LivE bETTER LivEs wiTh Us - Samasta Microfinance AR 2017-18 Final...women live better lives by...

SamaSta microfinance Limited | 23rd ANNUAL REPORT 2017-18

LivE bETTER LivEs wiTh Us

Between the pages

Corporate Overview 01-21 About IIFL Holdings Limited 02 | Business Segments 04 | Global Presence 05 |

Samasta Microfinance Limited at a glance 06 | Our Product Offerings 08 |

Our growing presence 09 | Financial Highlights 10 | Spreading smiles: Customer

success stories 12 | Investing in the latest technology 14 | Building foundation for

excellence 16 | Message from the Managing Director 18 | Board of Directors 20

Financial Statements 44-116 Standalone Financials 44 | Consolidated Financials 81

Statutory Reports 22-43 Board’s Report 22 | Management Discussion and Analysis Report 37 |

Secretarial Audit Report 41

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Economically independent women are a huge asset for society. being self-reliant and financially secure enables them to bring positive change in society and contribute significantly to the nation’s development.

At samasta Microfinance Limited, we help

women live better lives by providing them with

credit support. it is especially for those who have

limited access to the formal banking system. we

are pledged to bring women in the mainstream

economy and fulfil their aspirations.

Microfinance not only gives women access to

credit, but also supports the financial inclusion

initiative of the Government. Our loan products

and services fulfil the requirements of our

customers. we focus on generating more smiles

with presence across the length and breadth

of the country. we are committed to contribute

significantly towards increasing financial inclusion

in the country through our strong and efficient

business operations.

with an enthusiastic and strong workforce, we aim

to achieve enhanced value for our customers and

shareholders.

About iiFL holdings Limited

iiFL was founded in 1995 by two professionally qualified, driven entrepreneurs,

Nirmal Jain and R venkataraman, with the vision of becoming the most respected company in the

financial services space.

iiFL is mainly engaged in the business of loans and mortgages, wealth and asset management, and capital

market related activities. The loans and mortgages business comprises the non- banking finance, housing

finance and micro finance verticals. The wealth management business includes wealth and asset

management. The capital market business consists of retail and institutional broking and investment banking.

iiFL brings deep industry expertise, innovative solutions, ability to reinvent and a differentiated digital experience

to the table, which has led to the Company’s phenomenal success across business segments.

2

Samasta Microfinance Limited

Vision“To be the most respected financial services company in india.”- Not necessarily the largest or most profitable

ValuesfairneSSFairness in our transactions with all stakeholders including employees, customers and vendors, bereft of fear or favour.

inteGritYintegrity and honesty of the utmost nature, in letter, in spirit, and in all our dealings with people, internal or external.

tranSParencYTransparency in all our dealings with stakeholders, media, investors and the public at large.

Note: The financial figures are as on March 31, 2018

`50,661 million

Net worth

19.3%

Return on Equity

`11,621 million

Profit After Tax

2,500+

Locations

15,000+

workforce

5 million+

happy Customers

`311,336 million

Loan Assets Under Management (AUM)

`1,317,617 million

wealth Assets Under Management,

Distribution and Advice

500+

stocks Under Research

3

Annual Report 2017-18

Corporate Overview

1-21Statutory Reports 22-43

Financial Statements 44-116

about iifL HoLdinGS Limited corPorate oVerVieW

income ` 17.4 billionNet Profit ` 3.9 billion

income ` 8.4 billionNet Profit ` 2.2 billion

23 offices across 9 countries 1,122 locations pan india

One of the largest and fastest-growing wealth management companies in india offering a holistic approach towards managing clients’ portfolio with a broad range of innovative products and services

One of india’s leading broking houses with extensive presence all over the country, providing financial planning, investment banking and broking services in mutual funds, equity, commodities and currency trading

Asset management, Advisory, Financial Products Distribution, brokerage and Credit solutions

investment banking, institutional broking, Research, Retail broking and Financial Products Distribution

Direct channels and other distribution agreements

Agents, banks, brokers,Direct channels, other distributors and independent financial advisors

high Net-worth individuals institutional and Retail

FINANCIALS FY18income ` 38.6 billionNet Profit ` 5.5 billion

GEOGRAPHICAL LOCATIONS

1,378 branches Pan-india

BUSINESS

Diversified non-banking finance company offering comprehensive credit solutions to all classes of customers - salaried, self-employed, informal sector, hNis and corporates

PRODUCTS

home, Gold, Commercial vehicles and sME Loans, Digital Finance, Micro Finance, Loan Against Property, Construction Finance and Real Estate Loans

DISTRIBUTION CHANNELS

Agents, banks, brokers, Direct channels and other distribution agreements

CUSTOMER SEGMENTRetail and Corporate

Loans and Mortgages

Wealth and Asset Management

Capital Market related Activities


business segments

4


Our international subsidiaries are governed by the respective global regulators including Financial services Authority, UK; securities Exchange Commission and Financial industry Regulatory Authority, UsA; Monetary Authority of singapore; Dubai Financial services Authority; securities and Futures Commission, hong Kong; and Financial services Commission, Mauritius.

CANADA

swiTZERLAND UAE

MAURiTiUs

hONG KONG

UsA

international Subsidiaries’ Locations

siNGAPORE

UK


Global Presence

5


Corporate Overview



buSineSS SeGmentS corPorate oVerVieW

samasta Microfinance Limited at a glanceincorporated in 2008, samasta Microfinance Limited is the fastest growing player in the microfinance segment in the country. The Company provides financial services to economically weaker sections of society for income generation activities.

in January 2017, india infoline Finance Limited (iiFL Finance) acquired 95% stake in samasta Microfinance with the intent of benefiting both companies with an increased customer base and easy access to a wide range of financial products and services.

samasta has strong presence in the states of Tamil Nadu, Karnataka, Maharashtra, Goa and Odisha. Through its reach, it is committed to make micro loans and credit linked insurance available in the rural and semi-urban areas. The Company also offers a bouquet of non-financial services including life and health insurance. As an add-on service, it also offers financial counselling to its members. The Company is engaged as a ‘business Correspondent’ with premier banks in india like YEs bank Limited and iDbi bank Limited.

samasta is pledged to transform the lives of working poor across india by providing them with financial and non-financial services through a sustainable long-term relationship. Large unmet credit demand in the microfinance sector, supportive industry regulations and best-in-class technology help the Company secure a strong position.

`8,410 million

Assets Under Management

170

Number of branches

375,684

Number of clients

1,900+

Employees

6


mission

samasta Microfinance aims to bridge the gap between ambition and achievement of the working poor across india, by providing financial and non-financial services, in a sustainable long-term relationship to enable a better quality of life.

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Corporate Overview



SamaSta microfinance Limited at a GLance corPorate oVerVieW

Our Product Offeringswe are focussed on catering to the working capital requirements of women to support their micro businesses. Our objective is to promote sustainable livelihood and self-employment opportunities.

Loans we offer loans under various

categories such as income generation, education, etc.

A series of training sessions and a test is conducted before loan disbursal

it is ensured that members understand the product details and repayment structure

repayment Group lending

methodology wherein loan is disbursed to each individual in the group and the group guarantees for each other’s loans

This has resulted in great success rate in repayment of loans

Health and welfare samasta Microfinance

continuously works for the health and welfare of women

A host of loans were introduced such as water purifier loan, cattle loan, induction stove and induction stove utensils loan etc. to improve their living conditions

business correspondence

The Company has been associated as a business Correspondent for Yes bank Limited and iDbi bank Limited

insurance samasta Microfinance

provides credit insurance to all its members

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Our Growing Presence samasta has firmly set its footprint as one of the fastest growing microfinance companies in india. Currently it operates through 173 branches, with more than 100 new branches opened during the year in states such as bihar, Odisha, Chhattisgarh, Rajasthan, Gujarat and Kerala.

Rajasthan3

Maharashtra5

bihar8

Chhattisgarh2

Odisha40

Karnataka55

Tamil Nadu54

Goa2

Gujarat 2

Kerala2

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Corporate Overview



our Product offerinGS corPorate oVerVieW

Financial highlights

YoY Growth: 195% 5 Years CAGR: 49.2%

YoY Growth: 219% 5 Years CAGR: 41.2%

Capital Adequacy ratio was recorded

at 18.8% as on March 31, 2018YoY Growth: 250% 5 Years CAGR: 75.8%

income (` million)

130.7 132.4201.4

328.4

967.8

2013-14 2014-15 2015-16 2016-17 2017-18

net Profit (` million)

4.65.9

14.7

8.1

25.8

2013-14 2014-15 2015-16 2016-17 2017-18

Loan assets under management (` billion)

0.5 0.61.3

2.4

8.4

2013-14 2014-15 2015-16 2016-17 2017-18

capital adequacy ratio (%)

15.4

19.2 17.8

44.4

18.8

2013-14 2014-15 2015-16 2016-17 2017-18

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Return on Average Assets was 0.5%

for the year ended March 31, 2018

Return on Equity was 2.8%

for the year ended March 31, 2018

Cost of Funds was 13.5% for the

year ended March 31, 2018

Net interest Margin reduced marginally to

9.1% for the year ended March 31, 2018Gross NPA reduced to 0.3% for the


return on equity (%)

5.15.5

11.3

2.12.8

2013-14 2014-15 2015-16 2016-17 2017-18

return on average assets (%)

0.7

0.9

1.7

0.5 0.5

2013-14 2014-15 2015-16 2016-17 2017-18

cost of funds (%)

15.414.9

16.115.2

13.5

2013-14 2014-15 2015-16 2016-17 2017-18

net interest margin (%)

11.9 11.6

9.89.2 9.1

2013-14 2014-15 2015-16 2016-17 2017-18

Gross nPa (%)

0.50.3 0.3

3.85

0.3

2013-14 2014-15 2015-16 2016-17 2017-18

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Corporate Overview



financiaL HiGHLiGHtS corPorate oVerVieW

spreading smiles: Customer success storiesnurturing the ambitions

name: urmila deviUrmila Devi, a lady in bihar, runs a small vegetable business in the vicinity of her village. Through this, she could support just the basic necessities of her family. but, Urmila Devi and her husband were determined to increase their earnings and lead a better life. A distant relative informed her about the loan offerings from samasta Microfinance and their benefits.

Urmila Devi, with the help of her neighbours, visited a samasta Microfinance centre. she successfully availed a loan of ₹ 30,000 and invested the money in expanding her business. with her hard work, dedication and financial support from samasta, her daily income increased from ₹ 900 to ₹ 1,200.

As a result, her family’s living conditions improved immensely. Today, she is able to send her children to a good school and secure their future. Urmila Devi is grateful to the timely support by samasta and looks forward to continuing with this relationship.

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encouraging the entrepreneurial potential

name: mrs. e Lila beniMrs. E Lila beni is a successful entrepreneur, running a provision store in the Chatrapur market in Odisha. she had the dream to take her business forward and improve her family’s lifestyle. however, her income was not sufficient enough to implement her dream.

At that point of time, she came to know about samasta Microfinance. it proved to be a blessing in disguise as the support received from samasta helped her avail a loan of ₹ 25,000. Lila invested the money in business to add some inventory to the existing variety of stock. As a result, the sale and hence the income from her shop increased significantly. Today, she proudly claims that her income has grown from ₹ 1,000 to ₹ 1,500.

Lila was happy to share that she was able to grow her business well through the financial assistance from samasta. she further added that it was convenient to repay the loans in instalments. she wishes to be associated with samasta Microfinance for her future needs as well.

inspiring the big dreams

name: fatima begumFatima begum lives with her husband and two sons. she runs a salon in Chatrapur. her husband works in Paradeep Port and stays at Rourkela. Fatima takes care of the daily needs of the family.

she aspired to have a good source of income to provide a decent lifestyle to her family and higher education to her children. Fatima approached samasta to avail financial assistance. she availed a loan of ₹ 25,000 and managed to expand her services and grow operations.

Today, she contributes daily income of ₹ 500 and has improved the living conditions of her family. her children have also been admitted to a good school.

Fatima has managed to realise her dreams through the support received from samasta. with all her gratitude, she wishes to be associated with samasta for her future requirements as well.

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Corporate Overview



SPreadinG SmiLeS: cuStomer SucceSS StorieS corPorate oVerVieW

investing in the latest technologyDigitisation is essential for operational efficiencies in a developing economy like india. we, at samasta Microfinance, have embraced advanced technology to streamline our business operations. we have realised the growing need of customers and accordingly have created technology-led products to deliver a seamless experience. besides, our digital strategy will strengthen our pan-india reach, provide our business with the ability to use data in innovative ways and help us set new industry benchmarks.

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our new age technology toolsThe following has been proposed:

samasta has signed up with the stock holding Corporation of india Limited for loan document digitisation which will help them become completely paperless

C-KYC & E-sign are the future process improvements which will take samasta to the next level

Automation of workflows to streamline the existing process and reduction of errors

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Corporate Overview



inVeStinG in tHe LateSt tecHnoLoGY corPorate oVerVieW

building foundation for excellenceAt samasta, we believe in building a strong foundation for providing the best services to our customers. The crux of this is the best-in-class work-life where employees are contented and satisfied. we have continuously designed different training programs for developing and retaining the best talent and creating a vibrant work culture.

samasta has always invested in its people to build a culture of trust throughout the organisation. Our human resource team is committed to enable a unified vision and purpose among all employees through its initiatives and communication channels.

690 1,900+

Employees as on March 2017 Employees as on March 2018

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Key highlights of the year 2017-18

enhanced use of technologyTechnology plays a vital role in managing employee life cycle and delivering a greater customer experience. Regular investments have been made in technology and iT infrastructure to automate processes. This reduces turnaround time and results in less stress in employees and hence low attrition rates.

The Company has brought in a new software for improving the ease with which the employee can access the hR portal. The implementation of the software is currently in progress.

regular training programsThe training team ensures to equip employees with all the necessary process and functional trainings, people management, behavioural and leadership skills training among others. in addition to this, refresher trainings, usage of bR.net, Glow, training on mandatory laws etc. are delivered on a regular basis.

extensive policies and processesA comprehensive handbook includes all reviewed hR policies and processes with the aim of providing better employee benefits. we believe in policies through which employees are free to put across their ideas to foster transparency, fairness, integrity and innovation within the organisation.

rewards and recognition (r&r)we believe that our employees work with efficiency and higher commitment to meet the Company’s goals. Therefore, the Company motivates the deserving employees to perform better by presenting regular rewards through the R&R programs.

employee engagementsamasta believes in the purposeful involvement of employees at the workplace by promoting an ecosystem where learning, self-growth and excellence are encouraged. During the year, several employee engagement activities were planned for employees such as samasta Premier League, Christmas and New Year celebrations, Company get-together etc.

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Corporate Overview



buiLdinG foundation for exceLLence corPorate oVerVieW

Message from the Managing Director

We, at Samasta, are committed to serve not only various financial needs of our customers but also empower them for leading better lives with a secured future. the significant increase in our loan portfolio was an evident result of our well-planned strategies.

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dear Shareholders,it gives me great pleasure to present the highlights of your company’s performance, achievements and initiatives during the financial year 2017-18. it was a defining year for samasta as the Company attained higher levels of growth and sustainability.

The indian economy emerged as ‘the fastest growing economy’ with GDP recorded at 6.7% in FY 2017-18, backed by improved global demand, better monsoon prospects, credit uptick and continued reforms undertaken by the Government. Microfinance sector emerged as a crucial link for financial inclusion of the economically weaker section, primarily women. it has generated employment, livelihood opportunities and considerable enthusiasm, based on the small loans and other financial services.

This is an encouraging sign for many medium and small microfinance institutions who are set to expand their reach and operations. The microfinance industry, which has been reeling under pressure post demonetisation on account of a substantial dip in collection rates, resulting in the rise of non-performing assets (NPA), has started showing signs of recovery.

According to the Micrometer report by Microfinance institutions Network (MFiN), equity investments in Non-banking Finance Company-Microfinance institutions (NbFC-MFis) grew by 40% in FY 2017-18 as compared to FY 2016-17 and stood at ₹ 9,631 Crores. Overall the microfinance industry witnessed 27% YoY growth in the loan portfolio during FY 2017-18. The total gross loan portfolio of the industry stood at ₹ 136,633 Crores.

we, at samasta, are committed to serve not only various financial needs of our customers but also empower them for leading better lives with a secured future. The Company empowers women from the economically weaker section of the society by offering various loan products such as income Generation loans, Top up loans, Product loans and Educational loans among others.

The significant increase in our loan portfolio was an evident result of our well-planned strategies. The overall gross loan book including growth in managed assets grew by 253% as it has moved from ₹ 238 Crores to ₹ 840 Crores. we closed the financial year with a total income of ₹ 96.78 Crores, an increase of 195% over the previous year.

we expanded footprint across the country by adding 104 branches to our network. The Company ventured into the states of Odisha, Rajasthan, bihar, Gujarat, Chhattisgarh, Kerala along with addition of branches in Karnataka, Goa, Maharashtra and Tamil Nadu. The total number of branches at the end of the financial year stood at 173.

People are our most valuable assets and nurturing their capability is at the core of driving business excellence and meeting the demands of a transforming organisation. we mentor and guide our employees through customised training programmes to create a strong leadership in future. samasta has been aggressively hiring competent personnel to match the Company’s targets for the forthcoming financial years. The total number of employees on roll as on March 31, 2018 were 1,900+ as against 690 as on March 31, 2017.

The microfinance landscape is changing in line with increasing technology usage. The Company is proactively spreading digital tools in its operations by using tab-based enrolment for sourcing new customers and for recording the repayment entries by the field officers at the field level. we shall continuously strive to improve our position across all digital channels.

we will continue to grow, penetrate geographically and increase our product offerings in the future. Growth comes with lot of challenges and our preparedness to overcome these will be the key. in the process of doing so we aspire to set a benchmark for the industry. Our pledge this year would be to Grow responsibly and Efficiently.

Grow responsibly by adhering to definite principle that lending in the microfinance model requires

efficiently to standout as an organisation’s need to display high efficiency levels in whatever we do

we are well-positioned in the industry with the strong support of the brand name iiFL that helps us set us on the path of a larger vision, making samasta a household name.

with best wishes,

Venkatesh n.Managing Director

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Corporate Overview



meSSaGe from tHe manaGinG director corPorate oVerVieW

board of Directors

mr. Gaurav malhotra Director

Gaurav has a degree in Engineering and an MbA from iiM bangalore. he joined CDC in 2016, mainly responsible for advertising, supporting the CDC Group on the investments in Financial institutions in south Asia. Gaurav has a wide range of consultancy experience, working for several financial institutions during his 10 years with The boston Consulting Group in india and Europe. he also worked for a year as the head of strategy for an indian family business. he has experience in several areas including growth strategy, consumer behaviour, distribution networks, operations and iT, various Microfinance institutions.

mr. Venkatesh n. Managing Director

venkatesh has an experience of over 21 years in the financial services sector. he had founded PNv Techno Acquisitions Private Limited that marketed financial products and Affluence Edifice, which offered wealth management services for high net worth individuals. in 2008, he founded samasta Microfinance Limited, which has an asset size of ` 1,000 Crores at present. he holds a b.sc. Degree in Computer science and has completed ACCiO-N program for strategic leadership in Microfinance through harvard business school.

mr. r. Venkataraman Non-Executive Director

Mr. R. venkataraman, Non-Executive Director of the Company, is a b.Tech (Electronics and Electrical Communications Engineering, iiT Kharagpur) and an MbA (iiM, bangalore). he has been contributing immensely into the establishment of various businesses and spearheading key initiatives of the group over the past 18 years. he previously held senior managerial positions in iCiCi Limited, including iCiCi securities Limited, their investment banking joint venture with J P Morgan of Us and barclays – bZw. he worked as the Assistant vice President with G E Capital services india Limited in their private equity division. he has a varied experience of more than 26 years in the financial services sector.

mr. Shivaprakash d whole-time Director

shivaprakash has over 2 decades of rich and diverse cross-industry experience in software services, business operations and leadership positions. As Director and CiO, he has played a pivotal role in setting up business support functions, deploying iT applications and running iT as a support function for the organisation. Prior to samasta, he has spent nearly a decade with wipro Technologies, leading and executing projects for global clients.

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mr. ramanathan a. independent Director

Ramanathan has extensive experience in the development banking for the agriculture and rural sectors. he was Chief General Manager in the Micro Credit innovations Department of NAbARD. he managed the shG bank Linkage program, the largest microfinance program in the world. As in-charge of the Financial inclusion department, he has managed Financial inclusion Fund and Financial inclusion Technology Fund etc.

mrs. malini b. eden Additional Director

A Development specialist and strategy Consultant for over two decades, on the lines of Process based Management Principles. she has significant experience of working for the marginalised and drawing these into policy across several development themes. she has been a part of bilateral agencies and Government boards at state, National and international bodies in areas of Economic empowerment, health, Project Management, Donor Relations and stakeholders, Advocacy and Networking etc. Mrs. Malini played key role in setting up initiatives like section 25 company, software company for assessing NGO sector and MFi, Co-Promoter of an NbFC, conceptualizing the grassroots processes for policy decisions.

mr. Vikraman a. independent Director

A former Chief General Manager of siDbi Foundation for Micro Credit, Mr. vikraman has extensive experience in the Microfinance sector. in his experience spanning 38 years, he was with Reserve bank of india for 5 years, iDbi for 16 years and siDbi for 17 years. he is also in the board of other microfinance and financial corporations.

mr. badri Seshadri independent Director

An alumnus of iiT, Chennai and with a Ph. D in Mechanical Engineering from Cornell University in the UsA, Mr. badri seshadri co-founded Cricinfo.com, a cricket information portal, which is now owned by EsPN. his latest venture is New horizon Media, focusing on publishing in indian languages.

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Corporate Overview



board of directorS corPorate oVerVieW

BOARD’S REPORT

To,

The Members,

SAmASTA micROfinAncE LimiTED

Bangalore

Your Directors take pleasure in presenting the 23rd (Twenty Third)

Annual Report together with the audited financial statements

and the Auditors’ Report of your company for the financial year

ended March 31, 2018. The summarised results for the year ended

March 31, 2018 are as under:

1. PERiOD Of REPORT:

This report is for the period from April 1, 2017 to March 31,

2018.

2. DiScLOSURE UnDER SEcTiOn 92(3) Of THE cOmPAniES AcT, 2013 (HEREinAfTER KnOWn AS THE “AcT”)

Disclosure under Section 92(3) of the Act that relate to the

Extracts of Annual Return has been placed at Annexure I

and forms part of this Board Report.

3. mEETinGS Of THE BOARD AnD DiffEREnT cOmmiTTEES DURinG THE finAnciAL YEAR 2017-18:

The Board duly met for 4 (Four) times during the year under

review.

4. DiREcTORS’ RESPOnSiBiLiTY STATEmEnT:

Pursuant to Section 134(5) of the Act, the Board, based

on the representations received from the management,

confirms that:

a) In the preparation of the annual accounts, for year

ended on March 31, 2018, the applicable accounting

standards have been followed and that there are no

material departures;

b) The Board has selected such accounting policies and

applied them consistently and made judgments and

estimated that are reasonable and prudent so as to

give a true and fair view of the state of affairs of the

Company at the end of the financial year and of the

profit and loss of the Company for that period.

c) The Directors had taken proper and sufficient

care for the maintenance of adequate accounting

records in accordance with the provisions of the

Act for safeguarding the assets of the Company

and for preventing and detecting fraud and other

irregularities; and

d) The Directors had prepared the annual accounts on a

going concerns basis.

e) The directors had laid down internal financial controls

to be followed by the Company and that such internal

financial controls are adequate and were operating

effectively.

f ) The directors had devised proper systems to ensure

compliance with the provisions of all applicable laws

and that such systems were adequate and operating

effectively.

Following frauds were reported during the financial year

2017-2018. Appropriate measures have been taken in

respect of the frauds.

Details of instances of frauds during April 1 ,2017 to

March 31 ,2018 are given below-

1) No. of instances of fraud reported to RBI from April 1,

2017 to March 31, 2018:13 Cases.

2) Total amount involved in fraud: ` 615,550

3) Total amount recovered till March 2018: `260,038

5. DEcLARATiOnS BY inDEPEnDEnT DiREcTORS:

The Company has received declarations from the

Independent Directors stating they meet the criteria as

specified under Section 149 (6) of the Companies Act, 2013.

6. cOmPAnY’S POLiciES On APPOinTmEnT Of DiREcTORS, REmUnERATiOn AnD OTHER mATTERS:

The Company takes a cautious approach in relation to

appointment of Directors on the Board of the Company.

It shall appoint such persons who are relevant expertise

and vast experience in the field of microfinancing.

The remuneration of Directors shall be based on their

contribution towards the overall development of the

Company as well as their participation in the meetings of

the Company. The terms and conditions for appointment

of Independent Directors are uploaded on the website of

the Company and may be accessed by visiting our website

–www.samasta.co.in.

7. cOmPOSiTiOn Of BOARD Of DiREcTORS, cOmmiTTEES Of THE BOARD AnD KEY mAnAGERiAL PERSOnnEL:

A) The Board of Directors of the Company was duly

constituted throughout the year. However, following

changes were made to the Board composition:

i) Mr. Venkatraman Rajamani, Mr. Kalyanaraman

Chandrachoodan and Mr. Gaurav Malhotra were

regularised as the Director of the Company in

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BOARD’S REPORT (contd.)

the Annual General Meeting dated July 11, 2017.

ii) Mr. Kalyanaraman Chandrachoodan resigned as Director of the Company with effect from August 30, 2017;

The current composition of the Board of Directors is as below:

Si. no name of the Director Designation and category1 Mr. Venkatesh N. Managing Director 2 Mr. Shivaprakash D. Whole-Time Director 3 Mr. Venkataraman R. Non-Executive Director4 Mr. Gaurav Malhotra Non-Executive Director5 Mr. Vikraman A. Non-Executive, Independent Director6 Mr. Badrinarayanan S. Non-Executive, Independent Director7 Mr. Ramanathan A. Non-Executive, Independent Director

The meetings of Board of Directors and attendance of the Directors are as given below:

Presence of Directors

Sl no. Date of meeting

Venkatesh n.

Shivaprakash D.

Gaurav m.

Ramanathan A.

Badrinarayan S.

chandrachoodan K.

Venkataraman R.

Vikraman A.

1 21.04.2017 Y Y Y Y N Y Y Y2 11.07.2017 Y Y Y N Y Y Y N3 16.10.2017 Y Y Y Y Y NA Y Y4 23.01.2018 Y N Y Y Y NA Y Y

Y –Yes

N –No

NA –Not Applicable

B) Committees of the Board:

i) Audit Committee

The Audit Committee currently consists of the following members:

1. Mr. Vikraman Ampalakkat

2. Mr. Badrinarayanan Seshadri

3. Mr. Shivaprakash D.

All the recommendations of the Committee have been adopted by the Board.

The meetings of the Audit Committee and attendance of its members are as given below:

Sl no. Date of meeting name of DirectorsShivaprakash D. Vikraman A. Badrinarayanan S.

1 April 21, 2017 Yes Yes No2 July 11, 2017 Yes No Yes3 October 16, 2017 Yes Yes Yes4 January 23, 2018 No Yes Yes

ii) Nomination & Remuneration Committee:

The Nomination & Remuneration Committee currently consists of the Following members:

1. Mr. Ramanathan Annamalai

2. Mr. Badrinarayanan Seshadri

3. Mr. Venkatesh N.


The meetings of the Nomination and Remuneration Committee and attendance of its members are as given below:

Corporate Overview



23

Annual Report 2017-18 BOARD’S REPORT STATUTORY REPORTS

Sl no. Date of meeting name of DirectorsRamanathan A. Badrinarayanan S. Venkatesh n.

1 January 23, 2018 Yes Yes Yes

iii) Resourcing & Business Committee:

The Resourcing & Business Committee currently consists of the following members:

1. Mr. Narayanaswamy Venkatesh

2. Mr. Shivaprakash Deviah

The meetings of the Resourcing & Business Committee and attendance of its members are as given below:

Sl no. Date of meeting name of Directorsn. Venkatesh D. Shivaprakash

1 April 27, 2017 Yes Yes2 May 10, 2017 Yes Yes3 May 26, 2017 Yes Yes4 June 6, 2017 Yes Yes5 June 14, 2017 Yes Yes6 June 23, 2017 Yes Yes7 July 5, 2017 Yes Yes8 July 24, 2017 Yes Yes9 August 1, 2017 Yes Yes10 August 21,2017 Yes Yes11 August 28, 2017 Yes Yes12 September 14, 2017 Yes Yes13 September 26, 2017 Yes Yes14 September 28, 2017

(10.30 A.M)

Yes Yes

15 September 28, 2017

(5.00 P.M)

Yes Yes

16 October 04, 2017 Yes Yes17 November 10, 2017 Yes Yes18 December 5, 2017 Yes Yes19 December 22, 2017 Yes Yes20 December 24, 2018 Yes Yes21 January 27, 2018 Yes Yes22 February, 21, 2018 Yes Yes23 March 17, 2018 Yes Yes24 March 26, 2018 Yes Yes

iv) Allotment Committee:

The Allotment Committee currently consists of the following members:



The meetings of the Allotment Committee and attendance of its members are as given below:

Sl no. Date of meeting name of Directorsn. Venkatesh D. Shivaprakash

1 November 4, 2017 Yes Yes2 November 8, 2017 Yes Yes


24


v) ALCO Committee:

The Asset and Liability Committee currently consists of the following members:



3. Mr. T. Anantha Kumar (Chief Financial Officer)

4. Mr. Gaurav Malhotra

All the recommendations of the Committee have been adopted by the Board

The meetings of the Asset & Liability Committee and attendance of its members are as given below:

Sl no. Date of meeting name of Directorsn. Venkatesh D. Shivaprakash Gaurav malhotra

1 July 7, 2017 Yes Yes Yes2 October 7, 2017 Yes Yes Yes3 January 8, 2018 Yes Yes Yes

vi) Risk Management Committee:

The Risk Management Committee currently consists of the following members:



3. Mr. Ramanathan A.


The meetings of the Risk Management Committee and attendance of its members are as given below:

Sl no. Date of meeting name of Directorsn. Venkatesh D. Shivaprakash Ramanathan A.

1 July 11, 2017 Yes Yes Yes

C) Further, in relation to the changes in Key Managerial Personnel of the Company, there were no such changes.

8. cHAnGES in SHARE cAPiTAL:

The Authorised Capital of the Company was increased

from the existing ` 65,00,00,000 (Rupees Sixty Five Crore

Only) consisting of ` 63,00,00,000 (Rupees Sixty Three Crore

Only) Equity share capital divided into 6,30,00,000 Equity

Shares of ` 10 (Rupees Ten Only) each and, ` 2,00,00,000

(Rupees Two Crore Only) Preference share capital divided

into 1,45,000 Redeemable Non-Convertible Cumulative

Preference Shares of ` 10 each aggregating to ` 14,50,000

and 18,55,000 Preference Shares of ` 10 each aggregating

to ` 1,85,50,000 to the revised authorised capital of

` 115,00,00,000 (Rupees One Hundred and Fifteen Crore

Only) consisting of ` 113,00,00,000 (Rupees One Hundred

and Thirteen Crore Only) Equity share capital divided

into 11,30,00,000 Equity Shares of ` 10 (Rupees Ten Only)

each and, ` 2,00,00,000 Preference share Capital divided

into 1,45,000 Redeemable Non-Convertible Cumulative

Preference Shares of ` 10 each aggregating to ` 14,50,000

and 18,55,000 Preference Shares of ` 10 each aggregating

to ` 1,85,50,000.

The Paid-up Capital of the Company has been increased

from ` 61,34,46,110/- to ` 1,113,446,110/- on November 8,

2017 pursuant to allotment of 50,000,000 Equity Shares of

` 10/- each.

9. STATUTORY AUDiTORS:

The Company’s existing Statutory Auditors, M/s. Gowthama

and Company, Chartered Accountants are retiring by

rotation at the ensuing Annual General Meeting.

M/s. V Sankar Aiyar & Co., Chartered Accountantsare

proposed to be appointed as the Statutory Auditorsof the

Company at the ensuing Annual General Meeting.


Corporate Overview



25


10. AUDiTORS’ REPORT AnD iTS QUALificATiOnS:

There are no qualifications, reservations or adverse remarks

or disclaimer made by the auditor in their report for the year

under review and requires no further comments thereon.

11. SEcRETARiAL AUDiTOR:

The Company hasre-appointed Mr. Lakshmeenarayan Bhat,

Practicing Company Secretary as the Secretarial Auditor

under Section 204 of the Companies Act, 2013 for the

period under review.

12. QUALificATiOnS in THE SEcRETARiAL AUDiTORS’ REPORT AnD cOmmEnTS On THE SAmE:

• Point1oftheReportstatesthattheCompanyhasnot

appointed a Woman Director as per the provisions of

Section 149 of the Companies Act, 2013.

Directors’ comments: The Company has appointed

Mrs. Malini Eden as the Woman Director at the Board

Meeting dated April 26, 2018.

13. PARTicULARS Of LOAnS, GUARAnTEES OR inVESTmEnTS UnDER SEcTiOn 186:

The Company being a Non-Banking Financial Company

is exempted from the purview of Section 186 of the

Companies Act, 2013.

14. PARTicULARS Of cOnTRAcTS OR ARRAnGEmEnTS WiTH RELATED PARTiES:

The particulars relating to the contracts or arrangements

with related parties have been placed in Form No. AOC-2

enclosed as Annexure 2 to this and suitable disclosures as

required in compliance with accounting standards with

related parties are disclosed in note 27 of the financial

statements in the annual report.

15. DEPOSiTS:

Your Company has not accepted any deposits from public

during the financial year under review.

16. DETAiLS Of SUBSiDiARY, JOinT VEnTURE OR ASSOciATES:

The Company has a 100% wholly owned subsidiary M/s.

Ayusha Dairy Private Limited. Currently, merger between

Ayusha and the Company is in process and the application

for the same is pending with the Regional Director, Southern

Region –Hyderabad for approval.

17. finAnciAL HiGHLiGHTS (STAnDALOnE AnD cOnSOLiDATED):

A. Standalone financials of m/s. Samasta microfinance Limited

(`)

ParticularsYear ended

march 31, 2018

Year ended

march 31, 2017 Total Revenue 967,831,271 328,447,288 Total Expenses 898,635,725 322,212,993Earnings before tax 43,795,546 6,234,295Earnings after tax 25,829,713 8,089,888

B. consolidated financials with Subsidiary m/s. Ayusha Dairy Private Limited

(`)


march 31, 2018

Year ended

march 31, 2017 Turnover 968,301,603 330,802,429Profit/ (loss) before Tax 41,631,765 6,771,125Profit/ (loss) after Tax 23,762,849 8,476,718


26


18. OPERATiOnAL HiGHLiGHTS:

(`)


march 31, 2018

Year ended

march 31, 2017 Active borrowers (Own Portfolio) 292,900 79,559Loan disbursement (` in lakh) 94,088.11 24,480.48Loan portfolio (` in lakh) 63,350.65 14,249.91BC loan portfolio (` in lakh) 15,697.07 7,786.67Securitisation (` in lakh) 5,002.04 1,756.88No of Branches 173 70No. of centers 46,757 15,335No. of employees 1,655 690Repayment rate 98% 85%

The Company has increased its income from operations from `320,382,354 for the financial year ended March 31, 2017 to

`959,805,592 for the period under review.

19. DiViDEnD:

Your Board of Directors do not recommend any Dividend for

the financial year 2017-18.

20. TRAnSfER TO RESERVES:

During the year, entire profits have been transferred to

Reserves.

21. mATERiAL cHAnGES POST EnD Of THE finAnciAL YEAR:

M/s Ayusha Dairy Private Limited, the wholly owned

subsidiary is in the process of merger with the Company.

The members and creditors of both the transferor and

transferee companies have approved the scheme of

amalgamation vide their respective meetings dated March

28, 2018 and the requisite forms have been filed with the

appropriate authorities. While the Official Liquidator has

given his consent for the merger, the application is now

pending with the Regional Director, Southern Region for

approval.

22. mAnAGERiAL REmUnERATiOn:

There was no employee during the year-

• Who was in receipt of remuneration for that year

which, in the aggregate, was not less than One Crore

and Two Lakh Rupees;

• If employed for a part of the financial year, was in

receipt of remuneration for any part of that year, at a

rate which, in the aggregate, was not less than Eight

Lakh Fifty Thousand rupees per month;

• If employed throughout the financial year or part

thereof, was in receipt of remuneration in that year

which, in the aggregate, or as the case may be, at a

rate which, in the aggregate, is in excess of that drawn

by the managing director or whole-time director

or manager and holds by himself or along with his

spouse and dependent children, not less than two

percent of the equity shares of the Company

Disclosure under Section 197 (12) read with Rule 5 of the companies (Appointment and Remuneration of managerial Personnel) Rules, 2014:

i) the ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year:

Mr. Venkatesh N., Managing Director -34.19;

Mr. Shivaprakash D., Whole Time Director -25.90

ii) the percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year:

Managing Director - 63.60%

Whole Time Director - 75.25%

Chief Financial Officer - 21.09%

Company Secretary - 8.01%

iii) the percentage increase in the median remuneration of employees in the financial year: 10.79%

iv) the number of permanent employees on the rolls of company: -1,655

v) the ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year: Not Applicable

vi) affirmation that the remuneration is as per the remuneration policy of the Company: Yes, we affirm that the remuneration was as per the remuneration policy of the Company.


Corporate Overview



27


23. cOnSERVATiOn Of EnERGY, TEcHnOLOGY ABSORPTiOn, fOREiGn EXcHAnGE EARninGS/ OUTGO in TERmS Of SEcTiOn 134(3)(m) Of THE cOmPAniES AcT, 2013 AnD RULE, 8 Of cOmPAniES (AccOUnTS) RULES, 2015:

a) Energy consumption:

There are no matters to be reported under this head as the

Company is not engaged in power-intensive activities and

hence not applicable to this company.

b) Technology Absorption:

There are no matters to be reported under this head as the

Company is not entered into any technical collaboration

agreements.

c) foreign Exchange Outflow/inflow:

The Company has no transactions in foreign currency

during the Financial Year 2017-18.

24. RiSK mAnAGEmEnT POLicY:

Successful mortgage lending calls for timely identification,

careful assessment and effective management of the

credit operational, market (interest-rate and liquidity) and

reputation risks. The Company has adopted efficient risk-

management policies, systems and processes that seek to

strike an appropriate balance between risk and returns.

The Company has also introduced appropriate risk-

management measures, such as accessing the Applicant’s

credit history with credit information bureaus, field

investigation of the applicant’s credentials, multiple

verification layers, adoption of prudent loan/value ratio

and analysis and adoption of a conservative debt-service

capacity of the borrowers, thorough in-house scrutiny of

legal documents, monitoring the end-use of approved

loans and lending against approved properties.

25. mAnAGEmEnT DiScUSSiOn AnD AnALYSiS REPORT:

The Management Discussion and Analysis Report has been

enclosed as Annexure IV to this Report.

26. cORPORATE SOciAL RESPOnSiBiLiTY (cSR):

The Company was not required to comply with

theprovisions of Section 135 of the Companies Act, 2013

relating to Corporate Social Responsibility (CSR).

27. STATEmEnT SHOWinG AnnUAL PERfORmAncE EVALUATiOn Of BOARD AnD iTS cOmmiTTEE:

As per the provisions of the Companies Act, 2013, the Board

has carried out an annual performance evaluation of its

own performance, the directors individually as well as the

evaluation of the working of its Committees. A structured

exercise was carried out based on the criteria for evaluation

forming part of the Directors Appointment, Remuneration

& Evaluation Policy, including framework for performance

evaluation of Directors, Board & Committees, familiarisation

Program for Independent Directors Criteria for Evaluation

and the inputs received from the Directors, covering various

aspects of the Board’s functioning such as adequacy of the

composition of the Board and its committee, attendance at

meetings, Board culture, duties of directors, and governance.

A separate exercise was carried out to evaluate the

performance of individual Directors including the Chairman

of the Board, who were evaluated on parameters such as

level of engagement and contribution, independence of

judgment, safeguarding the interest of the Company and

its stakeholders etc. The performance evaluation of the

Independent Directors was carried out by the entire Board.

The performance evaluation of the Chairman and the Non-

Independent Directors was carried out by the Independent

Directors. The Directors have expressed their satisfaction

with the evaluation process.

28. inTERnAL cOnTROLS:

The Company has a well-established and adequate internal

financial control and risk management framework, with

appropriate policies and procedures, to ensure the highest

standards of integrity and transparency in its operations and

a strong corporate governance structure, while maintaining

excellence in services to all its stakeholders. Appropriate

controls are in place to ensure: (a) the orderly and efficient

conduct of business, including adherence to policies,

(b) safeguarding of assets. (c) prevention and detection

of frauds / errors, (d) accuracy and completeness of the

accounting records and (e) timely preparation of reliable

financial information.

The Company has an Audit Committee, which regularly

reviews and monitors systems, internal controls, risk

management measures, accounting procedures, financial

management and operations of the Company.

The Audit Committee, Independent Directors and the Board

after review are satisfied with the internal financial controls

and risk management systems put in place by the Company.

29. DETAiLS Of SiGnificAnT & mATERiAL ORDER PASSED BY THE REGULATORS OR cOURTS OR TRiBUnAL:

During the financial year, there are no significant and

material orders passed by the Regulators or Courts or

Tribunals impacting the going concern status and your

company’s operations in future.


28


30. DiScLOSURE On ESTABLiSHmEnT Of ViGiL mEcHAniSm:

Your Company has established a Vigil Mechanism & has

adopted a Whistle Blower Policy for directors and employees

to report their genuine concerns to the Chairman of the

Audit Committee.

The Whistle Blower Policy has been formulated with a view

to provide a mechanism for employees and directors to

approach the Audit Committee of the Company.

31. DiScLOSURES UnDER SEXUAL HARASSmEnT 0f WOmEn AT WORKPLAcE (PREVEnTiOn, PROHiBiTiOn & REDRESSAL) AcT, 2013:

The Company has in place Anti-Sexual Harassment Policy

named “Policy Against Sexual Harassment.’ in line with the

requirements of The Sexual Harassment of Women at the

Workplace (Prevention, Prohibition & Redressal) Act, 2013.

An Internal Complaints Committees (ICC) has been set up to

redress complaints received regarding sexual harassment.

Your Directors further state that during the year under

review, no complaints have been received pursuant to the

Sexual Harassment of Women at Workplace (Prevention,

Prohibition and Redressal) Act, 2013.

32. cOmPLiAncE WiTH THE SEcRETARiAL STAnDARDS iSSUED BY THE inSTiTUTE Of cOmPAnY SEcRETARiES Of inDiA:

The Board hereby confirms the compliance of the provisions

of the Secretarial Standard-1 and 2 issued by the Institute of

Company Secretaries of India.

33. AnnEXURE fORminG PART Of THiS REPORT Of DiREcTORS:

The Annexure referred to in this Report and other

information which are required to be disclosed are annexed

herewith and form a part of this Report of the Directors:

a. Extracts of Annual Return in Form MGT-9- Annexure I

b. Statement on contracts entered into with Related Parties in

Form AOC-2 –Annexure II

c. Management Discussion and Analysis Report- Annexure III

d. Statement containing salient features of the financial

statement of subsidiaries in Form AOC-1- Annexure IV

e. Secretarial Audit Report- Annexure V

34. AcKnOWLEDGmEnTS:

Your Directors wish to place on record their appreciation

and acknowledge with gratitude the continued support

and co-operation extended by the investors, clients,

business associates and bankers and look forward for their

continued support. Your Directors also place on record their

appreciation for the services rendered by the employees at

all levels.

For and on behalf of Samasta Microfinance Limited

Venkatesh narayanaswamy Shivaprakash DeviahManaging Director Whole Time DirectorDIN: 01018821 DIN: 02216802

Date: April 26, 2018Place: Bangalore


Corporate Overview



29


Annexure – A

fORm nO. mGT 9EXTRAcT Of AnnUAL RETURn

As on financial year ended on March 31, 2018Pursuant to Section 92 (3) of the companies Act, 2013 and rule 12(1) of the company (management & Administration)

Rules, 2014.

i. REGiSTRATiOn & OTHER DETAiLS:

1. CIN U65191KA1995PLC0578842. Registration Date 09/08/19953. Name of the Company SAMASTA MICROFINANCE LIMITED4. Category/Sub-category of the Company Company Limited by Shares5. Address of the Registered office & contact details 418,1/2A, 4th Cross, 6th Main, Wilson Garden, Bangalore KA

560027 INDIA Contact Number: 080429135006. Whether listed company No, Debt Listed7. Name, Address & contact details of the Registrar & Transfer

Agent, if any.

Link Intime India Pvt. Ltd 247 Park, C 101 1st Floor, LBS Marg,

Vikhroli (W), Mumbai – 400 083 Vishwas Attavar- +91 22

49186000

ii. PRinciPAL BUSinESS AcTiViTiES Of THE cOmPAnY:

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

Sl no. name and Description of main products / services nic code of the Product/service % to total turnover of the company

1 Financing Services – Micro

Finance Lending

64990 98.06

iii. PARTicULARS Of HOLDinG, SUBSiDiARY AnD ASSOciATE cOmPAniES:

Sl no. name and Address of the company

cin cATEGORYPercentage of

Shares HeldApplicable

Section1 India Infoline Finance

Limited12A-10, 13th Floor, Parinee

Crescenzo, G Block, C-38 & 39,

Bandra Kurla Complex, Bandra- East

Mumbai Mumbai City 400051

U67120MH2004PLC147365 Holding 97.37 2 (46)

2 Ayusha Dairy Private Limited

418, 1/2A, 4th Cross, 6th Main,

Wilson Garden, Bangalore KA

560027

U15490KA2011PTC058468 Subsidiary 100 2 (87)

iV. SHARE HOLDinG PATTERn (EQUiTY SHARE cAPiTAL BREAKUP AS PERcEnTAGE Of TOTAL EQUiTY)

A) category-wise Share Holding

Category of Shareholders

No. of Shares held at the beginning of the year No. of Shares held at the end of the year %

of Change during the

YearDemat Physical Total % of Total

Shares Demat Physical Total % of Total Shares

(A) PROmOTERS(1) indian

(a) Individual/HUF 1680840 - 1680840 2.74 1680840 - 1680840 1.51 (1.23)(b) Central Govt -- -- -- -- -- -- -- -- --(c) State Govt (s) -- -- -- -- -- -- -- -- --(d) Bodies Corp. 58417631 -- 58417631 95.23 108417631 -- 108417631 97.37 2.14(e) Banks / FI -- -- -- -- -- -- -- -- --

30


Annexure – A (contd.)






(f ) Any

other(relative of

promoters)

1246140 - 1246140 2.03 1246140 - 1246140 1.12 (0.91)

Sub-Total (A) (1) 61344611 -- 61344611 100 111344611 -- 111344611 100 --(2) foreign(a) NRIs –

Individuals

---- -- -- -- -- -- -- --

(b) Other –

Individuals

---- -- -- -- -- -- -- --

(c) Bodies Corp. -- -- -- -- -- -- -- -- --(d) Banks / FI -- -- -- -- -- -- -- -- --(e) Any Other…. -- -- -- -- -- -- -- -- --Sub-Total (A) (2) -- -- -- -- -- -- -- -- --Total Shareholding

of Promoter (A) = (A)

(1) + (A) (2)

61344611 -- 61344611 100 111344611 -- 111344611 100 --

(B) PUBLic SHAREHOLDinG(1) institutions(a) Mutual Funds -- -- -- -- -- -- -- -- --(b) Banks/FI -- -- -- -- -- -- -- -- --(c) Central Govt -- -- -- -- -- -- -- -- --(d) State Govt (s) -- -- -- -- -- -- -- -- --(e) Venture Capital

funds

-- -- -- -- -- -- -- -- --

(a) Insurance

Companies

-- -- -- -- -- -- -- -- --

(b) FIIs -- -- -- -- -- -- -- -- --(c) Foreign Venture

Capital Funds

-- -- -- -- -- -- -- -- --

(i) Others (Specify) -- -- -- -- -- -- -- -- --Sub-Total (B)(1) -- -- -- -- -- -- -- -- --(2) non- institutions(a) Bodies Corpi. Indian -- -- -- -- -- -- -- -- --ii. Overseas -- -- -- -- -- -- -- -- --(b) Individuals -- -- -- -- -- -- -- -- --i. Individual

shareholders `

1 lakh

-- -- -- -- -- -- -- -- --

ii. Individual

shareholders

holding

nominal share

capital in excess

of `1 lakh

-- -- -- -- -- -- -- -- --

(C) Others (Specify)Sub-Total (B)(2) -- -- -- -- -- -- -- -- --Total Public

Shareholding = (B)

(1) + (B) (2)

-- -- -- -- -- -- -- -- --

Corporate Overview



31







c. Shares held

by custodian

for GDRs &

ADRsGrand Total (A+B+c) 61344611 -- 61344611 100 111344611 -- 111344611 100 --

B) Shareholding of Promoters

SN Shareholder’s Name Shareholding at the beginning of the year

Shareholding at the end of the year % change in shareholding

during the year

No. of Shares % of total

Shares of the

Company

%of Shares Pledged /

encumbered to total shares

No. of Shares

% of total Shares

of the Company

%of Shares Pledged /

encumbered to total shares

1 Mr. Shivaprakash D. 345000 0.56 -- 345000 0.31 -- (0.25)2 Mr. Venkatesh N 1335840 2.18 -- 1335840 1.20 -- (0.98)3 India Infoline Finance Limited 58417631 95.23 -- 108417631 97.37 -- 2.14

c) change in Promoters’ Shareholding (please specify, if there is no change)

ParticularsShareholding at the beginning of the year cumulative Shareholding during the year

no. of shares% of total shares of the

companyno. of shares

% of total shares of the company

At the beginning of the year:1. Mr. Shivaprakash D 345000 0.562. Mr. Venkatesh N 1335840 2.183. India Infoline Finance

Limited

58417631 95.23

Changes in PromotersShare holding during the year:

1. Mr. Shivaprakash D. (0.22)2. Mr. Venkatesh N (0.98)3. India Infoline Finance

Limited

2.14

At the End of the year:1. Mr. Shivaprakash D. 345000 0.312. Mr. Venkatesh N 1335840 1.203. India Infoline Finance

Limited

108417631 97.37

D) Shareholding Pattern of top ten Shareholders: niL

(Other than Directors, Promoters and Holders of GDRs and ADRs)

Particulars Shareholding at the beginning of the year cumulative Shareholding during the year




At the beginning of the year:Changes in Promoters

Share holding during the year: At the End of the year:


32


E) Shareholding of Directors and Key managerial Personnel:

Particulars Shareholding at the beginning of the year cumulative Shareholding during the year




At the beginning of the year:1. Mr. N Venkatesh 345000 0.562. Mr. D Shivaprakash 1335840 2.18Changes in Promoters Share

holding during the year:1. Mr. N Venkatesh (0.22)2. Mr. D Shivaprakash (0.98)At the End of the year:1. Mr. N Venkatesh 345000 0.312. Mr. D Shivaprakash 1335840 1.20

note: There is a change in the percentage of shareholding of Mr. D Shiva Prakash and Mr. Venkatesh N due to allotment made during the

year to M/s. India Infoline Finance Limited.

V) inDEBTEDnESS:

Indebtedness of the Company including interest outstanding/accrued but not due for payment

(`)Particulars Secured Loans

excluding depositsUnsecured Loans Deposits Total indebtedness

inDEBTEDnESS AT THE BEGinninG Of THE finAnciAL YEARi) Principal Amount 1,414,607,976 500,000 - 1,415,107,976 ii) Interest due but not paid - - - iii) Interest accrued but not due 6,058,172 - - 6,058,172 Total (i+ii+iii) 1,420,666,148 500,000 - 1,421,166,148 cHAnGE in inDEBTEDnESS DURinG THE finAnciAL YEAR

* Addition 627,982,450 748,620,200 1,376,602,650 * Reduction - - -

net change 628,482,450 748,620,200 1,377,102,650 inDEBTEDnESS AT THE EnD Of THE finAnciAL YEARi) Principal Amount 3,884,110,764 628,482,450 748,620,200 5,261,213,414 ii) Interest due but not paid - - - iii) Interest accrued but not due 27,429,520 - - 27,429,520 Total (i+ii+iii) 3,911,540,284 628,482,450 748,620,200 5,288,642,934

Vi. REmUnERATiOn Of DiREcTORS AnD KEY mAnAGERiAL PERSOnnEL-

A. Remuneration to Managing Director, Whole-time Directors and/or Manager:

(`)Sn. Particulars of Remuneration name of mD and WTD Total Amount

mr. n Venkatesh mr. D Shivaprakash1 Gross salary

(a) Salary as per provisions contained

in section 17(1) of the Income-tax

Act, 1961

5,401,596 4,200,156 9,601,752

(b) Value of perquisites u/s 17(2)

Income-tax Act, 1961(c) Profits in lieu of salary under section

17(3) Income- tax Act, 19612 Stock Option3 Sweat Equity4 Commission


Corporate Overview



33


- as % of profitothers, specify…

5 Others, please specifyTotal (A) 5,401,596 4,200,156 9,601,752 ceiling as per the Act120 lakh

B. Remuneration to other directors

(`)Sn. Particulars of Remuneration name of Directors Total Amount

mr. B. Seshadri mr. R. Annamalai mr. V. Ampalakkat1 Independent Directors

Fee for attending board committee meetings 58,332 47,222 58,332 163,886Commission - - - -Others, please specify - - - -

Total (1)2 Other Non-Executive Directors

Fee for attending board committee meetings - - - -Commission Others, please specify - - - -

Total (2) Total (B)=(1+2) - - - -Total managerial 0 0 0 0Remuneration 58,332 47,222 58,332 163,886

58,332 47,222 58,332 163,886

C. Remuneration to other Key Managerial Personnel:

(`)Sn. Particulars of Remuneration Key managerial Personnel

mr. Sutheja KJmr. T. Anantha

Kumar Total

1 Gross salary 598,502 1,220,026 1,818,528 (a) Salary as per provisions contained in section 17(1) of the

Income-tax Act, 1961(b) Value of perquisites u/s 17(2) Income-tax Act, 1961(c) Profits in lieu of salary under section 17(3) Income-tax Act, 1961

2 Stock Option3 Sweat Equity4 Commission

- as % of profitothers, specify…

5 Others, please specifyTotal 598,502 1,220,026 1,818,528

VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES: Nil


34


Type Section of the companies Act Brief

Description

Details of Penalty /

Punishment/ compounding

fees imposed

Authority

[RD / ncLT/ cOURT]

Appeal made,

if any (give Details)

A. cOmPAnYPenalty

NONEPunishmentCompoundingB. DiREcTORSPenalty

NONEPunishmentCompoundingc. OTHER OfficERS in DEfAULTPenalty

NONEPunishmentCompounding

for and on behalf of Samasta microfinance Limited

Venkatesh narayanaswamy Shivaprakash DeviahManaging Director Whole Time Director

DIN: 01018821 DIN: 02216802

Date: April 26, 2018Place: Bangalore


Corporate Overview



35


Annexure - B

fORm nO. AOc2

form for disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in

sub-section (1) of section 188 of the companies Act, 2013 including certain armslength transactions under third proviso thereto

(Pursuant to clause (h) of sub-section (3) of Section 134 of the Act and Rule 8 (2) of the Companies (Accounts) Rules, 2014)

1. Details of contracts or arrangements or transactions not at arm’s length basis: niL

a) Name of the related party and nature of relationship:

b) Nature of contracts/ arrangements / transactions:

c) Duration of the contracts/ arrangements/ transactions:

d) Salient terms of the contracts or arrangements or transactions including the value, if any:

e) Justification for entering into such contracts/ arrangements/ transactions:

f ) Date of approval by the Board:

g) Amount paid as advance, if any:

h) Date on which the special resolution was passed in general meeting as required under the first proviso to section 188:

2. Details of material contracts or arrangement or transactions at arm’s length basis:

name nature of Relationship nature of Transactions Duration Date of approval Amount (in `)India Infoline

Finance Limited

Holding Company Service Fee on Business

Correspondence

1 Year 21.04.2017 65,254,963

India Infoline

Finance Limited

Holding Company Interest 1 year 21.04.2017 62,257,683

India Infoline

Housing

Finance Limited

Fellow Subsidiary

Company

Arranger Fee 1 year 21.04.2017 1,197,796

IIFL Management

Services

Limited

Fellow subsidiary

Company

Rent 1 Year 21.04.2017 9,000

Registered Office: By Order of the Board of DirectorsSamasta Microfinance Limited, n Venkatesh D Shivaprakash418, 1/2A, 4th Cross, 6th Main, Managing Director Wholetime DirectorWilson Garden, Bangalore – 560027

Place: BangaloreDate: April 26, 2018

36


management Discussion and Analysis Report

NBFCs have played a major role in complementing banks and

other financial institutions, and help fill the gaps in availability of

financial services with respect to products as well as customer and

geographical segments. Strong linkages at the grass root level

makes them a critical cog in catering to the unbanked masses

in rural and semi-urban reaches, enabling the Government

and Regulators to further the mission of financial inclusion.

The sheer size of the market in terms of financially excluded

households presents large opportunities for a business model

that offers sustainable credit to the unbanked and under-banked

at affordable rates and a repayment cycle spread over a longer

duration. The dynamics of the NBFC sector is reflective of its

evolving role in niche areas of specialised services.

The MFI industry has almost gone past the effects of the

demonetisation now and is optimistic to recover from the setback.

SAmASTA micROfinAncE LimiTED AnD iTS OPERATiOnS:

The Financial Year 2017-18 displayed a great impetus to the

growth of the Company with India Infoline Finance Limited (IIFL)

as its Holding Company. IIFL had acquired a substantial equity

stake in the Company and made a further equity infusion of ` 50

crore during November 2017.

Business Growth: Our overall gross loan book including growth

in managed assets grew by 251.61% and the GL book saw an

increase of 341.36%.

customer Segment: Our main target customers are the

economically backward women of the weaker sections of the

society with a view to generate employment and empower them.

Branch Expansion: Having a foresight to grow the loan book as

well as to cater to the people in various other states, 103 branches

were added to our network. Currently, the Company has branches

across 10 states including Karnataka, Tamil Nadu, Kerala, Goa,

Maharashtra, Odisha, Bihar, Rajasthan, Gujarat and Chhattisgarh.

The branch count as on March 31, 2018 was 173 as compared to

70 as on March 31, 2017

credit Quality: The PAR was at 1.01% in March 2018 as against

3.76% in March 2017 on AUM.

The PAR was at 0.31% in March 2018 as against 3.86% in March

2017 on Loan Book.

The major cause for the PAR was due to the effects of

demonetisation .

funding: The Company raised ` 20 crore through issuance of

Non-Convertible Debentures and ` 315 crore through Term loans

from banks as on March 2018 as against 132 crore in March 2017.

Further, we had an equity infusion of ` 50 crore from IIFL during

November 2017.

RiSK mAnAGEmEnT

Samasta Microfinance Limited has an established risk

management and audit framework to identify, assess, monitor

and manage credit, market, liquidity and operational risks.

This framework is driven actively by the Board through its

Audit committee and supported by an experienced senior

management team.

We have a strong credit function, which is independent of our

business and a key controller of the overall portfolio quality.

AUDiT AnD inTERnAL cOnTROLS

Samasta Microfinance Limited has a well-established Internal

Audit and Control Systems in place that monitors the company’s

adherence to policies, procedures and systems. The Board Audit

Committee reviews the adequacy and effectiveness of the

internal audit function, including the structure of the internal

audit department, annual audit plan, staffing etc., and ensures

effective and independent review process. The Internal Audit

Department is responsible for monitoring and evaluating the

internal controls of the organisation as well as its adherence to

various statutory and regulatory compliances. These audits cover

Branches, Regional offices and Head Office at regular intervals.

fUncTiOnAL AUDiTS

Internal audits at Regional Offices and Head Office is carried out

on a quarterly basis by a board-appointed independent audit

firm, covering all key functions including HR, Operations, Credit,

Administration, Finance and Accounts, Loan Processing, MIS, etc.,

The firm also audits the Company’s adherence to all Statutory

and Regulatory Guidelines that have been prescribed for NBFC-

MFIs. The scope of various audits are reviewed and continuously

modified to keep pace with a dynamic business environment.

A strong compliance monitoring mechanism ensures that all

critical issues are tracked until closure within specified timelines.

All significant audit observations of Internal Audits and follow-

up actions are reported and discussed by the Board Audit

Committee, which meets every quarter. Monthly audit updates

are also circulated to the board, summarizing audit trends and

critical issues.

OPERATiOnAL PERfORmAncE:

Particulars no.of customers

Amount of loan disbursed (in `)

Own Book 309,187 7,596,177,590

Business Correspondent

66,497 1,812,633,194

Total 375,684 9,408,810,784

Corporate Overview



37

Annual Report 2017-18 mAnAGEmEnT DiScUSSiOn AnD AnALYSiS REPORT STATUTORY REPORTS

finAnciAL PERfORmAncE:

Particulars (`) fY 17-18 fY 16-17Net Interest Income 959,805,592 320,382,354

Other Income 8,025,679 8,064,934

Total Income 967,831,271 328,447,288

Operating Expenses 728,912,099 311,695,737

Operating Profit 238,919,172 16,651,551

Provisions 195,123,626 10,517,255

Profit before Tax 43,795,546 6,234,295Taxes 17,965,833 (18,55,593)

Profit After Tax 25,829,713 8,089,888

infORmATiOn TEcHnOLOGY

Samasta believes in constant review and improvements to ensure

all functions are at its highest efficiency level. Each development

is thought through, discussed with business and operation teams

to achieve the lowest TAT possible, minimise human mistakes,

decrease cost, decentralisation, automation, and so forth. We

have embraced technology with open arms and are streamlining

many of our operations by adopting technology such as:

• for Sourcing: Group Loan Origination Workflow (GLOW),

an app used for tab based enrolment of customers wherein

the details of the customers are recorded in tablets provided

to the field officers which would reduce the time required

for enrolment in case of manual entry of details of the

customers and in turn increases the number of customers

for the Company;

• for collection: Trucell, an app which is used for recording

the collection entries by the field officers / branch managers;

• Standardisation of some critical processes to validate

and accept only permissible range of values, alerts for

cross verification, customised reports to serve repetitive

work requirements of various team, data flows within the

system instead of external tracking of work flows etc have

been deployed to help improve communication, reduce

redundancy and potential human errors.

• Several in-module automations and clean ups have been

introduced to ensure that data flows into screens ahead

from the previous screens based on certain restrictions and

validations to avoid repeated data entry giving clear TAT

benefit.

• Automation of Sanction as a process has led to huge

reduction of TAT and manpower dependence. Analytics

through Cynepia has brought in a new outlook to data and

the way the same is read or projected to IIFL management.

• Several outsourced processed have been brought inhouse

post automation leading to time and cost benefits.

• Introduction of RBL work flow (funds transfer through

the system) has given complete control of NEFT returns

and wrong account credits which are potential risks to

microfinance business considering the huge number of

disbursements done on a daily basis.

• Sending IVR messages to the members with loan related

details in various regional languages has been initiated

with the help of ‘Awaaz De’. This will intimate customers at

all stages in loan processing – sanction , disbursement and

funds transfer.

• Signing with up Stock Holding Corporation of India for

loan document digitisation will help us reduce the burden

of maintaining physical documents and can be great help

during internal and external audit checks.

• Zing HR giving us both app and web versions have both

in automation of all HR processes. It has cut out most of

the manual processes and streamlined all the routine HR

activities.

• Fresh Services which is already signed up for will be

implemented and rolled out soon and will surely help

resolve all IT related issues faced by business, process and

reconciliation teams.

• Spot ways has helped us automate the Travel Allowance and

ensuring that adhoc TA calculations without valid data for

field team has been eliminated.

• C-KYC & E-Sign are process improvements in pipeline. Death

Settlement Module, Center weighted average, enabling

offline mode of all applications used are a few more in

pipeline IT enhancements. Decentralisation of most of the

operations such as booking to branches, COB and EOD

automations will take Samasta to the next level and ensure

an error free reconciliation process.

HUmAn RESOURcES

The year 2017-18 has been a year of growth and expansion for

Samasta and so the role of the human resource function has been

a key for enabling this growth both in terms of talent acquisition

and talent management.

• competent Regional HR & training Teams in new states: To provide on-ground support and partner with

the business and address employee queries timely, conduct

trainings as and when need arises, Regional HR and process

training teams have been hired in all new states with

multiple HR/ Training reps for states with more number of

branches such as Odisha, Bihar etc.

• Recruitment and Growth: Samasta has seen significant

growth in the last year in terms of people and number of

branches. From an employee strength of 690 as of March

management Discussion and Analysis Report (contd.)

38


2017, the Company grew to an employee strength of 1900+

employees as of March 2018. Between April 2017 – Mar 2018,

more than 100 new branches were opened including in new

states such as Bihar, West Bengal, Chhattisgarh, Rajasthan,

Gujarat, etc. Samasta has set its footprint as a large and the

fastest growing MFI in India currently.

• campus Recruitment: Samasta entered the campus

recruitment scenario for the first time to hire management

graduates from some of the top universities that offer

rural management / NBFC related courses. Some of the

universities visited are IRMA Anand, IIFM Bhopal, XIMB

Bhubaneshwar, SDM Mysore, SIIB Pune etc.

• Policies & Processes: All HR policies and processes have

been reviewed, with the aim of providing better employee

benefits. A comprehensive employee hand book was

published which includes all the important information

that employees need to be aware of. The translation of the

employee handbook into different vernacular languages in

currently in progress.

• compensation & Benefits: The compensation and

benefits are reviewed on regular intervals to ensure Samasta

offers competitive salaries and benefits to its employees.

The compensation levels have been increased in several

locations to be on par with the market standards and ensure

we are able to hire quality people. Benefits were improved

to include an annual performance bonus with salary,

introduction of term life insurance, etc.

• Attrition management: Significant efforts are being made

to contain employee attrition. This includes hiring qualified

people with better salaries, hiring college graduates and

management graduates and provide better training to make

them job ready etc. Efforts are on to reduce stress levels,

improve work conditions, better training and coaching for

Supervisors on team management etc.

• Technology and continuous process improvements: Investments have been made significantly in technology

and IT infrastructure which help in better processes thus

enabling a better experience for the customers and the

employees. This reduces turnaround times and reduces

stress in employees thus helping in reduced attrition levels.

• Training & Development: The training team is on a mission

to equip our employees with all the necessary trainings such

as processes & functional related, people management,

behavioral trainings, leadership skills, etc. The earlier 10-day

boot camp for all newly hired field staff has been increased

to 1 month to equip them better when the go on field.

with a mix of class room and field training has been put in

place for all the newly hired Customer Relationship Officers.

Management graduates hired from various institutes for

the positions of Divisional Manager Trainee / Area Manager

Trainee, Branch Manager Trainee etc. The training /induction

for each of these positions is set at different levels as per the

job role they have been hired for. In addition to this, refresher

trainings, process trainings, usage of BR.net, Glow, training on

mandatory laws such as sexual harassment training etc. have

been delivered on a regular basis and will continue.

• Automation: HR automation with the Humanet software

did not meet with much success due to limitations of the

product/ issues during implementation. Hence, a new HR

software, Zing HR, was identified and implementation is in

progress.

• Performance management: Performance appraisals and

midyear appraisals (for those who were not part of the

annual appraisals) were conducted in May 2017 and Nov

2017 respectively. A total of 12.5% and 9% wer given as

increments to the employees for 2017-18 appraisal cycles.

• Rewards and Recognition: Regular rewards are presented

to those who are deserving employees through the R&R

program to motivate employees to do better. This program

will be reviewed and improved further as the Company

grows.

• Employee Engagement: Several employee engagement

activities were planned for Samasta employees such as

Samasta Premier League, Christmas / New year celebrations,

Company get together etc. which were appreciated by

employees. More activities are planned for the coming year.

While much progress has been made over the past year, a lot

is yet to be accomplished in the coming years. The HR team

with its dedicated professionals is committed to achieving

success and taking the HR function to the next level.

OUTLOOK AnD cHALLEnGES

Now that the effects of demonetisation has subsided, the industry

growth potential is expected to come to its normal. There are a

few geographies which are less penetrated and can be utilised for

business expansion. However, few of the local / ring leaders in the

communities cause a threat by influencing the customers not to

repay the loans or by spreading rumors of waiver of loans.

cOncLUSiOn

With the expansion of the branch network already taken place

and equity infused by IIFL, the credit rating of the Company has

improved and banks are willing to lend loans at lower interest

rates. The platform has been laid for entering into other states for

disbursal of more micro loans and reaching the needy customers

across the country and we are confident of reaching new heights

while satisfying our customers.

management Discussion and Analysis Report (contd.)

Corporate Overview



39


Annexure - iV

fORm nO. AOc1

Statement containing salient features of the financial statement of subsidiaries

(Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of

the Companies (Accounts) Rules, 2014)

(`)

Name of Subsidiary Company Ayusha Dairy Private LimitedIssued and Subscribed Capital 10,000,000/-Reserves 434,692Total Assets 10,622,672Total Liabilities 10,622,672Investments 0Turnover 0Profit / (Loss) Before Tax (2,163,782)Provision for tax 0Profit / (Loss) After Tax (2,066,865)Proposed Dividend 0% of Share holding 100%

note: The Company does not have any Associate Companies and Joint Ventures.

Registered Office: By Order of the Board of DirectorsSamasta Microfinance Limited, n Venkatesh D Shivaprakash418, 1/2A, 4th Cross, 6th Main, Managing Director Wholetime DirectorWilson Garden, Bangalore – 560027

Place: BangaloreDate: April 26, 2018

40


SEcRETARiAL AUDiT REPORT

fORm nO.mR-3SEcRETARiAL AUDiT REPORT

forthe financial year ended march 31, 2018

[Pursuant to section 204(1)of the Companies Act,2013andruleNo.9oftheCompanies(Appointment and Remuneration of Managerial Personnel) Rules, 2014]

To,

The Members,


418, 1/2A, 4th Cross, 6th Main, Wilson Garden

Bangalore -560027

I have conducted the secretarial audit of the compliance of

applicable statutory provisions and the adherence to good

corporate practices by Samasta microfinance Limited (herein

after called the ‘company’). Secretarial Audit was conducted in a

manner that provided me a reasonable basis for evaluating the

corporate conducts/statutory compliances and expressing my

opinion there on.

Based on my verification of the Company’s books, papers, minute

books, forms and returns filed and other records maintained

by the Company and also the information provided and

representation made by the Company, its officers, agents and

authorised representatives during the conduct of secretarial audit,

I hereby report that in my opinion, the Company has, during the

audit period covering the financial year ended on March 31, 2018

complied with the statutory provisions listed hereunder and also

that the Company has proper Board-processes and compliance-

mechanism in place to the extent, in the manner and subject to

the reporting made here in after:

I have examined the books, papers, minute books, forms and

returns filed and other records maintained by the Company for

the financial year ended on March 31, 2018 according to the

provisions of:

1. The Companies Act, 2013(the Act) and the rules made there

under;

2. The Securities Contracts(Regulation) Act, 1956 (‘SCRA’) and

the rules made thereunder;

3. The Depositories Act, 1996 and the Regulations and Bye-

laws framed there under;

4. The following Regulations and Guidelines prescribed under

the Securities and Exchange Board of India Act, 1992

• TheSecuritiesandExchangeBoardof India(Prohibitionof

Insider Trading) Regulations,1992;

• The Securities and Exchange Board of India (Issue and

Listing of Debt Securities) Regulations,2008;

• The Securities and Exchange Board of India (Listing

Obligation and Disclosures Requirements) Regulation, 2015;

5. Directions, Guidelines and Notifications issued by the

Reserve Bank of India from time to time with respect to the

‘Non-Banking Financial Company-Micro Finance Institutions’

(NBFC-MFIs)

I have also examined compliance with the applicable clauses of

the following:

a) Secretarial Standards issued by The Institute of Company

Secretaries of India; and

b) The Listing Agreements entered in to by the Company with

Bombay Stock Exchange(s), I further report that during

the period under review the Company has complied with

the provisions of the Act, Rules,Regulations,Guidelines,

Standards, etc. mentioned above subject to the following

observations:

1. The Board of Directors of the Company is duly

constituted with proper balance of Executive

Directors,Non-Executive Directors and Independent

Directors. The changes in the composition of the

Board of Directors that took place during the period

under review were carried out in compliance with

the provisions of the Act. Further, the Company has

appointed a Woman Director at the Board Meeting of

the Company dated April 26, 2018.

Other statutes, Acts, laws, Rules, Regulations, Guidelines and

Standards etc., as applicable to the Company are given below:

Labour Laws and other incidental laws related to labour and

employees appointed by the Company either on its payroll or

on contractual basis as related to wages, gratuity, provident fund,

ESIC, compensation etc.;

(i) Acts as prescribed under Direct Tax and Indirect Tax;

(ii) Acts prescribed under prevention and control of pollution;

(iii) Acts prescribed under environmental protection;

(iv) Land Revenue laws of respective States;

(v) Labour Welfare Act of respective States; and

(vi) Local laws as applicable to various offices of the Company.

Further, Adequate notice is given to all directors to schedule the

Board Meetings, agenda and detailed notes on agenda were sent

at least seven days in advance, and a system exists for seeking and

Corporate Overview



41


obtaining further information and clarifications on the agenda

items before the meeting and for meaningful participation at the

meeting.

During the period under review, decisions were carried through

unanimously and no dissenting views were observed, while

reviewing the minutes.

I further report that there are adequate systems and processes

in the Company commensurate with the size and operations of

the Company to monitor and ensure compliance with applicable

laws, rules, regulations and guidelines.

I further report that during the audit period the Company has

undertaken following events/actions having a major bearing on

the Company’s affairs in pursuance of the above referred laws,

rules, regulations, guidelines, standards, etc. referred to above:

1. Private Placement of Non-Convertible Debentures during

the year

S l . no.

issue Size Date of Allotment nature of Security

1. 200 28/09/2017 Rated Secured Unlisted Redeemable

Non-Convertible Debentures

2. Rights issue made during the year:

S l . no.

issue Size Date of Allotment nature of Security

1. 50,000,000 08/11/2017 Equity Shares

3. The Authorised Capital of the Company was increased from

` 650,000,000 divided into 6,30,00,000 Equity shares of ` 10

each aggregating to 630,000,000 and 145,000 Redeemable

Non-Convertible Cumulative Preference shares of ` 10 each

aggregating to ` 1,450,000 and 1,855,000 Preference shares

of ` 10 each aggregating to ` 18,550,000 to ` 1,150,000,000

consisting of 113,000,000 Equity Shares of `10 each

aggregating to ` 1,130,000,000 and 145,000 Redeemable

Non-Convertible Cumulative Preference shares of ` 10

each aggregating to ` 1,450,000 and 1,855,000 Preference

shares of ` 10 each aggregating to ` 18,550,000 vide Extra-

Ordinary General Meeting held on November 4, 2017.

4. The Paid-up Capital of the Company was increased from

613,446,110/-to ` 1,113,446,110/- on November 8, 2017

pursuant allotment of 50,000,000 Equity Shares of ` 10/-

each to M/s India Infoline Finance Limited on Rights Issue

basis.

5. The Company has approved the scheme of Amalgamation

of Ayusha Dairy Private Limited, the Wholly Owned

Subsidiary Company with the Company vide Extra-Ordinary

General Meeting held on March 28, 2018. However, the

Company is Awaiting the approval of the Regional Director,

Southern Region for the said merger

LakshmeenarayanBhatPracticing Company SecretaryAcS no: 35993cP no. 15003

Date: April 26, 2018Place: Bengaluru

This report is to be read with our letter of even date which is annexed as Annexure A and forms an integral part of this report.

SEcRETARiAL AUDiT REPORT (contd.)

42


Annexure A’

To,

The Members,


418, 1/2A, 4th Cross, 6th Main, Wilson Garden

Bangalore -560027

Our report of even date is to be read along with this letter.

1. Maintenance of secretarial record is the responsibility of

the management of the Company. Our responsibility is to

express an opinion on these secretarial records based on

our audit.

2. We have followed the audit practices and processes as

were appropriate to obtain reasonable assurance about the

correctness of the contents of the Secretarial records. The

verification was done on test basis to ensure that correct

facts are reflected in secretarial records. We believe that the

processes and practices, we followed provide a reasonable

basis for our opinion.

3. We have not verified the correctness and appropriateness of

financial records and Books of Accounts of the Company.

4. Where ever required, we have obtained the Management

representation about the compliance of laws, rules and

regulations and happening of events etc.

5. The compliance of the provisions of Corporate and

other applicable laws, rules, regulations, standards is the

responsibility of management. Our examination was limited

to the verification of procedures on test basis.

6. The Secretarial Audit report is neither an assurance as to

the future viability of the Company nor of the efficacy or

effectiveness with which the management has conducted

the affairs of the Company.

7. We have prepared the Secretarial Audit Report on the draft

Financials, therefore we are not able to comment on the

Related Party Transactions, Loans and advances which we

have to rely on the Audited Financials.

LakshmeenarayanBhatPracticing Company SecretaryAcS no: 35993cP no. 15003

Date: April 26, 2018Place: Bengaluru

Corporate Overview



43


INDEPENDENT AUDITORS’ REPORT

TO THE MEMBERS OF SAMASTA MICROFINANCE LIMITED

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial

statements of SAMASTA MICROFINANCE LIMITED (“the

Company”), which comprise the Balance Sheet as at March

31, 2018, and the Statement of Profit and Loss and Cash Flow

Statement for the year then ended, and a summary of significant

accounting policies and other explanatory information.

Management’s Responsibility for the Standalone Financial Statements

The Company’s Board of Directors is responsible for the matters in

section 134(5) of the Companies Act, 2013 (“the Act”) with respect

to the preparation of these standalone 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 principles generally accepted in India, including

the Accounting Standards specified under Section 133 of the Act,

read with Rule 7 of the Companies (Accounts) Rules, 2014.

This responsibility also includes the maintenance of adequate

accounting records in accordance with the provision of the Act

for safeguarding of the assets of the Company and for preventing

and detecting the frauds and other irregularities; selection

and application of appropriate accounting policies; making

judgments and estimates that are reasonable and prudent; and

design, implementation and maintenance of adequate internal

financial control, that were operating effectively for ensuring the

accuracy and completeness of the accounting records, relevant

to the preparation and presentation of the standalone financial

statements that give a true and fair view and are free from material

misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these standalone

financial statements based on our audit.

We have taken into account the provisions of the Act, the

accounting and auditing standards and matters which are

required to be included in the audit report under the provisions

of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards

on Auditing specified under section 143(10) of the Act. Those

Standards require that we comply with ethical requirements

and plan and perform the audit to obtain reasonable assurance

about whether the standalone financial statements are free from

material misstatement.

An audit involves performing procedures to obtain audit evidence

about the amounts and 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 financial

control relevant to the Company’s preparation of the financial

statements that give true and fair view in order to design audit

procedures that are appropriate in the circumstances. An audit

also includes evaluating the appropriateness of accounting

policies used and the reasonableness of the accounting estimates

made by Company’s Directors, as well as evaluating the overall

presentation of the standalone financial statements.

We believe that the audit evidence we have obtained is sufficient

and appropriate to provide a basis for our audit opinion on the

standalone financial statements.

Opinion

In our opinion and to the best of our information and according to

the explanations given to us, the standalone 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:

a) In the case of the Balance Sheet, of the state of affairs of the

Company as at March 31, 2018;

b) In the case of the Statement of Profit and Loss Account, of

the profit for the year ended on that date; and

c) In the case of the Cash Flow Statement, of the cash flows for

the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2016

(“the Order”) issued by the Central Government of India in

terms of sub-section (11) of section 143 of the Act, we give

in the ‘Annexure-A’ statement on the matters specified in

paragraphs 3 and 4 of the Order to the extent applicable.

2. As required by section 143(3) of the Act, we report that:

a) We have sought and 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 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 aforesaid standalone financial

statements comply with the Accounting Standards

specified under Section 133 of the Act, read with Rule

7 of the Companies (Accounts) Rules, 2014 and and

the Companies (Accounting Standards) Amendment

Rules, 2016.

44


e) On the basis of written representations received

from the directors as on 31st March, 2018, taken on

record by the Board of Directors, none of the directors

is disqualified as on March 31, 2018, from being

appointed as a director in terms of Section 164(2) of

the Act.

f ) With respect to the adequacy of the internal financial

controls over financial reporting of the company and

the operating effectiveness of such controls, refer to

our separate report in ‘Annexure-B’

g) With respect to the other matters to be included in

the Auditor’s Report in accordance with Rule 11 of

the Companies (Audit and Auditors) Rules, 2014, in

our opinion and to the best of our information and

according to the explanations given to us:

i. The Company does not have any pending

litigations which would impact its financial

position.

ii. The Company did not have any long-term

contracts including derivatives contracts for

which there were any material foreseeable

losses; and

iii. There were no amounts which required to

be transferred to the Investor Education and

Protection Fund by the Company.

For Gowthama & Company Chartered Accountants

Firm No: 005917S

H V GowthamaDate: April 26, 2018 PartnerPlace: Bangalore Mem. No: 014353

Corporate Overview



45

Annual Report 2017-18 STANDALONE FINANCIAL STATEMENTS

The Annexure-A referred to in our Report of even date to the members of Samasta Microfinance Limited, on the standalone financial statements of the company for the year ended March 31, 2018.On the basis of such checks as we considered appropriate and according to the information and explanation given to us during the course of our audit, we report that:

1 (a) The Company has maintained proper records showing full particulars including quantitative details and situation of its fixed assets.

(b) According to the information and explanation explained to us, fixed assets have been physically verified by the management during the year which, in our opinion, is reasonable having regard to the size of the company and the nature of its Assets. No material discrepancies were noticed on such verification.

(c) The Company does not hold any immovable properties, therefore this clause is not applicable to the Company.

2 According to the information and explanation explained to us, the Company is a Non-Banking Financial Company (‘NBFC’) engaged in the business of providing loans. As such, the Company does not carry any inventory. Therefore, the provisions of this clause are not applicable to the Company.

3. According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has not granted loans, secured or unsecured, to companies, as required to be specified in the register maintained under Section 189 of the Act. Hence disclosure under this clause is not applicable.

4. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 185 and 186 of the Companies Act, 2013 in respect of, making investments.

5. The Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, disclosure under this clause is not applicable.

6. According to the information and explanations given to us, the Central Government has not prescribed maintenance of cost records under Section 148(1) of the companies act for any services rendered by the Company. Therefore this clause is not applicable to the Company.

7. (a) According to the records of the company, undisputed statutory dues including Provident Fund, Employees’ State Insurance, Income-tax, Sales Tax, Duty of customs, Duty of Excise, Value Added Tax and any other statutory dues with the appropriate authorities have generally been regularly deposited with the appropriate authorities. According to the information and explanations given to us there were no outstanding statutory dues as on 31st of March, 2018 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given

to us, there is no amounts payable in respect of Income Tax, Sales tax, Service tax, duties of customs, duties of excise, Value Added Tax or Cess and which have not been deposited on account of any disputes.

8. According to the information and explanations given to us and on the basis of our examination of the books of account, we are of the opinion that, the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

9. According to the information and explanations give to us and in our opinion, the money raised by way of term loans and Private placed Debt instruments i.e. non Convertible Debenture were applied for the purpose for which those were raised though idle/surplus funds which were not required for immediate utilisation were gainfully invested in liquid assets payable on demand.

10. According to the information and explanations given to us and based upon the audit procedures performed, fraud on the company by its employee of ` 715,936 /- the same has been noticed or reported during the year.

11. Managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 read with schedule V to the companies act.

12. According to the information and explanations given to us and in our opinion, the Company is not a Nidhi Company and therefore clause is not applicable.

13. According to the information and explanation given to us, all the transactions with the related parties are in compliance with section 188 and 177 and where applicable the details have been disclosed in the financial statements as required by the accounting standard and Companies Act 2013.

14. According to the Information and Explanation given to us, the company has made preferential allotment of shares during the year, and the requirement of section 62 and other applicable provisions of Companies act 2013 have been complied with and the amount raised has been used for the purpose for which the funds were raised.

15. According to the Information and Explanation provided to us, the company has not entered into any Non-cash transactions with Directors or persons connected with him and therefore this clause is not applicable to the company.

16. According to the Information and Explanation given to us, the company has obtained the registration under section 45-IA of the Reserve Bank of India Act, 1934.


Firm No: 005917S


46


‘ANNEXURE-B’ TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS OF SAMASTA MICROFINANCE LIMITED REPORT ON THE INTERNAL FINANCIAL CONTROLS UNDER CLAUSE (I) OF SUB-SECTION 3 OF SECTION 143 OF THE COMPANIES ACT, 2013 (“THE ACT”)

We have audited the internal financial controls over financial reporting of Samasta Microfinance Limited (“the Company”) as of March 31, 2018 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

MANAGEMENT’S RESPONSIBILITy FOR INTERNAL FINANCIAL CONTROLS

The Company’s management is responsible for establishing and maintaining internal financial controls based on essential components such as the control environment, the entity’s risk assessment process, control activities, Information system and communication and the monitoring of such controls. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

AUDITORS’ RESPONSIBILITy

Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the

Company’s internal financial controls system over financial reporting.

MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that

(1) Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

(2) Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the Company; and

(3) Provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

OPINION

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, based on essential components such as the control environment, the entity’s risk assessment process, control activities, Information system and communication and the monitoring of such controls.


Firm No: 005917S


Corporate Overview



47


Standalone Balance Sheetas at March 31, 2018

As per our attached report of even date For and on behalf of the Board of DirectorsFor Gowthama & Company of Samasta Microfinance LimitedChartered Accountants Firm No. 005917S

H.V. Gowthama N. Venkatesh D. ShivaprakashPartner Managing Director Whole-time DirectorM. No. 014353 DIN : 01018821 DIN : 02216802

Place: Bangalore T. Anantha Kumar K. J. SuthejaDate: April 26, 2018 Chief Financial Officer Company Secretary

(`)

Particulars Note No.

As at March 31, 2018


I EQUITy AND LIABILITIES(1) Shareholders’ funds

(a) Share Capital 2 1,113,446,110 613,446,110 (b) Reserve and Surplus 3 55,916,061 30,086,348

1,169,362,171 643,532,458 (2) Share application money pending allotment - -(3) Non-Current Liabilities

(a) Long-term borrowings 4 1,956,414,608 682,670,317 (b) Other Long-term liabilities - - (c) Long-term provisions 5 1,009,84,630 23,557,225

2,057,399,239 706,227,542 (4) Current Liabilities

(a) Short-term borrowings 6 1,376,602,650 -(b) Trade payables 7 30,628,874 81,485,650 (c) Other current liabilities 8

-Current maturities of long term borrowings 2,129,377,029 783,637,803 -Others 603,167,056 38,563,552

(d) Short-term provisions 9 38,781,207 1,450,000 4,178,556,816 905,137,005

TOTAL 7,405,318,227 2,254,897,006 II ASSETS

(1) Non-current assets(a) Fixed assets 10

(i) Tangible assets 44,504,269 21,315,419 (ii) Intangible assets 925,026 725,220 (iii) Capital work-in-progress - - (iv) Intangible assets under development - -

45,429,296 22,040,639 (b) Non-current investments 11 10,500,000 10,500,000 (c) Deferred tax assets (Net) 12 24,663,572 4,787,015 (d) Long-term loans & advances 13

-Loans 2,113,382,091 369,165,027 -Others - -

(e) Other non-current assets 14 335,821,406 158,665,888 2,484,367,069 543,117,930

(2) Current assets(a) Current investments - - (b) Inventories - - (c) Trade receivables 15 37,916,290 9,852,927 (d) Cash and Bank balances 16 459,586,218 561,482,281 (e) Short-term loans & advances 17

-Loans 4,226,703,989 1,067,314,077 -Others 60,311,529 4,198,856

(f ) Other current assets 18 91,003,836 46,890,296 4,875,521,862 1,689,738,436

Total 7,405,318,227 2,254,897,006 Significant Accounting Policies and Notes to Accounts 1

48


Standalone Statement of Profit and Loss for the year ended March 31, 2018

(`)

Particulars Note No



REVENUE(A) Revenue from Operations 19 959,805,592 320,382,354 (B) Other Income 20 8,025,679 8,064,934 (C) Total Revenue (A+B) 967,831,271 328,447,288 (D) Expenses

a) Employee benefits expenses 21 280,081,104 112,174,370 b) Finance costs 22 313,024,282 146,308,160 c) Depreciation and amrotisation expenses 10 13,081,181 4,580,939 d) Administrative and Other expenses 23 122,725,532 48,632,269 e) Provisions / write off receivables under

financial activity24 195,123,626 10,517,255

Total Expenses (D) 924,035,725 322,212,992 (E) Profit for the year before tax (C-D) 43,795,546 6,234,295 (F) Tax expenses

(a) Current tax 36,500,000 1,450,000 (b) Deferred tax 12 (19,876,557) (1,963,203)(c) MAT credit availed and utilised 1,342,390 (1,342,390)

Total tax expense (F) 17,965,833 (1,855,593)(G) Profit for the year after tax (E-F) 25,829,713 8,089,888 (H) Profit for the period from continuing

operations 25,829,713 8,089,888

(I) Loss for the period from discontinuing operations

- -

(J) Tax expense of discontinuing operations - -(K) Profit from discontinuing operations

(after tax) (I-J)- -

(L) Profit for the period ( H+K) - -(M) Earnings per Equity Share (Face value of

`10/- each):(a) Basic 0.32 0.59 (b) Diluted 0.32 0.59

Significant accounting policies and notes to the accounts 1




Corporate Overview



49


Standalone Cash Flow Statementfor the year ended March 31, 2018

(`)

Particulars year ended March 31, 2018


CASH FLOW FROM OPERATING ACTIVITIES Net Profit Before Tax 43,795,546 6,234,295 Adjustments for: Depreciation 13,081,181 4,580,939 Dividend on Mutual funds - (6,947,850) Short Term Capital Gain (4,851,909) - Provisions for Standard and Non Performing Assets 49,045,000 7,558,375 Bad Debts Written Off 120,678,626 2,958,880 Interest on Fixed Deposits (18,603,421) (13,081,047) Interest on Income Tax 1,509,368 - Loss on sale of Fixed assets - 87,965 Operating Profit before Working Capital Changes A 204,654,391 1,391,557 Working Capital Changes: (Increase) / Decrease in trade and other receivables (28,063,363) (567,891,098) (Increase) / Decrease in Short term loans and advances (3,215,502,584) (10,498,254) (Increase) / Decrease in Other Current Assets (44,113,540) (17,787,465) (Increase) / Decrease in Loans & Advances (1,913,940,690) (190,884,377) (Increase) / Decrease in Other Non- Current Assets (161,565,145) (35,454,235) Increase / (Decrease) in Long term Liabilities 2,026,531,224 (339,701,973) Increase / (Decrease) in long term provisions 75,977,405 (1,579,164) Increase / (Decrease) in Other current liabilities (1,657,275,007) 403,155,821 Increase / (Decrease) in trade payables (50,856,776) - Changes in Working Capital B (4,968,808,475) (760,640,745) Cash generated from operations A+B (4,764,154,084) (759,249,188) Income taxes paid (16,932,764) (7,869,013) Net cash from operating activities (4,781,086,848) (767,118,201) CASH FLOW FROM INVESTING ACTIVITIES Sale of Fixed Assets 29,731 590,500 Dividend from Mutual Funds - 6,947,850 Short Term Capital Gain 4,851,909 Purchase of Fixed Assets (36,499,570) (16,426,835) Interest on Fixed Deposits 18,603,421 13,081,047 Net Cash used in Investing activities (13,014,508) 4,192,562 CASH FLOW FROM FINANCING ACTIVITIES Proceeds from issue of Equity Share Capital 500,000,000 500,000,000 Redemption of Preference Share Capital - - Proceeds from Borrowings 6,397,227,364 1,361,286,036 Repayment of Borrowings (2,205,022,072) (665,604,845) Dividends paid (including DDT) - (1,939,376) Net cash used in financing activities 4,692,205,292 1,193,741,815 Net increase in cash and cash equivalents (101,896,064) 430,816,176 Cash and cash equivalents as at 01-April-2017 561,482,281 130,666,105 Cash and cash equivalents as at 31-March-2018 459,586,218 561,482,281 The above Cash Flow Statement has been prepared under the "Indirect Method" as set out in Accounting Standard -3 on Cash Flow Statement.




50


Notes forming part of Standalone Financial Statements as at March 31, 2018

NOTE 1 : SIGNIFICANT ACCOUNTING POLICIES & NOTES FORMING PART OF THE ACCOUNTS

1. Basis of Preparation:

The financial statements of the Company have been prepared

in accordance with Generally Accepted Accounting Principles

in India (Indian GAAP) to comply with the Accounting

Standard specified under section 133 of the Companies Act,

2013, read with Rule 7 of the Companies (Accounts) Rules,

2014 and the relevant provisions of the Companies Act, 2013

(“the 2013 Act”)/Companies Act 1956, (“the 1956 Act”), as

applicable. The financial statements have been prepared on

accrual basis and the directions issued by the Reserve Bank of

India (RBI) to the extent applicable to the Company.

The Company follows the prudential norms for Income

recognition, asset classification and provisioning as

prescribed by the RBI for Non-deposit taking Non-Banking

Financial Companies (NBFC-MFI).

2. Use of Accounting Estimates:

The presentation of financial statements in conformity with

Indian Generally Accepted Accounting Principles requires

management to make estimates and assumptions that

affect the reported amounts of assets and liabilities and

disclosure of contingent assets and liabilities at the date of

the financial statements and reported amounts of revenues

and expenses during the reporting period. Although such

estimates are made on a reasonable and prudent basis

taking into account all available information, actual results

could differ from those estimates.

3. Cash flow statement:

The Cash Flow are reported using the indirect method,

whereby profit / (loss) before 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 available information.

4. Cash and cash equivalents:

Cash and cash equivalents for the purpose of cash flow

statement comprise cash in hand and cash at bank and

short-term investments with an original maturity of three

months or less.

5. Provisions and contingent liabilities:

A provision is recognised when the Company has a present

legal or constructive 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 reliable estimate

can be made. Provisions are not discounted to their present

value and are determined based on 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.

A contingent liability is a possible obligation that arises

from past events whose existence will be confirmed by the

occurrence or non-occurrence of one or more uncertain

future events beyond the control of the Company or a

present obligation that is not recognised because it is not

probable that an outflow of resources will be required to

settle the obligation. A contingent liability also arises in

extremely rare cases where there is a liability that cannot be

recognised because it cannot be measured reliably.

The Company does not recognise a contingent liability but

discloses its existence in the financial statements.

6. Income Taxes and Deferred Taxes:

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 difference, being

the difference between taxable income and accounting

income that originate in one period and are capable of

reversal in one or more subsequent periods. Deferred tax

assets are recognised only if there is virtual certainty that

they will be realised and are reviewed every year. The tax

effect is calculated on the accumulated timing differences

at the end of the year based on enacted or substantially

enacted tax rates.

7. Tangible fixed assets:

All fixed assets are stated at historical cost less accumulated

depreciation and impairment losses, if any. Cost comprises

the purchase price and any attributable cost of bringing the

asset to its working condition for its intended use.

8. Intangible assets:

Computer software are stated at the cost of acquisition and

are amortised over a period of five years, based on expected

future economic benefits accruing to the Company from

the year of acquisition.

9. Depreciation & Amortisation:

Depreciable amount for assets is the cost of an asset, or

other amount substituted for cost, less its estimated residual

value.

Depreciation on tangible fixed assets has been provided on

the straight-line method as per the useful life prescribed in

Corporate Overview



51


Schedule II to the Companies Act, 2013 The useful life of the

assets is as under:

Category of Assets Useful Life

Furniture and Fixtures 10 years

Office Equipment 5 years

Vehicles 8 years

Computers 3 years

Intangible assets are amortised over their estimated useful

life as follows:

Software - 3 Years

Servers & Networks - 6 Years

Individual assets costing less than ` 5,000 each are

depreciated fully in the year of purchase.

10. Investments:

Investments which are long term in nature are stated at cost

with provisions where necessary for diminution, other than

temporary, in the value of Investment.

Investments, which are readily realisable and intended

to be held for not more than one year from the date

on which such investments are made, are classified as

current investments. All other investments are classified

as long-term investments. Current investments are carried

in the financial statements at lower of cost and fair value

determined on an individual investment basis except for

investments in the units of mutual funds in the nature of

current investments that have been valued at the net

asset value declared by the mutual fund in respect of each

particular scheme, in accordance with the NBFC directions.

Long-term investments are carried at cost. However,

provision for diminution in value is made to recognise

a decline other than temporary in the value of the

investments. On disposal of an investment the difference

between carrying amount and net disposal proceeds are

charged or credited to the statement of profit and loss.

11. Classification & Provisions of Loan Portfolio:

Loans are classified and provided as per norms required

in Non-Banking Financial (Non-Deposit Accepting)

Companies Prudential Norms (Reserve Bank) Directions,

2007, as amended from time to time.

The Company has got classified as NBFC-MFI and

accordingly has provided its provisioning norms for loan

portfolio vide RBI circular dated December 02, 2011 as

amended vide circular dated March 20, 2012. According to

which the provision will be higher of:

Notes forming part of Standalone Financial Statements as at March 31, 2018 (Contd.)

a) 1% of the outstanding loan portfolio or

b) 50% of the aggregate loan installments which are

overdue for more than 90 days and less than 180 days

and 100% of the aggregate loan installments which

are overdue for 180 days or more.

In addition to the above provision, the Company has

provided 0.40% of the Loan Portfolio as Standard Asset

provision.

12. Trade receivables under Financing Activity:

Trade receivables under financing activity include Income

Generating Loan, Dairy Cow Loan / Cattle Loan, Water

Purifier Loan, Solar Products Loan and Individual Loan.

Loans are classified into ‘Performing and Non- Performing

assets in terms of the Non-Banking Financial Companies

Prudential Norms (Reserve Bank) Directions, 1998 and

NBFC-MFI Directions (as applicable) issued by the Reserve

Bank of India as amended from time to time.

13. Revenue Recognition:

a) Revenue from Interest on loans financed by the

Company is recognised on accrual basis, considering

the directions issued by the Reserve Bank of India

from time to time in terms of the Non Banking

Financial Companies Prudential Norms (Reserve Bank)

Directions, 1998.

b) Interest income on Fixed Deposits with Banks is

recognised on a time proportion basis taking into

account the amount outstanding and the rate

applicable.

c) Processing fee is recognised as and when collected at

the time of loan disbursement.

d) Dividend income from investments in mutual fund is

recognised when the right to receive is established.

e) Facilitation fee is recognised on accrual basis according

to the terms of agreement.

f ) Profit/Premium arising at the time of securitisation

of loan portfolio is amortised over the life of the

underlying loan/portfolio/securities and loss arising

thereon is accounted immediately.

g) All other income is recognised on an accrual basis,

when there is no uncertainty in the ultimate realisation

/ collection.

14. Borrowing Costs:

Borrowing costs attributable to qualifying assets (assets

which require substantial period of time to get ready for

their intended use) are capitalised as part of the cost of such

52



assets. All other borrowing costs are charged to revenue.

15. Earnings per Share:

Basic and diluted earnings per share are computed in

accordance with Accounting Standard (AS)-20 – Earnings

per share. In determining the Earning per share the

Company considers the Net Profit after Tax. The number

of Shares used in computing Basic Earning per share

is number of share outstanding during the period. The

number of shares used in computing diluted earnings per

share comprises the weighted average shares considered

for deriving basic earnings per share and also the weighted

average number of equity shares that could have been

issued on the conversion of all dilutive potential equity

shares.

16. Employee Benefits:

a) Short Term Employee Benefits:

All employee benefits falling due wholly within twelve

months of rendering the services are classified as

short-term employee benefits, which include benefits

like Salary, Allowances and incentives, and are

recognised as expenses in the period in which the

employee renders the related service.

b) Post- employment Benefits:

Defined Contribution Plans:

The Company’s contributions to provident fund are

considered as defined contribution plans and are

charged as an expense as they fall due based on the

amount of contribution required to be made.

Defined Benefit Plans:

For defined benefit plans in the form of gratuity,

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. Past service cost is recognised immediately

to the extent that the benefits are already vested

and otherwise is amortised on a straight-line basis

over the average period until the benefits become

vested. The retirement benefit obligation recognised

in the Balance Sheet represents the present value

of the defined benefit obligation as adjusted for

unrecognised past service cost.

17. Impairment:

The Company assesses at each reporting date whether

there is an indication that an asset may be impaired. If

any indication exists, or when annual impairment testing

for an asset is required, the Company estimates the asset’s

recoverable amount. An asset’s recoverable amount is the

higher of an asset’s net selling price and its value in use.

The recoverable amount is determined for an individual

asset, unless the asset does not generate cash inflows that

are largely independent of those from other assets or

groups of assets. Where the carrying amount of an asset

exceeds its recoverable amount, the asset is considered

impaired and is written down to its recoverable amount. In

assessing value in use, the estimated future cash flows are

discounted to their present value using a pre-tax discount

rate that reflects current market assessments of the

time value of money and the risks specific to the asset. In

determining net selling price, recent market transactions

are taken into account, if available. If no such transactions

can be identified, an appropriate valuation model is used.

18. Leases:

Leases where the lessor effectively retains, substantially all

the risks and benefits of ownership of the leased item, are

classified as operating leases. Operating lease payments are

recognised as an expense in the statement of profit and loss

on a straight-line basis over the lease term.

19. Foreign Currency Transactions:

I. All transactions in foreign currency are recognised

at the exchange rate prevailing on the date of the

transaction.

II. Foreign currency monetary items are reported using

the exchange rate prevailing at the close of the

financial year.

III. Exchange differences arising on the settlement of

monetary items or on the restatement of Company’s

monetary items at rates different from those at which

they were initially recorded during the year, or reported

in previous financial statements, are recognised as

income or as expenses in the year in which they arise.

20. General:

Any other accounting policy not specifically referred to are

consistent with generally accepted accounting principles.

Corporate Overview



53


NOTE 2 : SHARE CAPITAL

(`)

Particulars As at March 31, 2018


Authorised :13,000,000 (Previous year 63,000,000 Equity Shares of ` 10/- each) Equity Shares of ` 10/- each

1,130,000,000 630,000,000

2,000,000 (Previous year 2,000,000 Preference Shares of ` 10/- each) Preference Shares of ` 10/- each

20,000,000 20,000,000

Total 1,150,000,000 650,000,000 Issued, Subscribed and Paid-up share capital111,344,611 (Previous year : 61,344,611 shares) Equity Shares of 10/- each fully paid-up 1,113,446,110 613,446,110

Total 1,113,446,110 613,446,110

i) Reconciliation of the number of shares outstanding at the beginning and at the end of the year:

(` in Millions)



Equity Shares: Number of shares at the beginning of the year 61,344,611 10,470,000

Add: Equity shares issued during the year 50,000,000 50,874,611

Number of shares at the end of the year 111,344,611 61,344,611 Preference Shares: Preference Shares: - 1,000,000

Preference Shares: - -

Preference Shares: - 1,000,000

Number of shares at the end of the year - -

ii) Number of shares held by each shareholder holding more than 5% shares in the Company are as follows: Class of shares / Name of the shareholder

(`)

Particulars


Number of shares


Number of shares

Equity Shares: India Infoline Finance Limited 108,417,631 58,417,631 Total 108,417,631 58,417,631

iii) Terms / rights attached to Equity Shares:

The Company has Equity Shares having par value of ` 10/- per share. Each holder of Equity Shares is entitled to one vote per

share. Holders of Equity Shares are entitled to dividend, in proportion to the paid up amount, proposed by Board of Directors

subject to approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company,

the holders of Equity Shares will be entitled to receive any of the remaining assets of the company, after distribution of all

preferential amounts.

iv) Terms / rights attached to Preference Shares: a) Rights/preferences attached to Preference Shares

The dividend on preference shares proposed by the Board of Directors is subject to approval of shareholders in the

ensuing Annual General Meeting. Each holder of Preference Share is entitled to one vote per share only on resolutions

placed before the Company which directly affect the rights attached to the said shares. In the event of liquidation of the

Company before redemption of preference shares, the holders of preference shares will have priority over equity shares in


54


the payment of dividend and repayment of capital and premium thereon but shall not be entitled to any surplus arising

thereto.

NOTE 3 : RESERVE AND SURPLUS

(`)



Securities Premium Reserve

Opening balance 1,253,890 -

Addition during the year - 1,253,890

Deduction during the year - -

Closing balance 1,253,890 1,253,890

Special Reserve

Opening balance 7,757,977 6,132,977

Addition during the year 5,173,000 1,625,000


Closing balance 12,930,977 7,757,977

Surplus / (Deficit) in Statement of Profit and Loss

Opening balance 21,074,481 15,465,751

Addition: Profit for the year 25,829,713 8,089,888

Less: Appropriations

Dividend on Preference Shares - 729,863

Dividend Distribution Tax - Preference Shares - 126,295

Special Reserve* 5,173,000 1,625,000

Closing balance 41,731,194 21,074,481

Total 55,916,061 30,086,348

*As required by Section 45 1C of Reserve Bank of India Act, 1934.

NOTE4 : LONG-TERM BORROWINGS

(`)



Secured Loans

a) Term Loans - Secured

1) From Banks (Refer Note 4.1) 1,586,950,435 247,656,453

2) From Other Parties (Refer Note 4.1)

168,354,898 246,197,121

b) Non-Convertible Debentures - Secured (Refer Note 4.1) 150,000,000 137,500,800

c) Non-Convertible Debentures - Unsecured (Refer Note 4.1) - Tier II Capital 50,000,000 50,000,000

d) Vehicle Loans - Unsecured

1) From Banks (Refer Note 4.1) 670,093 676,627

2) From Other Parties (Refer Note 4.1) 439,182 639,316

Total 1,956,414,608 682,670,317


Corporate Overview



55


Not

e 4.

1 Te

rm L

oan

from

Ban

ks -

Secu

red

(`)

Nam

e of

the

Bank

Term

s of

repa

ymen

tSe

curi

ty O

ffer

edA

s at

Mar

ch 3

1, 2

018

As

at M

arch

31,

201

7

Curr

ent

Liab

iliti

esN

on-c

urre

nt

Liab

iliti

esCu

rren

t Li

abili

ties

Non

-cur

rent

Li

abili

ties

Bank

of M

ahar

asht

ra

Rate

of I

nter

est -

Bas

e ra

te +

4.5

0%,

loan

repa

yabl

e in

33

mon

thly

in

stal

lmen

ts.

Hyp

othe

catio

n of

boo

k de

bts,

cash

co

llate

ral a

nd p

erso

nal g

uara

ntee

of

Mr.

N. V

enka

tesh

, Dire

ctor

.

2,7

49,1

37

- 1

0,92

0,00

0 2

,874

,738

Bank

of M

ahar

asht

ra

Rate

of I

nter

est -

Bas

e ra

te +

4.5

0%,

loan

repa

yabl

e in

45

mon

thly

in

stal

lmen

ts.

Hyp

othe

catio

n of

boo

k de

bts,

cash

co

llate

ral a

nd p

erso

nal g

uara

ntee

of

Mr.

N. V

enka

tesh

, Dire

ctor

.

13,

344,

000

14,

734,

476

13,

344,

000

28,

255,

787

Bank

of

Mah

aras

tra-

8396

Rate

of I

nter

est 1

Y M

CLR

+0.

25%

+0.

95%

,loan

re

paya

ble

in 4

8 m

onth

ly

inst

alla

men

ts

Hyp

othe

catio

n of

boo

k de

bts

and

cash

col

late

ral

25,

008,

000

75,

100,

042

Bank

of B

arod

aRa

te o

f Int

eres

t 1Y

MC

LR+

0.25

%,lo

an re

paya

ble

in 3

0 m

onth

ly in

stal

lmen

ts fo

r BO

B

Hyp

othe

catio

n of

boo

k de

bts

and

cash

col

late

ral

150

,300

,000

3

49,7

00,0

00

Cana

ra B

ank

Rate

of I

nter

est -

Bas

e ra

te +

3.0

0%,

loan

repa

yabl

e in

12

quar

terly

in

stal

lmen

ts.

Hyp

othe

catio

n of

boo

k de

bts,

cash

co

llate

ral a

nd p

erso

nal g

uara

ntee

of

Mr.

N. V

enka

tesh

, Dire

ctor

.

5,0

00,0

00

- 1

0,00

0,00

0 5

,000

,000

Corp

orat

ion

Bank

Ra

te o

f Int

eres

t - B

ase

rate

+ 2

.10%

, lo

an re

paya

ble

in 1

2 qu

arte

rly

inst

allm

ents

.

Hyp

othe

catio

n of

boo

k de

bts

and

pers

onal

gua

rant

ee o

f Mr.

N.

Venk

ates

h, D

irect

or.

- -

Den

a Ba

nkRa

te o

f Int

eres

t 1Y

MC

LR+

2.30

%,lo

an re

paya

ble

in 3

3 m

onth

ly in

stal

lam

ents

Hyp

othe

catio

n of

boo

k de

bts

and

cash

col

late

ral

18,

181,

824

24,

340,

709

- -

Indi

an B

ank

Rate

of I

nter

est -

Bas

e ra

te +

3.8

0%,

loan

repa

yabl

e in

36

mon

thly

in

stal

lmen

ts.

Hyp

othe

catio

n of

boo

k de

bts,

cash

co

llate

ral a

nd p

erso

nal g

uara

ntee

of

Mr.

N. V

enka

tesh

, Dire

ctor

.

5,8

19,8

82

-

Indi

an B

ank

Rate

of I

nter

est -

Bas

e ra

te +

3.8

0%,

loan

repa

yabl

e in

36

mon

thly

in

stal

lmen

ts.

Hyp

othe

catio

n of

boo

k de

bts,

cash

co

llate

ral a

nd p

erso

nal g

uara

ntee

of

Mr.

N. V

enka

tesh

, Dire

ctor

.

9,1

66,6

75

1,0

44,0

75

9,9

99,9

96

10,

380,

872

Kave

ri G

ram

eena

Ba

nkRa

te o

f Int

eres

t - 1

4.25

%,

loan

repa

yabl

e in

36

mon

thly

in

stal

lmen

ts.

Hyp

othe

catio

n of

boo

k de

bts,

cash

co

llate

ral a

nd p

erso

nal g

uara

ntee

of

Mr.

N. V

enka

tesh

, Dire

ctor

.

12,

646,

933

-

Kave

ri G

ram

eena

Ba

nkRa

te o

f Int

eres

t - 1

3.75

%,

loan

repa

yabl

e in

36

mon

thly

in

stal

lmen

ts.

Hyp

othe

catio

n of

boo

k de

bts,

cash

co

llate

ral a

nd p

erso

nal g

uara

ntee

of

Mr.

N. V

enka

tesh

, Dire

ctor

.

- -

16,

666,

680

17,

042,

654

Laks

hmi V

ilas

Bank

Ra

te o

f Int

eres

t - B

ase

rate

+ 2

.25%

, lo

an re

paya

ble

in 3

6 m

onth

ly

inst

allm

ents

.

Hyp

othe

catio

n of

boo

k de

bts

and

cash

col

late

ral

18,

821,

491

1,4

27,6

45

16,

396,

547

20,

273,

934


56


(`)

Nam

e of

the

Bank

Term

s of

repa

ymen

tSe

curi

ty O

ffer

edA

s at

Mar

ch 3

1, 2

018

As

at M

arch

31,

201

7

Curr

ent

Liab

iliti

esN

on-c

urre

nt

Liab

iliti

esCu

rren

t Li

abili

ties

Non

-cur

rent

Li

abili

ties

Laks

hmi V

ilas

Bank

Ra

te o

f Int

eres

t - 1

2.55

% lo

an

repa

yabl

e in

33

mon

thly

in

stal

lmen

ts.

Hyp

othe

catio

n of

boo

k de

bts

and

cash

col

late

ral

6,6

66,6

72

6,1

11,1

04

6,6

66,6

72

12,

777,

772

Laks

hmi V

ilas

Bank

Ra

te o

f Int

eres

t - M

CLR

+ 0

.15%

, lo

an re

paya

ble

in 3

6 m

onth

ly

inst

allm

ents

.

Hyp

othe

catio

n of

boo

k de

bts

and

cash

col

late

ral

12,

500,

001

37,

499,

999

Laks

hmi V

ilas

Bank

Ra

te o

f Int

eres

t - M

CLR

+ 0

.15%

, lo

an re

paya

ble

in 3

9 m

onth

ly

inst

allm

ents

.

Hyp

othe

catio

n of

boo

k de

bts

62,

499,

999

187

,500

,001

Palla

van

Gra

ma

Bank

Rate

of I

nter

est -

14.

00%

, lo

an re

paya

ble

in 3

3 m

onth

ly

inst

allm

ents

.

Hyp

othe

catio

n of

boo

k de

bts,

cash

co

llate

ral a

nd p

erso

nal g

uara

ntee

of

Mr.

N. V

enka

tesh

, Dire

ctor

.

- -

3,4

48,6

63

-

Palla

van

Gra

ma

Bank

Rate

of I

nter

est -

14.

00%

, lo

an re

paya

ble

in 3

3 m

onth

ly

inst

allm

ents

.

Hyp

othe

catio

n of

boo

k de

bts,

cash

co

llate

ral a

nd p

erso

nal g

uara

ntee

of

Mr.

N. V

enka

tesh

, Dire

ctor

.

12,

415,

340

- 1

1,25

9,48

1 1

2,41

3,17

7

Palla

van

Gra

ma

Bank

Rate

of I

nter

est -

14.

00%

, lo

an re

paya

ble

in 3

3 m

onth

ly

inst

allm

ents

.

Hyp

othe

catio

n of

boo

k de

bts,

cash

co

llate

ral a

nd p

erso

nal g

uara

ntee

of

Mr.

N. V

enka

tesh

, Dire

ctor

.

3,8

65,0

58

2,5

32,7

63

3,3

67,4

99

6,4

76,0

80

Ratn

akar

Ban

k Lt

d.Ra

te o

f Int

eres

t - 1

3.50

% lo

an

repa

yabl

e in

24

mon

thly

in

stal

lmen

ts.

Hyp

othe

catio

n of

boo

k de

bts,

cash

co

llate

ral a

nd p

erso

nal g

uara

ntee

of

Mr.

N. V

enka

tesh

, Dire

ctor

.

11,

428,

571

- 2

2,85

7,14

3 1

1,42

8,57

1

Ratn

akar

Ban

k Lt

d.Ra

te o

f Int

eres

t 1Y

MC

LR+

0.50

%,lo

an re

paya

ble

in 2

4 m

onth

ly in

stal

lam

ents

Hyp

othe

catio

n of

boo

k de

bts

125

,000

,000

9

3,75

0,00

0

Sout

h In

dian

Ban

kRa

te o

f Int

eres

t - B

ase

rate

+ 3

.70%

, lo

an re

paya

ble

in 3

3 m

onth

ly

inst

allm

ents

.

Hyp

othe

catio

n of

boo

k de

bts,

cash

col

late

ral a

nd p

erso

nal

guar

ante

e of

Mr.

N. V

enka

tesh

, Mr.

D. S

hiva

prak

ash,

& M

r. R.

C. S

heka

r D

irect

or.

3,3

34,0

00

- 3

,636

,000

3

,334

,000

Sout

h In

dian

Ban

kRa

te o

f Int

eres

t - B

ase

rate

+ 3

.70%

, lo

an re

paya

ble

in 3

3 m

onth

ly

inst

allm

ents

.

Hyp

othe

catio

n of

boo

k de

bts,

cash

col

late

ral a

nd p

erso

nal

guar

ante

e of

Mr.

N. V

enka

tesh

, Mr.

D. S

hiva

prak

ash,

& M

r. R.

C. S

heka

r D

irect

or.

3,3

34,0

00

- 3

,636

,000

3

,334

,000

Sout

h In

dian

Ban

kRa

te o

f Int

eres

t - 1

3.30

% lo

an

repa

yabl

e in

35

mon

thly

in

stal

lmen

ts.

Hyp

othe

catio

n of

boo

k de

bts,

cash

co

llate

ral a

nd p

erso

nal g

uara

ntee

of

Mr.

N. V

enka

tesh

, Dire

ctor

.

9,0

96,0

00

8,3

24,0

00

8,3

38,0

00

16,

662,

000

Sout

h In

dian

Ban

kRa

te o

f Int

eres

t - 1

3.30

% lo

an

repa

yabl

e in

35

mon

thly

in

stal

lmen

ts.

Hyp

othe

catio

n of

boo

k de

bts,

cash

co

llate

ral a

nd p

erso

nal g

uara

ntee

of

Mr.

N. V

enka

tesh

, Dire

ctor

.

9,0

96,0

00

8,3

24,0

00

8,3

38,0

00

16,

662,

000

Not

e 4.

1 Te

rm L

oan

from

Ban

ks -

Secu

red


Corporate Overview



57


(`)

Nam

e of

the

Bank

Term

s of

repa

ymen

tSe

curi

ty O

ffer

edA

s at

Mar

ch 3

1, 2

018

As

at M

arch

31,

201

7

Curr

ent

Liab

iliti

esN

on-c

urre

nt

Liab

iliti

esCu

rren

t Li

abili

ties

Non

-cur

rent

Li

abili

ties

Stat

e Ba

nk o

f Ind

ia

Rate

of I

nter

est -

12.

25%

loan

re

paya

ble

in 3

6 m

onth

ly

inst

allm

ents

.

Hyp

othe

catio

n of

boo

k de

bts

and

cash

col

late

ral.

40,

000,

000

13,

810,

441

40,

000,

000

54,

261,

539

Stat

e Ba

nk o

f Ind

ia

Rate

of I

nter

est -

11.

30%

loan

re

paya

ble

in 3

6 m

onth

ly

inst

allm

ents

.

Hyp

othe

catio

n of

boo

k de

bts

and

cash

col

late

ral.

120

,000

,000

1

62,7

98,6

85

Stat

e Ba

nk (M

aurit

ius)

Lt

dRa

te o

f Int

eres

t 1Y

MC

LR+

2.00

%,lo

an re

paya

ble

in 3

9 m

onth

ly in

stal

lam

ents

Hyp

othe

catio

n of

boo

k de

bts

and

cash

col

late

ral.

33,

333,

336

59,

170,

259

- -

Stat

e Ba

nk o

f Mys

ore

Rate

of I

nter

est -

Bas

e ra

te +

2.2

5%,

loan

repa

yabl

e in

33

mon

thly

in

stal

lmen

ts.

Hyp

othe

catio

n of

boo

k de

bts,

cash

co

llate

ral a

nd p

erso

nal g

uara

ntee

of

Mr.

N. V

enka

tesh

, Dire

ctor

.

1,3

30,3

78

- 1

0,90

9,20

0 2

,321

,689

Stat

e Ba

nk o

f Pat

iala

Ra

te o

f Int

eres

t - B

ase

rate

+ 3

.50%

, lo

an re

paya

ble

in 3

4 m

onth

ly

inst

allm

ents

.

Hyp

othe

catio

n of

boo

k de

bts,

cash

co

llate

ral a

nd p

erso

nal g

uara

ntee

of

Mr.

N. V

enka

tesh

, Dire

ctor

.

3,6

83,7

51

-

Stat

e Ba

nk o

f Tr

avan

core

Ra

te o

f Int

eres

t - B

ase

rate

+ 4

.50%

, lo

an re

paya

ble

in 3

3 m

onth

ly

inst

allm

ents

.

Hyp

othe

catio

n of

boo

k de

bts,

cash

co

llate

ral a

nd p

erso

nal g

uara

ntee

of

Mr.

N. V

enka

tesh

, Dire

ctor

.

18,

466,

503

-

Stan

dard

Cha

rter

ed

Bank

Rate

of I

nter

est-

8.5

5%, l

oan

repa

yabl

e as

may

be

agre

ed w

ith

the

Bank

Hyp

othe

catio

n of

boo

k de

bts

and

corp

orat

e gu

aran

tee

of In

dia

Info

line

Fina

nce

Lim

ited.

200

,000

,000

-

Stan

dard

Cha

rter

ed

Bank

Rate

of I

nter

est-

8.5

5%, l

oan

repa

yabl

e as

may

be

agre

ed w

ith

the

Bank

Hyp

othe

catio

n of

boo

k de

bts

and

corp

orat

e gu

aran

tee

of In

dia

Info

line

Fina

nce

Lim

ited.

250

,000

,000

-

UCO

Ban

k Ra

te o

f Int

eres

t - B

ase

rate

+ 3

.00%

, lo

an re

paya

ble

in 4

5 m

onth

ly

inst

allm

ents

.

Hyp

othe

catio

n of

boo

k de

bts,

cash

co

llate

ral a

nd p

erso

nal g

uara

ntee

of

Mr.

N. V

enka

tesh

, Dire

ctor

.

7,2

86,6

85

-

UCO

Ban

k Ra

te o

f Int

eres

t - B

ase

rate

+ 3

.00%

, lo

an re

paya

ble

in 4

5 m

onth

ly

inst

allm

ents

.

Hyp

othe

catio

n of

boo

k de

bts,

cash

co

llate

ral a

nd p

erso

nal g

uara

ntee

of

Mr.

N. V

enka

tesh

, Dire

ctor

.

8,0

00,0

04

6,6

44,0

70

8,0

00,0

04

13,

995,

996

UCO

Ban

k Ra

te o

f Int

eres

t - 1

1.75

% l

oan

repa

yabl

e in

48

mon

thly

in

stal

lmen

ts.

Hyp

othe

catio

n of

boo

k de

bts

and

cash

col

late

ral.

10,

000,

000

-

UCO

Ban

k Ra

te o

f Int

eres

t MC

LR+

2.65

%,lo

an

repa

yabl

e in

45

mon

thly

in

stal

lam

ents

Hyp

othe

catio

n of

boo

k de

bts

and

cash

col

late

ral.

13,

333,

333

27,

054,

832

YES

Bank

Ltd

.Ra

te o

f Int

eres

t - 1

2.25

% l

oan

repa

yabl

e in

48

mon

thly

in

stal

lmen

ts.

Hyp

othe

catio

n of

boo

k de

bts,

cash

co

llate

ral a

nd p

erso

nal g

uara

ntee

of

Mr.

N. V

enka

tesh

, Dire

ctor

.

10,

000,

000

10,

161,

644

Not

e 4.

1 Te

rm L

oan

from

Ban

ks -

Secu

red

(con

td.)


58


(`)

Nam

e of

the

Bank

Term

s of

repa

ymen

tSe

curi

ty O

ffer

edA

s at

Mar

ch 3

1, 2

018

As

at M

arch

31,

201

7

Curr

ent

Liab

iliti

esN

on-c

urre

nt

Liab

iliti

esCu

rren

t Li

abili

ties

Non

-cur

rent

Li

abili

ties

YES

Bank

Ltd

.Ra

te o

f Int

eres

t 1YR

MC

LR+

3%,lo

an

repa

yabl

e in

24

mon

thly

in

stal

lam

ents

Hyp

othe

catio

n of

boo

k de

bts

and

cash

col

late

ral.

25,

000,

000

7,0

83,3

33

YES

Bank

Ltd

.Ra

te o

f Int

eres

t 1Y

MC

LR+

0.5%

,loan

re

paya

ble

in 2

4 m

onth

ly

inst

alla

men

ts

Hyp

othe

catio

n of

boo

k de

bts

and

cash

col

late

ral.

500

,000

,000

5

00,0

00,0

00

Tota

l 1

,692

,803

,820

1

,586

,950

,435

2

75,6

87,6

39

247

,656

,453

Term

Loa

n fr

om O

ther

Par

ties

- Se

cure

d

(`)

Nam

e of

the

FI /

NBF

CTe

rms

of re

paym

ent

Secu

rity

Off

ered

As

at M

arch

31,

201

8A

s at

Mar

ch 3

1, 2

017

Cu

rren

t Li

abili

ties

Non

-cur

rent

Li

abili

ties

Curr

ent

Liab

iliti

esN

on-c

urre

nt

Liab

iliti

esA

gri B

usin

ess

Fina

nce

Ltd.

Rate

of I

nter

est -

13%

loa

n re

paya

ble

in 3

6 m

onth

ly

inst

allm

ents

.

Hyp

othe

catio

n of

boo

k de

bts,

cash

co

llate

ral a

nd p

erso

nal g

uara

ntee

of

Mr.

N. V

enka

tesh

, Dire

ctor

.

16,

680,

000

16,

640,

000

16,

680,

000

33,

320,

000

Ana

nya

Fina

nce

for

Incl

usiv

e G

row

th P

rivat

e Li

mite

d

Rate

of I

nter

est -

15.

75%

, lo

an re

paya

ble

in 1

8 m

onth

ly

inst

allm

ents

.

Hyp

othe

catio

n of

boo

k de

bts,

cash

col

late

ral a

nd 1

8 no

. adv

ance

po

st-d

ated

che

ques

.

2,8

12,5

00

-

Fedb

ank

Fina

ncia

l Se

rvic

es L

imite

dRa

te o

f Int

eres

t - 1

2% l

oan

repa

yabl

e in

36

mon

thly

in

stal

lmen

ts.

Hyp

othe

catio

n of

boo

k de

bts

and

cash

col

late

ral.

13,

500,

000

36,

500,

000

Fedb

ank

Fina

ncia

l Se

rvic

es L

imite

d-TL

Rate

of I

nter

est -

11.

20%

loa

n re

paya

ble

in 3

6 m

onth

ly

inst

allm

ents

.

Hyp

othe

catio

n of

boo

k de

bts

and

cash

col

late

ral.

72,

719,

880

87,

871,

412

IFM

R Ca

pita

l Fin

ance

Pr

ivat

e Li

mite

dRa

te o

f Int

eres

t - 1

5.75

%,

loan

repa

yabl

e in

24

mon

thly

in

stal

lmen

ts.

Hyp

othe

catio

n of

boo

k de

bts

and

cash

col

late

ral.

- -

27,

664,

709

-

IFM

R Ca

pita

l Fin

ance

Pr

ivat

e Li

mite

dRa

te o

f Int

eres

t - 1

5.75

%,

loan

repa

yabl

e in

24

mon

thly

in

stal

lmen

ts.

Hyp

othe

catio

n of

boo

k de

bts

and

cash

col

late

ral.

- -

27,

688,

963

-

IFM

R Ca

pita

l Fin

ance

Pr

ivat

e Li

mite

dRa

te o

f Int

eres

t - 1

4.95

% l

oan

repa

yabl

e in

24

mon

thly

in

stal

lmen

ts.

Hyp

othe

catio

n of

boo

k de

bts

and

cash

col

late

ral.

20,

504,

788

- 2

4,02

5,35

7 2

0,50

4,78

8

IFM

R Ca

pita

l Fin

ance

Pr

ivat

e Li

mite

dRa

te o

f Int

eres

t - 1

4.95

% l

oan

repa

yabl

e in

24

mon

thly

in

stal

lmen

ts.

Hyp

othe

catio

n of

boo

k de

bts

and

cash

col

late

ral.

20,

504,

788

- 2

4,02

5,35

7 2

0,50

4,78

8

Not

e 4.

1 Te

rm L

oan

from

Ban

ks -

Secu

red

(con

td.)


Corporate Overview



59


(`)

Nam

e of

the

FI /

NBF

CTe

rms

of re

paym

ent

Secu

rity

Off

ered

As

at M

arch

31,

201

8A

s at

Mar

ch 3

1, 2

017

Cu

rren

t Li

abili

ties

Non

-cur

rent

Li

abili

ties

Curr

ent

Liab

iliti

esN

on-c

urre

nt

Liab

iliti

esM

aana

veey

a D

evel

opm

ent

& Fi

nanc

e Pr

ivat

e Li

mite

d

Rate

of I

nter

est -

14.

50%

, loa

n re

paya

ble

in 2

4 in

stal

lmen

ts.

Hyp

othe

catio

n of

boo

k de

bts

and

cash

col

late

ral.

40,

008,

000

19,

988,

000

Relia

nce

Capi

tal L

td.

Rate

of I

nter

est -

15.

00%

, lo

an re

paya

ble

in 1

5 m

onth

ly

inst

allm

ents

.

Hyp

othe

catio

n of

boo

k de

bts

and

cash

col

late

ral.

10,

758,

883

-

Relia

nce

Capi

tal L

td.

Rate

of I

nter

est -

13%

, loa

n re

paya

ble

in 2

4 m

onth

ly

inst

allm

ents

.

Hyp

othe

catio

n of

boo

k de

bts

and

cash

col

late

ral.

14,

256,

994

0

Relia

nce

Capi

tal L

td.

Rate

of I

nter

est -

13%

, loa

n re

paya

ble

in 2

4 m

onth

ly

inst

allm

ents

.

Hyp

othe

catio

n of

boo

k de

bts

and

cash

col

late

ral.

48,

269,

667

0

47,

373,

373

48,

269,

667

Relia

nce

Capi

tal L

td.

Rate

of I

nter

est -

13%

, loa

n re

paya

ble

in 2

4 m

onth

ly

inst

allm

ents

.

Hyp

othe

catio

n of

boo

k de

bts

and

cash

col

late

ral.

53,

228,

029

0

46,

771,

971

53,

228,

029

Relig

are

Finv

est L

imite

dRa

te o

f Int

eres

t - 1

5.75

%,

loan

repa

yabl

e in

26

mon

thly

in

stal

lmen

ts.

Hyp

othe

catio

n of

boo

k de

bts,

cash

co

llate

ral a

nd p

erso

nal g

uara

ntee

of

Mr.

N. V

enka

tesh

, Dire

ctor

.

16,

232,

023

-

Relig

are

Finv

est L

imite

dRa

te o

f Int

eres

t - 1

4.50

%,

loan

repa

yabl

e in

24

mon

thly

in

stal

men

ts.

Hyp

othe

catio

n of

boo

k de

bts,

cash

co

llate

ral a

nd p

erso

nal g

uara

ntee

of

Mr.

N. V

enka

tesh

, Dire

ctor

.

1,3

7,71

,278

0 2

,49,

35,2

33 1

,38,

81,8

48

Her

o Fi

n Co

rpRa

te o

f Int

eres

t - 9

.5%

, loa

n re

paya

ble

in 1

2 m

onth

ly

inst

allm

ents

.

Hyp

othe

catio

n of

boo

k de

bts

36,

156,

514

63,

843,

486

Tota

l 2

81,8

34,9

44

168

,354

,898

3

36,7

33,3

63

246

,197

,121

Non

-Con

vert

ible

Deb

entu

res

- Sec

ured

(`)

Nam

e of

D

eben

ture

Hol

der

Term

s of

repa

ymen

tSe

curi

ty O

ffer

edA

s at

Mar

ch 3

1, 2

018

As

at M

arch

31,

201

7

Curr

ent

Liab

iliti

esN

on-c

urre

nt

Liab

iliti

esCu

rren

t Li

abili

ties

Non

-cur

rent

Li

abili

ties

Hin

duja

Ley

land

Fi

nanc

e Li

mite

dRa

te o

f Int

eres

t - 1

2.78

% p

.a.

calc

ulat

ed o

n a

XIRR

bas

is,

prin

cipa

l rep

ayab

le in

24

mon

thly

in

stal

lmen

ts.

Hyp

othe

catio

n of

Boo

k D

ebts

45,

833,

400

-

Hin

duja

Ley

land

Fi

nanc

e Li

mite

dRa

te o

f Int

eres

t - 1

2.51

% p

.a.

calc

ulat

ed o

n a

XIRR

bas

is,

prin

cipa

l rep

ayab

le in

24

mon

thly

in

stal

lmen

ts.

Hyp

othe

catio

n of

Boo

k D

ebts

12,

500,

000

- 4

9,99

9,20

0 1

2,50

0,80

0

Not

e 4.

1 Te

rm L

oan

from

Ban

ks -

Secu

red

(con

td.)


60


(`)

Nam

e of

D

eben

ture

Hol

der

Term

s of

repa

ymen

tSe

curi

ty O

ffer

edA

s at

Mar

ch 3

1, 2

018

As

at M

arch

31,

201

7

Curr

ent

Liab

iliti

esN

on-c

urre

nt

Liab

iliti

esCu

rren

t Li

abili

ties

Non

-cur

rent

Li

abili

ties

Hin

duja

Ley

land

Fi

nanc

e Li

mite

dRa

te o

f Int

eres

t - 1

0.56

% p

.a.

calc

ulat

ed o

n a

XIRR

bas

is,

prin

cipa

l rep

ayab

le in

36

mon

thly

in

stal

lmen

ts.

Hyp

othe

catio

n of

Boo

k D

ebts

66,

666,

667

100

,000

,000

IFM

R Fl

mpa

ct L

ong

Term

Mul

ti A

sset

C

lass

-Sen

ior D

ebt

Rate

of I

nter

est -

15.

25%

loan

re

paya

ble

in 7

2 m

onth

ly

inst

allm

ents

.

Hyp

othe

catio

n of

Boo

k D

ebts

- 5

0,00

0,00

0 -

50,

000,

000

Mah

indr

a &

Mah

indr

a Fi

nanc

ial

Serv

ices

Ltd

Rate

of I

nter

est -

11.

40%

loan

re

paya

ble

in 2

4 m

onth

ly

inst

allm

ents

.

Hyp

othe

catio

n of

Boo

k D

ebts

75,

000,

000

- 7

5,00

0,00

0 7

5,00

0,00

0

Tota

l 1

5,41

,66,

667

15,

00,0

0,00

0 1

7,08

,32,

600

13,7

5,00

,800

Cash

Cre

dit -

Sec

ured

(`)

Nam

e of

the

Bank

Term

s of

repa

ymen

tSe

curi

ty O

ffer

edA

s at

Mar

ch 3

1, 2

018

As

at M

arch

31,

201

7

Curr

ent

Liab

iliti

esN

on-c

urre

nt

Liab

iliti

esCu

rren

t Li

abili

ties

Non

-cur

rent

Li

abili

ties

Ratn

akar

Ban

k Lt

d.Ra

te o

f Int

eres

t - 1

3.75

% lo

an

repa

yabl

e on

dem

and

- Ten

or -1

2 M

onth

s

Hyp

othe

catio

n of

Boo

k D

ebts

- 3

,586

-

Tota

l -

- 3

,586

Non

-Con

vert

ible

Deb

entu

res

- Uns

ecur

ed

(`)

Nam

e of

D

eben

ture

Hol

der

Term

s of

repa

ymen

tSe

curi

ty O

ffer

edA

s at

Mar

ch 3

1, 2

018

As

at M

arch

31,

201

7

Curr

ent

Liab

iliti

esN

on-c

urre

nt

Liab

iliti

esCu

rren

t Li

abili

ties

Non

-cur

rent

Li

abili

ties

IFM

R Fl

mpa

ct L

ong

Term

Mul

ti A

sset

C

lass

-Sub

Deb

t

Rate

of I

nter

est -

15.

25%

loan

re

paya

ble

in 7

2 m

onth

ly

inst

allm

ents

.

No

secu

rity

offer

ed -

50,

000,

000

- 5

0,00

0,00

0

Tota

l -

50,

000,

000

- 5

0,00

0,00

0

Not

e 4.

1 Te

rm L

oan

from

Ban

ks -

Secu

red

(con

td.)


Corporate Overview



61


Vehi

cle

Loan

from

Ban

ks -

Uns

ecur

ed

(`)

Nam

e of

the

Bank

Term

s of

repa

ymen

tSe

curi

ty O

ffer

edA

s at

Mar

ch 3

1, 2

018

As

at M

arch

31,

201

7

Curr

ent

Liab

iliti

esN

on-c

urre

nt

Liab

iliti

esCu

rren

t Li

abili

ties

Non

-cur

rent

Li

abili

ties

HD

FC B

ank

Rate

of I

nter

est -

9.6

5%, l

oan

repa

yabl

e in

60

mon

thly

in

stal

lmen

ts.

Hyp

othe

catio

n of

Car

218

,078

4

58,5

50

198

,093

6

76,6

27

HD

FC B

ank

Rate

of I

nter

est -

8.8

8%, l

oan

repa

yabl

e in

36

mon

thly

in

stal

lmen

ts.

Hyp

othe

catio

n of

Car

153

,387

2

11,5

43

- -

Tota

l 3

71,4

64

670

,093

1

98,0

93

676

,627

Vehi

cle

Loan

from

Oth

er P

arti

es -

Uns

ecur

ed

(`)

Nam

e of

the

FI /

NBF

CTe

rms

of re

paym

ent

Secu

rity

Off

ered

As

at M

arch

31,

201

8A

s at

Mar

ch 3

1, 2

017

Curr

ent

Liab

iliti

esN

on-c

urre

nt

Liab

iliti

esCu

rren

t Li

abili

ties

Non

-cur

rent

Li

abili

ties

Kota

k M

ahin

dra

Prim

e Lt

d Lo

an re

paya

ble

in 6

0 m

onth

ly

inst

allm

ents

(Mon

thy

EMI).

Hyp

othe

catio

n of

Car

200

,134

4

39,1

82

182

,522

6

39,3

16

Tota

l 2

00,1

34

439

,182

1

82,5

22

639

,316

Not

e 4.

1: T

he C

ompa

ny h

as n

ot d

efau

lted

in th

e re

paym

ent o

f due

s to

ban

ks /

finan

cial

inst

itut

ions

.

Not

e 4.

1 Te

rm L

oan

from

Ban

ks -

Secu

red

(con

td.)


62


NOTE 5: LONG-TERM PROVISIONS

(`)



a) Provision for Employee Benefits:

i) Provision for Gratuity 1,126,226 1,570,357

ii) Provision for Leave encashment 1,976,536 -

b) Other Provisions:

i) Provision for Taxation 9,071,868 7,621,868

ii) Provision against Standard Assets under financing activity 25,400,000 -

iii) Provision against Loan Assets under financing activity 63,410,000 14,365,000

Total 100,984,630 23,557,225

NOTE 6: SHORT-TERM BORROWINGS

(`)



Unsecured Loans

Inter Corporate Deposits 748,620,200 -

Commercial Paper 650,000,000 -

Less : Unexpired discount on commercial paper (22,017,550) -

Total 1,376,602,650 -

NOTE 7: TRADE PAyABLES

(`)



Outstanding dues of creditors 30,628,874 81,485,650

Total 30,628,874 81,485,650

NOTE 8: OTHER CURRENT LIABILITIES

(`)



Current maturities of long term borrowings

Secured Non Convertible Debentures (Refer Note 4.1) 154,166,667 170,832,600

Loans from Banks (Secured against receivables- Refer Note 4.1) 1,692,803,820 275,687,639

Term Loan from Other Parties - Secured (Refer Note 4.1) 281,834,944 336,733,363

Cash Credit (Refer Note 4.1) - 3,586

Vehicle Loans - Unsecured


Corporate Overview



63


(`)



1) From Banks (Refer Note 4.1) 371,464 198,093


Sub-total 2,129,377,029 783,637,803

Other Payable

Payable to Holding Company 196,119,125 -

Interest accrued but not due on borrowings 27,429,520 6,058,172

Payables on account of assignments and securitisation 25,961,592 21,824,760

Advances from customers 3,656,190 -

Statutory remittances (Contributions to PF and ESIC, Service Tax, etc.) 15,654,046 3,484,133

Accrued Salaries & Benefits 16,782,645 4,084,136

Provision for expenses 10,640,298 3,112,351

Other payables 306,923,640 -

Sub-total 603,167,056 38,563,552

Total 2,732,544,085 822,201,355

NOTE 9: SHORT-TERM PROVISIONS

(`)



Provision for Leave encashment 771,839 -

Provision for Tax 38,009,368 1,450,000

Total 38,781,207 1,450,000

64


(`)

Part

icul

ars

Tan

gibl

e A

sset

s In

tang

ible

Ass

ets

Fur

ntiu

re

& F

ixtu

res

Offi

ce

Equi

pmen

t C

ompu

ters

V

ehic

les

Tot

al

Com

pute

r So

ftw

ares

T

otal

T

otal

As

at A

pril

1, 2

017

8,5

44,5

35

7,5

92,9

05

12,

024,

511

4,5

06,0

14

32,

667,

965

5,4

63,0

36

5,4

63,0

36

38,

131,

001

Add

ition

s 6

,705

,872

8

,111

,394

1

9,62

5,47

3 1

,041

,500

3

5,48

4,23

9 1

,015

,331

1

,015

,331

3

6,49

9,57

0

Dis

posa

ls/A

djus

tmen

ts (4

0,71

9) (4

0,71

9) -

(40,

719)

As

at M

arch

31,

201

815

,250

,407

1

5,70

4,29

9 3

1,60

9,26

5 5

,547

,514

6

8,11

1,48

5 6

,478

,367

6

,478

,367

7

4,58

9,85

2

Dep

reci

atio

n / A

mor

tisa

tion

As

at A

pril

1, 2

017

3,0

30,8

55

2,4

64,8

92

4,2

90,2

08

1,5

66,5

91

11,

352,

546

4,7

37,8

16

4,7

37,8

16

16,

090,

362

Dep

reci

atio

n /

Am

ortis

atio

n fo

r the

yea

r 1

,089

,905

1

,908

,157

8

,688

,382

5

79,2

14

12,

265,

657

815

,525

8

15,5

25

13,

081,

182

Dis

posa

ls (1

0,98

8) (1

0,98

8) -

(10,

988)

As

at M

arch

31,

201

8 4

,120

,760

4

,373

,049

1

2,96

7,60

2 2

,145

,805

2

3,60

7,21

5 5

,553

,341

5

,553

,341

2

9,16

0,55

6

Net

Blo

ck

Bala

nce

as a

t Mar

ch 3

1, 2

018

(`)

11,1

29,6

47

11,

331,

250

18,

641,

663

3,4

01,7

09

44,

504,

269

925

,026

9

25,0

26

45,

429,

296

Bala

nce

as a

t Mar

ch 3

1, 2

017

(`)

5,5

13,6

80

5,1

28,0

13

7,7

34,3

03

2,9

39,4

23

21,

315,

419

725

,220

7

25,2

20

22,

040,

639

NO

TE 1

0: FI

XED

ASS

ETS


Corporate Overview



65


NOTE 11: NON-CURRENT INVESTMENTS

(`)



a) Trade - Unquoted Investments, at cost

i) Investments in Equity Instruments

1) Alpha Micro Finance Consultants Pvt. Ltd., 50,000 Equity shares of `10/- each fully paid up. (Previous year 50,000 Equity shares of `10/- per share)"

500,000 500,000

2) Ayusha Dairy Private Limited (Subsidiary), 1,000,000 Equity shares of `10/- each fully paid up. (Previous year 1,000,000 Equity shares of `10/- per share)"

10,000,000 10,000,000

Total 10,500,000 10,500,000

Aggregate amount of unquoted investments 10,500,000 10,500,000

NOTE 12: DEFERRED TAX

(`)

Particulars AS PER BOOKS AS PER IT DIFFERENCE Deferred Tax

1) Deferred tax liability

Fixed asset 45,429,296 45,160,878 268,418 (77,412)

Provision for bad and doubtful debts under Section 36(1)(viia)

- (6,897,556) 6,897,556 (1,989,255)

(2,066,667)

2) Deffered tax asset

Provision for Gratuity 1,126,226 - 1,126,226 324,804

Provision for Leave Encashment 2,748,375 - 2,748,375 792,631

Provision for Loan portfolio 88,810,000 - 88,810,000 25,612,804

26,730,239

Particulars Difference

Deferred Tax Liability as on 31.03.2018 2,066,667

Opening Balance of Deferred Tax Liability 748,513

Provision made in Profit & Loss Account 1,318,154

Deferred Tax Asset as on 31.03.2018 26,730,239

Opening Balance of Deferred Tax Asset 5,535,528

Provision made in Profit & Loss Account 21,194,711

Total Provision made in Profit & Loss Account (19,876,557)

Deferred Tax Asset as on 31.03.2018 (Net) 24,663,572

NOTE 13: LONG-TERM LOANS & ADVANCES

(`)



Loans & Advances - Unsecured 2,113,382,091 369,165,027 Total 2,113,382,091 369,165,027


66


NOTE 14: OTHER NON-CURRENT ASSETS

(`)



Others

i) Deposits with Banks more than 12 months maturity 257,512,951 110,536,853

ii) Deposits with other NBFC for term loans 30,766,434 13,373,558

iii) Deferred Revenue Expenditure 1,573,730 10,243,433

iv) Rent Deposits 14,494,623 8,628,750

v) Advance Tax 14,698,900 7,298,900

vi) TDS Receivables 16,774,768 7,242,004

vii) MAT Credit - 1,342,390

Total 335,821,406 158,665,888

* Represents margin money deposits placed to avail tem loans from banks, financial institutions, non banking financial companies

and as cash collateral in connection with securtisation transactions.

NOTE 15: TRADE RECEIVABLES

(`)



Trade receivables 37,916,290 9,852,927 Total 37,916,290 9,852,927

NOTE 16: CASH AND CASH EQUIVALENTS

(`)



Cash on hand 953,986 1,147,622 Balances with banks 430,711,213 190,487,432 Others(i) In Fixed Deposit accounts with maturity less than 12 months & all the deposits are lien noted against the term loans.

27,921,019 369,847,227

Total 459,586,218 561,482,281

NOTE 17: SHORT-TERM LOANS & ADVANCES

(`)



Loans & Advances - Unsecured 4,226,703,989 1,067,314,077 Sub-total 4,226,703,989 1,067,314,077 Others loans & advances Dues from customers - - Unsecured 59,178,693 - Staff Loans 909,993 844,117 Prepaid expenses 222,843 3,354,739 Sub-total 60,311,529 4,198,856 Total 4,287,015,518 1,071,512,933


Corporate Overview



67


NOTE 18: OTHER CURRENT ASSETS

(`)



Deferred Revenue Expenditure 8,669,706 11,584,937 Accrued Income on Loans 63,690,587 25,634,429 Accrued Interest on Fixed Deposits 14,095,108 9,670,930 Others 4,548,435 - Total 91,003,837 46,890,296

NOTE 19: REVENUE FROM OPERATIONS

(`)



Interest Income on Loans 718,173,021 197,194,881 Income from securitisation / assignment of loans 24,535,040 29,642,588 Income from Business Correspondents 121,748,084 64,478,357 Processing fee 76,746,025 15,985,481 Interest on fixed deposits 18,603,421 13,081,047 Total 959,805,592 320,382,354

NOTE 20: OTHER INCOME

(`)



Dividend income - 6,947,849 Short Term Capital Gain 4,851,909 - Commission Income 1,867,878 - Administration fee & other charges from customer 139,167 609,450 Miscelleneous income 1,166,725 507,635 Total 8,025,679 8,064,934

NOTE 21: EMPLOyEE COST

(`)



Salaries and bonus 246,696,350 101,530,529 Contribution to provident and other funds 18,784,898 6,974,010 Leave Encashment 3,277,501 - Gratuity 2,056,638 1,120,776 Staff Welfare Expenses 9,265,717 2,549,055 Total 280,081,104 112,174,370

NOTE 22: FINANCE COST

(`)



Interest Expenses on :

Term Loans 192,135,654 104,553,356

Cash Credit and Overdraft 666,019 37,320


68


(`)



Non Convertible Debentures 45,965,627 29,399,786

Inter Corporate Deposits 31,265,694 -

Commercial Papers 15,981,297 -

Vehicle Loan 173,983 131,765

Other borrowing cost 25,326,640 12,185,933

Interest Expense on Income Tax 1,509,368 -

Total 313,024,282 146,308,160

NOTE 23: ADMINISTRATION AND OTHER EXPENSES

(`)



Advertisement 377,153 490,892

Bank Charges 5,035,802 1,184,174

Communication 5,150,726 1,661,246

Electricity 1,771,378 648,516

Legal & Professional Fees 19,182,187 10,185,289

Miscelleneous Expenses 1,242,407 985,439

Office expenses 8,824,902 2,343,957

Postage & Courier 2,462,430 1,162,985

Printing & Stationary 6,195,047 2,358,770

Rates & Taxes 7,505,756 1,203,123

Rent 19,656,061 9,030,644

Repairs & Maintenance

- Computer 875,045 461,126

Remuneration to Auditors :

Audit Fees 250,000 175,000

Certificaton Expenses 50,000 -

Software Charges 7,564,087 4,576,919

Subscription 1,667,358 814,571

Travelling & Conveyance 34,915,193 11,211,651

Loss on sale of fixed assets - 87,965

Corporate Social Responsibility Expenses - 50,000

Total 122,725,532 48,632,269


Corporate Overview



69


Note (i)

(`)



Auditor's Remuneration - Statutory Audit Fee 150,000 110,000 - Tax Audit Fee 50,000 40,000 - Certification Charges 50,000 - - Other Services ( Limited Review) 50,000 25,000 Total 300,000 175,000

NOTE 24: PROVISIONS / WRITE OFF RECEIVABLES UNDER FINANCIAL ACTIVITy

(`)



Portfolio loans written off 120,678,626 2,958,880 Provision against Loans 49,045,000 7,558,375 Provision against Standard Assets 25,400,000 - Total 195,123,626 10,517,255

NOTE 25: EMPLOyEE BENEFITS

Disclosures envisaged in Accounting standard (AS) 15 - Employee Benefits as given below:

Note 25.1: Defined Contribution Plans

During the year, the Company has recognised the following amounts in the statement of profit and loss

(`)

Particulars

For the year ended


For the year ended


Employers Contribution to Provident & Pension Fund 10,706,738 4,910,772

Note 25.2: Defined Benefit Plans

The Company has funded defined benefit gratuity plan. Every employees who has completed five years or more of service is

eligible for gratuity on separation at 15 days basic salary (Last Drawn salary) for each completed year of service. Consequent to

the adoption of AS 15 ’Employee Benefits’ specified under section 133 of Companies Act, 2013 read with rule 7 of Companies

(Accounts) Rules, 2014, the following disclosures have been made as required by standard:

Contribution to Gratuity Fund:

Details of defined benefit plan of gratuity are given below:

(`)

Particulars

For the year ended


For the year ended


i) Changes in the Present Value of Obligation (PVO)PVO as at the beginning of the period 3,862,741 3,149,521 Interest Cost 262,666 219,015 Current service cost 1,181,267 795,240

NOTE 23: ADMINISTRATION AND OTHER EXPENSES (Contd.)


70


(`)

ParticularsFor the year

ended March 31, 2018

For the year ended

March 31, 2017Past service cost - (non vested benefits) - Past service cost - (vested benefits)Benefits paid (141,433) (458,650) Actuarial loss/(gain) on obligation (balancing figure) 219,853 157,615 PVO as at the end of the year 5,385,094 3,862,741

ii) Changes in the Fair Value of Plan AssetsFair value of plan assets as at the beginning of the period 2,292,384 - Expected return on plan assets 155,882 86,290 Contributions 2,000,000 2,699,940 Benefits paid (141,433) (458,650) Actuarial gain/(loss) on plan assets [balancing figure] (47,965) (35,196) Fair value of plan assets as at the end of the period 4,258,868 2,292,384

iii) Amount recognised in the Balance Sheet and Related AnalysisPresent value of the obligation 5,385,094 3,862,741 Fair value of plan assets 4,258,868 2,292,384 Difference 1,126,226 1,570,357 Unrecognised transitional liability - Unrecognised past service cost - non vested benefits - Liability recognised in the balance sheet 1,126,226 1,570,357

iv) Expenses recognised in the Profit & Loss AccountCurrent service cost 1,181,267 795,240 Interest Cost 106,784 219,015 Expected return on plan assets - -86,290 Net actuarial (gain)/loss recognised in the year 267,818 192,811 Transitional Liability recognised in the year - - Past service cost - non-vested benefits - - Past service cost - vested benefits - - Expenses recognised in the statement of profit and loss 1,555,869 1,120,776

v) Major categories of Plan Assets (As percentage of Total Plan Assets) Government of India Securities 0.00% 0.00%State Government Securities 0.00% 0.00%High Quality Corporate Bonds 0.00% 0.00%Equity shares of listed companies 0.00% 0.00%Property 0.00% 0.00%Insurer Managed 100.00% 100.00%Mutual Funds 0.00% 0.00%Bank Deposits 0.00% 0.00%

Total 100.00% 100.00%vi) Principal Actuarial Assumptions (Expressed as weighted averages)

Discount Rate 7.18% 6.80% Salary escalation rate 7.00% 7.00% Attrition rate 24.00% 24.00% Expected rate of return on Plan Assets 7.18% 7.70%

vii) AssumptionsDiscount rate as per para 78 of AS15R 7.18% 6.80%Salary escalation fixed by the Enterprise as per para 83-91 and 120[l] of AS15R 7.00% 7.00%Attrition rate fixed by Enterprise 24.00% 24.00%Age of Retirement 60 60Funding Mechanism Insurer Managed Insurer Managed

Note 25.2: Defined Benefit Plans (contd.)


Corporate Overview



71


NOTE 26: SEGMENT INFORMATION

The Company operates in a single reportable segment i.e. lending to microfinance customers which have similar risks and returns

for the purpose of AS 17 on ‘Segment Reporting’ specified under section 133 of the Companies Act 2013 read with Rule 7 of the

Companies (Accounts) Rules 2014 and the Companies (Accounting Standards) Amendment Rules. The Company operates in a

single geographical segment i.e. domestic

NOTE 27: RELATED PARTy DISCLOSURES

Related party disclosures as required under the Accounting Standard (AS) - 18 on “Related Party Disclosures” specified under

section 133 of Companies Act 2013 read with rule 7 of Companies (Accounts) Rules 2014 are given below:

Note 27.1: Names of Related Parties and Nature of Relationship

(`)Description of Relationship As at March 31, 2018 As at March 31, 2017 Holding Company India Infoline Finance Limited India Infoline Finance LimitedSubsidiary Company Ayusha Dairy Private Limited Ayusha Dairy Private LimitedFellow Subsidiary Company IIFL Management Services Limited IIFL Management Services LimitedFellow Subsidiary Company India Infoline Housing Finance Limited India Infoline Housing Finance

LimitedKey Management Personnel Mr. N. Venkatesh,

Managing DirectorMr. N. Venkatesh,

Managing DirectorMr. D. Shivaprakash,

Whole-time DirectorMr. D. Shivaprakash

Whole-time DirectorMr. T. Anantha kumar,

CFOMr. R.C.Shekar,

DirectorMr. K J Sutheja,

Company SecretaryMr. T. Anantha kumar,

CFOMr. A. Vikraman,

Independent DirectorMr. K J Sutheja,

Company SecretaryMr. R Venkataraman, Director Mr. S. Parthasarathy, CFO Upto 31st

May’16Mr. Gaurav Malhotra, DirectorMr. A. Ramanathan

Independent Director

Ms. Ritu Singh Company Secretary Upto 31st Oct’16

Mr. Badrinarayan Seshadri Independent Director

Mr. Badrinarayan Seshadri, Independent Director

Mr. A. Vikraman, Independent Director

Mr. A. Ramanathan Independent Director

Note 27.2: Transactions with Related Parties

(`)

Transaction Related Party For the year ended March 31, 2018

For the year ended March 31, 2017

IncomeService Fee on Business Correspondence

India Infoline Finance Limited 65,254,963 Nil

Arranger Fee India Infoline Housing Finance Limited

1,197,796 Nil

ExpenseInterest India Infoline Finance Limited 62,257,683 Nil

Rent IIFL Management Services Limited

9,000 Nil


72


Note 27.2: Transactions with Related Parties (contd.)

(`)



Remuneration to Director Mr. N. Venkatesh, Managing Director

5,401,596 3,301,704

Mr. D. Shivaprakash, Whole-time Director

4,200,156 2,401,908

Mr. R.C. Shekar, Director upto 16th Feb 2017

- 1,512,718

Reimbursement of expenses to Director

Mr. N. Venkatesh, Managing Director

- 60,000

Sitting fee to Independent Directors

Mr. Badrinarayanan Seshadri, Director

58,332 76,222

Mr. A. Vikraman, Director 58,332 85,555

Mr. A. Ramanathan, Director 47,222 80,000

Remuneration to KMP Mr. S. Parthasarathy, CFO Upto 31st May’16

- 157,926

Mr. T. Anantha kumar, CFO From 02nd July’16

1,257,429 811,813

Ms. Ritu Singh, Company Secretary Upto 31st Oct’16

- 83,293

Mr. K J Sutheja, Company Secretary from 11th Nov’16

628,158 250,000

Remuneration / Sitting fee Relatives of Directors and Key Management Personnel

Nil Nil

Other Transactions

Loans and Advances received from Holding Company

India Infoline Finance Limited 42,575,00,000 -

Loans and Advances repaid to Holding Company


Equity Share Capital India Infoline Finance Limited 500,000,000 584,176,310

Balance as at year end

Equity Share Capital India Infoline Finance Limited 1,084,176,310 584,176,310

Investment in Subsidiary (1000000 Equity shares of `10/- each)

Ayusha Dairy Private Limited 10,000,000 10,000,000

Term Loans (Including ICD) India Infoline Finance Limited 944,739,325 -

NOTE 28: ADDITIONAL INFORMATION

Note 28.1: Contingent liabilities and commitments (to the extent not provided for)

(`)



Contingent liabilities Nil Nil


Corporate Overview



73


Note 28.2: Disclosure on foreign currency exposure:

Earning in Foreign Exchange in Foreign Currency during the year is Nil (Previous Year: Nil). Expenditure in Foreign Exchange in

Foreign Currency during the year is Nil (Previous Year: Nil).

Note 28.3: Disclosures required under Section 22 of the Micro Small and Medium Enterprises Development Act 2006

There are no Micro and Small Enterprises to whom the Company owes dues which are outstanding for more than 45 days at

the Balance Sheet date. The above information regarding Micro Enterprises and Small Enterprises has been determined to the

extent such parties have been identified on the basis of information available with the Company. This has been relied upon by

the Auditors.

Note 28.4: Asset Classification & Provisioning:

The Company follows Prudential Norms of the Reserve Bank of India with regard to classification in respect of all loans extended

to its customer. The Company complies with the Prudential Norms of the Reserve Bank of India with regard to Income recognition

asset classification and provisioning. The Company is following provisioning norms as recommended vide DNBS.CC.PD.No.

250/03.10.01/2011-12 dated 02nd December 2011 DNBS.PD/CC.No.263/03.10.038/2011-12 dated 20th March 2012 and DNBS.

(PD).CC.No.347/03.10.38/2013-14 dated 01st July 2013. Accordingly, the Company in line with guidelines laid down the DNBS(PD)

CC.No. 347/30.10.038/2013-14 dated 01st July 2013 has provided 1% of the total loan portfolio outstanding as at 31st March 2018.

Classification of loan portfolio:

(`)

Asset ClassificationLoan Portfolio

as on 31.03.2018Loan Portfolio

as on 31.03.2017Less than 90 days 6,320,538,349 1,381,080,88291 - 180 days 14,110,483 53,243,308More than 180 days 5,437,248 2,154,914Total loan assets / loan portfolio 6,340,086,080 1,436,479,104

Provisioning Norms for Loans:

(`)

Asset Classification RBI Norms As at March 31, 2018 As at March 31, 2017 Total loan assets / loan portfolio - A 1% of the

outstanding loan portfolio

63,400,861 14,364,791

Provision for Non-performing assets (91-180 days)

50% 2,850,493 5,312,593

Provision for Non-performing assets (> 180 days)

100% 845,918 837,205

TOTAL PROVISION FOR NPA – B 36,96,411 61,49,798

Provision required - the higher of A) or B)

63,400,861 14,364,791

Less: Provision for loan portfolio already made

14,364,791 6,806,625

Provision made for the year ended 49,036,070 7,558,375

In addition to the above provision, the Company has provided 0.40% of the Loan Portfolio as Standard Asset provision


74


Note 28.5: Disclosure Pursuant to Reserve Bank of India Notification DNBS.200/CGM (PK)-2008 dated August-1- 2008

i) Capital to risk Assets ratio (CRAR) (computed as per the method prescribed by RBI)

(`)Particulars As at March 31, 2018 As at March 31, 2017 Tier I Capital 1,159,550,617 616,191,852Tier II Capital 83,018,946 64,365,000Total Capital Funds 1,242,569,563 68,05,56,852Total Risk Weighted Assets 6,620,690,512 1,533,754,137CRAR - Tier I Capital (%) 17.51% 40.17%CRAR - Tier II Capital (%) 1.25% 4.20%CRAR (%) 18.77% 44.37%

All Fixed Deposits with Banks under lien against term loans availed by the Company. However, considering the converge of secured loans by assets like book debts etc. the risk weighted with respect to fixed deposits with Banks has been considered as Zero.

ii) Exposure to Real Estate Sector (Direct & Indirect Exposure) – Nil (PY: Nil)

iii) Amount of Subordinated Debt raised as Tier II Capital – Nil (PY: `50000000)

iv) Exposure to Capital Markets – Nil (PY: Nil)

v) Ratings assigned during the year

a) MFI Grading – mfR3 rated by CRISIL Ratings (MFI Grading Scale – mfR1 Highest mfR8 Lowest)

b) Bank loan rating – CRISIL A/Stable rated by CRISIL Ratings ICRA A/Stable rated by ICRA Ratings

c) COCA Rating – SMERA C1

vi) Maturity Pattern of Assets and Liabilities

Maturity pattern of certain items of assets and liabilities as on March 31 2018 (Amount in ` )

(`)

Particulars

Liabilities AssetsBorrowings from Banks and others

Market Borrowings

Advances (Loan portfolio

outstanding

FD with Banks (Free of Lien)

Investments

Up to one month 928,098,820 - 332,730,736 - -

Over one month to 2 months

171,241,88534,21,63,150 353,518,983 - -

Over 2 months up to 3 months

214,156,333 28,58,19,300 348,884,635 - 10,000,000


622,379,919 - 1,088,879,813 - -

Over 6 months to 1 year 1,133,840,937 - 2,102,689,822 - -

Over 1 year to 3 years 1,860,813,068 - 2,113,382,091 - -

Over 3 years to 5 years 100,000,000 - - - -

Over 5 years - - - - 500,000

Total 5,030,530,963 627,982,450 6,340,086,0800 - 10,500,000


Corporate Overview



75


Note 28.6: Disclosures of frauds reported during the year vide DNBS PD.CC.No. 256 / 03.10.042 / 2011-12 dated March-02-2012

(`)Less than 1 Lakh 1 - 5 Lakhs 5 - 25 Lakhs TotalNo. of

AccountsValue ` in

LakhsNo. of

AccountsValue ` in

LakhsNo. of

AccountsValue ` in

LakhsNo. of

AccountsValue ` in

LakhsA) Person involved 18 2.82 6 4.34 Nil Nil 24 7.16

Staff 18 2.82 6 4.34 Nil Nil 24 7.16Customer 0 0 0 0 Nil Nil Nil NilStaff and Customer 0 0 0 0 Nil Nil Nil Nil

Total 18 2.82 6 4.34 Nil Nil 24 7.16B) Type of fraud

Misappropriation and criminal breach of trust

12 2.44 1 4.34 Nil Nil 13 6.78

Fraudulent encashment / Manipulation of books of Accounts

2 0.38 0 0 Nil Nil 2 0.38

Unauthorised credit facility extended

0 0 0 0 Nil Nil Nil Nil

Cheating and forgery 0 0 0 0 Nil Nil Nil NilTotal 14 2.82 1 4.34 Nil Nil 15 7.16

Note 28.7: Disclosure as required under DNBS (PD) CC. No. 300/03.10.038/2012-13 dated August-3-2012

The cap on margins (as defined by Malegam Committee) and in compliance with RBI circular RBI/2012-13/161 DNBS (PD)

CC.No.300 /03.10.038/2012-13 August-03-2012 is 9.09% as at March-31-2018 (9.22% as at March-31-2017).

Note 28.8: Merger with wholly owned Subsidiary:

Ayusha Dairy Private Limited (hereinafter referred to as the Company) is the Wholly Owned Subsidiary of Samasta Microfinance

Ltd. in which Samasta holds 100% of the equity capital of the Company. Since the operations in the Company had completely

stopped, it was proposed to merge the Company with its holding Company vide the Board Meeting dated 23.01.2018. The Scheme

of Amalgamation was also approved by the members of both the companies and Creditors of Samasta vide EGM and Creditors

Meetings dated 28.03.2018. Samasta -the Transferee Company has filed the application for merger with the Regional Director in

Form RD-1 on 04.04.2018 and approval is awaited on the same.

NOTE 29: EARNINGS PER SHARE

(`)

Particulars As at March 31, 2018 As at March 31, 2017 Profit after Tax (`) 25,829,713 8,089,888

Less : Dividend on preference shares and Dividend Distribution Tax

- 856,158

Net Profit available to equity share holders 25,829,713 7,233,730

Weighted Average Number of Equity Shares

- Basic 81,070,638 1,2,283,965

- Diluted 81,070,638 12,283,965

Earnings Per Share

- Basic 0.32 0.59

- Diluted 0.32 0.59

Face Value of Shares (`) 10 10


76


NOTE30: RECOGNITION OF MAT CREDIT

The Company has availed and utilised the MAT credit of `13,42,390/- during the year (previous year : Nil). No MAT credit is

recognised during the year (previous year : `13,42,390).

NOTE 31: DISCLOSURE PURSUANT TO RESERVE BANK OF INDIA NOTIFICATION DNBS.193DG (VL) 2007 DATED FEBRUARy-22-2007:

(`)

Sl No. ParticularsAs at March 31, 2018

Amount Outstanding

Amount Overdue

Liabilities(1) Loan and Advances availed by the NBFC inclusive of Interest accrued thereon

but not paid:A Debentures - -

- Secured - -

- Unsecured - -

(Other than falling the meaning of Public Deposits) - -

B Deferred Credits - -

C Term Loan 3,729,944,097 -

D Inter-corporate Loans & Borrowings 944,739,325 -

E Commercial Paper 627,982,450 -

F Public Deposits - -

G Other Loans – Vehicle Loan 1,680,874

354,166,667

-

-Non-Convertible Debentures

(`)

Sl No. ParticularsAmount OutstandingAs at March 31, 2018

(2) Break-up of (1) (f) above (Outstanding public deposits inclusive of interest accrued thereon but not paid)(a) In the form of Unsecured debentures(b) In the form of partly secured debentures i.e debentures where there is a shortfall

in the value of security(c) Other public depositsAssets

(3) Break-up of Loans & Advances including Bills Receivables [ Other than those included in (4) below](a) Secured -(b) Unsecured 6,340,086,080

(4) Breakup of Leased and Stock on Hire and other Assets counting towards AFC activities

-

(i) Lease assets including Lease rentals under sundry debtors: - (a) Finance 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 -


Corporate Overview



77


NOTE 31: DISCLOSURE PURSUANT TO RESERVE BANK OF INDIA NOTIFICATION DNBS.193DG (VL) 2007 DATED 22ND FEBRUARy 2007:(CONTD.)

(`)


(5) Break-up of Investments Current Investments - I Quoted: - (i) Shares: -

(a) Equity - (b) Preference -

(ii) Debentures and Bonds - (iii) Units of Mutual Funds - (iv) Government Securities - (v) Others - II Unquoted: -(i) Shares: -


(ii) Debentures and Bonds - (iii) Units of Mutual Funds - (iv) Government Securities(v) Others

Long term Investments - I Quoted: - (i) Shares: -


(ii) Debentures and Bonds - (iii) Units of Mutual Funds - (iv) Government Securities - (v) Others - II Unquoted: - (i) Shares: -

(a) Equity 10,500,000 (b) Preference -

(ii) Debentures and Bonds - (iii) Units of Mutual Funds - (iv) Government Securities - (v) Others -

(6) Borrower Group wise classification of Assets Financed as in (3) and (4) above(`)


Amount in (`) (Net of Provisions) Secured Unsecured Total

1 Related Parties(a) Subsidiaries - - - (b) Companies in the same group - - - (c) Other Related Parties - - -

2 Other than related parties - 6,276,685,219 6,276,685,219Total - 6,276,685,219 6,276,685,219


78


NOTE 31: DISCLOSURE PURSUANT TO RESERVE BANK OF INDIA NOTIFICATION DNBS.193DG (VL) 2007 DATED 22ND FEBRUARy 2007:(CONTD.)

(7) Investor Group-wise classification of all investments (Current and Long Term) in Share and Securities (both Quoted and Unquoted):

(`)

Sl No. Category

Market Value / Breakup value or Fair Value or

Net Assets Value Book Value1 Related Parties

(a) Subsidiaries - 10,000,000

(b) Companies in the same group - -

(c) Other Related Parties - -

2 Other than related parties - 500,000

Total - 10,500,000

(8) Other Information Amount(i) Gross Non - Performing Assets

(a) Related Parties -

(b) Other than related parties 19,547,731

(ii) Net Non - Performing Assets


(b) Other than related parties -

(iii) Assets acquired in Satisfaction of Debt -

NOTE 32: THE COMPANy HAS NOT DISBURSED ANy LOAN AGAINST SECURITy OF GOLD.

NOTE 33: DETAILS OF AVERAGE INTEREST PAID ON BORROWINGS AND CHARGED ON LOANS GIVEN TO JLGS

(`)

ParticularsAs at March 31, 2018 As at March 31, 2017Rate of Interest in %

for Microfinance loanRate of Interest in %

for Microfinance loanAverage Rate of Interest on Borrowings 13.48% 15.19%

Average Rate of Interest on Loans given 22.60% 24.41%

Net Interest Margin 9.12% 9.22%

NOTE 34: SECURITIzATION / ASSIGNMENT OF LOANS

During the year, the Company has sold loans through direct Securitization / assignments. The information on direct assignment

activity of the Company as an Originator / Assignor is as shown below:

(`)



Total number of loans securitized / assigned 40,268 23,917

Total book value of loans securitized / assigned 811,119,735 231,599,843

Sale consideration received for loans securitized / assigned 742,310,050 253,816,937

Income recognised in the statement of profit and loss 24,535,040 29,642,588

Balance of loans assigned / securitized as at the balance sheet date 452,660,769 175,687,865

Cash collateral provided and outstanding as at the balance sheet date 52,486,646 24,089,612


Corporate Overview



79


Notes forming part of Standalone Financial Statements for the year ended March 31, 2018 (Contd.)

NOTE 34: SECURITIzATION / ASSIGNMENT OF LOANS(CONTD.)

Disclosure to be made under Securitization guidelines issued by Reserve Bank of India vide policy no. DNBS. PD. No. 301/3.10.01/2012-13 dated August - 21- 2012.

(`)

Sl No. Particulars As at March 31, 2018


1 No. of SPVs sponsored by the NBFC for Securitization transactions 2 3

2 Total amount of securitized assets as per the books of the SPVs sponsored by the Company

811,119,735 231,599,843

3 Total amount of exposures retained by the Company to comply with MRR as on the date of balance sheet

- -

i) Off-Balance Sheet exposures

a) First Loss - -

b) Others - -

ii) On-Balance Sheet exposures

a) First Loss (in the form of Fixed Deposit) 52,486,646 24,089,612

b) Others - -

4 Amount of exposures to securitization transactions other than MRR


a) Exposure to own securitizationFirst Loss - -

Others - -

b) Exposure to third party securitization transaction - -

First Loss

Others - -

ii) On-Balance Sheet exposures - -

a) Exposure to own securitization

First Loss - -

Others - -

b) Exposure to third party securitization transactionFirst Loss - -

Others - -

NOTE 35: PREVIOUS yEAR FIGURES

Previous year’s figures have been reclassified to conform with the current year’s classification / presentation wherever applicable.

As per our attached report of even date For and on behalf of the Board of DirectorsFor Gowthama & CompanyChartered Accountants Firm No. 005917S


T. Anantha Kumar K. J. SuthejaPlace: Bangalore Chief Financial Officer Company SecretaryDate: April 26, 2018

80


INDEPENDENT AUDITORS’ REPORT

TO THE MEMBERS OF SAMASTA MICROFINANCE LIMITED

Report on the Consolidated Financial Statements

We have audited the accompanying consolidated financial

statements of SAMASTA MICROFINANCE LIMITED (“the Holding

Company”) its subsidiary (Ayusha Dairy Pvt Ltd), which comprise

the Consolidated Balance Sheet as at March 31, 2018 and the

Consolidated Statement of Profit and Loss and Consolidated

Cash Flow Statement for the year then ended, and a summary of

significant accounting policies and other explanatory information.

Management’s Responsibility for the Consolidated

Financial Statements

The Holding Company’s Board of Directors is responsible for the

matters in section 134(5) of the Companies Act, 2013 (“the Act”)

with respect to the preparation of these consolidated financial

statements that give a true and fair view of the consolidated

financial position, consolidated financial performance and

consolidated cash flows of the Company in accordance with the

accounting principles generally accepted in India, including the

Accounting Standards specified under Section 133 of the Act,

read with Rule 7 of the Companies (Accounts) Rules, 2014.

This responsibility also includes the maintenance of adequate

accounting records in accordance with the provision of the Act

for safeguarding of the assets of the Company and for preventing

and detecting the frauds and other irregularities; selection and

application of appropriate accounting policies; making judgments

and estimates that are reasonable and prudent; and design,

implementation and maintenance of adequate internal financial

control, that were operating effectively for ensuring the accuracy

and completeness of the accounting records, 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 or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these consolidated

financial statements based on our audit.

We have taken into account the provisions of the Act, the

accounting and auditing standards and matters which are

required to be included in the audit report under the provisions

of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards

on Auditing specified under section 143(10) of the Act. Those

Standards require that we comply with ethical requirements and

plan and perform the audit to obtain reasonable assurance about

whether the consolidated financial statements are free from

material misstatement.

An audit involves performing procedures to obtain audit evidence

about the amounts and disclosures in the consolidated financial

statements. The procedures selected depend on the auditor’s

judgment, including the assessment of the risks of material

misstatement of the consolidated financial statements, whether

due to fraud or error. In making those risk assessments, the

auditor considers internal financial control relevant to the Holding

Company’s preparation of the consolidated financial statements

that give true and fair view in order to design audit procedures

that are appropriate in the circumstances. An audit also includes

evaluating the appropriateness of accounting policies used and

the reasonableness of the accounting estimates made by the

Holding Company’s Directors, 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 on the

consolidated financial statements.

Opinion

In our opinion and to the best of our information and according

to the explanations given to us, the consolidated 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:

a) In the case of the Consolidated Balance Sheet, of the state of

affairs of the Company as at March 31, 2018;

b) In the case of the Consolidated Statement of Profit and Loss

Account, of the profit for the year ended on that date; and

c) In the case of the Consolidated Cash Flow Statement, of the

cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by section 143(3) of the Act, we report that:

a) We have sought and 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 appears

from our examination of those books.

c) The Consolidated Balance Sheet, the consolidated

Statement of Profit and Loss and the consolidated

Cash Flow Statement dealt with by this Report are in

agreement with the books of account.

Corporate Overview



81

Annual Report 2017-18 CONSOLIDATED FINANCIAL STATEMENTS

d) In our opinion, the aforesaid consolidated financial

statements comply with the Accounting Standards

specified under Section 133 of the Act, read with

Rule 7 of the Companies (Accounts) Rules, 2014 and

the Companies (Accounting Standards) Amendment

Rules, 2016.

e) On the basis of written representations received

from the directors as on 31st March, 2018, taken on

record by the Board of Directors, none of the directors

is disqualified as on 31st March, 2018, from being

appointed as a director in terms of Section 164(2) of

the Act.

f ) With respect to the adequacy of the internal financial

controls over financial reporting of the company and

the operating effectiveness of such controls, refer to

our separate report in ‘Annexure-A’

g) With respect to the other matters to be included in

the Auditor’s Report in accordance with Rule 11 of

the Companies (Audit and Auditors) Rules, 2014, in

our opinion and to the best of our information and

according to the explanations given to us:

i. The Company does not have any pending

litigations which would impact its financial

position.

ii. The Company did not have any long-term

contracts including derivatives contracts for

which there were any material foreseeable

losses; and

iii. There were no amounts which required to be

transferred to the Investor Education and Protection Fund by the

Company.


Firm No: 005917S


INDEPENDENT AUDITORS’ REPORT (contd.)

82


ANNEXURE-ATO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE CONSOLIDATED FINANCIAL STATEMENTS OF SAMASTA MICROFINANCE LIMITED REPORT ON THE INTERNAL FINANCIAL CONTROLS UNDER CLAUSE (I) OF SUB-SECTION 3 OF SECTION 143 OF THE COMPANIES ACT, 2013 (“THE ACT”)

In conjunction with our audit of the consolidated financial statements of the company as of and for the year ended March 31, 2018, we have audited the internal financial controls over financial reporting of Samasta Microfinance Limited (“the Holding Company”) and its subsidiary company, which are company incorporated in India, as of that date.

MANAGEMENT’S RESPONSIBILITy FOR INTERNAL FINANCIAL CONTROLS

The Company’s management is responsible for establishing and maintaining internal financial controls based on essential components such as the control environment, the entity’s risk assessment process, control activities, Information system and communication and the monitoring of such controls. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

AUDITORS’ RESPONSIBILITy

Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.

MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that

(1) Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and

(3) Provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

OPINION

In our opinion, the Holding Company and its subsidiary company, which are incorporated in India have in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, based on essential components such as the control environment, the entity’s risk assessment process, control activities, Information system and communication and the monitoring of such controls.


Firm No: 005917S


Corporate Overview



83


Consolidated Balance Sheetas at March 31, 2018




(`)

Particulars Note No.



I EQUITy AND LIABILITIES(1) Shareholders’ funds

(a) Share Capital 2 1,113,446,110 613,446,110 (b) Reserve and Surplus 3 56,350,753 32,587,905

1,169,796,863 646,034,015 (2) Share application money pending allotment - -(3) Non-Current Liabilities

(a) Long-term borrowings 4 1,956,414,608 682,670,317 (b) Other Long-term liabilities - - (c) Long-term provisions 5 101,134,630 23,557,225

2,057,549,239 706,227,542 (4) Current Liabilities

(a) Short-term borrowings 6 1,376,602,650 - (b) Trade payables 7 30,628,874 81,485,650 (c) Other current liabilities 8

-Current maturities of long term borrowings 2,129,377,029 783,637,803 -Others 603,205,036 38,470,193

(d) Short-term provisions 9 38,781,207 3,400,000 4,178,594,796 906,993,646

Total 7,405,940,899 2,259,255,204 II ASSETS

(1) Non-current assets(a) Fixed assets 10

(i) Tangible assets 44,504,269 21,315,419 (ii) Intangible assets 925,026 725,220 (iii) Capital work-in-progress - - (iv) Intangible assets under development - -

45,429,296 22,040,639 (b) Non-current investments 11 500,000 500,000 (c) Deferred tax assets (Net) 12 24,663,572 4,787,015 (d) Long-term loans & advances 13

-Loans 2,113,382,091 369,165,027 -Others - -

(e) Other non-current assets 14 336,048,074 160,595,639 2,474,593,737 535,047,681

(2) Current assets(a) Current investments 10,216,998 9,746,942 (b) Inventories - - (c) Trade receivables 15 37,916,290 12,310,485 (d) Cash and Bank balances 16 459,765,224 561,701,052 (e) Short-term loans & advances 17

-Loans 4,226,703,989 1,067,314,077 -Others 60,311,529 4,198,856

(f ) Other current assets 18 91,003,836 46,895,471 4,885,917,866 1,702,166,883

Total 7,405,940,899 2,259,255,204 Significant Accounting Policies and Notes to Accounts 1

84


Consolidated Statement of Profit and Loss for the year ended March 31, 2018

(`)

Particulars Note No



REVENUE(A) Revenue from Operations 19 959,805,592 320,382,354 (B) Other Income 20 8,496,012 10,420,076 (C) Total Revenue (A+B) 968,301,603 330,802,429 (D) Expenses

a) Employee benefits expenses 21 280,081,104 112,174,370 b) Finance costs 22 313,024,282 146,308,160 c) Depreciation and amrotisation expenses 10 13,081,181 4,580,939 d) Administrative and Other expenses 23 122,902,087 50,450,581 e) Provisions / write off receivables under

financial activity24 197,581,185 10,517,255

Total Expenses (D) 926,669,839 324,031,304 (E) Profit for the year before tax (C-D) 41,631,765 6,771,125 (F) Tax expenses

(a) Current tax 36,500,000 1,600,000 (b) Deferred tax 12 (19,876,557) (1,963,203)(c) MAT credit availed and utilised 1,342,390 (1,342,390)(d) Taxes for earlier years (96,917) - Total tax expense (F) 17,868,916 (1,705,593)

(G) Profit for the year after tax (E-F) 23,762,849 8,476,718 (H) Profit for the period from continuing

operations 23,762,849 8,476,718

(I) Loss for the period from discontinuing operations

- -

(J) Tax expense of discontinuing operations - -(K) Profit from discontinuing operations

(after tax) (I-J)- -

(L) Profit for the period ( H+K) - -(M) Earnings per Equity Share (Face value of

`10/- each):(a) Basic 0.29 0.62 (b) Diluted 0.29 0.62

Significant accounting policies and notes to the accounts 1




Corporate Overview



85


Consolidated Cash Flow Statementfor the year ended March 31, 2018

(`)

Particulars year ended March 31, 2018


CASH FLOW FROM OPERATING ACTIVITIES Net Profit Before Tax 41,631,765 6,771,125 Adjustments for: Depreciation 13,081,181 4,580,939 Dividend on Mutual funds (470,332) (7,259,028) Short Term Capital Gain (4,851,909) - Provisions for Standard and Non Performing Assets 49,045,000 7,558,375 Bad Debts Written Off 123,136,185 2,958,880 Interest on Fixed Deposits (18,603,421) (13,081,047) Interest on Income Tax 1,509,368 - Loss on sale of Fixed assets - 87,965 Operating Profit before Working Capital Changes A 204,477,835 1,617,209 Working Capital Changes: (Increase) / Decrease in trade and other receivables (25,605,805) (564,901,720) (Increase) / Decrease in Short term loans and advances (3,215,502,585) (10,713,666) (Increase) / Decrease in Other Current Assets (44,108,365) (4,149,697) (Increase) / Decrease in Loans & Advances (1,916,398,248) (190,884,377) (Increase) / Decrease in Other Non- Current Assets (161,565,144) (42,295,385) Increase / (Decrease) in Long term Liabilities 2,026,531,224 (339,701,975) Increase / (Decrease) in long term provisions 75,977,405 (1,579,164) Increase / (Decrease) in Short term provisions Increase / (Decrease) in Other current liabilities (1,657,143,666) 403,125,789 Increase / (Decrease) in trade payables (50,856,776) - Changes in Working Capital B (4,968,671,960) (751,100,195) Cash generated from operations A+B (4,764,194,125) (749,482,986) Income taxes paid (16,932,764) (7,980,680) Net cash from operating activities (4,781,126,888) (757,463,666) CASH FLOW FROM INVESTING ACTIVITIES Sale of Fixed Assets 29,731 590,500 Dividend from Mutual Funds 470,332 7,259,028 Short Term Capital Gain 4,851,909 Investment in Mutual Funds (470,055) (9,746,942) Purchase of Fixed Assets (36,499,570) (16,426,835) Interest on Fixed Deposits 18,603,421 13,081,047 Net Cash used in Investing activities (13,014,231) (5,243,202) CASH FLOW FROM FINANCING ACTIVITIES Proceeds from issue of Equity Share Capital 500,000,000 500,000,000 Redemption of Preference Share Capital - - Proceeds from Borrowings 6,397,227,364 1,361,286,036 Repayment of Borrowings (2,205,022,072) (665,604,845) Dividends paid (including DDT) - (1,939,376) Net cash used in financing activities 4,692,205,292 1,193,741,815 Net increase in cash and cash equivalents (101,935,828) 431,034,947 Cash and cash equivalents as at 01-April-2017 561,701,052 130,666,105 Cash and cash equivalents as at 31-March-2018 459,765,224 561,701,052

The above Cash Flow Statement has been prepared under the "Indirect Method" as set out in Accounting Standard -3 on Cash Flow Statement. As per our attached report of even date For and on behalf of the Board of DirectorsFor Gowthama & Company of Samasta Microfinance LimitedChartered Accountants Firm No. 005917S



86


Notes forming part of Consolidated Financial Statements as at March 31, 2018

NOTE 1 : SIGNIFICANT ACCOUNTING POLICIES & NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS:

1. Basis of Preparation:

The financial statements of the Company have been prepared

in accordance with Generally Accepted Accounting Principles

in India (Indian GAAP) to comply with the Accounting

Standard specified under section 133 of the Companies Act,

2013, read with Rule 7 of the Companies (Accounts) Rules,

2014 and the relevant provisions of the Companies Act, 2013

(“the 2013 Act”)/Companies Act 1956, (“the 1956 Act”), as

applicable. The financial statements have been prepared on

accrual basis and the directions issued by the Reserve Bank of

India (RBI) to the extent applicable to the Company.

The Company follows the prudential norms for Income

recognition, asset classification and provisioning as

prescribed by the RBI for Non-deposit taking Non-Banking

Financial Companies (NBFC-MFI).

2. Use of Accounting Estimates:

The presentation of financial statements in conformity with

Indian Generally Accepted Accounting Principles requires

management to make estimates and assumptions that

affect the reported amounts of assets and liabilities and

disclosure of contingent assets and liabilities at the date of

the financial statements and reported amounts of revenues

and expenses during the reporting period. Although such

estimates are made on a reasonable and prudent basis

taking into account all available information, actual results

could differ from those estimates.

2. Cash flow statement:

The Cash Flow are reported using the indirect method,

whereby profit / (loss) before 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 available information.

3. Cash and cash equivalents:

Cash and cash equivalents for the purpose of cash flow

statement comprise cash in hand and cash at bank and

short-term investments with an original maturity of three

months or less.

4. Provisions and contingent liabilities:

A provision is recognised when the Company has a present

legal or constructive 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 reliable estimate

can be made. Provisions are not discounted to their present

value and are determined based on 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.

A contingent liability is a possible obligation that arises

from past events whose existence will be confirmed by the

occurrence or non-occurrence of one or more uncertain

future events beyond the control of the Company or a

present obligation that is not recognised because it is not

probable that an outflow of resources will be required to

settle the obligation. A contingent liability also arises in

extremely rare cases where there is a liability that cannot be

recognised because it cannot be measured reliably.

The Company does not recognise a contingent liability but

discloses its existence in the financial statements.

5. Income Taxes and Deferred Taxes:

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 difference, being

the difference between taxable income and accounting

income that originate in one period and are capable of

reversal in one or more subsequent periods. Deferred tax

assets are recognised only if there is virtual certainty that

they will be realised and are reviewed every year. The tax

effect is calculated on the accumulated timing differences

at the end of the year based on enacted or substantially

enacted tax rates.

6. Tangible fixed assets:

All fixed assets are stated at historical cost less accumulated

depreciation and impairment losses, if any. Cost comprises

the purchase price and any attributable cost of bringing the

asset to its working condition for its intended use.

7. Intangible assets:

Computer software are stated at the cost of acquisition and

are amortised over a period of five years, based on expected

future economic benefits accruing to the Company from

the year of acquisition.

8. Depreciation & Amortisation:

Depreciable amount for assets is the cost of an asset, or

other amount substituted for cost, less its estimated residual

value.

Depreciation on tangible fixed assets has been provided on

the straight-line method as per the useful life prescribed in

Schedule II to the Companies Act, 2013 The useful life of the

Corporate Overview



87


assets is as under:

Category of Assets Useful Life

Furniture and Fixtures 10 years

Office Equipment 5 years

Vehicles 8 years

Computers 3 years

Intangible assets are amortised over their estimated useful

life as follows:

Software - 3 Years

Servers & Networks - 6 Years

Individual assets costing less than ` 5,000 each are

depreciated fully in the year of purchase.

10. Investments:

Investments which are long term in nature are stated at cost

with provisions where necessary for diminution, other than

temporary, in the value of Investment.

Investments, which are readily realisable and intended to be

held for not more than one year from the date on which such

investments are made, are classified as current investments.

All other investments are classified as long-term investments.

Current investments are carried in the financial statements

at lower of cost and fair value determined on an individual

investment basis except for investments in the units of

mutual funds in the nature of current investments that have

been valued at the net asset value declared by the mutual

fund in respect of each particular scheme, in accordance

with the NBFC directions. Long-term investments are

carried at cost. However, provision for diminution in value

is made to recognise a decline other than temporary in

the value of the investments. On disposal of an investment

the difference between carrying amount and net disposal

proceeds are charged or credited to the statement of profit

and loss.

11. Classification & Provisions of Loan Portfolio:

Loans are classified and provided as per norms required

in Non-Banking Financial (Non-Deposit Accepting)

Companies Prudential Norms (Reserve Bank) Directions,

2007, as amended from time to time.

The Company has got classified as NBFC-MFI and

accordingly has provided its provisioning norms for loan

portfolio vide RBI circular dated December 02, 2011 as

amended vide circular dated March 20, 2012. According to

which the provision will be higher of:

a) 1% of the outstanding loan portfolio or

b) 50% of the aggregate loan installments which are

overdue for more than 90 days and less than 180 days

Notes forming part of Consolidated Financial Statements as at March 31, 2018 (Contd.)

and 100% of the aggregate loan installments which

are overdue for 180 days or more

In addition to the above provision, the Company has

provided 0.40% of the Loan Portfolio as Standard Asset

provision.

12. Trade receivables under Financing Activity:

Trade receivables under financing activity include Income

Generating Loan, Dairy Cow Loan / Cattle Loan, Water

Purifier Loan, Solar Products Loan and Individual Loan.

Loans are classified into ‘Performing and Non- Performing

assets in terms of the Non-Banking Financial Companies

Prudential Norms (Reserve Bank) Directions, 1998 and

NBFC-MFI Directions (as applicable) issued by the Reserve

Bank of India as amended from time to time.

13. Revenue Recognition:

a) Revenue from Interest on loans financed by the

Company is recognised on accrual basis, considering

the directions issued by the Reserve Bank of India

from time to time in terms of the Non Banking

Financial Companies Prudential Norms (Reserve Bank)

Directions, 1998.

b) Interest income on Fixed Deposits with Banks is

recognised on a time proportion basis taking into

account the amount outstanding and the rate

applicable.

c) Processing fee is recognised as and when collected at

the time of loan disbursement.

d) Dividend income from investments in mutual fund is

recognised when the right to receive is established.

e) Facilitation fee is recognised on accrual basis according

to the terms of agreement.

f ) Profit/Premium arising at the time of securitisation

of loan portfolio is amortised over the life of the

underlying loan/portfolio/securities and loss arising

thereon is accounted immediately.

g) All other income is recognised on an accrual basis,

when there is no uncertainty in the ultimate realisation

/ collection.

14. Borrowing Costs:

Borrowing costs attributable to qualifying assets (assets

which require substantial period of time to get ready for

their intended use) are capitalised as part of the cost of such

assets. All other borrowing costs are charged to revenue.

15. Earnings per Share:

Basic and diluted earnings per share are computed in

accordance with Accounting Standard (AS)-20 – Earnings

per share. In determining the Earning per share, the

88



Company considers the Net Profit after Tax. The number

of Shares used in computing Basic Earning per share

is number of share outstanding during the period. The

number of shares used in computing diluted earnings per

share comprises the weighted average shares considered

for deriving basic earnings per share and also the weighted

average number of equity shares that could have been

issued on the conversion of all dilutive potential equity

shares.

16. Employee Benefits:

a) Short Term Employee Benefits:

All employee benefits falling due wholly within twelve

months of rendering the services are classified as short

term employee benefits, which include benefits like

Salary, Allowances and Incentives, and are recognised

as expenses in the period in which the employee

renders the related service.

b) Post- employment Benefits:

Defined Contribution Plans:

The Company’s contributions to provident fund are

considered as defined contribution plans and are

charged as an expense as they fall due based on the

amount of contribution required to be made

Defined Benefit Plans:

For defined benefit plans in the form of gratuity,

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. Past service cost is recognised immediately

to the extent that the benefits are already vested

and otherwise is amortised on a straight-line basis

over the average period until the benefits become

vested. The retirement benefit obligation recognised

in the Balance Sheet represents the present value

of the defined benefit obligation as adjusted for

unrecognised past service cost.

17. Impairment:

The Company assesses at each reporting date whether

there is an indication that an asset may be impaired. If

any indication exists, or when annual impairment testing

for an asset is required, the Company estimates the asset’s

recoverable amount. An asset’s recoverable amount is the

higher of an asset’s net selling price and its value in use.

The recoverable amount is determined for an individual

asset, unless the asset does not generate cash inflows

that are largely independent of those from other assets or

groups of assets. Where the carrying amount of an asset

exceeds its recoverable amount, the asset is considered

impaired and is written down to its recoverable amount. In

assessing value in use, the estimated future cash flows are

discounted to their present value using a pre-tax discount

rate that reflects current market assessments of the

time value of money and the risks specific to the asset. In

determining net selling price, recent market transactions

are taken into account, if available. If no such transactions

can be identified, an appropriate valuation model is used.

18. Leases:

Leases where the lessor effectively retains, substantially all

the risks and benefits of ownership of the leased item, are

classified as operating leases. Operating lease payments are

recognised as an expense in the statement of profit and

loss on a straight-line basis over the lease term.

19. Foreign Currency Transactions:

I. All transactions in foreign currency are recognised

at the exchange rate prevailing on the date of the

transaction.

II. Foreign currency monetary items are reported using

the exchange rate prevailing at the close of the

financial year.

III. Exchange differences arising on the settlement of

monetary items or on the restatement of Company’s

monetary items at rates different from those at which

they were initially recorded during the year, or reported

in previous financial statements, are recognised as

income or as expenses in the year in which they arise.

20. General:

Any other accounting policy not specifically referred to are

consistent with generally accepted accounting principles.

Corporate Overview



89


NOTE 2. SHARE CAPITAL

(`)



Authorised :113,000,000 (Previous year 63,000,000 Equity Shares of ` 10/- each) Equity Shares of ` 10/- each

1,130,000,000 630,000,000

2,000,000 (Previous year 2,000,000 Preference Shares of ` 10/- each) Preference Shares of ` 10/- each

20,000,000 20,000,000

Total 1,150,000,000 650,000,000 Issued, Subscribed and Paid-up share capital111,344,611 (Previous year : 61,344,611 shares) Equity Shares of ` 10/- each fully paid-up 1,113,446,110 613,446,110

- - Total 1,113,446,110 613,446,110

i) Reconciliation of the number of shares outstanding at the beginning and at the end of the year:

(` in Millions)As at March 31,

2018As at March 31,

2017 Equity Shares: Number of shares at the beginning of the year 61,344,611 10,470,000 Add: Equity shares issued during the year 50,000,000 50,874,611 Number of shares at the end of the year 111,344,611 61,344,611 Preference Shares: Number of shares at the beginning of the year - 1,000,000 Add: Preference shares issued during the year - - Less: Preference shares converted during the year - 1,000,000 Number of shares at the end of the year - -

ii) Number of shares held by each shareholder holding more than 5% shares in the Company are as follows: Class of shares / Name of the shareholder

(`)

Particulars


Number of shares


Number of shares

Equity Shares: India Infoline Finance Limited 108,417,631 58,417,631 Total 108,417,631 58,417,631

iii) Terms / rights attached to Equity Shares:

The Company has Equity Shares having par value of ` 10/- per share. Each holder of Equity Shares is entitled to one vote per share. Holders of Equity Shares are entitled to dividend, in proportion to the paid up amount, proposed by Board of Directors subject to approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of Equity Shares will be entitled to receive any of the remaining assets of the company, after distribution of all preferential amounts.

iv) Terms / rights attached to Preference Shares:

a) Rights/preferences attached to Preference Shares The dividend on preference shares proposed by the Board of Directors is subject to approval of shareholders in the

ensuing Annual General Meeting. Each holder of Preference Share is entitled to one vote per share only on resolutions placed before the Company which directly affect the rights attached to the said shares. In the event of liquidation of the Company before redemption of preference shares, the holders of preference shares will have priority over equity shares in


90


the payment of dividend and repayment of capital and premium thereon but shall not be entitled to any surplus arising thereto.

NOTE 3. RESERVE AND SURPLUS

(`)



Securities Premium ReserveOpening balance 1,253,890 -

Addition during the year - 1,253,890


Closing balance 1,253,890 1,253,890 Special Reserve Opening balance 7,757,977 6,132,977

Addition during the year 5,173,000 1,625,000


Closing balance 12,930,977 7,757,977 Surplus / (Deficit) in Statement of Profit and LossOpening balance 23,576,038 17,580,478

Addition: Profit for the year 23,762,849 8,476,718

Less: Appropriations Dividend on Preference Shares - 729,863

Dividend Distribution Tax - Preference Shares - 126,295

Special Reserve* 5,173,000 1,625,000

Closing balance 42,165,886 23,576,038 Total 56,350,753 32,587,905

*As required by Section 45 1C of Reserve Bank of India Act, 1934.

NOTE 4. LONG-TERM BORROWINGS

(`)



Secured Loansa) Term Loans - Secured

1) From Banks (Refer Note 4.1) 1,586,950,435 247,656,453

2) From Other Parties (Refer Note 4.1) 168,354,898 246,197,121

b) Non-Convertible Debentures - Secured (Refer Note 4.1) 150,000,000 137,500,800

c) Non-Convertible Debentures - Unsecured (Refer Note 4.1) - Tier II Capital 50,000,000 50,000,000

d) Vehicle Loans - Unsecured 1) From Banks (Refer Note 4.1) 670,093 676,627


Total 1,956,414,608 682,670,317


Corporate Overview



91


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Corporate Overview



93


(`)

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Liab

iliti

esN

on-c

urre

nt

Liab

iliti

esCu

rren

t Li

abili

ties

Non

-cur

rent

Li

abili

ties

Stat

e Ba

nk

(Mau

ritiu

s) L

tdRa

te o

f Int

eres

t 1Y

MC

LR+

2.00

%,lo

an re

paya

ble

in 3

9 m

onth

ly in

stal

lam

ents

Hyp

othe

catio

n of

boo

k de

bts

and

cash

col

late

ral.

33,

333,

336

59,

170,

259

- -

Stat

e Ba

nk o

f Mys

ore

Rate

of I

nter

est -

Bas

e ra

te +

2.2

5%,

loan

repa

yabl

e in

33

mon

thly

in

stal

lmen

ts.

Hyp

othe

catio

n of

boo

k de

bts,

cash

co

llate

ral a

nd p

erso

nal g

uara

ntee

of

Mr.

N. V

enka

tesh

, Dire

ctor

.

1,3

30,3

78

- 1

0,90

9,20

0 2

,321

,689

Stat

e Ba

nk o

f Pat

iala

Ra

te o

f Int

eres

t - B

ase

rate

+ 3

.50%

, lo

an re

paya

ble

in 3

4 m

onth

ly

inst

allm

ents

.

Hyp

othe

catio

n of

boo

k de

bts,

cash

co

llate

ral a

nd p

erso

nal g

uara

ntee

of

Mr.

N. V

enka

tesh

, Dire

ctor

.

3,6

83,7

51

-

Stat

e Ba

nk o

f Tr

avan

core

Ra

te o

f Int

eres

t - B

ase

rate

+ 4

.50%

, lo

an re

paya

ble

in 3

3 m

onth

ly

inst

allm

ents

.

Hyp

othe

catio

n of

boo

k de

bts,

cash

co

llate

ral a

nd p

erso

nal g

uara

ntee

of

Mr.

N. V

enka

tesh

, Dire

ctor

.

18,

466,

503

-

Stan

dard

Cha

rter

ed

Bank

Rate

of I

nter

est-

8.5

5%, l

oan

repa

yabl

e as

may

be

agre

ed w

ith

the

Bank

Hyp

othe

catio

n of

boo

k de

bts

and

corp

orat

e gu

aran

tee

of In

dia

Info

line

Fina

nce

Lim

ited.

200

,000

,000

-

Stan

dard

Cha

rter

ed

Bank

Rate

of I

nter

est-

8.5

5%, l

oan

repa

yabl

e as

may

be

agre

ed w

ith

the

Bank

Hyp

othe

catio

n of

boo

k de

bts

and

corp

orat

e gu

aran

tee

of In

dia

Info

line

Fina

nce

Lim

ited.

250

,000

,000

-

UCO

Ban

k Ra

te o

f Int

eres

t - B

ase

rate

+ 3

.00%

, lo

an re

paya

ble

in 4

5 m

onth

ly

inst

allm

ents

.

Hyp

othe

catio

n of

boo

k de

bts,

cash

co

llate

ral a

nd p

erso

nal g

uara

ntee

of

Mr.

N. V

enka

tesh

, Dire

ctor

.

7,2

86,6

85

-

UCO

Ban

k Ra

te o

f Int

eres

t - B

ase

rate

+ 3

.00%

, lo

an re

paya

ble

in 4

5 m

onth

ly

inst

allm

ents

.

Hyp

othe

catio

n of

boo

k de

bts,

cash

co

llate

ral a

nd p

erso

nal g

uara

ntee

of

Mr.

N. V

enka

tesh

, Dire

ctor

.

8,0

00,0

04

6,6

44,0

70

8,0

00,0

04

13,

995,

996

UCO

Ban

k Ra

te o

f Int

eres

t - 1

1.75

% l

oan

repa

yabl

e in

48

mon

thly

in

stal

lmen

ts.

Hyp

othe

catio

n of

boo

k de

bts

and

cash

col

late

ral.

10,

000,

000

-

UCO

Ban

k Ra

te o

f Int

eres

t MC

LR+

2.65

%,lo

an

repa

yabl

e in

45

mon

thly

in

stal

lam

ents

Hyp

othe

catio

n of

boo

k de

bts

and

cash

col

late

ral.

13,

333,

333

27,

054,

832

YES

Bank

Ltd

.Ra

te o

f Int

eres

t - 1

2.25

% l

oan

repa

yabl

e in

48

mon

thly

in

stal

lmen

ts.

Hyp

othe

catio

n of

boo

k de

bts,

cash

co

llate

ral a

nd p

erso

nal g

uara

ntee

of

Mr.

N. V

enka

tesh

, Dire

ctor

.

10,

000,

000

10,

161,

644

YES

Bank

Ltd

.Ra

te o

f Int

eres

t 1YR

MC

LR+

3%,lo

an

repa

yabl

e in

24

mon

thly

in

stal

lam

ents

Hyp

othe

catio

n of

boo

k de

bts

and

cash

col

late

ral.

25,

000,

000

7,0

83,3

33

YES

Bank

Ltd

.Ra

te o

f Int

eres

t 1Y

MC

LR+

0.5%

,loan

re

paya

ble

in 2

4 m

onth

ly

inst

alla

men

ts

Hyp

othe

catio

n of

boo

k de

bts

and

cash

col

late

ral.

500

,000

,000

5

00,0

00,0

00

Tota

l 1

,692

,803

,820

1

,586

,950

,435

2

75,6

87,6

39

247

,656

,453

Not

e 4.

1 Te

rm L

oan

from

Ban

ks -

Secu

red

(con

td.)


94


(`)

Nam

e of

the

FI /

NBF

CTe

rms

of re

paym

ent

Secu

rity

Off

ered

As

at M

arch

31,

201

8A

s at

Mar

ch 3

1, 2

017

Cu

rren

t Li

abili

ties

Non

-cur

rent

Li

abili

ties

Curr

ent

Liab

iliti

esN

on-c

urre

nt

Liab

iliti

esA

gri B

usin

ess

Fina

nce

Ltd.

Rate

of I

nter

est -

13%

loa

n re

paya

ble

in 3

6 m

onth

ly

inst

allm

ents

.

Hyp

othe

catio

n of

boo

k de

bts,

cash

co

llate

ral a

nd p

erso

nal g

uara

ntee

of

Mr.

N. V

enka

tesh

, Dire

ctor

.

16,

680,

000

16,

640,

000

16,

680,

000

33,

320,

000

Ana

nya

Fina

nce

for

Incl

usiv

e G

row

th

Priv

ate

Lim

ited

Rate

of I

nter

est -

15.

75%

, lo

an re

paya

ble

in 1

8 m

onth

ly

inst

allm

ents

.

Hyp

othe

catio

n of

boo

k de

bts,

cash

col

late

ral a

nd 1

8 no

. adv

ance

po

st-d

ated

che

ques

.

2,8

12,5

00

-

Fedb

ank

Fina

ncia

l Se

rvic

es L

imite

dRa

te o

f Int

eres

t - 1

2% l

oan

repa

yabl

e in

36

mon

thly

in

stal

lmen

ts.

Hyp

othe

catio

n of

boo

k de

bts

and

cash

col

late

ral.

13,

500,

000

36,

500,

000

Fedb

ank

Fina

ncia

l Se

rvic

es L

imite

d-TL

Rate

of I

nter

est -

11.

20%

loa

n re

paya

ble

in 3

6 m

onth

ly

inst

allm

ents

.

Hyp

othe

catio

n of

boo

k de

bts

and

cash

col

late

ral.

72,

719,

880

87,

871,

412

IFM

R Ca

pita

l Fin

ance

Pr

ivat

e Li

mite

dRa

te o

f Int

eres

t - 1

5.75

%,

loan

repa

yabl

e in

24

mon

thly

in

stal

lmen

ts.

Hyp

othe

catio

n of

boo

k de

bts

and

cash

col

late

ral.

- -

27,

664,

709

-

IFM

R Ca

pita

l Fin

ance

Pr

ivat

e Li

mite

dRa

te o

f Int

eres

t - 1

5.75

%,

loan

repa

yabl

e in

24

mon

thly

in

stal

lmen

ts.

Hyp

othe

catio

n of

boo

k de

bts

and

cash

col

late

ral.

- -

27,

688,

963

-

IFM

R Ca

pita

l Fin

ance

Pr

ivat

e Li

mite

dRa

te o

f Int

eres

t - 1

4.95

% l

oan

repa

yabl

e in

24

mon

thly

in

stal

lmen

ts.

Hyp

othe

catio

n of

boo

k de

bts

and

cash

col

late

ral.

20,

504,

788

- 2

4,02

5,35

7 2

0,50

4,78

8

IFM

R Ca

pita

l Fin

ance

Pr

ivat

e Li

mite

dRa

te o

f Int

eres

t - 1

4.95

% l

oan

repa

yabl

e in

24

mon

thly

in

stal

lmen

ts.

Hyp

othe

catio

n of

boo

k de

bts

and

cash

col

late

ral.

20,

504,

788

- 2

4,02

5,35

7 2

0,50

4,78

8

Maa

nave

eya

Dev

elop

men

t &

Fina

nce

Priv

ate

Lim

ited

Rate

of I

nter

est -

14.

50%

, loa

n re

paya

ble

in 2

4 in

stal

lmen

ts.

Hyp

othe

catio

n of

boo

k de

bts

and

cash

col

late

ral.

40,

008,

000

19,

988,

000

Relia

nce

Capi

tal L

td.

Rate

of I

nter

est -

15.

00%

, lo

an re

paya

ble

in 1

5 m

onth

ly

inst

allm

ents

.

Hyp

othe

catio

n of

boo

k de

bts

and

cash

col

late

ral.

10,

758,

883

-

Relia

nce

Capi

tal L

td.

Rate

of I

nter

est -

13%

, loa

n re

paya

ble

in 2

4 m

onth

ly

inst

allm

ents

.

Hyp

othe

catio

n of

boo

k de

bts

and

cash

col

late

ral.

14,

256,

994

0

Relia

nce

Capi

tal L

td.

Rate

of I

nter

est -

13%

, loa

n re

paya

ble

in 2

4 m

onth

ly

inst

allm

ents

.

Hyp

othe

catio

n of

boo

k de

bts

and

cash

col

late

ral.

48,

269,

667

0

47,

373,

373

48,

269,

667

Relia

nce

Capi

tal L

td.

Rate

of I

nter

est -

13%

, loa

n re

paya

ble

in 2

4 m

onth

ly

inst

allm

ents

.

Hyp

othe

catio

n of

boo

k de

bts

and

cash

col

late

ral.

53,

228,

029

0

46,

771,

971

53,

228,

029

Relig

are

Finv

est

Lim

ited

Rate

of I

nter

est -

15.

75%

, lo

an re

paya

ble

in 2

6 m

onth

ly

inst

allm

ents

.

Hyp

othe

catio

n of

boo

k de

bts,

cash

co

llate

ral a

nd p

erso

nal g

uara

ntee

of

Mr.

N. V

enka

tesh

, Dire

ctor

.

16,

232,

023

-

Not

e 4.

1 Te

rm L

oan

from

Ban

ks -

Secu

red

(con

td.)


Corporate Overview



95


Relig

are

Finv

est

Lim

ited

Rate

of I

nter

est -

14.

50%

, lo

an re

paya

ble

in 2

4 m

onth

ly

inst

allm

ents

.

Hyp

othe

catio

n of

boo

k de

bts,

cash

co

llate

ral a

nd p

erso

nal g

uara

ntee

of

Mr.

N. V

enka

tesh

, Dire

ctor

.

13,

771,

278

0

24,

935,

233

13,

881,

848

Her

o Fi

n Co

rpRa

te o

f Int

eres

t - 9

.5%

, loa

n re

paya

ble

in 1

2 m

onth

ly

inst

allm

ents

.

Hyp

othe

catio

n of

boo

k de

bts

36,

156,

514

63,

843,

486

Tota

l 2

81,8

34,9

44

168

,354

,898

3

36,7

33,3

63

246

,197

,121

Non

-Con

vert

ible

Deb

entu

res

- Sec

ured

(`)

Nam

e of

D

eben

ture

Hol

der

Term

s of

repa

ymen

tSe

curi

ty O

ffer

edA

s at

Mar

ch 3

1, 2

018

As

at M

arch

31,

201

7

Curr

ent

Liab

iliti

esN

on-c

urre

nt

Liab

iliti

esCu

rren

t Li

abili

ties

Non

-cur

rent

Li

abili

ties

Hin

duja

Ley

land

Fi

nanc

e Li

mite

dRa

te o

f Int

eres

t - 1

2.78

% p

.a.

calc

ulat

ed o

n a

XIRR

bas

is,

prin

cipa

l rep

ayab

le in

24

mon

thly

in

stal

lmen

ts.

Hyp

othe

catio

n of

Boo

k D

ebts

45,

833,

400

-

Hin

duja

Ley

land

Fi

nanc

e Li

mite

dRa

te o

f Int

eres

t - 1

2.51

% p

.a.

calc

ulat

ed o

n a

XIRR

bas

is,

prin

cipa

l rep

ayab

le in

24

mon

thly

in

stal

lmen

ts.

Hyp

othe

catio

n of

Boo

k D

ebts

12,

500,

000

- 4

9,99

9,20

0 1

2,50

0,80

0

Hin

duja

Ley

land

Fi

nanc

e Li

mite

dRa

te o

f Int

eres

t - 1

0.56

% p

.a.

calc

ulat

ed o

n a

XIRR

bas

is,

prin

cipa

l rep

ayab

le in

36

mon

thly

in

stal

lmen

ts.

Hyp

othe

catio

n of

Boo

k D

ebts

66,

666,

667

100

,000

,000

IFM

R Fl

mpa

ct L

ong

Term

Mul

ti A

sset

C

lass

-Sen

ior D

ebt

Rate

of I

nter

est -

15.

25%

loan

re

paya

ble

in 7

2 m

onth

ly

inst

allm

ents

.

Hyp

othe

catio

n of

Boo

k D

ebts

- 5

0,00

0,00

0 -

50,

000,

000

Mah

indr

a &

Mah

indr

a Fi

nanc

ial

Serv

ices

Ltd

Rate

of I

nter

est -

11.

40%

loan

re

paya

ble

in 2

4 m

onth

ly

inst

allm

ents

.

Hyp

othe

catio

n of

Boo

k D

ebts

75,

000,

000

- 7

5,00

0,00

0 7

5,00

0,00

0

Tota

l 1

54,1

66,6

67

150

,000

,000

1

70,8

32,6

00

137

,500

,800

Cash

Cre

dit -

Sec

ured

(`)

Nam

e of

the

Bank

Term

s of

repa

ymen

tSe

curi

ty O

ffer

edA

s at

Mar

ch 3

1, 2

018

Mar

ch 3

1, 2

017

Curr

ent

Liab

iliti

esN

on-c

urre

nt

Liab

iliti

esCu

rren

t Li

abili

ties

Non

-cur

rent

Li

abili

ties

Ratn

akar

Ban

k Lt

d.Ra

te o

f Int

eres

t - 1

3.75

% lo

an

repa

yabl

e on

dem

and

- Ten

or -1

2 M

onth

s

Hyp

othe

catio

n of

Boo

k D

ebts

- 3

,586

-

Tota

l -

- 3

,586

-

Not

e 4.

1 Te

rm L

oan

from

Ban

ks -

Secu

red

(con

td.)


96


Non

-Con

vert

ible

Deb

entu

res

- Uns

ecur

ed

(`)

Nam

e of

D

eben

ture

Hol

der

Term

s of

repa

ymen

tSe

curi

ty O

ffer

edA

s at

Mar

ch 3

1, 2

018

As

at M

arch

31,

201

7

Curr

ent

Liab

iliti

esN

on-c

urre

nt

Liab

iliti

esCu

rren

t Li

abili

ties

Non

-cur

rent

Li

abili

ties

IFM

R Fl

mpa

ct L

ong

Term

Mul

ti A

sset

C

lass

-Sub

Deb

t

Rate

of I

nter

est -

15.

25%

loan

re

paya

ble

in 7

2 m

onth

ly

inst

allm

ents

.

No

secu

rity

offer

ed -

50,

000,

000

- 5

0,00

0,00

0

Tota

l -

50,

000,

000

- 5

0,00

0,00

0

Vehi

cle

Loan

from

Ban

ks -

Uns

ecur

ed

(`)

Nam

e of

the

Bank

Term

s of

repa

ymen

tSe

curi

ty O

ffer

edA

s at

Mar

ch 3

1, 2

018

As

at M

arch

31,

201

7

Curr

ent

Liab

iliti

esN

on-c

urre

nt

Liab

iliti

esCu

rren

t Li

abili

ties

Non

-cur

rent

Li

abili

ties

HD

FC B

ank

Rate

of I

nter

est -

9.6

5%, l

oan

repa

yabl

e in

60

mon

thly

in

stal

lmen

ts.

Hyp

othe

catio

n of

Car

218

,078

4

58,5

50

198

,093

6

76,6

27

HD

FC B

ank

Rate

of I

nter

est -

8.8

8%, l

oan

repa

yabl

e in

36

mon

thly

in

stal

lmen

ts.

Hyp

othe

catio

n of

Car

153

,387

2

11,5

43

- -

Tota

l 3

71,4

64

670

,093

1

98,0

93

676

,627

Vehi

cle

Loan

from

Oth

er P

arti

es -

Uns

ecur

ed

(`)

Nam

e of

the

FI /

NBF

CTe

rms

of re

paym

ent

Secu

rity

Off

ered

As

at M

arch

31,

201

8A

s at

Mar

ch 3

1, 2

017

Cu

rren

t Li

abili

ties

Non

-cur

rent

Li

abili

ties

Curr

ent

Liab

iliti

esN

on-c

urre

nt

Liab

iliti

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tak

Mah

indr

a Pr

ime

Ltd

Loan

repa

yabl

e in

60

mon

thly

in

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ts (M

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I).H

ypot

heca

tion

of C

ar 2

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34

439

,182

1

82,5

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639

,316

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l 2

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34

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1

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22

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1: T

he C

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ny h

as n

ot d

efau

lted

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ent o

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s to

ban

ks /

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.

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e 4.

1 Te

rm L

oan

from

Ban

ks -

Secu

red

(con

td.)


Corporate Overview



97


NOTE 5. LONG-TERM PROVISIONS

(`)



a) Provision for Employee Benefits: i) Provision for Gratuity 1,126,226 1,570,357 ii) Provision for Leave encashment 1,976,536 -

b) Other Provisions: i) Provision for Taxation 9,221,868 7,621,868 ii) Provision against Standard Assets under financing activity 25,400,000 - iii) Provision against Loan Assets under financing activity 63,410,000 14,365,000

Total 101,134,630 23,557,225

NOTE 6. SHORT-TERM BORROWINGS

(`)



Unsecured LoansInter Corporate Deposits 748,620,200 - Commercial Paper 650,000,000 - Less : Unexpired discount on commercial paper (22,017,550) - Total 1,376,602,650 -

NOTE 7. TRADE PAyABLES

(`)



Outstanding dues of creditors 30,628,874 81,485,650 Total 30,628,874 81,485,650

NOTE 8. OTHER CURRENT LIABILITIES

(`)



Current maturities of long term borrowingsSecured Non Convertible Debentures (Refer Note 4.1) 154,166,667 170,832,600 Loans from Banks (Secured against receivables- Refer Note 4.1) 1,692,803,820 275,687,639 Term Loan from Other Parties - Secured (Refer Note 4.1) 281,834,944 336,733,363 Cash Credit (Refer Note 4.1) - 3,586 Vehicle Loans - Unsecured

1) From Banks (Refer Note 4.1) 371,464 198,093 2) From Other Parties (Refer Note 4.1) 200,134 182,522

Sub-total 2,129,377,029 783,637,803 Other PayablePayable to Holding Company 196,119,125 - Interest accrued but not due on borrowings 27,429,520 6,058,172 Payables on account of assignments and securitisation 25,961,592 21,824,760 Advances from customers 3,656,190 -


98


(`)



Statutory remittances (Contributions to PF and ESIC, Service Tax, etc.) 15,656,546 3,368,274 Accrued Salaries & Benefits 16,782,645 4,084,136 Provision for expenses 10,675,778 3,134,851 Other payables 306,923,640 - Sub-total 603,205,036 38,470,193 Total 2,732,582,065 822,107,996

NOTE 9. SHORT-TERM PROVISIONS

(`)



Provision for Leave encashment 771,839 - Provision for Tax 38,009,368 3,400,000 Total 38,781,207 3,400,000

NOTE 8. OTHER CURRENT LIABILITIES (Contd.)


Corporate Overview



99


(`)

Part

cula

rs T

angi

ble

Ass

ets

Inta

ngib

le A

sset

s

Fur

ntiu

re

& F

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res

Offi

ce

Equi

pmen

t C

ompu

ters

V

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les

Tot

al

Com

pute

r So

ftw

ares

T

otal

T

otal

As

at 1

st A

pril,

201

7 8

,544

,535

7

,592

,905

1

2,02

4,51

1 4

,506

,014

3

2,66

7,96

5 5

,463

,036

5

,463

,036

3

8,13

1,00

1

Add

ition

s 6

,705

,872

8

,111

,394

1

9,62

5,47

3 1

,041

,500

3

5,48

4,23

9 1

,015

,331

1

,015

,331

3

6,49

9,57

0

Dis

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ls/A

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ts (4

0,71

9) (4

0,71

9) -

(40,

719)

As

at M

arch

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201

815

,250

,407

1

5,70

4,29

9 3

1,60

9,26

5 5

,547

,514

6

8,11

1,48

5 6

,478

,367

6

,478

,367

7

4,58

9,85

2

Dep

reci

atio

n / A

mor

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tion

As

at 1

st A

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201

7 3

,030

,855

2

,464

,892

4

,290

,208

1

,566

,591

1

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6 4

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,816

4

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1

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Dep

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r 1

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1

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,157

8

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5

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8

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Dis

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at M

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8 4

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,760

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1

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7,60

2 2

,145

,805

2

3,60

7,21

5 5

,553

,341

5

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6

Net

Blo

ck

Bala

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(`)

11,1

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11,

331,

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18,

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9

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5,5

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80

5,1

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13

7,7

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03

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39,4

23

21,

315,

419

725

,220

7

25,2

20

22,

040,

639

NO

TE 1

0. F

IXED

ASS

ETS


100


NOTE 11. NON-CURRENT INVESTMENTS

(`)



a) Trade - Unquoted Investments, at costi) Investments in Equity Instruments

1) Alpha Micro Finance Consultants Pvt. Ltd., 50,000 Equity shares of ` 10/- each fully paid up. (Previous year 50,000 Equity shares of ` 10/- per share)"

500,000 500,000

Total 500,000 500,000 Aggregate amount of unquoted investments 500,000 500,000

NOTE 12. DEFERRED TAX

(`)Particulars AS PER BOOKS AS PER IT DIFFERENCE Deferred Tax1) Deferred tax liability

Fixed asset 45,429,296 45,160,878 268,418 (77,412)Provision for bad and doubtful debts under Section 36(1)(viia)

- (6,897,556) 6,897,556 (1,989,255)

(2,066,667)2) Deferred tax asset

Provision for Gratuity 1,126,226 - 1,126,226 324,804 Provision for Leave Encashment 2,748,375 - 2,748,375 792,631 Provision for Loan portfolio 88,810,000 - 88,810,000 25,612,804

26,730,239

Particulars DifferenceDeferred Tax Liability as on 31.03.2018 2,066,667 Opening Balance of Deferred Tax Liability 748,513 Provision made in Profit & Loss Account 1,318,154 Deferred Tax Asset as on 31.03.2018 26,730,239 Opening Balance of Deferred Tax Asset 5,535,528 Provision made in Profit & Loss Account 21,194,711 Total Provision made in Profit & Loss Account (19,876,557)Deferred Tax Asset as on 31.03.2018 (Net) 24,663,572

NOTE 13. LONG-TERM LOANS & ADVANCES

(`)



Loans & Advances - Unsecured 2,113,382,091 369,165,027 Total 2,113,382,091 369,165,027

NOTE 14. OTHER NON-CURRENT ASSETS

(`)



Othersi) Deposits with Banks more than 12 months maturity 257,512,951 110,536,853ii) * Deposits with other NBFC for term loans 30,766,434 13,373,558iii) Deferred Revenue Expenditure 1,573,730 10,243,433


Corporate Overview



101


iv) Rent Deposits 14,494,623 8,628,750v) Advance Tax 14,798,900 7,397,280vi) TDS Receivables 16,901,436 9,073,375vii) MAT Credit - 1,342,390Total 336,048,074 160,595,639

* Represents margin money deposits placed to avail tem loans from banks, financial institutions, non banking financial companies

and as cash collateral in connection with securtisation transactions.

NOTE 15. TRADE RECEIVABLES

(`)



Trade receivables 37,916,290 12,310,485

Total 37,916,290 12,310,485

NOTE 16. CASH AND CASH EQUIVALENTS

(`)



Cash on hand 954,496 1,148,132

Balances with banks 430,889,709 190,705,693

Others

(i) In Fixed Deposit accounts with maturity less than 12 months & all the deposits are

lien noted against the term loans.

27,921,019 369,847,227

Total 459,765,224 561,701,052

NOTE 17. SHORT-TERM LOANS & ADVANCES

(`)



Loans & Advances

- Unsecured 4,226,703,989 1,067,314,077

Sub-total 4,226,703,989 1,067,314,077

Others loans & advances

Dues from customers -

- Unsecured 59,178,693 -

Staff Loans 909,993 844,117

Prepaid expenses 222,843 3,354,739

Sub-total 60,311,529 4,198,856

Total 4,287,015,518 1,071,512,933


102


NOTE 18. OTHER CURRENT ASSETS

(`)



Deferred Revenue Expenditure 8,669,706 11,584,938

Accrued Income on Loans 63,690,587 25,634,429

Accrued Interest on Fixed Deposits 14,095,108 9,670,930

Others 4,548,435 5,174

Total 91,003,837 46,895,471

NOTE 19. REVENUE FROM OPERATIONS

(`)



Interest Income on Loans 718,173,021 197,194,881

Income from securitisation / assignment of loans 24,535,040 29,642,588

Income from Business Correspondents 121,748,084 64,478,357

Processing fee 76,746,025 15,985,481

Interest on fixed deposits 18,603,421 13,081,047

Total 959,805,592 320,382,354

NOTE 20. OTHER INCOME

(`)



Dividend income 470,332 7,259,028 Short Term Capital Gain 4,851,909 - Commission Income 1,867,878 - Administration fee & other charges 139,167 609,450 Miscelleneous income 1,166,725 2,551,598 Total 8,496,012 10,420,076

NOTE 21. EMPLOyEE COST

(`)



Salaries and bonus 246,696,350 101,530,529 Contribution to provident and other funds 18,784,898 6,974,010 Leave Encashment 3,277,501 - Gratuity 2,056,638 1,120,776 Staff Welfare Expenses 9,265,717 2,549,055 Total 280,081,104 112,174,370


Corporate Overview



103


NOTE 22. FINANCE COST

(`)



Interest Expenses on :Term Loans 192,135,654 104,553,356 Cash Credit and Overdraft 666,019 37,320 Non Convertible Debentures 45,965,627 29,399,786 Inter Corporate Deposits 31,265,694 - Commercial Papers 15,981,297 - Vehicle Loan 173,983 131,765 Other borrowing cost 25,326,640 12,185,933 Interest Expense on Income Tax 1,509,368 - Total 313,024,282 146,308,160

NOTE 23. ADMINISTRATION AND OTHER EXPENSES

(`)



Advertisement 377,153 490,892 Bank Charges 5,035,802 1,184,549 Communication 5,150,726 1,661,246 Electricity 1,771,378 648,516 Legal & Professional Fees 19,198,757 11,677,236 Miscelleneous Expenses 1,367,344 1,174,726 Office expenses 8,824,902 2,350,607 Postage & Courier 2,462,430 1,162,985 Printing & Stationary 6,195,047 2,358,770 Rates & Taxes 7,509,356 1,305,651 Rent 19,656,061 9,030,644 Repairs & Maintenance- Computer 875,045 461,126 Remuneration to Auditors :Audit Fees 281,448 202,525 Certificaton Expenses 50,000 - Software Charges 7,564,087 4,576,919 Subscription 1,667,358 814,571 Travelling & Conveyance 34,915,193 11,211,651 Loss on sale of fixed assets - 87,965 Corporate Social Responsibility Expenses - 50,000 Total 122,902,087 50,450,581

Note (i)

(`)



Auditor's Remuneration - Statutory Audit Fee 175,000 135,000 - Tax Audit Fee 50,000 40,000 - Certification Charges 50,000 - - Other Services ( Limited Review) 56,448 27,525 Total 331,448 202,525


104


NOTE 24. PROVISIONS / WRITE OFF RECEIVABLES UNDER FINANCIAL ACTIVITy

(`)



Portfolio loans written off 123,136,185 2,958,880 Provision against Loans 49,045,000 7,558,375 Provision against Standard Assets 25,400,000 - Total 197,581,185 10,517,255

NOTE 25. EMPLOyEE BENEFITS

Disclosures envisaged in Accounting standard (AS) 15 - Employee Benefits as given below:

Note 25.1. Defined Contribution Plans

During the year, the Company has recognised the following amounts in the statement of profit and loss

(`)



For the year ended

March 31, 2017Employers Contribution to Provident & Pension Fund 10,706,738 4,910,772

Note 25.2. Defined Benefit Plans

The Company has funded defined benefit gratuity plan. Every employees who has completed five years or more of service is

eligible for gratuity on separation at 15 days basic salary (Last Drawn salary) for each completed year of service.

Consequent to the adoption of AS 15 ’Employee Benefits’ specified under section 133 of Companies Act, 2013 read with rule 7 of

Companies (Accounts) Rules, 2014, the following disclosures have been made as required by standard:

Contribution to Gratuity Fund:

Details of defined benefit plan of gratuity are given below:

(`)



For the year ended

March 31, 2017i) Changes in the Present Value of Obligation (PVO)

PVO as at the beginning of the period 3,862,741 3,149,521

Interest Cost 262,666 219,015

Current service cost 1,181,267 795,240

Past service cost - (non vested benefits) -

Past service cost - (vested benefits) -

Benefits paid (141,433) (458,650)

Actuarial loss/(gain) on obligation (balancing figure) 219,853 157,615

PVO as at the end of the year 5,385,094 3,862,741 ii) Changes in the Fair Value of Plan Assets

Fair value of plan assets as at the beginning of the period 2,292,384 -


Corporate Overview



105


(`)



For the year ended

March 31, 2017Expected return on plan assets 155,882 86,290

Contributions 2,000,000 2,699,940

Benefits paid (141,433) (458,650)

Actuarial gain/(loss) on plan assets [balancing figure] (47,965) (35,196)

Fair value of plan assets as at the end of the period 4,258,868 2,292,384

iii) Amount recognised in the Balance Sheet and Related AnalysisPresent value of the obligation 5,385,094 3,862,741

Fair value of plan assets 4,258,868 2,292,384

Difference 1,126,226 1,570,357

Unrecognised transitional liability -

Unrecognised past service cost - non vested benefits -

Liability recognised in the balance sheet 1,126,226 1,570,357 iv) Expenses recognised in the Profit & Loss Account

Current service cost 1,181,267 795,240

Interest Cost 106,784 219,015

Expected return on plan assets - -86,290

Net actuarial (gain)/loss recognised in the year 267,818 192,811

Transitional Liability recognised in the year -

Past service cost - non-vested benefits -

Past service cost - vested benefits -

Expenses recognised in the statement of profit and loss 1,555,869 1,120,776 v) Major categories of Plan Assets (As percentage of Total Plan Assets)

Government of India Securities 0.00% 0.00%

State Government Securities 0.00% 0.00%

High Quality Corporate Bonds 0.00% 0.00%

Equity shares of listed companies 0.00% 0.00%

Property 0.00% 0.00%

Insurer Managed 100.00% 100.00%

Mutual Funds 0.00% 0.00%

Bank Deposits 0.00% 0.00%

Total 100.00% 100.00%vi) Principal Actuarial Assumptions (Expressed as weighted averages)

Discount Rate 7.18% 6.80%

Salary escalation rate 7.00% 7.00%

Attrition rate 24.00% 24.00%

Expected rate of return on Plan Assets 7.18% 7.70%

vii) AssumptionsDiscount rate as per para 78 of AS15R 7.18% 6.80%

Salary escalation fixed by the Enterprise as per para 83-91 and 120[l] of AS15R 7.00% 7.00%

Attrition rate fixed by Enterprise 24.00% 24.00%

Age of Retirement 60 60

Funding Mechanism Insurer Managed Insurer Managed

Note 25.2. Defined Benefit Plans (contd.)


106


NOTE 26. SEGMENT INFORMATION

The Company operates in a single reportable segment i.e. lending to microfinance customers which have similar risks and returns for the purpose of AS 17 on ‘Segment Reporting’ specified under section 133 of the Companies Act 2013 read with Rule 7 of the Companies (Accounts) Rules 2014 and the Companies (Accounting Standards) Amendment Rules. The Company operates in a single geographical segment i.e. domestic.

NOTE 27. RELATED PARTy DISCLOSURES

Related party disclosures as required under the Accounting Standard (AS) - 18 on “Related Party Disclosures” specified under section 133 of Companies Act 2013 read with rule 7 of Companies (Accounts) Rules 2014 are given below:

Note 27.1. Names of Related Parties and Nature of Relationship

Description of Relationship As at March 31, 2018 As at March 31, 2017 Holding Company India Infoline Finance Limited India Infoline Finance LimitedSubsidiary Company Ayusha Dairy Private Limited Ayusha Dairy Private LimitedFellow Subsidiary Company IIFL Management Services Limited IIFL Management Services LimitedFellow Subsidiary Company India Infoline Housing Finance Limited India Infoline Housing Finance Limited

Key Management Personnel

Mr. N. Venkatesh Managing Director


Mr. D. Shivaprakash Mr. D. Shivaprakash Whole-time Director Whole-time Director

Mr. T. Anantha kumar CFO Mr. R.C.Shekar DirectorMr. K J Sutheja Company Secretary Mr. T. Anantha kumar CFO

Mr. A. Vikraman Independent Director

Mr. K J Sutheja Company Secretary

Mr. R Venkataraman, Director Mr. S. Parthasarathy CFO Upto May’16

Mr. Gaurav Malhotra, Director Independent Director




Mr. A. Vikraman Independent Director

Mr. A. Ramanathan Independent Director

Note 27.2. Transactions with Related Parties

(`)



IncomeService Fee on Business Correspondence

India Infoline Finance Limited 65,254,963 Nil

Arranger Fee India Infoline Housing Finance Limited

1,197,796 Nil

ExpenseInterest India Infoline Finance Limited 62,257,683 Nil

Rent IIFL Management Services Limited

9,000 Nil


Corporate Overview



107


Note 27.2. Transactions with Related Parties (contd.)

(`)



Remuneration to Director Mr. N. Venkatesh Managing Director

5,401,596 3,301,704

Mr. D. Shivaprakash Whole-time Director

4,200,156 2,401,908

Mr. R.C. Shekar Director upto 16th Feb 2017

- 1,512,718

Reimbursement of expenses to Director


- 60,000

Sitting fee to Independent Directors

Mr. Badrinarayanan Seshadri Director

58,332 76,222

Mr. A. Vikraman Director 58,332 85,555

Mr. A. Ramanathan Director 47,222 80,000

Remuneration to KMP

Mr. S. Parthasarathy CFO Upto 31st May’16

- 157,926

Mr. T. Anantha kumar CFO From 02nd July’16

1,257,429 811,813


- 83,293

Mr. K J Sutheja Company Secretary from 11th Nov’16

628,158 250,000

Remuneration / Sitting fee Relatives of Directors and Key Management Personnel

Nil Nil

Other TransactionsLoans and Advances received from Holding Company


Loans and Advances repaid to Holding Company


Equity Share Capital India Infoline Finance Limited 500,000,000 584,176,310

Balance as at year endEquity Share Capital India Infoline Finance Limited 1,084,176,310 584,176,310

Investment in Subsidiary (1000000 Equity shares of ` 10/- each)

Ayusha Dairy Private Limited 10,000,000 10,000,000

Term Loans (Including ICD) India Infoline Finance Limited 944,739,325 -

NOTE 28. ADDITIONAL INFORMATION

Note 28.1. Contingent liabilities and commitments (to the extent not provided for)

(`)



Contingent liabilities Nil Nil


108


Note 28.2. Disclosure on foreign currency exposure:

Earning in Foreign Exchange in Foreign Currency during the year is Nil (Previous Year: Nil). Expenditure in Foreign Exchange in

Foreign Currency during the year is Nil (Previous Year: Nil).

Note 28.3. Disclosures required under Section 22 of the Micro Small and Medium Enterprises Development Act 2006

There are no Micro and Small Enterprises to whom the Company owes dues which are outstanding for more than 45 days at

the Balance Sheet date. The above information regarding Micro Enterprises and Small Enterprises has been determined to the

extent such parties have been identified on the basis of information available with the Company. This has been relied upon by

the Auditors.

Note 28.4: Asset Classification & Provisioning:

The Company follows Prudential Norms of the Reserve Bank of India with regard to classification in respect of all loans extended

to its customer. The Company complies with the Prudential Norms of the Reserve Bank of India with regard to Income recognition

asset classification and provisioning. The Company is following provisioning norms as recommended vide DNBS.CC.PD.No.

250/03.10.01/2011-12 dated 02nd December 2011 DNBS.PD/CC.No.263/03.10.038/2011-12 dated 20th March 2012 and DNBS.

(PD).CC.No.347/03.10.38/2013-14 dated 01st July 2013. Accordingly, the Company in line with guidelines laid down the DNBS(PD)

CC.No. 347/30.10.038/2013-14 dated 01st July 2013 has provided 1% of the total loan portfolio outstanding as at 31st March 2018.

Classification of loan portfolio:

(`)

Asset ClassificationLoan Portfolio

as on March 31, 2018Loan Portfolio

as on March 31, 2017

Less than 90 days 6,320,538,349 1,381,080,882

91 - 180 days 14,110,483 53,243,308

More than 180 days 5,437,248 2,154,914

Total loan assets / loan portfolio 6,340,086,080 1,436,479,104

Provisioning Norms for Loans:

(`)

Asset Classification RBI Norms As at March 31, 2018 As at March 31, 2017 Total loan assets / loan portfolio - A 1% of the

outstanding loan portfolio

63,400,861 14,364,791

Provision for Non-performing assets (91-180 days)

50% 2,850,493 5,312,593

Provision for Non-performing assets (> 180 days)

100% 845,918 837,205

TOTAL PROVISION FOR NPA – B 3,696,411 6,149,798

Provision required - the higher of A) or B)

63,400,861 14,364,791

Less: Provision for loan portfolio already made

14,364,791 6,806,625

Provision made for the year ended 49,036,070 7,558,375

In addition to the above provision, the Company has provided 0.40% of the Loan Portfolio as Standard Asset provision


Corporate Overview



109


Note 28.5. Disclosure Pursuant to Reserve Bank of India Notification DNBS.200/CGM (PK)-2008 dated August 1, 2008

i) Capital to risk Assets ratio (CRAR) (computed as per the method prescribed by RBI)

(`)

Particulars As at March 31, 2018 As at March 31, 2017 Tier I Capital 1,159,550,617 616,191,852

Tier II Capital 83,018,946 64,365,000

Total Capital Funds 1,242,569,563 680,556,852

Total Risk Weighted Assets 6,620,690,512 1,533,754,137

CRAR - Tier I Capital (%) 17.51% 40.17%

CRAR - Tier II Capital (%) 1.25% 4.20%

CRAR (%) 18.77% 44.37%

All Fixed Deposits with Banks under lien against term loans availed by the Company. However, considering the converge of secured loans by assets like book debts etc. the risk weighted with respect to fixed deposits with Banks has been considered as Zero.

ii) Exposure to Real Estate Sector (Direct & Indirect Exposure) – Nil (PY: Nil)

iii) Amount of Subordinated Debt raised as Tier II Capital – Nil (PY: ` 50,000,000)

iv) Exposure to Capital Markets – Nil (PY: Nil)

v) Ratings assigned during the year

a) MFI Grading – mfR3 rated by CRISIL Ratings (MFI Grading Scale – mfR1 Highest mfR8 Lowest)

b) Bank loan rating – CRISIL A/Stable rated by CRISIL Ratings ICRA A/Stable rated by ICRA Ratings

c) COCA Rating – SMERA C1

vi) Maturity Pattern of Assets and Liabilities

Maturity pattern of certain items of assets and liabilities as on March 31, 2018 (Amount in ` )

(`)

Particulars

Liabilities Assets

Borrowings from Banks and

others

Market Borrowings

Advances (Loan portfolio

outstanding

FD with Banks (Free of Lien)

Investments

Up to one month 928,098,820 - 332,730,736 - -

Over one month to 2 months

171,241,885342,163,150 353,518,983 - -


214,156,333 28,58,19,300 348,884,635 - 10,000,000


622,379,919 - 1,088,879,813 - -

Over 6 months to 1 year 1,133,840,937 - 2,102,689,822 - -

Over 1 year to 3 years 1,860,813,068 - 2,113,382,091 - -

Over 3 years to 5 years 100,000,000 - - - -

Over 5 years - - - - 500,000

Total 5,030,530,963 627,982,450 6,340,086,080 - 10,500,000


110


Note 28.6. Disclosures of frauds reported during the year vide DNBS PD.CC.No. 256 / 03.10.042 / 2011-12 dated March 2 , 2012

(`)

Less than ` 1 Lakh ` 1 - 5 Lakhs ` 5 - 25 Lakhs Total

No. of Accounts

Value ` in Lakhs

No. of Accounts

Value ` in Lakhs

No. of Accounts

Value ` in Lakhs

No. of Accounts

Value ` in Lakhs

A) Person involved 18 2.82 6 4.34 Nil Nil 24 7.16

Staff 18 2.82 6 4.34 Nil Nil 24 7.16

Customer 0 0 0 0 Nil Nil Nil Nil

Staff and Customer 0 0 0 0 Nil Nil Nil Nil

Total 18 2.82 6 4.34 Nil Nil 24 7.16B) Type of fraud

Misappropriation and criminal breach of trust

12 2.44 1 4.34 Nil Nil 13 6.78

Fraudulent encashment / Manipulation of books of Accounts

2 0.38 0 0 Nil Nil 2 0.38

Unauthorised credit facility extended

0 0 0 0 Nil Nil Nil Nil

Cheating and forgery 0 0 0 0 Nil Nil Nil Nil

Total 14 2.82 1 4.34 Nil Nil 15 7.16

Note 28.7. Disclosure as required under DNBS (PD) CC. No. 300/03.10.038/2012-13 dated August 3, 2012

The cap on margins (as defined by Malegam Committee) and in compliance with RBI circular RBI/2012-13/161 DNBS (PD) CC.No.300 /03.10.038/2012-13 August 03, 2012 is 9.09% as at March-31-2018 (9.22% as at March 31, 2017).

Note 28.8. Merger with wholly owned Subsidiary:

Ayusha Dairy Private Limited (hereinafter referred to as the Company) is the Wholly Owned Subsidiary of Samasta Microfinance Ltd. in which Samasta holds 100% of the equity capital of the Company. Since the operations in the Company had completely stopped, it was proposed to merge the Company with its holding Company vide the Board Meeting dated 23.01.2018. The Scheme of Amalgamation was also approved by the members of both the companies and Creditors of Samasta vide EGM and Creditors Meetings dated 28.03.2018. Samasta -the Transferee Company has filed the application for merger with the Regional Director in Form RD-1 on 04.04.2018 and approval is awaited on the same.”

NOTE 29. EARNINGS PER SHARE

(`)

Particulars As at March 31, 2018 As at March 31, 2017 Profit after Tax (`) 23,762,849 8,476,718

Less : Dividend on preference shares and Dividend Distribution Tax - 8,56,158

Net Profit available to equity share holders 23,762,849 7,620,560

Weighted Average Number of Equity Shares

- Basic 81,070,638 12,283,965

- Diluted 81,070,638 12,283,965

Earnings Per Share

- Basic 0.29 0.62

- Diluted 0.29 0.62

Face Value of Shares (`) 10 10


Corporate Overview



111


NOTE 30. RECOGNITION OF MAT CREDIT

The Company has availed and utilised the MAT credit of ` 1,342,390/- during the year (previous year : Nil). No MAT credit is recognised during the year (previous year : ` 13,42,390).

NOTE 31. DISCLOSURE PURSUANT TO RESERVE BANK OF INDIA NOTIFICATION DNBS.193DG (VL) 2007 DATED FEBRUARy 22, 2007:

(`)


Amount Outstanding

Amount Overdue

Liabilities(1) Loan and Advances availed by the NBFC inclusive of Interest accrued thereon

but not paid:A Debentures - -

- Secured - -

- Unsecured - -

(Other than falling the meaning of Public Deposits) - -

B Deferred Credits - -

C Term Loan 3,729,944,097 -

E Commercial Paper 627,982,450 -

F Public Deposits - -

G Other Loans – Vehicle Loan 1,680,874 -

- Non-Convertible Debentures 354,166,667

(`)


(2) Break-up of (1) (f) above (Outstanding public deposits inclusive of interest accrued thereon but not paid)

(a) In the form of Unsecured debentures

(b) In the form of partly secured debentures i.e debentures where there is a shortfall

in the value of security

(c) Other public deposits

Assets (3) Break-up of Loans & Advances including Bills Receivables [ Other than those

included in (4) below](a) Secured -

(b) Unsecured 6,340,086,080

(4) Breakup of Leased and Stock on Hire and other Assets counting towards AFC activities

-

(i) Lease assets including Lease rentals under sundry debtors: -

(a) Finance 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 -


112


NOTE 31. DISCLOSURE PURSUANT TO RESERVE BANK OF INDIA NOTIFICATION DNBS.193DG (VL) 2007 DATED 22ND FEBRUARy 2007:(CONTD.)

(`)


(5) Break-up of Investments Current Investments - I Quoted: - (i) Shares: -


(ii) Debentures and Bonds - (iii) Units of Mutual Funds - (iv) Government Securities - (v) Others - II Unquoted: -(i) Shares: -


(ii) Debentures and Bonds - (iii) Units of Mutual Funds - (iv) Government Securities(v) Others

Long term Investments - I Quoted: - (i) Shares: -


(ii) Debentures and Bonds - (iii) Units of Mutual Funds - (iv) Government Securities - (v) Others - II Unquoted: - (i) Shares: -

(a) Equity 10,500,000 (b) Preference -

(ii) Debentures and Bonds - (iii) Units of Mutual Funds - (iv) Government Securities - (v) Others -

(6) Borrower Group wise classification of Assets Financed as in (3) and (4) above(`)


Amount in (`) (Net of Provisions) Secured Unsecured Total

1 Related Parties

(a) Subsidiaries - - -

(b) Companies in the same group - - -

(c) Other Related Parties - - -

2 Other than related parties - 6,276,685,219 6,276,685,219

Total - 6,276,685,219 6,276,685,219


Corporate Overview



113


NOTE 31. DISCLOSURE PURSUANT TO RESERVE BANK OF INDIA NOTIFICATION DNBS.193DG (VL) 2007 DATED 22ND FEBRUARy 2007:(CONTD.)

(7) Investor Group-wise classification of all investments (Current and Long Term) in Share and Securities (both Quoted and Unquoted):

(`)

Sl No. Category

Market Value / Breakup value or Fair Value or

Net Assets Value Book Value1 Related Parties

(a) Subsidiaries - 10,000,000

(b) Companies in the same group - -

(c) Other Related Parties - -

2 Other than related parties - 500,000

Total - 10,500,000

(8) Other Information Amount(i) Gross Non - Performing Assets


(b) Other than related parties 19,547,731

(ii) Net Non - Performing Assets


(b) Other than related parties -

(iii) Assets acquired in Satisfaction of Debt -

NOTE 32. THE COMPANy HAS NOT DISBURSED ANy LOAN AGAINST SECURITy OF GOLD.

NOTE 33. DETAILS OF AVERAGE INTEREST PAID ON BORROWINGS AND CHARGED ON LOANS GIVEN TO JLGS

(`)

Particulars2017-18 2016-17

Rate of Interest in % for Microfinance loan

Rate of Interest in % for Microfinance loan

Average Rate of Interest on Borrowings 13.48% 15.19%

Average Rate of Interest on Loans given 22.60% 24.41%

Net Interest Margin 9.12% 9.22%

NOTE 34. SECURITIzATION / ASSIGNMENT OF LOANS

During the year, the Company has sold loans through direct Securitization / assignments. The information on direct assignment activity of the Company as an Originator / Assignor is as shown below:

(`)

Particulars March 31, 2018 March 31, 2017Total number of loans securitised / assigned 40,268 23,917

Total book value of loans securitised / assigned 811,119,735 231,599,843

Sale consideration received for loans securitised / assigned 742,310,050 253,816,937

Income recognised in the statement of profit and loss 24,535,040 29,642,588

Balance of loans assigned / securitised as at the balance sheet date 452,660,769 175,687,865

Cash collateral provided and outstanding as at the balance sheet date 52,486,646 24,089,612


114


NOTE 34. SECURITIzATION / ASSIGNMENT OF LOANS(CONTD.)

Disclosure to be made under Securitization guidelines issued by Reserve Bank of India vide policy no. DNBS. PD. No. 301/3.10.01/2012-13 dated August 21, 2012.

(`)

Sl No. Particulars As at March 31, 2018


1 No. of SPVs sponsored by the NBFC for Securitisation transactions 2 3

2 Total amount of securitised assets as per the books of the SPVs sponsored by the Company

811,119,735 231,599,843

3 Total amount of exposures retained by the Company to comply with MRR as on the date of balance sheet

- -


a) First Loss - -

b) Others - -

ii) On-Balance Sheet exposures

a) First Loss (in the form of Fixed Deposit) 52,486,646 24,089,612

b) Others - -

4 Amount of exposures to securitization transactions other than MRR


a) Exposure to own securitizationFirst Loss - -

Others - -

b) Exposure to third party securitization transaction - -

First Loss

Others - -

ii) On-Balance Sheet exposures - -

a) Exposure to own securitization

First Loss - -

Others - -

b) Exposure to third party securitization transactionFirst Loss - -

Others - -


Corporate Overview



115


NOTE 35. DISCONTINUED OPERATIONS:

Ayusha Dairy Private Limited, the wholly owned subsidiary Company, discontinued its Dairy product business. Accordingly, Dairy

product business was treated as a discontinuing operation under Accounting Standard (AS) 24 – Discontinuing Operations. The

Dairy product business was operational till 30- April- 2015 and discontinued thereafter.

NOTE 36. BASIS OF CONSOLIDATION

The financial statements of the following subsidiary Company have been consolidated as per Accounting Standard – 21

on ‘Consolidated Financial Statements’.

Name of the Subsidiary Country of Incorporation Proportion of ownership interest (%))Ayusha Dairy Private Limited India 100%

NOTE 37. PREVIOUS yEAR FIGURES

Previous year’s figures have been reclassified to conform with the current year’s classification / presentation wherever applicable.





116


Corporate informationboard of directorS

Mr. Venkatesh N. Managing Director

Mr. Shivaprakash D. whole Time Director

Mr. R. Venkataraman Non-Executive Director

Mr. Gaurav Malhotra Non-Executive Director

Mr. Badrinarayanan S. independent Director

Mr. Vikraman A. independent Director

Mr. Ramanathan A. independent Director

Mrs. Malini B. Eden Additional Director

committeeS of board

audit committee

Mr. Vikraman Ampalakkat independent Director

Mr. Badrinarayanan Seshadri independent Director


nomination and remuneration committee

Mr. Ramanathan Annamalai independent Director

Mr. Badrinarayanan Seshadri independent Director


aSSet LiabiLitY manaGement committee



Mr. Sreepal Jain Chief Financial Officer

Mr. Gaurav Malhotra Non-Executive Director

vistra (iTCL) LimitedThe iL&Fs Financial Centre, Plot C- 22, G block, bKC Road, bandra Kurla Complex, bandra East, Mumbai, Maharashtra 400 051

beacon Trusteeship Limited 4C, siddhivinayak Chambers,Gandhi Nagar, Opp MiG Cricket Club, bandra (E), Mumbai, Maharashtra 400 051

ratinG aGencieS

CRisiL Limitedhiranandani business Park, Central Ave, hiranandani Gardens, Powai, Mumbai, Maharashtra 400 076

CARE Ratings Limited 4th Floor, Godrej Coliseum, somaiya hospital Road, Off Eastern Express highway, sion (East), Mumbai, Maharashtra 400 022

iCRA LimitedElectric Mansion, 3rd FloorAppasaheb Marathe MargPrabhadevi, Mumbai 400 025

reGiStered office

418, 1/2A, 4th Cross, 6th Main, wilson Garden, bangalore 560 027, Karnataka, india

corPorate office

#37 A sannathi street Theradi Thiruvottriyur, Chennai 600 019

LiSt of banKerS

bank of MaharashtraCanara bankindian bankLakshmi vilas bankPallavan Grama bankRbL bank Limitedsouth indian bankstate bank of indiaUCO bankYes bank Limitedbank of barodaDena bankstandard Chartered banksbM bank (Mauritius) Limited

cautionarY Statement

This document contains forward-looking statement and information. such statements are based on our current expectations and certain assumptions, and are, therefore, subject to certain risk and uncertainties. should one or more of these risks or uncertainties materialise, or should underlying assumptions prove incorrect, actual results may vary. iiFL does not intend to assume any obligation or update or revise these forward-looking statements in light of developments, which differs from those anticipated.

riSK manaGement committee

Mr. Ramanathan Annamalai independent Director



cHief financiaL officer cum Head - treaSurY

Mr. Sreepal Jain

comPanY SecretarY

Mr. Sutheja K.J

StatutorY auditorS

M/s. Gowthama and Company Chartered Accountant

internaL auditorS

Mr. Subramanya Puranik Chartered Accountant

SecretariaL auditorS

Mr. Lakshmeenarayan Bhat Practicing Company secretary

core manaGement team

name deSiGnation

Mr. Naveen Mallik

Chief Operating Officer

Mr. Prakash R. head – internal Audit

Mr. Sabari K. Chief Risk Officer

reGiStrar and tranSfer aGent

Link intime india Private Limited C 101, 247 Park, L b s Marg, vikhroli west, Mumbai 400 083

debenture truteeS

Catalyst Trusteeship Limited Office No. 83 – 87, 8th Floor, Mittal Tower, ‘b’ wing, Nariman Point, Mumbai, Maharashtra 400 021

SamaSta microfinance Limited

No. 418-1/2A, 4th Cross, 6th Main, wilson Garden, bengaluru 560 027

Phone: +91 80 4291 3500 E-mail: [email protected]

www.iifl.com | www.samasta.co.in

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