Can Fin Homes Ltd Directors Report.

1. FINANCIAL RESULTS

The financial performance for the FY19-20 is summarised here below:

(Rs. in lakhs)

Particulars Year ending March 31, 2020 Year ending March 31, 2019
Prot before Tax & Provisions 57,860.22 47,059.70
Less: Impairment on financial instruments 6,031.57 109.22
Prot before Tax 51,828.65 46,950.48
Less: Tax expenses:
(a) Provision for Tax - Current Year 14,556.71 17,203.91
- Previous Year 461.81 151.54
(b) Deferred Taxation (802.22) (78.67)
Prot after Tax 37,612.35 29,673.70
Add: Other Comprehensive Income
A. Items that will not be reclassified to Prot or loss
(i) Actuarial (Gain)/ loss 228.55 (4.21)
(ii) Income tax relating to items that will not be reclassified to Prot or loss (57.52) 1.47
B. Items that will be reclassified to Prot or loss
(i) Income tax relating to items that will be reclassified to Prot or loss 0.00 0.00
Other Comprehensive Income 171.03 (2.74)
Total Comprehensive Income for the period 37,441.32 29,676.44
Balance brought forward from previous year 5,937.64 81.71
43,378.96 29,758.15
Appropriations:
Impact on adoption of Ind AS 116 382.80 -
Transfer to Special Reserve u/s.36(1)(viii) of the Income Tax Act, 1961 11,682.55 8,739.45
Transfer to General Reserve 7,488.26 5,935.29
Additional Reserve (u/s.29C of the NHB Act) 7,488.26 5,935.29
Proposed Dividend 2,663.08 2,663.08
Tax on Distributed Prots 547.45 547.40
Balance carried forward to balance sheet 13,126.55 5,937.64
43,378.96 29,758.15

Note: Figures have been regrouped wherever necessary while preparing the statements as per IND-AS requirements.

Note: The proposed dividend of Rs.2/- per equity share is not recognised as liability in the annual accounts as at March 31, 2020 (in compliance with IND AS 10 events occurring after the Balance sheet date). The same will be considered as liability on approval of shareholders at the 33rd Annual General Meeting.

2. SHAREHOLDERS WEALTH

(Rs. in lakhs)

Particulars Year ending March 31, 2020 Year ending March 31, 2019
Earnings Per Share (EPS) (Rs.) 28.25 22.29
Dividend Rate 100% 100%
Market Price of shares (Rs.) 279.05 348.85
Market Capitalisation (Rs. in Crore) 3715.67 4645.08

3. BUSINESS PERFORMANCE HIGHLIGHTS

a) Sanctions

During the year, the Company has sanctioned loans amounting to Rs.5,897 Crore as compared to Rs. 5,952 Crore in the previous year.

During the year, as in the previous year, thrust was given to retail (housing and non-housing) loan segment. 90% of fresh loan approvals during the year were for housing, 5% for Top-up Loans and 5% for Loans Against Property (LAP). The cumulative loan sanctions since inception of your Company stood at Rs. 43,971 Crore at the end of the FY20. Average ticket size of incremental housing loans and non-housing loans are Rs.18 Lakh and Rs. 9 Lakh, respectively.

b) Disbursements

During the year, the Company has disbursed loans amounting to Rs. 5,481 Crore as compared to Rs. 5,479 Crore in the previous year. The cumulative loan disbursements from inception to the end of the FY20 was Rs. 39,250 Crore.

c) Loans outstanding (Loan Book)

Your Directors are pleased to report that the total loan outstanding as at March 31, 2020 was Rs. 20,708 Crore, recording a growth of around 13% over last year (previous year Rs. 18,381 Crore). During the year, non-housing loan portfolio stood at around Rs. 2,127 Crore.

d) Non-Performing Asset (NPA)

The Gross NPA of your Company as on March 31, 2020 was Rs.157.13 Crore (previous year Rs.113.51 Crore). The net NPA as on date was Rs.111.82 Crore, with the NPA provision Coverage Ratio at 37% during the year. The gross NPA percentage as on March 31, 2020 stood at 0.76% compared to 0.62% as on March 31, 2019.

e) Prots

Your Directors are happy to inform that during the year under review, your Company recorded an Operating Prot of Rs.578.60 Crore (previous year Rs.470.60 Crore), Prot Before Tax (PBT) of Rs.518.29 Crore (previous year Rs.469.50 Crore) and Prot After Tax (PAT) of Rs.376.12 Crore (previous year Rs.296.76 Crore) registering a Year-on-Year increase of 26.75%, respectively. During the year Company has made provisions for standard assets amounting to Rs.7.92 Crore (previous year Rs.0.40 Crore), provisions for Non-performing assets amounting to Rs.15.85 Crore (previous year Rs.0.69 Crore), general provision made as per RBI circular on Covid-19 regulatory package dated April 17, 2020 of Rs.36.54 Crore, provisions for Taxation and Deferred Tax Asset amounting to Rs.142.16 Crore (previous year Rs.172.77 Crore).

f) Reserves

For reserves during the year please refer statement of changes in equity for the period ended March 31, 2020 forming part of Financial Statements, 2020.

g) Dividend

Your Company has been paying dividends continuously. Your directors, after giving due consideration to Capital Adequacy requirements, deferred tax liability, uncertainty on account of Covid-19 and its impact on the global economy, financial markets and the resultant impact on the Company and the dividend policy, are happy to recommend a dividend of Rs.2/- per equity share (100%), for the financial year ended March 31, 2020 for the 5th successive year. The amount of dividend recommended for payment for the year under review is Rs.26.63 Crore. Consequent to amendment made in the budget 2020, DDT u/s 115-O has been abolished, dividend paid on or after 1st April 2020 attracts TDS under section 194 at the rate of 10% if the aggregate of the amounts of such dividend distributed or paid during the year exceeds Rs.5,000/- to a shareholder being an individual, for all other cases no threshold limit. The Dividend Distribution Policy as required under regulation 43A of SEBI (LODR) Regulations, 2015, has been provided at the end of this Annual Report and is also made available on the website of the Company (web link https://www.can_nhomes. com/pdf/Dividend-Distribution-Policy-31012020.pdf)

Impact of COVID on performance:

Covid-19: The COVID-19 pandemic, which has spread rapidly throughout the world has had an impact on almost all entities either directly or indirectly. WHO has declared Covid-19 as a pandemic in March 2020.

Impact on business:

The Companys main business is providing loans for construction/ purchase of houses/_ats against the security of immovable property.

Due to the lockdown since March 25, 2020, the operations of the Company were restricted. Loan disbursements were not made during April 2020. Business resumed in many Centres during last week of May 2020. The administrative work of the Company was carried out through the work from home mode.

The demand for houses/_ats will be impacted in the short run. With bene_cial schemes offered by Central and/ or State Governments like PMAY, CLSS, reduction in stamp duty on registration of properties etc., there may not be much impact on the business of the Company in the long run.

Since most of the properties of our borrowers are self-occupied and the tenure of housing loans are long, ranging from 10 to 30 years, the reduction of value of the collateral security, if any, due to the COVID impact now, may not have any material impact.

On operations: The Company is fully operational from April 20th with necessary precautions for the safety of employees and customers. It has neither downsized its employee strength nor effected pay cuts.

On Capital & Financial Resources: The Company is well capitalised and there is no impact on the Companys capital and financial resources.

On Moratorium: Collection of EMIs in about 28% of the accounts have been postponed due to moratorium offered to borrowers as per RBI guidelines.

On Protability: From 24th March till third week of May, lending was impacted. However, impact on revenues has been minimum.

The Company is continuously following up stressed assets and there have been good collections in such accounts. We do not foresee any major impact in the long run.

On Liquidity and debt servicing: Companys liquidity position is good with suf_cient un-availed sanction limits lined up from Banks and has not opted for moratorium offered by its lending institutions. Future obligations will continue to be serviced.

Impact on internal financial reporting and control: The Company has a proper internal financial control and reporting system and the same is reviewed by the internal auditors periodically and reviewed by the Audit Committee on a quarterly basis.

The Company has apprised the Board of Directors on the operations during the Lockdown period and the measures taken to ensure the safety of the customers and the staff.

CSR activity: The Company has contributed Rs 1.50 cr to Prime Ministers Citizen Assistance & Relief in Emergency Situations Fund (PM – CARES) and Rs 1 cr to Karnataka State Disaster Management Authority – Covid 19.

4. EXPANSION OF BRANCH NETWORK

Your Company has been continuously expanding its network of branches. Though our presence in Southern states is predominant, new branches have been opened in various parts of the country after examining the potential on the basis of surveys conducted.

During FY20, 9 new branches were opened. As at the end of FY20, your Company has an expanded network of 198 outlets spread across 21 states comprising 163 branches, 21 AHLCs and 14 Satellite Of_ces.

During the FY21, your Company has plans to open 12 more branches / AHLCs, taking the total number of outlets to 210. The Branches of your Company as well as the Registered Of_ce function in spacious premises situated in good and accessible localities with the objective of providing a pleasant environment and amenities to our customers.

5. TECHNOLOGY INITIATIVES

All the branches and the Registered Of_ce are connected through a core-banking platform (Integrated Business Suite) with Cloud compute services under the Application Service Provider (ASP) Model. The Company is in advanced phase for implementation of MPLS links for a higher bandwidth and dedicated uptime.

In order to improve operational ef_ciency, your Company has embarked on technology initiatives like implementation of web based Application software for Inspection & Audit. Your Company has launched new website to make it interactive and more user friendly. Online Grievance Redressal portal has been deployed in the new website.

Your Company has introduced digital meetings platform for Board and Committee meetings which is paperless, secure, ef_cient and cost effective, further the Company has also introduced digital platform for the tracking of Unpublished Price Sensitive Information (UPSI).

Your Company has also introduced Video Conferencing facility to conduct meeting virtually.

Your Company has introduced online Application Module in its website and a customer portal to access account statements/ certi_cates and online money transfer. The Company has set up an in-house team of IT professionals drawn from reputed institutions / _rms to enhance IT capabilities.

6. CUSTOMER-FRIENDLY INITIATIVES

The Company continues to follow transparent, fair and impartial practices encompassing all customers across branches. Information related to our Company, products, schemes and charges are made available in the website of the Company. As per NHB directions, the Fair Practices Code (FPC) and Most Important Terms and Conditions (MITC) are regularly updated and uploaded in the Companys website for disseminating the information to our customers, clients and general public.

The customer portal enables customers to access certi_cates and online money transfer. As an environment friendly initiative, we have provided cotton cloth bags to our customers across the country through our branches, to discourage the use of plastic.

7. FINANCIAL RESOURCES

a) Re_nance from National Housing Bank (NHB) and borrowings from Banks

During the year, your Company had availed fresh re_nance amounting to Rs.1,500 Crore (previous year Rs.1,000 Crore) under the NHB re_nance scheme. The cumulative NHB borrowings as on March 31, 2020 were Rs. 3,446.88 Crore (previous year Rs.1,971.22 Crore), with the overall cost of borrowing (including the loans under Rural Housing and Urban Housing Schemes) of 6.92% p.a.

Borrowings from Bank

During the year, borrowings were diversi_ed through a combination of short-term and long-term loans considering the asset liability management position to derive the maximum benefit of competitive interest rates. The lenders included State Bank of India, Federal Bank, HDFC Bank and Corporation Bank apart from Canara Bank, the principal bankers to the Company. The aggregate bank borrowings (term loans plus overdraft) at the end of the financial year stood at Rs. 11,084.01 Crore; the overall borrowings are within regulatory ceiling of 14 times of net owned funds.

The overall cost of borrowings from banks was 8.07%p.a. as on March 31, 2020. During the year, the long-term ‘rating of the Company for term loans was [ICRA] AA+ (Pronounced as ICRA Double A Plus) outlook stable, signifying high degree of safety regarding timely servicing of financial obligations.

b) Debentures

(i) Secured Non-Convertible Debentures

The Company has issued Secured Redeemable Non-Convertible Non-Cumulative Taxable Debentures (SRNCD) during the year of Rs.250 Crores (previous year was NIL). The debentures were secured by way of a _oating charge on the assets i.e., loan receivables speci_cally earmarked for the purpose in favour of the Debenture Trustees. Most of the investors in these debentures comprised major insurance companies, public sector banks, corporates, PF Trusts & Funds and investors of repute, indicating their safety perception in your Companys fundamentals and prospects.

The tenure of the outstanding debentures is range bound for two to _ve years. The interest on these debentures was serviced regularly. The aggregate borrowings by way of Secured NCDs as on March 31, 2020 was Rs. 2,562.12 Crore (previous year Rs. 3,478.57 Crore) while the overall cost was 7.76% p.a. The debentures are rated ‘IND AA (Outlook Stable) by India Ratings and Research Pvt. Ltd. (FITCH), ‘CARE AAA by CARE Limited and ‘[ICRA] AA+ by ICRA Limited.

The ratings by India Ratings and Research Pvt. Ltd (FITCH) has been revised to ‘IND AA (Outlook Stable). The rationale for downgrade in credit rating given by FITCH is because of the reason Canara Bank had indicated its intention of selling its stake in the Company as part of mobilising capital in light of governments direction.

These debentures were listed on the Wholesale Debt Market (WDM) segment of the National Stock Exchange of India Limited. Your Company plans to raise Non- Convertible Debentures up to a maximum of Rs. 4,000 Crore subject to cost benefit and asset liability management requirements and with the approval of members at ensuing Annual General Meeting.

(ii) Unsecured Non-Convertible Debentures

During FY14-15, your Company had issued 8.94% Unsecured Non-Convertible Debentures in the nature of Tier II Bonds aggregating Rs. 100 Crore for a tenure of 10 years. 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 Requirements. These Tier II Bonds were rated ‘IND AA (Outlook Stable) long-term rating by India Rating & Research Private Limited (FITCH), ‘CARE AAA by CARE Limited and ‘[ICRA] AA+ by ICRA Ltd.

The rating has been revised by India Rating & Research Pvt Limited (FITCH) as ‘IND AA (outlook stable). Your Company has serviced the interest on the above debentures on the due date.

The rationale for downgrade in credit rating given by FITCH is because of the reason Canara Bank had indicated its intention of selling its stake in the Company as part of mobilising capital in light of governments direction.

c) Commercial Paper

Your Company mobilises funds through commercial paper (CP) also. The outstanding at the end of the March 2020 was Rs. 1,247.43 Crore (previous year Rs. 2,156.10 Crore). The effective cost of funds raised through CP was 7.30% p.a. The CP issued by your Company was rated at the maximum [ICRA] A1+ rating by ICRA Ltd., and CARE A1+ by CARE Limited, IND A1+ by FITCH indicating, ‘Instruments with this rating are considered to have very strong degree of safety regarding timely payment of financial obligations.

d) Deposits

During the year your Company accepted deposits of Rs.195.23 Crore (Previous year Rs.142.56 Crore). The outstanding balance of deposits (including interest accrued, but not due) as of March 31, 2020 was Rs. 305.08 Crore (previous year Rs. 261.09 Crore). The rate of interest on public deposits ranged from 6.75% to 8.10%, while the overall cost (average) of deposits was 8.04% p.a. as on March 31, 2020.

As on March 31, 2020, a sum of Rs. 13.91 Crore relating to 879 accounts of public deposits (Rs. 19.94 Crore as on March 31, 2019 relating to 891 accounts) remained unclaimed/ overdue. Of this amount, a sum of Rs.11.39 Crore relating to 252 accounts (previous year Rs. 5.75 Crore relating to 373 accounts) were claimed and renewed/settled up to June 30th, 2020. Your Company has not defaulted in repayment of deposits or interest during the year. The Company has complied with the requirements under Chapter V of the Companies Act, 2013 to the extent applicable.

During the year, the deposit schemes of your Company have been rated ‘MAAA (pronounced as M Triple A) with an outlook revised to stable from negative, by ICRA Ltd., indicating ‘highest credit- quality and that the rated deposit programme carried the lowest credit risk. Your Company, being a Housing Finance Company registered with National Housing Bank (NHB), has complied with the Directions/Guidelines issued by the NHB with regard to deposit acceptance and renewal. Your Company is exempted from the applicability of the Companies (Acceptance of Deposits) Rules 2014.

e) Mortgage-backed securities

Your Company did not opt for securitisation during the year under review. There were no securitised assets outstanding as on March 31, 2020.

8. REGULATORY COMPLIANCES

a) Compliance with Directions/ Guidelines of National Housing Bank (NHB) and other statutes

The Government has issued noti_cation communicating transfer of regulation of HFCs from National Housing Bank to Reserve Bank of India (RBI) w.e.f. 09/08/2019. Reserve Bank has issued a Press Release dated 13/08/2019 stating that RBI will carry out a review of the extant regulatory framework applicable to HFCs and come out with revised regulations in due course and till such time HFCs shall continue to comply with the directions and instructions issued by NHB.

Your Company has complied with the Housing Finance Companies (NHB) Directions, 2010 and other directions/ guidelines prescribed by NHB and as amended from time to time. Your Company has adhered to the prudential guidelines/norms for non- performing assets (NPAs) and directions issued by NHB on withdrawal of pre-closure charges for all loans, asset classification of credit/ investments, credit rating, acceptance of deposits, Fair Practices Code (FPC), Most Important Terms and Conditions (MITC), Customer Complaints Redressal Mechanism, Know Your Customer (KYC), Anti-Money Laundering (AML) Guidelines, Asset Liability Management, Capital Adequacy Ratio (CAR) norms, Information Technology frameworks, CERSAI, Implementation of Indian Accounting Standards (Ind AS), Guidelines on Reporting and Monitoring of Frauds in Housing Finance Companies, INGRAM software, constitution of IT Strategy Committee, Guidelines on reporting and monitoring of Frauds in Housing Finance Companies and other related instructions issued by the National Housing Bank (NHB) were implemented in letter and spirit with an explicit noti_cation on the website of your Company, to the extent applicable.

During the year NHB has issued the following policies, circulars, guidelines etc. for Housing Finance Companies:

1. Policy-Circular-No.95 dated 29/05/2019: NHB has directed all HFCs with asset size of more than Rs. 5,000 Crore, to appoint Chief Risk of_cer. The Company has appointed Mr. H R Narendra as the Chief Risk Of_cer of the Company w.e.f. 22/05/2019.

2. NHB Circular NHB/ND/DRS/ Policy Circular No.96/2019-20 dated July 19, 2019 was issued on "Disbursement of housing loan to individuals linked to the stages of construction" the Company has been following the procedure even prior to the policy Circular.

In terms of the Housing Finance Companies – Corporate Governance (NHB) Directions, 2016, the Company has attached the Related Party Transactions Policy at the end of this Annual Report.

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

During the year, the NHB conducted regular inspection of your Company during October 2019, for the position as at March 2019. The compliance on the observations were submitted within the prescribed time to NHB, which were reviewed by the Audit Committee and the Board.

Your Company has complied with other related statutory Guidelines/Directions/Policies as applicable to the Company from time to time. Compliance of all Regulatory guidelines of NHB/RBI other statutes are periodically reviewed by the Audit Committee and the Board.

Your Company has complied with Indian Accounting Standards (Ind AS) as noti_ed under the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standard) Amendment Rules, 2016 as applicable read with Section 133 of the Companies Act, 2013 and guidelines issued by National Housing Bank.

b) IRDAI Compliance

The Company is registered with IRDAI for carrying on the Insurance Agency Business and has complied with the applicable compliances under Insurance Regulatory and Development Act, 1999 and IRDAI (Registration of Corporate Agent) Regulations 2015, as amended from time to time.

c) Other Compliances

(i) The Company, on 04/04/2018, had obtained the Legal Entity Identi_er No.335800EJ9Y3XDP5ZDH81 as required under the RBI Circular -No.RBI/2017-18/82 - DBR. No.BP.92/21.04.048/2017-18 dated November 02, 2017 and as advised by NHB. Since the same is required to be renewed on an annual basis on or before 4th April every year, we got it renewed for the year 2020 on February 17, 2020. The next renewal due date for the year 2021 is April 04, 2021.

(ii) As required under Section 215 of the Insolvency and Bankruptcy Code, 2016, the Company has registered itself with National e-governance Services Limited (NeSL) authorized by IBBI obtained registration No.9160743937431514312. Further, we have executed an agreement with NeSL on February 28, 2019. We are authenticating the request by our creditors on NeSL on regular basis.

(iii) The Company has got itself registered on TReDS Platform through Receivables Exchange of India Limited (RXIL) vide registration No.CA0000876.

(iv) As per RBI/2015-16/96 Master Circular No.15/2015-16 i.e. Master Circular on Foreign Investment in India and as per RBI/2017-18/194 A.P (DIR Series) Circular No.30 dated June 07, 2018 i.e. Foreign Investment in India, all types of Companies which have foreign investment are required to report through FIRMS - Reporting in Single Master Form. For the purpose the Company has completed the registration process for Entity User and for Business User.

9. COMPLIANCE UNDER THE COMPANIES ACT, 2013

Your Company has complied with the requirements of the applicable provisions of the Companies Act, 2013 and related Rules during the FY 19-20. In accordance with Sec 134 (3) (a) of the said Act, amended provision, the provisional Annual Return in the prescribed format has been made available on the website of the Company at https://www.can_nhomes. com/pdf/MGT7.pdf. An extract of Annual Return (MGT-9) is placed as Annexure-1. For more details regarding Compliances, please refer the Secretarial Audit Report enclosed to this Report as Annexure-2.

10. CAPITAL ADEQUACY

The Capital Adequacy Ratio (CAR) of your Company as at March 31, 2020 was 22.26% (previous year 16.44%). As against the Regulatory benchmark of 13% prescribed by the National Housing Bank (NHB).

11. DEPRECIATION

Depreciation was calculated on the Written Down Value Method based on useful life, in the manner prescribed in Schedule II to the Companies Act, 2013.

12. LEASES

The Company has adopted Ind AS 116 "Leases", with effect from April 1, 2019 and applied to all lease contracts existing on April 1, 2019 using the modi_ed retrospective method and has taken the cumulative adjustment to retained earnings, on the date of initial application. Accordingly, comparatives for the year ended March 31, 2019 have not been retrospectively adjusted. On transition, the adoption of the new standard resulted in recognition of Right-of-Use asset (ROU) of Rs. 32.12 Crore and a lease liability of Rs. 37.24 Crore after difference being set off against rent equalisation reserve existing as on April 1, 2019. The cumulative effect of applying the standard resulted in Rs. 3.83 Crore net of taxes being debited to retained earnings.

13. DEFERRED TAX ASSET (DTA)

During the year, Deferred Tax Asset (net) of Rs 8.02 Crore (previous year Rs 0.78 Crore) was considered to the Statement of Prot & Loss, on account of various components of asset & liabilities. The DTA outstanding at the end of the March 2020 was Rs.33.89 Crore (previous year Rs.24 Crore).

14. RECOVERY ACTION UNDER SECURITISATION & RECONSTRUCTION OF FINANCIAL ASSETS AND ENFORCEMENT OF SECURITY INTEREST ACT, 2002 (SARFAESI ACT)

During the year, your Company initiated action against 402 defaulting borrowers under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest ("SARFAESI ") Act, 2002 and recovered Rs.49.74 Crore (previous year Rs. 36.69 Crore) from borrowers of Non-Performing accounts. Of this Rs.11.66 Crore (previous year Rs. 9.27 Crore) was recovered by way of sale of assets under SARFAESI. This apart Rs.2.35 Crore was recovered in Written off accounts (Previous year Rs. 2.59 Crore).

15. LISTING OF SECURITIES:

The equity shares of the Company continues to be listed on the BSE Limited (BSE), Mumbai, and the National Stock Exchange of India Ltd. (NSE), Mumbai.

The non-convertible debentures issued on private placement are listed on National Stock Exchange of India Ltd.

Also as per SEBI Circular SEBI/HO/DDHS/DDHS/CIR/P/2019/115 dated October 22, 2019, captioned "Framework for listing of Commercial Paper" the Company has listed its Commercial Papers (CPs) on BSE Limited (BSE) and National Stock Exchange of India Ltd. (NSE).

16. HUMAN RESOURCES DEVELOPMENT

The total number of employees of the Company was 838 (652 regular and 186 on contract) as on March 31, 2020 as against 792 (592 regular and 200 on contract) as at the end of the previous year.

To upgrade knowledge/skill of the employees, select employees were deputed for training programmes/ seminars organised by the National Housing Bank and other reputed institutions. During the year, training in credit, information technology, human relations, customer service, Grievance redressal, _nance, taxation, marketing, fraud prevention, KYC & AML and other topics of importance was imparted to employees and executives. Your Company has put in place a series of HR measures including promotions and appropriate reward schemes. Industrial relations in your Company continued to be cordial during the year.

Particulars of Employees:

During FY 19-20, the Board of Directors has appointed the Managing Director with a remuneration of Rs.12.50 Lakh per month and no other employees were employed for a part of the year with a remuneration of Rs.8.5 Lakh or more per month. The ratio of remuneration of each Director to the median of employees remuneration and such other details as required under Sec 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, and 2016 are furnished below:

(i) Ratio of remuneration of each director to the median employees remuneration for FY 2020

The ratio of the remuneration of Managing Director to the median remuneration of the employees (regular employees) of the Company for the FY2019-20 was 17.35 : 1

The ratio of the remuneration of Dy. Managing Director to the median remuneration of the employees (regular employees) of the Company for the FY2019-20 was 3.09 : 1

Non-executive Directors and Independent Directors are eligible for sitting fee only. The details of sitting fee paid to the Directors for the meetings of Board and Committees are given in the Report of Directors on Corporate Governance.

(ii) Percentage increase in the remuneration of each Director and Key Managerial Personnel in FY 2020

The percentage increase in remuneration in the financial year for the Managing Director & CEO was 233% and that of the Deputy Managing Director was 9.79%. The other Key managerial personnel of the Company are the General Manager, the Chief Financial Of_cer and the Company Secretary and the percentage increase in their remuneration was 17%, 11.53% and 10.77%, respectively.

(iii) Percentage increase in the median remuneration of employees in FY 2020

The total number of permanent employees of the Company were 652 as on March 31, 2020. Apart from the permanent employees, there were 186 employees on contract as on March 31, 2020.

The percentage increase in the median remuneration of employees in the financial year was 18%.

(iv) Average percentile increase already made in salaries of employees other than managerial personnel in last financial year and its comparison with the percentile increase in managerial remuneration.

Average% increase in remuneration of the employees other than managerial personnel in the last financial year was 3.72% and that of Managerial remuneration was 5.89% during the period under review.

The average increase in the remuneration of both, the managerial and non-managerial personnel was determined based on the Annual Performance Evaluation and also based on the remuneration policy as recommended by the Nomination Remuneration & HR Committee of Directors and approved by the Board of Directors. There were no exceptional circumstances which warranted an increase in managerial remuneration which was not justi_ed by the overall performance of the Company. The Company af_rms that the remuneration is as per the remuneration policy of the Company.

(v) Prevention of Sexual Harassment of Women at the Workplace

The Company has a Policy on ‘Prevention of Sexual Harassment of Women at Workplace and matters connected therewith or incidental thereto covering all the aspects as contained under the Sexual Harassment of Women at Workplace (Prohibition, Prevention and Redressal) Act, 2013. During FY19-20 no cases of sexual harassment were reported.

The Company has in place "Equal Opportunity Policy" as per Section 21(1) of Rights of the Persons with Disabilities Act, 2018.

The Company has laid down a Code of Conduct for Prevention of Insider Trading, in accordance with the requirements under the Securities and Exchange Board of India (Prevention of Insider Trading) Regulations, 2015 and Companies Act, 2013, with a view to regulate trading in Securities of the Company by its directors, designated persons and employees. The same is made available on the website of the Company. For related link, please refer Annexure 7.

17. TRANSFER OF UNCLAIMED AND UNPAID DIVIDEND/ DEPOSIT AMOUNTS TO THE INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

In terms of section 124 and 125 of the Companies Act, 2013, the amounts (dividend, deposits etc., with interest) that remained unclaimed and unpaid for more than 7 years from the date they _rst became due for payment, should be transferred to IEPF. As an investor-friendly measure, your Company has been intimating the respective shareholders / depositors / investors to encash their dividend warrant/renew matured deposits or lodge their claim for payment of due, if any, from time to time and claims made are settled. As per the statutory requirements, the details of such amounts are made available on the website of MCA-IEPF as well as on the Companys website. In order to receive prompt payment of dividend, the members/ investors are requested to demat the shares held in physical mode, register bank account particulars, opt for ECS facility, register nomination and intimate change of address, if any, to the Company/ Depository Participants promptly.

a) Unclaimed dividends

As at March 31, 2020, dividends aggregating to Rs.173.02 Lakh (previous year Rs.163.76 Lakh) relating to dividends declared for the years FY12-13 to FY18-19 (of which Rs.26.88 Lakh related to dividend for the year 2019), had not been claimed by shareholders. As an investor friendly measure, your Company has intimated shareholders to lodge their claims and related particulars were provided in the annual reports each year as well as on the website of your Company. The dividend pertaining to 2011-12, which remained unclaimed/unpaid amounting to Rs. 9.40 Lakh (in respect of 2,021 shareholders), was transferred to IEPF on September 07, 2019, after the settlement of claims by members received in response to the individual reminder letters sent by your Company to the respective members. The dividend pertaining to 2012-13 remaining unclaimed and unpaid, amounting to Rs.14.18 Lakh (in respect of 2,338 shareholders) as on March 31, 2020, would be transferred to IEPF during August 2020 after settlement of the claims received up to the date of completion of seven years i.e. on August 06, 2020.

b) Transfer of shares to IEPF Demat account

Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and refund) Amendment Rules, 2017 was noti_ed by the Ministry of Corporate Affairs (MCA) on October 13, 2017. As per Rule 6 of the said Rules, the shares, in respect of which dividend amounts have not been paid or claimed for 7 consecutive years, are required to be transferred to ‘IEPF demat Account of IEPF Authority. On veri_cation of records of unclaimed dividend amounts from 2006 to 2012, which have already been transferred to IEPF on lapse of 7 years (during 2013 to 2019 respectively), 7 shareholders had not claimed dividend for consecutive 7 years and their shares 4,000 Nos. have been transferred to IEPF demat account within the prescribed period and the details are provided on the website of the Company. For more details, please refer ‘General Information to shareholders in this report.

In terms of the above Rules, reminder letters were sent by the Company to all the shareholders who had not claimed their dividends for a consecutive period of 7 years, informing that their shares will be transferred to IEPF suspense account on the due date, August 07, 2020, if they do not place their claim for unclaimed dividend amounts before the Company. Your Company has provided the related details on its website (Investors page).

c) Unclaimed deposits

As required under Section 125 of the Companies Act, 2013, the unclaimed and unpaid deposits together with interest for the year 2011-12 amounting to Rs.60,000/- (previous year Rs.5.19 Lakh) that remained unclaimed and unpaid for a period of 7 years were transferred to IEPF during the year under review.

18. PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND EXPENDITURE

During the year, your Company did not earn any income or incur any expenditure in foreign currency/exchange other than payment of Dividend 2019 to NRIs on repatriation basis to an extent of Rs.26.34 Lakh through authorised dealers.

Since your Company is a Housing Finance Company and does not own any manufacturing facility, the requirement relating to providing the particulars relating to conservation of energy and technology absorption as per Sec 134 (3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules 2014, are not applicable. Also the Company does not use energy intensively. However the Company as its responsibility towards the society, has taken measures towards optimum energy utilisation and conservation, like, installation of Solar Power systems including Solar UPS and power saving lamps in some of its branches, use of LED lights instead of conventional CFL & Fluorescent lamps.

As a part of Save Green efforts and leverage of technology, a lot of paper work at branches and the Registered Of_ce has been reduced (also refer para 5).

As a green initiative, the Company has started availing the services of "Dess Digital Software for sharing the soft copies of agenda papers pertaining to all the Board and Committee meetings, with the Directors and executives.

19. DIRECTORS & KEY MANAGERIAL PERSONNEL APPOINTMENTS / RE- APPOINTMENTS:

The Board of Directors made the following appointments/ re-appointments based on the recommendations of the Nomination, Remuneration & HR Committee on _t and proper criteria and performance evaluation of the Directors:

(1) Dr. Yeluri Vijayanand was appointed as an Independent Director at the Annual General Meeting held on July 17, 2019 for a tenure of 3 years up to the conclusion of the Annual General Meeting of the Company for the financial year 2020-21.

(2) Shri Shankara Narayanan Subramanian (S Subramanian), General Manager of Canara Bank, was appointed at the Annual General Meeting held on July 17, 2019 as a Director (Non-executive Promoter) liable to retire by rotation.

(3) Shri Debashish Mukherjee, Executive Director of Canara Bank was appointed at the Annual General Meeting held on July 17, 2019 as a Director (Non-executive Promoter) liable to retire by rotation.

(4) Shri G Naganathan, Independent Director was re-appointed at the Annual General Meeting of the Company held on July 17, 2019, for a further period of three years i.e., up to the conclusion of the Annual General Meeting of the Company for the financial year 2021-22.

(5) Shri Girish Kousgi has been appointed by the Board as the Managing Director and CEO of the Company w.e.f. September 05, 2019 for a tenure of 5 years. The brief pro_le and all other particulars relating to Shri Girish Kousgi, the terms and conditions of appointment, including remuneration, are provided in detail in the Notice of the ensuing Annual General Meeting of the Company for approval of members and all the relevant information in this regard are provided in the explanatory statement. Shri Girish Kousgi has also been designated as the Key Managerial Personnel.

(6) Shri Satish Kumar Kalra has been appointed as an Additional Director (Non-executive Independent) by the Board of Directors of the Company on June 15, 2020.

(7) Smt Shubhalakshmi Panse has been appointed as an Additional Director (Non-executive Independent) by the Board of Directors of the Company on June 15, 2020.

(8) Shri Lingam Venkata Prabhakar has been appointed as an additional Director (Non-executive Promoter) by the Board of Directors of the Company on July 30, 2020.

The agenda relating to appointment of Shri Satish Kumar Kalra and Smt. Shubhalakshmi Panse, as Independent Directors and and Shri Lingam Venkata Prabhakar as a Director liable to retire by rotation, are included in the Notice of the ensuing Annual General Meeting and complete particulars of the Directors are provided in the Explanatory Statements forming part of the said Notice.

The directors had _led their consent(s) and declaration(s) that they are not disquali_ed to become directors in terms of the provisions of Companies Act, 2013 and related Rules. The directors have intimated to the Company that they are not holding any shares or taken any loan(s) from the Company. The agenda relating to appointments / re-appointments of Directors are provided in the Notice of the 33rd Annual General Meeting of the Company seeking approval from the members. The particulars relating to the Directors and all other relevant information are provided in the explanatory statement(s) forming part of the said Notice for the information of members.

Brief pro_le of all the Directors are provided in page Nos. 22 to 25 of this Annual Report.

Key Managerial Personnel:

Shri Prashanth Joishy, Assistant General Manager of F & A Department of the Company, who has an experience of 31 years in the Company and about 11 years in Finance & Accounts Department of the Company has been designated as the Chief Financial Of_cer and Key Managerial Personnel of the Company w.e.f. November 04, 2019, in the place of Shri Atanu Bagchi, Chief Financial Of_cer, who attained superannuation w.e.f.

May 31, 2019.

Resignation/Vacation of Of_ce:

1. Shri. S K Hota, Managing Director resigned on June 27, 2019, on his repatriation to Canara Bank consequent to his appointment as the Managing Director & CEO of National Housing Bank [vide Government of India (MOF-DFS) Gazette Noti_cation F. No. 24/10/2018-IF.II dated June 27, 2019].

2. Shri. S Subramanian (Chief General Manager, Canara Bank) has laid down his Of_ce w.e.f. May 31, 2020 on attainment of superannuation. Consequently, he has tendered his resignation as Director (Non-executive Promoter Director) of the Company and hence ceased to be the director of the Company w.e.f. June 04, 2020.

Retirement by rotation and re-appointment:

In terms of Section 152 and all other applicable provisions of the Companies Act, 2013, and the Articles of Association of the Company, Shri Debashish Mukherjee, Director (Non-executive and Promoter), retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. The agenda relating to re-appointment of Shri Debashish Mukherjee, Director forms part of the notice convening the ensuing Annual General Meeting and all other relevant information as per SEBI Regulations are provided in the explanatory statement.

All the appointments and re-appointments of Directors are made by the Board of Directors on the recommendations of the Nomination Remuneration & HR Committee on _t and proper criteria and also based on the performance evaluation of the Directors.

All the appointments and re-appointments mentioned above, which form part of the Notice of the ensuing Annual General Meeting of the Company, are recommended by your Directors to the members for appointment/re-appointment/approval..

20. MEETINGS OF THE BOARD

During the Financial year 2019-20, seven meetings of the Board of Directors were held and the related details, including that of various committees constituted by the Board, are made available in the Report of Directors on Corporate Governance forming part of this annual report placed before the members. Your Company has complied with all the requirements as applicable under Companies Act, 2013 and related rules, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and also HFCs Corporate Governance (NHB) Directions, 2016, in relation to the Board of Directors and the Committees of the Board.

Committees of the Board:

Currently the Board has seven Committees viz. the Audit Committee, the Nomination, Remuneration & HR Committee, the Corporate Social Responsibility Committee, the Stakeholders Relationship Committee, the Risk Management Committee, the Management Committee and the IT Strategy Committee.

A detailed note on the composition of the Board and its Committees and other related particulars are provided in the Report of Directors on Corporate Governance forming part of this Annual Report.

21. DIRECTORS RESPONSIBILITY STATEMENT

In accordance with the provisions of section 134(3)(c) read with Section 134(5) of the Companies Act, 2013 and based on the information provided by the management and review of the draft statement by the Audit Committee, the Board of Directors report that-

(a) in the preparation of the annual accounts for the year ended on March 31, 2020, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any;

(b) the directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company for the financial year ended on March 31, 2020 and of the Prot and loss of the Company for that period;

(c) the directors had taken proper and suf_cient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis;

(e) this being a listed Company, the directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively and

(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Declaration by Independent Directors:

The Independent Directors have given declarations to the Company in terms of Section 149(7) and 149(8) of the Companies Act, 2013 and Regulation 25(8) of SEBI (LODR) Regulations, 2015 that they meet the criteria of independence as provided in Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of SEBI (LODR), 2015.

All the Independent Directors of the Company are persons of integrity, expertise and experience and have completed online pro_ciency self assessment tests and obtained certi_cates from the Institute noti_ed under Section 150(1) of the Act.

Code of Conduct:

In terms of Regulation 26(3) of the SEBI (LODR) Regulations, 2015, all the members of the Board and Senior Management Personnel have af_rmed compliance with the Code of Conduct of Board of Directors and Senior Management for the FY19-20. As required under Schedule V (D) of the said Regulations, a declaration signed by the Managing Director & Chief Executive Of_cer of the Company stating that the members of the Board and the Senior Management Personnel have af_rmed compliance of their respective Codes of Conduct, is an annexure to Corporate Governance Report.

22. NOMINATION REMUNERATION AND HR (NRC) POLICY

Your Company has constituted a Nomination Remuneration and HR Committee (NRC) of the Board in terms of Section 178 of the Act, Regulation 19 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 and Para 3(II) of NHB Corporate Governance (National Housing Bank) Directions, 2016. This Committee identi_es persons who are quali_ed to become Directors of the Company. The appointment, renewal, reappointment, re-categorisation and/ or removal of the Directors so identi_ed, including extension or continuation of the term of appointment, will be recommended by the NRC to the Board. This Committee has also laid down the criteria to identify persons who may be appointed to the senior management of the Company. The NRC has formulated the criteria for determining quali_cations, positive attributes and independence of a Director, carrying out evaluation of every Directors performance, performance of the Board and that of the Committees. The NRC Policy of the Company covering all the above aspects is made available on the of_cial website of the Company at https://www.can_nhomes.com/ pdf/Nomination-Remuneration-and-HR-Policy-120419.pdf, in terms of Section 134(3) of the Companies Act, 2013. The Board ensures the annual evaluation of the performance of the Board, its Committees and of its individual directors through the meeting of independent directors, the NRC and evaluation by each of the directors independently.

23. CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY

Your Company has constituted a Corporate Social Responsibility (CSR) Committee of the Board as prescribed under Section 135 of the Companies Act 2013 and has put the CSR policy in place. The Company has focussed in promoting education including special education, setting up hostels for tribal children, Construction of class room blocks for schools, Scholarships for under privileged, renovation of schools and anganawadis, Sponsorship of child education. The Company also focuses on healthcare by donating advanced medical equipments to various hospitals. To promote eradicating hunger, Company has contributed for mid-day meals at schools through Akshaya Patra Foundation. The Company has donated Relief materials to Cyclone and Flood affected areas. To promote Environmental Sustainability, donation of tree saplings, contribution towards "Cauvery Calling", a campaign to revitalize the southern Indian river Cauvery by planting trees in the river basin was undertaken. Contribution to Prime Ministers Citizen Assistance and Relief in Emergency Situations Fund (PM CARES), Karnataka State Disaster Management Authority, CM Relief Fund, Karnataka during COVID-19 pandemic, also forms part of its CSR activities.

As a well thought out strategy, all CSR projects of the Company are executed through our own branches with a view to inculcate a sense of social responsibility amongst the staff. The total amount/ budget under CSR for the FY 2019-20 was Rs.1,321 Lakhs, (including previous years Rs.456 lakhs), out of which total amount spent under the CSR activities is Rs.1004 lakhs. The unspent amount of Rs.317 Lakhs is carried forward as per provisions of Companies Act, 2013 with the aim to go in for granular details/ appropriate projects before spending in FY 20-21. A summary of CSR details as on 31/03/2020 is given below:

Sl. No. Activities undertaken No. of Projects Rupees in Lakh
1 Construction/ repair & renovation of Schools/ Hostels/Hospitals 10 369.42
2 Desks & Benches/ Tables/ Almirah/ Green Board/ Chairs/Bags/Books etc. 1 9.82
3 Drinking water facility/ supply of other articles of necessity etc. 4 2.06
4 Scholarship 7 2.42
5 Medical Equipment to Hospitals 5 105.13
6 Equipment to old age home/Rehabilitation centers 2 15.36
7 Eradicating Hunger 2 86.80
8 Disaster Management 5 276.38
9 Environmental Sustainability 1 15.12
10 Setting up of blood bank 1 47.00
11 Tree planting under environmental protection/ sustainability/ saplings with tree 2 0.09
guards/ pots to the customers.
12 Medical Vans to Hospitals 2 28.17
13 Sponsorship of child education 1 21.60
14 Ecological Balance 1 13.56
15 Promoting Tribal Sports 2 11.06
Total 46 1004.02

The Annual Report on CSR activities including brief contents are provided as Annexure-3 to this report

24. RISK MANAGEMENT POLICY

Your Company has constituted a Risk Management Committee with three directors, Chief Risk Of_cer (CRO) and a senior executive of the Company. In terms of Section 134(3)(n) of the Act, your directors wish to state that your Company has adhered to the Risk Management Policy. The above policy was reviewed during the year. For web link please refer Annexure 7.

25. AUDIT AND INTERNAL CONTROL

Your Company strengthened existing internal control systems for loan reviews at periodical intervals and introduced measures for minimising operational risks commensurate with the nature of its business and size of operations. Further, your Company has reviewed delegation of authorities and streamlined standard operating procedures for all areas of its business/ operations/ functions, strengthened the Offsite Transaction Monitoring System (OTMS) to track transactions/ early-warning signals across all branches by introducing innovative monitoring tools. The National Housing Bank conducts inspection of your Company on an annual basis. During the year, the NHB conducted regular inspection of your Company in October 2019 for the position as at March 31, 2019. The compliance on the observations were submitted within the prescribed time to the NHB, which were reviewed by the Audit Committee and the Board.

Your Company has also put in place a well- Defined policy on Risk Based Internal Audit (RBIA) and as per the said policy, 159 branches were audited in the FY19-20. Apart from the

RBIA, considering the volume of business, branches are also subjected to quarterly/ half yearly internal audit by empanelled audit _rms. During the year two loan accounts amounting to H 55 lakhs have been suspected to be fraudulent and have been reported to the authorities/regulators. The Audit Committee reviewed the audit reports/remarks/ observations and replies/ compliances including the compliance of KYC norms. Management Audit by Canara Bank was conducted during January, 2019 for the period, January 2017 to December 2018.

26. SECRETARIAL AUDIT & SECRETARIAL COMPLIANCE

As required under section 204 of the Companies Act, 2013 and Rules thereof, the Board appointed M/s Kedarnath & Associates, Practising Company Secretaries, for conducting the ‘Secretarial Audit of the Company and for submission of the Annual Compliance Report for the financial year 2019-20. The Secretarial Audit for FY19-20 was conducted as required u/s.204 of the Companies Act 2013, Regulation 24A of SEBI(LODR) Regulation 2015 and SEBI Circular No. CIR/CFD/CMD1/27/2019 dated February 08, 2019, by Shri S. Kedarnath, FCS, Practising Company Secretary and his team. The report does not contain any quali_cation, reservation or adverse remark. The Secretarial Audit Report issued by the Practising Company Secretaries is enclosed to the Report of Directors (Annexure 2) in terms of Section 134(3) (f) read with Section 204(1) of the Act.

In addition to the Secretarial Audit Report, Secretarial Compliance Report has also been issued by the PCS as per the SEBI Circular No. CIR/CFD/CMD1/27/2019 dated February 02, 2019, and the said report has been submitted to the Stock Exchanges.

Secretarial Standards

The Company complies with the mandatory Secretarial Standards i.e. SS-1 and SS-2 issued by the Institute of Company Secretaries of India and has referred to Secretarial Standards SS-3 and SS-4 for good governance.

Loans, Guarantees or Investments:

There are no particulars of loans, guarantees or investments made during the year in terms of Section 186(1) and 186(2) of the Act requiring disclosure to be made in the report of Directors as required under Section 134(3)(g) of the Act. In terms of Section 186(11) (a) the requirement relating to the disclosure is not applicable to a loan made, guarantee given or security provided by a Housing Finance Company.

Related Party Transactions:

The particulars of contracts or arrangements with the ‘Related Parties referred to in sub-section (1) of Section 188 of the Act are furnished in Note No.42 of the Notes forming part of the financial statements for FY19-20, forming a part of the Annual Report. The particulars of Related Party Transactions as required u/s sec 134(3)(h) in the prescribed format (AOC-2) is attached to this Report as Annexure-4.

27. STATUTORY AUDITORS

Pursuant to the provisions of Section 139, 142 and all other applicable provisions of the Companies Act, 2013 and rules made thereunder, M/s. Varma & Varma, Chartered Accountants (Firm Reg.No.004532S) were appointed by the members as the Statutory Auditors of the Company to hold of_ce from the conclusion of this 30th Annual General Meeting until the conclusion of the 35th Annual General Meeting, subject to rati_cation by members every year, as applicable, at such remuneration and out-of-pocket expenses, as may be decided by the Board of Directors of the Company. Pursuant to the provisions of Section 143(8) of the Companies Act, 2013 and rules made thereunder, the Members had authorised the Board of Directors to appoint any person(s) quali_ed for appointment as auditor(s) of the Company under Section 141 and all other applicable provisions of the Companies Act, 2013 as Branch Auditors for audit of any of the Branch of the Company, present and future, from the conclusion of this Annual General Meeting until the conclusion of the 35th Annual General Meeting, subject to rati_cation by members every year, as applicable, on such terms and conditions, including remuneration and out of pocket expenses, as may be decided by the Board of Directors of the Company. The requirement for the annual rati_cation of auditors appointment at the AGM has been omitted pursuant to Companies (Amendment) Act, 2017 noti_ed on May 7, 2018.

In view of the above, M/s Varma & Varma, Chartered Accountants (Firm Reg.No.004532S) appointed by the members at the 30th Annual General Meeting for a tenure up to the conclusion of the 35th Annual General Meeting will continue as the Statutory Auditors of the Company, at such remuneration and out of pocket expenses, as may be decided by the Board of Directors of the Company.

The Statutory Auditors Report for the FY2019-20 does not contain any quali_cation, reservation or adverse remark.

28. COST RECORDS AND COST AUDIT

Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Companies Act, 2013 are not applicable for the business activities carried out by the Company.

29. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In terms of Regulation 34(2) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Management Discussion and Analysis Report forms part of this Annual Report.

30. CORPORATE GOVERNANCE

As required under the Companies Act, 2013, Regulation 34 read with Schedule V of the SEBI (LODR) Regulations, 2015 and Housing Finance Companies – Corporate Governance (National Housing Bank) Directions, 2016, the ‘Report of Directors on Corporate Governance for the year FY19-20 is placed in this Annual Report.

The said Report covers in detail the Corporate Governance Philosophy of the Company, Board Diversity, Directors appointment and remuneration, declaration by Independent Directors, Board evaluation, familiarisation programme, vigil mechanism etc. The Auditors Certi_cate on Corporate Governance is provided with this report as Annexure-5.

Business Responsibility Report:

The SEBI (LODR) Regulations, 2015, mandates inclusion of Business Responsibility Report (BRR) in the prescribed format, as a part of the Annual Report for top 500 listed entities based on the market capitalisation. In compliance with the said Regulations, the BRR is provided as a part of this Report as Annexure 6.

Board Evaluation:

In terms of Regulation 17(10) of the SEBI (LODR) Regulations, 2015 read with the SEBI Circular No. SEBI/HO/CFD/ CMD/ CIR/P/2017/004 dated January 05, 2017, your Company has put in place the ‘Board and Directors Evaluation Policy laying down a framework for evaluation of the Board, its Committees and of the individual directors with Defined attributes for evaluation. The Board has evaluated the performance of the independent directors including their independence criteria as speci_ed in the said regulations and their independence from the management. The directors who were subject to evaluation did not participate in their own evaluation. The results of the evaluation exercise were shared with the Board in subsequent Board Meeting(s).

31. SAVE GREEN EFFORTS & RESPONSIBILITY TOWARDS SOCIETY

In recognition and support to the green initiative taken by the Ministry of Corporate Affairs (MCA), Government of India, your Company is sending AGM notices, annual reports, correspondence with the stakeholders etc. to the respective e-mail IDs of stakeholders. To facilitate paperless banking, initiatives taken by your Company include ECS / NACH facility for repayment of loans, streamlining the systems and procedures for reporting by the branches and at the Registered Of_ce through Integrated Business Suite (IBS), networking of branches with the Registered Of_ce, harnessing solar energy for lighting and computer operations in 16 branches. The digital storage of data is being increasingly adopted and therefore, the usage of paper is curtailed to the minimum.

As in the previous years, we continue to publish only the statutory disclosures in the print version of the Annual Report. Electronic copies of the Annual Report, Annual General Meeting Notices, and such other notices are being sent to all members whose e-mail addresses are registered with the Company/ Depository participants. Further as per MCA circular dated 13/04/2020 notices for the General meeting may be given only through e-mails registered with the Company/DP/RTA. As per SEBI Circular SEBI/HO/CFD/CMD1/ CIR/P/2020/79 dated 12/05/2020, the requirements of Reg.36 (1)(b) and (c) and Reg.58 (1)(b) &(c) of the LODR are dispensed with for listed entities who conduct their AGMs during the calendar year 2020 (i.e. till 31/12/2020).

[Regulation 36 (1)(b) and (c) of the LODR prescribes that a listed entity shall send a hard copy of the statement containing salient features of all the documents, as prescribed in Section 136 of the Companies Act, 2013 to the shareholders who have not registered their email addresses and hard copies of full annual reports to those shareholders, who request for the same, respectively. Regulation 58 (1)(b) &(c) of the LODR extend similar requirements to entities which have listed their NCDs and CPs]

Through our CSR activities in the _eld of health care, education and empowerment of the downtrodden, we have strived to improve the lives of lakhs of our country men, women and children. We have sanctioned Rs. 12.38 Crore and spent Rs. 10.04 Crore towards various activities which have been detailed in point no. 23 of this report.

32. OUTLOOK FOR 2020-21

In the aftermath of COVID-19, the various schemes and packages provided by the Union Government will be instrumental for revival of the economy and for giving a _llip to the real estate market. Your Company will continue to lend prudently and concentrate on the Affordable Housing Loan Segment.

Our market expansion in potential locations will continue and we propose to open about 10 new branches during the current FY 2020-21. Thrust is given on distribution of general insurance products through corporate agencies to provide insurance products to secure the health and assets of our customers.

Our focus on Lending to the salaried class will be unabated. However, on account of the market conditions in the current scenario, there will be some pressure on performance. Your Company would continue its pursuit of qualitative growth. Your Company is committed to uphold and retain the high standards which have been followed from inception despite the various challenges encountered in the discharge of its functions.

33. ACKNOWLEDGEMENTS

Your Directors would like to thank Canara Bank, the promoter, for their continuous support.

Your Directors would like to acknowledge the role of all its stakeholders viz., shareholders, debenture holders, CP holders, depositors, bankers, lenders, borrowers, merchant bankers, insurance partners, Statutory and Branch Auditors, Secretarial Auditors, panel advocates, panel valuers, agents and all others for their continuous support to your Company and the con_dence and faith that they have always reposed in your Company.

Your Directors acknowledge and appreciate the guidance and support extended by all the Regulatory authorities including National Housing Bank (NHB), Reserve Bank of India (RBI), Insurance Regulatory and Development Authority of India (IRDAI), Securities Exchange Board of India (SEBI), Ministry of Corporate Affairs (MCA), Registrar of Companies, Karnataka, Stock Exchanges, NSDL and CDSL.

Your Directors thank the Rating Agencies, viz. ICRA, CARE, India Ratings & Research Ltd., (FITCH), the Registrars & Share Transfer Agents, Debenture Trustees and Trustees of public deposits of your Company, Government(s), local/ statutory authorities, and all others for their whole-hearted support during the year and look forward to their continued support in the years ahead.

Your Directors value the professionalism of all the employees who have proved themselves in a challenging environment and whose efforts have stood the Company in good stead and taken it to present level.

(Form No. MGT - 9)

AS ON THE FINANCIAL YEAR ENDED ON MARCH 31, 2020

[Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014]

I. REGISTRATION AND OTHER DETAILS:

i. CIN L85110KA1987PLC008699
ii. Registration Date 29/10/1987
iii. Name of the Company CAN FIN HOMES LTD
iv. Category/Sub-Category of the Company Financial Institution – Housing Finance
v. Address of the Registered of_ce and contact details No.29/1, 1st Floor, Sir M N Krishna Rao Road, Near Lalbagh West
Gate, Basavanagudi, Bengaluru – 560 004, Karnataka
vi. Whether listed Company Yes
vii. Name, Address and Contact details of Registrar and Canbank Computer Services Ltd.
Transfer Agent, if any Unit: Can Fin Homes Ltd., R&T Centre No.218, J P Royale, 1st
Floor, 2nd Main, Sampige Road, (Near 14th Cross), Malleshwaram,
Bengaluru – 560 003.
Contact Person: Shri Ravi. K, Senior Manager
Tel:080-23469661/662/664/665
e-mail: ravi@ccsl.co.in

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

All the business activities contributing 10% or more of the total turnover of the Company shall be stated:-

Sl. No. Name and Description of main products/ services NIC Code of the Product/ service % to total turnover of the Company
1. Housing Loans 64192 90.00%
2. Non housing Loans 10.00%

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES

Sl. No. Name And Address of the Company CIN/GLN Holding/ Subsidiary /Associate %of shares held Applicable Section
NIL

IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)

i) Category-wise Share Holding

No. of Shares held at the beginning of the year March 31, 2019–

No. of Shares held at the end of the year March 31, 2020 –

Category of Shareholders Demat Physical Total % of Total Shares Demat Physical Total % of Total Shares % Change during the year
A. Promoter
1) Indian
a) Individual/ HUF -- -- -- -- -- -- -- -- --
b) Central Govt -- -- -- -- -- -- -- -- --
c) State Govt(s) -- -- -- -- -- -- -- -- --
d) Bodies Corp -- -- -- -- -- -- -- -- --
e) Banks / FI 39930365 -- 39930365 29.99 39930365 -- 39930365 29.99 --
f) Any Other -- -- -- -- -- -- -- -- --
(Promoter Group)
Sub-total(A)(1):- 39930365 -- 39930365 29.99 39930365 -- 39930365 29.99 --
2) Foreign -- -- -- -- -- -- -- -- --
a) NRIs-Individuals -- -- -- -- -- -- -- -- --
b) Other-Individuals -- -- -- -- -- -- -- -- --
c) Bodies Corp. -- -- -- -- -- -- -- -- --
d) Banks / FI -- -- -- -- -- -- -- -- --
e) Any Other…. -- -- -- -- -- -- -- -- --
Sub-total(A)(2):- -- -- -- -- -- -- -- -- --
Total Shareholding of 39930365 -- 39930365 29.99 39930365 -- 39930365 29.99 --
Promoter (A) = (A)(1)+(A)(2)
B. Public Shareholding
1. Institutions
a) Mutual Funds 3785280 1000 3786280 2.85 14800380 1000 14801380 11.12 8.27
b) Banks / FI 1023579 -- 1023579 0.77 862383 -- 862383 0.65 (0.12)
c) Central Govt -- -- -- -- -- -- -- --
d) State Govt(s) -- -- -- -- -- -- -- --
e) Venture Capital -- -- -- -- -- -- -- --
f) Insurance Companies 191278 -- 191278 0.14 613873 -- 613873 0.46 0.32
g) FIIs -- -- -- -- -- -- -- -- --
h) Foreign Venture -- -- -- -- -- -- -- -- --
Capital Funds
i) Others (specify) -- -- -- -- -- -- -- -- --
(i) Foreign Financial -- 2000 2000 0.00 -- 2000 2000 0.00 --
Institutions
Sub-total(B)(1)

5000137

3000

5003137

3.76

16276636

3000

16279636 12.23 8.47
2. Non Institutions
a) Bodies Corp. 19408810 44500 19453310 14.61 16892120 44750 16936870 12.72 (1.89)
i) Indian
ii) Overseas
b) Individuals
(i) Individual shareholders holding nominal share capital upto Rs.2 Lakh 29648221 2331296 31979517 24.00 24000230 2068835 26069065 19.57 (4.43)
(ii) Individual shareholders holding nominal share capital in excess of H2 Lakh 7930323 -- 7930323 5.96 6722288 -- 6722288 5.05 (0.91)
c) Quali_ed Foreign -- -- -- -- -- -- -- -- --
Investor

 

d) Others(Specify)
i) Non-Resident 1658806 -- 1658806 1.25 1319811 -- 1319811 0.99 (0.26)
Indians
ii) Clearing 882652 -- 882652 0.66 146004 -- 146004 0.11 (0.55)
Members
iii) Hindu Undivided 728657 -- 728657 0.55 596077 -- 596077 0.45 (0.10)
Families
iv) Employee 13360 8330 21690 0.02 16165 6830 22995 0.02 --
Shareholders
v) Director & their -- -- -- -- -- -- -- -- --
relatives
vi) Custodian - -- -- -- -- -- -- --
vii) Trusts 24841 -- 24841 0.02 17333 -- 17333 0.01 (0.01)
viii) Foreign 25288027 -- 25288027 18.99 24860701 -- 24860701 18.67 (0.32)
Corporate Bodies
ix) Foreign National/ -- -- -- -- 430 -- 430 -- --
Individual
x) IEPF Authority 252800 -- 252800 0.19 252550 -- 252550 0.19 --
Sub-total(B)(2) 85836497

2384126

88220623 66.25 74823709

2120415

76944124 57.78 (8.47)
Total Public Shareholding 90836634

2387126

93223760 70.01 91100345

2123415

93223760 70.01
(B)=(B)(1)+(B) (2)
C. Shares held by Custodian for GDRs&ADRs -- -- -- -- -- -- -- -- --
Grand Total (A+B+C) 130766999

2387126

133154125 100.00 131030710

2123415

133154125 100.00

ii. Shareholding of Promoters

Shareholding at the beginning of the year

Shareholding at the end of the year

Sl. No. Shareholders Name No. of Shares % of total Shares of the company % of Shares Pledged / encumbered to total shares No. of Shares % of total Shares of the company %of Shares Pledged / encumbered to total shares % change in share holding during the year
1. Canara Bank 39930365 29.99 -- 39930365 29.99 -- --
Total 39930365 29.99 -- 39930365 29.99 -- --

iii. Change in Promoters Shareholding (please specify, if there is no change)

Sl. No. Shareholders Name

Shareholding at the beginning of the year

Cumulative Shareholding during the year

No. of Shares % of total Shares of the company No. of Shares % of total Shares of the company
At the beginning of the year 39930365 29.99 -- --
Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus/ sweat equity etc): No Change -- -- 39930365 29.99
At the End of the year 39930365 29.99

iv. Shareholding pattern of top ten shareholders (other than Directors, Promoters, Holders of GDRs and ADRs)

Sl. No. Shareholders Name

Shareholding at the beginning of the year

Cumulative Shareholding during the year

No. of Shares % of total Shares of the company No. of Shares % of total Shares of the company
1 CALADIUM INVESTMENT PTE LTD.
At the beginning of the year 17904245 13.45
Date wise Increase / Decrease in Shareholding during the year: Sale from April 01, 2019 to March 31, 2020 (1265493) (0.95) 16638752 12.50
At the End of the year 16638752 12.50
2 CHHATTISGARH INVESTMENTS LIMITED
At the beginning of the year 11979411 9.00
Date wise Increase / Decrease in Shareholding during the year: Sale from April 01, 2019 to March 31, 2020 (1329890) (1.01) 10649521 7.99
At the End of the year 10649521 7.99
3 AXIS MUTUAL FUND TRUSTEE LIMITED A/C AXIS MUTUAL FUND A/C AXIS SMALL CAP FUND
At the beginning of the year 169674 0.13
Date wise Increase / Decrease in Shareholding during the year: Purchase From April 01, 2019 to March 31, 2020 2522839 1.89 2692513 2.02
At the End of the year 2692513 2.02
4 NITIN RAOJIBHAI DESAI
At the beginning of the year 2156600 1.62
Date wise Increase / Decrease in Shareholding during the year: No Change From April 01, 2019 to March 31, 2020 -- -- 2156600 1.62
At the End of the year 2156600 1.62
5 RELIANCE CAPITAL TRUSTEE CO LTD-A/C NIPPON INDIA SMALL CAP FUND
At the beginning of the year -- --
Date wise Increase / Decrease in Shareholding during the year: Purchase From April 01, 2019 to March 31, 2020 1601174 1.20 1601174 1.20
At the End of the year 1601174 1.20
6 SARDA ENERGY AND MINERALS LIMITED
At the beginning of the year 1500000 1.13
Date wise Increase / Decrease in Shareholding during the year: No Change From April 01, 2019 to March 31, 2020 -- -- 1500000 1.13
At the End of the year 1500000 1.13
7 AADI FINANCIAL ADVISORS LLP
At the beginning of the year 1302195 0.98
Date wise Increase / Decrease in Shareholding during the year: No change From April 01, 2019 to March 31, 2020 -- -- 1302195 0.98
At the End of the year 1302195 0.98
8 PINEBRIDGE GLOBAL FUNDS - PINEBRIDGE INDIA EQUITY FUND
At the beginning of the year -- --
Date wise Increase / Decrease in Shareholding during the year: Purchase From April 01, 2019 to March 31, 2020 1233475 0.93 1233475 0.93
At the End of the year 1233475 0.93
9 AKASH MANEK BHANSHALI
At the beginning of the year 1193392 0.89
Date wise Increase / Decrease in Shareholding during the year: No change From April 01, 2019 to March 31, 2020 -- -- 1193392 0.89
At the End of the year 1193392 0.89

 

Sl. No.Shareholders Name

Shareholding at the beginning of the year

Cumulative Shareholding during the year

No. of Shares % of total Shares of the company No. of Shares % of total Shares of the company
10 SBI SMALL CAP FUND
At the beginning of the year -- --
Date wise Increase / Decrease in Shareholding during the year: Purchase From April 01, 2019 to March 31, 2020 1169720 0.88 1169720 0.88
At the End of the year 1169720 0.88

P.S: The percentage of shareholding is calculated on the paid-up share capital.

V. SHAREHOLDING OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

Sl. No. Shareholders Name

Shareholding at the beginning of the year

Cumulative Shareholding during the year

No. of Shares % of total Shares of the company No. of Shares % of total Shares of the company
NIL

VI. INDEBTEDNESS

Indebtedness of the Company including interest outstanding/accrued but not due for payment (Amount in Rupees)

Secured loans excluding deposits Unsecured loans excluding deposits Deposits Total
Opening Balance
Principal 129,867,113,221 34,466,307,274 2,610,947,847 166,944,368,342
interest due but not paid - - - -
Interest accrued but not due for 1,827,339,342 29,146,586 - 1,856,485,928
payment
Total 131,694,452,563 34,495,453,860 2,610,947,847 168,800,854,270
Change in indebtedness - - - -
Addition 51,950,000,000 13,600,000,000 1,888,430,406 67,438,430,406
Reduction 24,847,118,584 22,459,153,588 1,448,573,276 48,754,845,448
Net Change 27,102,881,416 (8,859,153,588) 439,857,130 18,683,584,958
Closing Balance
Principal 157,682,169,628 25,606,316,373 3,050,804,977 186,339,290,978
interest due but not paid - - - -
Interest accrued but not due for payment 1,115,164,351 29,983,899 - 1,145,148,250
Total 158,797,333,979 25,636,300,272 3,050,804,977 187,484,439,228

VII. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Remuneration to Managing Director/Whole Time Director/General Manager

(Amount in Rupees)

Sl. No. Particulars of Remuneration

Name of MD/WTD/ Manager

Total
S.K.Hota Managing Director Shri Girish Kousgi Managing Director Shri Shreekant M Bhandiwad Dy. Managing Director Amount
1 Gross Salary 4,71,019.35 57,22,219.00 17,86,842.64 79,80,080.99
(a) Salary as per provisions contained in Section 17(1) of the Income Tax Act, 1961
(b) Value of perquisites u/s 17(2) of the Income Tax Act, 1961 -- -- -- --
(c) Prots in lieu of salary under section 17(3) of Income Tax Act,1961 -- -- -- --
2 Stock Option -- -- -- --
3 Sweat Equity -- -- -- --
4 Commission
-as% of Prot -- -- -- --
-others, Incentive -- -- -- --
5 Others (Companys contribution to PF) 25,500 -- 93,638 1,19,138
Gratuity 2,55,000 -- -- 2,55,000
Leave Salary 4,38,441.46 -- -- 4,38,441.46
Total (A)* 11,89,960.81 57,22,219.00 18,80,479.64 87,92,659.45
Ceiling as per the Act 37,61,23,477 --

P.S.: Re-imbursement of salary to Canara Bank for the year ended March 31, 2020. *excluding incentive pertaining to financial year 2018-19.

B. Remuneration to other Directors

(Amount in Rupees)

Sl. No. Particulars of Remuneration Independent Directors

Name of the Directors

Total Amount
Shri G Naganathan Smt Bharati Rao Dr. Yeluri Vijayanand
Fee for attending board and committee meetings 5,55,000 5,85,000 4,95,000 16,35,000
Commission -- -- -- --
Others, please specify -- -- -- --
Total (1) 5,55,000 5,85,000 4,95,000 16,35,000

 

Other Non-Executive Directors S Subramanian Shri Debashish Mukherjee --
Fee for attending board and committee meetings 1,50,000 2,15,000 3,65,000
Commission -- -- -- --
Others, please specify -- -- -- --
Total (2) 1,50,000 2,15,000 3,65,000
Total (B)=(1+2) 20,00,000
Total Managerial Remuneration -- -- -- 20,00,000
Overall Ceiling as per the Act -- -- --

C. Remuneration to Key Managerial Personnel other than Managing Director, Whole-time Director and/or Manager

(Amount in Rupees)

Sl. No. Particulars of Remuneration

Key Managerial Personnel

Total
Shamila M Atanu Bagchi Prashanth Joishy Veena G Kamath
1 Gross Salary
(a) Salary as per provisions contained in Section 17(1) of the Income Tax Act, 1961 1765892 448761 1494788 1451921 5161362
(b) Value of perquisites u/s 17(2) of the Income Tax Act, 1961
(c) Prots in lieu of salary under section 17(3) of Income Tax Act, 1961
2 Stock Option
3 Sweat Equity
4 Commission 60000 124995 50000 60000 294995
-as% of Prot
-others, Incentive/LFC
5 Others (Companys contribution to PF) 192705 23384 191464 129557 537110
Leave Salary 540669 540669
Total (A) 2018597 1137809 1736252 1641478 6534136
Ceiling as per the Act

VIII. PENALTIES/PUNISHMENT/COMPOUNDING OF OFFENCES

There were no penalties/punishments/compounding of offences for the year ending March 31, 2020