MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Industry Overview

The Indian Economy is on a high growth trajectory since the current government has come into power. The country has embarked upon the path of steady growth owing to an improved performance on various macroeconomic parameters as well as the various reforms announced by the government. A stable macroeconomic environment and the falling commodity prices are some of the factors that have helped the country achieve strong economic growth estimates. The country is expected to register a GDP growth of 7.6% as compared to 7.2% in the brvious year registering the highest percentage increase in the last five years.

Average WPI-based inflation was recorded at -2.7% during the year under review; the continued decline in crude oil price which has been one of a major contributors to the declining inflation trend. As a result, the Reserve Bank Of India (RBI) has been able to reduce the repo rate by 100 basis points (bps) since January 2015 up to March 2016.

However, the transmission of lower interest rates has not proven effective. RBI hence has directed Banks to move away from the Base Rates to Marginal Cost-based Lending Rate effective 1st April 2016. RBI, in its recent bi-monthly policy has reduced repo rate by further 25 bps and has taken several other measures to address the liquidity shortage. These measures are expected for interest rates to decline in the economy with expectation of stable CP- based inflation at 5%. As a result, the credit growth is expected to improve.

During the year, the Government launched an ambitious housing program - “Housing For All by 2022”. The government offers interest subsidy on housing loans and capital subsidy to meet the cost of construction. The subsidies will be available to the families in EWS & LIG income segments. The success of the program will depend on the speed with which respective federal state governments implement the program.

The government also passed Real estate (Regulation & Development) Bill, 2016 which is expected to ease the home buying process. The bill aims to bring the much needed transparency and accountability in the real estate sector.

The Union Cabinet has also approved an upgraded rural housing scheme to build one crore pucca houses over the next three years. In support of the government’s program for housing; The National Housing Bank (NHB) has reduced risk weights on smaller loans to promote affordable housing. The recent budget has also offered tax concession to developers for a supply of dwelling units in the lower income segments. These measures will certainly increase the supply of affordable housing in the country.

Market Scenario

The Indian real sector continues to remain in the grip of a downturn with no change in the status of demand and inventory of unsold properties remaining high. The launch of new projects also declined by 28% during the year with low absorption across all income segments.  

The demand for loans against existing properties continued to be high and in spite of high risks attached to this form of housing finance; the bulk of disbursals of loans were made by the lenders during the year in this segment. However, going forward, with the thrust being given to affordable housing by the current government, the prospects for financing of new housing is expected to improve in the coming years. GRUH expects demand and supply to improve during the next 15 to 18 months period post monsoon.

National Housing Bank has issued Guidelines on Wilful Defaulters which requires Housing Finance Companies to report the names of Wilful Defaulters with the Credit Information Bureaus. The guidelines also provide for certain other stringent steps such as inclusion of guarantors for the purpose of the penal actions, exclusion from Directorship of other companies etc. which are likely to act as a good deterrent and should help improve the recovery of dues in the sector.

Loan Products

GRUH’s major focus has been to provide home loans to individuals and families for purchase, construction and extension. GRUH also provides loans for repair and renovation of houses and home loans to families in the self-employed category where formal income proofs are not easily available and the repayment capacity of such families are appraised based on their cash flows. Apart from extending home loans, GRUH offers loans for purchase and construction of nonresidential properties (NRP) and also offers mortgage loans against existing residential and commercial properties. GRUH offers developer

loans on a selective basis.

Home loan products are being offered at variable and fixed rates, giving customers an option to decide on the type of interest rate risk. Customers are also offered an option to select the mode of calculation of interest on loans, since GRUH offers home loans on annual, monthly and daily rest basis

GRUH also offers loans with a credit guarantee cover wherein the loans are guaranteed by the Credit Risk Guarantee Fund Trust (CRGFT) set up by the Government of India. The selection criteria for loans which can be guaranteed by the CRGFT are laid down by the Government of India and loans are identified by GRUH which meet these specific criteria.

GRUH also offers home loans under the Rural Housing Fund (RHF) scheme of National Housing Bank (NHB) wherein loans are given in rural areas for select categories viz. Backward classes or Minority Community or Women owners or families having annual household income less than Rs. 2 lacs. Since NHB offers refinance at concessional rate of interest under the scheme, the ultimate rate of interest applicable on loans to beneficiaries is regulated with a cap on the sbrad. GRUH has launched a special scheme viz. GRUH Shubh Lakshmi under the RHF scheme wherein property is owned by women applicants in rural areas.

GRUH has also signed an MOU with NHB which is the Central Nodal Agency under the Pradhan Mantri Awas Yojana (PMAY) for the Credit Linked Subsidy Scheme (CLSS). GRUH has also started claiming subsidy under this scheme during the year.

With a view to enable uniform processing of credit risk assessment, GRUH has adopted a credit score methodology. The pricing of each loan is linked to the credit score. This methodology enables GRUH to offer finer interest rates to deserving families, where credit risk is low and charge a higher rate of interest where credit risk is high. The credit score parameters and risk weightage are reviewed on regular basis and modified in line with the changing risk profile. The rate of interest bands are also reviewed on regular basis and aligned with the brvailing rates in the market.

Marketing Efforts

To ensure a deeper geographic reach, GRUH has been sourcing retail business through third party channels by appointment of GRUH Referral Associates (GRAs). GRAs only source loans while GRUH retains control over the credit, legal and technical appraisals. Business sourced through GRAs was 65% of total disbursements made during the year and GRUH paid referral fees of Rs. 12.11 crores to GRAs for sourcing business. GRUH is operating in ten states - Gujarat, Maharashtra, Karnataka, Rajasthan, Madhya Pradesh, Chhattisgarh, Tamil Nadu, Uttar Pradesh Bihar and Jharkhand. GRUH established 25 new offices, including its first office in Bihar and Jharkhand, during the year. GRUH now has 179 retail offices across these ten states. GRUH’s staff strength as at March 31, 2016 was 641.

GRUH conducts outreach programmes from each of the retail offices to potential taluka places. The outreach marketing programme also serves as collection centre for collecting instalments besides providing services of enquiry handling, file opening and effecting disbursements.

Disbursements

GRUH disbursed Rs. 3,856.58 crores during the year as against Rs. 3,120.87 crores in the brvious year. GRUH disbursed loans of Rs. 3,341.94 crores (brvious year Rs. 2,721.11 crores) for home purchase, repair and renovation and registered a growth of 22.82% in the retail home loan segment. GRUH disbursed home loans to 39,473 families (brvious year 33,625 families) and the average home loan to individuals was Rs. 8.86 lacs during the year as against Rs. 8.39 lacs during the brvious year.

GRUH disbursed loans of Rs. 108.96 crores (brvious year Rs. 113.26 crores) for purchase of NRP and Rs. 405.67 crores (brvious year Rs. 286.50 crores) to developers.

Cumulative disbursements as at March 31, 2016 stood at Rs. 19,071.70 crores with a Compound Annual Growth Rate (CAGR) of 21% over the past 3 years period.

Insurance Products

GRUH has an arrangement with The Oriental Insurance Company Limited for providing property insurance of the property mortgaged. During the year, GRUH referred 39,026 customers under this arrangement in respect of property cover of Rs. 3,602.20 crores.

GRUH has an arrangement with three life Insurance service providers. GRUH continued to persuade its customers to take insurance cover on the life of the principal income earner as the collateral for its loans through this arrangement. The policies are assigned in favour of GRUH. During the year, 17,412 customers have taken the life cover from these insurance companies in respect of life cover of Rs. 1,198.80 crores under its various tie-up arrangements.

Loans

The loan approval process at GRUH is decentralised with varying approval limits. Approvals of lending proposals are carried out by retail sanctioning committees up to the limits delegated. Approvals beyond certain limits are referred to the Committee of Management. Larger proposals, as appropriate, are referred to the Committee of Directors, set up by the Board.

During the year, GRUH’s total outstanding loans increased to Rs. 11,114.55 crores from Rs. 8,926.48 crores and registered a growth of 25%. CAGR over the past 3 years period has been 27%. The total outstanding loans at variable rates stood at Rs. 10,219.21 crores (brvious year Rs. 8,662.30 crores), which was 91.94% (brvious year 97 %) of the total outstanding loans. Loans to total assets stood at 97.13% as at March 31, 2016.

GRUH’s outstanding home loans to individuals of Rs. 10,253.51 crores and other loans to individuals for non-residential brmises (NRP) of Rs. 427.10 crores constituted 92.25% and 3.84% respectively of the total outstanding loans. GRUH experienced a brpayment ratio of 12.00% (brvious year 11.44%) in respect of individual loans. The outstanding loans to developers of Rs. 433.94 crores constituted 3.91% of the total outstanding loans

Provision for Standard Assets, NPAs and Contingencies

As per the prudential norms brscribed by NHB for Standard Loan Assets, HFCs are required to carry a provision of 0.40% on Individual Home Loans, 1% on individual NRP Loans, 0.75% on developer loans for residential projects and 1% on Developers loan for commercial projects.

Accordingly, GRUH has made a provision of Rs. 51.28 crores towards Standard Loan Assets comprising individual home loans, individual NRP Loans and developer loans aggregating to Rs. 11,079.00 crores. GRUH carries a provision of Rs. 0.13 crore towards standard assets in respect of instalments due from borrowers of Rs. 29.08 crores and a provision of Rs. 0.03 crore in respect of standard assets on loan against GRUH’s Fixed Deposits of Rs. 2.53 crores.

As per the prudential norms of NHB, GRUH has identified Non Performing Assets (NPAs) and made required provisions on such NPAs besides not recognising income in respect of such NPAs. An asset is NPA if the interest or principal instalment is overdue for 90 days. GRUH’s NPAs as at March 31, 2016 were Rs. 32.98 crores in respect of individual home loans and Rs. 2.57 crores in respect of individual NRP loans. There were no NPAs under developer loans. As per prudential norms of NHB, GRUH is required to carry a provision of Rs. 8.54 crores towards such NPAs. However, as a measure of brcaution, GRUH carries a provision of Rs. 25.17 crores. GRUH thus carries excess provision of Rs. 16.63 crores as contingencies. GRUH’s net NPAs are 0.09% (brvious year Nil) on the outstanding loans of Rs. 11,114.55 crores as at March 31, 2016.

During the year, GRUH has written off an amount of Rs. 5.43 crores in respect of individual loans where the recovery was difficult in the near future. However, GRUH continued the recovery efforts in respect of written off loans of earlier years and could effect recoveries of Rs. 0.18 crore in respect of written off loans.

GRUH carried properties aggregating to Rs. 11.13 crores acquired in settlement of dues at the beginning of the year. During the year, GRUH acquired properties aggregating to Rs. 4.35 crores in settlement of dues under the SARFAESI Act. GRUH also made efforts to dispose off the acquired properties and could dispose off few properties during the year. As at March 31, 2016, GRUH carried properties worth Rs. 13.55 crores which was 1.49% of GRUH’s capital funds, well within the 20% limit stipulated by NHB.

Investments

The Investment Committee constituted by the Board of Directors is responsible for approving investments in line with limits as set out by the board. The decisions to buy and sell up to the approved limit delegated by the board are taken by the Managing Director, who is assisted by two senior managers. The investment function is carried out primarily to support the core business of housing finance to ensure adequate levels of liquidity and to maintain investment in approved securities in respect of public deposits raised as per the norms of NHB.

Considering the time lag between raising of resources and its deployment, the surplus funds are generally being parked with liquid fund schemes of mutual funds and short-term deposits with banks. During the year, GRUH earned Rs. 0.74 crore as surplus from cash management schemes of mutual funds and Rs. 5.90 crores by way of interest on deposits placed with banks. At the end of the year, GRUH maintained Rs. 58.20 crores by way of deposits with banks. As per NHB guidelines, HFCs are required to maintain Statutory Liquid Ratio (SLR) in respect of public deposits. Currently the SLR requirement is 12.50% of the public deposits. As at March 31, 2016 GRUH has invested Rs. 207.82 crores in approved securities comprising government securities, government guaranteed bonds and deposits with scheduled banks, which is higher than the limits brscribed by NHB.

GRUH has classified its investments in SLR securities as long-term investments and valued them at cost. GRUH carries a provision of Rs. 6.69 crores towards losses, if any, that would arise on redemption of investments on maturity.

Borrowed Funds

GRUH has been raising funds for its lending activities from NHB by way of refinance, from banks by way of term loans, by private placement of non-convertible debentures (NCDs), by issuance of commercial paper and mobilisation of public deposits.

Endeavours at GRUH have been to maintain a prudent mix of fixed rate borrowings and variable rate borrowings with a view to minimise the weighted average cost of borrowings and maintain a healthy sbrad on its lending activities. GRUH has also been funding its operations through short-term borrowings in the form of commercial paper and short tenure loans from banks. While such a mix enables GRUH to sustain a healthy net interest margin, - it raises the risks of asset liability mismatch. To minimise the risk arising on account of such mismatch, GRUH has set internal norms on the quantum of shortterm borrowings so that a prudent balance is maintained in keeping the cost of funds low to an extent that the risk arising from the mismatch could be managed.

The borrowings which are maturing within twelve months from the end of the year, constituted 15.78% (brvious year 19.37%) of the total borrowings of Rs. 10,244.40 crores (brvious year Rs. 8,215.59 crores). The outstanding borrowings at fixed rate stood at Rs. 4,911.57 crores (brvious year Rs. 3,911.39 crores), which was 47.95% (brvious year 47.61%) of the total outstanding borrowings.

GRUH continued to borrow for both long and short-term from the banking sector at competitive rates. GRUH raised fresh loans from banks aggregating to Rs. 2,521 crores during the year and repaid loans aggregating to Rs. 1,290 crores. Term loans from banks are secured by a negative lien on all assets of the Company excluding the specific immovable property mortgaged in favour of the Debenture Trustees for issuance of NCDs, Statutory Liquid Assets having floating charge in favour of the Public Deposit Trustees against Public Deposits and negative lien on the dwelling units financed from Line of credit of KfW through HDFC. Outstanding balance of bank loans was Rs. 3,931 crores as at March 31, 2016.

GRUH availed refinance of Rs. 1,671.94 crores from NHB and repaid refinance of Rs. 490.17 crores. Outstanding refinance from NHB as at March 31, 2016, of Rs. 3,958.94 crores is secured by a negative lien on all assets of the Company excluding the specific immovable property mortgaged in favour of the Debenture Trustees for issuance of NCDs, Statutory Liquid Assets having floating charge in favour of the Public Deposit Trustees against Public Deposits and negative lien on the dwelling units financed from Line of credit of KfW through HDFC.

GRUH raised Rs. 197 crores through issuance of NCDs during the year. The outstanding balance of NCDs as at March 31, 2016 was Rs. 847 crores. The NCDs are secured by mortgage of a specific immovable property, negative lien on all assets of the Company excluding the Statutory Liquid Assets having floating charge in favour of the Public Deposit Trustees against Public Deposits and negative lien on the dwelling units financed from Line of credit of KfW through HDFC. GRUH’s NCDs are rated “ICRA AAA” with Stable outlook, indicating highest degree of safety regarding timely servicing of financial obligations and “CRISIL AA+” with Positive outlook, indicating high degree of safety regarding timely servicing of financial obligations.

The outstanding subordinated debt as at March 31, 2016 stood at Rs. 35 crores. The debt is subordinated to brsent and future senior indebtedness of the Company and is rated “ICRA AAA” with Stable outlook, indicating highest degree of safety regarding timely servicing of financial obligations and “CRISIL AA+” with Positive outlook, indicating high degree of safety regarding timely servicing of financial obligations. Based on the balance term to maturity, as at March 31, 2016, Rs. 35 crores of the book value of subordinated debt is considered as Tier II capital under the guidelines issued by NHB for the purpose of computation of CAR.

GRUH’s short term borrowings including commercial paper and short term NCDs are rated “ICRA A1+” and “CRISIL A1+”, indicating very strong degree of safety regarding timely payment of financial obligations. The outstanding balance of commercial paper as at March 31, 2016 was Nil.

During the year, GRUH received fresh deposits of Rs. 441.80 crores, and repaid deposits of Rs. 271.60 crores. The renewal ratio (the ratio of deposits renewed to the deposits maturing during the year) experienced by GRUH was 60.77%. The outstanding deposits have increased from Rs. 1,292.11 crores at the beginning of the year to Rs. 1,462.30 crores by the end of the year and registered a growth of 13.17%. The outstanding balance of public deposits constituted 14.27% of the total outstanding borrowings as at March 31, 2016.

GRUH’s Deposit Programme is rated “MAAA” (with stable outlook) by ICRA, indicating highest credit quality rating and “FAAA” (with stable outlook) by CRISIL, indicating very strong degree of safety regarding timely payment of interest and principal.

GRUH has been offering brokerage to its deposit referral associates. The brokerage structure is linked to the term of deposits mobilised. GRUH has been amortising the brokerage paid over the tenure of deposits mobilised.

The average cost of total borrowings experienced during the year was 8.75% per annum (brvious year 9.24%).

NHB Guidelines and Prudential Norms

GRUH has complied with the guidelines issued by NHB regarding accounting standards, prudential norms for asset classification, income recognition, provisioning, capital adequacy, concentration of credit, credit rating, “Know Your Customer” (KYC) Guidelines and Anti Money Laundering (AML) Standards, Fair Practices Code, grievance redressal mechanism, recovery of dues, channel partners and real estate and capital market exposures.

GRUH had no investment in excess of the limits brscribed by NHB with any one company or any single group of companies. GRUH has not made investment in any of the promoter group companies or in the stock markets.

GRUH’s total borrowings as at March 31, 2016 of Rs. 10,244.40 crores were within the permissible limit of 16 times the net owned funds. Of this, the public deposits of Rs. 1,462.30 crores were also within the limit of 5 times the net owned funds as brscribed by NHB. GRUH has complied with the guidelines issued by NHB regarding the ceiling on interest rates offered on deposits and brokerage paid to the deposit referral associates.

GRUH’s Capital Adequacy Ratio as at March 31, 2016 was 17.82% as against NHB’s brscribed limit of 12%. The Capital Adequacy on account of Tier I Capital was 16.13% while the Capital Adequacy on account of the Tier II Capital was 1.69%.

NHB vide its letter dated March 7, 2016 imposed penalty of Rs. 36.64 lacs for non-compliance with the provisions under section 29B(1) & (2) of the NHB Act 1987 regarding non-maintenance of requisite percentage of liquid assets during the period 01.04.2013 to 30.09.2014 on the component of “Interest accrued but not due on Deposits”. GRUH paid the penalty as directed by NHB and has submitted an appeal to reconsider and review NHB’s decision on the grounds stated hereunder.

GRUH has been maintaining the required percentage of liquid assets in the designated securities of the “Outstanding Public Deposits” as per Section 29B (1) & (2) of the NHB Act by considering the “interest accrued and due” along with Principal amount of Public Deposits as “Outstanding Deposits” for the purpose of maintaining the required percentage of liquid assets.

However, in the month of August 2014, NHB stated that GRUH should have maintained SLR also on the component of ‘interest accrued but not due’ and for non-maintenance of SLR on such component for the period from 01.04.2013 to 30.09.2014, imposed the penalty.

GRUH commenced the maintenance of liquid assets as per the observation of NHB with immediate effect with a submission that NHB has not issued any specific guideline to consider the component of “interest accrued but not due”. According to GRUH, under para 2(1)(g) of NHB Directions, Deposit is assigned the same meaning as defined Under Section 45 I (bb) of RBI Act. Under Section 45 I (bb) of the RBI Act, ‘interest accrued’ is not included within the ambit of term ‘Deposit’. Under para 2(1)(y) of NHB Directions where Public Deposits has been defined, there is no mention of ‘interest accrued’. Section 29B (1) & (2) of the NHB Act requires Housing Finance Companies to maintain 12.5% SLR on Public Deposit Outstanding at the close of business. Hence, nowhere in any of the above provisions of the NHB Act / Directions, ‘Deposit’ is defined to include the component ‘interest accrued but not due”.

The Statutory Auditors have also been certifying the “Outstanding Deposits” as an aggregation of the ‘principal amount of Public Deposits’ and interest accrued and due as “Outstanding Deposits”. According to GRUH, the component of ‘interest accrued but not due’ could not be considered as a part of “Outstanding Deposits” as per the Accounting Standards as applicable. Such component is being provided in the Books of Accounts only with a view to adhere to the Principles of Mercantile Accounting System and the said component is shown as Provisions under “Other Liabilities”. While GRUH has appealed to NHB, GRUH continues to maintain the liquid assets as per the interbrtation of NHB.

Central Registry

The Government of India has set up the Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI) under section 21 of the SARFAESI Act, 2002 to have a central database of all mortgages created by lending institutions. The object of this registry is to compile and maintain data relating to all transactions secured by mortgages. All Banks & HFCs which fall under the purview of SARFAESI Act are required to register with CERSAI and submit the data in respect of all properties mortgaged in its favour. The lending institutions are required to pay fees for uploading of the data of mortgage.

GRUH is registered with CERSAI. GRUH has uploaded 36,637 records in respect of loans disbursed during the year. GRUH has paid fees of Rs. 1.66 crores to Central Registry towards uploading the data of mortgages.

Risk Management

GRUH has formulated a risk management framework which lays the procedure for risk assessment and mitigation. The Risk Management Committee (RMC) comprises the Managing Director as the chairman and the members include senior managers holding key positions in the Company. The RMC apprises the Audit Committee of the key risks associated with the business of the Company and the measures to mitigate them.

The Audit Committee has been periodically reviewing the risk profile of the Company and evaluating the adherence by the branches / functions of the systems and processes in place for monitoring, evaluation, assessment and mitigation of risk through a systematic and effective audit programme. The observations of Audit Committee, if any, on the risk management are reported to the Board. GRUH manages various risks like financial risk, operational risk, marketing risk, external risk and regulatory risks associated with the mortgage business. The critical risks which can significantly impact profitability and financial strength are credit risk, interest rate risk and liquidity risk. GRUH manages credit risk through internal credit norms. Liquidity risk and interest rate risks arising out of maturity mismatch of assets and liabilities are managed through regular monitoring of the maturity profile.

Internal Audit and Control

GRUH has an adequate system of internal control in place which has been designed to provide a reasonable assurance with regard to maintaining of proper accounting controls, monitoring of operations, protecting assets from unauthorized use or losses, compliance with regulations and for ensuring reliability of financial reporting. GRUH has documented procedures covering all financial and operating functions.

GRUH has robust internal audit programme, where the internal auditors, an independent firm of chartered accountants, conduct a risk-based audit with a view to not only test adherence to laid down policies and procedures but also to suggest improvements in processes and systems. Their audit program is agreed upon by the Audit Committee. Internal audit observations and recommendations are reported to the Audit Committee, which monitors the implementation of such recommendations.

IT Audit and Security

Information systems is the backbone of GRUH’s business. GRUH has implemented an application software which is being maintained and has been enhanced and modified by the in-house IT software development group. The software is integrated to record and process lending and deposit mobilization and accounting transactions of GRUH across its branches.

The Information System at GRUH operates under centralized IT environment and all the branches are connected through MPLS VPN connectivity. The centralized IT environment enables prompt communication between its retail offices and head office and also provides highway for easy and quick MIS and brparation of various monthly reports.

Considering the significant dependence of GRUH’s operations on its IT system, GRUH also takes initiative in maintaining adequate control for data integrity and its confidentiality. The Application Software and IT System at GRUH are upgraded from time to time. GRUH is having its entire IT infrastructure on a Cloud based model at Tier 4 Data Center. GRUH has also arranged for a Cold Disaster Recovery site at a different geographical location than the primary Data Center. GRUH carries out audit of its IT system from external agency at regular intervals. The external agency’s suggestions and recommendations are reported to Audit Committee and implemented where found necessary.

Statement of Profit and Loss

Key elements of the statement of profit and loss for the year ended March 31, 2016 are:

• Profit before tax grew by 20% as against 23% in the brvious year.

• Profit after tax grew by 20% as against 15% in the brvious year.

• Current year income tax provision amounted to Rs. 98.24 crores as compared to Rs. 80.56 crores in the brvious year. The effective income tax rate for the year remained at 27%.

• Pre-tax return on average assets was 3.51% in the current year as against 3.66% in the brvious year. Post-tax return on average assets was 2.36% as against 2.48% in the brvious year.

• Return on average net worth for the year was 31.49% as against 30.91% in the brvious year.

• Ratio of net interest margin to average assets was 4.08% for the current year as against 4.18% in the brvious year.

• Cost to income ratio was 17.03% for the year as against 16.65% in the brvious year.

• The Earnings Per Share (Basic) was Rs. 6.70 for the current year as against Rs. 5.57 for the brvious year.

Human Resource

The enthusiasm of staff members continued to be high in sustaining positive growth of disbursements and in maintaining healthy recoveries. With the high level of commitment and loyalty by staff members, GRUH is confident to face the challenges of the tougher market conditions.