Annual Report 2013

Transcription

Annual Report 2013

PROTECTING OUR MEMBERS
Seventh Annual Report 2013 - 14
STRONG
ROOTS
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“Sometimes adversity is what you need to face in order to become successful” - As we complete 6 full years of
operations and step into the seventh year of our journey, we are able to appreciate the meaning of this quote
better.
Having made our footprint when the industry was in its heydays and having seen the crisis of survival take
its toll on the industry, Asirvad probably has seen it all. And it would be no exaggeration to say that we have
emerged more efficient and poised for stronger growth.
The fairly stable regulatory environment characterized by the granting of NBFC - MFI licenses after rigorous
checks, liquidity finding its way back to the sector, stabilization of the credit bureau usage, have all contributed
to the growth of the industry at large. The adversities showcased the resilience of Asirvad and the organization
is back on an accelerated growth trajectory after the slack growth during the last couple of years. Our borrowers
have stood with us, our staff have been pillars of support, our lenders have reposed their confidence in us and
all these have contributed in no mean measure to Asirvad’s growth.
Asirvad’s growth during the current year stands out - we have achieved what may be termed as “diversified
growth” and this is the theme of our 7th Annual report. Marking our presence in the states of Kerala, Orissa
and Gujarat, we have taken the first step in reaching out to financially include people outside the state of Tamil
Nadu. Blessed are those who are able to share their good fortune with the not so fortuitous; we hope that our
journey of empowering people continues to be just as sweet and enriching as the last seven years.
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ASIRVAD STORY
Small Loans, Big Dreams...
“
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We Rise by Lifting Others
”
A SNEAK
PREVIEW
March 08
March 09
March 10
March 11
March 12
No: Members enrolled
6,092
57,276
1,47,850
3,34,135
3,87,535
4,26,489
5,31,760
No: Active members
6,092
48,425
1,26,483
2,19,043
1,73,109
1,13,416
2,11,260
235
2,152
6,137
12,380
15,205
17,375
25,958
No: Branches
2
19
49
85
78
64
94
No: Districts covered
2
7
14
22
21
20
30
No: States covered
1
1
1
1
1
1
4
19
130
327
531
412
280
351
Cumulative disbursal
(` in Lakhs)
305
2,570
11,889
31,487
46,067
59,551
84,009
Portfolio Outstanding
(Gross) (` in Lakhs)
286
1,509
6,243
10,101
7,937
10,246
18,880
-
-
2
63
1
-
5.6
March 13 March 14
OPERATIONAL METRICS
No: Centres
HEADCOUNT METRICS
Total staff
DELINQUENCY METRICS (`
LAKHS)
PAR (`in Lakhs)
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BOARD OF DIRECTORS
S V Raja Vaidyanathan
S V Krishnamurthy
Kalpana Iyer
Rajivan Krishnaswamy
S Rathinasabapathi
Venkatesh Natarajan
MANAGEMENT COMMITTEE
Venkatesh Natarajan
S V Krishnamurthy
G Srikanth
BORROWING COMMITTEE
S V Krishnamurthy
S Rathinasabapathi
ASSET LIABILITY COMMITTEE
G Srikanth
K.Nithya
AUDITORS
M/s.Deloitte Haskins & Sells.,
Chartered Accountants,
ASV ‘N’ Ramana Tower,
52, Venkatnarayana Road,
T.Nagar, Chennai17.
AUDIT COMMITTEE
S V Krishnamurthy
Venkatesh Natarajan
Kalpana Iyer
COMPENSATION COMMITTEE
Rajivan Krishnaswamy
Venkatesh Natarajan
S Rathinasabapathi
CHIEF FINANCIAL OFFICER
G Srikanth
HEAD OPERATIONS
S Gopinath
COMPANY SECRETARY
K.Nithya
LEGAL ADVISOR
M/s.Essess Associates
No.4, Trustpuram, 4th Cross Street,
Kodambakkam, Chennai 600 024.
BANKERS/FUNDERS
• Axis Bank Limited
• Corporation Bank
• Development Credit Bank Limited
• HDFC Bank Limited
• ICICI Bank Limited
• IFMR Capital Finance Private Limited
• The Karur Vysya Bank Limited
• Lakshmi Vilas Bank Limited
• Small Industries Development Bank of India (SIDBI)
• State Bank of India
• Union Bank of India
• Punjab National Bank
• MAS Financial Services Private Limited
• Agri Development Finance (Tamil Nadu) Limited
• Ratnakar Bank Limited
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•
•
•
•
•
•
•
IDBI Bank Limited
Dena Bank
South Indian Bank
Vijaya Bank
Andhra Bank
Pallavan Grama Bank
Reliance Capital
INDEX
PROFILE OF BOARD OF DIRECTORS............................................................ 8
MESSAGE FROM CHAIRMAN...................................................................... 9
DIRECTORS’ REPORT.................................................................................... 11
MANAGEMENT DISCUSSION ANALYSIS...................................................... 16
CORPORATE GOVERNANCE REPORT........................................................ 22
CORPORATE SOCIAL RESPONSIBILITY......................................................... 29
THE ASIRVAD JOURNEY............................................................................... 32
AUDITORS’ REPORT...................................................................................... 36
FINANCIAL STATEMENT................................................................................ 43
SIGNIFICANT ACCOUNTING POLICIES....................................................... 63
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DIRECTORS AND THEIR PROFILE
S V RAJA VAIDYANATHAN
B.Tech (IIT Madras), MBA (IIM Calcutta), AICWAI, ACS and has more than 33 years of
experience in the field of financial services, infrastructure, media, telecom & Retail
sectors in large private sector companies in India.
S V KRISHNAMURTHY
FCA and ACS. Has more than 31 years of work experience being one of the pioneers
of a BPO industry way back in the eighties.
KALPANA IYER
FCA and ex- business head of Citibank - Micro finance division. Presently a management
consultant in Mumbai. She has more than 25 years of work experience
KRISHNASWAMY RAJIVAN
a Ph.D in Economics from the University of South Carolina, Los Angeles, USA and
an Ex-IAS Officer, was President of IFMR Trust. He has also served in the PMO.
He is now an Urban Advisor to the World Bank.
S RATHINASABAPATHI
is a B.Com, M.A. FCA and IPS Retd. Official, is an Honorary Treasurer with the Guild of
Services and is also an Honorary Secretary of the Retired Police Officers Association.
His expertise ranges from Internal and External Auditing to Taxation Consultancy. He
is also well versed on Information Systems Audit.
VENKATESH NATARAJAN
is an MBA from Cornell University and has an Engineering degree from Annamalai
University, Chennai. He has over 15 years of experience in product development
and venture capital at Intel; he has led several equity deals in design software,
computing wireless technology sectors and acted as operational consultant to
various MFIs in India. He is the MD of Lok Advisory Services.
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MESSAGE FROM THE CHAIRMAN
It feels good to be back to times of positivity.
Having been engulfed by the industry crisis since
the latter half of 2010, the financial year 201314 has been like the calm after the storm. While
the crisis showed signs of easing out during the
second half of 2012-13, it was only in 2013-14
that the confidence of the investors, lenders and
all other stakeholders was restored in totality
and no doubt, the results of the Microfinance
Institutions say it all.
Microfinance is probably one of the few
businesses with twin objectives of commercial
sustainability and social impact. While there
is no doubt that the loans provided by the
Microfinance Institutions go a long way in
improving the standard of life of the borrowers,
it is also essential for the Companies to remain
commercially sustainable so that long term
social impact could be achieved. To this extent,
the guidelines issued by the Reserve Bank of
India are a welcome step to achieve commercial
sustainability without compromising on the
social impact that Microfinance Institutions
are expected to bring about. The Reserve Bank
has also signaled its intent to be the regulator
of the industry through issue of NBFC – MFI
licenses which has lent additional credence to
the contribution of Microfinance Institutions in
achieving financial inclusion.
It is with immense joy that I would like to mention
that Asirvad was one of the earliest recipients
of this license which reinforces the efficacy
of its processes, adherence to regulations,
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transparency and strong corporate governance.
It is also an undisputable fact that the Reserve
Bank left no stone unturned in convincing
themselves of the orderly functioning of the
Microfinance Institutions before awarding the
NBFC – MFI license. To this extent, the Company
had to provide lots of documentation sought for
by the Central bank, respond to their queries and
clarifications and convince them of its orderly
functioning. Thanks to the untiring efforts of the
staff and the Management team, Asirvad was
able to demonstrate its credibility to the Reserve
Bank and the NBFC – MFI license stands a
testimony to this.
I also take pride in mentioning that Asirvad grew
from strength to strength during the current
financial year and following are some of the
significant achievements of Asirvad during the
year:
• We have commenced lending operations in
other States apart from Tamil Nadu
• We got ourselves registered as an NBFC –
MFI
• We showed significant increase in our
portfolio and member base
• We have managed to maintain our very
strong portfolio quality with close to zero
delinquencies
• We continue to remain a commercially viable
organization
All this was achieved without any compromise on
the quality of our processes or internal controls.
We continue to use Credit Bureau reports for
every single loan that we sanction, training and
group recognition tests are adhered to without
any deviations, and all the stipulations laid down
by the Reserve Bank are followed both in letter
and in spirit.
This year also marks the geographical expansion
of Asirvad into the states of Kerala, Orissa and
Gujarat. Despite the sourcing constraints laid
down by the regulations, Asirvad has managed to
build a fairly sizeable portfolio in Kerala. We have
also been able to originate quality portfolio in the
states of Gujarat and Orissa and I am sure that
we will be able to scale up our non-TN portfolio
further in the coming years. This will help us
mitigate any concentration risk that might arise
on account of specific state level actions.
I would be failing in my duty if I don’t mention the
immense support that our lenders have extended
during the current year. With their support, we
have managed to mobilize over Rs.255 Crores
during FY 2013-14 which is over 75% higher
than the funds mobilized in the previous year.
This has also resulted in our portfolio growing
by about 85% during the current year. We had
also issued our first Non-Convertible Debenture
during this year, which has helped us diversify
our funding streams and we hope that we will be
able to deepen this in the coming years.
This year has seen the highest amount of loan
disbursals that Asirvad has achieved ever since
inception. We disbursed about Rs.245 Crores,
which is about 90% higher than last year’s
disbursals. This would not have been possible
but for the dedicated efforts of our field staff
who were ably backed up by all other support
functions. Our staffs continue to be the pillars
of strength for Asirvad and no amount of words
would be adequate to thank them for their
phenomenal efforts and I am sure Asirvad will
be able to scale new highs with their enthusiasm
and commitment. I also want to express my
sincere gratitude towards the Board members
who have been extremely supportive in providing
necessary guidance and direction to the team so
that we could realize all these achievements.
Asirvad Development Foundation has continued
its good work in providing education and medical
assistance to the needy. During the year, we
provided education scholarships to deserving
students and also funded the setting up of
English Language labs in rural and nursery
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schools which will help improve the English
speaking and conversation skills of rural
children so that they remain on par with the
children of urban schools. On the medical
front, the foundation supported the open heart
surgery of an underprivileged child, and I am
happy to state that the child is now healthy and
doing well. Such instances bring about a sense
of satisfaction and happiness and I hope that we
get further opportunities to be of service to the
society.
By far, FY 2013-14 has been the best year for
Asirvad and I hope that these good times continue
in the years to come. I would like to thank all the
stakeholders for their support and patronage
and hope that they continue to remain with us
in this glorious journey of financial inclusion
and social development. Exciting times await us
and I hope and pray that we will be able to make
these times count.
Sd/S.V. Raja Vaidyanathan
Chairman and Managing Director
DIRECTORS’ REPORT
The Directors are pleased to present the Seventh Annual Report on the business and operations of
Your Company together with the Audited Accounts of Your Company for the year ended 31st March
2014. This year has been a very good year for Your Company in which Your Company has recorded
growth on both the balance sheet size and profitability. The following are the highlights:
FINANCIAL RESULTS
S.No.
Particulars
Year ended 31st March
2014 (` in crores)
Year ended 31st March
2013 (` in crores)
1
Gross Income
37.30
20.40
2
Less : Total Expenditure
30.20
17.26
3
Profit Before Tax
7.10
3.14
4
Profit After Tax
4.70
2.13
RESERVES & DIVIDEND
During the year under review, the Directors do not recommend any dividend for the year as it was
decided to use the internal accruals for furtherance of the business objectives.
OPERATIONS AND BUSINESS PERFORMANCE
During the year, Your Company was registered as NBFC – MFI by the Reserve Bank of India which
stands a testimony to the adherence of regulations laid down by the Central bank.
The operational highlights of your Company are:
• Client base of about 2.1 million across 94 branches.
• Portfolio has increased by about 85%, after sluggish business conditions that existed over the last 18-24
months
• Your company managed to disburse about Rs. 245 Crores during the year
• Your company has also ensured compliance to all the guidelines stipulated by the Central bank for the
Microfinance industry.
CREDIT RATING
ICRA, India’s leading Ratings, Research, Risk and Policy Advisory Company had reaffirmed the
grading of M2 to Your Company in January 2014. The rating was given after taking into account the
experienced management team, good corporate governance, strong loan monitoring and collection
mechanisms.
Your company was also part of 13 multi-originator Securitization transactions done during the year.
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RBI GUIDELINES
Your company is registered with RBI as a Non-Deposit Non Banking Company by their original
letter in December 2007. RBI’s approval was regularized vide their letter DNBS(Che)/CMD/3843/1327.056/9-16 dated 19th April 2010. RBI had also issued the certificate of registration as NBFC –
MFI to Your Company on the 4th of Oct 2013. Your Company has also complied with all applicable
regulations of Reserve Bank of India. As per Non-Banking Finance Companies RBI Directions, 1998,
the Directors hereby report that your Company did not accept any public deposits during the financial
year under review.
Your Company continues to comply with all the guidelines prescribed for a systemically important
NBFC.
The Board of Directors and its various Sub-Committees have met from time to time and ensured
adherence to the guidelines issued by RBI. Liquidity Risk Management, Interest Rate Risk, Funding
and Capital Planning, Profit Planning and Growth Projections, Pricing, Credit Risk, Portfolio Risk
Management, Operational and Process Risk Management have also been reviewed from time to time
and the Sub-Committees have also been making necessary changes to KYC and other disclosure
norms based on the policies being issued by the Central bank at periodic intervals.
CAPITAL ADEQACY
The Capital Adequacy Ratio was 16.83% as on 31st March 2014. The Net Owned Funds (NOF) as
on that date was Rs.31.34 Crores. The minimum capital adequacy requirement stipulated for Your
Company by Reserve Bank of India is 15%.
ISSUE OF CAPITAL
The authorized share capital of the company is Rs.20 Crores represented by Rs.15 Crores of Equity
and Rs.5 Crores of Preference Share Capital. The paid-up capital of your Company as on reporting
date was Rs.8.07 Crores.
EMPLOYEES STOCK OPTION PLAN
ESOP and the right to subscribe to future shares
During 2011-12, the Company had put together an Employees Stock Option plan as a retention tool
for the employees. A total of 2,04,500 options were granted at Rs.11.17 per option (at a discount of
50% to market value). After adjusting for employees who ceased to be employees of the company
during the year, the outstanding options as at Mar ’14 stood at 1,34,000.
RESOURCE MOBILISATION
The Financial year 2013-14 saw an easing of liquidity conditions and Your Company was also the
beneficiary of such conditions. Your Company has received term loan disbursals of Rs.256.20 Crores
from various public / private banks / NBFCs and market instruments like Securitization.
CREDIT BUREAU SUBSCRIPTION
Your company continues to submit data to Highmark and Equifax Credit bureaus on a weekly basis
and also use their credit reports for every single loan that is sanctioned. This, coupled with the
efficient processes, has resulted in a strong portfolio quality with NIL delinquencies.
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FAIR PRACTICES CODE
RBI had been issuing revised Fair Practices code guidelines from time to time and Your Company
has adhered to all of them without any compromise. The new Fair Practices Code, Code of Conduct,
Code of Ethics and Grievance Redressal Mechanism have been approved by the Board and displayed
prominently in all the branches of Your Company.
ASIRVAD DEVELOPMENT FOUNDATION
Asirvad Development Foundation (ADF), the Corporate Social Responsibility wing of Your Company
had successfully launched schemes for providing financial assistance to underprivileged students
and also funding primary schools for renovating their dilapidated buildings.
DIRECTORS
Mr. S V Krishnamurthy and Mr. Rathinasabapathy retire by rotation and being eligible has offered
themselves for re-appointment.
AUDITORS
M/s.Deloitte Haskins and Sells, Chartered Accountants, re-appointed as the Auditors of Your
Company at the AGM held on 25th September 2013, retire at the ensuing Annual General Meeting
and have offered themselves for re-appointment.
DIRECTORS’ RESPONSIBILITY STATEMENT
Pursuant to Section 217(2AA) of the Companies (Amendment) Act, 2000 the Directors confirm that
1. In the preparation of the Annual Accounts, all the applicable accounting standards have been
followed.
2. Appropriate accounting policies have been selected and applied consistently and judgments and
estimates that are reasonable and prudent have been made so as to give a true and fair view of
the state of affairs at the end of the financial year and profit of Your Company for the financial year
ended 31st March 2014.
3. Proper and sufficient care has been taken for the maintenance of adequate accounting standards
in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the
Company and for prevention and detecting fraud and other irregularities.
4. The Annual Accounts have been prepared on the ‘going concern’ basis.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management’s Discussion and Analysis Report for the year under review is presented in a separate
section forming part of the Annual Report.
CORPORATE GOVERNANCE REPORT
The Directors have adhered to the Corporate Governance requirements and have implemented the
best corporate governance practices. A report on Corporate Governance of your Company is attached
and forms part of the Directors’ Report.
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PARTICULARS OF EMPLOYEES REMUNERATION.
In terms of the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies
(Particulars of Employees) Rules 1975 as amended from time to time, Mr. S.V. Raja Vaidyanathan,
Chairman & Managing Director has drawn Rs.74,00,000 per year as his remuneration which falls
under the ceiling.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS
AND OUTGO
The particulars relating to energy conservation, technology absorption, foreign exchange earnings
and outgo as required to be disclosed under Section 217(1)(e) of the Companies Act, 1956 read with
Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, our company
had not engaged in any activity relating to consumption of energy or technology absorption. Your
Company had not spent any foreign currency expenditure and Your Company has no foreign currency
earnings.
ACKNOWLEDGEMENT
Your directors express their appreciation for the assistance and co-operation received from Banks,
Financial institutions, Government Authorities, Customers, Vendors and other members during the
year under review. Your Directors also wish to place on record their deep sense of appreciation for
the sincere and committed services by the executives, staff and other employees of Your Company.
For and on behalf of the Board of Directors
Sd/
Chennai | 6thJune, 2014
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(S.V. Raja Vaidyanathan)
MANAGEMENT
DISCUSSION
ANALYSIS
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MANAGEMENT DISCUSSION ANALYSIS
INTRODUCTION
In a country like India where a major part of the population does not have access to banking, achieving
financial inclusion assumes a great level of importance. However it does not come without its share
of challenges. Despite being one of the top items on the Central bank agenda, banks have not been
able to make much inroads and financial inclusion continues to remain a distant dream.
The Joint Liability Group model of lending patronized by the Microfinance Institutions (MFIs) helped
bridge this gap and access to finance was made available even to hitherto unbanked people. The
operational framework of the MFIs which enables finance being taken to the doorsteps of the
borrowers made financial inclusion possible and the concept was well embraced by the borrowers
as well. Such financial inclusion helped the borrowers enhance their standard of living and resulted
in numerous benefits to the society at large.
The industry faced a survival crisis with the introduction of an ordinance by the AP government which
effectively curbed the Microfinance business. However the Reserve Bank of India took cognizance of
the fact that the benefits brought about by the sector overweighed the costs and hence ensured the
survival of the industry albeit within a much more stringent regulatory framework. Detailed policies
were laid down and RBI went so far as to create a special category under the NBFC umbrella, the
‘NBFC – MFI’. NBFC – MFI licenses were also issued by the Central bank during FY 2013-14, which
brought the original resurgence back to the sector.
Asirvad was one of the earliest institutions to be certified as NBFC – MFI by the RBI, which was
one of the very positive developments for the organization during 2013-14. This, coupled with the
high grading accorded by ICRA, served as a launch-pad for securing new funding relationships
and Asirvad was able to significantly increase its disbursals and portfolio during the current year.
The Company raised funds through multiple modes of funding – vanilla term loans from banks and
financial institutions, multi-originator securitization transactions structured by IFMR Capital and
also issue of its first non-convertible debenture through the private placement route.
Despite the increase in business volumes during the year, Asirvad has strictly adhered to all the
covenants laid out by the Reserve Bank in its circular. Every loan application is screened through the
Credit Bureau and all the loans provided conform to the stipulations of the Central bank. The process
efficiencies coupled with compliance to regulations and strict underwriting norms have ensured that
the portfolio of Asirvad continues to remain very strong with the delinquencies being sub 5 bps.
FINANCIAL YEAR 2013 - 14
FY 2013-14 has been a commendable year for Asirvad to say the least. With favorable liquidity
conditions that prevailed during the entire year, the portfolio nearly doubled, profitability has more
than doubled and all this has been achieved without any compromise on the portfolio quality.
The stringent controls enforced by the organization have given a lot of comfort to the lenders and
this resulted in new banks and financial institutions coming forward to lend to the company during
the financial year under review. Andhra Bank, Vijaya bank, Bank of Maharashtra, IndusInd Bank, ING
Vysya Bank, Pallavan Grama Bank and Reliance Capital lent to Asirvad for the first time during FY
2013-14.
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OPERATIONAL HIGHLIGHTS
RBI issued NBFC – MFI licenses during the financial year 2013-14 after a long period of inspection.
Asirvad was one of the earliest institutions to obtain this license and this paved the way for banks to
recommence funding to the sector. On account of the untiring work of our field staff, we were able to
grow our portfolio by about 85% during 2013-14. Membership base almost doubled to more than 2
lakhs. During the year, we also expanded geographically and were able to originate portfolio in the
states of Kerala, Orissa and Gujarat. However we mixed our expansion with caution since we wanted
the processes to be well-entrenched before embarking upon a phase of high growth.
The Following are some of the operational highlights:
Particulars
No. of states
March 2014
March 2013
March 2012
March 2011
4
1
1
1
No. of branches
94
64
78
85
No. of districts
30
20
21
22
351
280
412
531
2,11,260
1,13,512
1,73,109
2,19,043
245
129
151
196
No. of employees
No of active members
Disbursements (In `
Crores)
FINANCIAL HIGHLIGHTS
The financial year 2013-14 showed improvement on the financials as well and some of the key
financial metrics are given below:
Particulars
March 2014
March 2013
March 2012
March 2011
8.07
8.04
8.04
8.04
Microfinance portfolio under
management
188.80
102.46
79.37
101.09
Borrowings (` in Crores)
162.29
98.98
50.40
73.65
Total Revenue (` in Crores)
37.30
20.40
24.28
29.31
Profit after tax (` in Crores)
4.70
2.13
1.29
3.59
215.44
131.96
78.74
97.89
Paid-up capital
Total Assets (` in Crores)
CUSTOMER ENGAGEMENT INITIATIVES
Mahatma Gandhi once remarked, “A customer is the most important visitor on our premises. He
is not dependent on us. We are dependent on him. He is not an interruption in our work. He is the
purpose of it. He is not an outsider in our business. He is part of it. We are not doing him a favor by
serving him. He is doing us a favor by giving us an opportunity to do so”. No business or company
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can survive bereft of its customers. And this is no different for a Microfinance Institution and is even
truer in the current situation when RBI guidelines do not permit more than 2 institutions to lend to
the same customer.
Given that our customers come from the lower half of the societal pyramid and may not be sufficiently
aware of the financial intricacies, we ensure that they are kept informed of all the details pertaining
to the products being offered to them. We conduct compulsory 3-day training to them before the
disbursal of the loan wherein they are kept informed about the profile of the company, terms and
conditions of our products, pricing and other important issues. Also in line with the RBI guidelines,
our Company interacts with the customers by having scheduled group meetings in a common place
without causing any hindrance to the general public. We are one of the very few companies that still
insist on a minimum attendance and consider attendance as a primary criterion for the grant of a
higher cycle loan.
HUMAN RESOURCES
It is no doubt that the customers are the backbone of any business however the fact remains that
the staffs of an organization are just as important as them. In Microfinance, which is a highly people
oriented business, the primary challenge is to find a large pool of people with the right skill sets
and aptitude, followed by additional challenges of retention, talent management and development.
It is also necessary to enhance their skill and knowledge so that they become capable of assuming
higher responsibilities in the future. And no doubt, the staff of a Microfinance Institution should also
have a social bent of mind so that they can render their duties without any compromise on the social
mission of the organization.
As at the end of March 31, 2014, the number of employees in our Company stood at 351 across the
4 states that we have operations in. This is an increase of about 25% over the staff strength as at
Mar ’13.
The other challenge is to manage the attrition which is generally high amongst the Field Officers due
to their tendency to shift employment regularly for higher monetary benefits to other companies or
other lucrative industries. The compensation provided by our company is benchmarked to the market
and we also conduct performance appraisal to retain the best talent and take steps to promote and
reward high performing individuals. Out of the total employee strength mentioned above, about 60%
of employees have been with us for more than 2 years, which indicates the high level of employee
stickiness that has been the foundation on which the organization rests.
TRAINING
Training to staff is an essential prerequisite for the success of any organization. The field staffs in
a Microfinance Institution, who are the face of the organization to the customers, will have to be
trained adequately so that they are able to understand the financial requirements of the customers
and take necessary steps to satisfy such needs. In addition to this, the staff should also be made to
understand the policies and processes of the organization so that they are able to discharge their
duties without compromising any of the controls laid down by the organization.
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Our company imparts induction and also continuous training to our staff so that they have a clear
understanding of the processes followed and are able to discharge their duties effectively and
efficiently. The Company also equips them with necessary skills so that they stay prepared to shoulder
additional responsibilities which will help in their career progression. We have also prepared a
DVD (in vernacular language) containing the operational process in detail which is used to impart
induction training to the staff. Also the incumbent field staff is placed under senior field staff and he
/ she accompanies the senior staff during field visits which will enable him/her to understand the
process on the field under an able guidance.
INFORMATION TECHNOLOGY
In today’s era of Information Technology, a company needs to have a strong technology platform in
order to ensure smooth functioning. Given RBI imposed caps on Net Interest Margins, it becomes all
the more essential to leverage the benefits of technology as a means of cost reduction.
Since inception, our company had strongly relied on technology for capturing borrower data and
updating the collections which has resulted in addressing the operational and reporting requirements
in a better manner, reducing the man-hours of staff and productively utilizing the time of field staff.
Periodic review of the system is done by the Management team and annual review of the adequacy
of system controls is also done by our statutory auditors. This ensures that any changes required are
made to the system without any delays and the system has adequate controls to prevent any errors
of omission or commission.
Given the humungous volume of data entered into the system, we have segregated our transactional
and reporting data engines to ensure that there are no delays either on the transactional or MIS
fronts. We have also hired dedicated server space in an external server for data storage in addition
to a server hosted at Chennai, which acts as the backup. This ensures close to zero outage time and
demonstrates our preparedness to meet any eventualities.
TREASURY
The functioning of a financial institution will be seriously hampered in the absence of adequate
liquidity. This situation was very evident during the last 24 months or so when banks clamped up the
liquidity to the sector in the aftermath of the AP crisis. However, we have found normalcy returning
to the sector during the financial year under review and we managed to raise close to Rs. 256 Crores
of funds from banks and other NBFCs during this year. This is about 74% higher than the quantum
of funds mobilized in FY 2013.
In addition to mobilizing funds in the form of term loans from banks and financial institutions, the
company also participated in numerous Multi-Originator Securitization transactions structured by
IFMR Capital during the year. The Company also made its first ever NCD issuance during the year.
INTERNAL AUDIT
Setting up efficient and robust processes is only one side of the coin; it is equally important to ensure
that the processes are adhered to without any deviations. The Internal Audit function plays a major
role in ensuring adherence to defined processes. The Company had migrated to an in-house audit
team last year in order to bring in additional control mechanisms and flexibility to any changes that
19
may become necessary.
We found the in-house mechanism to be much more effective as compared to an outsourced
arrangement and we were also able to increase the scope of audit to cover documentation check in
addition to process compliance. It was also observed that small issues, if any, could be identified and
resolved then and there. As the auditors had previous experience with the processes and operations
of the organization, they were not only able to identify and resolve issues but were also able to
provide valuable suggestions on how issues can be avoided in the future.
RISK MANAGEMENT
Every organization is subject to the following risks - Credit risk (risk of delinquency), Operational risk
(risk of inadequate processes), Liquidity risk (risk of paucity in funding availability) and Sector risk
(political considerations and the like). The Risk Management framework of an organization serves to
minimize the impact in the event of any risks threatening to compromise the organizational strength.
Our company had put in adequate checks and balances to minimize these risk incidents and also to
counter-act as and when these risks occur. Adherence to RBI guidelines also acts as a risk mitigant.
Moreover all our processes are constantly evaluated and necessary changes are brought in from
time to time. This helps weed away untoward incidents and manage credit and operational risks. The
stringent borrower selection process ensures minimal credit risk and employee training coupled with
a robust audit mechanism helps manage operational risk. Deduplication against Credit bureau and
being one of the 2 lenders to a borrower helps prevent over leveraging and multiple indebtedness.
Our Company has also constituted the ALCO (Asset-Liability Committee) which meets at periodic
intervals to ensure that there is always a positive asset-liability pattern and funding is adequately
available to meet the financial obligations that become due in the forthcoming months. The ALM
of the organization is discussed in detail and necessary action taken to ensure that it is in line with
standard requirements.
Our company mandates strict adherence to regulatory guidelines comprising of KYC requirements,
transparency, usage of credit bureau, etc, and thereby expends all efforts to ensure orderly
functioning, which in a matured scenario, would be sufficient to address the sector risk. The
registration of MFIs as NBFC – MFIs, constant supervision of the Reserve Bank, the likelihood of
Microfinance Institutions Network being appointed as the Self-regulatory organization bode well for
the Microfinance Institutions and should bring in the required supervisory framework to the Industry.
The priority sector classification available to the banks for the loans lent to MFIs, fairly attractive
interest rates charged on the facilities, low level of risk given the recent regulatory pronouncements
should help the flow of liquidity to the sector.
We are at a moment of resurgence for the Microfinance Industry. It would not be out of place to hope
for the emergence of a stronger industry backed by the experiences of all past crises and we firmly
believe that it is not a forlorn hope.
Sd/-
S.V.Raja Vaidyanathan
Chennai | 6th June, 2014
20
CORPORATE
GOVERNANCE
21
REPORT ON CORPORATE GOVERNANCE
Asirvad believes that Governance is a continuous process and an integral part of any company’s
growth strategy and hence it is imperative to adopt the “best practices” that are followed in the
area of Corporate Governance across different industries and various geographies. The Company
emphasizes the need for full transparency and accountability in all transactions, in order to protect
the interests of its stakeholders.
Asirvad’s Board of Directors represent the shareholder’s interest in perpetuating a successful
business and optimizing long term financial returns in a manner consistent with applicable regulatory
and legal requirements and ethical considerations.
Asirvad is headed by an effective Board that exercises leadership, integrity and judicious judgment in
directing so as to achieve optimal returns for all the stakeholders keeping in mind the best interests
of the Company. The Board plays a critical role in overseeing how the management serves the short
and long term interests of shareholders and other stakeholders. This is reflected in the governance
practices, under which the company strives to maintain an active, informed and independent Board.
They ensure that the Company complies with all relevant laws, regulations, governance practices,
accounting and auditing standards. They identify key risk areas and key performance indicators of
the Company’s business and constantly monitor these factors.
Creating value that is not only profitable to the business but sustainable in the long run, which is
in the interests of all the stakeholders, obtained in an ethical manner is one of the cornerstones of
the Corporate governance at Asirvad. Asirvad encourages compliance to rules and regulations not
only in letter but also in spirit. The success of an organization is a reflection of the professionalism,
conduct and ethical values of its management and employees.
In terms of corporate governance philosophy, all statutory and significant material information is
placed before the Directors to enable them to effectively supervise the Company.
Asirvad’s Corporate Governance philosophy is based on the following principles:
•
•
•
•
•
•
•
Compliance to laws in both letter and spirit
Utmost transparency in dealings with all the stakeholders.
Clear communication of relevant information and high degree of disclosure levels.
Make a clear distinction between personal conveniences and corporate resources.
Communicate externally, in a truthful manner, about how the Company is running internally.
Have a simple, transparent and efficient corporate structure driven solely by business needs.
Create value for all stakeholders without compromising on ethical principles.
BOARD OF DIRECTORS AND COMPOSITION OF THE BOARD
The principal role of the board of directors – as representatives of the shareholders, is to oversee
the functioning of the organization and ensure that it continues to operate in the best interests of
all stakeholders. The Board of Directors are also responsible for defining the company’s purpose,
strategizing and drawing up plans to achieve that purpose, appointing the chief executive, monitoring
and assessing the performance of the executive team and also to assess and be accountable for their
own performance.
22
The following are the responsibilities of the Board of Directors:
• Keep the organization’s mission, values, and vision at the forefront of all business
decisions.
• Measure the performance of the institution under key areas of capital adequacy, asset
quality,profitability, liquidity management, and financial audit, which provides the board
with the capacity to adequately asses the strength of the institution’s internal controls.
• Strategic planning for the organization which involves drawing up long term goals and identifying
short term milestones in order to maintain effective tracking of the achievement of such long
term goals.
• Monitor fiscal management and maintain accountability to funders and donors.
• Review and approve the annual budget, major program plans, and organizational policies.
• Ensure that adequate resources are available to the organization to fulfill the goals.
• Determine and Monitor the Organization’s Products, Services and Programs.
• Define clear risk management and internal control policies and procedures.
Asirvad believes that an active, well-informed and independent Board is necessary to ensure highest
standards of corporate governance. The Board of Directors currently consists of 6 members, 2
representing the promoters, 3 Independent Directors with the other one being a Nominee Director of
the investor, M/s.Lok Capital LLC, Mauritius. There was no change in Directorship during the year.
During the year ended 31st March 2014, 4 Board Meetings were held on the following dates – 6th
June 2013, 25th September 2013, 6th December 2013 and 28th February 2014.
Particulars of the Attendance at the Board Meetings are given below:
S.No
Name of the Director
Category
Attendance
1
Mr. S. V. Raja Vaidyanathan
4/4
2
Mr. S. V. Krishnamurthy
Promoter Director and Non-executive
Director
4/4
3
Ms. Kalpana Iyer
Independent and Non Executive Director
3/4
4
Mr. S. Rathina Sabapathi
4/4
5
Mr. Rajivan Krishnaswamy
2/4
6
Mr. Venkatesh Natarajan
3/4
COMMITTEES OF THE BOARD
Board committees are formed to help the Board of Directors conduct its business more efficiently.
Committees offer individuals an opportunity to contribute their specific talents and expertise for
the overall betterment of the organization. Committees also serve as training grounds for board
members to take on positions of increasing responsibility. Board committees improve the quality and
efficiency of the Board by defining ways to address and resolve issues. The Committees also help
focus on specific aspects which may miss the attention of the Board given the paucity of time and
also on account of the multifarious issues that may be placed in front of the Board.
23
Asirvad’s Board has assigned considerable responsibilities to committees to work effectively.
The Board is assisted by Committees which oversee the various aspects relating to Operations,
Borrowing Strategy, Finance & Accounts, Compensation, etc. The Committees of the Board of
Directors of the Company are as under:
MANAGEMENT COMMITTEE
Management Committee establishes the fundamental values, the ethical principles and strategic
direction in which the organisation operates and ensures that everything the organization does
supports its vision, mission, purpose and aims. It is responsible for translating into action, the
policies and strategies of the Board and implementing the directives framed by the Board to achieve
corporate objectives of the company, and assisting the board in its decision making process with
respect to the company’s strategy, policies, code of conduct and performance targets, by providing
necessary inputs. The following are the objectives of the Management Committee
• Implementing the policies and code of conduct instituted by the Board.
• Managing the day to day affairs of the company in an efficient manner to achieve the targets and
goals set by the board, resulting in enhanced stakeholder value.
• Providing timely, accurate, substantive and material information, including financial matters and
exceptions, to the Board, Board-Committees and the Shareholders.
• Ensuring compliance of all regulations and laws and ensuring efficient service to the shareholders
and to protect shareholder’s rights and interests.
• Monitoring and evaluation all areas of the Organisation’s performance.
• Ensures that all monies and resources are properly used, managed and accounted for.
The Management Committee met 2 times on the following dates: 19th August 2013, 17th January
2014. The details of the composition, number of meetings held and attendance thereat during the
year are as under:
S.No.
Category
Attendance
1.
2/2
2.
Promoter Director
2/2
3.
Independent Director
2/2
4.
Mr. G. Srikanth
Chief Financial Officer
2/2
AUDIT COMMITTEE
The Audit Committee, being the sub-group of the full board, has an important role to play in the process
of financial monitoring and reporting. The audit committee is established with the aim of enhancing
confidence in the integrity of an organization’s processes and procedures relating to internal controls
and corporate reporting including financial reporting. Audit Committee provides an ‘independent’
reassurance to the board through its oversight and monitoring role, ensuring transparency and
accuracy of financial reporting and disclosures, effectiveness of external and internal audit functions,
robustness of the systems of internal audit and internal controls, effectiveness of anti-fraud, ethics
24
and compliance systems, and review of the functioning of the whistleblower mechanism. Audit
Committee may also play a significant role in the oversight of the company’s risk management
policies and programs. Both internal and external auditors report directly to the audit committee.
The functions of the audit committee include:
• Monitor and review the Company’s financial statements and internal controls.
• Supervise financial reporting process.
• Review financial results before placing them to the Board along with related disclosures and
filing requirements.
• Review adequacy of internal controls and performance of internal audit function.
• Discuss with management, the Company’s major policies with respect to risk assessment and risk
management.
• Ensure compliance with accounting standards with respect to financial statements.
Each Member of the Committee has relevant experience in the field of finance, banking and accounting
with a majority of the Members being professionals with long years of corporate work experience.
The Audit Committee consists of members who are not involved in the day to day functioning of the
organization in any executive capacity which lends an air of independence to its functioning. Such
independence helps the Committee members in impartially evaluating the financial aspects of the
company and taking necessary corrective action.
During the year under review, the audit committee met 4 times on the following dates – 6th June 2013,
25th September 2013, 6th December 2013, and 28th February 2014. The details of the composition,
number of meetings held and attendance thereat during the year are as under:
S.No.
Category
Attendance
1
Promoter Director
4/4
2
3/4
3
Ms. Kalpana Iyer
3/4
BORROWING COMMITTEE
The Borrowing Committee is in place to approve fresh borrowings from banks and financial
institutions and also to empower designated individuals in the senior management to finalize the
terms and conditions relating to the proposal under consideration. The Borrowing Committee met
25 times during the year on the following dates -30th April 2013, 30th May 2013, 11th June 2013, 21st
June 2013, 27th July 2013, 4th September 2013, 10th September 2013, 19th September 2013, 25th
September 2013, 4th October 2013, 21st October 2013, 24th October 2013, 28th October 2013, 4th
November 2013, 20th November 2013, 28th November 2013, 12th December 2013, 20th December
2013, 26th December 2013, 28th January 2014, 30th January 2014, 14th March 2014, 19th March
2014, 28th March 2014 and 29th March 2014 . The details of the composition, number of meetings
held and attendance thereat during the year are as under:
25
S.No.
Category
Attendance
1.
25/25
2
Promoter Director
25/25
3
Mr. S. Rathina Sabapathi
25/25
COMPENSATION COMMITTEE
Asirvad has a credible and transparent policy in determining and accounting for the remuneration
of the directors. The objective was to determine the correct remuneration package while striking
a balance between the interests of the company and the shareholders. The Committee consisted
of three members namely Mr. Krishnaswamy Rajivan, Mr. Venkatesh Natarajan and Mr. S. Rathina
Sabapathi. Compensation Committee Meeting was held on 6th June 2013 during the year under
review.
ASSET - LIABILITY COMMITTEE
The risk management framework is perhaps one of the most important parameters that define the
success of a financial services organization. A risk management programme establishes a process
of identifying and assessing the major risks covering all areas of the institution’s activities. This
includes all activities geared toward meeting its strategic, operational, reporting, and compliance
objectives. Management then develops ways to manage and mitigate these risks by implementing
a very strong system of internal controls. Management is accountable to the board of directors
for the state of the institution’s risk management and is responsible for reporting to the board of
directors its assessment of the institution’s risk and its efforts to manage and reduce this risk. The
board of directors is responsible to ensure that management has implemented a risk management
programme, that resources are allocated for risk management and internal controls, and that there
is adequate oversight of the audit function as one of the board of director’s responsibilities.
Asset Liability Committee is constituted to monitor the asset liability gap, strategize action to mitigate
the risk associated, ensuring adherence to the limits set by the Board as well as for deciding the
business strategy of the company (on the assets and liabilities sides) in line with the company’s
budget and decided risk management objectives.
During the year under review, ALCO met 12 times on 11th April 2013, 13th May 2013, 12th June 2013,
12th July 2013, 13th August 2013, 11th September 2013, 11th October 2013, 12th November 2013,
12th December 2013, 13th January 2014, 11th February 2014, 11th March 2014. The details of the
composition, number of meetings held and attendance thereat during the year are as under:
S.No.
Category
1.
12/12
2.
Mr. G. Srikanth
12/12
3.
Mr. B. Muralidharan Iyer *
Company Secretary
11/12
* Resigned w.e.f 17 April 2014
th
26
Attendance
REMUNERATION TO DIRECTORS
No remuneration was paid to any Non-Executive Director except as Sitting Fees for attending the
Board Meeting.
GENERAL BODY MEETING
During the year ended 31st March 2014, one Annual General Meeting was held and the details are
given below:
S.No.
Date
Time
Venue
1.
25th
September
2013
2.00.P.M.
Old No.2,New No.11,Habibullah Road,
T.Nagar,Chennai 600 017.
All the proposed resolutions, including special resolutions were passed by the shareholders as set
out in their respective notices.
GENERAL SHAREHOLDER INFORMATION AS ON 31ST MARCH 2014
Category
No of shares
% of
shareholding
Promoter
*Includes individual foreign national category
54,29,800
67.28
Overseas Corporate Body
26,05,855
32.29
30,000
0.37
5,200
0.06
80,70,855
100
Employees
Individual investors
Total
For and on behalf of the Board
Sd/
Chennai |6th June, 2014
27
(S.V. Raja Vaidyanathan)
CORPORATE
SOCIAL
RESPONSIBLITY
28
CORPORATE SOCIAL RESPONSIBLITY
This is my simple religion. There is no need for temples; no
need for complicated philosophy. Our own brain, our own heart is our
temple; the philosophy is kindness.
- Dalai Lama XIV
Faith in action is Love and Love in action is Service
- Mother Teresa
ADF is based on the philosophy of achieving sustainable economic development through philanthropy.
The inequality prevalent in our communities needs to be addressed if we are to achieve sustainable
development. And practices like philanthropy, volunteerism and development of socially-oriented
business products and services go a long way in facilitating this. We get a lot from the society and
it is our responsibility to ensure that social inequalities are remedied to the best possible extent
that lies within the realms of our capabilities. Through philanthropic contribution and support of
employee volunteerism, Asirvad Development Foundation aims in advancing social change through
educational, financial, humanitarian and health-related initiatives.
Education is a tool to refine human mind and intellect. However it is very unfortunate that a lot of
children are unable to afford education due to poverty. An educated child will turn out to be a worthy
citizen of the country. One of the primary objectives of Asirvad Development Foundation is to foster
the educational needs of the children who show a willingness to study but are prevented from doing
so due to lack of resources. One of the programs undertaken during this year was the financial
support provided to the underprivileged students to pursue their education.
The Student Scholarship Scheme commenced in the year 2010 and continued this year as well.
During 2013-14, ADF provided scholarships to 26 students amounting to Rs 1.30 lakhs. And it is very
heartening to note the exemplary progress that these students had made and their keenness to
pursue their education further with a view to becoming a responsible citizen of the country.
As part of education fostering activities, the Company also funded the set up of an English lab
during the current financial year. In the current scenario, English learning has become a mandatory
requirement and students who lack knowledge of English are always at a disadvantage. In order
29
to address, the Company had tied up with a trust called Disha Foundation and provided financial
assistance for setting up 2 English Language Labs at Eureka School, Parameswaramangalam(near
Kalpakkam) and Eureka School, Vembakkam(near Kanchipuram). We hope that this would pave the
way for the enhanced knowledge of the children in these schools and they will be able to face the
challenges of life with skill and confidence.
Improving health care access for those with limited incomes and resources
is one of the fundamental objects of the trust. Our trust facilitates
low-income, uninsured, and underserved to have access to good health
care. The Trust had conducted many health camps, eye camps during the
last couple of years. This year, it was decided to provide assistance to needy
individuals towards their surgery expenses so that they can get back their
lost health. We are glad to inform that we have been able to fund the open
heart surgery expenses of a two and half year child and even gladder to
inform that the child is doing well after the surgery. Such activities provide a
sense of fulfillment to us and enthuse us to work with renewed vigour for the holistic benefit of the
society.
In all these endeavours, we have received the generous and whole-hearted support and assistance
from many individuals, institutions and organizations, both Government and Non-Government, and
we would like to extend our heartfelt thanks to each and every one of them. Though our achievements
may seem small when compared to the immensity and imminence of the tasks we have already
committed ourselves to and the tasks awaiting and clamouring for our attention, we believe in the
philosophy of tiny drops making a mighty ocean.
I would also like to take this opportunity to extend my gratitude to the employees of Asirvad
Microfinance Private Limited, who have been extending their support, financial and non-financial,
in identifying the deserved people, seeking their concerns and updating the Management team and
finally in ensuring that the benefits provided by the trust reach the beneficiaries in a timely manner.
Our trust looks forward to and is geared up for the immense work awaiting us in the field of
social service that uplifts the economically weaker section, awakens the depressed, comforts the
deprived and rehabilitates the displaced. Our trust would continue to work towards the upliftment
of the economically weaker section and is confident of valuable contributions from all concerned in
furthering its objectives of catering to the health, education, science, culture, art, peace, philosophy
and friendship.
30
Sd/-
S.V. Raja Vaidyanathan
THE
ASIRVAD
JOURNEY
31
POST CRISIS GROWTH
2,000
1,888
47
1,800
1,600
35.9
1,400
30.3
1,200
Growth after successful
adaptation of new
regulations
45
40
35
30
1,025
1,010
1,000
25
21.3
794
800
50
624
20
12.9
600
15
400
10
200
151
29
5
5.1
0
0.5
FY08
FY09
FY10
FY11
AUM (Rs Mn)
FY12
FY13
FY14
PAT (Rs Mn)
Demonstration of Asirvad’s
ability to withstand stress
GROWTH CHART
100
250
94
90
85
219
80
211
78
70
173
60
200
64
150
50
49
113
126
40
100
30
20
10
-
19
2
FY08
50
48
6
FY09
FY10
Branch Network
32
FY11
FY12
FY13
Customer Growth (`000)
FY14
-
ROBUST FINANCIAL METRICS
40.0
37.3
35.0
30.0
29.3
25.0
24.3
20.4
20.0
15.0
12.8
12.7
13.0
11.2
10.0
5.0
-
9.2
3.6
18.7
11.5
8.6 8.7
7.1
5.3
4.4 4.7
3.1
2.1
FY10
FY11
Incomes (in ` Crs)
FY12
FY13
Financial Cost (in ` Crs)
FY14
Other Costs (in ` Crs)
PBT (in ` Crs)
FINANCIAL RATIOS
20.00%
16.00%
18.04%
18.00%
14.00%
16.05%
16.00%
12.00%
14.00%
13.81%
10.00%
12.00%
10.00%
11.10%
10.42%
8.00%
8.00%
8.18%
6.00%
0.00%
2.08%
3.50%
FY11
Return on Equity
2.72%
1.39%
FY12
FY13
Return on Assets
FY14
Opex / AUM
One of the lowest opex ratios resulting in
increased returns post the crisis
33
6.00%
4.00%
5.27%
4.00%
2.00%
7.41%
2.00%
0.00%
ROBUST NATURE OF ASIRVAD PORTFOLIO
100.00%
99.50%
Collection efficiencies
always close to 100%
99.00%
0.04%
0.03%
PAR 30 less than 5 bps
0.03%
0.02%
0.02%
0.01%
0.01%
34
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4
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3
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3
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g
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Ap
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3
3
-1
Fe
b
De
c-1
2
2
t-1
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2
-1
Au
g
12
nJu
Ap
r-1
2
0.00%
4
-1
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b
3
c-1
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3
t-1
Oc
Au
g
-1
3
13
nJu
Ap
r-1
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c-1
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Fe
b
2
2
t-1
Oc
Au
g
-1
12
nJu
Ap
r-1
2
98.00%
2
98.50%
AUDITOR’S
REPORT
35
INDEPENDENT AUDITORS’ REPORT
To the Members of Asirvad Microfinance Private Limited
Report on the Financial Statements
We have audited the accompanying financial statements of ASIRVAD MICROFINANCE PRIVATE
LIMITED (“the Company”), which comprise the Balance Sheet as at 31st March , 2014, the Statement
of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the
significant accounting policies and other explanatory information.
Management’s Responsibility for the Financial Statements
The Company’s Management is responsible for the preparation of these financial statements that give
a true and fair view of the financial position, financial performance and cash flows of the Company in
accordance with the Accounting Standards notified under the Companies Act, 1956 (“the Act“) (which
continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General
Circular 15/2013 dated 13th September , 2013 of the Ministry of Corporate Affairs) and in accordance
with the accounting principles generally accepted in India. This responsibility includes the design,
implementation and maintenance of internal control relevant to the preparation and presentation
of the financial statements that give a true and fair view and are free from material misstatement,
whether due to fraud and error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We
conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with ethical requirements and plan
and perform the audit to obtain reasonable assurance about whether the financial statements are
free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the
disclosures in the financial statements. The procedures selected depend on the auditor’s judgment,
including the assessment of the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor considers internal control relevant
to the Company’s preparation and fair presentation of the financial statements in order to design
audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness of the accounting estimates
made by the Management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the
aforesaid financial statements give the information required by the Act in the manner so required
and give a true and fair view in conformity with the accounting principles generally accepted in India:
36
(a) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2014;
(b) In the case of the Statement of Profit and Loss, of the profit of the Company for the year ended
on that date; and
(c) In the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on
that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor’s Report) Order, 2003 (“the Order”) issued by the Central
Government in terms of Section 227(4A) of the Act, we give in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the Order.
2. As required by Section 227(3) of the Act, we report that:
(a) We have obtained all the information and explanations which to the best of our knowledge
and belief were necessary for the purposes of our audit.
(b) In our opinion, proper books of account as required by law have been kept by the Company
so far as it appears from our examination of those books.
(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt
with by this Report are in agreement with the books of account.
(d) In our opinion, the Balance Sheet, the Statement of Profit and Loss, and the Cash Flow
statement Statement comply with the Accounting Standards notified under the Act (which
continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of
General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs).
(e) On the basis of the written representations received from the directors as on 31st March,
2014 taken on record by the Board of Directors, none of the directors is disqualified as on
31st March 2014 from being appointed as a director in terms of Section 274(1)(g) of the Act.
For DELOITTE HASKINS & SELLS
Chartered Accountants
(Firm Registration No. 008072S)
Sd/
Bhavani Balasubramanian
Partner
Chennai | 6th June, 2014 37
(Membership No. 22156)
ANNEXURE TO THE INDEPENDENT AUDITORS’ REPORT
(Referred to in paragraph 1 under ‘Report on Other Legal and Regulatory Requirements
section of our report of even date)
(i)Having regard to the nature of the Company’s business / activities / results during the year, clauses
(ii),(vi), (viii), (xii) and (xiv) to (xx) of paragraph 4 of the Order are not applicable to the Company.
(ii) In respect of its fixed assets:
(a) The Company has maintained proper records showing full particulars, including quantitative
details and situation of fixed assets.
(b) The fixed assets were physically verified during the year by the Management in accordance
with a regular programme of verification which, in our opinion, provides for physical verification of
all fixed assets at reasonable intervals. According to the information and explanation given to us,
no material discrepancies were noticed on such verification.
(c) The fixed assets disposed off during the year, in our opinion, do not constitute a substantial
part of the fixed assets of the Company and such disposal has, in our opinion, not affected the
going concern status of the Company.
(iii) The Company has neither granted nor taken any loans, secured or unsecured, to/from companies
firms or other parties covered in the Register maintained under Section 301of the Companies Act,
1956.
(iv) In our opinion and according to the information and explanations given to us, there is an adequate
internal control system commensurate with the size of the Company and the nature of its business
with regard to purchases of fixed assets and the rendering of services. During the course of our
audit, we have not observed any major weaknesses in such internal control system. The activities of
the Company do not involve purchase of inventory and sale of goods.
(v) To the best of our knowledge and belief and according to the information and explanations given
to us, there are no contracts or arrangements that needed to be entered in the Register maintained
under Section 301 of the Companies Act, 1956.
(vi) In our opinion, the internal audit carried out during the year by a firm of Chartered Accountants
appointed by the Management has been commensurate with the size of the Company and the nature
of its business.
(vii) According to the information and explanations given to us, in respect of statutory dues:
(a) The Company has generally been regular in depositing undisputed dues, including
Provident Fund, Employees’ State Insurance, Income-tax,Value Added Tax, Wealth Tax, Service
Tax, Cess and other material statuory dues applicable to it with the appropriate authorities. The
statuory dues towards Investors Education and Protection Fund, Customs Duty, and Excise Duty
are not applicable to the Company.
(b) There were no undisputed amounts payable in respect of Provident Fund, Employees’
State Insurance,Income-tax, Value Added Tax, Wealth Tax, Service Tax, Cess and other material
statuory dues in arrears as at 31st March, 2014 for a period of more than six months from the
date they became payable.
38
(c) There are no dues of Income-tax, Value Added tax, Wealth Tax, Service Tax and Cess which
have not been deposited as on March 31, 2014 on account of disputes.
(viii) The Company does not have accumulated losses at the end of the financial year and the Company
has not incurred cash losses during the financial year covered by our audit and in the immediately
preceding financial year.
(ix) In our opinion and according to the information and explanations given to us, the Company has
not defaulted in the repayment of dues to banks and financial institutions. The Company has not
issued any debentures.
(x) According to the information and explanations given to us, the Company has not given guarantees
for loans taken by others from banks and financial institutions.
(xi) In our opinion and according to the information and explanations give to us, the term loans have
been applied by the Company during the year for the purposes for which they were obtained, other
than temporary deployment pending applications
(xii) According to the information explanations given to us and on the basis of the maturity profile of
assets and liabilities with a maturity profile of one year, as given in the Asset Liability Management
Report, liabilities maturing in the next one year are in excess of the assets of similar maturity by
Rs.41,471,380
(xiii) During the year, the Company has not made any perferential allotment of shares to parties and
companies covered in the Register maintained under Section 301 of the Companies Act,1956.
(xiv) To the best of our knowledge and according to the information and explanations given to us, no
fraud by the Company and no material fraud on the Company has been noticed or reported during
the year.
For DELOITTE HASKINS & SELLS
Sd/
Partner
39
(Membership No. 22156)
To the Members Of Asirvad Microfinance Private Limited
The Board of Directors,
Asirvad Microfinance Private Limited,
Chennai.
Dear Sirs,
As required under the Non-Banking Financial Companies Auditor’s Report (Reserve Bank) Directions,
2008 issued vide Reserve Bank of India’s Notification No. DNBS.201/ DG(VL)– 2008 dated 18th
September, 2008, updated as on 30 June 2013, as amended, on the basis of our examination of the
books of account and the other records of Asirvad Microfinance Private Limited (“the company“) for
the year ended 31st March, 2014 in accordance with the Generally Accepted Auditing Standards and
according to the information, explanations and representations given to us by the Management, we
report as follows in terms of Paragraph 3 of the said Directions/ Notifications:
1.The Company is a Non-Banking Finance Company - Micro Finance Institution (NBFC-MFI).
The Company has received the Certificate of Registration under Non-Banking Financial Company
- Micro Finance Institutions (Reserve Bank) Directions, 2011, having registration number
N-07-00769 dated 4 October 2013 in lieu of the Certificate of Registrations Number N-0700769 dated 14 December 2007 (amended for conversation to NBFC- MFI) from the Reserve
Bank of India to carry on the business of Non-Banking Financial Institution witout accepting
deposits.
2. The Company is not an Asset Finance Company and hence Paragraph 3(A)(iii) of the said
Notification is not applicable to the Company.
3. The Reporting requirements under paragraph 3(B) of the said Notification are not applicable to
the Company since the Company is not accepting/ holding public deposits.
4. The Company is entitled to continue to hold the COR based on its asset/ income pattern as on
31st March, 2014, which has been computed in the manner laid down in the RBI Circular No.
DNBS (PD) C.C. NO. 81/ 03.05.002/ 2006-07 dated 19th October, 2006 and for which we are yet to
issue a seperate certificate as required in terms of para.15 of the Non-Banking Financial (NonDeposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007.
5. As per paragraph 3(C)(i) of the said Notification, a resolution was passed by The Board of
Directors on 6 June 2013 for non-acceptance of public deposits during the year ended 31 March
2014.
6. As per paragraph 3(C)(ii) of the said Notification, the Company has not accepted any public
deposits during the year ended 31 March 2014.
40
7. As per paragraph 3(C)(iii) of said Notification, the Company has complied with the
prudential norms relating to income recongnition, accounting standards, assets classification
and provisioning for bad and doubtful debts as applicable to it in terms of the Non-Banking
Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank)
Directions, 2007, as amended.
8. As per paragraph 3(C)(iv) of said Notification, the Capital Adequacy Ratio of the Company as on
31st March, 2013 as disclosed in the Return submitted to the Bank in form NBS-7 is 24.31% and
the same has been correctly computed and for which we have issued a seperate certificate dated
28th June, 2013. The Company is in the process of filling the forms NBS-7 for the year ended 31st
March, 2014 with the Reserve Bank of India.
9. The Company has submitted to the RBI the annual statement of capital funds, risk assets/
exposures and risk asset ratio (NBS-7) for the year ended 31st March 2013 on 28th June 2013,
which is within the stipulated period.
For Deloitte Haskins & Sells
Partner
41
Membership No. 22156
FINANCIAL
STATEMENTS
42
BALANCE SHEET AS AT 31ST MARCH 2014
Particulars
Note No.
As at 31st As at 31st
March, 2014 March, 2013
`
`
A. EQUITY AND LIABILITIES
1.Shareholders’ funds
(a). Share capital
(b). Reserves and surplus
3
4
8,07,08,550
24,04,29,553
8,04,08,550
19,19,84,472
2.Non-current liabilities
(a). Long-term borrowings
5
(b). Other long-term liabilities
6
(c). Long-term provisions
9
32,11,38,10327,23,93,022
54,89,95,904 6,00,79,592
26,59,976
35,59,80,801
1,05,960
17,07,266
3.Current liabilities
(a). Trade Payables
7
(b). Other current liabilities
8
(c). Short-term provisions
9
61,17,35,472
35,77,94,027
1,46,83,413
1,18,96,65,224
1,72,01,724
79,05,769
67,20,72,105
94,57,095
1,22,15,50,36168,94,34,969
2,15,44,23,936
1,31,96,22,018
B. ASSETS
1.Non-current assets
(a). Fixed assets
10
(i). Tangible assets
(ii). Intangible assets
(b). Non-current investments
(c). Deferred tax assets (net)
(d). Receivables under financing activity
(d). Long-term loans and advances
(e). Other Non-Current assets
11
12
16
13
14
47,46,750
46,28,535
3,68,002
5,23,482
51,14,75251,52,017
500,000
73,26,646
17,41,96,348
74,92,365
1,07,33,551
500,000
42,32,002
15,33,99,083
37,85,076
47,16,813
20,02,48,91016,66,32,974
2.Current assets
(a). Current investments
15
-
5,87,67,957
(b). Receivables under financing activity
16
1,06,20,40,706
53,56,78,923
(c). Cash and cash equivalents
17
80,47,29,964
50,85,99,941
(d). Short-term loans and advances
18
49,92,457
41,87,496
(e). Other current assets
19
7,72,97,147
4,06,02,710
1,94,90,60,2741,14,78,37,027
2,15,44,23,936
1,31,96,22,018
See accompanying notes forming part of the financial statements
In terms of our report attached.
(Registration No.008072S)
Chairman & Managing Director
Sd/Bhavani Balasubramanian
Partner
(Membership No.22156)
Sd/Venkatesh Natarajan
Director
Place : Chennai | Date : 6th June 2014
43
Sd/G.Srikanth
Sd/S. Rathina Sabapathi
Director
Sd/K. Nithya
Company Secretary
Sd/Kalpana Iyer
Director
STATEMENT OF PROFIT AND LOSS FOR
THE YEAR ENDED 31ST MARCH, 2014
Particulars
Note No
As at 31st
As at 31st
March, 2014
March, 2013
`
`
INCOME
Revenue from operations
Other income
20
21
34,30,81,804
2,99,60,487
19,33,99,032
1,06,14,049
37,30,42,291
20,40,13,081
EXPENSES
Finance costs
Employee benefit expenses
Depreciation and amortisation expense
Provision and Other Losses
Other Expenses
22
23
10
24
25
18,69,33,887
7,13,35,100
20,94,874
88,99,492
3,27,49,439
8,56,99,824
5,63,43,852
27,90,170
21,12,437
2,56,41,818
30,20,12,792
17,25,88,101
PROFIT BEFORE TAX
7,10,29,4993,14,24,980
TAX EXPENSE:
(a) Tax expense for current year
2,70,77,5001,10,41,972
(b) Tax expense relating to prior years
-
(c) Deferred tax
(30,94,644)
(9,65,341)
Net tax expense / (benefit)
2,39,82,856
1,00,76,631
PROFIT FOR THE YEAR
4,70,46,643
2,13,48,349
Earnings per share (of `10/- each)
Basic
30
Diluted
5.842.66
5.812.63
See accompanying notes forming part of the financial statements
Partner
Director
44
Sd/G.Srikanth
Director
Sd/K. Nithya
Company Secretary
Sd/Kalpana Iyer
Director
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31st MARCH 2014
Note 3 Share Capital
Particulars
As at 31st March, 2014
Number of
shares
Amount
(`)
Number of
shares
Amount
(`)
1,50,00,000
15,00,00,000
1,50,00,000
15,00,00,000
5,00,000
5,00,00,000
5,00,000
5,00,00,000
1,55,00,000
20,00,00,000
80,70,855
8,07,08,550
80,40,855
8,04,08,550
80,70,855
80,07,08,550
80,40,855
8,04,08,550
(a) Authorised
Equity shares of `10/- each
Redeemable preference shares of `100/- each
(b) Issued , Subscribed and Fully Paid Up
Equity shares of `10/- each
1,55,00,000
20,00,00,000
(i) Details of Share Capital Reconciliation
Reconciliation of the number of shares and amount outstanding at the beginning and at the end of the reporting period
Particulars
No of Shares
At the beginning of the year
ESOP (Refer Note 3(iv))
Oustanding at the end of the year
Amount
(`)
No of Shares
Amount
(`)
80,40,855
8,04,08,550
80,40,855
8,04,08,550
30,000
3,00,000
-
-
80,70,855
80,07,08,550
80,40,855
80,04,08,550
(ii) Details of Shares Held By Each Shareholder Holding More Than 5% shares:
Particulars
Class of Shares / Name of Shareholder
No of shares
held
% holding in
the class of
shares
No of shares
held
% holding in
the class of
shares
Equity / S V Raja Vaidyanathan
32,29,800
40.02%
31,99,800
39.79%
Equity / K Sethuraman (jointly with
Mrs. Susheela Sethuraman)
10,00,000
12.39%
10,00,000
12.44%
Equity / M/s Lok Capital LLC
26,05,855
32.29%
26,05,855
32.41%
(iii) Terms / Rights Attached To Equity Shares
The Company has only one class of Equity shares having a par value of Rs.10 per share. All these
shares have the same rights and preferences with respect to payment of dividend, repayment of
capital and voting. In the event of liquidation of the Company, the holders of equity shares will be
entitled to receive remaining assets of the Company, after distribution of all preferential amounts.
The distribution will be in proportion to the number of Equity shares held by the shareholders
Dividend proposed by the Board of Directors,if any is subject to the approval of the shareholders at
the Annual General Meeting, except in the case of interim dividend.
45
NOTES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2014
(contd.)
(iv) (Employees Stock Option Scheme (ESOP):
On 8th August 2011, the company established an Employees stock option scheme. Under the scheme,
the company is authorized to issue up to 2,04,500 equity shares of Rs.10 each to eligible employees.
Employees covered by the plan are granted an option to purchase shares of the company subject to
the requirements of vesting.
The following are the outstanding options as at 31st Mar 2014 :
Particulars
Date of grant
Grant
08-Aug-11
01-Nov-13
11.17
11.17
1,60,000
-
-
20,000
Less: Options forfeited / lapsed during the year
16,000
-
Options exercised as at CY
30,000
-
1,14,000
20,000
- Vested
60,663
6,250
- Yet to vest
53,337
13,750
Exercise price per option (`)
Total options granted and outstanding as at PY
Add:Options granted during the year
Options outstanding as at CY
Vesting Period:
In the case of the options granted to the Managing Director, 50% of the options vest on completion of
one year and the balance on completion of two years from the date of the grant. In the case of other
employees, the options vest in the following proportion over a three year period in such a manner
that 16.67% vests on completion of one year from date of grant, 41.66% each over the completion of
years two and three.
Exercise Period:
Within five years from the date of vesting.
Method of Settlement:
Equity settled. Cash settlement is at the option of the board.
The fair value of the share has been estimated on the date of the initial grant by an external firm
of consultants based on the audited financial statements for the year ended 31 March 2011. The
valuation was done based upon the weighted average of the per share value arrived at through the
Net Asset Value (NAV) approach and Profit Earning Capacity Method (PECV). The exercise price was
fixed at about a 50% discount to the fair value. The fair value of options, based on the valuation of the
independent valuer as on the date of initial grant i.e. 8 August 2011 is Rs.22.34 per share.
In accordance with the Guidance Note issued by the Institute of Chartered Accountants of India,
the difference between the fair value of Rs.22.34 and the exercise price per share of Rs.11.17 on
options granted will be charged to Profit and Loss account over the vesting period of the options as
employee compensation cost and will be carried forward as Share options outstanding account and
disclosed separately in the Balance Sheet. Accordingly an amount of Rs.1,363,338 (which includes
employee stock option expenses relating to earlier years amounting to Rs.655,866) has been debited
46
(contd.)
to employee compensation cost and credited to share option outstanding account. As and when the
options are exercised and the shares are transferred to the eligible employees by the Trust, the
corresponding amount would be transferred from share options outstanding account to the General
reserve.
Note 4 Reserves and surplus
Particulars
As at 31st
March, 2014
`
As at 31st
March, 2013
`
(a) Securities premium account (Refer Note 4(i))
Opening balance
12,34,44,244
Add: Premium on shares issued (Refer Note 4(i))
3,70,200
Less: Utilised during the year
-
12,34,44,244
-
12,38,14,444
12,34,44,244
2,12,09,198
94,09,329
-
1,69,39,528
42,69,670
-
3,06,18,527
2,12,09,198
-
13,63,338
(3,35,100)
-
Closing Balance
(b) Statutory Reserve (Refer Note 4(ii))
Opening balance
Add: Additions during the year
Less: Utilised / transferred during the year
Closing balance
(c) Share options outstanding account
Opening balance
Add: Amounts recorded on grants during the year (Refer 3(iv))
Transfered to Securities premium account on exercise
10,28,238-
Closing balance
(d) General reserve
Opening balance
Add: Transfered from surplus in Statement of Profit and Loss
Less: Utilised / transfered during the year for:
Closing balance
(e) Surplus in Statement of profit and loss
Opening balance
Add: Profit for the year
Less: Transfer to Statutory Reserve (Refer 4(ii))
Closing balance
35,92,758
-
-
35,92,758
-
35,92,758
35,92,758
4,37,38,272
4,70,46,643
(94,09,329)
2,66,59,593
2,13,48,349
(42,69,670)
8,13,75,586
4,37,38,272
24,04,29,553
19,19,84,472
(i)Securities premium on allotment of shares
Name of the
Shareholder
No of Shares
Premium per share
As at 31 March 2013
`
M/s Lok Capital LLC
17,16,966
30.48
5,23,33,124
5,23,33,124
M/s Lok Capital LLC
8,88,889
80.00
7,11,11,120
7,11,11,120
S. V. Raja Vaidyanathan
10,000
12.34
1,23,400
-
S. V. Raja Vaidyanathan
20,000
12.34
2,46,800
-
12,38,14,444
12,34,44,244
Total
47
As at 31 March 2014
`
(contd.)
Note 5 Borrowings - secured
Particulars
As at 31st
March, 2014
`
Term Loans
-From banks
-From others
Others (Refer Note 31) - From Banks
As at 31st
March, 2013
`
1,11,29,92,888
53,99,00,007
-
59,78,77,339
39,16,88,411
1,88,906
1,65,28,92,895
98,97,54,656
(i) Security on Term Loans
All loans are secured by hypothecation of the Book Debts receivable under Micro Finance Loans.
Further, the Company has provided a specific lien on deposits with Banks(Refer (a) below) and also
have deposits with Financial Institutions for Term Loans(Refer (b) below).
Particulars
As at 31st
March, 2014
`
a) Deposits with Banks towards lien
As at 31st
March, 2013
`
14,61,74,302
13,79,56,848
-
70,00,000
b) Deposits with Financial Institutions for Term Loans
(ii) Details of Terms of Repayment- Secured Loans
(a) Current Year
Maturity (`)
Particulars
Base Rate
As at 31st
March, 2014
1,50,57,537
Base Rate+Spread
Fixed
Number of
Instalments
< 1 Year
36
42,24,201
> 1 Year
1,08,33,333
1,09,79,35,354
1 to 36
67,01,91,730
42,77,43,624
53,99,00,007
1 to 21
42,94,81,060
11,04,18,947
1,10,38,96,991
54,89,95,904
1,65,28,92,895
b) Previous Year
Maturity (`)
Particulars
Base Rate
As at 31st
March, 2013
Number of
Instalments
< 1 Year
> 1 Year
1,11,11,104
2
1,11,11,104
-
Base Rate+Spread
59,78,77,339
3 to 32
30,96,41,285
28,82,36,054
Fixed
38,05,77,307
6 to 18
31,28,32,560
6,77,44,747
63,35,84,949
35,59,80,801
98,95,65,750
(iii) Details of Terms of Repayment- Securitization Loans
a) Current Year
Maturity (`)
Particulars
Fixed
As at 31st
March, 2014
65,21,05,962
65,21,05,962
48
Number of
Instalments
1 to 21
< 1 Year
1 - 2 Years
61,23,34,898
3,97,71,064
61,23,34,898
3,97,71,064
(contd.)
b) Previous Year
Maturity (`)
Particulars
Fixed
As at 31st
Number of
March, 2013
Instalments
34,08,79,792
1 to 15
34,08,79,792
Others - From banks - Fixed interest
< 1 Year
1 - 2 Years
34,08,79,792
-
34,08,79,792
-
Number of
As at 31st
As at 31st
instalments
March, 2014
March, 2013
`
`
Current portion 3
-
Non-Current portion 3
1,88,906
-
-
-
1,88,906
Note 6 Other long-term liabilities
Particulars
As at 31st
As at 31st
March, 2014
March, 2013
`
`
Grants (Refer Note 29)
Advance subscription money recevied towards allotment of 14% Secured,
Redeemable, Non-convertible Debentures of a face value of Rs.500,000 each
(Refer Note 38)
Total
79,592
1,05,960
6,00,00,000
-
6,00,79,592
1,05,960
Note 7 Trade Payables
Particulars
Other than Acceptances (Refer Note 33)
As at 31st
March, 2013
`
`
1,34,06,643
Bonus
Total
49
As at 31st
March, 2014
68,01,319
12,76,770
11,04,450
1,46,83,413
79,05,769
(contd.)
Note 8 Other Current Liabilities
Particulars
As at 31st
As at 31st
March, 2014
March, 2013
`
`
Current Maturities of Long term debt (Refer Note 5(i & ii) )
-From Banks
67,44,15,931
30,98,30,191
-From Others
42,94,81,060
32,39,43,664
Interest accrued but not due on borrowings
1,44,51,763
64,43,002
Income received in advance (Unearned revenue)
4,94,30,653
2,86,70,684
13,27,489
4,50,280
7,97,500
19,04,506
69,75,000
-
1,27,85,828
8,29,778
Total 1,18,96,65,224
67,20,72,105
Other payables
- Statutory remittances (Contributions to PF and ESIC and
Withholding Taxes)
- Advances from customers
- Advance from MAS Financial Services Limited (Refer Note 35)
- Others
Note 9 Provisions
Particulars
Provision for compensated absences
Provision for Standard Assets
Provision for Credit Enhancement
Total
As at 31st
As at 31st
March, 2014
March, 2013
`
`
9,82,118
9,18,553
1,23,58,523
68,37,010
65,21,059
34,08,798
1,98,61,700
1,11,64,361
(i) Short term provisions
Particulars
Total
As at 31st
As at 31st
March, 2014
March, 2013
`
`
9,82,118
9,18,553
1,06,16,558
53,03,020
56,03,048
32,35,522
1,72,01,724
94,57,095
(ii) Long term provisions
Particulars
Total (i+ii)
50
As at 31st
As at 31st
March, 2014
March, 2013
`
`
17,41,965
15,33,990
9,18,011
1,73,276
26,59,976
17,07,266
1,98,61,700
1,11,64,361
(contd.)
(iii) Loan Portfolio And Provision For Standard And Non-Performing Assets
a) Current Year
Asset Classification
Standard Assets
Loan
Provision for
Loan
Outstanding as
Assets - as at
Outstanding as
at 31st March
31st March 2014
at 31st March
2014 (Gross)
(Net)
2014 (Net)
`
`
`
1,23,58,52,149
1,23,58,523
1,22,34,93,626
Sub-Standard Assets
-
-
-
Doubtful Assets
-
-
-
Loss Assets
-
-
-
1,23,58,52,149
1,23,58,523
1,22,34,93,626
Total
b) Previous Year
Loan
Provision for
Loan
Outstanding as
Assets - as at
Outstanding as
at 31st March
31st Mar 2013
at 31st March
2013 (Gross)
`
(Net)
`
2013 (Net)
`
Standard Assets
68,37,01,029
68,37,010
67,68,64,019
Sub-Standard Assets
-
-
-
Doubtful Assets
-
-
-
Loss Assets
-
-
-
68,37,01,029
68,37,010
67,68,64,019
Total
(iv) Changes in provisions
a) Current Year
Particulars
As at 1st Apr 2013
`
Additional provision
`
Utilization / Reversal
`
As at 31st March 2014
`
Provision for standard
assets under
financing activity
68,37,010
55,21,513
-
1,23,58,523
Provision for
sub-standard and
doubtful assets under
financing activity
-
-
-
-
Provision for Credit
enhancements on
assets de-recognized
34,08,798
31,12,261
-
65,21,059
1,02,45,808
86,33,774
-
1,88,79,582
Total
(b) Previous Year
Particulars
Provision for standard assets under
financing activity
Provision for sub-standard and doubtful
assets under financing activity
Provision for Credit enhancements on
assets de-recognized
Total
51
As at
Additional
Utilization /
As at 31st March
1st April 2012
`
provision
`
Reversal
`
2013
`
53,71,970
14,65,040
-
68,37,010
37,016
-
37,016
-
25,58,612
8,50,186
-
34,08,798
79,67,598
23,15,226
37,016
1,02,45,808
52
2,94,894
4 Air
Conditioners
20,57,609
1,81,73,994
Total (A+B)
1,51,575
37,87,234
37,87,234
1,51,575
19,06,034
-
Total (B)
1,43,86,760
4,91,784
7,48,145
32,200
5,85,901
3,24,288
2,15,500
Additions
2,53,236
6,500
6,500
2,46,736
-
-
-
64,250
22,520
1,59,966
Deletions
Gross block
1 Software
Intangible
Assets
Total (A)
6 Electrical
Equipments
32,32,732
31,59,810
3 Office
Equipments
5 Vehicles
33,40,395
2 Furnitures &
Fixtures
Balance as at
01.04.2013
38,67,145
Tangible Assets
Description
1 Computers
S.
No.
Fixed Assets
Note 10
1,99,78,367
39,32,309
39,32,309
1,60,46,058
4,91,784
39,80,877
3,27,094
36,81,461
36,42,163
39,22,699
Balance as at
31.03.2014
1,30,21,977
32,63,752
32,63,752
97,58,225
1,06,312
18,21,482
1,36,847
20,73,504
24,26,756
31,93,324
Balance as at
01.04.2013
20,94,874
3,07,055
3,07,055
17,87,819
53,619
4,94,857
26,253
4,66,631
3,88,227
3,58,232
Depreciation
/amortisation
expense for
the year
2,53,236
6,500
6,500
2,46,736
-
-
-
64,250
22,520
1,59,966
Elimination
on disposal
of assets
1,48,63,615
35,64,307
35,64,307
1,12,99,308
1,59,931
23,16,339
1,63,100
24,75,885
27,92,463
33,91,590
Balance as at
31.03.2014
Accumulated Depreciation / Armortisation
(contd.)
51,14,752
3,68,002
3,68,002
47,46,750
3,31,853
16,64,538
1,63,994
12,05,576
8,49,700
5,31,089
Balance as at
31.03.2014
51,52,017
5,23,482
5,23,482
46,28,535
3,85,472
14,11,250
1,58,047
10,86,306
9,13,639
6,73,821
Balance as at
31.03.2013
Net block
Amount in `
53
Total (A+B)
1,79,84,529
38,22,869
38,22,869
Total (B)
1,41,61,660
1,52,684
32,02,097
1 Software
Intangible Assets
Total (A)
6 Electrical
Equipments
5 Vehicles
2,94,894
27,53,441
3 Office
Equipments
4 Air Conditioners
33,40,395
2 Furnitures &
Fixtures
Balance as at
01.04.2012
44,18,149
Tangible Assets
Description
1 Computers
S.
No.
Fixed Assets - Previous Year
Note 10
-
-
8,40,369
64,265
64,265
7,76,104
3,39,100
30,635
-
4,06,369
Additions
6,50,904
99,900
99,900
5,51,004
-
-
-
-
-
5,51,004
Deletions
Gross block
1,81,73,994
37,87,234
37,87,234
1,43,86,760
4,91,784
32,32,732
2,94,894
31,59,810
33,40,395
38,67,145
Balance as at
31.03.2013
1,04,30,148
28,88,008
28,88,008
75,42,140
80,206
13,37,443
1,11,314
11,35,398
21,11,894
27,65,885
Balance as at
01.04.2012
27,90,170
4,16,230
4,16,230
23,73,940
26,106
4,84,039
25,533
9,38,106
3,14,862
5,85,294
Depreciation/
Amortisation
expense for
the year
1,98,341
40,486
40,486
1,57,855
-
-
-
-
-
1,57,855
Elimination
on disposal of
assets
1,30,21,977
32,63,752
32,63,752
97,58,225
1,06,312
18,21,482
1,36,847
20,73,504
24,26,756
31,93,324
Balance as at
31.03.2013
Accumulated Depreciation / Amortisation
(contd.)
51,52,017
5,23,482
5,23,482
46,28,535
3,85,472
14,11,250
1,58,047
10,86,306
9,13,639
6,73,821
Balance as at
31.03.2013
75,54,381
9,34,861
9,34,861
66,19,520
72,478
18,64,654
1,83,580
16,18,043
12,28,501
16,52,264
Banlance as at
31.03.2012
Net block
Amount in `
(contd.)
Note 11 Non-Current Investments
Particulars
As at 31st
March, 2014
`
As at 31st
March, 2013
`
Non Trade Investments - Unquoted
50,000 (P.Y - 50,000) Equity Shares of Alpha Micro Finance Consultants Private
Limited of Rs.10/- each
Aggregate amount of unquoted investments
5,00,000
5,00,000
5,00,000
5,00,000
5,00,000
5,00,000
Note 12 Deferred Tax Asset (Net)
Particulars
As at 31st
March, 2014
`
As at 31st
March, 2013
`
Deferred Tax Asset
40,09,722
22,18,207
-
-
21,15,758
11,05,985
3,18,648
2,98,025
Provision for Sub-Standard and Doubtful Assets
Provision for Credit Enhancements on Assets De-recognized
Employee Benefits
Depreciation
Net Deferred Tax Asset
8,82,518
6,09,785
73,26,646
42,32,002
Note 13 Long-term loans and advances
Particulars
As at 31st
March, 2014
`
Advance income tax (net of Provision for Tax ` 43,695,490) (P.Y. Net of Provision for
Tax- ` 166,10,559) - Unsecured, considered good
Total
As at 31st
March, 2013
`
74,92,365
37,85,076
74,92,365
37,85,076
Note 14 Other Non-Current Assets
Particulars
As at 31st
March, 2014
`
Prepaid Finance Charges
As at 31st
March, 2013
`
49,45,553
Interest accrued on Deposits with Banks/ Others
Total
37,97,631
57,87,998
9,19,182
1,07,33,551
47,16,813
Note 15 Current investments (At lower of cost and fair value, unless otherwise stated)
Particulars
As at 31st
March, 2014
`
As at 31st
March, 2013
`
Investment in mutual funds
NIL (As at 31 March, 2013- 38,413) units of Reliance Liquidity Fund - Daily Dividend
reinvestment Option
Aggregate market value of unquoted investments
54
-
5,87,67,957
-
5,87,67,957
-
5,87,67,957
(contd.)
Note 16 Receivables under Financing Activity
Particulars
As at 31st
March, 2014
`
As at 31st
March, 2013
`
Unsecured
Microfinance Loans
Business Loans
1,23,58,52,149
68,37,01,029
3,84,905
53,76,977
1,23,62,37,054
68,90,78,006
1,23,62,37,054
68,90,78,006
-
-
Of the above
- Considered Good
- Considered Doubtful
(i) Receivables under financing activity - current
Particulars
Microfinance Loans
Business Loans
As at 31st
March, 2014
`
As at 31st
March, 2013
`
1,06,16,55,801
53,03,01,946
3,84,905
53,76,977
1,06,20,40,706
53,56,78,923
(ii) Receivables under financing activity - Non-current
Particulars
Microfinance Loans
As at 31st
March, 2014
`
17,41,96,348
15,33,99,083
-
-
17,41,96,348
15,33,99,083
65,21,05,962
34,08,79,792
Business Loans
(iii) Managed Micro finance Loans (Refer Note 5 (iii) (a) & 5 (iii) (b))
As at 31st
March, 2013
`
(iv) Securitization of Assets
Particulars
Total number of Loan Assets Securitized during the year
55
For the Year ended
31st March 2014
`
For the Year ended
31st March 2013
`
97,914
72,549
Book value of Loan Assets Securitized during the year
86,27,60,506
45,07,30,817
Sale Consideration received during the year
91,70,06,876
47,83,56,408
Gain / (Loss) on the Securitization transaction recognised on P&L
2,13,37,339
67,27,468
Gain / (Loss) on the Securitization transactions deferred
3,29,09,031
2,08,98,123
Quantum of Credit Enhancement provided on the transactions in the
form of deposits
8,13,37,198
5,51,72,688
Quantum of Credit Enhancement as at year end
8,13,37,198
5,51,72,688
(contd.)
Note 17 Cash and cash equivalents
Particulars
Cash on hand
As at 31st
March, 2014
`
As at 31st
March, 2013
`
29,88,046
1,829
44,96,41,815
18,62,78,576
-
11,56,80,000
35,21,00,103
20,66,39,536
80,47,29,964
50,85,99,941
Balances with banks
- In current accounts
- In deposits accounts - Free of Lien
- In deposits accounts - Under Lien (Refer Note (ii) below)
Notes:
45,26,29,86130,19,60,405
(i) Of the above, the balances that meet the definition of Cash and cash equivalents
as per AS 3 Cash Flow Statements is
(ii) Deposit under lien represents
- Deposits amounting to Rs.236,976,881 (As at 31 March, 2013 Rs.144,956,848) with respect to the Term Loans obtained
by the Company from Banks and Financial institutions.
- Deposits amounting to Rs. 115,123,222 (As at 31 March 2013 Rs.61,682,688) placed as cash collateral with Assignees
towards Assets De-recognised.
(iii) Balance with Bank includes Lien Marked deposits amounting to Rs 178,424,052 which have a maturity of more than
12 months from the Balance sheet date.
Note 18 Short - term loans and advances (Unsecured, considered good)
Particulars
Security deposits
Loans and advances to employees
As at 31st
March, 2014
`
As at 31st
March, 2013
`
42,22,500
34,29,000
7,69,957
4,45,600
-
3,12,896
49,92,457
41,87,496
Balances with government authorities
- Service Tax credit receivable
Note 19 Other current assets
Particulars
As at 31st
March, 2013
`
Interest Accrued on Deposits with Banks/ Others
1,09,59,227
99,19,941
Interest Accrued but not due on Receivables from Financing Activities
2,01,09,084
1,29,60,368
70,54,313
33,42,663
Prepaid Finance Charges
2,51,53,635
1,42,04,173
Other Receivables
1,40,20,888
1,75,565
7,72,97,147
4,06,02,710
Commission receivable
56
As at 31st
March, 2014
`
(contd.)
Note 20 Revenue from operations
Particulars
For the year ended
31st March, 2014
`
For the year ended
31st March, 2013
`
Income from Financing Activities
Interest on Loan
Interest on Loan- Microfinance Loans*
25,94,33,369
15,13,50,743
7,21,046
25,43,439
26,01,54,415
15,38,94,182
1,63,58,856
1,30,14,353
-
30,880
Interest Income - on Deposits with Banks and Financial Institutions
2,28,36,532
1,30,09,751
Profit on securitisation
4,17,33,857
1,25,95,192
19,98,144
8,54,674
8,29,27,389
3,95,04,850
34,30,81,804
19,33,99,032
Interest on Loan- Business Loans
Other operating income
Documentation Fees- Microfinance Loans
Documentation Fees - Business Loans
Registration Fees
* Includes interest received on loans sourced by business partner ` 5,22,764 (Refer Note 36)
Note 21 Other income
Particulars
(a) (Loss)/ Income from mutual funds - dividend/ redemption
For the year ended
31st March, 2014
`
(9,66,921)
For the year ended
31st March, 2013
`
9,15,767
(b) Other non-operating income
- Marketing commission (Refer Note 37)
1,05,66,038
-
- Other commission
2,01,10,072
93,73,788
26,368
37,494
2,24,930
2,87,000
2,99,60,487
1,06,14,049
- Grant (Refer Note 29)
- Miscellaneous Income
Note 22 Finance costs
Particulars
For the year ended
31st March, 2014
`
For the year ended
31st March, 2013
`
Interest expense on term loans
- From Banks
- From Financial Institutions
- From Others
8,79,60,562
3,40,10,214
3,73,768
-
7,46,96,876
4,47,18,050
2,31,24,964
49,11,716
7,77,717
20,59,844
18,69,33,887
8,56,99,824
Other borrowing costs
- Loan processing fee
- Bank Charges
57
(contd.)
Note 23 Employee Benefits Expenses
Particulars
For the year ended
31st March, 2014
`
Salaries and wages
Contributions to provident and other funds
Gratuity (Refer Note 27)
Expense on employee stock option (ESOP) scheme*
Staff Welfare Expenses
Total
For the year ended
31st March, 2013
`
6,39,63,168
5,16,98,495
49,93,379
39,64,918
1,61,366
91,093
13,63,338
-
8,53,849
5,89,346
7,13,35,100
5,63,43,852
* Includes employee stock option expense relating to the earlier years ` 6,55,866
Note 24 Provisions and Other Losses
Particulars
Provision for Sub Standard & Doubtful Assets
Provision for Credit Enhancements on Assets De-Recognised
Loss Assets Written off
58
For the year ended
31st March, 2014
`
For the year ended
31st March, 2013
`
55,21,513
14,65,040
-
(37,016)
31,12,261
8,50,186
2,65,718
(1,65,773)
88,99,492
21,12,437
(contd.)
Note 25 Other Expenses
Particulars
For the year ended
31st March, 2013
`
Electricity Charges
6,95,030
6,43,338
Water
2,22,736
1,94,935
Rent including lease rentals
66,81,255
57,51,919
Repairs and maintenance - Buildings
7,56,463
7,34,120
Repairs and maintenance - Machinery
1,39,639
1,36,300
Repairs and maintenance - Others
18,81,462
17,02,682
Insurance
11,03,439
8,47,762
Rates and taxes
82,550
24,932
Communication
12,23,542
11,97,397
Travelling and conveyance
74,86,420
61,97,433
Printing and stationery
41,28,341
25,49,951
Directors’ Sitting Fees
80,000
67,000
8,60,443
4,66,678
Donations and contributions (Refer Note 34)
20,00,000
10,00,000
Legal and professional
34,88,401
25,76,833
-
-
Business promotion
Payments to auditors
- Statutory Audit
9,00,000
7,00,000
- Tax Audit
1,00,000
1,00,000
- Certification Charges
1,00,000
3,00,000
- Out of Pocket Expenses and statutory levies
2,09,600
1,76,663
Miscellaneous expenses
59
For the year ended
31st March, 2014
`
6,10,118
2,73,875
3,27,49,439
2,56,41,818
CASH FLOW STATEMENT FOR THE
YEAR ENDED 31st MARCH, 2014
For the year ended
For the year ended
March 31st, 2014
March 31st, 2013
``
A. Cash Flow from Operating Activities
Profit Before Tax
Adjustments for:
Depreciation/Amortisation
Expense on employee stock option scheme
Portion of captital grant taken to income based on depreciation
of underlying asset
Provision for standard receivables under Financing Activity
Provision for Sub-standard/doutful receivables under
Financing Activity
Provision for Credit enhancements on assets under Financial
Acitivity
Loan Assets written off
Interest on Term Loans
Dividend Income
Loss on Sale of investments
Interest on Deposits
Interest Income from borrowers
Income from processing and membership fees
Income from securitization of receivables
Operating Profit before Working Capital changes
7,10,29,499
3,14,24,980
20,94,87427,90,170
13,63,338
(26,368)
55,21,513
(37,494)
14,65,040
-
(37,016)
31,12,2618,50,186
63,565
(3,97,307)
2,65,718
(1,65,773)
16,30,31,206
7,87,28,264
-
(9,15,767)
9,66,921
(2,28,36,531)
(1,30,09,751)
(26,01,54,415)
(15,38,94,182)
(1,83,57,000)
(1,38,99,907)
(4,17,33,857)
(1,25,95,192)
(9,56,59,276)
(7,96,93,749)
(54,74,24,766)
(8,04,961)
(2,85,06,432)
(14,54,60,567)
(31,12,26,170)
(11,47,922)
(14,09,75,867)
4,31,235
(1,69,50,283)
(5,27,43,884)
(8,50,18,580)
(37,97,631)
67,77,644
48,88,24,286
4,03,626
25,83,02,486
(63,46,28,164)
(12,00,42,647)
(15,50,22,445)
25,30,05,699
2,66,04,456
5,42,46,370
1,27,43,740
(2,66,00,000)
(7,44,56,083)
14,44,94,463
1,37,91,828
2,76,25,470
1,01,11,605
(1,00,00,000)
(46,96,50,344)
(84,75,364)
Changes in Working Capital:
Adjustments for (increase) / decrease in operating assets:
Receivables under Financing Activity
Short-term loans and advances
Other current assets
Bank deposits under lien
Securitization of assets (Net)
Other Non-Current assets
Adjustments for increase/(decrease) in operating liabilities:
Increase in Trade Payables
Increase in other current liabilities
Cash Flow generated from/(Used in) Operations
Interest paid on Term Loans
Interest received from borrowers
Income from Processing and membership fees
Income from securitisation of receivables
Interest Income on Deposits
Net Income Tax (Paid)/refunds
Net Cash Flow generated from/(Used in) Operations
60
For the year ended
For the year ended
March 31st, 2014
March 31st, 2013
``
B. Cash Flow from Investing Activities
Purchase of Fixed Assets
Purchase from current investments (Net)
Proceeds from Sale of Current Investments (net)
Dividend received
(20,57,609)
-
5,78,01,036
-
(8,40,369)
(5,77,43,409)
3,87,800
5,57,43,427
(5,81,95,978)
2,58,27,60,506
(2,01,85,19,233)
3,35,100
1,47,33,56,408
(1,15,91,28,724)
-
Net Cash flow from Financing Activities (C)
56,45,76,373
31,42,27,684
Net increase in Cash and Cash Equivalents (A + B + C)
15,06,69,456
24,75,56,342
Net Cash Flow generated from/(used in) Investing Activities C. Cash Flow from Financing Activities
Proceeds from long-term borrowings
Repayment of long-term borrowings
Proceeds from Issue of equity shares
Cash and Cash Equivalents at the Beginning of the Year30,19,60,405
5,44,04,063
Cash and Cash Equivalents at the End of the Year
45,26,29,861
30,19,60,405
Reconciliation of Cash and Cash equivalents with Balance Sheet:
Cash and cash equivalents as per balance sheet
(Refer note 17)
Less: Bank Balances not considered as cash and cash equivalents
as defined in AS3 Cash flow statements
- Balances held as margin money or security against borrowings,
guarantees and other commitments
50,85,99,941
35,21,00,103
20,66,39,536
45,26,29,861
30,19,60,405
Partner
Director
61
80,47,29,964
Sd/G.Srikanth
Director
Sd/K. Nithya
Company Secretary
Sd/Kalpana Iyer
Director
SIGNIFICANT
ACCOUNTING
POLICIES
62
(contd.)
NOTE 1 : SIGNIFICANT ACCOUNTING POLICIES
a. Nature of the Operations
Asirvad Micro Finance Private Limited (‘the Company’) was incorporated in August 2007.
The Company is engaged in extending micro credit advances to poor women, who are otherwise
unable to access finance from the main stream banking channels. The Company provides small
value collateral free loans up to Rs. 20,000 for a tenor of 12 months / 18 months/ 24 months with
weekly /fortnightly/ monthly repayments. The Company follows the Grameen model with suitable
adoptions using the joint liability framework, where each member of the group guarantees the loan
repayment of the other members of the group.
The Company also uses its branch infrastructure to market products / services to the members of
the self help groups on behalf of other agencies for an agreed fee/ commission.
NOTE 2 – BASIS OF ACCOUNTING AND PREPARATION OF FINANCIAL STATEMENTS
The financial statements of the Company have been prepared in accordance with the Generally
Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards
notified under Section 211(3C) of the Companies Act, 1956 (“the 1956 Act”) (which continue to be
applicable in respect of Section 133 of the Companies Act, 2013 (“the 2013 Act”) in terms of General
Circular 15/2013 dated 13 September, 2013 of the Ministry of Corporate Affairs) and the relevant
provisions of the 1956 Act/ 2013 Act as applicable. The financial statements have been prepared on
accrual basis under the historical cost convention. The accounting policies adopted in the preparation
of financial statements are consistent with those followed in the previous year.
The Company follows the prudential norms for income recognition, asset classification and
provisioning as prescribed by the Reserve Bank of India for Systemically Important Non-deposit
taking Non-Banking Finance Companies (NBFC-ND-SI) or more stringent norms as indicated in
Note 2(n) below.
a. Use of Estimates
The preparation of the financial statements requires the Management to make estimates and
assumptions considered in the reported amounts of assets and liabilities (including contingent
liabilities) as of the date of the financial statements and the reported income and expenses during the
reporting period such as provisioning for employee benefits, provisioning for receivables, provisioning
for credit enhancement for assets de-recognized, useful lives of fixed assets, provisioning for taxation
etc. Management believes that the estimates used in the preparation of the financial statements
are prudent and reasonable. Future results could differ due to these estimates and the differences
between the actual results and the estimates are recognised in the periods in which the results are
known / materialise.
b. Fixed Assets and Depreciation
Tangible assets:
Fixed assets are stated at cost less accumulated depreciation / amortization and impairment losses,
where applicable. The cost of fixed assets comprises its purchase price net of any trade discounts
63
(contd.)
and rebates, any import duties and other taxes (other than those subsequently recoverable from the
tax authorities), any directly attributable expenditure on making the asset ready for its intended use.
Depreciation on fixed assets is provided on the written down value method basis, pro-rata to the
period of use of the assets at the rates prescribed under Schedule XIV of Companies Act, 1956.
Tangible Assets
Percent
Office Equipments
13.91
Computers
40.00
Furniture & Fittings
18.10
Vehicles
25.89
Intangible assets:
Software is acquired primarily from third-party vendors and is in ready-to-use condition. Costs for
acquiring such software are capitalized. The capitalized software is amortized based on the rates
prescribed under Schedule XIV of Companies Act, 1956.
Intangible Assets
Intangible assets - Software
Percent
40.00
Assets individually costing less than Rs.5,000 each are fully depreciated in the year of capitalisation.
c. Impairment
The carrying values of assets are reviewed at each balance sheet date if there is any indication of
impairment based on internal / external factors. An impairment loss is recognized wherever the
carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater
of the asset’s net selling price and value in use. Value in use is arrived at by discounting the future
cash flows to their present value based on an appropriate discount factor. When there is indication
that an impairment loss recognized for an asset in earlier accounting periods no longer exists or may
have decreased, such reversal of impairment loss is recognized in the Statement of Profit and Loss,
except in case of revalued assets.
d. Investments
Investments which are long term in nature are stated at cost less provision where necessary for
diminution, other than temporary, in the value of investments.
Current investments are carried individually, at the lower of cost and fair value.
e. Receivables under Financing Activity
All loan exposures to borrowers with installment structure are stated at the full agreement value
after netting off
i. Unearned income
ii. Installments appropriated up to the year-end
64
(contd.)
f. Revenue Recognition
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the
Company and the revenue can be reliably measured.
i. Interest income on loans given (including loans sourced by business partners on behalf of the
Company) is recognized under the internal rate of return method. Income on Non-performing
Assets is recognized only when realized and any interest accrued on such assets is de-recognized
by reversing the unrealized interest income already recognized.
ii. Loan processing fee is recognized over the life of the loan on a straight line basis.
iii. In respect of the receivables securitized / assigned, losses arising are recognized in the
Statement of Profit and Loss immediately upon receipt of sale consideration. Gains arising from
the transaction are amortized over the tenor of the transaction. Reversal of gains proportionate
to the amount prepaid by the borrowers is also provided for during the year of prepayment.
iv. Commission income on marketing of products is recognised accrual basis when the service is
rendered taking into account the number of units sold at the rates applicable according to the
terms of the agreement.
v. Commission income on the other services is recognised on accrual basis when the service is
rendered at the rates applicable in accordance with the terms of the agreement.
vi. Fee income on loans sourced on behalf of other business partners is recognized on accrual basis
according to the terms of the agreement.
vii. Interest income on deposits is recognized on a time proportion basis taking into account the
amount outstanding and the rate applicable.
viii.All other income is recognized on an accrual basis, when there is no uncertainty in the ultimate
realization / collection.
g. Prepaid Finance Charges
Prepaid finance charges represents ancillary costs incurred in connection with the arrangement
of borrowings; including borrowings sanctioned but not availed, and is amortized on a straight
line basis, over the tenure of the underlying receivables built out of such borrowings. Unamortized
borrowing costs remaining, if any, are fully expensed off as and when the related borrowing is prepaid
/ cancelled.
h. Employee Benefit:
Employee benefits include provident fund, employee state insurance scheme, gratuity fund and
compensated absences
(i) Defined Contribution Plan
Provident Fund and Employees State Insurance: The Company’s contribution to provident fund
and employee state insurance scheme are considered as defined contribution plans and are
charged as an expense based on the amount of contribution required to be made and when
services are rendered by the employees.
(ii) Defined Benefit Plan
Gratuity: For defined benefit plans in the form of gratuity fund and post-employment medical
65
(contd.)
benefits, the cost of providing benefits is determined using the Projected Unit Credit method,
with actuarial valuations being carried out at each balance sheet date. Actuarial gains and
losses are recognised in the Statement of Profit and Loss in the period in which they occur. The
liability for Gratuity is funded with the Life Insurance Corporation of India and the contribution
thereof paid / payable is absorbed in the accounts.
(iii) Short-term Employee Benefits
The undiscounted amount of short-term employee benefits expected to be paid in exchange for
the services rendered by employees are recognised during the year when the employees render
the service. These benefits include performance incentive and compensated absences which
are expected to occur within twelve months after the end of the period in which the employee
renders the related service.
(iv)Compensated absences
Compensated absences which are not expected to occur within twelve months after the end of
the period in which the employee renders the related service are recognised as a liability at the
present value of the defined benefit obligation as at the balance sheet date less the fair value of
the plan assets out of which the obligations are expected to be settled.
i. Deferred Employee Stock Compensation Cost
Deferred employee stock compensation cost for stock options is recognized on the basis of generally
accepted accounting principles and is measured as the difference between the estimated intrinsic
value of the company’s shares on the date of grant of the stock options and the exercise price to be
paid by the option holders. The compensation expense, if any, is amortized uniformly over the vesting
period of the options.
j. Service Tax Input Credit
Service tax input credit is accounted for in the books in the period when the underlying service
received is accounted and when there is reasonable certainty in availing / utilizing the same.
The Finance Act, 2011 had brought in amendments to CENVAT Credit Rules, 2004, whereby only 50%
of the CENVAT credit availed will be available for utilization towards payment of service tax under
‘Banking and other financial services’ by a banking company and financial institution.
k. Insurance Claims
Insurance claims are accrued for on the basis of claims admitted and to the extent that the amount
recoverable can be measured reliably and it is reasonable to expect ultimate collection.
l. Taxes on Income
Current tax is the amount of tax payable on the taxable income for the year as determined in
accordance with the provisions of the Income Tax Act, 1961.
Deferred tax is recognised on timing differences, being the differences between the taxable income
and the accounting income that originate in one period and are capable of reversal in one or more
subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or
66
(contd.)
substantively enacted as at the reporting date. Deferred tax liabilities are recognised for all timing
differences. Deferred tax assets are recognised for timing differences of items other than unabosrbed
depreciation and carry forward losses only to the extent that reasonable certainty exists that sufficient
future taxable income will be available against which these can be realised. Deferred tax assets and
liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and
the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each
balance sheet date for their realisability.
m. Provisions and Contingencies
A provision is recognised when the Company has a present obligation as a result of past events and
it is probable that an outflow of resources will be required to settle the obligation in respect of which
a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to
their present value and are determined based on the best estimate required to settle the obligation
at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the
current best estimates. Contingent liabilities are disclosed in the Notes. Contingent assets are not
recognised in the financial statements.
n. Classification & Provisions of Loan Portfolio
Loans are classified and provided for as per the Company’s Policy and Management’s estimates,
subject to the minimum classification and provisioning norms required as per the Non-Banking
Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank)
Directions, 2007, duly taking into account the requirements of Non-Banking Financial Company –
Micro Finance Institutions (Reserve Bank) Directions, 2011.
i. Classification of Loan
Period of Overdue
Standard Assets
Non Performing Assets (NPA)
Not Overdue and Overdue for less than 30 days
Sub-Standard Assets
Overdue for 30 days and more but less than 90 days
Doubtful Assets
Overdue for 90 days and more
Loss Assets
Assets which are identified as loss asset by the Company or
the internal auditor or the external auditor or by the
Reserve Bank of India
“Overdue” refers to interest and / or principal and / or installment remaining unpaid from the day it
became receivable.
67
(contd.)
ii. Provisioning Norms for Loans
Provisioning Percentage
used by the Company for
FY 2013-14
Provisioning Percentage
used by the Company for
FY 2012-13
1.00%
1.00%
a. Overdue for more than 30 days
and more but less than 60 days
10.00%
10.00%
b. Overdue for more than 60 days
25.00%
25.00%
a. Overdue for more than 90 days
50.00%
50.00%
Loss Assets (Overdue for more than
120 days) [Refer note below]
Fully charged off to P&L
Fully charged off to P&L
Standard Assets
Non Performing Assets (NPA)
Sub-Standard Assets
Doubtful Assets
Note: (a) Income on NPAs is recognized only when realized.
(b) Accounting Standard 4 as applicable to MFIs allows charge off of assets only when the MFI’s contractual right
to receive cashflows from that loan expires. The Loss assets which are overdue for more than 120 days satisfy this
criterion and hence they are charged off fully to P&L.
o. Accounting for Grants
Grants relating to depreciable fixed assets are treated as deferred income over the useful life of the
asset in proportion to which depreciation on the related assets is charged.
p. Accounting for Retention Bonus
The retention bonus is accounted, on the basis of completion of the specified period of service by the
employees in accordance with the stipulated policies of the Company. The policy is applicable only to
employees who have joined on or before March 31, 2011.
q. Leases
Leases are classified as finance or operating leases depending upon the terms of the lease
agreements:
(i) Finance Leases
Finance leases, which effectively transfer substantially all the risks and benefits incidental to the
ownership of the leased item, are capitalized at the lower of the fair value or present value of the
minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease
payments are apportioned between the finance charges and the reduction of the lease liability
based on the implicit rate of return. Finance charges are charged directly against income.
68
(contd.)
(ii) Operating Leases
Lease of assets under which all the risks and rewards of ownership are effectively retained by the
lessor are classified as operating leases. Lease payments under operating leases are recognized
as an expense on a straight-line basis over the lease term.
r. Provision for Credit Enhancements on Assets Derecognized
Provision for credit enhancements on assets derecognized is made based on Management estimates
@ 1% of the outstanding amount of assets de-recognized from the books of the company as at the
Balance Sheet Date.
s. Cash and cash equivalents (for purposes of Cash Flow Statement)
Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short –term
balances (with an original maturity of three months or less from the date of acquisition), highly
liquid investments that are readily convertible into known amounts of cash and which are subject to
insignificant risk of changes in value.
t. Cash flow Statement
Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items
and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals
of past or future cash receipts or payments. The cash flows from operating, investing and financing
activities of the Company are segregated based on the available information.
Note 26 - Contingent Liabilities
Contingent liability : On account of Corporate Guarantees provided by the Company
Particulars
Current Year (in `)
Previous Year (in `)
On account of managed portfolio
68,025,000
-
Total
68,025,000
-
Accounting Standard Disclosures
Note 27 - Employee Benefit Plans
a. Defined contribution plans
The Company makes Provident Fund, Superannuation Fund and Employee State Insurance
Scheme contributions which are defined contribution plans, for qualifying employees. Under the
Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund
the benefits. The Company recognised Rs.3,042,771 (Year ended 31 March, 2013 Rs. 2,626,360)
for Provident Fund contributions and Rs.1,226,252 (Year ended 31 March, 2013 Rs. 1,267,553)
for Employee State Insurance Scheme contributions in the Statement of Profit and Loss. The
contributions payable to these plans by the Company are at rates specified in the rules of the
schemes
69
(contd.)
b. Defined benefit plans – Gratuity (included as part of ‘Gratuity’ in Note 23 Employee benefits
expenses
The Company has a funded gratuity scheme with LIC for its employees as at 31 March 2014. The
premium payable to LIC is accounted for in the Statement of Profit and Loss and the details for the
current financial year are given as under:
Particulars
31 March 2014
Projected Benefit obligation at the beginning of
the year
31 March 2013
1,223,887
991,862
Service Cost
398,154
232,025
Interest Cost
97,911
-
5,375
-
-
-
1,725,327
1,223,887
Actuarial (Gains)/ Losses
Benefits Paid
Projected Benefits Obligation at End of the Year
Particulars
Change in Plan Assets
31 March 2014
31 March 2013
Fair Value of plan assets at the
beginning of the year
1,103,234
1,012,141
Expected returns on plan assets
at the beginning of the year
119,981
-
Employer’s contribution
864,203
91,093
-
-
220,093
-
2,307,511
1,103,234
Present value of obligation
1,725,327
1,223,887
Fair value of plan assets at the
year end
2,305,511
1,103,234
Liability recognised in the
Balance Sheet *
(582,184)
120,653
Benefits paid
Actuarial Gains / (Losses)
Fair Value of Plan Assets at the
end of the year
Amounts recognised in the
Balance Sheet
* On a conservative basis, the excess of plan assets over plan liabilities is not considered in these
financial statements
70
(contd.)
Cost of the Defined Benefit
Plan for the year
Current service cost
31 March 2014
31 March 2013
398,154
91,093
97,911
-
Expected return on plan assets
(119,981)
-
Net acturial (Gains) / Losses
recognized in the year
(214,718)
-
Net cost recognized in the
Statement of Profit & Loss
161,366
91,093
Interest on obligation
Assumptions
Discount Rate
Future Salary Increase
Mortality Rate
Attrition Rate
Expected rate of return on Plan
Assets
31 March 2014
31 March 2013
8.00%
8.00%
5.00%
5.00%
LIC 1994 - 96 rates
LIC 1994 - 96 rates
1 - 3%
1 - 3%
NA
NA
Notes:
1. The estimate of future salary increase takes into account inflation, seniority, promotion and other
relevant factors.
2. Discount rate is the prevailing market yields used by LIC for similar computations.
3. The entire Plan Assets are managed by the Life Insurance Corporation of India (LIC). The details
with respect to the composition of investments in the fair value of Plan Assets have not been
disclosed in the absence of the necessary information.
4. In the absence of the relevant information from the actuary, no disclosure has been made for
experience adjustments.
Note 28 Segment information
The Company is primarily engaged in the business of Micro financing. All the activities of the
Company revolve around the main business. Further, the Company does not have any separate
geographic segments other than India. As such there are no separate reportable segments as per
AS-17 “Segmental Reporting”.
Note 29 Grants
The Company had received a capacity building grant of Rs. 5,69,000 during the financial year
2008-09 from Small Industries Development Bank of India(SIDBI). The amount was received
towards capital grant for purchase of fixed assets, and was accordingly spent for the stated
purpose. An amount of Rs. 26,368 (P.Y Rs. 37,494) has been recognized as income during the year
being the proportionate depreciation on assets purchased, out of capital grant received.
71
(contd.)
Note 30 Earnings per Share
For the Year
ended
31 March 2014
For the year
ended
31 March 2013
47,046,643
21,348,349
80,50,800
80,40,855
72,119
80,000
81,04,507
81,20,855
Earnings per Share – Basic
5.84
2.66
Earnings per Share – Diluted
5.81
2.63
10
10
Particulars
Profit after Tax (`)
Weighted Average Number of Equity Shares (Basic)
Add: Dilutive effect relating to ESOP
Weighted Average Number of Equity Shares (Diluted)
Face value of Shares
Note 31 Disclosure requirements under Accounting Standard 19 on ‘Leases’
Financial lease comprises lease of vehicles under a Hire purchase scheme. The future cash flows
are disclosed below:
Rentals (`)
Present Value (`)
As at 31 March
2014
As at 31 March
2013
As at 31 March
2014
As at 31 March
2013
-
191,745
-
188,906
-
191,745
-
188,906
Rentals
payable
under Hire purchase
agreement
- Within one year
- Later than one
year and not later
than five years
Less: Future finance
charges
2,839
-
188,906
Operating leases taken by the company are cancellable at the option of the Company and hence do
not require disclosure under Accounting Standard 19 on Leases.
72
(contd.)
Note 32 Related party transactions
Details of related parties:
Name of Related parties and the nature of relationship (with respect to parties with whom the
Company had transactions during the year)
Nature of Relationship
Name of the Party
For the Year ended
-For the Year ended
31 March 2014
31 March 2013
Mr. S V Raja Vaidyanathan,
Chairman & Managing
Director
Mr. S V Raja Vaidyanathan,
Chairman & Managing
Director
Entities holding substantial interest
Lok Capital LLC
Lok Capital LLC
Entities where Company has control
Asirvad Development
Foundation
Asirvad Development
Foundation
Key Management Personnel
Transactions with related parties
Transaction
Remuneration
Assistance
Related Party
Mr. S V Raja
Vaidyanathan
Asirvad
Development
Foundation
For the Year ended
31 March 2014
For the Year ended
31 March 2013
`
`
7,400,000
4,800,000
2,000,000
1,000,000
2,000,000
1,000,000
Balance as at year end
Assistance payable
Asirvad
Development
Foundation
Notes:
(a). Related party relationships are as identified by the Management and relied upon by the Auditors.
(b). Lok Capital’s shareholding as on 31 March 2014 was 32.29%
Note 33 Micro, Small and Medium Enterprises
Based on the extent of information available with the management, there are no transactions with
Micro and Small Enterprises. This has been relied upon by the auditors.
Note 34 Assistance
The Company has approved an assistance of Rs. 2,000,000 (Previous Year - Rs. 1,000,000) to Asirvad
Development Foundation for the year ended 31st March 2014. The amount is disclosed under
‘Donations and contributions’ in Note 25 Other expenses.
73
(contd.)
Note 35 Agreement with MAS Financial Services Limited
The Company has entered into agreements dated 28 February 2014 and 18 March 2014 with MAS
Financial Services Limited (MAS) whereby the Company will undertake to disburse and manage
loans on behalf of MAS. The Company will pay an interest of 15.25% to MAS and shall be entitled to
retain the interest over and above the specified percentage for the services rendered. The Company
received advances amounting to Rs.750 lacs from MAS during 2013-14 towards this activity of which
Rs.680.25 lacs were disbursed. The balance of Rs.69.75 lacs is disclosed under Note No.8 Other
Current Liabilities. The Company is liable for the collection of the loans and any losses arising on
default of the loans is to be borne by the Company. The Company has also given a cash collateral of
Rs.93.75 lacs in the form of fixed deposits and a guarantee to the extent of loan outstanding at any
point of time.
Note 36 Agreement with Adhikar Microfinance Private Limited
The Company has entered into an agreement dated 15 December 2013 with Adhikar Microfinance
Private Limited (Adhikar) whereby Adhikar will undertake to source the prospective borrowers,
disburse the loans and manage the loans on behalf of the Company. The loans will be recorded in
the books of the Company and the interest income and fee on such loans shall be receivable by the
Company. The Company shall pay a fee compensation equal to interest of 6% on the loans to Adhikar
for the services rendered. The Company has disbursed such loans amounting to Rs.52,635,000 with a
portfolio outstanding of Rs.50,780,274 as on 31 March 2014, which is included in ‘Microfinance Loans’
in Note 16 Receivables under Financing Activity. The fee paid to Adhikar during this period amounted
to Rs. 100,531 which has been included under Miscellaneous expenses in Note 25 Other expenses.
Note 37 Marketing Commission
The Company has entered into an agreement with Inthree Financial Services for marketing their
solar lamps to its members. The Company receives a commission for the lamps sold at the volume
based slab rates specified according to the terms of the agreement. The Company has received an
amount of Rs.10,566,038 towards commission for the marketing of solar lamps.
Note 38 Issue of Debentures
Subsequent to the Balance Sheet date, the Company has allotted 120 Redeemable Non-convertible
Debentures (NCDs) of Rs.5,00,000 each having an interest rate of 14%. The NCDs are secured by
charge on specific loans and receivables of the Company. The Debentures are repayable in April
2016.
RBI Disclosures – Disclosures in accordance with provisions of RBI
Note 39 Disclosure Pursuant to Reserve Bank of India Notification DNBS.200/CGM (PK) –
2008 dated 1st August 2008
i. Capital Adequacy Ratio
Particulars
Capital adequacy (%)
74
As at 31 March 2014
As at 31 March 2013
16.83%
23.41%
(contd.)
ii. Exposure to Real Estate Sector, both Direct and Indirect
The Company does not have any direct or indirect exposure to the real estate sector as at 31st
March 2014 and 31 March 2013.
iii. Asset Liability Management
Maturity Pattern of Certain Items of Assets and Liabilities as at 31st March 2014:
Upto 1
month (`)
Over 1
month to 2
months (`)
Over 2
months to 3
months (`)
Over 3
months to 6
months (`)
Over 6
months to 1
year (`)
Over 1 year to
3 years (`)
Over 3
year to 5
years(`)
Over 5
years(`)
Total(`)
Borrowing
from
Banks*
48,685,330
61,342,179
76,077,888
181,381,289
306,929,245
437,743,624
833,333
-
1,112,992,888
Market
Borrowing
44,448,733
43,604,255
41,809,254
121,841,070
177,777,748
110,418,947
-
-
539,900,007
Advances@
125,232,557
122,271,276
112,762,347
292,501,194
409,658,237
174,196,348
-
-
1,236,621,959
Investment
-
-
-
-
-
-
-
500,000
500,000
Liabilities
Assets
Note:
* - Excludes Interest Accrued but Not Due on Loans to Borrowers
@ - Excludes Interest Accrued but Not Due on advances
Note 40 Disclosure Pursuant to Reserve Bank of India Notification DNBS.193G (VL) – 2007
dated 22nd February 2007
S.No.
Particulars
As at March 31st 2014
Amount
Amount
outstanding in
overdue in
`
`
Liabilities:
(1) Loans and Advances availed by the NBFC inclusive of
interest accrued thereon but not paid
A Debentures
- Secured
-
-
- Unsecured
-
(other than falling within the meaning of public
deposits)
-
-
-
-
1,652,892,895
-
D Inter-Corporate Loans and Borrowings
-
-
E Commercial Paper
-
-
F Other Loans
-
-
B Deferred Credits
C Term Loans
75
(contd.)
S.No.
Particulars
Amount
outstanding as
on 31st March
2014 in
`
Assets:
(2) Break-up of Loans and Advances including Bills Receivables (other
than those included in 3 below)
A Secured
B Unsecured
1,236,621,959
(3) Break-up of Leased Assets and Stock on Hire and Other Assets
counting towards AFC activities
i Lease Assets including Lease rentals accrued and due:
(a) Financial Lease
-
(b) Operating Lease
-
ii Stock on Hire including Hire Charges under Sundry Debtors:
(a) Assets on Hire
-
(b) Repossessed Assets
-
iii Other Loans counting towards AFC activities:
(a) Loans where Assets have been repossessed
-
(b) Loans other than (a) above
-
(4) Break-up of Investments
I Quoted:
i Shares: (a) Equity
-
(b) Preference
-
ii Debentures and Bonds
-
iii Units of Mutual Funds
-
iv Government Securities
-
v Others (please specify)
I Unquoted:
(b) Preference
-
-
-
-
v Others
-
Long term Investments
I Quoted:
76
-
-
(b) Preference
-
-
-
-
v Others (please specify)
-
I Unquoted:
-
(b) Preference
-
-
-
-
v Others
-
* Represents application money received against issue of Debentures
(5) Borrower Group-wise Classification of Assets financed as in (2) and (3) above
S.No.
Particulars
As at 31st March 2014
Amount in ` (Net of Provisions) (Refer Note below)
Secured
Unsecured
Total
-
-
-
1 Related Parties
(a) Subsidiaries
(b) Companies in the same
group
-
(c) Other Related Parties
2 Other than Related Parties
Total
-
-
-
1,217,357,472
1,217,357,472
-
1,217,357,472
1,217,357,472
Note:
The amount of Assets financed represents the net owned portfolio outstanding after adjusting the provisions for
standard, substandard and doubtful assets.
6. Investor Group-wise classification of all Investments (Current and Long term) in Shares and
Securities (both quoted and unquoted):
S.No.
Category
1 Related Parties
(a) Subsidiaries
77
Market Value /
Breakup Value
or Fair Value or
Net Asset Value
(Company's Share)
Book Value
(b) Companies in the same group
(c) Other Related Parties
2 Other than Related Parties
(Refer note)
Total
5,84,894
5,00,000
5,84,894
5,00,000
Note:
The Company’s share of the Net Asset Value of Alpha Micro Finance Consultants Private Limited has been calculated
based on the unaudited financial statements of the Company as at 31st March 2014
7
Other Information
Related Parties
Other than Related
Parties
i Gross Non-Performing Assets
-
3,81,046
ii Net Non-Performing Assets
-
-
iii Assets acquired in satisfaction of debt
-
-
Note 41
Disclosure of Fraud to Reserve Bank of India Notification DNBS.PD.CC.No.256/03.10.042/011-2012
dated 2nd March 2012
NIL
Note 42 NBFC - ND
The Company is a Systemically Important Non-deposit taking Non-Banking Finance Company
(NBFC-ND-SI). The Company has received Certification of Registration dated 14 December 2007
from the Reserve Bank of India to carry on the business of Non Banking Financial Institution without
accepting deposits.
Note 43 Previous Year Figures
Previous year’s figures have been reclassified to conform with the current year’s classification /
presentation, wherever applicable.
For and behalf of the Board of Directors
Sd/-
Sd/-Sd/-
Venkatesh Natarajan
S Rathinasabapathi
DirectorDirector
Sd/-
Sd/-
Sd/-
Kalpana Iyer
K. Nithya
G Srikanth
Director
Company Secretary
78
DISTRICTS COVERED
Operating through 94 branches in 30 districts in 4
States
*CHENNAI
THIRUVALLUR
*COIMBATORE
THIRUVARUR
DINDUGAL
TUTICORIN
*ERODE
TRICHY
KANCHIPURAM
VIRUDHUNAGAR
KANYAKUMARI
IDUKKI
*MADURAI
KOTTAYAM
NAGAPATTINAM
*PALAKKAD
NAMAKKAL
BOLANGIRI
NILGIRIS
KALAHANDI
PUDUKOTTAI
KORAPUT
SALEM
MALKANGIRI
SIVAGANGA
SONEPUR
*THANJAVUR
SURAT
THIRUPUR
*THIRUNELVELI
* Divisional Offices
79
www.asirvadmicrofinance.co.in
REGISTERED OFFICE
1st Floor, Desabandhu Plaza 47, Whites Road,
Royapettah, Chennai - 600 014
+91 44 4351 0081
CORPORATE OFFICE
New no.11, Old no.2, Habibullah Road
T.Nagar, Chennai - 600 017
+91 44 4212 4493

Annual Report 2013

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