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Can Fin Homes

BSE: 511196|NSE: CANFINHOME|ISIN: INE477A01012|SECTOR: Finance - Housing
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Mar 15
Notes to Accounts Year End : Mar '16
1.1 During the previous 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 premium 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.
 
 1.2 Terms and Rights attached to Equity Shares: The Company has one
 class of Equity shares having a face value of Rs.10/- 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 preferential
 amount in proportion to their shareholdings.
 
 2.1 Special Reserve has been created over the years in terms of Income
 Tax Act 1961, out of the distributable Profits of the Company.
 
 2.2 As per Section 29C 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
 U/S 29C of the NHB Act, 1987 also. The Company has transferred a sum of
 Rs.5,500 Lakh (previous year Rs.2,850 Lakh) to Special Reserve which is 
 interms of Section 36(1)(viii) of the Income Tax Act, 1961 and 3,200
 Lakh (previous year Rs.1,800 Lakh) to Additional Reserve U/S 29C of the
 NHB Act, 1987 during the FY 2015-16.
 
 2.3 Vide Circular NHB(ND)/DRS/Pol.62/2014 dated May 27, 2014, the
 National Housing Bank (NHB) had directed Housing Finance Companies
 (HFCs) to provide for deferred tax liability in respect of the balance
 in the Special Reserve created under section 36(1) (viii) of the
 Income Tax Act, 1961 as on March 31, 14 and permitted to adjust the
 same from Retained Earnings. Further, vide Circular
 NHB(ND)/DRS/Pol.65/2014 dated August 22, 2014, NHB has permitted HFCs
 to adjust the Deferred Tax Liability in a phased manner, over a period
 of three years in the ratio of 25:25:50 starting from FY 2014-15.
 Accordingly the Company has to adjust the DTL of Rs.7,399.96 Lakh in 
 three years. In the current year the Company has transferred Rs.1,850.00 
 Lakh (previous year Rs.1,850 Lakh) from the General Reserve to DTL on 
 The Special Reserve outstanding as on March 31, 14.
 
 2.4 Further, Deferred Tax Liability (net) of Rs.1,675.56 (previous year
 Rs.797.91 Lakh) is charged off to the Statement of Profit & Loss, on 
 account of various components of assets & liabilities including Special
 Reserve appropriated during the current year.
 
 2.5 The Company has in the previous year reworked the useful life on
 various Fixed Assets as prescribed in Part C of Schedule II of the
 Companies Act, 2013. In respect of those assets whose remaining useful
 life as on April 1, 14 was NIL, the same had been adjusted to the
 General Reserve as prescribed under 7(b) to the notes of the said
 Schedule II of the Companies Act, 2013.
 
 2.6 The Company has in the current year recommended a Dividend of Rs.10/-
 on the Equity Shares of the face value of Rs.10/- each.
 
 2.7 Presentation of Reserve Fund as per NHB''s policy circular reference
 NHB(ND)/ DRS/ Pol.Circular.61/ 2013-14 dated April 7, 2014:
 
 3.1 The borrowings from National Housing Bank, HUDCO, Canara Bank, HDFC
 Bank, Bank of Baroda, Kotak Mahindra Bank, Federal Bank, Deutsche Bank
 and State Bank of India are secured by way of specific charge on book
 debts, outstanding, receivables, etc.,/ promissory notes and / or a
 negative lien on assets of the Company. The tenure of the Long term
 borrowings are between 2-15 years and that of short term borrowings is
 less than 1 year.
 
 3.2 During the year the Company has issued Secured Redeemable
 Non-Convertible Non-Cumulative Taxable Debentures worth Rs.1,54,000 Lakh
 (previous year Rs.30,000 Lakh) through private placement totaling to
 Rs.2,09,000 Lakh. These debentures are secured by way of floating
 charge on the assets i.e., loan receivables specifically earmarked for
 the purpose. The debentures to the extent of Rs.25,000 Lakh (raised in
 the year 2013-14) are secured by way of floating charge on the assets
 i.e., loan receivables specifically earmarked for the purpose and also
 by mortgage of an immovable property (an apartment located at
 Kodigehalli, Hebbal, Bengaluru) in favour of the Debenture Trustees.
 
 3.3 Further, the Company has issued Unsecured Debentures in the nature
 of Tier II Bonds worth NIL (previous year Rs.10,000 Lakh) for a term of
 10 years through private placement. These Debentures are subordinated
 to present and future senior indebtedness of the Company and qualify as
 Tier II Capital under the National Housing Bank (NHB) guidelines for
 assessing capital adequacy. Based on the balance term to maturity as at
 March 31, 2016, 100% of the book value of the subordinated debt is
 considered as Tier II Capital for the purpose of Capital Adequacy
 computation.
 
 3.4 As per the Directions of the National Housing Bank, the Company has
 created floating charge on Statutory Liquid Assets (Investments in
 Govt. Securities and Deposits in Commercial Banks) in favour of the
 Trustees of the depositors in a manner prescribed by the National
 Housing Bank in terms of sub-sections (1) & (2) of section 29B of the
 NHB Act, 1987.
 
 4.1 The Overdraft account with related party includes Rs.8,980.76 Lakh
 (previous year Rs.5,312.48 Lakh) being the cheques issued towards 
 disbursements to borrowers and towards expenses but not encashed as on
 March 31, 2016.
 
 4.2 The Company has issued Commercial Paper at a discount to the face
 value and the discount is amortised for the current year to the extent
 accrued and the unamortised amount of Rsm3,863.46 Lakh (previous year
 Rs.2,929.13 Lakh) is shown under Current Asset. 
 
 4.3 Other Liabilities include Nil (Previous Year Nil) payable to
 Suppliers registered under The Micro, Small & Medium Enterprises 
 Development Act 2006. No interest has been paid by the company during
 the year to the suppliers covered under The Micro, Small & Medium
 Enterprises Development Act 2006. The above information takes into
 account only those suppliers who have responded to inquiries made by
 the company for this purpose.
 
 4.4 As required under Section 125 of the Companies Act, 2013, the
 Company has transferred Rs.3.62 Lakh (Previous Year Rs.19.43 Lakh) to
 Investor Education and Protection Fund (IEPF) during the year as of
 March 31, 2016, except to the extent of Rs.21.41 Lakh (previous year
 Rs.5.51 Lakh) in respect of claims that are disputed. As of March 31,
 2016, no amount was due for transfer to the IEPF.  
 
 4.5 Provision for Expenses includes provision made for interest on NHB
 borrowings of Rs.7,025.46 Lakh (previous year Rs.NIL) and interest on 
 Debentures of Rs.8,544.83 Lakh (previous year Rs.1,333.95 Lakh).  
 
 5.1 Loans and installments due from borrowers are secured, partly
 secured or otherwise by:
 
 (a) Equitable mortgage of property and /or
 
 (b) Other securities, assignment of life insurance policies and/or
 
 (c) Bank guarantees, company guarantees or personal Guarantees and/or
 
 (d) Negative lien and/or
 
 (e) Undertaking to create a security.
 
 5.2 Recognition of income and provision for non-performing assets has
 been made in accordance with the guidelines on prudential norms
 applicable as of March 31, 2016. Provision of loans is required to be
 maintained as per NHB guidelines on prudential norms to the extent of
 Rs.935.73 Lakh (Previous year Rs.758.38 Lakh) against which the company, 
 by way of prudence and abundant caution has maintained cumulative
 provision of Rs.1,975.73 Lakh (Previous year Rs.1,435.19 Lakh).  
 
 6.1 Other Advances includes unamortised discount on Commercial Paper
 (CP) amounting to Rs.3,863.46 Lakh (previous year Rs.2,929.13 Lakh) and
 Advance Taxes paid (net of provisions) Rs.8,464.16 Lakh (previous year
 Rs.4,906.04 Lakh).  
 
 7.1 Employee Benefit Expenses include Rs.407.50 Lakh (Previous Year
 Rs.215.90 Lakh) towards provision made in respect of Gratuity, 
 accumulated leave salary (PL encashment), Statutory Provident Fund and
 Leave Travel Assistance which is in the nature of Long Term Employee
 Benefits and has been actuarially determined as per the Accounting
 Standard on Employee Benefits (AS 15).
 
 8.1 The Company has entered into lease cum licence agreement with M/s
 Encore Theme Technologies Pvt. Ltd., for implementation of Integrated
 Business Suit (IBS) software. The expenditure incurred in this regard
 amounting to Rs.277.87 Lakh (Previous Year Rs.239.08 Lakh) is charged off
 to the P & L account under Professional fees  IBS.
 
 9. The Company has provided 100% provision for Non-Performing assets.
 Additional Provision provided in the current year is Rs.540.53 Lakh
 (previous year Rs.224.77 Lakh).  
 
 10. Disclosure required as per NHB
 
 The following additional disclosures have been given in terms of the
 circular no. NHB/ND/DRS/Pol-No.35/2010-11 dt. October 11, 2010 issued
 by the National Housing bank.
 
 11. Disclosure on Employee Benefits  AS 15 Revised
 
 Gratuity is an Employee Benefit payable on retirement / superannuation
 / resignation on completion of 5 years of service.
 
 Privilege Leave is an employee benefit wherein confirmed
 Officer/Employee is entitled to 30 days of PL every year, which can be
 accumulated upto a max of 240 days.
 
 Provident Fund is a statutory employee benefit wherein contributions
 are made by the employee and employer in prescribed proportion.
 
 Sick Leave is a Benefit, which an Officer/Employee is entitled to 15
 days in a year, which can be accumulated upto a maximum of 270 days.
 
 Leave Fare Concession is an employee benefit wherein all confirmed
 Employees/Officers are entitled once in two years
 
 12.  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.
 
 13.  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:
 
 14.  The National Housing Bank has levied penalty of Rs.NIL/- (previous
 year Rs.2,000/-) for a single instance of delayed submission of one 
 Statutory Return.
 
 15.  There were no adverse comments on the company by the National
 Housing Bank on Regulatory compliance, which requires disclosure.
 
 16.  The Company has constituted Corporate Social Responsibility (CSR)
 Committee to prescribe 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 (previous year Rs.
 3.10Lakh), during the year.  The balance unspent amount of Rs.263.28 Lakh 
 (previous year Rs.158.90 Lakh), will be carried forward to FY 16-17.
 
 17.  The Company has complied with requirements as per Para 29 of the
 Housing Finance Companies (NHB) Directions 2010.
 
 18.  Previous year figures have been rearranged / regrouped wherever
 necessary to correspond with the current year''s classification/
 disclosure.
Source :
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