Notes to Accounts of SRG Housing Finance Ltd.

Mar 31, 2018

Terms/Rights attached to Equity Shares

The Company has one class of share referred to as equity shares having at par value of Rs. 10 each. Each shareholder is entitled to one vote per share held.

1.1) Nature of Security

i) Refinance from National Housing Bank (NHB) and other Term Loans are secured by first and exclusive charge on the specific book debts, receivables of the Company and irrevocable power of attorney given by the Company in favour of Banks/ FIs/NHB for recovery of dues, Lien on specific FDR’s and Personal Guarantee of Mr. Vinod Kumar Jain MD, Ms. Seema Jain, Director and Third party guarantee of Mr. G. L. Jain and Mr. Rajesh Jain.

ii) Redeemable Non Convertible Debentures are secured by first and exclusive charge on specific assets by way of hypothecation of book debts and also by way of mortgage of specific immovable property situated at Chennai in favour of Debenture Trustee.

Loans repayable on demand from Bank are secured by first and exclusive charge on the specific book debts, receivables of the company and irrevocable power of attorney given by the Company in favour of Bank for recovery of dues, Lien on specific FDR’s and Personal Guarantee of Mr. Vinod Kumar Jain MD, Ms. Seema Jain, Director and Third party guarantee of Mr. G.L. Jain and Mr. Rajesh Jain.

2. TRADE PAYABLES:

Trade Payables of Rs. 56.03 Lakhs (Previous Year Rs. 79.67 Lakhs) includes f NIL (Previous Year f NIL) payable to suppliers registered under the Micro, Small and Medium Enterprises and Development Act, 2006 which has been determined to the extent such parties have been identified on the basis of information available with the Company. No interest has been paid/ payable by Company during the year to the suppliers covered under Micro, Small and Medium Enterprises and Development Act, 2006.

3. In the opinion of management the current assets and advances are approximately of the value as stated if realized in the ordinary course of business unless otherwise stated. The provisions for all liabilities are adequate and not in excess / shortage of the amount reasonably necessary.

4. During the year, there was no employee employed throughout the year who was in receipt of remuneration of Rs. 1.02 Crores or more per annum or Rs. 8.50 Lakhs or more per month, if employed for the part of the year.

5. All the balances of Trade Payables, Loans and Advances are subject to confirmation.

6. Previous year figures which were audited by the predecessor auditors have been regrouped / reclassified wherever necessary to correspond with current year’s classification disclosure.

7. The Company have complied all the prudential norms prescribed by National Housing Bank on income recognition, accounting standards, assets classification, provisions for bad & doubtful debts, capital adequacy and credit/investment concentration.

8. The Company does not have any exposure in foreign currency at the year end.

9. The Company is engaged in the business of providing loans for purchase, construction, repairs and renovation etc. of houses to Individuals, Corporate Bodies, Builders and Co-operative Housing Societies and or loan against properties and has its operations within India. Accordingly, there are no separate reportable segments, as per the Accounting Standard on ‘Segment Reporting’ (AS 17) issued by The Institute of Chartered Accountants of India notified under The Companies (Accounting Standards) Amendment Rules, 2011.

10. As required by 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, the following additional disclosures are given as under:

10.1 During the year, Company has not entered into any (a) derivative transaction (b) securitisation and assignment transaction (c) financing of Parent Company product and (d) finance of any unsecured advances against intangible securities such as rights, licenses, authority etc. as collateral security.

10.2 The Company has not exceeded limit prescribed by National Housing Bank for Single Borrower Limit (SGL) and Group Borrower Limit (GBL).

10.3 The Company has not obtained registration from any other financial sector regulator.

10.4 No penalties have been imposed by NHB or any other regulator on the company during the year.

10.5 RELATED PARTY DISCLOSURES:

Disclosures as required by the Accounting Standard 18 of ICAI in respect of Related Party Transactions for the year ended on 31/03/2018:-

The related parties of the Company with whom the Company had carried out transactions are as follows.

Vinod Kumar Jain, Managing Director Seema Jain, Director Vinod Jain HUF

Archis Jain (Relative of Director)

The nature and volume of transactions with the above related parties during the year were as follows: Director’s Remuneration Rs. 84.00 Lakhs (Previous year Rs. 84.00 Lakhs)

Office Rent Rs. 26.56 Lakhs (Previous year Rs. 24.14 Lakhs)

Rent Deposit Rs. 2.45 Lakhs (Previous year f NIL)

Salary Rs. 15.40 Lakhs (Previous year Rs. 12.00 Lakhs)

10.6 During the financial year 2017-18, no payment is made to Non Executive Directors.

10.7 During the year, a) no prior period items occurred which has impact on profit and loss account; b) there was no change in any accounting policy; c) there were no circumstances in which revenue recognition has been postponed pending the resolution of significant uncertainties; d) there was no withdrawal from Reserve fund; e) Company has not accepted public deposits, f) Company does not consists of any Overseas Assets; and g) Company does not consists Off-balance Sheet SPVs sponsored (which are required to be consolidated as per Accounting Norms).

10.8 The Company has no subsidiary company. Hence, requirement of consolidated financial statements is not applicable to the company.

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Mar 31, 2016

* As per section 29C of the NHB 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.37.50 Lacs (Previous Year Rs. 31.00 Lacs) 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.

(Secured against Hypothecation of Advances (Book-Debts) an, irrevocable power of attorney in favor of bank to create mortgage / hypothecation charge in favor of bank over the specific assets and to collect the book debts directly from individual borrowers in the event of default by the company and personal guarantees of the director)

Term Loan-1 Rs 400.00 Lacs -Repayable in 54 months @ Rs.7.50 lacs for 53 months and last installment being 2.50 lacs. Outstanding at the year end Rs. 101.10 lacs

Term Loan-2 Rs 1250.00 Lacs -Repayable in 54 months @ Rs.23 lacs for 53 months and last installment being 31 lacs. Outstanding at the year end Rs.707.52 lacs

Term Loan-3 Sanction Rs. 3000.00 Lacs ,Repayable in 60 months @ Rs 50.00 lacs PM w.e.f. May-2016 , Loan Outstanding at the year end Rs.3031.72

(Secured against Hypothecation of Advances (Book-Debts) an, irrevocable power of attorney in favor of bank to create mortgage / hypothecation charge in favor of bank over the specific assets and to collect the book debts directly from individual borrowers in the event of default by the company and personal guarantees of the director)

1. RELATED PARTY DISCLOSURES : Disclosures as required by the accounting standard 18 of ICAI in respect of related party transactions for the year ended on 31/03/2016:-

The related parties of the Company with whom the Company had carried out transactions are as follows.

Mr. Vinod K Jain, Managing Director

Seema Jain, Director Vinod Jain HUF

Archis Jain (Relative of Director)

S R G Securities Finance Limited (Associated / Related Entity)

The nature and volume of transactions with the above related parties during the year were as follows:

Directors Remuneration- (Salary) Rs. 79.20 Lakhs (Previous year Rs.35.10 Lakhs)

Office Rent Rs. 14.16 Lakhs (Previous year Rs.2.78 Lakhs)

Salary Rs. 6.00 Lakhs (Previous year Rs.0.00 Lakhs)

Investment in shares Rs. 41.95 Lakhs (Previous year Rs.0.00 Lakhs)

2. In the opinion of management the current assets and advances are approximately of the value as stated if realized in the ordinary course of business unless otherwise stated. The provisions for all liabilities are adequate and not in excess / shortage of the amount reasonably necessary.

3. During the year one employee (Managing Director) was getting salary more than Rs. 60, 00,000/-p.a.

4. All the balances of Sundry Creditors, Loans and Advances are subject to confirmation.

5. The previous year figure have been regrouped / reclassified, wherever necessary to confirm to the current year presentation.

6. The Company have complied all the prudential norms prescribed by National Housing Bank on income recognition , accounting standards, assets classification , provisions for Bad & doubtful debts , capital adequacy and credit / investment Concentration .

7. The company does not have any exposure in foreign currency at the year end.

8. The Company is engaged in the business of providing loans for purchase, construction, repairs and renovation. etc. of houses to Individuals, Corporate Bodies, Builders and Co-operative Housing Societies and or loan against properties and has its operations within India. Accordingly, there are no separate reportable segments, as per the Accounting Standard on ''Segment Reporting'' (AS 17) issued by the Institute of Chartered Accountants of India / notified under the Companies (Accounting Standards) Amendment Rules, 2011.

9. National Housing Bank (NHB) vide its circular no NHB(ND)DRS/Policy circular 62/2014 dated 27^th May 2014 directed Housing Finance Companies to provide for deferred tax liability in respect of the balance in the Special reserve created under section 36(i)(viii) of the Income Tax Act,1961 further NHB vide its policy circular dated 22^nd August 2014, has clarified that such contingent deferred tax liability in respect of opening balance in the Special Reserve as at 1^st April,2014 may be created by adjusting the opening reserves of the Company over a period of three years . Accordingly, Company has adjusted its opening general reserve as at 1^st April, 2015 with an amount of Rs.4.24 Lakhs as contingent deferred tax liability and the unamortized amount against the same is Rs.8.48 Lakhs.

The contingent deferred tax liability of Rs 8.74 Lakhs in respect of the amount appropriated to Special Reserve during the year ended on 31^st March, 2016 has been charged to Statement of Profit & Loss and deferred tax liability on Special reserve created under section 36(i)(viii) of the Income Tax Act,1961 has beer created as per NHB Direction. For comparability, DTL charged to statement of Profit & Loss has been separately disclosed in the above a/c.

10. As required by the revised guidelines dated 11^th October, 2010 by NHB read with additional requirements/guidelines with reference to the interpretation of various terms/ classifications, the following additional disclosures are given as under :

11. CAPITAL TO RISK ASSETS RATIO (CRAR)

12.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 NHB Act,1987 is provided

13. Notes on Financial statements lto32 are annexed and forming part of the Balance Sheet and Profit & Loss.

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Mar 31, 2015

1 Related Party Disclosures : Disclosures as required by the accounting standard 18 of ICAI in re- spect of related party transactions for the year ended on 31/03/2015 :-

The related parties of the Company with whom the Company had carried out transactions are as follows.

Mr. Vinod K Jain, Managing Director Vinod Jain HUF

The nature and volume of transactions with the above related parties during the year were as follows:

Directors Remuneration- (Salary) Rs. 35.10 Lakh (Previous year Rs 25.50 Lakh)

Office Rent Rs. 2.78 Lakh (Previous year Rs 2.25 Lakh)

2 In the opinion of management the current assets and advances are approximately of the value as stated. If realized in the ordinary course of business unless otherwise stated. The provisions for all liabilities are adequate and not in excess / shortage of the amount reasonably necessary.

3 None of the employees were getting more than Rs. 60,00,000/-p.a. or 5,00,000/p.m. during the year.

4 All the balances of Sundry Creditors, Loans and Advances are subject to confirmation.

5 The previous year figure have been regrouped / reclassified, wherever necessary to confirm to the current year presentation.

6 The Company have complied all the prudential norms prescribed by National Housing Bank on income recognition , accounting standards, assets classification , provisions for Bad & doubtful debts , capital adequacy and credit / investment Concentration .

7 The company does not have any exposure in foreign currency at the year end.

8 The Company is engaged in the business of providing loans for purchase, construction, repairs and renovation. etc. of houses to Individuals, Corporate Bodies, Builders and Co-operative Housing Societies and or loan against properties and has its operations within India. Accordingly, there are no separate reportable segments, as per the Accounting Standard on 'Segment Reporting' (AS 17) issued by the Institute of Chartered Accountants of India / notified under the Companies (Accounting Standards) Amendment Rules, 2011.

9 As per the provisions of new Companies Act, 2013 ( Act), the Company has applied the new rates of depreciation based upon the useful life of fixed assets specified in Part C of schedule II of the Act.

During the Current year , the Company has revised remaining useful lives of certain fixed as speci- fied in Part C of schedule II of the Act, accordingly, the carrying value of fixed assets as on 1st April,2014 has been depreciated over the revised remaining useful lives. As a result of this change, the net depreciation charge for the year ended on 31st March, 2015 is higher by Rs.3.25 Lakh as compared to provisions if made under earlier companies Act. Further , an amount of Rs.0.28 Lakh representing the carrying value of assets , whose remaining useful life is NIL, as at 1st April,2014 has been charged to opening balance of retained earnings as per the transitional provision pre- scribed in note 7(b) of part c Schedule II of the Companies Act, 2013.

10. National Housing Bank (NHB) vide its circular no NHB(ND)DRS/Policy circular 62/2014 dated 27th May 2014 directed Housing Finance Companies to provide for deferred tax liability in respect of the balance in the Special reserve created under section 36(i)(viii) of the Income Tax Act,1961 further NHB vide its pol- icy circular dated 22nd August 2014, has clarified that such contingent deferred tax liability in respect of opening balance in the Special Reserve as at 1st April,2014 may be created by adjusting the opening re- serves of the Company over a period of three years . Accordingly, Company has adjusted its opening gen- eral reserve as at 1st April, 2014 with an amount of Rs.4.24 Lakhs as contingent deferred tax liability and the unamortized amount against the same is Rs.12.72 Lakhs.

The contingent deferred tax liability of Rs 6.97 Lacs in respect of the amount appropriated to Special Re- serve during the year ended on 31st March, 2015 has been charged to Statement of Profit & Loss and de- ferred tax liability on Special reserve created under section 36(i)(viii) of the Income Tax Act,1961 has been created as per NHB Direction. For comparability, DTL charged to statement of Profit & Loss has been separately disclosed in the above a/c.

11. Notes on Financial statements 1to32 are annexed and forming part of the Balance Sheet and Profit & Loss account.

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Mar 31, 2014

1. RESERVE AND SURPLUS

* As per section 29C of the NHB 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 elegible transfer. The Company has transferred an amount of Rs.24.00 Lacs (Previous Year Rs. 12.70 Lacs] to special reserve in terms of Section 36 (1] (Viii] of the the income Tax Act, 1961. The Company doesn''t anticipate any withdrawl from special reserve in forseeable future.

2. LONG TERM BORROWINGS :

(Secured against Hypothecation of Advances (Book-Debts] an, irrevocable power of attorney in favor of bank to create mortgage / hypothecation charge in favor of bank over the specific assets and to collect the book debts directly from individual borrowers in the event of default by the company and personal guarantee of the director] Term Loan-1 Rs 400.00 Lacs -Repayable in 54 months @ Rs.7.50 lacs for 53 months and last installment being 2.50 lacs. Outstanding at the year end Rs. 290.70 lacs Term Loan-2 Rs 1250.00 Lacs -Repayable in 54 months @ Rs.23 lacs for 53 months and last installment being 31 lacs. Outstanding at the vear end Rs.1261.58 lacs.

3. SHORT TERM BORROWINGS :

(Secured against Hypothecation of Advances (Book-Debts] an, irrevocable power of attorney in favor of bank to create mortgage / hypothecation charge in favor of bank over the specific assets and to collect the book debts directly from individual borrowers in the event of default by the company and personal guarantee of the director]

4. Related Party Disclosures : Disclosures as required by the accounting standard 18 of ICAI in respect of related party transactions for the year ended on 31/03/2014:-

Key Managerial Personnel (KMP) on the Board Mr. Vinod K Jain, Managing Director

Particulars of Related Party Transactions:-

Directors Remuneration- (Salary] Rs. 25.50 Lakh (Previous year Rs 13.00 Lakh)

Office Rent Rs. 2.25Lakh (Previous year Rs2.05 Lakh)

5. In the opinion of management the current assets and advances are approximately of the value as stated. If realized in the ordinary course of business unless otherwise stated. The provisions for all liabilities are adequate and not in excess/shortage of the amount reasonably necessary.

6. None of the employees were getting more than Rs. 60, 00,000/-p.a. or 5, 00,000/p.m. during the year.

7. All the balances of Sundry Creditors, Loans and Advances are subject to confirmation.

8. The previous year figure have been regrouped/reclassified, wherever necessary to confirm to the current year presentation.

9. The Company have complied all the prudential norms prescribed by National Housing Bank on income recognition , accounting standards, assets classification , provisions for Bad & doubtful debts , capital adequacy and credit/ investment Concentration.

10. The Company is engaged in the business of providing loans for purchase, construction, repairs and renovation, etc. of houses to Individuals, Corporate Bodies, Builders and Co-operative Housing Societies and or loan against properties and has its operations within India. Accordingly, there are no separate reportable segments, as per the Accounting Standard on ''Segment Reporting'' (AS 17] issued by the Institute of Chartered Accountants of India/notified under the Companies (Accounting Standards] Amendment Rules, 2011.

11. NHB vide its letter dated 09.04.2014 has levied under section 52A of the National Housing Bank Act,1987 a penalty of Rs 5000/- ( Rupees Five thousand], which has been paid by the company, in relation to section 29C of the National Housing Bank Act 1987 on the company for the year 2012-13.

12. As required by the revised guidelines dated 11th October, 2010 by NHB read with additional requirements/guidelines with reference to the interpretation of various terms/ classifications.

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Mar 31, 2013

1. In the opinion of management the current assets and advances are approximately of the value as stated. If realized in the ordinary course of business unless otherwise stated. The provisions for all liabilities are adequate and not in excess / shortage of the amount re asonably necessary.

2. None of the employees were getting more than Rs. 60, 00,000/ -p.a. or 5, 00,000/p.m. during the year.

3. All the balances of Sundry Creditors, Loans and Advances are subject to confirmation.

4. The previous year figure have been regrouped / reclassified, wherever necessary to confirm to the current year presentation.

5. The Company have complied all the prudential norms prescribed by National Housing Bank on income recognition, accounting standards, assets classificat ion, provisions for Bad & doubtful debts, capital adequacy and credit / investment Concentration.