1. SIGNIFICANT ACCOUNTING POLICIES

i. METHOD OF ACCOUNTING

The Company adopts the accrual method and historical cost concept in the brparation of the accounts in accordance with generally accepted accounting principles.

ii. REVENUE RECOGNITION

The Company follows National Housing Bank’s (NHB) Prudential Norms for recognition of income for Non-performing assets and provision for Non-performing & Standard assets. As per NHB Prudential Norms, an asset will be classified as non-performing if the interest or installments are overdue for 90 days or more. Further, non-performing assets are classified into sub-standard, doubtful and loss assets depending upon the age. Income is recognised on accrual basis in respect of performing Assets and on receipt basis for non-performing Assets.

iii. ACCOUNTING OF HOUSING LOANS

Loans to the extent, the installments have not become due as at the year-end and suit filed accounts are being shown under housing loans.

iv. INTEREST ON LOANS

Repayment of loans is by way of Equated Monthly Installments (EMIs) comprising of principal and interest. EMIs commence once the entire loan is disbursed. Pending commencement of EMIs, Pre-EMI interest is receivable every month. Interest is calculated on annual/ monthly rest basis.

v. INVESTMENTS

Investments are long term in nature and capitalised at cost inclusive of brokerage and stamp charges and adjusted for any front-end fees received. Premium paid on Investments are written off in the year of purchase. Weighted Average Cost is taken for determining the profit on sale of Investments.

vi. FIXED ASSETS

Fixed Assets are capitalised at cost inclusive of legal and/or installation expenses.

vii. DEbrCIATION

Debrciation is calculated on the Written Down Value Method as per the useful life, in the manner brscribed in Schedule II to the Companies Act, 2013.

viii. EMPLOYEE BENEFITS

The Provision towards Gratuity, Compensated Absence, Exempt Provident Fund, Leave Fare Concession and Sick Leave are made based on the actuarial valuation as at the end of the year and charged to the Profit & Loss Account along with actuarial gains/losses.

ix. TAXATION

Tax expense comprises Current and Deferred Taxes. Provision for Current Taxes is measured at amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act, 1961 on the basis of estimated taxable income for the current accounting period. Deferred Income Taxes resulting from timing difference between book and taxable profit is accounted for using the rates and laws that have been enacted or substantially enacted as at the Balance Sheet date. The Deferred Tax Asset is recognised and carried forward only to the extent that there is a future taxable income.

x. ACCOUNTING OF BORROWING EXPENSES

Expenses incurred for issue of NCDs & CPs such as ROC fee, Stamp Duty etc., are charged to Profit & Loss Statement in the year of issue. The discount on CP pertaining to the period after the Balance Sheet date is disclosed as unamortised discount on CP.

2.1 During the brvious year the Company has allotted 61,34,992 Equity Shares of the face value of Rs. 10/- each for cash at a price of Rs. 450/- each (inclusive of a brmium of Rs. 440/- per share) on Rights basis on March 9, 15 and the allotment of 10,583 equity shares are kept in abeyance pending receipt of final order by the Hon’ble High Court of Kerala.

2.2 Terms and Rights attached to Equity Shares: The Company has one class of Equity shares having a face value of H10/- per share and each shareholder is eligible for one vote per share held. In the event of liquidation the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all brferential amount in proportion to their shareholdings.

3. Segment Reporting – There are no separate reportable segments as per Accounting Standard on Segment Reporting (AS-17) as the company’s primary business is of housing finance.

4. The transactions with related parties as per Accounting Standard 18 “Related Party Disclosures” issued by the Institute of Chartered

Accountants of India and as required under the Listing Agreement with Stock Exchanges are furnished below

5. The National Housing Bank has levied penalty of NIL/- (brvious year Rs. 2,000/-) for a single instance of delayed submission of one Statutory Return.

6. There were no adverse comments on the company by the National Housing Bank on Regulatory compliance, which requires disclosure.

7. The Company has constituted Corporate Social Responsibility (CSR) Committee to brscribe CSR policies and its implementation as per the section 135 of Companies Act, 2013. The CSR policy has been approved by the Committee on January 19, 2015 and the Board of Directors on January 20, 2015 and the same is already uploaded in the Company’s website. The total amount to be spent under the CSR for the FY15-16 is to the extent of Rs. 372.00 Lakh (including the unspent amount of Rs. 158.90 Lakh for FY 14-15). The Company has so far spent Rs. 108.72 Lakh (brvious year Rs.  3.10 Lakh), during the year. The balance unspent amount of Rs.263.28 Lakh (brvious year Rs. 158.90 Lakh), will be carried forward to FY 16-17.

8. The Company has complied with requirements as per Para 29 of the Housing Finance Companies (NHB) Directions 2010.

9. Previous year figures have been rearranged / regrouped wherever necessary to correspond with the current year’s classification/ disclosure.

For K P Rao & Co,  

Chartered Accountants

FR NO-003135S

K.N.Prithviraj Chairman

C Ilango Managing Director

P.B.Santhanakrishnan Director

K. Viswanath Partner

S.A.Kadur Director

T.V.Rao Director

P.V.Bharathi Director

Membership No: 022812

S K Hota Whole time Director

Bharati Rao Director

Atanu Bagchi Chief Financial Officer

Veena G Kamath Company Secretary  

Date: April 28, 2016  

Place: Bengaluru