The Directors are pleased to present the 25th Annual Report of the
 business and operations of the Company together with the audited
 accounts for the year ended March 31, 2012, the Silver Jubilee Year of
 your Company.
 
 FINANCIAL RESULTS
 
 The financial performance for fiscal 2012 is summarised here below:
 
                                              For the 
                                              year ended    For the
                                                            year ended
                                              March 31, 
                                              2012          March 31, 
                                                            2011
                                             (Rs in lakh)  (Rs in lakh)
 
 Profit before Tax & Provisions                6830.88        5997.11
 
 Less: Provision for Standard Assets           1100.00              -
 
 Provision for Doubtful Debts - Housing Loans  (361.16)        145.58
 
 Prior Period adjustments                        (5.53)             _
 
 PROFIT BEFORE TAX                             6097.57        5851.53
 
 Tax expenses:
 
 (a) Provision for Tax - Current Year          1780.00        1725.00
 
 (b) Deferred Taxation                          (58.42)        (75.07)
 
 PROFIT AFTER TAX                              4375.99        4201.60
 
 Balance brought forward from previous year     936.89         480.50
 
                                               5312.88        4682.10
 
 Appropriations:
 
 Transfer to Special Reserve u/s.36(1)(viii)   1350.00        1150.00 
 of the Income Tax Act, 1961
 
 Transfer to General Reserve                   2700.00        2000.00
 
 Proposed Dividend                              614.62         512.13
 
 Tax on Distributed Profits                      99.71          83.08
 
 Provision for Contingencies                         -              -
 
 Balance carried forward                        548.55         936.89
 
                                               5312.88        4682.10
 
 PERFORMANCE HIGHLIGHTS 
 
 SANCTIONS
 
 During the year, the housing loans and other loans sanctioned were to
 the extent of Rs1105.41 crore registering a growth of 102.63% over the
 previous year. The cumulative loan sanctions since inception of the
 Company, as at the end of the financial year 2011 -12, was Rs7822.59
 crore.
 
 DISBURSEMENT
 
 During the year, the loans disbursed were to the extent of T859.07
 crore registering an increase of 81.71% over the previous year. The
 cumulative loan disbursements since inception of the Company as at the
 end of the financial year 2011-12 stood at Rs6661.06 crore.
 
 LOANS OUTSTANDING
 
 The cumulative loan(s) outstanding at the end of the year was Rs2674.39
 crore as compared to Rs2207.51 crore (including the loan under
 Securitised Assets of Rs3.92 crore, repaid during 2011-12) in the
 previous year registering an increase of 21.15%.
 
 NON PERFORMING ASSET (NPA)
 
 During the year, your Company has reduced the gross NPA from T23.47
 crore to Rs19.01 crore (a reduction of 19%) and the net NPA continued to
 be Nil (provision conversion ratio: 100%). Your Company has recovered
 Rs2.14 crore out of long pending core NPA accounts by way of one time
 settlements.
 
 PROFITS
 
 Your directors are pleased to inform that during the year under review
 your Company has recorded a Profit Before Tax (PBT) of T60.98 crore as
 against Rs58.52 crore during 2010-11 and Profit After Tax (PAT) of
 Rs43.76 crore after making provision for standard assets for Rs11 crore
 at a time as per the Directions of NHB. Excluding the provision for
 standard assets, the year-on-year growth of net profit for the year is
 30.32%.
 
 DIVIDEND
 
 Your directors have discussed the subject in detail with specific
 reference to the present minimum required level of Capital Adequacy
 Ratio (CAR) at 12%, the additional requirement of funds to meet CAR as
 per the Guidelines/ Directions issued by the Regulators from time to
 time, future requirement of funds/capital for incremental business
 projected, further expansion of business and other relevant factors.
 Considering the above and in the long-term interest of the Company, it
 is considered prudent and expedient to conserve profits of the Company
 to the extent possible.
 
 Appreciating the confidence reposed by the members in the Company and
 their continued support, the Board of Directors of your Company have
 recommended a dividend of Rs2.50 per equity share (25%) and being the
 Silver Jubilee Year, an additional dividend of Rs0.50 per equity share
 (5%) for the year ended March 31, 2012, aggregating to 30%. The tax on
 distributed profits u/s.115-0 of the Income Tax Act, 1961, at 16.22% is
 being paid by the Company.
 
 BRANCH NETWORK EXPANSION
 
 With a view to reach out to a large section of customers in need of
 housing as well as non-housing finance and to increase business
 performance level, your Company opened 18 new branches in different
 parts of the Country and the total branch network of the Company at the
 end of the financial year stood at 52 (previous year 41), 59 branches
 as of date, located in major cities of the Country. Your Company
 envisages to increase the number of branches to 70 by March 31, 2013.
 
 SAVE GREEN EFFORTS
 
 In recognition and support to the green initiative taken by the
 Ministry of Corporate Affairs (MCA), Government of India, your Company
 has been sending the annual reports including report of directors,
 report on corporate governance, general information to shareholders of
 the Company to the registered e-mail IDs of the shareholders.  Other
 initiatives taken by your Company include ECS facility for repayment of
 loans, paperless banking, sending official communications by way of
 scanned images and harnessing solar energy for lighting and computer
 operations at Karur, Madurai, Salem and RN.Palayam branches of the
 Company.
 
 SILVER JUBILEE CELEBRATIONS
 
 Your Company commenced year-long Silver Jubilee Year celebrations from
 December 27, 2011. As a part of customer initiatives your Company has
 launched three new products viz., Loans for Rural Housing (LRH) with
 housing loans at 9.75% rate of interest, Loans for Commercial Property
 (LCP) and Loans to Childrens Education (LCE), introduction of ECS
 facility, establishing Document Storage Centres (DSC) at Bangalore and
 Gurgaon for safe keeping of loan documents. The state-of-the-art IBS
 system is devised so as to provide data security. The ambience of
 branches are being enhanced and media coverage and customers'' meet
 are being held.
 
 FINANCIAL RESOURCES DEPOSITS
 
 The deposits outstanding (inclusive of interest accrued, but not due)
 as of March 31, 2012 were Rs143.89 crore as against Rs149.76 crore as at
 the end of the previous year.
 
 As at March 31, 2012 a sum of Rs9.99 crore relating to 2057 accounts
 (Rs10.44 crore as at March 31, 2011 relating to 2148 accounts) was
 unclaimed. Out of the same, a sum of Rs3.25 crore relating to 506
 accounts was claimed and renewed/settled as of date. The remaining
 depositors have been informed individually by the respective branches
 either to renew or claim their deposit amounts.
 
 The Ministry of Corporate Affairs, Government of India, New Delhi, vide
 order F.NO.07/07/2009-CLA/I dated July 12, 2010 has granted an
 exemption to the Company from the applicability of the provisions of
 Section 58A(2)
 
 (a) and (b) of the Companies Act, 1956 (the Act) for a period of
 3 years with effect from October 22, 2009, which enables the Company to
 publish abridged deposit advertisement(s) only during the period of
 validity of the Statutory Advertisement. The said approval is granted
 subject to certain conditions mentioned vide Paragraph nos. (i) to
 (vii) of the said Order viz., mentioning reference to the statutory
 advertisements published by the Company with date and name of the news
 paper, filing of the said abridged advertisement with the Registrar of
 Companies in Karnataka, within 15 days of its publication, that the
 exemption granted would be without prejudice to any legal rights
 available to any depositor or any share holder or creditor as per law
 in force in respect of recovery of any amount which has become due for
 repayment and the exemption granted does not convey approval of Central
 Government under any other provisions of the Act. The statutory
 requirements, as applicable, are being complied with periodically.
 
 RATING OF DEPOSITS
 
 The deposit schemes of the Company continued to be rated as MAA 
 (pronounced M double A plus) by the credit rating agency viz., ICRA
 Ltd., indicating high-credit-quality and the rated deposit programme
 carries low credit risk. The high credit quality rating takes into
 account the strong ownership, low operating cost structure, superior
 capital adequacy, its favourable liquidity position and comfortable
 asset quality indicators. The outlook on the rating has also been
 re-affirmed as Stable.
 
 LONG TERM FINANCIAL RESOURCES
 
 REFINANCE FROM NATIONAL HOUSING BANK (NHB)
 
 With the continued support by the NHB, during the year your Company
 availed refinance amounting to Rs280 crore against Rs253 crore availed
 during 2010-11 under the NHB''s Refinance Scheme to Housing Finance
 Companies.  The cumulative borrowings from NHB as of March 31, 2012 was
 Rs595.18 crore compared to Rs560.11 crore as at the end of the previous
 year.
 
 MORTGAGE BACKED SECURITIES (MBS)
 
 Your Company did not 30 in for fresh securitisation during the year or
 during the previous year considering its cost and funds available
 through alternative sources.
 
 The entire amount of securitised outstanding as of March 31, 2011
 amounting to Rs3.92 crore was paid in full to the investors as per the
 schedule of re-payment and the account was closed. As such there was no
 securitised assets outstanding as of March 31, 2012 (refer si.no.4 of
 Note no.21 on ''Notes on Accounts'').
 
 DEBENTURES
 
 The Company had no outstanding on account of debentures as of March 31,
 2012.
 
 BORROWINGS FROM BANKS
 
 Your Company borrowed Rs595 crore from banks during the year compared to
 Rs414 crore during the previous year. The aggregate of term loans from
 various banks outstanding at the end of the financial year stood at
 Rs1544.59 crore as against Rs1193.92 crore during the previous year and
 there were no short-term loans.
 
 RATING OF TERM LOANS
 
 During the year a Rating for the borrowings by the Company by way of
 Term Loans was obtained from CARE Ltd., and the Rating of CARE AA 
 (Double A Plus) was assigned for long-term bank facilities indicating
 high safety for timely servicing of debt obligations. The above Rating
 was obtained by the Company as per Basel-ll requirements.
 
 COMPLIANCE WITH DIRECTIONS/GUIDELINES OF NATIONAL HOUSING BANK (NHB)
 AND OTHER STATUTES
 
 During the year, the National Housing Bank vide their letter dated
 August 05, 2011 issued Directions to the Housing Finance Companies for
 making a provision for Standard Assets at 0.40% of the standard assets
 outstanding (which was applicable only to the non-housing loans
 outstanding during the previous year). In view of the above and keeping
 in view the anticipated requirements for making a provision for
 standard assets, your Company has made a provision of Rs11 crore as of
 March 31, 2012, against the requirement of Rs10.62 crore.
 
 Your Company has complied with the Guidelines and Directions issued by
 the NHB on asset classification of Credit/ Investments, Credit Rating,
 Fair Practices Code, Know Your Customer (KYC), Deposits and Anti Money
 Laundering Guidelines, Accounting Standards issued by the ICAI, New
 Delhi and the like.
 
 CAPITAL ADEQUACY
 
 The Capital Adequacy Ratio (CAR) maintained by your Company has been
 above the minimum required level of 12% prescribed by the National
 Housing Bank (NHB). During the year under review, the Risk Weight on
 housing loans sanctioned to individuals secured by mortgage of
 immovable property and classified as standard assets was modified. The
 Capital Adequacy Ratio of the Company as at March 31, 2012 was 17.44%
 as against 19.14% as at the end of the previous year.
 
 RECOVERY ACTION UNDER SECURITISATION G> RECONSTRUCTION OF FINANCIAL
 ASSETS AND ENFORCEMENT OF SECURITY INTEREST ACT, 2002 (SARFAESI ACT)
 
 The SARFAESI Act 2002, the proceedings under which are summary in
 nature has been made applicable to the housing finance companies from
 the year 2003. Your Company has been initiating action under the said
 Act for recovery of dues and could recover Rs1.35 crore out of 14
 accounts that were classified as non-performing assets, by selling the
 secured assets (security), without intervention of Hon''ble Courts.
 
 PARTICULARS OF EMPLOYEES
 
 There are no such particulars to be furnished under the provisions of
 Section 217(2A) of the Companies Act, 1956 read with Companies
 (Particulars of Employees) Rules, 1975.
 
 LISTING OF SECURITIES
 
 The equity shares of the Company continue to be listed on the Bangalore
 Stock Exchange Ltd., (Bg.SE), Bangalore, Bombay Stock Exchange Ltd.,
 (BSE), Mumbai and the National Stock Exchange of India Ltd., (NSE),
 Mumbai.
 
 The Listing Fee payable to the above Stock Exchanges has been paid
 before the due dates.
 
 The securities of the Company are actively traded on the BSE and NSE.
 The other related particulars are provided to the Members in the Report
 on Corporate Governance.
 
 MAN POWER - HUMAN RESOURCES DEVELOPMENT
 
 Your Company had 251 employees (excluding the Managing Director on
 deputation from Canara Bank) as of March 31, 2012 as against 223
 employees (215 employees of the Company and 8 officers on deputation
 from Canara Bank) as at the end of the previous year. During the year,
 training was imparted to all the employees of the Company, including
 orientation training to the new recruits, by internal and external
 faculty.
 
 In order to upgrade knowledge in the fast changing scenario, to enhance
 employee competencies and up- gradation of skills, all the employees at
 various levels were nominated for various external training programmes
 on subjects related to housing finance, taxation, information security,
 corporate governance, risk management and other related topics of
 importance.
 
 80 Probationary Officers were appointed during the year. In recognition
 of the performance and as a motivational measure 55 eligible
 employees/Officers/Executives were promoted and incentive schemes like
 Employees Suggestion Scheme and education tour etc. were introduced.
 
 TRANSFER OF UNCLAIMED AND UNPAID AMOUNTS TO THE INVESTOR EDUCATION AND
 PROTECTION FUND (IEPF)
 
 In terms of Section 205C of the Companies Act, 1956, the amounts
 (dividends, deposits etc.) that remained unclaimed and unpaid for more
 than 7 years from the date they became first due for payment, should be
 transferred to IEPF. In terms of the said Section no claim would lie
 against the Company or the IEPF after such transfer.
 
 As an investor friendly measure, your Company has been intimating the
 respective shareholders/depositors/ investors to encash their dividend
 warrant/lodge their claim for payment due, if any, from time to time
 and claims made are settled. Certain amount still remains unclaimed
 despite constant and sincere efforts by the Company to pay such
 unclaimed amounts to the investors.
 
 (i) UNCLAIMED DIVIDENDS
 
 As of March 31, 2012 dividends aggregating to Rs53.85 lakh (previous
 year Rs51.81 lakh), relating to dividend declared during 2004-05 to
 2010-11, of which Rs9.92 lakh related to dividend for the year 2011, had
 not been claimed by the shareholders of the Company. The Company has
 been intimating the shareholders to lodge their claim for dividend from
 time to time and the related details are being provided in annual
 reports every year.
 
 The dividend pertaining to the financial year 2003-04 which remained
 unclaimed/unpaid amounting to Rs5.61 lakh (in respect of 1,308
 shareholders) was transferred to IEPF during August 2011, after
 settlement of claims received in response to the individual reminder
 letters sent by the Company to the respective shareholders).
 
 The dividend pertaining to the financial year 2004-05 remaining
 unclaimed and unpaid amounting to Rs7.32 lakh (in respect of 1680
 shareholders) as at the end of the financial year would be transferred
 to IEPF during July 2012 after settlement of the claims received upto
 the date of completion of 7 years, The Company has sent individual
 reminder letters to the respective shareholders during April 2012 and
 with a request to submit their claim forms within a prescribed date.
 
 (H) UNCLAIMED DEPOSITS
 
 During the year, in terms of Section 205C of the Companies Act, 1956,
 the unclaimed and unpaid deposits with interest for the year 2004-05
 amounting to Rs7,62 lakh (previous year Rs2.14 lakh) that remained
 unclaimed and unpaid for a period of 7 years were transferred to IEPF.
 
 PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND
 FOREIGN EXCHANGE EARNINGS AND EXPENDITURE
 
 The requirement relating to providing the particulars relating to
 conservation of energy and technology absorption stipulated in the
 Companies (Disclosure of Particulars in the Report of the Board of
 Directors) Rules, 1988 required '' to be furnished u/s.217 (1) (e) of
 the Companies Act, 1956 are not applicable since the Company is a
 housing finance Company and does not own any manufacturing facility.
 
 During the year, your Company did not earn any income or incur any
 expenditure in foreign currency.
 
 DIRECTORS
 
 Your directors wish to report that Mr.Ashok Kumar Jain, director
 vacated his office with effect from January 19, 2012, by virtue of
 Section 283(1 Xg) of the Companies Act, 1956 and Mr.RR.Yagnik, director
 and Chairman of the Board of Directors resigned as a director with
 effect from January 30, 2012.
 
 Your directors wish to place on record their appreciation for the
 services rendered and contribution made by Mr.Ashok Kumar Jain during
 his tenure as a director and Mr.P.R.Yagnik, during his tenure as a
 director and Chairman of the Board and certain Committees of Directors.
 
 The Board of Directors appointed Mr.RB.Santhanakrishnan FCA, a
 Practising Chartered Accountant as an Additional Director with effect
 from February 16, 2012. Further particulars relating to
 Mr.RB.Santhanakrishnan are provided in the explanatory statement for
 the related agenda forming part of the notice of the ensuing annual
 general '' meeting.
 
 In terms of the applicable provisions of Section 260 and all other
 applicable provisions, if any, of the Companies Act, 1956 and Article
 22 of the Articles of Association of the Company,
 Mr.RB.Santhanakrishnan, director holds office as such only upto the
 date of the ensuing Annual General Meeting. Your Company has received a
 notice in writing from a shareholder, under Section 257 and all other
 applicable provisions, if any, of the Companies Act, 1956 proposing the
 appointment of Mr.RB.Santhanakrishnan, as a director at the ensuing
 Annual General Meeting.
 
 Your directors are of the opinion that the appointment of
 Mr.RB.Santhanakrishnan, as a director would be in the best interest of
 the Company.
 
 DIRECTOR(S) RETIRING BY ROTATION
 
 In terms of the provisions of Section 256 and other applicable
 provisions, if any, of the Companies Act, 1956 and the Articles of
 Association of the Company, Mr.Anil Kumar Nayyar, Director, retires by
 rotation at the ensuing Annual General Meeting and being eligible,
 offers himself for re-appointment. The particulars relating to Mr.Anil
 Kumar Nayyar are mentioned in the Report on Corporate Governance. Your
 directors recommend the re-appointment of , Mr.Anil Kumar Nayyar as a
 director.
 
 The agenda relating to re-appointment of MrAnii Kumar Nayyar is
 included in the notice convening the ensuing Annual General Meeting.
 
 All the directors of the Company have confirmed that they are not
 disqualified from being appointed as directors in terms of Section
 274(1 )(g) of the Act.
 
 AUDITORS
 
 Ws.K.RRao S'' Co., Chartered Accountants, Bangalore, Statutory
 Auditors of the Company having Registration No.003135S and also the
 branch auditors for branches in the States of Karnataka, Kerala, Goa,
 Gujarat, Maharashtra and the new branches, if any, to be opened during
 2011 -12 and the Auditors for the other branches viz., M/s.L.U.Krishnan
 S'' Co, Chartered Accountants, Chennai, M/s.K.RRao Associates,
 Chartered Accountants, Hyderabad and M/s.H.K.Chaudhry S'' Co.,
 Chartered Accountants, New Delhi, hold office until the conclusion of
 the ensuing Annual General Meeting and are eligible for re-appointment.
 
 The Company has received confirmation from M/s.K.P.Rao & Co., Statutory
 auditors to the effect that their proposed appointment, if made, would
 be within the limits prescribed under Section 224(1 B) of the Companies
 Act, 1956.
 
 Your directors recommend the re-appointment of the M/s.K.RRao S'' Co.,
 as the statutory auditors. The resolutions seeking approval of the
 members for appointment of Statutory Auditors and fixation of their
 remuneration and authorisation to the Board of Directors for
 appointment of Branch Auditors and fixation of their remuneration have
 been included in the notice convening the ensuing Annual General
 Meeting. The above said appointment attracts the provisions of Section
 224A, 228 and all other applicable provisions, if any, of the Act.
 
 DIRECTORS'' RESPONSIBILITY STATEMENT
 
 In accordance with the provisions of Section 217(2AA) of the Companies
 Act, 1956 and based on the information provided by the Management, the
 Board of Directors report that:
 
 (a) In the preparation of annual accounts, the applicable Accounting
 Standards have been followed along with proper explanation relating to
 material departures, if any;
 
 (b) The Accounting Policies selected were applied consistently.
 Reasonable and prudent judgements and estimates were made so as to give
 a true and fair view of the state of affairs of the Company as at the
 end of March 31, 2012 and of the profit of the Company for the year
 ended on that date;
 
 (c) Proper and sufficient care has been taken for the maintenance of
 adequate accounting records in accordance with the provisions of the
 Companies Act, 1956, for safeguarding the assets of the Company and for
 preventing and detecting fraud and other irregularities; and
 
 (d) The annual accounts have been prepared on a going concern basis.
 
 MANAGEMENT DISCUSSION AND ANALYSIS REPORT
 
 In terms of the Clause 49 of the listing agreement, the Management
 Discussion and Analysis Report forms part of this report.
 
 CORPORATE GOVERNANCE
 
 The Auditors Certificate on Corporate Governance issued by the
 Statutory Auditors of the Company for the year under review as required
 under the Act and in pursuance of Clause 49 of the Listing
 Agreements is annexed to the Report of the Directors on Corporate
 Governance.
 
 OUTLOOK FOR 2012-13
 
 The Indian economy is one of the fastest growing economies in the world
 and the GDP growth is expected to improve in 2012-13. The real estate
 sector witnessed a robust growth in the last few years. The demand for
 commercial property is being driven by the economic growth of the
 Country. The housing sector alone contributes to about 5-6 per cent of
 the Country''s GDR
 
 The demand for real estate is expected to grow at a Compounded Annual
 Growth Rate (CAGR) of 19% between 2010 and 2014. Urbanisation and
 growing household income are a few factors influencing the demand for
 residential accommodation and growth in the retail sector.
 
 As such, a sharp increase in demand for residential units and
 commercial real estate are foreseen.
 
 Your Company would continue to give a more focussed attention for
 lending to individual loan segment, project loans and non-housing loans
 with an emphasis to further enhance its market share in the housing
 market segment.
 
 With a view to sustain and enhance its performance level your Company
 is offering housing as well as non-housing products, with more emphasis
 on marketing and customer oriented business relationship.
 
 Your Company expects to maintain a sustained growth in its performance
 levels during 2012-13 and has put in place a well drawn vision
 document. However, given the indications about the likely changes in
 cost of funds and expectations of borrowers for availing loans at
 reasonably lesser rates, the margins are expected to be under pressure.
 
 ACKNOWLEDGEMENTS
 
 Your directors wish to place on record with thanks the role of Canara
 Bank for their consistent support and guidance.
 
 Your directors would like to thank all its stakeholders viz., the
 shareholders, depositors, borrowers and others for their continued
 support to the Company and the confidence and faith that they have
 always reposed in the Company.
 
 Your directors acknowledge and appreciate the guidance and co-operation
 extended by various regulatory authorities including National Housing
 Bank (NHB), Securities Exchange Board of India (SEBI), Ministry of
 Corporate Affairs, Registrar of Companies, Karnataka, the Stock
 Exchanges and the Depositories.
 
 Your directors thank the Credit Rating Agencies, Government(s),
 local/statutory authorities, the Registrars and Share Transfer Agents
 of the Company and all others for their wholehearted support during the
 year and look forward to their continued support in the years ahead.
 
 Your directors appreciate and acknowledge the professionalism displayed
 and the contributions made by the employees whose efforts have kept the
 CanFin Homes flag flying high.
 
 
                        For and on behalf of the Board of Directors
 
                                            Sd/-
 
 Place: Bangalore                        S.R.IYER
 
 Date: June 12,2012                      Chairman