AFFLUENCE

DIRECTOR’S REPORT

To

The Members,

The Directors have pleasure in presenting before you the Annual Report of the Company together with the Audited Statements of Accounts for the year ended 31st March, 2016.

LENDING OPERATIONS & DISBURSEMENT OF LOANS:

Your Company registered a remarkable growth in its operations. The highlights of Company's Performance are as follows:

? The operating profit before charging depreciation and tax amounted to Rs 285.14 lacs in the year 2015-16 as against Rs. 234.77 lacs in the preceding year; representing a rise of 21.46%.

? Profit after Tax (PAT) before extraordinary items went up by 21.59% to Rs. 186.74 lacs in the year 2015-16 from Rs.153.58 lacs in the previous year.

? As at 31st March, 2016, the loan book stood at Rs. 5328.45 lacs as against Rs. 3867.52 lacs in the previous year marking an increase of 37.77%.

? Disbursements during the year amounted to Rs. 2730.59 lacs in 2015-16 from Rs. 2538.64 lacs in 2014-15 .

As part of its liability management, your Company endeavors to diversify its resource base in order to achieve an appropriate maturity structure and minimize the weighted average cost of borrowed funds.

DIVIDEND:

Your Directors felt it prudent to retain the earnings for the year under review to be ploughed back in busi­ness, which shall result in further augmentation of the Company's growth and shareholders' wealth.

CHANGES IN SHARE CAPITAL:

During the year under review, there were no changes in the share capital of the Company.

UNCLAIMED DIVIDEND:

As at March 31st, 2016, dividend amounting to Rs. 5025/- has not been claimed by shareholders. The Compa­ny has been intimating the shareholders to lodge their daim for dividend from time to time.

Under the provisions of section 125 of Companies Act, 2013 dividends that remain unclaimed for a period of seven years from the date of declaration are required to be transferred to the Investor Education and Protec­tion Fund (IEPF) administered by the Central Government. As at March 31st, 2016 there is no unpaid/ Un­claimed Dividend to be transferred to Investor Education & Protection Fund.

In terms of the IEPF (Uploading of information regarding unpaid and unclaimed amounts lying with compa­nies) Rules, 2012, the Company has made the relevant disclosures to the Ministry of Corporate Affairs (MCA) regarding unclaimed dividends. SRGHFL has uploaded the prescribed information on www.iepf.gov.in <http://www.iepf.gov.in> and www.srghousing.com <http://www.srghousing.com>.

MANAGEMENT DISCUSSION AND ANALYSIS:

Pursuant to SEBI (LODR) Regulations, 2015,Report on Management Discussion and Analysis is annexed here-with in Annexure IV.

SUBSIDIARY COMPANIES:

The Company does not have any subsidiary.

DIRECTOR'S RESPONSIBILITY STATEMENT:

In pursuance of section 134 (3) (c) of the Companies Act, 2013, and based on the information provided by the management, your Directors hereby confirm that:

(a) In the preparation of the annual accounts, the applicable accounting standards had been followed;

(b) Accounting policies selected were applied consistently. Reasonable and prudent judgments and est-mates were made so as to give a true and fair view of the state of affairs of the Company as at March 31st, 2016 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 accord-ance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities;

(d) The annual accounts of the Company have been prepared on a going concern basis.

(e) Internal controls have been laid down to be followed by the Company and such internal controls were adequate and were operating effectively.

(f) Systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION:

Your Company has taken adequate steps to adhere to all the stipulations laid down in SEBI (LODR) Regula­tions, 2015. A report on Corporate Governance is included as a part of this Annual Report in ANNEXURE VI.

Certificate from the Statutory Auditors of the company confirming the compliance with the conditions of Cor­porate Governance as stipulated under SEBI (LODR) Regulations, 2015 is attached to this report.

In terms of Section 136 of the Act, the reports and accounts are being sent to the members and others entitled thereto.

RELATED PARTY TRANSACTIONS:

All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm's length basis. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be consid-ered material in accordance with the policy of the Company on materiality of related party transactions.

The Policy on materiality of related party transactions and dealing with related party transactions as ap-proved by the Board may be accessed on the Company's website at the link: (<http://srghousing.com/> DataImages/download/RELATED%20PARTY%20TRANSACTION%20POLICY.pdf).

Your Directors draw attention of the members to Note 20 to the financial statement which sets out related party disclosures.

RISK MANAGEMENT POLICY:

Pursuant to section 134 (3) (n) of the Companies Act, 2013 & SEBI (LODR) Regulations, 2015, the company has in place a risk management framework approved by the board of Directors. SRGHFL's Risk Management framework provides the mechanism for risk assessment and mitigation. Company has in place Risk Manage­ment Committee. The details of the committee and its terms of reference are set out in the corporate gov­ernance report forming part of the Boards report.

At present the company has not identified any element of risk which may threaten the existence of the com­pany.

CORPORATE SOCIAL RESPONSIBILTY POLICY:

Pursuant to the provisions of section 135 and schedule VII of the Companies Act, 2013, at present the CSR provisions are not applicable on the Company.

DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS:

The Company has an Internal Control System, commensurate with the size, scale and complexity of its opera­tions. The scope and authority of the Internal Audit function is defined by board. To maintain its objectivity and independence, the Internal Auditor reports to the Chairman of the Audit Committee of the Board and/or to the Managing Director.

The Internal Auditor monitors and evaluates the efficacy and adequacy of internal control system in the Com­pany, its compliance with operating systems, accounting procedures and policies of the Company.

Based on the report of internal auditor, respective heads undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and recommendations along with correc­tive actions thereon are presented to the Audit Committee of the Board and/or to the Managing Director.

DIRECTORS:

In accordance with the provisions of the Act and the Articles of Association of the Company Mr. Rajesh Jain, Director is liable to retire by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment.

Your Directors recommend his re-appointment.

During the year under review, the Board of Directors on the recommendation of Nomination and Remunera­tion Committee had appointed Shri Nishant Badala as an Additional Director to hold office in the capacity of Non-Executive Independent director in the Company w.e.f. May 14th, 2015 and shareholders of the company in their meeting held on September 10th, 2015 regularized his appointment as Non-Executive Independent Director of the Company.

During the year under review, your Directors revised the remuneration of Mr. Vinod K. Jain , Managing Direc­tor, in accordance with the provisions of Companies Act, 2013 in their meeting held on 28.05.2015 and share­holders in their Annual General Meeting held on September 10th, 2015 approved the revised remuneration in addition to his re-appointment as the Managing Director of the Company for a period of three years from May 7th, 2016 on such terms and conditions as approved by Board in consultation with Nomination and Re­muneration Committee of the Company.

All the directors of the Company have confirmed that they are not disqualified from being appointed as direc­tors in terms of Section 164 of the Companies Act, 2013.

There was no change in Key Managerial Personnel during the financial year.

DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS:

The Company has received necessary declaration from each Independent Director of the Company under Section 149(7) of the Companies Act, 2013 that the Independent Directors of the Company meet with the criteria of their Independence as laid down in Section 149(6).

AUDITORS:

STATUTORY AUDITORS:

At the 15TH Annual General Meeting held on September 18th, 2014, the members had appointed M/s Valawat Jha Pamecha & Co. Chartered Accountants (registration No. 008265 C) as the statutory auditors of the Com­pany for a period of 3 years upto the conclusion of 18th Annual General Meeting to be held in the year 2017, subject to them ratifying the said appointment at every AGM. The Company has received a confirmation from M/s Valawat Jha Pamecha & Co. Chartered Accountants, to the effect that their appointment, if made, at the ensuing AGM would be in terms of Sections 139 and 141 of the Companies Act, 2013 and rules made there under. The board proposes to the members to ratify the said appointment of M/s Valawat Jha Pamecha & Co. Chartered Accountants.

SECRETARIAL AUDITORS:

M/s Deepak Vijaywargey & Associates, Practicing Company Secretary, Udaipur was re-appointed as the Sec-retarial Auditor of the Company for the financial year 2015-16 by the Board of Directors pursuant to provi­sions of Companies Act, 2013 and rules there under. Secretarial audit report as provided by M/s Deepak Vi­jaywargey & Associates, Practicing Company Secretary is annexed to this Report as ANNEXURE II.

QUALIFICATIONS IN AUDIT REPORTS:

There are no qualifications, reservations or adverse remarks or disclaimer made-

(a) By the statutory auditor in his report; and

(b) By the company secretary in practice in his secretarial audit report

BOARD MEETINGS:

The Board of Directors met 11 (Eleven) times during the financial year 2015-16. COMPOSITION OF AUDIT COMMITTEE:

The Audit Committee consists of adequate composition of Non-Executive Independent Directors. The details of which are mentioned in the Corporate Governance Report.

COMPOSITION OF NOMINATION & REMUNERATION COMMITTEE:

The Nomination & Remuneration Committee consists of adequate composition of Non-Executive Independ­ent Directors. The details of which are mentioned in the Corporate Governance Report.

COMPOSITION OF STAKEHOLDER'S RELATIONSHIP COMMITTEE:

The Stakeholder's Relationship Committee consist of adequate composition of Non- Executive Directors and Non-Executive Independent Directors. The details of which are mentioned in the Corporate Governance Re­port.

PARTICULARS OF LOANS, GAURANTEES OR INVESTMENTS:

Since the Company is a housing finance Company, the disclosure regarding particulars of loans given, guaran-tees given and security provided is exempt under the provisions of Section 186 (11) of the Companies Act, 2013.

As regards investments made by the Company, the details of the same are provided under Note 11 forming part of the annual accounts of the Company for the year ended March 31st, 2016.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO:

(A) CONSERVATION OF ENERGY:

The Company's operations are not power intensive. Nevertheless, your Company is taking every step to con­serve and minimize the use of energy wherever possible such as using energy efficient computer terminals, purchasing energy efficient equipments etc.

(B) TECHNOLOGY ABSORPTION:

The Company has imported no technology. Indigenous technology available is continuously upgraded to improve overall performance.

(C) EXPENDITURE INCURRED ON RESEARCH AND DEVELOPMENT:

The Company has no formal research and development department but the Company is continuously making efforts to strengthen research and development activities to improve quality and reduce cost.

(D) FOREIGN EXCHANGE EARNINGS AND OUTGO:

During the year under review there was no earnings and outgo in foreign exchange.

EXTRACT OF ANNUAL RETURN:

As required pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, the details forming part of extract of annual return in MGT 9 is annexed herewith as ANNEXURE III.

PARTICULARS OF EMPLOYEES:

As at March 31st, 2016, there was 1 employee employed throughout the year who was in receipt of remuner­ation of Rs. 60 lacs or more per annum.

In accordance with the provisions of Section 197 of the Companies Act, 2013, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, the name and other particulars of such employee is set out in the Annexure IX to the Directors' Report.

EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS:

There are no material changes and commitments affecting financial position of the company between 31st March and the date of Board's Report.

CHANGE IN THE NATURE OF BUSINESS:

There are no changes in the Nature of Business.

DETAILS RELATING TO DEPOSITS:

The Company has been granted registration by the National Housing Bank, New Delhi as a non-deposit taking Housing Finance Company. Being so, the Company has neither accepted in the past nor has any future plans to accept any public deposits, by whatever name called.

SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS:

The Company has been following directions, guidelines, circulars issued by SEBI, BSE, MCA, NHB etc. from time to time relating to companies and that there are no significant & material orders passed by these regula-tors so far.

DISCLOSURES ON MANAGERIAL REMUNERATION:

Details of Managerial remuneration as required under Rule 5(1) of the Companies (Appointment and Remu­neration of Managerial Personnel) Rules, 2014 is given as per "Annexure VIII" to this report.

LISTING WITH STOCK EXCHANGES:

The Company confirms that it has paid the Annual Listing Fees for the year 2016-2017 to BSE where the Com­pany's Shares are listed.

INVESTOR COMPLAINTS AND COMPLIANCE:

During the year company has not received any investor complaints and that as on date no complaints are pending.

EARNINGS PER SHARE (EPS):

The Earnings Per Share (EPS) is 1.65 as at March 31st, 2016 as against 1.43 as at March 31st, 2015.

NON-PERFORMING ASSETS AND PROVISIONS FOR CONTINGENCY:

Your Company adhered to the prudential guidelines for Non performing Assets (NPAs), issued by the National Housing Bank (NHB) under its Directions of 2010, as amended from time to time. As per the prudential norms, the income on such NPAs is not to be recognized if unrealized.

As per the prudential norms prescribed by the NHB, the Company has made provision for contingentes on standard as well as non-performing housing loans and property loans.

A NOTE OF APPRECIATION:

Your Directors place on record their appreciation for the advice, guidance and support given by various regu-latory authorities including the NHB, RBI, SEBI, MCA, the Stock Exchange (BSE), Depositories and all the bank-ers of the Company including State Bank of India. The Directors would also like to acknowledge the role of all its stakeholders - shareholders, borrowers, key partners and lenders for their continuing support to the Com­pany. Your Directors also record their appreciation for the dedicated services of the employees and their con­tribution to the growth of the Company. The Board would also like to express its sincere appreciation to all the Company's valued Shareholders, RTA, Service Providers and Counselors for their continued support and patronage.

Best Wishes

Sd/- Vinod K. Jain Managing Director DIN:00248843

Sd/- Rajesh Jain Director DIN:00212393

Date : 12.04.2016

Place: Udaipur