approved a Scheme of Amalgamation, for the merger of GRUH Finance Limited with Bandhan Bank Limited with effect from proposed Appointed Date of January 1, 2019. In this regards, Competition Commission of India, BSE and NSE have approved proposed scheme of merger. The scheme remains subject to receipt of approvals of National Company Law Tribunal, Shareholders and Creditors of the Company. The effective date shall be based on the receipt of the aforesaid approvals. Pending the same, the proposed transaction does not have any impact on the current financial statements of the Company as at and for the year ended March 31, 2019.

The number of equity shares considered in the above computation includes 36,57,20,011 equity shares allotted as fully paid-up Bonus Shares during the year. The figures for the previous year have been adjusted for the Bonus Shares.

12 SEGMENT REPORTING

The Company’s main business is to provide loans for purchase or construction of residential houses. All other activities of the Company revolve around the main business. As such, there are no separate reportable segments, as per the Ind AS 108 “Operating Segments” specified under section 133 of the Companies Act, 2013.

13 MATURITY ANALYSIS OF ASSETS AND LIABILITIES

The table below shows an analysis of assets and liabilities analysed according to when they are expected to be recovered or settled. With regard to loans and advances to customers, the Company uses the same basis of expected repayment behaviour as used for estimating the EIR. Issued debt reflect the contractual coupon amortisations.

14 RELATED PARTY DISCLOSURES

As per the Indian Accounting Standard on ‘Related Party Disclosures’ (Ind AS 24), details of related parties, nature of the relationship, with whom company has entered transactions and the balances in related party accounts at year end, are as mentioned below. All these transactions with related parties were carried out in ordinary course of business and on arm’s length basis.

(a) Holding Company

Housing Development Finance Corporation Limited (HDFC)

(b) Fellow Subsidiary Companies

(i) HDFC Life Insurance Co. Limited

(ii) HDFC ERGO General Insurance Co. Limited

(c) Fellow Associate Company HDFC Bank Limited

(d) Chairman (Non-Executive and Non-Independent)

Mr. Keki M. Mistry

(e) Non-Executive and Non-Independent Director

(i) Ms. Renu S. Karnad (up to March 8, 2019)

(ii) Mr. K. G. Krishnamurthy

(f) Independent Directors

(i) Mr. Prafull Anubhai (up to March 31, 2019)

(ii) Mr. S. G. Mankad

(iii) Mr. Biswamohan Mahapatra

(iv) Mr. Pankaj Patel

(v) Mr. Rajesh Gupta

(vi) Ms. Bhavna Doshi

(g) Key Management Personnel

(i) Mr. Sudhin Choksey, Managing Director

(ii) Mr. Kamlesh Shah, Executive Director

(iii) Mr. Marcus Lobo, Company Secretary

(iv) Mr. Hitesh Agrawal, Chief Financial Officer

(h) Entity in which Independent Director exercise significant influence M/s SNG & Partners, Advocates & Solicitors

(i) Entities in which Key Management Personnel exercise significant influence

(i) GRUH Finance Limited Employees’ Provident Fund Trust

(ii) GRUH Finance Limited Employees’ Gratuity Trust Fund

(iii) GRUH Finance Limited Officers’ Superannuation Fund

Level 1 : Level 1 hierarchy includes financial instruments measured using quoted prices.

Level 2 : The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3 : If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

The Company’s policy is to recognise transfers into and transfers out of fair value hierarchy levels as at the end of the reporting period.

(ii) Valuation technique used to determine fair value

The carrying amounts of cash and cash equivalents, other bank balances, trade payables and other financial liabilities are considered to be the same as their fair values, due to their short-term nature.

The fair values for loans, investment in government securities and other financial assets were calculated based on cash flows discounted using a current lending rate. They are classified as level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs including counterparty credit risk.

The fair values of debt securities, borrowings other than debt securities, deposits and subordinated liabilities are based on discounted cash flows using a current borrowing rate. They are classified as level 3 fair values in the fair value hierarchy due to the use of unobservable inputs, including own credit risk.

For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair values.

15 FINANCIAL RISK MANAGEMENT

Credit Risk

Credit risk is the risk of loss that may occur from the failure of any party to abide by the terms and conditions of any contract, principally the failure to make required payments of amounts due to company. In lending operations, the Company is principally exposed to credit risk.

The credit risk is governed by various Product Policies. The Product Policy outlines the type of products that can be offered, customer categories, the targeted customer profile and the credit approval process and limits.

The Company measures, monitors and manages credit risk at an individual borrower level and at the group exposure level for other borrowers. The credit risk for retail borrowers is being managed at portfolio level for both Home loans and Non Home Loans. The Company has a structured and standardized credit approval process, which includes a well-established procedure of comprehensive credit appraisal. The Risk Management Policy addresses the recognition, measurement, monitoring and reporting of the Credit risk. The Company has additionally taken the following measures : -

- Borrower group exposure limits as per applicable regulations.

- Establishment of a team to enhance focus on monitoring of process implementation at the branches and to facilitate proactive action wherever required.

- Enhanced monitoring of retail product portfolios through periodic review.

Credit Approval Authorities

The Board of Directors has approved delegation of loan sanctioning powers to Managing Director and member of the management team on a graded level of the loan amount.

Retail Loans

Company’s customers for retail loans are primarily low, middle and high-income, salaried and self-employed individuals. All retail loans are also subjected to risk based pricing wherein the individual cases are graded on a credit score linked to multiple parameters of appraisal.

The Company’s credit officers evaluate credit proposals on the basis of active credit policies as on the date of approval. The criteria typically include factors such as the borrower’s income & obligations, the loan-to-value ratio, Fixed obligation to income ratio and demographic parameters subject to regulatory guidelines. Any deviations need to be approved at the designated levels.

The various process controls such as KYC check, Credit Bureau Report analysis are undertaken. Company’s staff performs comprehensive due diligence process including visits to customer’s business and residence premises.

Company analyses the portfolio performance of each product segment regularly, and use these as inputs in revising the product programs, target market definitions and credit assessment criteria to meet the twin objectives of combining volume growth and maintenance of asset quality. The retail loans are fully secured and have full recourse against the borrower. The Company has a equitable mortgage over the collateral Immovable Properties. Whereever the state laws provide, the memorandum of deposit of title deeds are also registered.

Other Loans

The Company has a framework for the appraisal and execution of project finance transactions and it believes that such framework enables optimal risk identification, allocation and mitigation and helps minimize risk in the transaction.

The project finance approval process undertakes detailed evaluation of credit, technical, commercial and financial besides capacity and capability of developer/promoter. A credit scan by obtaining CIBIL and legal litigation reports of key developer/promotor further strengthens credit evaluation. As part of the appraisal process, a risk matrix is prepared to assess project risks in terms of its viability and implementation of projects and other risks associated with the project.

Project finance loans are fully secured by equitable mortgage with registered MOD of the prime property being land on which project is to be executed besides lien on constructed units. The Company creates lien on the receivables arising from sale of constructed units. Cash flows are being escrowed in favour of the company besides setting up the escrowing of sale proceeds as per the RERA Act. The Company also obtains personal guarantees of the developer/key promoters. Besides, monthly reports on progress of work, sales booking and sales proceeds are being collected from borrowers which are being monitored until loans are fully repaid.

Risk Management and Portfolio Review

The Company ensures effective monitoring of credit facilities through a risk-based asset review framework under which the frequency of asset review is determined depending on the risk associated with the product.

For both Retail and other borrowers, the company staff verifies adherence to the terms of the credit approval prior to the commitment and disbursement of credit facilities.

The Company monitors compliance with the terms and conditions for credit facilities prior to disbursement. It also reviews the completeness of documentation, creation of security and compliance with regulatory guidelines.

The Company, regularly reviews the credit quality of the portfolio and various sub-portfolios. A summary of the reviews carried out is submitted to the concern teams.

The Company reviews adherence to policies and processes, carries out audit through internal auditor and briefs the Audit Committee and the Board periodically.

Expected Credit Loss

Expected Credit loss is a calculation of the present value of the amount expected to be lost on a financial asset, for financial reporting purposes. Credit risk is the potential that the obligor and counterparty will fail to meet its financial obligations to the lender. This requires an effective assessment and management of the credit risk at both individual and portfolio level.

Probability of Default (PD)represents the likelihood of default over a defined time horizon, Exposure at Default (EAD) represents how much the counterparty is likely to be borrowing at the time of default, Loss Given Default (LGD)represents the proportion of EAD that is likely to be lost post-default.The definition of default is taken as 90 days or above past due for all retail and other loans.The ECL is computed as a product of PD, LGD and EAD.

Delinquency buckets have been considered as the basis for the staging of all loans with0-30 days past due loans classified as Stage 1, 3189 days past due loans classified as Stage 2 and90 days or above past due loans classified as Stage 3.

For individual and other loans vintage analysis has been used to create PD terms structure which incorporates both 12 months PD for Stage 1 loans and life time PD for stage 2 and 3 loans. The vintage analysis captures a vintage default experience across a particular portfolio by tracking the yearly slippages from advances originating in a particular year. The vintage slippage experience/default rate is then used to build the PD term structure. This methodology has been used to create the LGD vintage which takes into account the recovery experience across accounts of a particular portfolio post default. The recoveries are tracked and discounted to the date of default using the interest rate.

Significant estimates and judgements Impairment of financial assets

The impairment provisions for financial assets disclosed above are based on assumptions about risk of default and expected loss rates. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the Company’s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.

Liquidity risk :

(i) Financing arrangements

The Company had access to the following undrawn borrowing facilities at the end of the reporting period :

The facilities may be drawn at any time and may be terminated by the bank without notice. Subject to the continuance of satisfactory credit ratings, the facilities may be drawn at any time in INR and have an average maturity of 12 months from sanction date.

(ii) Maturities of financial liabilities

The Company’s financial liabilities into relevant maturity groupings based on their contractual maturities for essential for an understanding of the timing of the cash flows.

The amounts disclosed in note 35 are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.

Market risk

(i) Cash flow and fair value interest rate risk

The Company’s core business is borrowing and lending, deposit taking as permitted by the National Housing Bank. These activities expose the Company interest rate risk. Interest rate risk is measured through earnings at risk from an earnings perspective and through duration of equity from an economic value perspective. Further, exposure to fluctuations in interest rates is also measured by way of gap analysis, providing a static view of the maturity and re-pricing characteristic of Balance sheet positions. An interest rate sensitivity gap report is prepared by classifying all rate sensitive assets and rate sensitive liabilities into various time period categories according to contracted/ behavioural maturities or anticipated re-pricing date. The difference in the amount of rate sensitive assets and rate sensitive liabilities maturing or being re-priced in any time period category, gives an indication of the extent of exposure to the risk of potential changes in the margins on new or re-priced assets and liabilities. Company monitors interest rate risk through above measures on a regular basis.

(a) Interest rate risk exposure

The exposure of the Company’s borrowing (including debt securities, deposits and subordined liabilities) at face value to interest rate changes at the end of the reporting period are as follows :

(b) Sensitivity

Since 93% of the Company’s Loan Assets are at variable rate of interest, the Company is in a position to pass on increase in cost of borrowings/benefit on reduction of cost of borrowings to its customers. As a result, the interest rate risk arising on account of movement in cost of borrowings is significantly low. However, for any reason, if the Company was not in a position to pass on cost/benefit to its customers, then an impact on profit could have been as under :

* Holding all other variables constant

(ii) Price risk

(a) Exposure

The Company’s exposure to price risk arises from investments held by the Company and classified in the balance sheet at fair value through profit or loss. The Company’s exposure to Mutual Funds is not significant and hence the Company’s exposure to price risk is insignificant.

16 CAPITAL MANAGEMENT

The Company maintains an actively managed capital base to cover risks inherent in the business and is meeting the capital adequacy requirements of National Housing Bank (NHB). The adequacy of the Company’s capital is monitored using, among other measures, the regulations issued by NHB.

The Company has complied with the applicable capital requirements over the reported period.

17 (i) Risk management

The Company’s objectives when managing capital are to :

1. Safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and

2. Maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.Consistent with others in the industry, the Company monitors capital on the basis of the following gearing ratio : Net debt (total borrowings net of cash and cash equivalents) divided by Total ‘equity’ (as shown in the balance sheet).

The Company’s strategy is to maintain a gearing ratio within 16 times as stipulated by National Housing Bank. The gearing ratios were as follows :

Loan covenants

Under the terms of the major borrowing facilities, the Company has complied with the covenants throughout the reporting period. As at March 31, 2019, the ratio of net finance cost to EBITDA was 67.78% (Previous Year - 63.33%).

18. Disclosure as required by National Housing Bank :

The following disclosures have been given in terms of National Housing Bank’s notification no. NHB.HFC.CG-DIR.1/MD&CEO/2016 dated February 9, 2017 and in terms of the circular no. NHB/ND/DRS/Pol-No.35/2010-11 dated October 11, 2010. Further, the disclosures which are for regulatory and supervisory purpose, have been made so as to comply with NHB’s Policy Circular No. NHB(ND)/DRS/Policy Circular No. 89/2017-18 dated June 14, 2018 which requires Housing Finance Companies to continue to follow the extent provisions of National Housing Bank Act, 1987 and Housing Finance Companies (NHB) Directions 2010 including framework on prudential norms and other related circulars issued in this regards by NHB from time to time and the same have been prepared in accordance with Accounting Standards prescribed under section 133 of the Companies Act, read with the Companies (Accounting Standards) Rules, 2006, as amended (Indian GAAP).

18.1 During the year, GRUH has not entered into any a) derivative transaction, b) securitisation, assets reconstruction and assignment transaction,

c) purchase/sale of Non-performing financial assets d) Capital market transaction and exposure, e) financing of Parent Company product,

f) finance of any unsecured advances i.e. advances against intangible securities such as rights, licenses, authoritations etc. as collateral security except as disclosed in note 7 and g) transaction in foreign currency apart from dividend payment to Non-resident shareholder as per note 23.

18.2 GRUH has not exceeded limit prescribed by National Housing Bank for Single Borrower Limit (SBL) and Group Borrower Limit (GBL).

18.3 GRUH do not have an exposure to teaser rate loans.

18.4 Assets liability Management (Note 40.24)

Assets and Liabilities are classified in the maturity buckets as per the guidelines issued by the National Housing Bank.

18.5 GRUH has not obtained registration from any other financial sector regulator.

18.6 National Housing Bank (NHB) has not raised any stricture or direction in their inspection carried out during the year. NHB has not imposed any penalty on GRUH during the year.

18.7 As per the Accounting Standard on ‘Related Party Disclosures’, details of the related parties, nature of the relationship with whom Company has entered transactions, remuneration of directores and balances in related party account at the year end, are given in Note no. 36. There were no material transaction with related parties and all these transactions with related parties were carried out in ordinary course of business at arm’s length price.

18.8 During the year, a) no prior period items occurred which has impact on profit and loss account, b) no change in any accounting policy except implementation of Ind AS required by Ministry of Company Affairs, c) there were no circumstances in which revenue recognition has been postponed pending the resolution of significant uncertainties, and d) there is no withdrawal from Reserve fund.

18.9 GRUH has no subsidiary company. Hence, requirement of consolidated financial statements is not applicable to GRUH.

18.10 GRUH does not have any overseas assets and any off balance sheet Special Purpose Vehicle (SPV) which requires to be consolidated as per accounting norms.

19 In compliance with the Indian Accounting Standard on ‘Employee Benefits’ (Ind AS 19), following disclosures have been made :

19.1 State Plans

GRUH has recognised expenses of Rs. 0.56 crore (Previous Year Rs. 0.55 crore) in Statement of Profit and Loss for Contribution to State Plan namely Employees’ Pension Scheme.

19.2 Defined Benefit Plans

(a) Contribution to Provident Fund :

The Company makes Provident Fund contributions to defined contribution retirement benefit plans for employees. Under the scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The contributions as specified under the law are paid to the provident fund set up as a trust by the Company.

The Company recognised Rs. 1.07 crore (Previous Year Rs. 0.86 crore) for provident fund contribution in the Statement of Profit and Loss which is included under Contribution to Provident Fund and Other Funds.

The Rules of GRUH’s Provident Fund administered by a Trust require that if the Board of the Trustees are unable to pay interest at the rate declared for Employees’ Provident Fund by the Government under para 60 of the Employees’ Provident Fund Scheme, 1952 for the reason that the return on investment is less or for any other reason, then the deficiency shall be made good by GRUH. Having regard to the assets of the fund and the return on the investments, GRUH does not expect any deficiency in the foreseeable future.

(b) Leave Encashment/Compensated Absences :

Salaries and Bonus includes Rs. 1.30 crore (Previous Year Rs. 1.05 crore) towards provision made as per actuarial valuation in respect of accumulated leave salary encashable on retirement.

(c) Contribution to Gratuity Fund :

Risks associated with defined benefit plan

Gratuity is a defined benefit plan and Company is exposed to the following risks :

Interest rate risk : A fall in the discount rate which is linked to the G-Sec rate will increase the present value of the liability requiring higher provision. Since Gratuity Trust’s investments are carried at book value, they are generally not exposed to interest rate risk.

Salary Risk : The present value of the defined benefit plan liability is calculated by reference to the future salaries of employees. As such, an increase in the salary of the employees more than assumed level will increase the plan’s liability.

Investment Risk : The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. If the return on plan asset is below this rate, it will create a plan deficit. Currently, for the plan in India, it has a relatively balanced mix of investments in government securities, and other debt instruments.

Asset Liability Matching Risk : Company’s Gratuity fund is administered through a trust which is recognised by the Income Tax Authorities and the contribution thereto is charged as an expense based on the amount of contribution determined by actuary. Company’s Gratuity trust faces insignificant ALM risk as to the matching cash flow. Since the trust invests in line of Rule 101 of Income Tax Rules, 1962, this generally reduces ALM risk. Further, trust’s more than 95% of funds are invested in securities/Fixed Deposit with banks with Interest frequency of Quarterly/Half-yearly/Annual which also reduced ALM risk. Trust has also invested in equity Mutual Funds and Fixed Deposit with banks which are easily redeemable.

Mortality risk : Since the benefits under the plan is not payable for life time and payable till retirement age only, plan does not have any longevity risk.

20 Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) is Rs. 0.21 crore (Previous Year Rs. 0.69 crore).

21 Contingent liability in respect of Income-tax demands net of amounts provided for and disputed by GRUH amounts to Rs. 9.92 crore (Previous Year Rs. 7.87 crore). Out of this, Rs. 7.64 crore has been paid/adjusted and will be received as refund, if the matters are decided in favour of GRUH.

There has been a Supreme Court judgement dated February 28, 2019, relating to components of salary structure that need to be taken into account while computing the contribution to provident fund under the Employees’ Provident Funds and Miscellaneous Provident Act, 1952. There are interpretative aspects related to the Judgement including the effective date of application. The Company will continue to assess any further developments in this matter for the implications on financial statements, if any.

22 There are no indications which reflects that any of the assets of GRUH had got impaired from its potential use and therefore no impairment loss was required to be accounted in the current year as per Indian Accounting Standard on ‘Impairment of Assets’ (Ind AS 36).

23 Figures less than Rs. 50,000 which are required to be shown separately, have been shown as actual in brackets.

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Mar 31, 2018

1.1 Terms/Rights attached to Equity Shares :

GRUH has one class of share referred to as equity shares having a face value of Rs.2 each. Each shareholder is entitled to one vote per share held and dividends, if any, proposed by the Board of Directors subject to the approval of the shareholders at the ensuing Annual General Meeting.

1.2 Shares reserved for issue under option :

(a) During the year, GRUH has issued 11,55,527 (Previous Year 8,82,744) shares on exercise of options granted to its employees and Directors under ESOS Schemes.

(b) As at March 31, 2018, GRUH has following Employee Stock Option Scheme, the features of the same are as follows :

(c) Intrinsic Value Method has been used to account for the compensation cost of stock options to employees of GRUH. The intrinsic value is the amount by which the quoted market price of the underlying share exceeds the exercise price of the option. Since the options under ESOS - 2015 were granted at the market price, the intrinsic value of the option is ‘ Nil. Consequently the accounting value of the option (compensation cost) is ‘ Nil.

(d) Further details of the stock option plan are as follows :

(e) The Black-Scholes Model have been used to derive the estimated value of stock option granted, if the fair value method to account for the employee share based payment plans were to be used. The estimated value of each stock options and the parameters used for deriving the estimated value of Stock Option granted under Black-Scholes Model is as follows :

2.1 As per section 29C of the National Housing Bank Act, 1987, GRUH is required to transfer at least 20% of its net profit every year to reserve before any dividend is declared. For this purpose, any Special Reserve created by GRUH under section 36(1)(viii) of the Income Tax Act, 1961 is considered to be an eligible transfer. GRUH has transferred an amount of Rs.106.25 crores (Previous Year Rs.84.00 crores) to Statutory Reserve in terms of section 36(1)(viii) of the Income Tax Act, 1961. GRUH doesn’t anticipate any withdrawal from Statutory Reserve in foreseeable future.

3.1 Refinance from National Housing Bank (NHB) and Term Loans from Banks :

(a) Nature of Security

Refinance from National Housing Bank (NHB) and Term Loans from Banks are secured against negative lien on all the assets of GRUH excluding specific immovable property mortgaged in favour of Debenture Trustees against the Secured Redeemable Non-Convertible Debentures and the charge created in favour of its depositors pursuant to the regulatory requirements under section 29B of the National Housing Bank Act, 1987.

(b) Maturity Profile of Term Loans from National Housing Bank :

Previous Year figures are in (bracket)

(c) Maturity Profile of Term Loans from Banks : Previous Year figures are in (bracket)

3.2 Redeemable Non-Convertible Debentures :

(a) Nature of Security

Redeemable Non-Convertible Debentures are secured by the mortgage of specific immovable property created in favour of Debenture Trustees and by a negative lien on all the assets of GRUH excluding the charge created in favour of its depositors pursuant to the regulatory requirements under section 29B of the National Housing Bank Act, 1987.

(b) Maturity Profile

Previous Year figures are in (bracket)

3.3 Unsecured Non-Convertible Subordinated Debentures :

Redeemable Non-Convertible Subordinated Debentures, for value aggregating to Rs.35 crores are subordinated debt to present and future senior indebtedness of GRUH and qualify as Tier II Capital under National Housing Bank’s (NHB) guidelines for assessing capital adequacy. These NCDs carry interest rate of 9.75% and are redeemable at par on March 22, 2023 (Rs.10 crores) and on March 25, 2023 (Rs.25 crores).

3.4 Public Deposits :

Public deposits as defined in paragraph 2(1)(y) of the Housing Finance Companies (NHB) Directions, 2010, are secured by floating charge on the Statutory Liquid Assets maintained in terms of sub-sections (1) & (2) of Section 29B of the National Housing Bank Act, 1987.

4.1 NHB vide notification No. NHB.HFC.DIR.18/MD&CEO/2017 dated August 2, 2017 reduced the provisioning requirement on Standard Individual Home Loans from 0.40% to 0.25%. In terms of the said notification, as of March 31, 2018, GRUH carries provision of Rs.20.25 crores towards Standard Housing Assets which is higher than the revised regulatory requirement of minimum 0.25%.

5.1 Nature of Security

Borrowings from Banks are secured against negative lien on all the assets of GRUH excluding specific immovable property mortgaged in favour of Debenture Trustees against the Secured Redeemable Non-Convertible Debentures and the charge created in favour of its depositors pursuant to the regulatory requirements under section 29B of the National Housing Bank Act, 1987.

6 TRADE PAYABLES

Trade Payables of Rs.2.60 crores (Previous Year Rs.4.83 crores) include ‘ Nil (Previous Year ‘ Nil) payable to “Suppliers” registered under the Micro, Small and Medium Enterprises Development Act, 2006 which has been determined to the extent such parties have been identified on the basis of information available with the GRUH. No interest has been paid / payable by GRUH during the year to the “Suppliers” covered under the Micro, Small and Medium Enterprises Development Act, 2006.

7.1 There are no amounts due for payment to the Investor Eduction and Protection Fund under section 125 of the Companies Act, 2013 as at the year end in respect of Unclaimed Matured Deposits and Unclaimed Dividends.

8.1 The above Investments includes Investments of Rs.151.12 crores (Previous year Rs.156.09 crores) made as Statutory Liquid Assets in accordance with the norms prescribed by the National Housing Bank.

8.2 In case of quoted investments, where quotes are not available, book value has been considered as market value.

9.1 Loans granted by GRUH are secured or partly secured by one or combination of following securities :

a) Equitable mortgage of property and / or

b) Pledge of shares, Units, Other Securities, assignments of Life Insurance policies and / or

c) Hypothecation of assets and / or

d) Bank guarantees, Company guarantees or Personal guarantees and / or

e) Undertaking to create a security.

9.2 Loans includes Rs.36.70 crores (Previous Year Rs.28.56 crores) in respect of properties held for disposal under Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

9.3 Loans includes Rs.0.25 crore (Previous Year Rs.0.27 crore) given to the related parties of GRUH under the Staff Loan Scheme.

10.1 Other Interest includes Interest on Long-Term SLR Investments Rs.16.27 crores (Previous Year Rs.15.30 crores) and Interest on Bank Deposits amounting to Rs.4.34 crores (Previous Year Rs.4.77 crores).

10.2 Fees and Other Income is net of Loan Referral Charges of Rs.17.80 crores (Previous Year Rs.14.22 crores).

10.3 Surplus from deployment in Cash Management Schemes of Mutual Funds is in respect of Investments held as Current Investments.

11 In accordance with the Accounting Standard on ‘Leases’ (AS 19), the following disclosure in respect of operating leases are made :

GRUH has taken office premises under operating lease for a period ranging from 11 months to 180 months. These are cancellable and have no specific obligation for renewal. The total lease payments for current year amounts to Rs.6.50 crores (Previous year Rs.6.01 crores) which is recognised in the Statement of Profit and Loss under ‘Rent Expenses’ under Note 21.

12 Disclosure as required by National Housing Bank :

The following disclosures have been given in terms of National Housing Bank’s notification no. NHB.HFC.CG-DIR.1/MD&CEO/2016 dated February 9, 2017 and in terms of the circular no. NHB/ND/DRS/Pol-No.35/2010-11 dated October 11, 2010 :

12.1 During the year, GRUH has not entered into any (a) derivative transaction, (b) securitisation, assets reconstruction and assignment transaction, (c) purchase/sale of Non-performing financial assets, (d) Capital market transaction and exposure, (e) financing of Parent Company product, (f) finance of any unsecured advances i.e. advances against intangible securities such as rights, licenses, authorisations etc. as collateral security and (g) transaction in foreign currency apart from dividend payment to Non-resident shareholder as per note 33.

12.2 GRUH has not exceeded limit prescribed by National Housing Bank for Single Borrower Limit (SBL) and Group Borrower Limit (GBL).

12.3 Assets liability Management

Assets and Liabilities are classified in the maturity buckets as per the guidelines issued by the National Housing Bank.

12.4 GRUH has not obtained registration from any other financial sector regulator.

12.5 National Housing Bank (NHB) has not raised any stricture or direction in their inspection carried out during the year. NHB has not imposed any penalty on GRUH during the year.

12.6 As per the Accounting Standard on ‘Related Party Disclosures’ (AS 18), the related parties of GRUH with whom GRUH had carried out transactions are as follows. There were no material transaction with related parties and all these transactions were carried out in ordinary course of business and were at arm’s length price.

(a) Holding Company

Housing Development Finance Corporation Limited (HDFC)

(b) Fellow Subsidiary Companies

(i) HDFC Standard Life Insurance Co. Limited

(ii) HDFC ERGO General Insurance Co. Limited

(c) Key Management Personnel

(i) Mr. Sudhin Choksey, Managing Director

(ii) Mr. Kamlesh Shah, Executive Director

(iii) Mr. Marcus Lobo, Company Secretary

(iv) Mr. Hitesh Agrawal, Chief Financial Officer

(d) Entity in which Director exercise significant influence (i) M/s SNG & Partners, Advocates & Solicitors

(e) Entity in which Key Management Personnel exercise significant influence (i) GRUH Foundation

12.7 During the year, (a) no prior period items occurred which has impact on profit and loss account, (b) no change in any accounting policy,

(c) there were no circumstances in which revenue recognition has been postponed pending the resolution of significant uncertainties and (d) there is no withdrawal from Reserve fund.

12.8 GRUH has no subsidiary company. Hence, requirement of consolidated financial statements is not applicable to GRUH.

12.9 Provisions and Contingencies charged during the year under the head expenditure in Statement of Profit and Loss :

12.10 GRUH does not have any overseas assets and any off balance sheet Special Purpose Vehicle (SPV) which requires to be consolidated as per accounting norms.

13 In compliance with the Accounting Standard on ‘Employee Benefits’ (AS 15), following disclosures have been made :

13.1 Defined Contribution Plans

GRUH has recognised the following amounts in Statement of Profit and Loss which are included under Contribution to Provident Fund and Other Funds :

The Rules of GRUH’s Provident Fund administered by a Trust require that if the Board of the Trustees are unable to pay interest at the rate declared for Employees’ Provident Fund by the Government under para 60 of the Employees’ Provident Fund Scheme, 1952 for the reason that the return on investment is less or for any other reason, then the deficiency shall be made good by GRUH. Having regard to the assets of the fund and the return on the investments, GRUH does not expect any deficiency in the foreseeable future.

13.2 State Plans

GRUH has recognised expenses of Rs.0.55 crore (Previous Year Rs.0.51 crore) in Statement of Profit and Loss for Contribution to State Plan namely Employees’ Pension Scheme.

13.3 Defined Benefit Plans

(a) Leave Encashment / Compensated Absences :

Salaries and Bonus includes Rs.1.05 crore (Previous Year Rs.1.28 crore) towards provision made as per actuarial valuation in respect of accumulated leave salary encashable on retirement.

(b) Contribution to Gratuity Fund :

The details of GRUH’s post-retirement benefit plans for its employees are given below which is certified by the actuary and relied upon by the auditors :

14 Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) is Rs.0.69 crore (Previous Year Rs.0.61 crore).

15 Contingent liability in respect of Income-tax demands net of amounts provided for and disputed by GRUH amounts to Rs.7.87 crores (Previous year Rs.11.16 crores). The said amount has been paid/adjusted and will be received as refund, if the matters are decided in favour of GRUH.

16 Disclosure on Corporate Social Responsibility (CSR) activities u/s 135 of the Companies Act, 2013 is as under :

(a) Gross amount required to be spent by GRUH during the year : Rs.7.36 crores (Previous year Rs.6.04 crores)

(b) Amount spent, utilised and charged during the year on :

17 GRUH’s main business is to provide loans for purchase or construction of residential houses in India. All other activities of GRUH revolve around the main business. As such, there are no separate reportable segments, as per the Accounting Standard on Segment Reporting (AS 17), specified under section 133 of the Companies Act, 2013.

18 In accordance with the Accounting Standard on ‘Earnings Per Share’ (AS 20), the Earnings Per Share is as follows :

18.1 The Basic Earnings Per Share have been computed by dividing the Profit After Tax by the weighted average number of equity shares for the respective periods. The weighted average number of shares have been derived as follows :

18.2 The Diluted Earnings Per Share have been computed by dividing the Profit After Tax by the weighted average number of equity shares, after giving dilute effect of outstanding Stock Options for the respective periods. The relevant details are as follows:

19 There are no indications which reflects that any of the assets of GRUH had got impaired from its potential use and therefore no impairment loss was required to be accounted in the current year as per Accounting Standard on ‘Impairment of Assets’ (AS 28).

20 Figures less than Rs.50,000 which are required to be shown separately, have been shown as actual in brackets.

21 Previous year’s figures which were audited by the predecessor auditors have been re-grouped / re-classified wherever necessary to correspond with current year’s classification disclosure.

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Mar 31, 2017

1 Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) is '' 0.61 crore (Previous Year Rs, 0.68 crore).

2. Contingent liability in respect of Income-tax and Interest-tax demands, amounts to Rs, 11.16 crores (Previous year Rs, 22.95 crores) disputed by GRUH and matters in dispute are under appeal. GRUH expects to succeed in these matters before appellate authority and hence no additional provision is considered necessary. Against the said demand, Rs, 8.24 crores (Previous year Rs, 18.89 crores) has been paid / adjusted and will be received as refund, if the matters are decided in favour of GRUH.

3. Disclosure on Corporate Social Responsibility (CSR) activities u/s 135 of the Companies Act, 2013 is as under :

(a) Gross amount required to be spent by GRUH during the year : Rs, 6.04 crores (Previous year Rs, 4.94 crores)

(b) Amount spent, utilized and charged during the year on :

4. In opinion of GRUH, there is only one identified reportable Business segment i.e. Housing Finance Business Segment geographically only located in India for the purpose of Accounting Standard on ''Segment Reporting'' (AS 17).

5 There are no indications which reflects that any of the assets of GRUH had got impaired from its potential use and therefore no impairment loss was required to be accounted in the current year as per Accounting Standard on ''Impairment of Assets'' (AS 28).

6 Figures less than Rs, 50,000 which are required to be shown separately, have been shown as actual in brackets.

7 Previous year''s figures have been re-grouped / re-classified wherever necessary to correspond with current year''s classification disclosure.

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Mar 31, 2015

1.1 (a) Reconciliation of Number of Shares

(b) Aggregate number of shares allotted as fully paid-up by way of Bonus Shares (During 5 years immediately preceding March 31, 2015)

During the year, pursuant to approval of share holders at the 28th Annual General Meeting (AGM) of the Company held on May 28, 2014, the Company allotted 18,01,31,150 Bonus Equity Shares of Rs. 2 each as fully paid-up shares in the proportion of 1:1. In order to facilitate issue of bonus equity shares, the authorised Share Capital of the Company is increased from Rs. 50 crores to Rs. 100 crores.

1.2 Terms/Rights attached to Equity Shares

The Company has one class of share referred to as equity shares having a par value of Rs. 2 each. Each shareholder is entitled to one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders at the ensuing Annual General Meeting.

2.1 Shares reserved for issue under options

(a) During the year, the Company has issued 31,22,280 (Previous Year 16,54,475) shares on exercise of options granted to its employees and Directors under ESOS Schemes.

(c) Intrinsic Value Method has been used to account for the employee share based payment plans. The intrinsic value of each stock option granted under the ESOS - 2015, ESOS - 2011 (Tranche I and II) plan is Rs. Nil, since the market price of the underlying share at the grant date was same as the exercise price and consequently the accounting value of the option (compensation cost) is Rs. Nil.

3.1 As per section 29C(i) of the National Housing Bank Act, 1987, the Company is required to transfer at least 20% of its net profit every year to 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. The Company has transferred an amount of Rs. 56.87 crores (Previous Year Rs. 45 crores) to Special Reserve in terms of section 36(1)(viii) of the Income Tax Act, 1961. The Company doesn''t anticipate any withdrawal from Special Reserve in foreseeable future.

3.2 Vide circular NHB(ND)/DRS/Policy Circular 65/2014-15 dated August 22, 2014, the National Housing Bank ("NHB") has directed Housing Finance Companies (HFCs) to provide for a deferred tax liability in respect of amount transferred to "Special Reserve" created under section 36(1)(viii) of the Income Tax Act, 1961. As per the circular, NHB has advised HFCs to create deferred tax liability in respect of accumulated balance of Special Reserve as on April 1, 2014 from the reserves over a period of 3 years starting with current financial year, in a phased manner in the ratio of 25:25:50. Accordingly, the Company has created 25% of deferred tax liability of Rs. 19.20 crores on accumulated Special Reserve as on April 1, 2014 out of General Reserve.

Also, the Company has charged its Statement of Profit and Loss by Rs. 19.33 crores for the year ended March 31, 2015 with the deferred tax liability on additional amount appropriated towards Special Reserve out of profits. The deferred tax liability charged to the Statement of Profit and Loss has been separately disclosed.

3.3 The Company has transferred an amount of Rs. Nil (Previous Year Rs. 15 crores) to Additional Reserve u/s 29C of the National Housing Bank Act, 1987. During the year, an amount of Rs. Nil (Previous Year Rs. 7.26 crores) net of Deferred Tax of Rs. Nil (Previous year Rs. 3.74 crores) has been transferred from Additional Reserve as per section 29C of the National Housing Bank Act, 1987 pursuant to circular NHB(ND)/DRS/ Pol-No.03/2004-05 dated August 26, 2004 to Provision for Contingencies Account.

3.4 A sum of Rs. 36.03 crores was utilised out of the Securities Premium Account in accordance with section 52 of the Companies Act, 2013 for the issue of fully paid-up bonus shares to the equity shareholders of the Company.

3.5 In respect of equity shares issued pursuant to Employee Stock Option Scheme, the Company has paid dividend of Rs. Nil for the year 2013- 14 (Previous year Rs. 0.23 crore) and tax on dividend of Rs. Nil (Previous year Rs. 0.04 crore) as approved by the shareholders at the Annual General Meeting.

3.6 In terms of requirement of NHB''s Circular No. NHB(ND)/DRS/Pol.Circular.61/2013-14 dated April 7, 2014 following information on Reserve Fund under section 29C of the National Housing Bank Act, 1987 is provided :

4.1 Refinance from National Housing Bank (NHB) and Term Loans from Banks :

(a) Nature of Security

Refinance from National Housing Bank (NHB) and Term Loans from Banks are secured against negative lien on all the assets of the Company excluding :

(i) The specific immovable property mortgaged in favour of Debenture Trustees against the Secured Redeemable Non-Convertible Debentures;

(ii) The Statutory Liquid Assets having floating charge in favour of the Public Deposit Trustees against the Public Deposits; and

(iii) Dwelling units financed under line of credit of KfW through HDFC .

4.2 Redeemable Non-Convertible Debentures :

Nature of Security

Redeemable Non-Convertible Debentures are secured by the mortgage of specific immovable property created in favour of Debenture Trustees and by a negative lien on all the assets of the Company excluding (i) the Statutory Liquid Assets having floating charge in favour of the Public Deposit Trustees against the Public Deposits and (ii) Dwelling units financed under the line of credit of KfW through HDFC.

4.3 Term Loan under Line of Credit from Kreditanstalt fur Wiederaufbau (KfW) through HDFC :

Nature of Security

Loan from HDFC is secured by negative lien on dwelling units financed under line of credit of KfW.

4.4 Unsecured Non-Convertible Subordinated Debentures :

Redeemable Non-Convertible Subordinated Debentures, for value aggregating to Rs. 35 crores are subordinated debt to present and future senior indebtedness of the Company and qualify as Tier II Capital under National Housing Bank''s (NHB) guidelines for assessing capital adequacy. These NCDs are redeemable at par on March 22, 2023 (Rs. 10 crores) and on March 25, 2023 (Rs. 25 crores).

4.5 Public Deposits :

Public deposits as defined in paragraph 2(1)(y) of the Housing Finance Companies (NHB) Directions, 2010, are secured by floating charge on the Statutory Liquid Assets maintained in terms of sub-sections (1) & (2) of section 29B of the National Housing Bank Act, 1987.

5.1 Term Loans from Banks : -

Nature of Security

Term Loans from Banks are secured against negative lien on all the assets of the Company excluding :

(i) The specific immovable property mortgaged in favour of Debenture Trustees against the Secured Redeemable Non-Convertible Debentures;

(ii) The Statutory Liquid Assets having floating charge in favour of the Public Deposit Trustees against the Public Deposits; and

(iii) Dwelling units financed under line of credit of KfW through HDFC.

Rate of interest

Secured Loans from Banks carry interest rate 10.20% per annum.

5.2 Public Deposits

Public deposits as defined in paragraph 2(1)(y) of the Housing Finance Companies (NHB) Directions, 2010, are secured by floating charge on the Statutory Liquid Assets maintained in terms of sub-sections (1) & (2) of section 29B of the National Housing Bank Act, 1987.

6 TRADE PAYABLES

Trade Payables Rs. 0.92 crore (Previous Year Rs. 0.80 crore) include Rs. Nil (Previous Year Rs. Nil) payable to "Suppliers" registered under the Micro, Small and Medium Enterprises Development Act, 2006. No interest has been paid / payable by the Company during the year to the "Suppliers" covered under the Micro, Small and Medium Enterprise Development Act, 2006.

7.1 There are no amounts due for payment to the Investor Eduction and Protection Fund under section 205C of the Companies Act, 1956 (1 of 1956) as at the year end in respect of Unclaimed Matured Deposits and Unpaid Dividends.

8.1 The above Investments are made as Statutory Liquid Assets in accordance with the norms prescribed by the National Housing Bank.

8.2 In case of quoted investments, where quotes are not available, book value has been considered as market value.

9.1 Loans granted by the Company are secured or partly secured by :

(a) Equitable mortgage of property and / or

(b) Pledge of Shares, Units, Other Securities, assignments of Life Insurance policies and / or

(c) Hypothecation of assets and / or

(d) Bank guarantees, Company guarantees or Personal guarantees and / or

(e) Undertaking to create a security.

9.2 Loans includes Rs. 0.47 crore (Previous Year Rs. 0.42 crore) given to the related parties of the Company under the Staff Loan Scheme.

9.3 The Company has complies with the norms prescribed under Housing Finance Companies (NHB) Directions, 2010 for recognising Non- Performing Assets (NPAs) in preparation of Accounts. As per the norms, NPAs are recognised on the basis of 90 days overdue. NPAs are to be treated as Bad & Doubtful, if they remain outstanding for more than 15 months. The Company has made adequate provisions on Non-Performing Assets and Standard Assets in respect of Housing and Non-Housing Loans as prescribed under Housing Finance Companies (NHB) Directions, 2010.

10.1 Surplus from deployment in Cash Management Schemes of Mutual Funds amounting to Rs. 0.34 crore (Previous Year Rs. 1.24 crores) is in respect of Investments held as Current Investments.

10.2 Fees and Other Charges is net of Loan Referral Charges of Rs. 8.10 crores (Previous Year Rs. 6.63 crores).

2 DISCLOSURE REQUIRED BY NATIONAL HOUSING BANK

The following additional disclosures have been given in terms of the circular no. NHB/ND/DRS/Pol-No.35/2010-11 dated October 11, 2010 issued by the National Housing Bank :

3. In compliance with the Accounting Standard on ''Employee Benefits'' (AS 15) (Revised 2005), following disclosures have been made :

The Rules of the Company''s Provident Fund administered by a Trust require that if the Board of the Trustees are unable to pay interest at the rate declared for Employees'' Provident Fund by the Government under para 60 of the Employees'' Provident Fund Scheme, 1952 for the reason that the return on investment is less or for any other reason, then the deficiency shall be made good by the Company. Having regard to the assets of the fund and the return on the investments, the Company does not expect any deficiency in the foreseeable future.

3.1 State Plans

The Company has recognised expenses of Rs. 0.40 crore (Previous Year Rs. 0.30 crore) in Statement of Profit and Loss for Contribution to State Plan namely Employees'' Pension Scheme.

3.2 Defined Benefit Plans

(a) Leave Encashment/Compensated Absences :

Salaries and Bonus includes Rs. 0.41 crore (Previous Year Rs. 0.48 crore) towards provision made as per actuarial valuation in respect of accumulated leave salary encashable on retirement.

4.1 Contingent liability in respect of Income-tax and Interest-tax demands, amounts to Rs. 17.77 crores (Previous year Rs. 15.63 crores) disputed by the Company and matters in dispute are under appeal. The Company expects to succeed in these matters before appellate authority and hence no additional provision is considered necessary. Against the said demand, Rs. 15.58 crores (Previous year Rs. 14.48 crores) has been paid / adjusted and will be received as refund if the matters are decided in favour of the Company.

4.2 Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) is Rs. 0.03 crore (Previous Year Rs. Nil).

4 Changes in Accounting Policies and estimates :

(a) Depreciation :

The Company has reviewed its policy of providing for depreciation on its tangible fixed assets and has also reassessed their useful lives. On and from April 1, 2014, the straight line method is being used to depreciate all classess of fixed assets. Previously, the straight line method was used for depreciating buildings while other tangible fixed assets were being depreciated using the reducing balance method. The revised useful lives, as assessed by management, match those specified in Part C of Schedule II to the Companies Act, 2013, for all classes of assets other than Computers. Management believes that the revised useful lives of the assets reflect the periods over which these assets are expected to be used.

As a result of (a) the change in accounting policy, the depreciation charge for the year is lower by Rs. 2.89 crores and (b) the change in useful lives estimates, the depreciation charge is higher by Rs. 0.62 crore as compared to the method and estimated useful lives used respectively during previous year.

(b) Incentive on Deposits :

The Company has reviewed its accounting policy of incentive payable on public deposits. On and from April 1, 2014, the Company has started amortising incentive paid over the period of the deposit. Previously, incentive was charged to revenue on accrual basis.

As a result of the change, the incentive amortisation charge for the year is lower by Rs. 1.24 crores compared to the method used previously.

5 In the opinion of the Company, there is only one identified reportable Business Segment i.e. Housing Finance Business Segment geographically only located in India for the purpose of Accounting Standard on ''Segment Reporting'' (AS 17).

6 As per the Accounting Standard on ''Related Party Disclosures'' (AS 18), the related parties of the Company with whom the Company had carried out transactions are as follows. These transactions were carried out in ordinary course of business and were at arm''s length price.

(a) Holding Company

Housing Development Finance Corporation Limited (HDFC)

(b) Fellow Subsidiary Companies

(i) HDFC Standard Life Insurance Co. Limited

(ii) HDFC ERGO General Insurance Co. Limited

(c) Key Management Personnel

(i) Mr. Sudhin Choksey, Managing Director

(ii) Mr. Kamlesh Shah, Executive Director

(iii) Mr. Marcus Lobo, Company Secretary

(iv) Mr. Jayesh Jain, Chief Financial Officer (Resigned w.e.f. August 19, 2014)

(v) Mr. Hitesh Agrawal, Chief Financial Officer (Appointed w.e.f. January 19, 2015)

(d) Entities in which Key Management Personnel exercise significant influence

(i) GRUH Foundation

7 In accordance with the Accounting Standard on ''Earnings Per Share'' (AS 20), the Earnings Per Share is as follows :

7.1 The number of equity shares considered in the above computation includes 18,01,31,150 equity shares allotted as fully paid-up Bonus Shares during the year. The figures for the previous year have been adjusted for the Bonus Shares in accordance with the Accounting Standard - 20 on "Earnings per share".

8 During previous year, some of software amounting to Rs. 0.56 crore being integral part of hardware and inseparable from hardware was shown as intangible assets. The same was not deducted from Net owned funds (NOF) reported to National Housing Bank in Statutory Return and NOF was therefore overstated to that extent.

9 There are no indications which reflects that any of the assets of the Company had got impaired from its potential use and therefore no impairment loss was required to be accounted in the current year as per Accounting Standard on ''Impairment of Assets'' (AS 28).

10 Figures less than Rs. 50,000 which are required to be shown separately, have been shown as actual in brackets.

11 Previous year''s figures have been re-grouped / re-classified wherever necessary to correspond with current year''s classification disclosure.

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Mar 31, 2014

1.1 There are no amounts due for payment to the Investor Education and Protection Fund under section 205C of the Companies Act, 1956 as at the year end in respect of Unclaimed Matured Deposits and Unpaid Dividends.

2.1 The above Investments are made as Statutory Liquid Assets in accordance with the norms prescribed by the National Housing Bank.

2.2 In case of quoted investments, where quotes are not available, book value has been considered as market value.

3.1 Loans granted by the Company are secured or partly secured by :

(a) Equitable mortgage of property and / or

(b) Pledge of Shares, Units, Other Securities, assignments of Life Insurance policies and / or

(c) Hypothecation of assets and / or

(d) Bank guarantees, Company guarantees or Personal guarantees and / or

(e) Undertaking to create a security.

3.2 Loans includes Rs. 0.14 crore (Previous Year Rs. 0.16 crore) given to the Officer of the Company under the Staff Loan Scheme.

3.3 The Company has complied with the norms prescribed under Housing Finance Companies (NHB) Directions, 2010 for recognising Non-Performing Assets (NPA) in preparation of Accounts. As per the norms, NPAs are recognised on the basis of 90 days overdue. NPAs are to be treated as Bad & Doubtful, if they remain outstanding for more than 15 months. The Company has made adequate provisions on Non-Performing Assets and Standard Assets in respect of Housing and Non-Housing Loans as prescribed under Housing Finance Companies (NHB) Directions, 2010.

3.4 Installments due from borrowers includes Rs. 10.28 crores (Previous Year Rs. 9.51 crores) which are accrued but not due.

3.5 Surplus from deployment in Cash Management Schemes of Mutual Funds amounting to Rs. 1.24 crores (Previous Year Rs. 4.07 crores) is in respect of Investments held as Current Investments.

4.1 Fees and Other Charges is net of Loan Referral Charges of Rs. 6.63 crores (Previous Year Rs. 4.94 crores).

5. DISCLOSURE REQUIRED BY NATIONAL HOUSING BANK

The following additional disclosures have been given in terms of the circular no. NHB/ND/DRS/Pol-No.35/2010-11 dated October 11, 2010 issued by the National Housing Bank :

26. In compliance with the Accounting Standard on ''Employee Benefits'' (AS 15) (Revised 2005) following disclosures have been made :

6. Defined Contribution Plans

The Company has recognised the following amounts in Statement of Profit and Loss which are included under Contribution to Provident Fund and Other Funds :

The Rules of the Company''s Provident Fund administered by a Trust require that if the Board of the Trustees are unable to pay interest at the rate declared for Employees'' Provident Fund by the Government under para 60 of the Employees'' Provident Fund Scheme, 1952 for the reason that the return on investment is less or for any other reason, then the deficiency shall be made good by the Company. Having regard to the assets of the fund and the return on the investments, the Company does not expect any deficiency in the foreseeable future.

7. State Plans

The Company has recognised expenses of Rs. 0.30 crore (Previous Year Rs. 0.29 crore) in Statement of Profit and Loss for Contribution to State Plan namely Employees'' Pension Scheme.

8. Defined Benefit Plans

(a) Leave Encashment/Compensated Absences :

Salaries and Bonus includes Rs. 0.48 crore (Previous Year Rs. 0.81 crore) towards provision made as per actuarial valuation in respect of accumulated leave salary encashable on retirement.

9. Contingent liability in respect of Income-tax and Interest-tax demands, amount of Rs. 15.63 crores (Previous year Rs. 13.36 crores) disputed by the Company and matters in dispute are under appeal. The Company expects to succeed in these matters before appellate authority and hence no additional provision is considered necessary. Against the said demand, Rs. 14.48 crores has been paid / adjusted and will be received as refund if the matters are decided in favour of the Company.

10. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) is Rs. Nil (Previous Year Rs. 0.34 crore).

11. In the opinion of the Company, there is only one identified reportable Business segment i.e. Housing Finance Business Segment geographically only located in India for the purpose of Accounting Standard on ''Segment Reporting'' (AS 17).

12. Consequent to the Accounting Standard on ''Related Party Disclosure'' (AS 18), following persons will be considered as related persons for the year ended as on March 31, 2014 :

(a) Holding Company

Housing Development Finance Corporation Limited (HDFC)

(b) Fellow Subsidiary Companies

(i) HDFC Developers Limited

(ii) HDFC Investments Limited

(iii) HDFC Holdings Limited

(iv) HDFC Asset Management Co. Limited

(v) HDFC Trustee Co. Limited

(vi) HDFC Standard Life Insurance Co. Limited

(vii) HDFC Realty Limited

(viii) HDFC ERGO General Insurance Co. Limited

(ix) HDFC Sales Private Limited

(x) HDFC Ventures Trustee Company Limited

(xi) HDFC Property Ventures Ltd.

(xii) HDFC Ventures Capital Limited

(xiii) GRIHA Investments

(xiv) GRIHA Pte Ltd. Singapore

(xv) Credila Financial Services Pvt. Ltd.

(xvi) HDFC Education and Development Services Private Limited

(xvii) HDFC Life Pension Fund Management Company Limited

(xviii) H T Parekh Foundation

(xix) Windermere Properties Pvt. Ltd.

(xx) Grandeur Properties Pvt. Ltd.

(xxi) Winchester Properties Pvt. Ltd.

(xxii) Pentagram Properties Pvt. Ltd.

(xxiii) Haddock Properties Pvt. Ltd.

(c) Key Management Personnel

(i) Mr. Sudhin Choksey, Managing Director

(ii) Mr. Kamlesh Shah, Executive Director

(Related party relationships are as identified by the Company and relied upon by the auditors.)

13. There are no indications which reflects that any of the assets of the Company had got impaired from its potential use and therefore no impairment loss was required to be accounted in the current year as per Accounting Standard on ''Impairment of Assets'' (AS 28).

14. Figures less than Rs. 50,000 which are required to be shown separately, have been shown as actual in brackets.

15. Previous year''s figures have been re-grouped / re-classified wherever necessary to correspond with current year''s classification disclosure.

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Mar 31, 2013

1.1 (a) Sub-division of Shares

With effect from July 26, 2012, the nominal face value of equity shares of the Company was sub-divided from Rs. 10 per share to Rs. 2 per share. Accordingly, each option exercised after July 26, 2012 is entitled to 5 equity shares of Rs. 2 each. Number of shares for the previous year / period have been adjusted to give effect of sub-division.

1.2 Terms/Rights attached to Equity Shares

The Company has one class of share referred to as equity shares having a par value of Rs. 2 each. Each shareholder is entitled to one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

(a) Intrinsic Value Method has been used to account for the employee share based payment plans. The intrinsic value of each stock option granted under the ESOS - 2011 Tranche II and ESOS - 2011 Tranche I plan is Rs. Nil, since the market price of the underlying share at the grant date was same as the exercise price and consequently the accounting value of the option (compensation cost) is Rs. Nil.

2.1 As per Section 29C(i) of the National Housing Bank Act, 1987, 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. The Company has transferred an amount of Rs. 37 crores (Previous Year Rs. 28 crores) to Special Reserve in terms of Section 36 (1)(viii) of the Income Tax Act, 1961. The Company doesn''t anticipate any withdrawal from Special Reserve in foreseeable future.

2.2 National Housing Bank (NHB) vide circular no. NHB.HFC.DIR.3/CMD dated August 5, 2011 had introduced provisioning for Standard Individual Home Loans. Company utilised Rs. Nil (Previous Year Rs. 7.79 crores) Net of Deferred Tax of Rs. Nil (Previous Year Rs. 3.75 crores) out of General Reserve to meet additional provision required on Standard Individual Home Loan Assets as at March 31, 2011.

2.3 The Company has transferred an amount of Rs. 12.50 crores (Previous Year Rs. 7.50 crores) to Additional Reserve u/s 29C of the National Housing Bank Act, 1987.

2.4 In respect of equity shares issued pursuant to Employee Stock Option Scheme, the Company has paid dividend of Rs. 0.22 crore for the year 2011-12 (Previous year Rs. 0.09 crore) and tax on dividend of Rs. 0.04 crore (Previous year Rs. 0.01 crore) as approved by the shareholders at the Annual General Meeting held on June 18, 2012.

3.1 Refinance from National Housing Bank (NHB) and Term Loans From Banks :

(a) Nature of Security

Refinance from National Housing Bank (NHB) and Term Loans from Banks are secured against negative lien on all the assets of the Company excluding

(i) The specific immovable property mortgaged in favour of Debenture Trustees against the Secured Redeemable Non-Convertible Debentures;

(ii) The Statutory Liquid Assets having floating charge in favour of the Public Deposit Trustees against the Public Deposits; and

(iii) Dwelling units financed under line of credit of KfW through HDFC.

Loan from HDFC is secured by negative lien on dwelling units financed under line of credit of KfW.

3.2 Redeemable Non-Convertible Debentures :

(a) Nature of Security

Redeemable Non-Convertible Debentures are secured by the mortgage of specific immovable property created in favour of Debenture Trustees and by a negative lien on all the assets of the Company excluding (i) the Statutory Liquid Assets having floating charge in favour of the Public Deposit Trustees against the Public Deposits and (ii) Dwelling units financed under the line of credit of KfW through HDFC .

3.3 Unsecured Non-Convertible Subordinated Debentures :

Redeemable Non-Convertible Subordinated Debentures, for value aggregating to Rs. 35 crores are subordinated debt to present and future senior indebtedness of the Company and qualify as Tier II Capital under National Housing Bank''s (NHB) guidelines for assessing capital adequacy. These NCDs are redeemable at par on March 22, 2023 (Rs. 10 crores) and on March 25, 2023 (Rs. 25 crores).

3.4 Public Deposits :

Public deposits as defined in Paragraph 2(1)(y) of the Housing Finance Companies (NHB) Directions, 2010, are secured by floating charge on the Statutory Liquid Assets maintained in terms of sub-sections (1) & (2) of Section 29B of the National Housing Bank Act, 1987.

4.1 Public Deposits

Public deposits as defined in Paragraph 2(1)(y) of the Housing Finance Companies (NHB) Directions, 2010, are secured by floating charge on the Statutory Liquid Assets maintained in terms of sub-sections (1) & (2) of Section 29B of the National Housing Bank Act, 1987.

5 TRADE PAYABLES

Trade Payables include Rs. Nil (Previous Year Rs. Nil) payable to "Suppliers" registered under the Micro, Small and Medium Enterprises Development Act, 2006. No interest has been paid / payable by the Company during the year to the "Suppliers" covered under the Micro, Small and Medium Enterprise Development Act, 2006.

6.1 There are no amounts due for payment to the Investor Eduction and Protection Fund under section 205C of the Companies Act, 1956 as at the year end in respect of Unclaimed Matured Deposits and Unpaid Dividends.

7.1 The above Investments are made as Statutory Liquid Assets in accordance with the norms prescribed by the National Housing Bank.

7.2 In case of quoted investments, where quotes are not available, book value has been considered as market value.

8.1 Loans granted by the Company are secured or partly secured by :

(a) Equitable mortgage of property and / or

(b) Pledge of Shares, Units, Other Securities, assignments of Life Insurance policies and / or

(c) Hypothecation of assets and / or

(d) Bank guarantees, Company guarantees or Personal guarantees and / or

(e) Undertaking to create a security.

8.2 Loans includes Rs. 0.16 crore (Previous Year Rs. 0.18 crore) given to the Officer of the Company under the Staff Loan Scheme.

8.3 The Company has complied with the norms prescribed under Housing Finance Companies (NHB) Directions, 2010 for recognising Non-Performing Assets (NPA) in preparation of Accounts. As per the norms, NPAs are recognised on the basis of 90 days overdue. NPAs are to be treated as Bad & Doubtful, if they remain outstanding for more than 15 months. The Company has made adequate provisions on Non-Performing Assets and Standard Assets in respect of Housing and Non- Housing Loans as prescribed under Housing Finance Companies (NHB) Directions, 2010.

9.1 Instalments due from borrowers includes Rs. 9.51 crores (Previous Year Rs. 10.43 crores) which are accrued but not due.

10.1 Surplus from deployment in Cash Management Schemes of Mutual Funds amounting to Rs. 4.07 crores (Previous Year Rs. 1.44 crores) is in respect of Investments held as Current Investments.

10.2 Fees and Other Charges is net of Loan Referral Charges of Rs. 4.94 crores (Previous Year Rs. 3.11 crores).

11. The following additional disclosures have been given in terms of the circular no. NHB/ND/DRS/Pol-No.35/2010-11 dated October 11, 2010 issued by the National Housing Bank :

12. In compliance with the Accounting Standard on ''Employee Benefits'' (AS 15) (Revised 2005) notified by Companies (Accounting Standards) Rules, 2006, the following disclosures have been made :

The Rules of the Company''s Provident Fund administered by a Trust require that if the Board of the Trustees are unable to pay interest at the rate declared for Employees'' Provident Fund by the Government under para 60 of the Employees'' Provident Fund Scheme, 1952 for the reason that the return on investment is less or for any other reason, then the deficiency shall be made good by the Company. Having regard to the assets of the fund and the return on the investments, the Company does not expect any deficiency in the foreseeable future.

13.1 State Plans

The Company has recognised expenses of Rs. 0.29 crore (Previous Year Rs. 0.25 crore) in Statement of Profit and Loss for Contribution to State Plan namely Employees'' Pension Scheme.

13.2 Defined Benefit Plans

(a) Leave Encashment/Compensated Absences :

Salaries and Bonus includes Rs. 0.81 crore (Previous Year Rs. 0.42 crore) towards provision made as per actuarial valuation in respect of accumulated leave salary encashable on retirement.

14.1 Contingent liability in respect of Income-tax and Interest-tax demands, amount of Rs. 13.86 crores (Previous year Rs. 14.21 crores) disputed by the Company and matters in dispute are under appeal. The Company expects to succeed in these matters before appellate authority and hence no additional provision is considered necessary. The said amount has been paid / adjusted and will be received as refund if the matters are decided in favour of the Company.

14.2 Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) is Rs. 0.34 crore (Previous Year Rs. Nil).

15. In the opinion of the Company, there is only one identified reportable Business segment i.e. Housing Finance Business Segment geographically only located in India for the purpose of Accounting Standard on ''Segment Reporting'' (AS 17) notified by Companies (Accounting Standards) Rules, 2006.

16. Consequent to the Accounting Standard on ''Related Party Disclosure'' (AS 18) notified by Companies (Accounting Standards) Rules, 2006 following persons will be considered as related persons for the year ended as on March 31, 2013:

17. In accordance with the Accounting Standard on ''Earnings Per Share'' (AS 20) notified by the Companies (Accounting Standards) Rules, 2006, the Earnings Per Share is as follows :

18. There are no indications which reflects that any of the assets of the Company had got impaired from its potential use and therefore no impairment loss was required to be accounted in the current year as per Accounting Standard on ''Impairment of Assets'' (AS 28) notified by the Companies (Accounting Standards) Rules, 2006.

19. Figures less than Rs. 50,000 which are required to be shown separately, have been shown as actual in brackets.

20. Previous year''s figures have been re-grouped / re-classified wherever necessary to correspond with current year''s classification disclosure.

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Mar 31, 2012

1.1 Terms/Rights attached to Equity Shares

The Company has one class of shares referred to as equity shares having a par value of Rs 10/- each. Each shareholder is entitled to one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

1.2 Shares reserved for issue under options

(a) During the year, the Company has issued 1,45,005 (Previous Year 4,32,483) shares on exercise of Options granted to its employees and Directors under ESOS Scheme - 2007.

(c) Intrinsic Value Method has been used to account for the employee share based payment plans. The intrinsic value of each stock option granted under the ESOS - 2011 Tranche II, ESOS - 2011 Tranche I and ESOS - 2007 plan is Rs Nil since the market price of the underlying share at the grant date was same as the exercise price and consequently the accounting value of the option (compensation cost) is Rs Nil.

(e) The Black-Scholes-Mertons Option Pricing Model have been used to derive the estimated value of stock option granted if the fair value method to account for the employee share based payment plans were to be used. The estimated value of each stock options and the parameters used for deriving the estimated value of Stock Option granted under Black-Scholes-Mertons Option Pricing Model is as follows:

2.1 As per Section 29C(i) of the National Housing Bank Act, 1987, the Company is required to transfer at least 20% of its net profits 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. The Company has transferred an amount of Rs 28,00,00,000/- (Previous Year Rs 22,00,00,000/-) to Special Reserve in terms of Section 36(1)(viii) of the Income Tax Act, 1961. The Company doesn't anticipate any withdrawal from Special Reserve in foreseeable future.

2.2 National Housing Bank (NHB) vide circular no. NHB.HFC.DIR.3/CMD dated August 5, 2011 has introduced provisioning for Standard Individual Home Loans. The Company utilised Rs 7,79,45,765/- (Previous Year Rs Nil) Net of Deferred Tax of Rs 3,74,35,428/- (Previous Year Rs Nil) out of General Reserve to meet additional provision required on Standard Individual Home Loan Assets as at March 31, 2011.

2.3 The Company has transferred an amount of Rs 7,50,00,000/- (Previous Year Rs Nil) to Additional Reserve u/s 29C of the National Housing Bank Act, 1987.

2.4 In respect of equity shares issued pursuant to Employee Stock Option Scheme, the Company has paid dividend of Rs 9,00,592/- for the year 2010-11 (Previous year Rs 8,02,325/-) and tax on dividend of Rs 1,46,098/- (Previous year Rs 1,33,256/-) as approved by the share holders at the Annual General Meeting held on July 14, 2011.

3.1 Refinance from National Housing Bank (NHB) and Term Loans from Banks:

(a) Nature of Security

Refinance from National Housing Bank and Term Loans from Banks are secured against negative lien on all the assets of the Company excluding :

(i) The specific immovable property mortgaged in favour of Debenture Trustees against the Secured Redeemable Non-Convertible Debentures; and

(ii) The Statutory Liquid Assets having floating charge in favour of the Public Deposit Trustees against the Public Deposits.

3.2 Redeemable Non-Convertible Debentures

(a) Nature of Security

Redeemable Non-Convertible Debentures are secured by the mortgage of specific immovable property created in favour of Debenture Trustees and by a negative lien on all the assets of the Company excluding the Statutory Liquid Assets having floating charge in favour of the Public Deposit Trustees against the Public Deposits.

3.3 Unsecured Non-Convertible Subordinated Debentures

8.18% Redeemable Non-Convertible Subordinated Debentures of Rs 40,00,00,000/- are subordinated debt to present and future senior indebtedness of the Company and qualify as Tier II Capital under National Housing Bank's guidelines for assessing capital adequacy. These NCDs are redeemable at par on February 13, 2013.

3.4 Public Deposits

Public Deposits as defined in Paragraph 2(1)(y) of the Housing Finance Companies (NHB) Directions, 2010, are secured by floating charge on the Statutory Liquid Assets maintained in terms of Sub-sections (1) & (2) of section 29B of the National Housing Bank Act, 1987.

4.1 Term Loans from Banks Nature of Security

Term Loans from Banks are secured against negative lien on all the assets of the Company excluding :

(a) The specific immovable property mortgaged in favour of Debenture Trustees against the Secured Redeemable Non-Convertible Debentures; and

(b) The Statutory Liquid Assets having floating charge in favour of the Public Deposit Trustees against the Public Deposits.

4.2 Public Deposits

Public Deposits as defined in Paragraph 2(1)(y) of the Housing Finance Companies (NHB) Directions, 2010, are secured by floating charge on the Statutory Liquid Assets maintained in terms of Sub-sections (1) & (2) of section 29B of the National Housing Bank Act, 1987.

5 TRADE PAYABLES

Trade Payables include Rs Nil (Previous Year Rs Nil) payable to "Suppliers" registered under the Micro, Small and Medium Enterprises Development Act, 2006. No interest has been paid / payable by the Company during the year to the "Suppliers" covered under the Micro, Small and Medium Enterprise Development Act, 2006.

6.1 There are no amounts due for payment to the Investor Education and Protection Fund under section 205C of the Companies Act, 1956 as at the year end in respect of Unclaimed Matured Deposits and Unpaid Dividends.

7.1 The above Investments are made in Statutory Liquid Assets in accordance with the norms prescribed by the National Housing Bank.

7.2 In case of quoted investments, where quotes are not available, book value has been considered as market value.

8 DEFERRED TAX ASSET

In accordance with Accounting Standard on 'Accounting for Taxes on Income' (AS 22) notified by Companies (Accounting Standards) Rules, 2006 the Company is accounting for Deferred Tax.

9.1 Loans granted by the Company are secured or partly secured by :

(a) Equitable mortgage of property and / or

(b) Pledge of shares, Units, Other Securities, assignments of Life Insurance policies and / or

(c) Hypothecation of assets and / or

(d) Bank guarantees, Company guarantees or Personal guarantees and / or

(e) Undertaking to create a security.

9.2 Loans includes Rs 10,63,17,517/- (Previous Year Rs 4,66,80,441/-) in respect of properties held for disposal under Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

9.3 Loans includes Rs 17,98,148/- (Previous Year Rs 19,70,000/-) and Rs Nil (Previous Year Rs 3,26,671/-) respectively given to the Officer and Executive Director of the Company under the Staff Loan Scheme.

10.1 The Company has complied with the norms prescribed under Housing Finance Companies (NHB) Directions, 2010 for recognising Non-Performing Assets (NPAs) in preparation of Accounts. As per the norms, NPAs are recognised on the basis of 90 days overdue. NPAs are to be treated as Bad & Doubtful, if they remain outstanding for more than 15 months. The Company has made adequate provisions on Non-Performing Assets and Standard Assets in respect of Housing and Non-Housing Loans as prescribed under Housing Finance Companies (NHB) Directions, 2010.

11.1 Instalments due from borrowers includes Rs 10,42,50,060/- (Previous Year Rs 7,58,67,799/-) which are accrued but not due.

12.1 Surplus from deployment in cash management schemes of Mutual Funds amounting to Rs 1,43,56,394/- (Previous Year Rs Nil) is in respect of investments held as current Investments.

12.2 Fees and other charges is net of Loan Referral charges of Rs 3,10,69,565/- (Previous Year Rs 1,67,08,419/-).

13. The following additional disclosures have been given in terms of the circular no. NHB/ND/DRS/Pol-No.35/2010-11 dated October 11, 2010 issued by the National Housing Bank :

14. In compliance with the Accounting Standard on 'Employee Benefits' (AS 15) (Revised 2005) notified by Companies (Accounting Standards) Rules, 2006, the following disclosures have been made :

The Rules of the Company's Provident Fund administered by a Trust require that if the Board of the Trustees are unable to pay interest at the rate declared for Employees' Provident Fund by the Government under para 60 of the Employees' Provident Fund Scheme, 1952 for the reason that the return on investment is less or for any other reason, then the deficiency shall be made good by the Company. Having regard to the assets of the fund and the return on the investments, the Company does not expect any deficiency in the foreseeable future.

14.1 State Plans

The Company has recognised expenses of Rs 25,30,771/- (Previous Year Rs 21,35,352/-) in Statement of Profit and Loss for Contribution to State Plan namely Employees' Pension Scheme.

14.2 Defined Benefit Plans

(a) Leave Encashment/Compensated Absences :

Salaries and Bonus includes Rs 42,05,985/- (Previous Year Rs 49,48,632/-) towards provision made as per actuarial valuation in respect of accumulated leave salary encashable on retirement.

15. The Company has disputed demands of Rs 14,20,98,417/- (Previous Year Rs 14,27,04,086/-) in respect of Income Tax and Interest Tax in the appellate proceedings. The Company expects to succeed in these proceedings and hence no additional provision is considered necessary.

16. In the opinion of the Company, there is only one identified reportable Business segment i.e. Housing Finance Business Segment geographically only located in India for the purpose of Accounting Standard on 'Segment Reporting' (AS 17) notified by Companies (Accounting Standards) Rules, 2006.

17. In accordance with the Accounting Standard on 'Earnings Per Share' (AS 20) notified by the Companies (Accounting Standards) Rules, 2006, the EPS are as follows :

18. There are no indications which reflects that any of the assets of the Company had got impaired from its potential use and therefore no impairment loss was required to be accounted in the current year as per Accounting Standard on 'Impairment of Assets' (AS 28) notified by the Companies (Accounting Standards) Rules, 2006.

19. The Revised Schedule VI has become effective from April 1, 2011 for the preparation of Financial Statements. This has significantly impacted the disclosure and presentation made in the Financial Statements. Previous Year's figures have been regrouped / reclassified wherever necessary to correspond with current Year's classification / disclosure.

20. Balance Sheet under Pre-revised Schedule VI :

Till the year ended March 31, 2011, the Company was reporting its financial statements as per pre-revised Schedule VI to the Companies Act, 1956. During the year ended March 31, 2012, the revised Schedule VI notified under the Companies Act, 1956, has become applicable to the Company and accordingly previous year figures have been reclassified to this year's classification. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However, it significantly impacts the presentation and disclosures, particularly presentation of Balance Sheet. The following is a summary of the Balance Sheet as at March 31, 2012 under pre-revised Schedule VI of the Companies Act.

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Mar 31, 2010

1. During the year, the Company has issued 69,292 and 3,898 (Previous Year Nil and 4,261) shares on exercise of Options granted to its employees and directors under ESOS Scheme - 2007 and 2005 respectively.

2. As per Section 29C(i) of the National Housing Bank Act, 1987, the Company is required to transfer at least 20% of its net profits every year to a reserve before any dividend is declared. For this purpose any Special Reserve created by the Company under Section 36(l)(viii) of the Income-tax Act, 1961 is considered to be an eligible transfer. The Company has transferred an amount of Rs. 17.50 Crores (Previous Year Rs. 12 Crores) to Special Reserve in terms of Section 36(l)(viii) of the Income Tax Act, 1961. Company doesnt anticipate any withdrawal from Special Reserve in foreseeable future.

3. Secured Loans :

(a) Refinance from National Housing Bank (NHB) and Term Loans from Banks are secured against negative lien on all the assets of the Company excluding

i. The specific immovable property mortgaged in favour of Debenture Trustees against the Secured Redeemable Non-Convertible Debentures; and

ii. The Statutory Liquid Assets having floating charge in favour of the Public Deposit Trustees against the Public Deposits.

(b) Redeemable Non-Convertible Debentures amounting to Rs. 135 Crores are secured by mortgage of specific immovable property created in favour of Debenture Trustees and by a negative lien on the assets of the Company excluding the Statutory Liquid Assets having floating charge in favour of the Public Deposit Trustees against the Public Deposits. These NCDs are redeemable at par in one or more instalments, on various dates, with the earliest redemption date being November 19, 2014 and the last being December 3, 2014.

4. Unsecured Loans :

(a) Redeemable Non-Convertible Subordinated Debentures of Rs. 40 Crores are subordinated debt to present and future senior indebtedness of the Company and qualify as Tier II Capital under National Housing Banks (NHBs) guidelines for assessing capital adequacy. These NCDs are redeemable at par on February 13, 2013.

(b) The maximum amount of Commercial Paper outstanding at any time during the year was Rs. 500 Crores (Previous Year Rs. 500 Crores). As at March 31, 2010 there were no Commercial Paper outstanding.

(c) Public Deposits include Rs. 107,22,08,642/- (Previous Year Rs. 77,75,04,557/-) due within one year. The Public Deposits are secured by floating charge on the Statutory Liquid Assets.

5. Loans granted by the Company are secured or partly secured by :

(a) Equitable mortgage of property and / or

(b) Pledge of Shares, Units, Other Securities, Assignments of Life Insurance Policies and / or

(c) Hypothecation of assets and / or

(d) Bank Guarantees, Company Guarantees or Personal Guarantees and / or

(e) Undertaking to create a security.

6. (a) The Company has complied with the norms prescribed under Housing Finance Companies (NHB) Directions, 2001

for recognising Non-Performing Assets (NPA) in preparation of Accounts. As per the norms, NPAs are recognised on the basis of 90 days overdue. NPAs are to be treated as Bad & Doubtful, if they remain outstanding for more than 15 months. The Company has made adequate provisions on Non-Performing Assets and Standard Assets in respect of Housing and Non Housing Loans as prescribed under Housing Finance Companies (NHB) Directions, 2001.

7. Loans include Rs. 4,91,92,175/- (Previous Year Rs. 5,82,36,952/-) in respect of properties held for disposal under Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

8. (a) The instalments due from borrowers includes Rs. 7,25,02,076/- (Previous Year Rs. 8,14,87,042/-) which are accrued but not due.

(b) Advances recoverable in cash or kind include Advance Tax of Rs. 108,81,92,341/- (Previous Year Rs. 80,85,20,047) after adjusting Rs. 98,56,10,063/- (Previous Year Rs. 68,89,60,063/-) towards Provision for Taxation.

9. As required under Section 205C of the Companies Act, 1956 the Company has transferred Rs. 4,92,002/- (Previous Year Rs. 4,32,900/-) to the Investor Education and Protection Fund (IEPF) during the year.

10. (a) Interest on loans includes income from home loans Rs. 247,83,46,013/- (Previous Year Rs. 229,78,70,905/-) and Income from other loans Rs. 27,98,84,270/- (Previous Year Rs. 32,02,19,705/-).

(b) Other Operating Income includes Interest on Bank Deposit Rs. 19,49,05,130/- (Previous Year Rs. 16,92,84,257/-), Dividend from Mutual Funds Rs. 1,59,29,648/- (Previous Year Rs. 3,44,63,250/-), Income from Long Term Investments amounting to Rs. 2,03,57,010/- (Previous Year Rs. 1,55,32,166/-) and Income on Sold Loans Rs. (3,48,04,675/-) (Previous Year Rs. 2,72,17,313/-).

11. In compliance with the Accounting Standard on Employee Benefits (AS 15) (Revised 2005) notified by Companies (Accounting Standards) Rules, 2006 the following disclosures have been made :

b) State Plans

The Company has recognised Rs. 17,99,242/- (Previous Year Rs. 16,41,193/-) in the Profit and Loss Account for Contribution to State Plan namely Employees Pension Scheme.

c) Defined Benefit Plans

i) Leave Encashment/Compensated Absences :

Salaries and Bonus includes Rs. 31,82,164/- (Previous Year Rs. 41,12,761/-) towards provision made as per actuarial valuation in respect of accumulated leave salary encashable on retirement.

ii) Contribution to Gratuity Fund :

The details of the Companys post-retirement benefit plans for its employees including the Managing Director are given below which is certified by the actuary and relied upon by the auditors :

12. The Company has disputed demands of Rs. 12,72,09,365/- (Previous Year Rs. 11,07,56,815/-) in respect of Income Tax, Fringe Benefit Tax and Interest Tax in the appellate proceedings. The Company expects to succeed in these proceedings and hence no additional provision is considered necessary.

13. In the opinion of the Company, there is only one identified reportable segment i.e. Housing Finance Business Segment for the purpose of Accounting Standard on Segment Reporting (AS 17) notified by Companies (Accounting Standards) Rules, 2006.

14. Consequent to the Accounting Standard on Related Party Disclosure (AS 18) notified by Companies (Accounting Standards) Rules, 2006 following persons will be considered as related persons for the period ended as on March 31, 2010 :

Sr. No. Name of the Related Party Nature of Relationship

(i) Housing Development Finance Corporation Limited (HDFC) Holding Company

(ii) HDFC Developers Limited Fellow Subsidiary

(iii) HDFC Investments Limited Fellow Subsidiary

(iv) HDFC Holdings Limited Fellow Subsidiary

(v) HDFC Asset Management Co. Limited Fellow Subsidiary

(vi) HDFC Trustee Co. Limited Fellow Subsidiary

(vii) HDFC Standard Life Insurance Co. Limited Fellow Subsidiary

(viii) HDFC Realty Limited Fellow Subsidiary

(ix) HDFC ERGO General Insurance Co. Limited Fellow Subsidiary

(x) HDFC Sales Private Limited Fellow Subsidiary

(xi) HDFC Ventures Trustee Company Limited Fellow Subsidiary

(xii) HDFC Property Ventures Ltd. Fellow Subsidiary

(xiii) HDFC Ventures Capital Limited Fellow Subsidiary

(xiv) HDFC Asset Management Company (Singapore) PTE Ltd. Fellow Subsidiary

(xv) GRIHA Investments Fellow Subsidiary

(xvi) Mr. Sudhin Choksey, Managing Director Key Management Personnel

(Related party relationships are as identified by the Company and relied upon by the auditors.)

15. In accordance with Accounting Standard on Accounting for Taxes on Income (AS 22) notified by Companies (Accounting Standards) Rules, 2006 the Company is accounting for deferred tax. The Company has taken credit of Rs. 4,22,43,231/- (Previous Year Rs. 97,26,845/-) in the Profit & Loss Account for the year ended March 31, 2010 towards deferred tax asset (net) for the year, arising on account of timing differences.

b) Intrinsic Value Method has been used to account for the employee share based payment plans. The intrinsic value of each stock option granted under the ESOS - 2007 plan is Rs. Nil since the market price of the underlying share at the grant date was same as the exercise price and consequently the accounting value of the option (compensation cost) is Rs. Nil.

16. Sundry Creditors include Rs. Nil (Previous Year Rs. Nil) payable to "Suppliers" registered under the Micro, Small and Medium Enterprises Development Act, 2006. No interest has been paid / payable by the Company during the year to the "Supplier" covered under the Micro, Small and Medium Enterprise Development Act, 2006.

17. Miscellaneous Expenses includes Expenses for Recovery Rs. 78,25,257/- (Previous Year Rs. 70,08,536/-), Expenses on Statutory Advertisement of Rs. 12,04,338/- (Previous Year Rs. 9,43,611/-) and Loss on Sale of Acquired Properties Rs. 16,46,932/- (Previous Year Rs. 12,67,097/-).

18. There are no indications which reflect that any of the assets of the Company had got impaired from its potential use and therefore no impairment loss was required to be accounted in the current year as per Accounting Standard on Impairment of Assets (AS 28) notified by Companies (Accounting Standards) Rules, 2006.

19. Figures for the Previous Year have been re-grouped or recast wherever necessary.