Madura Annual Report 2016-2017...

Contents

Company

Letter from Chairman

Borrower Profiles

Wide Variation in Microeconomies

Health: A Major Cause of Lost Productivity and Wages

Numerical Literacy: A Significant Weakness

Demonetization Resulted in Substantial Loss of Income

Auditor’s Report

Annexure (I,II,III,IV,V,VI)

Balance sheet

Cash Flow

Notes

Auditor’s Report

Balance Sheet

Cash Flow

MADURA MICRO FINANCE (STANDALONE)

MADURA MICRO EDUCATION

Director’s Report

MADURA MICRO FINANCE (CONSOLIDATED)

Auditor’s Report

Balance sheet

Cash Flow

Notes

Notes

Snapshot of Results

03

04

06

08

12

10

14

39

45

46

47

48

77

78

79

23

87

91

92

93

94

80

71

16

02

Management Discussion and Analysis 38.a

10Numerical Literacy:

A Significant Weakness

12Health: A Major Cause of

Lost Productivity and Wages

06Borrower Profiles

Other (Services/ Manuf)

68%32%

Retail/

WholesaleOther

(Services/

Manuf.)

68%

32%

Retail/ Wholesale

Madura Microfinance 01

Snapshot of Results

GROWTHFY 2015 FY 2016 FY 2017

8,226

1,768

302

Nil

6.69%

515,104

217

Tamilnadu,Karnataka,

Maharashtra,Kerala

48.73%

51.37%

57.29%

17

GLP ( . Mn)*

Revenue ( . Mn)

PAT ( . Mn)

Net NPA% (PAR > 90 days)

Efficiency (OPEX/GLP)

Active Borrowers

Branches

Geography

3,686

774

146

0.10%

6.63%

329,600

169


Maharashtra

5,531

1,168

192

0.12%

6.82%

407,730

200


Maharashtra,Kerala

1000

2000

3000

4000

GROSS LOAN PORTFOLIO ( . Mn)*

7000

6000

5000

2013 2017

8000

9000

2014 2015 2016

REVENUE ( . Mn)

200

800

1000

1600

1800

400

600

1200

1400

2000

2013 20172014 2015 2016

Madura Microfinance02

* includes securitized portfolio


Company

Mr. M. Narayanan

Company Secretary

Mr. Sanin Panicker

nd36, 2 Main Road,

Kasturba Nagar, Adyar,

Chennai - 600020.

Bankers/Financial Institutions

DIRECTORS

President & CFO

Dr. Tara Thiagarajan (Chairperson and Managing director)

Mr. Ashok Mirza

Mr. R. Ramaraj

Mr. N.C. Sarabeswaran

Mr. Puneet Agarwal

Mr. Sandeep Farias

Mr. Mohan Eddy (Wholetime Director)

Ms. Siva Kameswari Vissa

Mr. Ajit Thomas

Axis Bank

City Union Bank

Development Credit Bank

Dhanalakshmi Bank

Industrial Development Bank of India

South Indian Bank

Canara Bank

Lakshmi Vilas Bank

ING Vysya Bank

Dena Bank

Indian Bank

Andhra Bank

Bank of Baroda

Bank of Maharashtra

RBL Bank

IDFC Bank

Union Bank of India

State Bank of India

Vijaya Bank

National Bank for Agricultural and Rural Development

Micro Units Development and Refinance Agency Ltd

Au Financiers India Ltd

Hero Fincorp Ltd

Small Industrial Development Bank of India

MAS Financial Services Ltd

Reliance Capital Ltd

Nabkisan Finance Ltd

Maanaveeya Development and Finance (P) Ltd

IFMR Capital Finance Private Ltd

Reliance Home Finance Ltd

Tata Capital Financial Services Ltd

World Business Capital

L & T Finance Ltd

Sundaram Finance Limited

Banks Financial Institutions

Registered Office

S.N.S. AssociatesthNo.25, 11 Cross street,

Indira Nagar, Adyar,

Chennai - 600020.

Auditors

Debenture Trustee

Catalyst Trusteeship Limited

Office No. 83 - 87, 8th Floor,

B' Wing, Mittal Tower,

Nariman Point, Mumbai - 400021

6th Floor,

Karumuttu Centre,634,

Anna Salai, Nandanam,

Chennai - 600035

Corporate Office

Dear Members,This has been another year of strong growth

for Madura despite the disruption from the

unexpected and abrupt demonetization in

the third quarter. We finished the year with

an ~50% change in both gross loan portfolio

and revenue, and a 57% increase in profits

after tax, higher than originally projected for

the year. Our portfolio at the end of the year

was Rs. 8.2 billion. Operationally Madura also

took a dramatic leap forward. Our

investments in people, data and technology

over the last few years have resulted in

significant gains in organizational

intelligence. This includes more granular and

relevant data on borrowers and

microgeographies and more realtime

information flow across the organization.

PORTFOLIO GROWTH AND IMPACT OF

DEMONETIZATION

Demand for microfinance continues to be

strong. However, in the short term, the loss

of income and paucity of cash on account of

demonetization was a substantial hardship

for borrowers and therefore the industry.

Our borrowers were hard hit with 45%

reporting a loss of income or wages that has

put pressure on repayment and slowed

down disbursements. While the recovery in

Tamil Nadu has been rapid and smooth,

Karnataka and Maharashtra have seen politicalrepercussions and unrest that have

compounded the issue and resulted in greater

challenges in repayment and a slower return to

normalcy.

GROWING INTELLIGENCE

One of the continuing goals of Madura has

been to build greater intelligence in the

organization through systems that enable

access to more relevant and accurate data and

efficient information flow. This year Madura

made many leaps forward bringing into play

near-realtime member level repayment

information, technology for faster workflows,

larger scale customer research and data audit

systems, automated management reports for

all levels and a revamped, comprehensive

internal audit system.

Another core element of organizational

intelligence is its people. This year Madura

made a number of key leadership hires and

established a people excellence function that,

as a first step, has brought about a more

rigorous and uniform recruitment, onboarding

and training experience across the field

organization.


LETTER FROM

CHAIRMAN

The results of these changes have manifested in various gains. The most visible result has been in

the speed of loan processing with turn around times decreasing from 12 days at the start of the

year to 6 days by the end. In addition, we have also seen substantial gains in employee retention.

In new geographies where retention was previously a challenge numbers moved from ~75% to

90%. Altogether these gains have resulted in a reduction in operational costs. Despite a large

number of new branches, our operational costs not only did not increase but fell from 6.82% of

portfolio in the previous year to 6.69%.

KNOW YOUR CUSTOMER

Microfinance has typically been a one size fits all product with processes and mechanisms

designed to compensate for the lack of customer data in these offline populations. However with

our now established data systems to gather relevant and reliable primary data from customers

combined with key external advances such as Aadhar and microfinance credit bureaus, our

priorities have now shifted externally to a deeper understanding of customers and

their ecosystems. With this deeper understanding will come the ability to segment customers

and innovate on more calibrated individual loan products without taking on undue risk.

MACRO ENVIRONMENT

The macro environment continues to evolve rapidly with a number of implications for the

microfinance industry.

The India Stack, particularly Aadhar, along with new payment technologies will provide

opportunities to make substantial process and product advances. However, there are also several

aspects that pose both potential risks and opportunities that need to be watched and evaluated.

The regulatory environment continues to change. The granting of small finance bank (SFB)

licenses to microfinance companies has resulted in a need for a relook at MFI regulation by RBI to

ensure continued market discipline. In addition, along with the emerging SFBs, the number of

acquisitions of MFIs by Banks has the potential to alter the cost of capital and manner of product

offerings. Overall however, we see the environment as pro-growth and enabling of innovation.

With possibilities expanding it is an exciting time in India's journey of financial inclusion and we

look forward to your continued participation in our journey.

Tara ThiagarajanChairperson and Managing Director


We serve largely middle-aged women,

of whom 85% have a 10th pass

education or less and 75% have total

assets less than Rs. 1 lakh.

Nonetheless, from the perspective of

credit needs, our borrowers spans

multiple consumer segments.

Borrower Profiles


Education of Borrowers

5% 10% 15% 20% 25%

22.78%

0

No School

1-5 Std

6-8 Std

9-10 Std

11-12 Std

Diploma

Graduate

Post Graduate

23.24%

21.83%

18.78%

8.49%

2.61%

1.59%

0.69%

07


Wide Variation in Microeconomies

Our borrowers are spread across widely varying microeconomies. As an

example, we show here a wide range of industrialization in Karnataka

where highly industrial areas are interspersed with agricultural areas.

Different ecosystems have different incomes patterns and credit needs

and warrant differentiated product strategies.

IndustrialWorker Rate

0 20 40 60

Percentile among all taluks in Karnataka

SULYA

Decadal industrialization

(Z-Score)

Main WorkerRate for Females

Main Worker Rate

Female Literacy Rate

Average Employees

per Firm

Population

Population Density

Decadal Migration

0 20 40 60 80 100

Percentile among all taluks in Karnataka

HEGGADADEVANKOTE

Decadal industrialization

80 (Z-Score)1.42

IndustrialWorker Rate

0.15

Population Density

177

Average Employees

per Firm

1.86

Female Literacy Rate

57

Main Worker Rate

79

Main WorkerRate for Females

67

DecadalMigration

-0.28

Population 263.7k

0

0

57

28

28

28

28

14

14

Mysore Kannada

80 100

0.94

0.6

93

95

82

1.86

145.2k

162

-0.56

0

0

0

60

60

80

80

80

80

09

Numerical Literacy in MicroentrepreneursSurvey of 198 Microentrepreneurs in Tamilnadu

Retail/

Wholesale

Other

(Services/ Manuf.)

Numerical Literacy: A Significant Weakness

Our borrowers struggle with basic numerical operations such as

decimals and percentage, skills essential for understanding financial

transactions. Without knowing what a percentage actually is how can

our customers understand the interest rate on the loans they take

from us? How can they calculate the commissions they receive on

product sales? Numerical literacy among staff and members is a key

priority area of the future.

68%

32%



Participant Profiles

7th-1

0th

Education

0

5

10

15

20

25

30

10th

Pass

12th

Pass

College

Diplo

ma

Post G

raduate

0

5

10

15

20

25

30

5000

1000

0

1500

0

2000

0

2500

0

3000

0

3500

0

4000

0

4500

0

5000

0

35

40

Estimated Monthly Revenue

Add

0 20% 40% 60% 80% 100%

Subract

Multiply

Whole Number

Operations (2 Digit)

Decimal

Operations (2 Digit)

Percentage Operation

(Whole Number)

0 20% 40% 60% 80% 100% 0 20% 40% 60% 80%

By Hand By Calculator

calculatingCommissions/

Margins

Needed for Calculatinginterest & Commissions

Needed for Calculating Loss

Numerical Skills

90

95

77

94

81

Divide94

71

84

Subract(n-N) 71

41

Add77

94

Subract77

94

Divide54

78

Multiply41

86

What isN/100 in

%?

65

73

Find N%of a

Number

35

45

Converta fraction

to %

14

27

By Hand By Calculator By Hand By Calculator

15

2826

20

8

3

12

39

16

13

9

3 32

0

3

SHG Woman age 20-65, Average age 38

Sample sze: 1000 across Tamilnadu, Karnataka and Maharashtra

Health: A Major Cause of Lost Productivity and Wages

47% of our borrowers miss one or more days of

work in a month due to a health issue with an

average loss of 3.44 days per month equating

to ~42 working days lost per person in a year.

This is a startlingly large number when

compared to for example, sick days taken by

the average worker in the United States, which

is only 5.2 per year, or UK and Europe which are

at 9.1 and 7.3 days per year respectively. Health

will be a major focus area of our CSR.

Tamilnadu

Karnataka

Maharashtra


0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30

10%

20%

30%

40%

50%

60%

47%Lost days of workdue to their own

illness or illness ofa family member.

Average days ofwork lost perperson was

This amounts to a loss of...

3.44 42 Productiveman daysper year or...

15%of Workdays

0

ChronicIllness

Productivity Loss in the 30 Days prior to Survey

Days of Work Lost

Primary Health Issues/ Symptoms Chronic Disease/ Illness

High BloodPressure

VisionProblem

Diabetes

Ulcer

Asthma

Skin Disease

Heart Disease

Tuberculosis

0 1% 2% 3% 4%

Cancer

6%5% 7%

HIV/AIDS

Fever

Cough/Cold/Sore Throat

Back Pain

Headaches/Migraine

Other Pain

Tooth Pain

Fatigue/Weakness

Vomiting/Nausea

0 5% 10% 15% 20%

Breathing Difficulty

30%25%

Injury

Depression/Anxiety/Tension

Diarrhea/Stomachupset


Lines were too long in the Bank and there was not time to wait

Withdrawal Limit was too low for my needs

Bank did not have cash

ATM did not have cash

Bank was too far to access

ATM was too far to access

Did not have ATM Card

Did not know how to use ATM Card

Challenges faced from Demonetization

0 10% 20% 30% 40% 50%

46%

43%

41%

32%

22%

18%

5%

4%

Demonetization Resulted in Substantial Loss of Income

With the abrupt removal of cash from the

economy in October of 2016 our members

struggled with the long lines, low withdrawal

limits and lack of cash in the banks, and

experienced substantial loss of income. ~45%

reported a reduced monthly income in the month

of January relative to their income prior to the

announcement of demonetization with an

average reduction of 40%.

Sample: 1325

Microfinance

borrowers across

Tamil Nadu,

Karnataka and

Maharashtra


Tamilnadu

Karnataka

Maharashtra


Change in Monthly Income January 2017 Relative to Pre-Demonetization

Causes of Loss in Monthly Income by Primary Occupation Type

Daily Wage

Business Activity

Salaried

Job Work

Primary Occupation 0 10% 20% 30% 40% 60%50% 70% 0 10% 20% 30% 40% 60%50%

Fraction who reported a change in income Median Income Loss

35%

50%

58%

66%

58%

55%

52%

35%

Impact of Demonetization on Monthly Income

Sales reduced due to inability to provide change

Sales reduced due to not enough cash

Quit from work

Employer promises to pay

0 20% 40% 60% 100%80%

Business Activity Daily Wage Job Work Salaried

0 20% 40% 60% 80% 100%-20%-40%-60%-80%-100%0

20%

15%

10%

5%

Loss (%) Gain (%)

17

13

78

4

21

9

45

01

4 45

43

4

1 10

Director’s Report


MADURA MICRO FINANCE LIMITED(CIN: U65929TN2005PLC057390)

Dear Members,

Your Board of Directors take pleasure in presenting the Twelfth Annual Report together with the audited

financials of your Company for the financial year ended March 31, 2017.

Financial highlights:

Business Overview:

During the year the company has provided Entry Level Loans to 169743 New self-help groups, Activity term

loans to 126083 Existing Groups, Certified Activity Term Loan to 18651 Members and Business Development

Loan to 9517 Members. Overall the company has disbursed 323994 SHG Loans, providing financial assistance

amounting to INR 7.56 billion.

The Assets Under Management (AUM) as on 31-03-2017 was at INR 8.23 billion representing an increase of 48%

over the previous year.

The profit before tax during the year was at INR 495.20 million compared to INR 289.37 million during the

previous year and the profit after tax increased by INR 110.27 million over previous year. The cumulative

repayment rate for the year was 99.07%.

New Locations

The company is presently operating in four states viz. Tamil Nadu, Karnataka, Kerala and Maharashtra.

During the year, the Company has opened a total of 17 new branches including 2 new branches in Kerala, 6 in

Tamil Nadu, 1 in Karnataka and 8 in Maharashtra.

Capital Adequacy

The Capital Adequacy Ratio was 26.99% as on 31st March 2017 as against the minimum requirement of 15%

stipulated by RBI. The net owned funds as on that date was INR 1.73 billion.

Subsidiary

The company's subsidiary Madura Micro Education Private Ltd provided skill development training course to

19589 students during the year. The revenue from operations increased to INR 9.54 million in the current year

as compared to INR 5.96 million in the previous year. During the year under review, the Company reported a

loss of INR 10.44 million as compared to a loss of INR 11.77 million in the previous year. With the development

and implementation of new systems and technologies the company anticipates strong growth in operations

and revenues in the coming year.

1768.84

26.57

1267.37

27.59

744.57

495.20

198.50

302.13

61.00

DETAILSYear ended

31.03.2017

Revenue from operationsOther Income

Profit Before Interest, Tax, Depreciation and Amortization

Depreciation and amortization

Interest expense (Net)

Profit Before Tax

Tax Expense (Current Tax)

Profit After Tax

Amount transferred to Statutory Reserve

Year ended

31.03.2016

Reg.Office: No.36,

Second Main Road, Kasturba Nagar,

Adyar, Chennai 600020

Phone: 044 42054369,

Fax : +91 (044) 24413841,

Email: [email protected]

1168.02

19.68

825.54

14.78

521.38

289.37

107.85

191.86

38.50

(INR in million)

Director’s Report

The detail of the subsidiary in Form AOC 1 is attached as Annexure III.

Major Corporate Developments

During the year, your Company issued 8,55,002 equity shares to A. V. Thomas & Company Limited and 2,85,002

equity shares to Midland Rubber and Produce Company Limited at a premium of Rs. 340.88 per share.

During the year, the Company also issued subordinated, unsecured, rated, listed Non-Convertible Debentures

aggregating to INR 500 million to IFMR Capital Finance Private Limited.

Vigil Mechanism

In compliance with the procedure laid down under the Vigil Mechanism as required under the Companies Act,

2013, the Company has established procedures for:

1. Receiving, retaining and treating complaints received;

2. Confidential, anonymous submission by employees / Directors of complaints regarding questionable

accounting or auditing matters, conduct which results in a violation of law by Company on in a substantial

mismanagement of Company resources;

3. Reporting the genuine concerns by the employees and Directors;

4. Adequate safeguards against victimization of persons who use vigil mechanism.

Events Subsequent to the date of Financial Statements

No material changes and commitments have occurred affecting the financial position of the Company after

March 31, 2017 till the date of this report.

Dividend

In order to conserve resources for operations and future growth, your Directors do not recommend any

dividend for the year under review.

Transfer to Reserves

As required under Section 45-IC of the Reserve Bank of India Act, 1934, an amount equivalent to 20 % of the

profit after tax (INR 61 million) has been transferred to the Statutory Reserve Account.

Deposits

Your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 read

with the Companies (Acceptance of Deposits) Rules, 2014.

Order of the Court

There are no significant material orders passed by the Regulators or Courts or Tribunals impacting the going

concern status of the Company's operations in future.

RBI Guidelines

Reserve Bank of India (RBI) granted the Certificate of Registration to the Company in February 2006 vide

Registration No. N.07.00754, to commence the business of a non-banking financial institution without accepting

deposits. The Company was converted to NBFC-MFI with effect from December 2013. Your Company is a

Systemically Important Non Deposit taking Non-Banking Financial Company (NBFC-ND-SI). The Company has

complied with and continues to comply with all the applicable regulations and directions of the RBI.


Director’s Report

Board Evaluation

The Board of Directors have carried out an annual evaluation of its own performance, board committees and

individual Directors pursuant to the provisions of section 134 of the Companies Act, 2013.

Performance evaluation criteria for Board, Committees of the Board and Directors were approved by the

Nomination Committee of the Board at its meeting held on January 18, 2017. The main criteria on which the

evaluations was carried out were Director's contribution to Boards' discussion on various issues related to

strategy, risk, business performance and continuity; awareness on norms relating to Corporate Governance,

disclosure and legal compliances and contribution of new insights and ideas on business management and

growth.

The performance of the board was evaluated by the board after seeking inputs from all the directors on the

basis of the criteria such as the board composition and structure, effectiveness of board processes, information

and functioning etc. The performance of the committees was evaluated by the board after seeking inputs from

the committee members on the basis of the criteria such as the composition of committees, effectiveness of

committee meetings etc.

In a separate meeting of independent directors held on March 07, 2017, performance of non-independent

directors, performance of the board as a whole and performance of the chairman was evaluated, taking into

account the views of executive directors and non-executive directors. The same was discussed in the board in

their meeting that followed the meeting of the independent directors, at which the performance of the board,

its committees and individual directors was also discussed.

Directors' Responsibility Statement

Your Directors state:

1. That in the preparation of the annual accounts, the applicable accounting standards had been followed

along with proper explanation relating to material departures;

2. That we have selected such accounting policies and applied them consistently and made judgments and

estimates 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 or loss of the Company for that period;

3. That proper and sufficient care was taken for the maintenance of adequate accounting records in

accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company

and for preventing and detecting fraud and other irregularities;

4. That the annual accounts have been prepared on a going concern basis.

5. That that proper systems to ensure compliance with the provisions of all applicable laws were in place and

that such systems were adequate and operating effectively; and

6. That proper internal financial controls were laid down and that such internal financial controls are

adequate and were operating effectively.

Corporate Governance

Your Company has been complying with the principles of good Corporate Governance over the years and is

committed to the highest standards of compliance.

The performance of the Board, Audit Committee, Nomination and Remuneration Committee and the individual

Directors were evaluated on the basis of criteria as approved by the Board.


Director’s Report

Listing Compliance

The Company has complied with the provisions of the Debt Listing Agreement entered by the Company with

Bombay Stock Exchange Limited in respect of the three Series of Secured / Unsecured Non-Convertible

Debentures issued by the Company.

Declaration by Independent Directors

The Company has received necessary declarations of independence from each of its Independent Directors

under section 149(7) of the Companies Act, 2013, that he/she meets the criteria of independent director

envisaged in section 149 (6) of the Companies Act, 2013. All Independent Directors have submitted the

declaration of Independence, as required pursuant to Section 149(7) of the Act, stating that they meet the

criteria of Independence as provided in section 149(6) of the Companies Act, 2013 and are not disqualified from

continuing as Independent Directors.

Development and Implementation of Risk Management Policy

The Company has developed and implemented a risk management policy, upon which the company is ensuring

that the activities are undertaken in a risk free environment.

Adequacy of Internal Financial Controls with reference to the Financial Statements

The Company has implemented and evaluated Internal Financial Controls which provide a reasonable

assurance in respect of providing financial and operational information, complying with applicable statutes and

policies, safeguarding of assets, prevention and detection of frauds, accuracy and completeness of accounting

records. The Directors and Management confirm that the Internal Financial Controls (IFC) are adequate with

respect to the operations of the Company. Further, the Board annually reviews the effectiveness of the

Company's internal control system.

Directors

Presently, the Board of Directors comprise of nine Directors. Ms. Siva Kameswari Vissa was appointed as

additional director (non-executive and independent) by the Board of Directors on 28.07.2016 and her

appointment was regularized by the shareholders in their Annual General Meeting held on 05th September,

2016. Mr. Ajit Thomas was appointed as an additional director pursuant to the provision of Section 161(1) of the

Companies Act, 2013 and the Articles of Association of the Company with effect from 12th October, 2016 and

holds office up to the date of the ensuing Annual General Meeting.

Board Meetings & Attendance

During the year, the Board of Directors of your Company met 8 times. The Board Meetings were held on

20.04.2016, 26.05.2016, 28.07.2016, 30.09.2016, 12.10.2016, 05.11.2016, 18.01.2016 and 30.03.2017. The time

period between any two meetings were not more than 120 days.

The details of attendance of the Directors for the year ended March 31, 2017:

NAME OF THE DIRECTORNO. OF MEETINGS

HELD ATTENDED

Ms. Tara Thiagarajan

Mr. N C Sarabeswaran

Mr. R Ramaraj

Mr. Ashok Mirza

Mr. Mohan Eddy

Mr. Sandeep Farias

Mr. Puneet Agarwal

Ms. Siva Kameswari Vissa*

Mr. Ajit Thomas*

8

8

8

8

8

8

8

8

8

4

8

3

5

8

4

2

4

3 Madura Microfinance 19

Director’s Report

Committees

NAME OF THE COMMITTEE MEMBERS

1. Audit Committee

2. Nomination & Remuneration Committee

3. Risk Management Committee

Mr. N C Sarabeswaran, Chairman

Mr. R Ramaraj


Mr. Ashok Mirza, Chairman


Mr. Sandeep Farias

Mr. Puneet Agarwal

Mr. N C Sarabeswaran, Chairman


Mr. R Ramaraj

5. Corporate Social Responsibility Committee Ms. Tara Thiagarajan, Chairman

Mr. Ajit Thomas


4. Asset Liability Management Committee Mr. N C Sarabeswaran, Chairman


Mr. M Narayanan

Mr. Samuel Mathews

* Ms. Siva Kameswari Vissa was appointed as Director w.e.f 28.07.2016 and Mr. Ajith Thomas was

appointed as Director w.e.f 12.10.2016

Director retiring by rotation

Mr. Ashok Mirza, Director and Ms. Tara Thiagarajan, Managing Director retires by rotation at the ensuing

Annual General Meeting and being eligible, offers themselves for reappointment. Your Directors

recommend their re-appointment.

6. IT Committee Mr. R Ramaraj, Chairman

Mr. Mohan Eddy

Mr. Ashok Mirza

Mr. Puneet Agarwal

Overall Remuneration

Details of remuneration as required under Section 197 of the Companies Act, 2013 read with Rule 5 of

Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached as

Annexure VI and forms part of this Report.

Statutory Auditors

Under Section 139 of the Companies Act, 2013 and the Rules made thereunder, it is mandatory to rotate

the Statutory Auditors on the completion of the maximum term permitted under the said Section.

Pursuant to the recommendation of the Audit Committee on 01st August, 2017, the Board of Directors of

the Company has recommended the appointment of M/s. PKF Sridhar & Santhanam LLP as the Statutory

Auditors of the Company. M/s. PKF Sridhar & Santhanam LLP will hold the office for a period of 5

consecutive years from the conclusion of the 12th Annual General Meeting till the conclusion of the 17th

Annual General Meeting to be held in the year 2022 subject to the ratification of the shareholders of the

Company.

The Auditors in their report to the members have given one qualified opinion and the response of your

Directors with respect to it is as follows:


Director’s Report

Management response to the audit qualification:

The Company had obtained the approval of the Central Government for the appointment of Ms Tara

Thiagarajan as the Chairman & Managing Director of the Company for a period of 3 years w.e.f 26th February

2009. Hence, the Company was under the belief that since the remuneration paid to Ms Tara Thiagarajan as the

Chairman & Managing Director of the Company was well within the limits specified in Part II of Schedule XIII of

the Companies Act, 1956, there was no requirement again to obtain the approval of the Central Government for

her subsequent re-appointments. However, the Company was required to get the approval of the Central

Government for her subsequent appointments under Part I of Schedule XIII of the Companies Act, 1956 since

she was not resident in India during the period of her re-appointment.

However, as advised by the Ministry of Corporate Affairs, the Company has already initiated steps to obtain the

approval of the Central Government for the appointments made from February 2009 including the

re-appointment made in October 2016 under the relevant provisions of the Companies Act, 1956 and the

Companies Act, 2013 and expect to complete the same expeditiously.

Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment

and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr V Ramasubramanian,

Practising Company Secretary to undertake the Secretarial Audit of the Company.

The Secretarial Audit Report as obtained from V Ramasubramanian, Practising Company Secretary is attached

as Annexure V and forms part of this Report.

The Secretarial Auditor in his Report to the members has given one qualified opinion and the response of your

Directors with respect to it is as follows:

Response to Point No. 7

The Company had obtained the approval of the Central Government for the appointment of Ms Tara

Thiagarajan as the Chairman & Managing Director of the Company for a period of 3 years w.e.f 26th February

2009. Hence, the Company was under the belief that since the remuneration paid to Ms Tara Thiagarajan as the

Chairman & Managing Director of the Company was well within the limits specified in Part II of Schedule XIII of

the Companies Act, 1956, there was no requirement again to obtain the approval of the Central Government for

her subsequent re-appointments. However, the Company was required to get the approval of the Central

Government for her subsequent appointments under Part I of Schedule XIII of the Companies Act, 1956 since

she was not resident in India during the period of her re-appointment.

However, as advised by the Ministry of Corporate Affairs, the Company has already initiated steps to obtain the

approval of the Central Government for the appointments made from February 2012 including the

re-appointment made in October 2016 under the relevant provisions of the Companies Act, 1956 and the

Companies Act, 2013 and expect to complete the same expeditiously.

Conservation of Energy, Technology Absorption and Foreign Exchange Outgo

The particulars prescribed under clause (m) of sub section (3) of Section 134 of the Companies Act, 2013 read

with Rule 8 (3) of the Companies (Accounts) Rules, 2014 of the following:

In view of the nature of activities that are being carried out by the Company, the particulars prescribed under

clause (m) of sub section (3) of Section 134 of the Companies Act, 2013, read with the Companies (Accounts)

Rules 2014 on conservation of energy and technology absorption are not applicable to the Company.

During the year, the Company did not have any foreign exchange earnings and had an outgo of INR 14.70

million.Madura Microfinance 21

Director’s Report

Particulars of Loans, Guarantees and Investments

The company has not given any loans/guarantees as covered under provisions of section 186 of the Companies

Act, 2013 during the year.

Corporate Social Responsibility (CSR) Policy

Pursuant to the provisions of section 135 and Schedule VII of the Companies Act, 2013, CSR Committee

has been constituted and the said committee has recommended and the Board has approved a policy on

Corporate Social Responsibility (CSR).

For the financial year 2016-17, your Company is required to spend an amount of INR 4.54 million.

Your Company is in the process of implementing the appropriate projects for spending the said amount in the

areas of improving health care including preventive healthcare.

Annual Report on CSR is attached as Annexure I.

Related Party TransactionsstAll related party transactions that were entered into during the financial year ended 31 March, 2017 were on an

arm's length basis and were in the ordinary course of business.

The particulars of contracts or arrangements with related parties referred to in sub section (1) of Section 188

entered by the Company during the financial year ended 31st March, 2017 is annexed hereto as Annexure IV in

prescribed Form AOC-2 and forms part of this report.

Extract of Annual Return

As required pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies

(Management and Administration) Rules, 2014, an extract of Annual Return in Form MGT 9 as a part of this

Annual Report is attached as Annexure II.

Employees' Particulars in terms of Section 134 read with Rules of the Companies Act, 2013

There were no Employees in the Company whose particulars are required to be given under Section 197 of the

Companies Act, 2013 read with Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial

Personnel) Rules, 2014.

Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has in place a Policy in line with requirements of the Sexual Harassment of Women at Workplace

(Prevention, Prohibition & Redressal) Act, 2013 that covers all employees. An Internal Complaints Committee

has been set up to redress complaints received regarding sexual harassment. No complaints regarding sexual

harassment have been received during the financial year.

Acknowledgement

Your directors take this opportunity to place on record their appreciation to all employees for their hard work,

spirited efforts, dedication and loyalty to the Company which has helped the Company maintain its growth.

The Directors also wish to place on record their appreciation for the support extended by the Reserve Bank of

India, other regulatory and Government bodies, Company's auditors, customers, bankers, promoters and

shareholders.

For and on behalf of the board


ChennaistDate: 01 August 2017


Annexure I

Corporate Social Responsibility Report

Company's CSR Policy:

i) Madura Micro Finance Limited (MMFL) believes that in alignment with its vision, it will continue to enhance

value through its CSR initiatives and promote social sustainability, sustainable development of the

environment and social welfare of the people and society at large, more specifically for the deprived and

underprivileged persons.

ii) This policy encompasses the Company's philosophy for giving back to society as a corporate citizen and lays

down the guidelines and mechanism for undertaking socially useful programmes for the welfare &

sustainable development of the community at large, is titled as the “MMFL CSR Policy”.

iii) In keeping with the Company’s belief in the positive benefits of promoting community health including both

cognitive health and preventive healthcare, its CSR initiatives were focused on these areas.

Composition of the CSR Committee:



Mr. Ajit Thomas

Chairperson

Member

Member

Average Net Profit of the Company for last three financial years:

289.37

223.92

167.58

680.87

226.95

Financial Year Net Profit before tax and

exceptional items in INR million

2015-16

2014-15

2013-14

Total

Average Net Profit for the last 3 years

Prescribed CSR Expenditure (2% of the amount as in item 3 above): INR 4.54 million

Details of CSR spent during the financial year

(a) Total amount to be spent for the financial year: INR 4.54 million

(b) Amount spent: INR 2.03 million

(c) Amount unspent: INR 2.51 million

(d) The manner in which the amount spent during the financial year is attached below.


In case the Company has failed to spend the two percent, of the average net profit of the last three

financial years or any part thereof, the Company shall provide the reasons for not spending the amount

in its Board report.

The Company's CSR initiatives usually involve setting the foundation of various programs at a small scale to

learn from on-ground realities, getting feedback from community and then putting in place a sustainable model

to ensure maximum benefit to the community. For this reason, during the year, the Company's spend on the

CSR activities has been less than the limits prescribed under Companies Act, 2013. Moving forward the

Company will endeavour to spend on CSR activities in accordance with the prescribed limits.

A responsibility statement of the CSR Committee that the implementation and monitoring of CSR policy

is in compliance with CSR objectives of and policy of the Company

We hereby declare that implementation of the CSR policy are in compliance with CSR objective and policy of the

Company.

Dr. Tara ThiagarajanChairperson, CSR Committee

Annexure I


Annexure I




Sector in

which the

project is

covered

Projects or programs

(1) Local area or

other

(2) Specify the State

and district where

projects or programs

was undertaken

Amount

outlay

(budget)

project or

program

wise (INR)

Amount

spent on the

projects or

programs

(INR)

Cumulative

expenditur

e upto the

reporting

period

(INR)

Amount Spent:

Direct or

through

implementing

agency.*

* Details of

implementing

agency

Rewari, Haryana 15.00 2.00 2.03 Public Health

Foundation of

India

Promoting

health care

including

preventive

healthcare

(Amount in million)

0.03

Direct Overhead

CSR project

or activity

identified

Collaborative

Research on

Cognitive

Health

Development

S.NO.

1.


FORM NO. MGT 9

EXTRACT OF ANNUAL RETURN

As on financial year ended on 31.03.2017

Pursuant to Section 92 (3) of the Companies Act, 2013 and

rule 12(1) of the Company (Management & Administration) Rules, 2014.

U65929TN2005PLC057390

September 2, 2005

Madura Micro Finance Limited

Company Limited by shares

India Non-Government Company

(Non-Banking Financial Company)

36, II Main Road, Kasturba Nagar, Adyar, Chennai 600 020

Phone: +91 44 4211 6843 email: [email protected]

website: www.maduramicrofinance.co.in

Debt Listed Company

Bigshare Services Private Limited

E-2 & 3, Ansa Industrial Estate, Saki-Vihar Road. Sakinaka,

Andheri(E), Mumbai-400 072 Phone: 022-40430200

1. CIN

2. Registration Date

3. Name of the Company

4. Category/

Sub-category of the Company

5. Address of the Registered office &

contact details

6. Whether listed company

7. Name, Address & contact details of the

Registrar & Transfer Agent, if any.

I. REGISTRATION & OTHER DETAILS:

Name and Description of main

products / services

NIC Code of the

Product/service

% to total turnover

of the company

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

Micro Finance 649 99.65

Name and address

of the Company CIN/GLN

Holding/Subsidiary/

Associate company

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES

Madura Micro

Education Private

Limited

U80301TN2013PTC091745 2(87)

% of

shares held

Applicable

Section

Subsidiary 100

(All the business activities contributing 10 % or more of the total turnover of the company shall be stated)

S.

N0

1.

S.

N0

1.

Annexure 2



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S.

NO

B. Remuneration to other Director

Particulars of Remuneration Name of Directors

Independent Directors

Fee for attending Board/Committee meetings

Commission

Others, please specify

Total (1)



Commission


Total (2)



Commission


Total (3)

Other Non-Executive Directors


Commission


Total (4)

Other Non-Executive Directors


Commission


Total (5)

Total (B) = (1+2+3+4+5)

N C Sarabeswaran

Siva Kameswari Vissa

Puneet Agarwal

R Ramaraj

Ashok Mirza

1,030,000.00

1,030,000.00

825,000.00

825,000.00

110,000.00

110,000.00

440,000.00

440,000.00

480,000.00

480,000.00

2,885,000.00

Total Amount (Rs)

Name of MD/WTD/ Manager Total Amount

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

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

Particulars of Remuneration

Name

Designation

Gross salarya) 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

Stock Option

Sweat Equity

Commission

- as % of profit

- others, specify


TOTAL (A)


Managing Director

6,488,844.00

-

6,488,844.00

Mr. Mohan Eddy

Whole-time Director

6,000,000.00

-

6,000,000.00

12,488,844.00

-

12,488,844.00

S.

NO1.

2.

3.

4.

5.

S.NO

Annexure 2


2.

3.

4.

5.

1.

Annexure 2


Name of Key Managerial Personnel Total Amount

C. Remuneration to Key Managerial Personnel other than MD/Manager/WTD

Particulars of Remuneration

Name

Designation

Gross salarya) 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

Stock Option

Sweat Equity

Commission

- as % of profit

- others, specify

Others - Variable pay

TOTAL

M Narayanan

CFO

6,000,000.00

1,000,000.00

7,000,000.00

Sanin Panicker

CS

530,160.00

530,160.00

7,530,160.00

7,530,160.00

S.NO

1.

2.

3.

4.

5.

VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES: NIL

SECTION OF

THE

COMPANIES

ACT

A. COMPANY

B. DIRECTORS

C. OTHER OFFICERS IN DEFAULT

Penalty

Punishment

Compounding

Penalty

Punishment

Compounding

Penalty

Punishment

Compounding

TYPE BRIEF

DESCRIPTION

DETAILS OF

PENALTY/

PUNISHMENT/

COMPOUNDING

FEES IMPOSED

AUTHORITY

[RD / NCLT/

COURT]

APPEAL

MADE, IF

ANY

(GIVE

DETAILS)




Annexure 3

Form AOC-1(Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of

Companies (Accounts) Rules, 2014)

STATEMENT CONTAINING SALIENT FEATURES OF THE FINANCIAL STATEMENT OF

SUBSIDIARIES/ASSOCIATE COMPANIES/JOINT VENTURES

PART “A”: SUBSIDIARIES

(Information in respect of each subsidiary to be presented with amounts in Rs.)

S.NO Particulars Details

Name of the subsidiary

Reporting period for the subsidiary concerned, if different

from the holding company’s reporting period

Reporting currency and Exchange rate as on the last date of

the relevant Financial year in the case of foreign subsidiaries

Share Capital

Reserves & Surplus

Total Assets

Total Liabilities

Investments

Turnover

Profit before taxation/(Loss)

Provision for taxation

Profit/(Loss) after taxation

Proposed Dividend

% of shareholding

Part “B”: Associates and Joint Ventures: Not Applicable

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.

12.

13.

14.

Madura Micro Education Private Limited

NA

NA

1,49,00,000

(33,359,740)

10,476,259

10,476,259

NIL

9,536,850

(10,438,092)

NIL

(10,438,092)

NIL

100%





Annexure 4


Form AOC-2(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the

Companies (Accounts) Rules, 2014.

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 arm's length transaction under third

proviso thereto.


Name(s) of the related party and nature of the relationship

Nature of contracts/agreements/transaction

Salient features of the contracts or arrangements or transactions

including the value, if any

Justification for entering in to such contracts or arrangements or

transactions

Date of approval by the Board

Amount paid as advances, if any

Date on which a special resolution was passed in General Meeting as

required under first proviso to section 188

1. Details of contracts or arrangements or transactions not at Arm's length basis.

1.

2.

3.

4.

5.

6.

7.

NIL

NIL

NIL

NIL

NIL

NIL

NIL

Name(s) of the related party and nature of the

relationship

Nature of contracts/ arrangements/transaction

Duration of contracts / arrangements /

transaction

Salient terms of the contracts or arrangements

or transaction including the value, if any



2. Details of contracts or arrangements or transactions at Arm’s length basis.

1.

2.

3.

4.

5.

6.


Name(s) of the related party and nature of the

relationship

Nature of contracts/ arrangements/transaction

Duration of contracts/

arrangements/transaction

Salient terms of the contracts or arrangements

or transaction including the value, if any



Scimergent Analytics and Education

Private Limited

Provision for Management Services

One Year.

To avail management services to oversee

the task implementation. Amount approved:

36 Lacs, Amount paid: 36 lacs

07.08.2015, 28.07.2016

NIL

1.

2.

3.

4.

5.

6.


Scisphere Analytics India Private Limited

Subscription of user licenses, use of analytic models

No specific duration. Duration is determined by the

terms of the agreement.

To explore the Scisphere platform for data analytics.

Amount approved: 75 lacs, Amount paid: 39.65 lacs

26.05.2016, 28.07.2016, 05.11.2016

NIL

Annexure 4

Name(s) of the related party and

nature of the relationship

Nature of contracts/ arrangements/

transaction

Duration of contracts/

arrangements/transaction

Salient terms of the contracts or

arrangements or transaction including

the value, if any



Scimergent Analytics and Education Private Limited

IT Support

No Specific duration.

Loan Process Automation, Support and Maintenance.

Amount approved: 214 lacs, Amount paid: 144.50 lacs

26.05.2016, 28.07.2016, 05.11.2016.

NIL

1.

2.

3.

4.

5.

6.

S. NO Particulars Details





Form No MR-3

Secretarial Audit ReportFor the Financial Year ended March 31, 2017

[Pursuant to Section 204(1) of the Companies Act, 2013 and Rule No.9 of the

Companies (Appointment and Remuneration Personnel) Rules, 2014]

To

The Members

M/s Madura Micro Finance Limited

No.36, II Main Road

Kasturba Nagar

Adyar

Chennai 600 020

I have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence

to good corporate practices byM/s Madura Micro Finance Limited (hereinafter called the “Company”). The

Secretarial Audit was conducted in a manner that provided me a reasonable basis for evaluating the corporate

conducts/statutory compliances and expressing my opinion thereon.

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 by the Company, its Officers, Agents and

Authorized 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, 2017complied 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 hereinafter:

I have examined the Books, Papers, Minutes Books, Forms and Returns filed and other records maintained by

the Company for the Financial Year ended on March 31, 2017 according to the provisions of:

1. The Companies Act, 2013 (the Act) and the Rules made thereunder;

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 thereunder.

4. Foreign Exchange Management Act, 1999 and the Rules and Regulations made thereunder to the extent

applicable to Foreign Direct Investment (FDI) and External Commercial Borrowings (ECB);

5. The Following Regulations and Guidelines prescribed under the Securities and Exchange Board of India

Act, 1992 (SEBI Act):

-The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008, and

-The Debt Listing Agreement with BSE Limited;

6. The Memorandum and Articles of Association; and

7. Other applicable Laws:

a) The Employees Provident Fund & Miscellaneous Provisions Act, 1952.

b) The Employees State Insurance Act, 1948

c) The Maternity Benefit Act, 1961

d) The Payment of Bonus Act, 1965

e) The Payment of Gratuity Act, 1972

f) The Tamilnadu Labour Welfare Fund Act, 1972

g) The Tamilnadu Shops and Establishment Act, 1947

Annexure 5


I have also examined the compliance with the applicable clauses of the following:

(i) Secretarial Standards issued by The Institute of Company Secretaries of India.

(ii) The Debt Listing Agreement entered by the Company with Bombay Stock Exchange Limited in respect of the two

Series of Secured / Unsecured Non-Convertible Debentures issued by the Company.

During the period under audit, the Company has complied with the provisions of the Act, Rules, Regulations,

Guidelines, Standards, etc. mentioned above subject to the following observation:

The Company's application to the Central Government for the reappointment of Ms Tara Thiagarajan as the Chairman

& Managing Director of the Company for a period of Five years commencing from 1.10.2016 to 30.9.2021 under

Section 196 read with Clause (e) of Part I of Schedule V of the Companies Act, 2013 has been rejected and closed vide

their letter dated 10.4.2017 since the Company has not complied with Clause (e) of Part I of Schedule XIII of the

Companies Act, 1956 in respect of her earlier reappointment made from 26th February 2012.

Further, MCA has also stated that the onus of complying with the provisions of the Companies Act, 1956 and 2013 lies

with the Company.

Hence, the Company is required to expeditiously initiate suitable legal course action to compound the offence

committed under the Companies Act, 1956 and to regularize her present appointment from 1st October 2016 under

the Companies Act, 2013.

I further report that: The Board of Directors of the Company is duly constituted with proper balance of Executive

Directors and Non-Executive Directors except Independent Directors as mentioned above.

Adequate notice was given to all the 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 obtaining further information

and clarifications on the Agenda items before the meeting and for meaningful participation at the meeting.

Majority decision is carried through while the dissenting members' views, if any, are captured and recorded as part

of 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, there were no instances of:

(i) Public / Right / Preferential Issue of Shares / Debentures / Sweat Equity etc.

However, the Company has made issue of Equity Shares as well as Redeemable Non-Convertible Debentures on

Private Placement, which were in compliance with the provisions of the Companies Act, 2013

(ii) Redemption / Buy-Back of Securities.

(iii) Major decisions taken by the members in pursuance to Section 180 of the Companies Act, 2013:

In terms of the powers conferred on the Board of Directors of the Company under Section 180(1)(a) & (c) of the

Act and with the approval of the Board:

a) The Company has created security on the Current Assets of the Company for the various borrowings made,

which were well within the limits approved by the shareholders by Special Resolution at the Extraordinary

General Meeting held on December 10, 2016.

b) The Company has borrowed funds from Banks, Financial Institutions and Non-Banking Financial Companies,

which were well within the limits approved by the shareholders through Postal Ballot Process by Special

Resolution on December 10, 2016.

(iv) During the period under review, the Company has not entered into any Foreign Technical Collaboration

Agreement.

V RamasubramanianCompany Secretary

ChennairdDate: 23 May 2017

ACS No.5890

COP No.11325

Annexure 5


Details of remuneration as required to be provided under Section 197 of the Companies Act, 2013 read

with Rule 5 of Companies (Appointment and Qualification of Managerial Personnel) Rules, 2014

1. Ratio of Remuneration of each Director with Median

employees Remuneration.

The percentage increase in remuneration of each Director,

Chief Financial Officer, Chief Executive Officer, Company

Secretary or Manager, if any, in the financial year;

The percentage increase in the median remuneration of

employees in the financial year;

The number of permanent employees on the rolls of the

Company as on 31st March 2017.

Average percentile increase already made in the salaries of

employees other than the managerial personnel in the last

financial year and its comparison with the percentile

increase in the managerial remuneration and justification

thereof and point out if there are any exceptional

circumstances for increase in the managerial Remuneration.

Affirmation that the remuneration is as per the

remuneration policy of the Company.

(a) Managing Director – 42.61:1(b) Whole-time Director – 39.32:1

The increase in remuneration:Managing Director- 8.14 % Whole-time Director - 20%CFO - 20%Company Secretary - 11%

25.65 %

988 (excluding part time employees)

The Average increase in the salaries of

the employees other than the

managerial personnel in the last

financial year was 10% while the

increase in the remuneration of the

Chief Financial Officer was 20%.

The remuneration is as per the

remuneration policy of the Company.

2.

3.

4.

5.

6.

None of the Employees employed throughout the financial year, was in receipt of remuneration for that year

which, in the aggregate, was not less than Rupees One Crore and Two Lacs.

None of the employees 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 Rupees Eight Lac Fifty Thousand per month.

None of the employees 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.




Annexure 6


Management Discussion and Analysis

Industry Structure and Developments

The microfinance industry has seen a tremendous growth over the last five years. The industry is regulated by

the Reserve Bank of India as well as by the Self-Regulatory Organisations like Microfinance Institutions Network

(MFIN) and Sa-Dhan. The industry has been successful in providing small ticket size credit accessible to women

and households in the most unbanked and underbanked districts of the country. The transformation of several

NBFC-MFIs into Small Finance Banks, regulatory policies by RBI, financial assistance from Micro Units

Development and Refinance Agency (MUDRA) and stronger interventions by Credit Bureaus have made the

Microfinance sector in India more robust with better prospects in future.

Opportunities and Threats

The microfinance industry continues to be one of the sectors in India having a huge potential for substantial

growth. There is a great demand for microcredit in the country and a large part of the demand supply gap is

currently being met by informal sources including moneylenders..

Microfinance borrowers belong to low income group, hence are more prone to default as the loan is given

without any collateral security. There is a lack of awareness amongst rural people regarding Microfinance

companies. Improper usage of loan funds by the borrowers and high operational costs are the other challenges

faced by the Microfinance institutions.

Segment wise or Product wise Performance

Product wise break up as on 31st March, 2017.

Outlook

As mentioned above, the huge gap in demand and supply in micro credit in India and that a large part of this

gap is serviced by informal sources, including moneylenders, represents an attractive business opportunity for

Madura. The company intends to focus on its current business and diversify itself in several geographical areas

in the coming years.

Risk and Concerns

As a financial intermediary, the company is exposed to risks that are peculiar to its lending and the environment

within which it operates. The company has identified and implemented comprehensive policies and procedures

to assess, monitor and manage risk throughout the company.

Madura Microfinance 38.a

PRODUCTTotal outstanding

(INR in Million)

Activity Term Loan

Business Development Loan

Certified Activity Loan

Entry Level Loan

VVL

Total

4,343.32

90.55

184.27

3,549.23

58.79

8,226.17

Management Discussion and Analysis

Internal Control Systems and their Adequacy

The company's internal control system commensurate with the nature of its business and the size and

complexity of its operations. These are regularly tested and cover all branches, cluster offices and the Head

Office. Significant audit observations and follow-up actions thereon are reported to the Audit Committee. The

Audit Committee of the Board oversees the internal audit function of the company. The Audit Committee

reviews the adequacy and effectiveness of the company's Internal Control System and monitors the

implementation of audit recommendations including those related to strengthening of the company's risk

management policies and systems.

Discussion on Financial Performance with Operational Performance

There has been a significant rise in the operations of the company during the year. The company has extended

its operations as on March 31, 2017 in 4 states with 217 branches as compared to its presence in 4 states with

200 branches in the previous year 2015-16.

The active borrowers of the Company has also increased to 515,104 as compared to 407,730 in the previous

year. This has resulted in increase in the revenue of the company to INR 1,768 million crore during the year

2016-17 as compared to INR 1,168 million in the year 2015-16. The Profit after Tax of the Company was INR 302

million as compared to INR 192 million in the previous year. Despite a large number of new branches, the

operational costs of the Company fell from 6.82% of the portfolio in the previous year to 6.69%.

Human Resource Development

As an Organisation, we understand that in order to offer the end customer a common experience we have to

first offer our employees a similar experience irrespective of the location or state they may be hired in. To

achieve this objective, our efforts during the last year were aimed in this direction. We had standard orientation

and on-boarding process designed and delivered to all the new joinees. We did this not only through an audio

visual media but also delivered it in the vernacular language. Apart from this we also standardised the

procedures for the employee's life cycle management through implementation of an HR system which is now

available to the employee at the click of a button. These efforts have resulted in building a model which is

replicable and scalable in our journey of growth.

Madura Microfinance38.b

Auditors Report

INDEPENDENT AUDITOR’S REPORT

TO THE MEMBERS OF MADURA MICRO FINANCE LIMITED

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Madura Micro Finance Limited (“the

Company”), which comprise the Balance Sheet as at 31st March 2017 the Statement of Profit and Loss and the

Statement of Cash Flows for the year then ended and a summary of the 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 stated 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 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 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

controls, 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.

Auditor's 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 financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the

financial statements. The procedures selected depend on the auditor's judgment, including the assessment of

the risks of material misstatement of the financial statements, whether due to fraud or error. In making those

risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the

financial statements that give a true and fair view in order to design audit procedures that are appropriate in the

circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an

adequate internal financial controls system over financial reporting and the operating effectiveness of such

controls. An audit also includes evaluating the appropriateness of the accounting policies used and the

reasonableness of the accounting estimates made by the 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 Standalone financial statements.

Basis for Qualified Opinion

As stated in Note No.29 to the Standalone Financial Statements, the appointment and payment of remuneration

to the Chairperson and Whole-time Director is subject to the approval of the Central Government.


Opinion

In our opinion and to the best of our information and according to the explanations given to us, (except for the

effects of the matter described in the Basis for Qualified Opinion paragraph above, the aforesaid 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 31st March 2017;

b) In the case of the Statement of Profit and Loss of its Profits for the year ended 31st March 2017; and

c) In the case of the Cash Flow Statement, of the Cash Flows for the year then ended.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2016 (“the Order”), as amended, 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”

a statement on the matters specified in paragraphs 3 and 4 of the Order.

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 purpose of our audit;

b) In our opinion, proper books of account as required by law have been kept by the Company so far as it

appears from our examination of those books;

c) The Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this

Report are in agreement with the books of account .

d) In our opinion, the 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.

e) On the basis of written representations received from the directors as on March 31, 2017 taken on

record by the Board of Directors, none of the directors is disqualified as on March 31, 2017 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 has disclosed the impact of pending litigations on its financial position in its financial

statements – Refer Note 27 to the Standalone financial statements;

(II) The Company did not have any long-term contracts including derivative contracts for which there

were any material foreseeable losses.

(III) There were no amounts which were required to be transferred to the Investor Education and

Protection Fund by the Company.

(IV) The Company has provided requisite disclosures in the Standalone Financial Statements as to holding

as well as dealings in Specified Bank Notes during the period from 8th November 2016 to 30th

December 2016 and these are in accordance with the books of accounts maintained by the Company.

Refer Note 41 to the Standalone Financial Statements

ChennaithDated: 26 May 2017

Auditors Report


Annexure A to the Independent Auditors' Report to the Members of Madura Micro Finance Limited

(i) a) The Company has maintained proper records showing full particulars including quantitative details and

situation of fixed assets.

b) The Fixed Assets have been physically verified by the Management during the year and no material

discrepancies were noticed on such verification. In our opinion, the periodicity of the verification is

reasonable having regard to the size of the Company and the nature of its assets.

c) The Company does not have any immovable properties.

(ii) The Company does not have any inventories.

(iii) The Company has not granted any loans, secured or unsecured to companies, firms, limited liability

partnerships or other parties covered in the register maintained under section 189 of the Companies Act,

2013 except advances to its subsidiary company, Madura Micro Education Private Limited and the amount

outstanding as at 31st March 2017 was Rs.74,12,091/- (Rs.74,12,091/- as at 31st March 2017). In respect of

such advance, we report that:

a) As explained to us, there are no specific terms regarding the advance paid to the Subsidiary

Company and he are not able to express our opinion as to whether the same are prejudicial to the

Company's interests.

b) As explained to us, the advance is interest free and repayment schedule has been specified.

c) As explained to us, in respect of the amount due from the subsidiary company, for which provision

has been made in the financial statements, the Management is confident of recovery of the said

amount and in view of the business model of the subsidiary company, no separate steps need to be

taken specifically for recovery of the said amount.

(iv) In our opinion and according to the information and explanations given to us, the Company has complied

with the provisions of section 185 and 186 of the Companies Act, 2013, with respect to loans and

investments made.

(v) The Company has not accepted deposits from the public.

(vi) The Central Government has not prescribed the maintenance of cost records under section 148 of the

Companies Act, 2013, for any of the activities of the Company.

(vii) a) According to the information and explanations given to us and on the basis of our examination of the

records of the Company, the amounts deducted/accrued in the books of accounts in respect of

undisputed statutory dues including provident fund, employees state insurance, excise, income tax, sales

tax, value added tax, duty of customs, service tax, cess and other statutory dues have been regularly

deposited during the year by the Company with appropriate authorities. According to the information

and explanations given to us, there are no undisputed amounts payable in respect of provident fund,

employees state insurance, income tax, sales tax, value added tax, duty of customs, excise, service tax,

cess and other statutory dues which were in arrears as on 31st March 2017 for a period of more than six

months from the date they became payable.

b) There are no dues of income tax, sales tax, value added tax, duty of customs, excise, service tax, cess or

other statutory dues that have not been deposited on account of any dispute except the following:

Details of Demand Amount Forum where the dispute is pending

Penalty under the Income tax Act, 1961 for

the assessment year 2007-08

71,01,923 High Court of Judicature at Madras

Income tax demand raised for the

assessment year 2014-15

23,30,836 The Company is in the process of filing appeal to the

Income tax Appellate Tribunal at Chennai

Auditors Report


(viii) The Company has not defaulted in the repayment of dues to banks, financial institutions or debenture

holders.

(ix) The Company has not raised moneys by way of initial public offer or further public offer (including debt

instruments). As per the records of the Company, the term loans availed during the year were applied for

the purposes for which those are raised.

(x) As per the records of the Company and according to the information and explanations given to us, the

following fraud on the company has been noticed and reported to the Audit Committee:

(xi) The payment of remuneration to the Chairperson and Whole time Director for the period from 26th

February 2012 to 31st March 2017 is subject to the approval of the Central Government. The Company is in

the process of obtaining the requisite approval of the Central Government.

(xii) The Company is not a nidhi company.

(xiii) In our opinion, all transactions with related parties are in compliance with section 177 and 188 of the

Companies Act, 2013 and the details have been disclosed in the financial statements as required by the

applicable Accounting Standard.

(xiv) According to the records of the Company, in respect of the private placement of equity shares during the

year under review, the Company has complied with the requirements of section 42 of the Companies Act,

2013 and the amounts raised were used for the purpose for which the funds were raised.

(xv) Based on the audit procedures performed and the information and explanations given to us, the Company

has not entered into any non-cash transactions with the Directors or persons connected with the Directors.

(xvi) In our opinion, the Company is required to be registered under section 45IA of the Reserve Bank of India

Act, 1934 and accordingly registration has been obtained from Reserve Bank of India.


Embezzlement of cash by an employee 6,51,000

AmountDetails

For S.N.S AssociatesCHARTERED ACCOUNTANTS

(FIRM REGISTRATION No:006297S)S.NAGARAJAN (Partner)MEMBERSHIP No:20899

Auditors Report


“Annexure B” to the Independent Auditor's Report of even date on the Standalone Financial Statements

of MADURA MICRO FINANCE 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 MADURA MICRO FINANCE IMITED

(“the Company”) as of 31st March 2017 in conjunction with our audit of the standalone 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 the internal control over financial reporting criteria established by the Company considering the essential

components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over financial

reporting issued by the Institute of Chartered Accountants of India. 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.


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 system 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 procedure selected depend on the

auditor's judgment, including the assessment of the risk 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

Auditors Report


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 authorizations of management and

directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of

unauthorized 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, 2017, based on the internal control over financial reporting criteria established by the Company

considering the essential components of internal control stated in the Guidance Note on Audit of Internal

Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

ChennaithDate: 26 May 2017

Auditors Report




Balance Sheet


Significant Accounting Policies

Vide out report of even date attached

1

Shareholders' Funds

As at31.03.2017

As at31.03.2016

EQUITY AND LIABILITIES

(a) Share Capital

(b) Reserves and Surplus

Non Current Liabilities

(a) Long Term Borrowings

(b) Other Long Term Liabilities

(c) Long Term Provisions

Current Liabilities

(a) Short term borrowings

(b) Other Current Liabilities

(c) Short Term Provisions

9,498,805,002 6,039,092,950

Non Current Assets

ASSETS

(a) Fixed Assets

(i) Tangible Assets

(ii) Intangible Assets

20,940,792

275,472

(b) Non Current Investments

(c) Deferred Tax Assets (net)

(d) Long Term Loans and Advances

(e) Other non current assets

TOTAL

2,498,744,893 2,254,885,342

(a) Current Investments

(b) Cash and cash equivalents

(c) Short term loans and advances

(d) Other current assets

7,000,060,109

Current Assets

9,498,805,002 6,039,092,950 TOTAL

Note no

2

3

4

5

6

3,434,068,141

585,736

57,275,508

3,491,929,385

66,975,210

1,694,523,504

1,761,498,714

55,575,170

1,003,796,455

1,059,371,625

2,635,911,125

585,736

37,088,254

2,673,585,115

11,199,735

4,128,436,027

105,741,141

4,245,376,903

10,266,176

2,242,174,320

53,695,714

2,306,136,210

7

8

9

10

11

16,589,686

953,643

12

13

14

15

16,900,000

32,290,683

2,411,223,289

17,114,657

16,900,000

26,865,136

2,175,613,000

17,963,877

16

17

18

19

50,000,000

1,103,050,633

5,788,886,449

58,123,027

34,426,865

629,110,059

3,059,925,549

60,745,135

3,784,207,608

thChennai / Date: 26 May 2017

Sanin Panicker

Company Secretary

Mohan Eddy

Wholetime Director

Tara Thiagarajan

Managing DirectorFor S.N.S Associates

CHARTERED ACCOUNTANTS(FIRM REGISTRATION No:006297S)

S.NAGARAJAN (Partner)MEMBERSHIP No:20899

M. Narayanan

President & CFO

Profit and Loss


I. Revenue from Operations

II. Other Income

III. Total Revenue

Note no

20

21

1,168,019,141

19,680,666

1,187,699,807

1,768,380,779

26,568,634

1,794,949,413

22

23

10 & 11

24

261,216,757

744,573,865

27,594,157

-

266,363,272

1,299,748,051

163,665,174

521,384,341

14,776,522

7,412,091

191,087,502

898,325,630

IV. Expenses:

Employee Benefits Expenses

Finance Cost

Depreciation

Provision for impairment of advance to subsidiary

Other Expenses

Total Expenses

495,201,362

-

495,201,362

-

495,201,362

198,500,000

-5,425,547

302,126,909

289,374,177

-

289,374,177

-

289,374,177

107,850,000

-10,336,582

191,860,759

V. Profit before exceptional and

extraordinary items and tax

VI. Exceptional Items

VII. Profit before extraordinary items and tax

VIII. Extraordinary Items

IX. Profit before tax

X. Tax expense

Current tax

Deferred Tax

XI. Profit or loss for the period from continuing operations

XII. Proift or loss from discontinuing operations

XIII. Tax expense of discontinuing operations

XIV. Profit/loss from discontunuing operations

XV. Profit for the period

XVI. Earnings per share

(1) Basic

(2) Diluted

-

-

-

302,126,909

49.29

49.29

-

-

-

191,860,759

34.52

34.52



1

As at31.03.2017

As at31.03.2016


Sanin Panicker

Company Secretary

Mohan Eddy

Wholetime Director

Tara Thiagarajan




M. Narayanan

President & CFO

Cash Flow


31.03.2017

Profit before tax

Add: Depreciation

Provision made for Advances and NPAs

Provision for impairment of advances to subsidiary

Provision for impairment of Investment in subsidiary

Provision made for assets derecognised

Less: Dividend from mutual funds

495,201,362

27,594,157

43,495,171

-

14,900,000

-2,696,909

578,493,781

8,973,306

Operating profit before changes in operating Assets and Liabilities

Changes in operating assets and liabilities

(Increase)/Decrease in advance to self help groups

(Increase)/decrease in other current assts and loans and advances

(Increase)/Decrease in Term Deposits under Lien

Increase/(Decrease) in current liabilities and other provisions

Tax paid net of provisions

Total Cash flow from operating activities A

569,520,475

-2,964,571,189

2,731,929

36,551,746

-24,253,902

-197,760,601

-2,577,781,542

CASH FROM INVESTING ACTIVITIES

Purchase of fixed assets

Investments made:

In Mutual fund

In Subsidiary Company

Dividend from mutual funds

Total cash flow from investing activities B

-31,267,092

-15,573,135

-

8,973,306

-37,866,921

Year ended

CASH FROM FINANCING ACTIVITIES

Proceeds from issue of Shares (including Share Premium)

Long Term Borrowings Taken

Long Term Borrowings Repaid

Short Term Borrowings Repaid/Taken (net)

Total Cash from Financing activities C

Total cash generated during the year (A+ B+ C)

Cash and Cash Equivalents at the beginning of the Year

Cash and Cash Equivalents at the end of the year

400,000,180

6,000,000,000

-3,274,792,956

933,559

3,126,140,783

510,492,320

285,736,289

796,228,609

31.03.2016Year ended

289,374,177

14,776,522

20,118,125

7,412,091

-

1,479,243

333,160,158

16,377,304

316,782,854

-1,697,430,532

-36,799,774

4,188,320

65,920,517

-112,138,196

-1,459,476,811

-16,557,948

86,112,570

-1,000

16,377,304

85,930,926

-

3,651,600,000

-2,066,735,495

10,266,176

1,595,130,681

221,584,796

64,151,493

285,736,289


Sanin Panicker

Company Secretary

Mohan Eddy

Wholetime Director

Tara Thiagarajan




M. Narayanan

President & CFO

Notes

1 . SIGNIFICANT ACCOUNTING POLICIES

a) Fixed Assets

The Fixed Assets are stated at cost. Grants received for purchase of the fixed assets are credited to the

value of the Fixed Asset after retaining a nominal value in the Fixed Asset. Depreciation on the balance is

provided on straight line method. The Fixed Assets are depreciated on SLM basis at the following rates:

As at31.03.2017

As at31.03.2016

33.33%

20.00%

15.00%

20.00%

33.33%

15.00%

20.00%

100.00%

33.33%

20.00%

15.00%

20.00%

33.33%

15.00%

20.00%

100.00%

Computer

Office Equipment

Plant and Machinery

Motor Vehicles

Software

Furniture and Fittings

Electrical Fittings

Temporary Structures in Rented Premises

Fixed assets costing less than Rs.5000/- are fully depreciated in the year of capitalisation.

b) Investments

Investments which are long term in nature, are stated at cost with provision wherever necessary for

diminution, other then temporary in the value of the investments. Current Investments are valued at lower

of cost or market value.

c) Revenue Recognition

i) Interest receivable on loans to Self Help Groups are accounted for on accrual basis at the agreed rate of

interest.

ii) In respect of accounts identified as Non Performing Assets, interest income is accounted as per the directions of Reserve Bank of India.

iii) In accordance with Reserve Bank of India Guidelines on Securitisation transactions, gains arising from assignment/securitisation are amortized over the life of the underlying portfolio loans. In case of loss, the same is recognised in the Statement of Profit and Loss immediately.

iv) Other income and all expenditure is accounted for on accrual basis.

v) Provision for gratuity and leave encashment has been made on the basis of actuarial valuation on

Projected Unit Credit (PUC) method.

d) Foreign Currency Transactions

i) Initial Recognition

Foreign currency transactions are accounted for at the rate of exchange prevailing on the date of

transactions.

ii) Conversion

Foreign currency items are reinstated using the exchange rate prevailing at the reporting date. In

respect of External Commercial Borrowing, the Company has entered into a currency swap agreement

as a hedge against foreign exchange fluctuation . The liability and interest payments are accounted for

at the exchange rate specified in the currency swap agreement.

iii) The exchange difference arising on conversion is charged off to the Profit and Loss Account.


e) Provision for Microfinance and other Loans

Provision on Microfinance and other loans treated as Non-Performing Assets is being made in accordance

with the Prudential Norms issued by Reserve Bank of India. The provsion created by the Company on

Standard Advances works out to 0.72% as against provision of 0.40% stipulated by RBI

In respect of asset derecognised, provision is made at the rate of 1% of the outstanding amounts of assets

derecognised from the books of the Company as at the balance sheet date.

f) Defered Tax

Deferred Tax Assets arising from temporary timing differences are recognised to the extent there is a

virtual certainity that the assets can be realised in future.

2 . SHARE CAPITAL

Authorised

1,00,00,000 Equity Shares of Rs.10/- each

Issued, Subscribed and Paid up

66,97,521 (previous year 55,57,517) Equity Shares of Rs.10/- each

fully paid up

SHARES HELD BY A SHAREHOLDER HOLDING MORE THAN 5%

Name of the shareholder

Ms.Tara Thiagarajan

Mr.M.Narayanan

A.V.Thomas and Co. Ltd

Midland Rubber & Produce Company Ltd

Mr.Marti Subramaniam

Employees' Welfare Trust

Elevar Unitus Corporation

Reconciliation of the number of shares outstanding at the beginning and end of the year

Number of Shares outstanding at the beginning of the year

Number of shares issued during the year

Number of Shares outstanding at the end of the year

31.03.2017 31.03.2016

100,000,000

66,975,210

No. of shares

2,442,199

344,166

855,002

855,004

300,000

495,667

865,916

100,000,000

55,575,170

No. of shares

2,670,200

340,000

-

-

300,000

504,000

1,207,917

5,557,517

1,140,004

6,697,521

5,557,517

-

5,557,517

The Company has issued only one class of Shares, viz., Equity Shares. Each Equity Share has a face value of

Rs.10/- each and is entitled to one vote. On liquidation each share is entitled to participate in the assets

proportionate to the paid up value of the share.

3. RESERVES AND SURPLUS

Share Premium Account

As per Last Balance Sheet

Add: Received during the year on shares issued

Statutory Reserve


Add: Transfer from Profit and Loss Account

207,918,753

388,600,140

596,518,893

160,815,000

61,000,000

221,815,000

207,918,753

-

207,918,753

122,315,000

38,500,000

160,815,000

Notes


Notes

Surplus, Balance in Profit and Loss Account


Add: Profit after tax for the year

Less: Transfer to Statutory Reserve

Total of Reserves and Surplus

635,062,702

302,126,909

937,189,611

61,000,000

876,189,611

1,694,523,504

481,701,943

191,860,759

673,562,702

38,500,000

635,062,702

1,003,796,455

4. LONG TERM BORROWINGS

I. Debentures

a) Secured

14.15% Non-convertible Debentures - privately placed Secured

by hypothecation of loans granted to Self Help Groups The

maturity date of the Debentures is 13th September 2020, with

99.99% to be redeemed on 13th September 2019 and balance

on maturity date. The NCD carries interest at 14.15% .

14.84% Non-Convertible Debentures - Privately placed

Secured by exclusive charge on the loans created out of the

proceeds of the Debentures. The NCD carries interest rate of

14.84% and is redeemable in one bullet payment at the end of

36 months from the date of allotment, viz. on 12-5-2018

b) UnSecured

14.25% Non-Convertible Debentures - Privately placed The

Debentures are unsecured and carry interest of 14.25%. The

Debentures are redeemable on March 29, 2024 .

366,000,000

366,000,000

400,000,000

400,000,000

II. Term Loans from Banks and Financial Institutions

From Banks

Axis Bank

City Union Bank


Dhanalakshmi Bank


South Indian Bank

Canara Bank

Lakshmi Vilas Bank

ING Vysya Bank

Dena Bank

Indian Bank

Andhra Bank

Bank of Baroda

Bank of Maharashtra

RBL Bank Limited

State Bank of Hyderabad

State Bank of Travancore

IDFC Bank

214,285,715

35,473,274

120,830,500

328,027,990

590,476,180

104,545,450

34,285,711

92,574,779

50,000,000

115,000,000

217,417,455

13,508,695

436,666,667

1,934,998

62,500,000

94,443,171

150,000,000

173,809,524

61,111,122

50,244,521

132,292,171

194,990,674

559,722,216

90,909,090

68,571,427

118,888,650

11,111,317

55,000,000

50,752,439

31,689,933

110,000,000

41,134,998

100,000,000

-

-

-

500,000,000

-


Union Bank of India

State Bank of India

Vijaya Bank

From Financial Institutions




Hero Fincorp Limited


MAS Financial services limited

Reliance Capital Limited

Nabkisan Finance Limited


IFMR Capital Finance Private Limited

Reliance Home Finance

Tata Capital Financial Services Limited

Habitat Micro Build


L & T Finance


Less: Payable within 12 months disclosed under other Current Liabilities

All the above loans are secured by a charge on the advances granted to Self Help Groups from the proceeds of the Loans.

The Terms of repayment of the Term Loans are as under

197,272,727

397,786,928

22,500,000

1,354,166,666

180,400,000

99,999,999

99,791,197

-

56,249,998

261,863,420

89,929,172

13,333,332

101,240,809

-

58,860,000

-

265,600,000

33,333,333

74,623,456

7,408,731,146

3,974,663,005

3,434,068,141

-

-

52,500,000

433,333,333

307,600,000

-

56,978,514

55,565,000

125,416,674

370,680,906

23,333,500

39,999,996

304,641,485

48,115,812

12,500,600

12,658,887

265,600,000

83,333,336

48,847,501

4,683,524,102

2,047,612,977

2,635,911,125

Name of the

Bank

Rate of

interest

Tenor of

Loan

Mode of

RepaymentInstalment

Bal. o/s as on

31.03.17

Incofin- RIF

AAV SARL

IFMR Capital Finance Pvt LtdMannaveeya Development & Finance Pvt Ltd




Reliance Capital

Reliance Capital

Reliance Capital




Au Financers (India) Ltd

Andhra Bank

14.84%

14.15%

14.25%

15.00%

14.10%

14.10%

12.00%

13.50%

13.50%

13.00%

12.80%

14.00%

12.50%

12.75%

13.25%

36

60

84

36

26

26

24

24

24

12

96

36

36

12

36

Bullet

Bullet

Bullet

Quarterly

Monthly

Monthly

Monthly

Monthly

Monthly

Monthly

Quarterly

Quarterly

Quarterly

Bullet

Monthly

400,000,000

366,000,000

500,000,000

6,666,666

4,166,659

2,083,340

2,083,333

9,555,403

9,555,403

16,970,282

11,066,666

3,333,300

8,333,333

100,000,000

1,515,151

400,000,000

366,000,000

500,000,000

13,333,332

4,166,659

2,083,340

50,000,000

81,354,204

98,347,247

82,161,969

265,600,000

6,600,274

83,328,897

100,000,000

13,508,695

Notes


Notes

Axis Bank

Bank of Baroda

Bank of Baroda

Bank of Maharashtra

Canara Bank

City Union Bank



Dena Bank

Dena Bank

Dhanalakshmi Bank

Dhanalakshmi Bank

Dhanalakshmi Bank

Dhanalakshmi Bank

Dhanalakshmi Bank

Family Credit Limited

Hero Fin Corp Limited


IDBI Bank

IDBI Bank

IFMR Capital Finance Pvt Ltd



IDFC Bank

IDFC Bank

Indian Bank

Indian Bank

Kotak Mahindra Bank Limited

Lakshmi Vilas Bank

Lakshmi Vilas Bank

MUDRA

NABARD

NABARD

NABARD

NABARD

NABARD

NABARD

RBL Bank Limited

RBL Bank Limited

South Indian Bank

South Indian Bank

Sundaram Finance Ltd


State Bank of India



Tata Capital Financials Limited

Union Bank of India

Union Bank of India

Vijaya Bank

11.65%

12.35%

12.15%

12.80%

12.15%

12.75%

12.35%

12.00%

11.40%

10.50%

13.65%

13.65%

12.75%

12.40%

11.40%

12.85%

14.00%

12.75%

12.30%

11.75%

14.25%

14.25%

13.75%

12.75%

12.75%

12.90%

11.50%

10.40%

13.05%

12.25%

10.25%

10.50%

11.50%

11.50%

11.50%

11.00%

11.00%

12.80%

11.25%

12.80%

12.15%

13.00%

13.00%

12.15%

12.15%

12.15%

12.10%

12.10%

10.25%

12.90%

24

35

35

36

36

36

26

26

36

33

36

36

36

36

36

24

26

26

24

24

24

24

24

24

24

36

39

24

36

36

36

36

36

36

60

60

60

24

24

36

36

36

36

35

39

36

24

36

36

36

Quarterly

Monthly

Monthly

Monthly

Monthly

Monthly

Monthly

Monthly

Quarterly

Quarterly

Monthly

Monthly

Monthly

Monthly

Monthly

Monthly

Monthly

Monthly

Monthly

Monthly

Monthly

Monthly

Monthly

Monthly

Monthly

Quarterly

Monthly

Monthly

Monthly

Monthly

Monthly

Half yearly

Half yearly

Half yearly

Half yearly

Half yearly

Half yearly

Quarterly

Monthly

Quarterly

Quarterly

Monthly

Monthly

Monthly

Monthly

Monthly

Monthly

Monthly

Monthly

Monthly

35,714,285

5,000,000

13,333,333

1,934,998

2,857,143

1,678,685

4,166,667

4,166,666

5,000,000

25,000,000

1,666,667

2,223,000

2,800,000

4,170,000

5,600,000

4,166,667

3,098,801

4,742,449

19,047,619

35,714,285

6,040,902

5,792,497

4,297,467

7,142,857

4,761,905

4,166,667

5,555,555

2,083,333

2,777,781

2,121,219

10,600,000

16,666,667

25,000,000

33,333,333

37,500,000

75,000,000

60,000,000

6,250,000

2,272,727

9,090,910

4,545,500

1,685,000

1,685,000

16,607,000

2,800,000

4,545,000

4,166,000

5,455,000

7,576,000

2,500,000

214,285,715

50,000,000

386,666,667

1,934,998

34,285,711

35,473,274

37,502,500

83,328,000

15,000,000

100,000,000

9,999,990

26,648,000

66,400,000

124,980,000

100,000,000

33,333,332

22,466,056

77,325,147

190,476,172

400,000,000

24,412,037

36,053,908

40,774,864

92,857,144

80,952,380

17,417,455

200,000,000

50,000,000

41,666,530

50,908,249

180,400,000

49,999,999

100,000,000

166,666,667

212,500,000

425,000,000

400,000,000

12,500,000

50,000,000

54,545,450

50,000,000

34,128,501

40,494,955

397,786,928

94,443,171

150,000,000

58,859,999

147,272,730

50,000,000

22,500,000


Notes


5 . OTHER LONG TERM LIABILITIES

Flexi Grant

6 . OTHER LONG TERM PROVISIONS

Provision for gratuity

Provision for leave encashment

Provision for Impairment on investment in subsidiary Company

Provision for impairment of advances to subsidiary Company

Provision for Standard Assets

7 . SHORT TERM BORROWINGS

CASH CREDIT FROM BANKS :

Secured

SOUTH INDIAN BANK - CASH CREDIT

The above limit is secured by a charge on the loans granted to Self

Help Groups out of the proceeds of the Loan. The Cash Credit/OD

facility is renewable every year and carries interest at 13% per annum.

4,895,861

3,024,172

-

7,412,091

21,756,130

37,088,254

6,658,944

4,192,240

14,900,000

7,412,091

24,112,233

57,275,508

683,104 51,814

585,736

585,736

585,736

585,736

31.03.2017 31.03.2016

Unsecured

CITY UNION BANK - OVERDRAFT

The Cash Credit/OD facility is renewable every year and carries

interest at 12.75% per annum.

9,583,072

10,266,176

11,147,921

11,199,735

8. OTHER CURRENT LIABILITIES

Current maturities of Long Term Debt

(Refer Note No.4 for Security and repayment)

Sundry Creditors

3,974,663,005

153,773,022

4,128,436,027

2,047,612,977

194,561,343

2,242,174,320

9. SHORT TERM PROVISIONS

Provision for Gratuity

Provision for Leave Encashment

Provident Fund and ESI contribution

Provision for Bonus

Provision for staff related expenditure

Provision for Assest Derecognised


Provision for Non Performing Assets

1,225,549

2,030,835

3,662,839

6,369,552

14,469,187

260,567

34,592,440

43,130,172

105,741,141

928,961

1,554,027

2,685,381

4,155,234

4,831,091

2,957,476

30,475,954

6,107,590

53,695,714

Notes


Office Equipments

Plant and Machinery

Motor Vehicles


Electrical Fittings


12,615,545

1,900,221

4,537,347

7,936,413

1,388,963

14,408,016

83,125,466

1,146,607

49,464

-

2,716,555

-

14,408,016

31,267,092

11,468,938

1,850,757

4,537,347

5,219,858

1,388,963

-

51,858,373

DEPRECIATION BLOCK

Computers

Office Equipments

Plant and Machinery

Motor Vehicles


Electrical Fittings


24,964,817

11,867,726

856,191

4,347,491

5,132,033

608,400

14,408,016

62,184,674

8,764,441

714,977

255,169

383,365

2,114,861

275,157

14,408,016

26,915,986

16,200,376

11,152,749

601,022

3,964,126

3,017,172

333,243

-

35,268,688

Upto

31.03.2016

For the

Year

As at

31.03.2017

NET BLOCK

Computers

Office Equipments

Plant and Machinery

Motor Vehicles

As at

31.03.2017

As at

31.03.2016


Electrical Fittings


2,202,686

1,055,720

-

16,589,686

2,804,380

780,563

-

20,940,792

Cost as at

1.4.2016

Additions As at

31.03.2017

-

-

-

10,966,874

9,618,959

20,585,833

Upto

31.03.2016

For the

Year

As at

31.03.2017

As at

31.03.2017

As at

31.03.2016

677,209

962

678,171

10,691,402

9,618,959

20,310,361

275,472

-

275,472

COST BLOCK

Software

Micro Education Digital Products

DEPRECIATION BLOCK

Software


NET BLOCK

Software


11. (a)FIXED ASSETS - Intangibles

10,966,874

9,618,959

20,585,833

10,014,193

9,617,997

19,632,190

952,681

962

953,643

11,192,135

316,189

1,249,735

573,221

15,374,144

747,819

1,044,030

189,856

10. NON CURRENT ASSETS

(a) Fixed Assets - (i) Tangible Assets

COST BLOCK

Computers

Cost as at

1.4.2016 Additions

As at

31.03.2017

40,338,961 12,946,450 27,392,511

14,900,000

2,000,000 2,000,000

16,900,000

24,813,995

2,051,141

26,865,136 32,290,683

30,754,700

1,535,983

2,411,223,289

2,411,223,289 2,175,613,000

2,175,613,000

7,781,550

14,200

9,318,907

12. NON CURRENT INVESTMENTS

Trade Investments

a) Investment in Equity Shares - Unquoted

I) In Subsidiary Company 14,90,000 Equity Shares of Madura Micro

Education Private Limited.

ii) In other Companies 200000 Equity Shares of Rs.10/- each in

Alpha Micro Finance Consultants Pvt. Ltd

13. DEFERRED TAX ASSETS (NET)

(i) Deferred Tax Asset

On account of provision made

allowable on basis of payment

On Account of depreciation

14. LONG TERM LOANS AND ADVANCES

Microfinance and Other Loans

Unsecured Considered Good - repayable after 12 months

15. OTHER NON CURRENT ASSETS

Rent advance

Deposits

Tax payments pending adjustment (net of provision)

7,905,571

-

10,058,306

14,900,000

16,900,000

17,114,657 17,963,877

Cash on hand

Bank balances in current account

Bank Balance in earmarked Deposit account

under lien to banks for various credit facilities granted

Other deposits with Bank

16. CURRENT INVESTMENT

-

50,000,000

Investment in Units of Mutual Fund - unquoted (Previous year

33770.182 units) of UTI Liquid Fund - Dividend Plan

17. CASH AND CASH EQUIVALENTS

3,020

146,225,589

306,822,024

650,000,000

1,103,050,633

Microfinance and other loans repayable

within 12 months - Unsecured

of the above

Considered Good

Considered Doubtful

(representing Non-Performing assets as per RBI's provisioning norms)

18. SHORT TERM LOANS AND ADVANCES

5,788,886,449

5,788,886,449

5,748,409,413

40,477,036

3,059,925,549

3,059,925,549

3,047,710,374

12,215,175

61,841

55,674,448

343,373,770

230,000,000

629,110,059

31.03.2017 31.03.2016

34,426,865

34,426,865

Investment in Units of Mutual Fund - unquoted 18,779.023 units

(Previous year NIL) of UTI Liquid Fund - Growth Plan

50,000,000 -

Notes


Notes

Advances receoverable in cash or in kind or for value to be

received - Unsecured Considered good

Due by others

19. OTHER CURRENT ASSETS

58,123,027

58,123,027

60,745,135

60,745,135

Interest on loans

Own Portfolio

Securitised Portfolio

Processing and other charges

Bad debts recovered

Interest from Banks

20. REVENUE FROM OPERATIONS

1,629,278,379

17,577,060

76,479,433

15,322,400

29,723,507

1,768,380,779

Dividend received

Others

21. OTHER INCOME

8,973,306

17,595,328

26,568,634

1,060,237,549

12,483,577

55,232,616

9,946,716

30,118,683

1,168,019,141

16,377,304

3,303,362

19,680,666

Salaries and wages

Honororium paid

Contribution to Provident Fund

Contribution to Employees State Insurance

Contribution to Labour Welfare fund



Staff welfare Expenses

22. EMPLOYEE BENEFIT EXPENSES

211,101,542

19,934,966

17,537,716

4,305,479

22,996

1,919,301

2,394,286

4,000,471

261,216,757

31.03.2017 31.03.2016

126,049,355

17,742,784

10,907,786

2,793,344

18,464

2,061,859

1,556,185

2,535,397

163,665,174

Interest on cash credit

Processing Charges

Interest on Non Convertible Debentures

Interest on Term Loans

Other Interest

Upfront fee for ECB from WBC

Bank charges

23. FINANCE COST

285,042

31,221,000

126,757,088

583,545,966

66,438

-

2,698,331

744,573,865

93,944

10,186,440

85,571,926

409,165,813

72,059

11,077,837

5,216,322

521,384,341

Office Rent

Rates and Taxes

Electricity charges

Filing Fees

Insurance

Auditors' Remuneration

For Audit

For Certification and other services

Vehicle Maintenance

24 . OTHER EXPENSES

16,805,696

53,528

2,853,172

320,043

1,272,329

952,500

342,000

303,358

14,562,653

25,190

1,831,889

58,220

764,106

700,000

398,363

349,077


25. The Company is registered with Reserve Bank of India as a Non Banking Finance Company under the

category of NBFC - MFI.

26. CONTINGENT LIABILITIES

a) Income tax demand disputed in appeal not provided for NIL 2,742,160

27. The penalty of Rs.71,01,923/- levied by the Assessing Officer, which was deleted by the Commissioner' of

Income Tax (Appeals) has been restored by the Income Tax Appellate Tribunal. Against the order of Income Tax

Appellate Tribunal, the Company has filed an appeal before the High Court of Judicature’ at Madras. The

appeal filed by the Company has been admitted and the Honourable High Court has granted interim stay.

Based on professional advice, no provision is considered necessary for the penalty. The Company had filed an

appeal before the Income Tax Appellate Tribunal against the order of the Commissioner of Income Tax

(Appeals) confirming the addition and the appeal has been admitted after condonation of the delay in filing

and the addition made by the Assessing Officer and confirmed by the Commissioner of Income Tax (Appeals),

has been deleted. In view of the decision of the Hon'ble ITAT. Chennai, provision for the income Tax and penalty

is not considered necessary.

Apart from the above, there are no other pending litigations by/against the Company which might

have a material impact on the financial statements.

28. During the year, the Company has paid an additional amount of Rs.173.04 lakhs towards Advance tax for the

assessment year 2017-18. The same has been included in the provision made for Current Tax. Based on legal

advice, the Company intends to claim refund of the same. As and when the refund is granted by the Income tax

Department, the same will be credited to the Profit and Loss Account.

29. The appointment and payment of remuneration to the Managing Director for the period from 26th Feb'2012 to

31st Mar'2017 is subject to the approval of the Central Government.

30. Till last year, the Company was making a provision of 1% on Standard Advances in addition to making provision

for assets over due for more than 90 but less than 180 days and write off of advances overdue for more than

180 days. This year, the method of working has been changed based on the directives of Reserve Bank of India

as mentioned in Accounting Policies [Note No.1(e)]. However there is no impact in the Profit and Loss

Statement on account of such change.

31. The Company has invested in a wholly owned subsidiary, Madura Micro Education Private Limited in which it

holds 100% of the Equity of the subsidiary. The Company has also advanced money to the said Subsidiary

Company. The net worth of the Subsidiary Company as at 31st March 2017 is negative. Though in the opinion

of the Management, the subsidiary is in a nascent stage of its development and having regard to the prospects,

the net worth would become positive, as a measure of abundant caution, provision has been made for the

investment in the Subsidiary and the amount due from the Subsidiary.

6,997,018

39,263,561

6,472,589

68,274,699

37,022,582

909,764

14,900,000

-2,696,909

3,139,509

26,287,666

2,029,913

40,860,254

266,363,272

4,343,719

33,498,317

16,832,597

53,941,451

3,285,528

1,801,061

-

1,479,243

140,000

26,239,874

-

30,836,214

191,087,502

Office Maintenance

Bad Debts written off


Professional Fees


SHG Formation Expenses

Impairment of investment in Subsidiary Company

Provision on assets derecognised

Directors Sitting Fees

Travelling expenses

Corporate Social Responsibility Expenses (See Note No.37 )

Other Expenses

Notes


Notes

32. The Company has given a corporate guarantee in favour of National Skill Development Centre in respect of

the loan granted by them to the subsidiary company, Madura Micro Education Private Limited.

The amount of loan outstanding as on the reporting date is Rs. 20,208,924

NAME OF THE RELATED PARTIES

i) Microcredit Foundation of India

ii) Ms.Tara Thiagarajan - Key Managerial Personnel

iii) Mr.Mohan Eddy - Whole Time Director

iv) Madura Micro Education Private Limited - Subsidiary Company

v) Scimergent Analytics and Education Private Limited

vi) Scisphere Analytics India Private Limited

vii) Midland Rubber and Produce Company Limited

viii) A.V.Thomas and Co. Limited

33. RELATED PARTY TRANSACTIONS

DETAILS OF TRANSACTIONS WITH RELATED PARTIES

Remuneration to Key Managerial Personnel

i) Ms.Tara Thiagarajan

ii) Mr.Mohan Eddy - Whole Time Director

iii) Directors Sitting Fees

iv) Professional fees paid to Scimergent Analytics and Education P Ltd

v) Professional fees paid to Scisphere Analytics India Private Limited

vi) Amount due from Subsidiary Company, Madura Micro

Education Private Limited

vii) Corporate Guarantee given on account of Madura Micro

Education P Ltd

6,488,844

6,000,000

2,885,000

18,945,000

4,157,625

7,412,091

20,208,924

6,000,000

5,000,000

140,000

16,891,130

2,250,000

7,412,091

20,208,924

34. The Company operates only in one segment - viz., financing of self help groups. There are no other

reportable segments as required under Accounting Standard 17.

Currency Nature of

Transaction

USD External Commercial

Borrowing

Foreign

Currency

Indian

Rupees

31.3.2016

The above exposure is hedged fully by a currency swap agreement with the bankers of the Company.

USD 4 million 265,600,000

Foreign

Currency

Indian

Rupees

31.3.2017

265,600,000 USD 4 million

The Company has an unfunded defined benefit gratuity plan.

Details of Defined Benefit - Gratuity Plan

Fair Value of Plan Assets

Present value of unfunded obligation

Less: Unrecognised past service cost

Plan asset/(liability)

Change in the present value of Defined Benefit Gratuity Plan

Opening defined benefit obligation

Interest cost

36. POST EMPLOYMENT BENEFITS

-

7,884,493

-

-7,884,493

5,824,822

-

5,824,822

-

-5,824,822

4,386,618


35. Foreign currency exposures recognised by the company that have been hedged are as under:

Notes

Current Service cost

Actuarial (gains)/losses on obligation

Closing defined benefit obligation

Principal Assumptions used in determining Defined Benefit Gratuity Plan

Discount Rate

Expected rate of return on plan assets

Salary increment rate

Attrition rate

Details of Other Defined Benefit Plan

Leave Encashment

Fair Value of plan assets



Plan asset (liability)

Change in present value of Other Defined Benefit Plan


Interest cost




2,394,286

-334,615

7,884,493

6.80%

Not applicable

10%

22%

-

6,223,075

-

-6,223,075

4,578,199

1,919,301

-274,425

6,223,075

1,556,185

-117,981

5,824,822

7.60%

Not applicable

10%

20%

-

4,578,199

-

-4,578,199

2,589,476

-

2,061,859

-73,136

4,578,199


Discount Rate



Attrition rate

Proportion of leave availment

7.60%

Not applicable

10%

20%

10%

7.60%

Not applicable

10%

20%

10%

37. Provisions and contingencies

Provision is recognised in the Balance Sheet when, the Company has a present obligation as a result of a

past event and it is probable that an outflow of economic benefits will be required to settle the obligation

and a reliable estimate of the amount of the obligation can be made.

i) Provision for Standard Assets

Carrying amount at the beginning of the period

Additional provision made during the period

Amounts used(i.e., incurred and charged against the provision)

Amount of provision at the end of the period

ii) Provision for Non Performing Assets




Unutilised amounts reversed during the period


52,232,084

6,472,589

58,704,673

6,107,590

37,022,582

-

43,130,172

35,399,487

16,832,597

-

52,232,084

2,822,062

3,285,528

-

6,107,590

Notes


Notes


iii) Provision for assets derecognised






2,957,476

-

-

2,696,909

260,567

38 . Earnings In Foreign Exchange Nil

39. Expenditure In Foreign Currency

Nil

1,138,069

13,565,711

1,478,233

1,479,243

-

-

2,957,476

Nil

Nil

1,287,502

17,245,676

40. As required under section 138 of the Companies Act, 2013, the Company has set up a Corporate Social

Responsibility Committee. The Committee has evolved policies for CSR Spending. The Company is required

to spend Rs. 45.39 lakhs on CSR during the year. (Up to 31-3-2016 Rs.51.24 lakhs). During the year, the

Company has spent a sum of Rs.20,29,913/- during the year on projects identified by the Corporate Social

Responsibility Committee.

41. Disclosure pursuant to Notification No.G.S.R.307(E) and 308(E) issued by Ministry of Corporate Affairs:

Details of cash transactions between 8th November 2016 and 30th December 2016

2,032,000

-

136,057,500

-

138,089,500

-

Other

denominations

Total Specified Bank

Notes (SBN)

372,051

674,438,000

-

420,684

672,530,081

1,859,286

2,404,051

674,438,000

136,057,500

420,684

810,619,581

1,859,286

Closing cash in hand as on 8th November 2016

(+) Permitted Receipts

(+) Other Receipts

(-) Permitted Payments

(-) Amount deposited in Banks

Closing cash on hand as on 30th December 2016

Other receipts represents the repayment of loans by members of SHGs, in the form of Specified Bank Notes

in rural and semi urban areas immediately after the announcement of demonetisation for a period of two

to three days after such announcement. In view of the fact that other denomination currency was not

available adequately in rural areas, predominantly serviced by the Company, and in view of there being no

clarity on receipt of SBNs for repayment of loans granted prior to demonetisation the Company accepted

SBNs from Self Help Group members who were KYC compliant. These repayments were made in the

ordinary course of business of the Company and there is no abnormal change in the pattern of repayment

on account of demonetisation. Though the term Permitted Receipt has not been defined in the Notification

issued by the Ministry of Corporate Affairs, but having regard to the spirit and purpose of demonetisation,

the Company has been legally advised that the Company is not prohibited from accepting SBNs towards

repayment of loans by SHG members till 30th December, 2016. Hence the same has been disclosed under

Other receipts.

42. Earnings per Share - Basic and Diluted

Profit after Tax

Weighted average of number of Equity Shares of face value of Rs.10/- each

Earnings per share - Basic

Earnings per share - Diluted

302,126,909

6,129,081

49.29

49.29

191,860,759

5,557,517

34.52

34.52

Travelling Expenses

Professional Charges

Interest and Finance charges

NotesNotes


a) Secured

b) Unsecured

a) Debentures - Secured

b) Debentures - Unsecured

c) Deferred Credits

d) Term Loans

e) Intercorporate Loan and borrowing

f) Commercial Paper

g) Public deposits

h) Other Loans - Overdraft

Amount

Outstanding

(Rs. in lakhs)

Amount

Overdue

(Rs. in lakhs)

Amount

Outstanding

(Rs. in lakhs)

Particulars

43. DETAILS REQUIRED UNDER RESERVE BANK OF INDIA,NBFC DIRECTIONS

S.

No

Amount

Overdue

(Rs. in lakhs)

i) Loans and Advances availed by NBFCs inclusive of interest accrued there on but not paid

7,660.00

5,000.00

Nil

61,427.31

Nil

Nil

Nil

112.00

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

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

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

ii) Break up of 1(g) above (Outstanding public deposits inclusive of interest accrued thereon but not

paid)

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

iii) Break up of Loans and Advances including bills receivable (other than those included in 4 below)

(Net of NPA Provision)

Nil

81,596.33

Nil

Nil

Nil

Nil

iv) Break up of Leased Assets and stock on hire and hypothecation loans counting towards EL/HP

activities

(i) Leased assets including lease rentals under

sundry debtors

a) Financial Lease

b) Operating LeaseNil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

31-3-2017 31-3-2016

Nil

52,233.23

7,660.00

Nil

Nil

39,175.24

Nil

Nil

Nil

102.66

(ii) Stock on hire including hire charges under

sundry debtors

a) Asset on hire Nil Nil Nil Nil

LIABILITIES SIDE

ASSETS SIDE

Notes


Amount

Outstanding

(Rs. in lakhs)

Amount

Overdue

(Rs. in lakhs)

Amount

Outstanding

(Rs. in lakhs)

ParticularsS.

No

Amount

Overdue

(Rs. in lakhs)

31-3-2017 31-3-2016

b) Repossessed assets

(iii) Hypothecation Loans counting towards

EL/HP activities

a) Loans where assets have been repossessed

b) Loans other than (a) above

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

v) Break up of Investments

Current Investments

1. QUOTED

i) Shares: (a) Equity

(b) Preference

ii) Debentures and Bonds

iii) Units of mutual funds

iv) Government securities

v) Others

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

2. UNQUOTED


(b) Preference




v) Others

Nil

Nil

Nil

500.00

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Long Term Investments

1. QUOTED


(b) Preference




v) Others

2. UNQUOTED


(b) Preference




v) Others

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

169.00

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

169.00

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

344.27

Nil

Nil

NotesNotes


vi) Borrower group-wise classificationof all leased assets, stock-on-hireand loans

and advances

CATEGORYAmount net of NPA provisions

Secured Unsecured Total

Amount net of NPA provisions


1. Related Parties

a) Subsidiaries

b) Companies in the same group

c) Other related parties

2. Other than related parties

TOTAL

Nil

Nil

Nil

Nil

Nil

Nil

Nil

81,596.33

81,596.33

-

-

-

81,596.33

81,596.33

vii) Investor group-wise classification of all investments (current and long term in

shares and securities (both quoted and unquoted)

CATEGORY

31-3-2017

1. Related Parties

a) Subsidiaries

b) companies in the same group



TOTAL

Nil

Nil

Nil

Nil

Nil

149.00

Nil

Nil

520.00

669.00

Market Value /

NAV or face Value

Book Value Net

of provisions

31-3-2016

Nil

Nil

Nil

Nil

Nil

Market Value /

NAV or face Value

Book Value Net

of provisions

viii) Other Information




Secured Unsecured Total(i) Gross Non-Performing Assets

(a) Related Parties

(b) Other than related parties

(ii) Net Non-Performing Assets

(a) Related Parties


(iii) Assets acquired in satisfaction

of debts

Nil

Nil

Nil

Nil

Nil

Nil

404.77

Nil

Nil

Nil

Nil

404.77

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

ix) Customer Complaints

a) Number of Complaints pending as the beginning of the year

b) Number of Complaints received during the year

c) Number of Complaints redressed during the year

d) Number of Complaints pending as at the end of the year

x) Details of Registration with Financial Regulators

a) Ministry of Corporate Affairs

b) Reserve Bank of India

c) Microfinance Institutional Network

CIN No.U65929TN2005PLC057390

N.07.00754

20

-

-

-

52,233.23

52,233.23

Nil

Nil

Nil

52,233.23

52,233.23

149.00

Nil

Nil

364.27

513.27

31-3-2017 31-3-2016

Nil

122.15

Nil

61.08

Nil

Nil

122.15

Nil

61.08

Nil

31.3.2017 31.3.2016

Nil

50

50

Nil

Nil

62

62

Nil

31-3-2017 31-3-2016

Nil

Nil

Nil

Nil

Notes

Not applicable

Not applicable

(ICRA) BBB Stable

(CARE) BBB+ Stable

(ICRA) BBB Stable

(ICRA) BBB Stable

(ICRA) BBB Stable

M2

Not applicable

Percentage of NPAs to total

advances in that sector

31-3-2017

45.77%

54.23%

0.00%

12,215,175

40,477,036

12,215,175

40,477,036

6,107,585

3,454,454

12,215,175

-

6,107,590

37,022,582

-

43,130,172

xi) Ratings assigned by Credit Rating Agencies

Commercial Paper

Working Capital Facility (Cash credit/WCDL)

Long Term Bank Facilities


14.84% Non-Convertible Debentures (allotted in May 2015)

14.15% Non-Convertible Debentures (allotted in August 2015)

14.84% Non-Convertible Debentures (allotted in March 2017)

MFI Grading

Perpetual Debt

xii) Concentration of Advances, Exposures and NPAs

xiii) Sector wise NPAs as at the end of the year

a) Agriculture and Allied Activities

b) MSME

xiv) Movement of NPAs

a) Net NPAs to total Advances (%)

b) Movement of NPAs (Gross)

i) Opening Balance

ii) Additions during the year

iii) Reduction during the year

iv) Closing balance

c) Movement of Net NPAs

i) Opening Balance



iv) Closing balance

d) Movement of provision for NPAs excluding standard assets

i) Opening Balance

ii) Provision made during the year

iii) Write off/write back of excess provisions

iv) Closing balance

The Company operates primarily in the business of microfinance providing collateral free loans for fixed

amounts ranging from Rs. 20,000/- to Rs. 58,000/- predominantly to rural and semi urban women. As on

31st March 2017, the Company provided loans to more than 3.23 lakhs women and hence the disclosure

relating to concentration of Advances, Exposures and NPAs are not applicable to the Company.

Not applicable

Not applicable

(ICRA) BBB Stable

Nil

(ICRA) BBB Stable

(ICRA) BBB Stable

Nil

M2

Not applicable

31-3-2016

21.79%

78.21%

0.12%

6,237,185

11,385,271

5,407,281

12,215,175

3,415,123

8,099,743

5,407,281

6,107,585

2,822,062

3,285,528

-

6,107,590

xv) Disclosure relating to Securitisation

The information on securitisation activity of the Company as an originator is furnished below:


NotesNotes


a) Total number of loans securitised or assigned

b) Total book value of loans securitised or assigned

c) Total book value of loans securitised or assigned including

loans placed as collateral

d) Sale consideration received for loans securitised/assigned

e) Excess interest spread recognised in the Statement of Profit

and Loss

f) Credit ehancements provided and outstanding (gross)

i) Interest subordination

- for PTC Series A1

- for PTC Series A2

ii) Principal subordination

- for PTC Series A1

- for PTC Series A2

iii) Cash collateral

Number of SPVs sponsored by the Company for securitisation

during the year

Total amount of securitised assets as per the books of the SPVs

sponsored by the Company as on the date of balance sheet

Total amount of exposure retained by the Company to comply

with minimum retention requirement as at the date of the

balance sheet

a) Off balance sheeet exposures

i) First Loss

ii) Others

b) On balance sheet exposures

i) First Loss

ii) Others

Amount of Exposures to other than MRR

a) Off Balance sheet exposures

i) Exposure to own securitisations

ii) Exposure to third party securitisations


i) Exposure to own securitisation

ii) Exposure to third party securitisation

5,902

260.57

260.57

-

-

9.52%

9.14%

9.00%

7.00%

6.00%

Nil

Nil

Nil

Nil

197.14

Nil

Nil

Nil

Nil

Nil

Nil

xvi) Information on instances of fraud reported during the year

Embezzlement of cash 651,000 Nil

xvii) Information on net interest margin

Average interest

Average effective cost of borrowing

Net interest margin

23.80%

13.85%

9.95%

24.44%

14.68%

9.76%

xviii) Information required by Reserve Bank of India Prudential Norms

1) Capital Adequacy Ratio Items

i) CRAR (%)

ii) CRAR - Tier I Capital (%)

iii) CRAR - Tier II Capital (%)

26.99%

20.46%

6.53%

39,235

2,923.53

2,923.53

3,143.58

-

9.52%

9.14%

9.00%

7.00%

6.00%

1

3,143.58

Nil

Nil

188.62

Nil

Nil

Nil

Nil

Nil

Nil

20.12%

19.15%

0.97%

Notes

iv) Amount of subordinated debt raised as Tier II Capital

(Rs. In Lakhs)

v) Amount raised by issue of Perpetual Debt Instruments

2) Exposure to Real Estate Sector Category

A. DIRECT EXPOSURE

i) Residential Mortgages -

Lending fully secured by mortgages on residential property

that is or will be occupied by the borrower or that is rented;

(Individual housing loans upto Rs.15 lakh may be shown

separately)

ii) Commercial Real Estate -

Lending secured by mortgages on commercial real estates

(office buildings, retail space, multipurpose commercial

premises, multi-family residential buildings, multi- tenanted

commercial premises, industrial or warehouse space,hotels

land acquisition, development and construction, etc.).

Exposure would also include non-fund based (NFB) limits;

iii)Investments in Mortgage Backed Securities (MBS) and other

securitised exposures-

a. Residential

b. Commercial Real Estate.

B. INDIRECT EXPOSURE

Fund based and non-fund based exposures on National

Housing Bank (NHB) and Housing Finance Companies(HFCs)

5,000

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

xix) Details of Financial Assets sold to Securitisation / Reconstruction Company for Asset Reconstruction

The Company has not sold financial assets to securitisation/reconstruction companies for asset

reconstruction in the current and previous year.

xx) Details of Assignment transactions undertaken by NBFCs

The Company has not undertaken assignment transaction in the current and previous year.

xxi) Details of non-performing financial assets purchased / sold

The Company has not purchased/sold non performing financial assets during the current and previous year.

xxii) Details of penalties imposed by RBI and other Regulators

No penalties have been imposed by RBI and other Regulators during the current and previous year.

xxiii) Exposure to Capital Market

The company does not have any exposure to Capital Market

xxiv) Details of Financing of Parent company products

Not Applicable

xxv) Details of Single Borrower Limit (SGL) / Group Borrower Limit (GBL) exceeded by applicable NBFC

The Company has not given any loan exceeding Single Borrower Limit / Group Borrower Limit

xxvi) Provisions and Contingencies

Breakup of "Provisions and Contingencies" shown under

the head Expenditure in Profit and Loss Account

a) Provisions for depreciation on Investment 14,900,000 Nil

31.3.2017 31.3.2016


Notes

b) Provision towards NPA

c) Provision made towards Income Tax

d) Other Provision and Contingencies (with detail)

Impairment of Advance on Subsidiary Company

e) Provision for Standard Assets

37,022,582

198,500,000

-

6,472,589

3,285,528

107,850,000

7,412,091

16,832,597

xxvii) Draw Down from Reserves

The company has not done any Draw down from Reserves

xxviii) Concentration of Deposits (for deposit taking NBFCs)

Not applicable to the Company

xxix) Overseas Assets (for those with Joint Ventures and Subsidiaries abroad)


xxx) Off- Balance Sheet SPVs Sponsored

The company does not have any Off-Balance Sheet SPV

xxxi) Investments

Particulars

(1) Value of Investment (Permanent and Current Investments)

(i) Gross Value of Investment

(a) In India

(b) Outside India

(ii) Provision for Depreciation

(a) In India

(b) Outside India

(iii) Net Value of Investments

(a) In India

(b) Outside India

(2) Movement of Provisions held towards depreciation on Investments

(i) Opening Balance

(ii) Add : Provisions made during the year

(iii) Less: Write-Off / Write-back of excess provisions during the year

(iv) Closing balance

66,900,000

Nil

51,326,865

Nil

14,900,000

Nil

Nil

Nil

52,000,000

Nil

51,326,865

Nil

Nil

14,900,000

Nil

14,900,000

Nil

Nil

Nil

Nil

xxxii) Derivatives

(1) Forward Rate Agreement / Interest Rate Swap

Particulars

(i) The notional principal of swap agreements

(ii) Losses which would be incurred if counter parties failed to fulfil

their obligations under the agreements

(iii) Collateral required by the NBFC upon entering into swaps

(Book Debts)

(iv) Concentration of credit risk arising from the swapping

(v) The fair value of the swap book

265,600,000

20,854,980

66,000,000

-

20,854,980

265,600,000

15,307,948

66,000,000

-

15,307,948

31.3.2017 31.3.2016

The Company has entered into a full currency swap agreement with RBL Bank Ltd to hedge the interest and

currency risk relating to the external commercial borrowing (ECB) of USD 40 lakhs from World Business

Capital. The swap agreement covers the total principal and interest payment due on the ECB at a USD-INR

spot reference rate of 66.40 and interest rate of 12.80% p.a. The principal and interest receipts and

payments are recorded at the actual amount of the INR amount received or paid

Notes


Notes

2) Exchange Traded Interest Rate (IR) Derivatives

The company does not have any Interest Rate (IR) Derivatives

3) Disclosures on Risk Exposure in Derivatives

Qualitative Disclosures

The Company has entered into cross currency and Interest rate swap derivative transaction to hedge the

foreign currency exposure on the principal and interest repayment of dollar denominated borrowings as

required by Master Circular on External Commercial Borrowings and Trade Credits issued by Reserve Bank

of India dated 1st July 2013. The Company does not trade in derivatives. Outstanding derivative contracts

are monitored by the management and any new contracts entered into or modifications to an existing

contract requires approval from Board of Directors. The Company has not adopted Accounting Standard

(AS) 30 and accordingly, has not assessed hedge effectiveness.

Quantitative Disclosures

Derivatives (Notional Principal Amount) For hedging

Marked to Market Position [1]

Asset (+)

Liabilities (-)

Credit Exposure [2]

Unhedged Exposures

265,600,000

300,068,927

(320,923,907)

20,854,980

-

265,600,000

318,102,520

(333,410,467)

15,307,947

-

Currency and Interest rate derivatives

31.3.2017 31.3.2016


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Micro Education


INDEPENDENT AUDITOR’S REPORT

TO THE MEMBERS OF MADURA MICRO EDUCATION PRIVATE

LIMITED

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of MADURA MICRO EDUCATION PRIVATE

LIMITED (“the Company”), which comprise the Balance Sheet as at 31st March 2017 the Statement of Profit and

Loss and the Statement of Cash Flows for the year then ended and a summary of the 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 stated 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 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 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

controls, 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.


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 financial statements are free from material misstatement.


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 a true and fair view in order to design audit procedures that are appropriate in

the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an

adequate internal financial controls system over financial reporting and the operating effectiveness of such

controls. An audit also includes evaluating the appropriateness of the accounting policies used and the

reasonableness of the accounting estimates made by the 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 Standalone financial statements.

Auditors Report


Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid

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 31st March 2017;

b) In the case of the Statement of Profit and Loss of its Profits for the year ended 31st March 2017; and

c) In the case of the Cash Flow Statement, of the Cash Flows for the year then ended.


1. As required by the Companies (Auditor's Report) Order, 2016 (“the Order”), as amended, 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” a

statement on the matters specified in paragraphs 3 and 4 of the Order.

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 purpose of our audit;

b) In our opinion, proper books of account as required by law have been kept by the Company so far as it

appears from our examination of those books;

c) The Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this Report

are in agreement with the books of account.

d) In our opinion, the 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.

e) On the basis of written representations received from the directors as on March 31, 2017 taken on record

by the Board of Directors, none of the directors is disqualified as on March 31, 2017 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 has disclosed the impact of pending litigations on its financial position in its financial

statements – Refer Note 27 to the Standalone financial statements.

(ii) The Company did not have any long-term contracts including derivative contracts for which there were

any material foreseeable losses.

(iii) There were no amounts which were required to be transferred to the Investor Education and

Protection Fund by the Company.

(iv) The Company has provided requisite disclosures in the Standalone Financial Statements as to holding

as well as dealings in Specified Bank Notes during the period from 8th November 2016 to 30th

December 2016 and these are in accordance with the books of accounts maintained by the Company.

Refer Note 41 to the Standalone Financial Statements.

ChennaithDated: 28 April 2017



Auditors Report


Annexure A to the Independent Auditors' Report to the Members of Madura Micro Education Private Limited

(I) a) The Company has maintained proper records showing full particulars including quantitative details and situation

of fixed assets.

b) The Fixed Assets have been physically verified by the Management during the year and no material discrepancies

were noticed on such verification. In our opinion, the periodicity of the verification is reasonable having regard

to the size of the Company and the nature of its assets.

c) The Company does not have any immovable properties.

(ii) The Company does not have any inventories.

(iii) The Company has not granted any loans, secured or unsecured to companies, firms, limited liability partnerships or

other parties covered in the register maintained under section 189 of the Companies Act, 2013.

(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the

provisions of section 185 and 186 of the Companies Act, 2013, with respect to loans availed by it.

(v) The Company has not accepted deposits from the public.

(vi) The Central Government has not prescribed the maintenance of cost records under section 148(1) of the Companies

Act, 2013, for any of the activities of the Company.

(vii) a) According to the information and explanations given to us and on the basis of our examination of the records of

the Company, the amounts deducted/accrued in the books of accounts in respect of undisputed statutory dues

including provident fund, employees state insurance, excise, income tax, sales tax, value added tax, duty of

customs, service tax, cess and other statutory dues have been regularly deposited during the year by the

Company with appropriate authorities. According to the information and explanations given to us, there are no

undisputed amounts payable in respect of provident fund, employees state insurance, income tax, sales tax, value

added tax, duty of customs, excise, service tax, cess and other statutory dues which were in arrears as on 31st

March 2017 for a period of more than six months from the date they became payable.

b) There are no dues of income tax, sales tax, value added tax, duty of customs, excise, service tax, cess or other

statutory dues that have not been deposited on account of any dispute.

(viii) The Company has not defaulted in the repayment of dues to banks, financial institutions or debenture holders.

(ix) The Company has not raised moneys by way of initial public offer or further public offer (including debt

instruments). As per the records of the Company, the term loans availed during the year were applied for the

purposes for which those are raised.

(x) As per the records of the Company and according to the information and explanations given to us, no frauds on the

company by its officers or employees have been noticed or reported during the year.

(xi) According to the information and explanations given to us, the Company has not paid any managerial remuneration

to its Directors requiring approval mandated by the provisions of section 197 read with Schedule V to the

Companies Act, 2013.

(xii) The Company is not a nidhi company.

(xiii) In our opinion, all transactions with related parties are in compliance with section 177 and 188 of the Companies

Act, 2013 and the details have been disclosed in the financial statements as required by the applicable Accounting

Standard.

(xiv) According to the records of the Company, the Company has not made any preferential allotment or private

placement of its shares or fully or partly convertible debentures during the year under review.

Auditors Report


(xv) Based on the audit procedures performed and the information and explanations given to us, the Company

has not entered into any non-cash transactions with the Directors or persons connected with the Directors.

(xvi) In our opinion, the Company is not required to be registered under section 45IA of the Reserve Bank of

India Act, 1934.

ChennaithDated: 28 April 2017



Auditors Report


“Annexure B” to the Independent Auditor's Report of even date on the Standalone Financial Statements of

MADURA MICRO EDUCATION PRIVATE 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 MADURA MICRO EDUCATION PRIVATE

LIMITED (“the Company”) as of 31st March 2017 in conjunction with our audit of the standalone financial statements

of the company for the year ended on that date.


The Company's management is responsible for establishing and maintaining internal financial controls based on the

internal control over financial reporting criteria established by the Company considering the essential components of

internal control stated in the Guidance Note on Audit of Internal Financial Controls over financial reporting issued by

the Institute of Chartered Accountants of India. 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.


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.


controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls

system 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 procedure selected depend on the auditor's

judgment, including the assessment of the risk 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,


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 authorizations of management and directors of the company; and (3) provide

reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the

company’s assets that could have a material effect on the financial statements.

Auditors Report



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, 2017, based on the internal control over financial reporting criteria established by the Company

considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial

Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

ChennaithDate: 28 April 2017




Auditors Report

Significant Accounting Policies 1

Shareholders' Funds

As at31.03.2017

As at31.03.2016


(a) Share Capital






Current Liabilities




10,476,259 21,071,144

Non Current Assets

ASSETS

TOTAL

21,071,144 TOTAL

Note no

2

3

4

5

6

7

8

9

20,208,924

7,412,091

409,676

28,030,691

14,900,000

-22,921,648

-8,021,648

32,396

759,882

269,823

1,062,101

14,900,000

-33,359,740

-18,459,740

20,208,924

7,412,091

569,268

28,190,283

303,001

271,643

171,072

745,716

717,689

7,569,599

258,590

856,124

9,402,002

11,669,142

(a) Fixed Assets

(i) Tangible Assets


(iii) Capital work in progress

(b) Other non current assets

(a) Cash and cash equivalents

(b) Other current assets

Current Assets

10

11

12

13

14

10,905,205

763,937

743,391

4,463,957

-

504,004

5,711,352

4,764,907

4,755,017

9,890

10,476,259

Mohan Eddy

Director

Tara Thiagarajan

DirectorFor S.N.S Associates



thChennai / Date: 28 April 2017

See accompanying Notes to Financial Statements


Balance Sheet


Profit and Loss


As at31.03.2017

As at31.03.2016


II. Other Income

III. Total Revenue

Note no

IV. Expenses:


Finance Cost

Depreciation

Other Expenses

Total Expenses







X. Tax expense


XII. Proift or loss from discontinuing operations before Tax



XV. Profit for the period


(1) Basic

(2) Diluted

See accompanying Notes to Financial Statements


15

16

5,997,000

1,232,726

7,229,726

17

18

9 & 10

19

8,174,938

1,227,393

6,254,518

3,344,734

19,001,583

-11,771,857

-

-11,771,857

-

-11,771,857

-

-11,771,857

-

-

-

-11,771,857

-7.90

-7.90

9,536,850

483,137

10,019,987

9,178,109

1,454,498

7,178,369

2,647,103

20,458,079

-10,438,092

-

-10,438,092

-

-10,438,092

-

-10,438,092

-

-

-

-10,438,092

-7.01

-7.01

Mohan Eddy

Director

Tara Thiagarajan





Cash Flow


Net Profit before tax

Less: Depreciation

Interest expense

Operating Profit before working capital changes

Decrease (Increase) in Other Current Assets

Increase in short term provisions

Decrease (Increase) in Other Current Liabilities

Increase in Long Term Provisions

Increase in other non current assets

Net Cash from Operating Activities

CASH FLOW FROM INVESTING ACTIVITIES

Purcase of fixed assets and intangible assets

(Increase)/Decrease in Capital work in progress

Net Cash from Investing Activities

CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from issue of shares

Increase in Long Term Borrowings

(Decrease)/Increase in Short Term Borrowings

Interest paid

Funds received from Holding Company

Net Cash from Financing Activities

Net Cash generated during the year

Opening Cash and Cash Equivalents

Closing Cash and Cash Equivalents

CASH FLOW FROM OPERATING ACTIVITIES

31.03.2017 31.03.2016Year endedYear ended

-10,438,092

7,178,369

1,213,015

-2,046,708

754,047

-98,751

-488,239

159,592

352,120

-1,367,939

-4,098,429

258,590

-3,839,839

-

-

270,605

-1,213,015

-

-942,410

-6,150,188

10,905,205

4,755,017

-11,771,857

6,254,518

1,218,372

-4,298,967

-623,903

157,656

289,663

409,676

-381,062

-4,446,937

-3,265,608

463,630

-2,801,978

-

-

-61,344

-1,218,372

14,829

-1,264,887

-8,513,802

19,419,007

10,905,205

Mohan Eddy

Director

Tara Thiagarajan





Notes


The accompanying financial statements are prepared on historical cost convention and a)

materially comply with the mandatory accounting standards issued under the Companies Act, 2013

b) Fixed Assets

The Fixed Assets are stated at cost.

The Fixed Assets are depreciated on Straight Line Basis at the following rates:

Assets costing less than Rs.5,000/- are fully depreciated in the year of purchase.


The fees receivable in respect of courses conducted is reckoned on accrual basis on the basis of the

courses conducted during the year. Other income is accounted for on accrual basis.

d) Expenses are accounted for on accrual basis.

e) The provisions of Payment of Gratuity Act are not applicable to the Company. The Company contributes

to Provident Fund and Employees State Insurance which are charged off to revenue as incurred.

2 . SHARE CAPITAL

Authorised

50,00,000 Equity shares of Rs.10/- each

Issued, Subscribed and Paid up

14,90,000 Equity Shares of Rs.10/- each fully paid up

Notes:

1. Reconciliation of the number of shares outstanding at the beginning and end of the year

Number of shares at the beginning of the period

Shares issued during the year

Shares outstanding at the end of the period

2. Details of shares held by a shareholder holding more than 5% of the issued shares

Name of the Shareholder


3. Details of shares held by the holding company

Name of the holding company


4. Details of shares allotted for a consideration other than cash

Educational content on digital media

Computer accessories

Office Equipment

Furniture and fittings

33.33%

33.33%

20.00%

15.00%

50,000,000

14,900,000

1,490,000

-

1,490,000

No. of shares

1,490,000

No. of shares

1,490,000

1,480,000

33.33%

33.33%

20.00%

15.00%

31.03.201631.03.2017

50,000,000

14,900,000

1,490,000

-

1,490,000

No. of shares

1,490,000

No. of shares

1,490,000

1,480,000


NotesNotes


Debit balance in profit and loss statement

Loss for the year

31-3-2016

-11,149,791

-11,771,857

-22,921,648


Borrowings from National Skill Development Corporation

Secured by a charge on the assets acquired out of the loan, project cash flows and

intellectual property of the Company. The Company is also secured by a corporate

guarantee issued by the Holding Company, Madura Micro Finance Limited. The loan is

repayable over a period of eight years with an initial moratorium of 4 years. The loan

carries interest at 6% per annum.

20,208,924

20,208,924

5 . OTHER LONG TERM LIABILITIES


The amount due to the holding company Madura Micro Finance Limited is repayable

after 31.03.2017 and hence the entire amount outstanding is classified under the

other Long term liability.

6 . OTHER LONG TERM PROVISIONS


Provision for Leave encashment

7 . SHORT TERM BORROWINGS

ICICI Bank Adyar

Represents cheques issued in excess of the balance available with the Bank.

7,412,091

7,412,091

187,640

222,036

409,676

32,396

32,396


Sundry Creditors 759,882

759,882


Provision for employees

Provident Fund and ESI Contribution

Other Provisions 107,481

162,342

269,823

31-3-2017

-22,921,648

-10,438,092

-33,359,740

20,208,924

20,208,924

7,412,091

7,412,091

250,791

318,477

569,268

303,001

303,001

271,643

271,643

96,020

75,052

171,072

10. (a) Fixed - Assets - Tangibles

COST BLOCK

Computer Accessories

Office Equipment


As at

31.03.2017

1,228,202

167,459

100,529

1,496,190

Additions

Cost as at

01.04.2016

399,649

-

-

399,649

828,553

167,459

100,529

1,096,541


Notes

DEPRECIATION BLOCK


Office Equipment


NET BLOCK


Office Equipment


COST BLOCK


Other software

DEPRECIATION BLOCK


Other software

NET BLOCK


Other software

11. (a) FIXED ASSETS - Intangibles


Rent Advance

Tax Deducted at Source

Preliminary Expenses (to the extent not written off or adjusted)

617,374

69,740

65,685

752,799

As at

31.03.2017

610,828

97,719

34,844

743,391

As at

31.03.2017

As at

31.03.2017

20,324,923

2,427,631

22,752,554

As at

31.03.2017

As at

31.03.2017

18,021,346

267,251

18,288,597

2,303,577

2,160,380

4,463,957

856,124

375,000

123,124

358,000

334,810

32,612

6,525

373,947

282,564

37,128

59,160

378,852

For the

Year

545,989

130,331

41,369

717,689

As at

01.04.2016

Additions

1,346,340

2,352,440

3,698,780

18,978,583

75,191

19,053,774

For the

Year

As at

31.03.2016

6,575,288

229,134

6,804,422

11,446,058

38,117

11,484,175

7,532,525

37,074

7,569,599

75,000

71,004

358,000

504,004

Upto

01.04.2016

Upto

01.04.2016

Cost as at

01.04.2016

13 . CASH AND CASH EQUIVALENTS

-

-

10,905,205

10,905,205

Balances with banks in current account

Cash in Hand

Deposits with banks

147,875

5,871

4,601,271

4,755,017


Notes

14 . OTHER CURRENT ASSETS

763,937

763,937

Others

15 . REVENUE FROM OPERATIONS

5,997,0005,997,000

Course Fees received

Interest on deposits with Bank

Interest received from others

Misc. Income

Profit on sale of Investment in Mutual Fund

16. OTHER INCOME

1,231,238

1,488

-

-

1,232,726

Salary & Wages


Contribution to Employee state insurance

Contribution to Gratuity

Contribution to Welfare fund

Contribution to Leave Encashment

17 . EMPLOYEE BENEFIT EXPENSES 7,205,489

491,974

66,979

187,640

820

222,036

8,174,938

Interest paid National Skill Development Corporation

Other Interest

Bank Charges

18. FINANCE COST

1,218,372

6,620

2,401

1,227,393

Office Rent

Rates and Taxes

Subscription

Filing Fees

Office Maintenance

Professional Fees

Travelling expenses

Other Expenses

Auditors' Remuneration - For Audit

For others

19 . OTHER EXPENSES

442,839

12,446

145,000

1,932

217,811

966,137

866,781

578,433

65,265

48,090

3,344,734

9,890

9,890

9,536,850 9,536,850

477,311

5,536

290

-

483,137

8,315,064

561,581

120,058

63,151

733

117,522

9,178,109

1,213,015

2,862

238,621

1,454,498

388,200

4,290

-

12,376

170,809

813,744

634,556

557,578

65,550

-

2,647,103

20. The Company has taken up the development of Programmes for Teach 70 Consumer Literacy which is

under Progress. The expenses incurred for this project has been capitalised and shown under Capital

Work in Progress.

21. In view of the loss, provision for taxation is not considered necessary.

22. Though the Company has unabsorbed losses, it has been considered prudent not to recognise any

Deferred Tax Asset.

Notes


Notes

23. Nil Nil Earnings in foreign Exchange

24. Nil Nil Expenditure in foreign currency Professional Fees









Interest cost




Principal Assumptions used in determining

Defined Benefit Gratuity Plan

Discount Rate



Attrition rate


Leave Encashment







Name of the Related Party

Nature of Relationship

Details of transactions during the year

1. Amount due to Holding Company

2. Corporate guarantee given by Holding Company

-

250,791

-

-250,791

187,640

-

63,151

-

250,791

7.60%

Not Applicable

10%

10%

-

318,477

-

-318,477


Holding Company

7,412,091

20,208,924

7,412,091

20,208,924

-

187640

-

-187640

Nil

-

-

-187,640

187,640

7.60%

Not Applicable

10%

10%

-

222,036

-

-222,036

Change in the present value of the Defined benefit Plan


Interest cost




Nil

-

-

-222,036

222,036

222,036

-

117,522

-21,081

318,477


Notes

Details of cash transactions between 8th November 2016 and 30th December 2016

Principal Assumptions used in determining

Defined Benefit Gratuity Plan

Discount Rate



Attrition rate


7.60%

Not applicable

10%

10%

90%

7.60%

Not applicable

10%

10%

90%

-

-

Other

denominations


Notes (SBN)

167

1,254,500

4,088

1,244,500

6,079






167

1,254,500

4,088

1,244,500

6,079

28. Earnings per share

Loss for the period

Number of Shares outstanding at the end of the period

Earnings per share

Signatures to Notes

-11,774,857

1,490,000

-7.90

-10,438,092

1,490,000

-7.01

Mohan Eddy

Director

Tara Thiagarajan





Notes




Micro Finance / Consolidated

INDEPENDENT AUDITOR'S REPORT

TO THE MEMBERS OF MADURA MICRO FINANCE LIMITED

Report on the Consolidated Financial Statements

We have audited the accompanying consolidated financial statements of MADURA MICRO FINANCE LIMITED (“the

Holding Company”) and its subsidiary (collectively referred to as “the Group), which comprise the Consolidated Balance

Sheet as at 31st March, 2017, the Consolidated Statement of Profit and Loss and the Consolidated Cash Flow Statement

for the year then ended, and a summary of the significant accounting policies and other explanatory information

(hereinafter referred to as “the Consolidated Financial Statements”).

Management’s Responsibility for the Consolidated Financial Statements

The Holding Company's Board of Directors is responsible for the matters stated 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

maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets

of the Company and for preventing and detecting 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 controls, 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, which

have been used for the purpose of preparation of the consolidated financial statements by the Directors of the Holding

Company.

Auditor’s 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 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 financial statements are free from material misstatement.


consolidated 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 consolidated

financial statements that give a true and fair view in order to design audit procedures that are appropriate in the

circumstances, but not for the purpose of expressing an opinion on whether the Company has in place and adequate

internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also

includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting

estimates made by the Holding Company’s Board of Directors, as well as evaluating the overall presentation of the

consolidated financial statements.


opinion on the consolidated financial statements.

Basis for Qualified Opinion

As stated in Note No.30 to the Consolidated Financial Statements, the appointment and payment of remuneration to the

Chairperson and Whole-time Director is subject to the approval of the Central Government.

Auditors Report




Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of

the matter described in the Basis for Qualified Opinion paragraph above, the aforesaid 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:

i) In the case of the Consolidated Balance Sheet, of the state of affairs of the Group as at 31st March, 2017;

ii) In the case of the Consolidated Statement of Profit and Loss of its PROFIT of the Group for the year ended on that

date; and

iii) In the case of the Consolidated Cash Flow Statement of the Cash Flows of the Group for the year ended on that

date.


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 of the consolidated financial statements.

b) In our opinion, proper books of account as required by law relating to preparation of the aforesaid consolidated

financial statements have been kept by the Company so far as it 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 maintained for the purpose of

preparation of the 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.

e) On the basis of the written representations received from the Directors of the Holding Company and its Subsidiary as

on 31st March, 2017 taken on record by the Board of Directors, none of the directors of the Group is disqualified as on

31st March, 2017 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 consolidated financial statements disclose the impact of pending litigations in the Financial Statements. Refer

Note No. 27 of the Notes to the Consolidated Financial Statements.

(ii) The Group did not have any long term contracts including derivative contracts for which there were any material

foreseeable losses.

(iii) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and

Protection Fund by the Group.

(iv) The Holding Company and its Subsidiary have provided adequate disclosures in Note No.40 to these Consolidated

Financial Statements as to the holding of Specified Bank Notes on 8th November 2016 and 30th December 2016 as

well as dealings in Specified Bank Notes during the period from 8th November 2016 to 30th December 2016 and

these are in accordance with the books of accounts maintained by the Holding Company and the Subsidiary

Company. Refer Note No.40 to the Consolidated Financial Statements


Auditors Report


“Annexure A” to the Independent Auditor's Report of even date on the Consolidated Financial Statements of

MADURA MICRO FINANCE 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 MADURA MICRO FINANCE LIMITED (“the

Company”) and its Subsidiary Company as of 31st March 2017 in conjunction with our audit of the consolidated

financial statements of the company for the year ended on that date.


The respective Board of Directors of the Holding Company and its Subsidiary are responsible for establishing and

maintaining internal financial controls based on the internal control over financial reporting criteria established by

the Company considering the essential components of internal control stated in the Guidance Note on Audit of

Internal Financial Controls over financial reporting issued by the Institute of Chartered Accountants of India. 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.


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.


controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls

system 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 procedure selected depend on the auditor's

judgment, including the assessment of the risk of material misstatement of the financial statements, whether due to

fraud or error.


opinion on the Company's internal financial controls system 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 authorizations of management and directors of the company; and (3) provide

reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the

company's assets that could have a material effect on the financial statements.

Auditors Report



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 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, 2017, based on the internal control over financial reporting

criteria established by the Company considering the essential components of internal control stated in the

Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of

Chartered Accountants of India.




Auditors Report


Balance Sheet




Shareholders' Funds


(a) Share Capital






Current Liabilities




Non Current Assets

ASSETS

(a) Fixed Assets

(i) Tangible Assets


(iii) Capital Work In Progress

(b) Non current Investments

(c) Deferred Tax Assets (net)

(d) Long Term Loans and Advances

(e) Other non current assets

TOTAL

(a) Current Investments

(b) Cash and cash equivalents

(c) Short term loans and advances

(d) Other current assets

Current Assets

TOTAL

1

As at31.03.2017

As at31.03.2016

9,486,969,168 6,037,852,002

21,684,181

4,739,429

-

2,489,556,243 2,249,387,343

6,997,412,925

9,486,969,168 6,037,852,002

Note no

2

3

4

5

6

3,434,068,141

585,736

57,844,776

3,492,498,653

66,975,210

1,661,163,762

1,728,138,972

55,575,170

980,874,806

1,036,449,976

2,656,120,049

585,736

37,497,930

2,694,203,715

11,502,736

4,148,916,594

105,912,213

4,266,331,543

10,298,572

2,242,934,202

53,965,537

2,307,198,311

7

8

9

10

11

17,307,374

8,523,242

258,590

12

13

14

15

2,000,000

32,290,683

2,411,223,289

17,618,661

2,000,000

26,865,136

2,175,613,000

18,820,001

16

17

18

19

50,000,000

1,107,805,650

5,788,886,449

50,720,826

34,426,865

640,015,264

3,059,925,549

54,096,981

3,788,464,659


Sanin Panicker

Company SecretaryFor S.N.S Associates



Mohan Eddy

Wholetime Director

Tara Thiagarajan

Managing Director

M. Narayanan

President & CFO

Profit and Loss


As at31.03.2017

As at31.03.2016


II. Other Income

III. Total Revenue

Note no


1,174,016,141

20,913,392

1,194,929,533

1,777,923,165

27,046,235

1,804,969,400

22

23

10 & 11

24

270,394,866

746,028,363

34,772,526

-

269,010,376

1,320,206,131

171,840,112

522,611,734

21,031,040

7,412,091

194,432,237

917,327,214

IV. Expenses:


Finance Cost

Depreciation

Provision for impairment of advance to subsidiary

Other Expenses

Total Expenses

484,763,269

-

484,763,269

-

484,763,269

198,500,000

-5,425,547

-

291,688,816

277,602,319

-

277,602,319

-

277,602,319

107,850,000

-10,336,582

-

180,088,901







X. Tax expense

Current tax

Deferred Tax

Income tax relating to earlier years (net)


XII. Proift or loss from discontinuing operations



XV. Profit for the year


(1) Basic

(2) Diluted

-

-

-

291,688,816

43.55

43.55

-

-

-

180,088,901

32.40

32.40


Sanin Panicker




Mohan Eddy

Wholetime Director

Tara Thiagarajan

Managing Director

M. Narayanan

President & CFO

Cash Flow


31.03.2017 31.03.2016Year ended

Profit before tax

Add: Depreciation

Interest Expense relating to Micro Education

Provision made for Advances and NPAs


Provision for impairment of Investment in subsidiary

Provision made for assets derecognised

Less: Dividend from mutual funds

277,602,319

21,031,040

1,218,372

20,118,125

7,412,091

-

1,479,243

328,861,190

16,377,304

484,763,269

34,772,526

1,213,015

43,495,171

-

14,900,000

-2,696,909

576,447,072

8,973,306

Operating profit before changes in operating Assets and Liabilities

Changes in operating assets and liabilities

(Increase)/Decrease in advance to self help groups

(Increase)/decrease in other current assets and loans and advances

(Increase)/Decrease in Term Deposits under Lien

Increase/(Decrease) in current liabilities and other provisions

Tax paid net of provisions

Total Cash flow from operating activities A

567,473,766

-2,964,571,189

3,785,976

36,551,746

-24,681,300

-197,708,481

-2,579,149,482

CASH FROM INVESTING ACTIVITIES

Purchase of fixed assets

Investments made:

In Mutual fund

In Subsidiary Company

Dividend from mutual funds

Total cash flow from investing activities B

312,483,886

-1,697,430,532

-37,693,848

4,188,320

66,777,512

-112,234,258

-1,463,908,920

-35,106,930

-15,573,135

-

8,973,306

-41,706,759

-19,359,925

86,112,570

-1,000

16,377,304

83,128,949

Year ended

CASH FROM FINANCING ACTIVITIES

Proceeds from issue of Shares (including Share Premium)

Long Term Borrowings Taken

Long Term Borrowings Repaid

Short Term Borrowings Repaid/Taken (net)

Interest expense relating to Micro Education

Total Cash from Financing activities C

Total cash generated during the year (A+ B+ C)

Cash and Cash Equivalents at the beginning of the Year

Cash and Cash Equivalents at the end of the year

400,000,180

6,000,000,000

-3,274,792,956

1,204,164

-1,213,015

3,125,198,373

504,342,132

296,641,494

800,983,626

-

3,651,600,000

-2,056,469,319

-61,344

-1,218,372

1,593,850,965

213,070,994

83,570,500

296,641,494


Sanin Panicker




Mohan Eddy

Wholetime Director

Tara Thiagarajan

Managing Director

M. Narayanan

President & CFO

Notes

NOTES TO FINANCIAL STATEMENTS

1) a) Basis of Accounting

The financial statements are prepared under the historical cost convention and comply with the accounting

standards prescribed under the companies Act, 2013.

b) Principles of consolidation

The Consolidated Financial Statements relate to Madura Micro Finance Limited and its subsidiary Madura

Micro Education Private Limited. The Consolidated Financial Statements have been prepared on the

following basis:

I. The Financial statements of the Company and its subsidiary have been prepared on a line by

consolidation by adding together the book values of like items of assets and liabilities, income and

expenses as per the respective financial statements duly certified by the Statutory Auditors of the

respective companies. Intra group balances and intra group transactions have been eliminated.

ii. The Consolidated Financial Statements have been prepared using uniform accounting policies for the like

transactions and other events in similar circumstances and are presented to the extent possible in the

same manner as the Company's individual financial statements.

iii. The Subsidiary company consolidated in the Company's financial statements are as follows:


a) Fixed Assets

The Fixed Assets are stated at cost. Grants received for purchase of the fixed assets are credited to the

value of the Fixed Asset after retaining a nominal value in the Fixed Asset. Depreciation on the balance is

provided on straight line method. The Fixed Assets are depreciated on SLM basis at the following rates:

Computer

Office Equipment

Plant and Machinery

Motor Vehicles

Software


Electrical Fittings


Fixed assets costing less than Rs.5000/- are fully depreciated in the year of capitalisation.

b) Investments

Investments which are long term in nature, are stated at cost with provision wherever necessary for

diminution, other then temporary in the value of the investments. Current Investments are valued at lower

of cost or market value.

Name of the

Subsidiary

Country of

Incorporation

Percentage of

voting powerheld

as on 31.03.2017

Percentage of

voting powerheld

as on 31.03.2016

Madura Micro

Education P LtdIndia 100% 100%

As at

31.03.2017

As at

31.03.2016

33.33%

20.00%

15.00%

20.00%

33.33%

15.00%

20.00%

100.00%

33.33%

20.00%

15.00%

20.00%

33.33%

15.00%

20.00%

100.00%


NotesNotes


i) Interest receivable on loans to Self Help Groups are accounted for on accrual basis at the agreed rate of interest.

ii) In respect of accounts identified as Non Performing Assets, interest income is accounted as per the directions of Reserve Bank of India.

iii) In accordance with Reserve Bank of India Guidelines on Securitisation transactions, gains arising from assignment/securitisation are amortized over the life of the underlying portfolio loans. In case of loss,

the same is recognised in the Statement of Profit and Loss immediately.

iv) Other income and all expenditure is accounted for on accrual basis.

v) Provision for Gratuity and leave encashment has been made on the basis of actuarial valuation on

Projected Unit Credit (PUC) method.

d) Foreign Currency Transactions

i) Initial Recognition

Foreign currency transactions are accounted for at the rate of exchange prevailing on the date of transactions.

ii) Conversion

Foreign currency items are reinstated using the exchange rate prevailing at the reporting date. In respect of

External Commercial Borrowing, the Company has entered into a currency swap agreement as a hedge

against foreign exchange fluctuation . The liability and interest payments are accounted for at the

exchange rate specified in the currency swap agreement.

iii) The exchange difference arising on conversion is charged off to the Profit and Loss Account.

e) Provision for Microfinance and other Loans

Provision on Microfinance and other loans treated as Non-Performing Assets is being made in accordance

with the Prudential Norms issued by Reserve Bank of India. The Company is also creating a provision of

0.72% on all the Standard Advances as against provision of 0.35% stipulated by RBI. In respect of asset

derecognised, provision is made at the rate of 1% of the outstanding amounts of assets derecognised from

the books of the Company as at the balance sheet date. In respect of assets derecognised, provision is

made at the rate of 1% of the outstanding amounts of assets derecognised from the books of the

Company as at the balance sheet date.

f) Defered Tax

Deferred Tax Assets arising from temporary timing differences are recognised to the extent there is a virtual

certainity that the assets can be realised in future.

3. SHARE CAPITAL

Authorised

1,00,00,000 Equity Shares of Rs.10/- each

Issued, Subscribed and Paid up 66,97,521 (previous year 55,57,517) Equity Shares of Rs.10/- each fully paid up

100,000,000 100,000,000

66,975,210 55,575,170

31.03.2017 31.03.2016

SHARES HELD BY A SHAREHOLDER HOLDING MORE THAN 5%

Name of the shareholder

Ms.Tara Thiagarajan

Mr.M.Narayanan

A.V.Thomas and Co. Ltd

No. of shares No. of shares

2,442,199 2,670,200

344,166 340,000

855,002 -


Notes

Midland Rubber & Produce Company Ltd

Mr.Marti Subramaniam

Employees' Welfare Trust

Elevar Unitus Corporation

Reconciliation of the number of shares outstanding at

the beginning and end of the year

Number of Shares outstanding at the beginning of the year

Number of shares issued during the year

Number of Shares outstanding at the end of the year

855,004 -

300,000 300,000

495,667 504,000

865,916 1,207,917

5,557,517 5,557,517

1,140,004 -

6,697,521 5,557,517

The Company has issued only one class of Shares, viz., Equity Shares. Each Equity Share has a face value of

Rs.10/- each and is entitled to one vote. On liquidation each share is entitled to participate in the assets

proportionate to the paid up value of the share.

207,918,753

388,600,140

596,518,893

160,815,000

61,000,000

221,815,000

612,141,053

291,688,816

903,829,869

61,000,000

-

842,829,869

1,661,163,762


Share Premium Account


Add: Received during the year on shares issued

Statutory Reserve


Add: Transfer from Profit and Loss Account

Surplus, Balance in Profit and Loss Account


Add: Profit after tax for the year

Less: Transfer to Statutory Reserve

Adjustment of Minority Interest on subsidiary becoming wholly owned

Total of Reserves and Surplus

207,918,753

207,918,753

122,315,000

38,500,000

160,815,000

470,555,515

180,088,901

650,644,416

38,500,000

3,363

612,141,053

980,874,806


i) Debentures

a) Secured

14.15% Non-convertible Debentures - privately placed Secured by

hypothecation of loans granted to Self Help Groups The maturity

date of the Debentures is 13th September 2020, with 99.99% to be

redeemed on 13th September 2019 and balance on maturity date.

The NCD carries interest at 14.15%

14.84% Non-Convertible Debentures - Privately placedSecured by

exclusive charge on the loans created out of the proceeds of the

Debentures.

The NCD carries interest rate of 14.84% and is redeemable in one

bulletpayment at the end of 36 months from

the date of allotment, viz. on 12-5-2018

366,000,000 366,000,000

400,000,000 400,000,000


NotesNotes

500,000,000 -

b) Unsecured

14.25% Non-Convertible Debentures - Privately placed The

Debentures are unsecured and carry interest of 14.25%. The

Debentures are redeemable on March 29, 2024

ii) Term Loans from Banks and Financial Institutions

Secured

From Banks

Axis Bank

City Union Bank


Dhanalakshmi Bank


South Indian Bank

Canara Bank

Lakshmi Vilas Bank

ING Vysya Bank

Dena Bank

Indian Bank

Andhra Bank

Bank of Baroda

Bank of Maharashtra

RBL Bank Limited



IDFC Bank

Union Bank of India

State Bank of India

Vijaya Bank

From Financial Institutions




Hero Fincorp Limited


MAS Financial services limited

Reliance Capital Limited



IFMR Capital Finance Private Limited

Reliance Home Finance

Tata Capital Financial Services Limited

Habitat Micro Build


L & T Finance


61,111,122

50,244,521

132,292,171

194,990,674

559,722,216

90,909,090

68,571,427

118,888,650

11,111,317

55,000,000

50,752,439

31,689,933

110,000,000

41,134,998

100,000,000

-

-

-

-

-

52,500,000

433,333,333

307,600,000

-

56,978,514

55,565,000

125,416,674

370,680,906

23,333,500

39,999,996

304,641,485

48,115,812

12,500,600

12,658,887

265,600,000

83,333,336

48,847,501

214,285,715

35,473,274

120,830,500

328,027,990

590,476,180

104,545,450

34,285,711

92,574,779

50,000,000

115,000,000

217,417,455

13,508,695

436,666,667

1,934,998

62,500,000

94,443,171

150,000,000

173,809,524

197,272,727

397,786,928

22,500,000

1,354,166,666

180,400,000

99,999,999

99,791,197

-

56,249,998

261,863,420

89,929,172

13,333,332

101,240,809

-

58,860,000

-

265,600,000

33,333,333

74,623,456


All the above loans are secured by a charge on the advances granted to Self Help

Groups from the proceeds of the Loans.

National Skill Development Corporation

Secured by charge on assets acquired outof the loan and the project cash flows

Less: Payable within 12 months disclosed under

other Current Liabilities

The Terms of repayment of the Term Loans are as under

20,208,924

4,703,733,026

2,047,612,977

2,656,120,049

20,208,924

7,428,940,070

3,994,871,929

3,434,068,141

Incofin- RIF

AAV SARL


Mannaveeya Development & Finance Pvt Ltd




Reliance Capital

Reliance Capital

Reliance Capital




AU Financers (India) Ltd

Andhra Bank

Axis Bank

Bank of Baroda

Bank of Baroda

Bank of Maharashtra

Canara Bank

City Union Bank



Dena Bank

Dena Bank

Dhanalakshmi Bank

Dhanalakshmi Bank

Dhanalakshmi Bank

Dhanalakshmi Bank

Dhanalakshmi Bank

Family Credit Limited



IDBI Bank

IDBI Bank

14.84%

14.15%

14.25%

15.00%

14.10%

14.10%

12.00%

13.50%

13.50%

13.00%

12.80%

14.00%

12.50%

12.75%

13.25%

11.65%

12.35%

12.15%

12.80%

12.15%

12.75%

12.35%

12.00%

11.40%

10.50%

13.65%

13.65%

12.75%

12.40%

11.40%

12.85%

14.00%

12.75%

12.30%

11.75%

36

60

84

36

26

26

24

24

24

12

96

36

36

12

36

24

35

35

36

36

36

26

26

36

33

36

36

36

36

36

24

26

26

24

24

Bullet

Bullet

Bullet

Quarterly

Monthly

Monthly

Monthly

Monthly

Monthly

Monthly

Quarterly

Quarterly

Quarterly

bullet

Monthly

Quarterly

Monthly

Monthly

Monthly

Monthly

Monthly

Monthly

Monthly

Quarterly

Quarterly

Monthly

Monthly

Monthly

Monthly

Monthly

Monthly

Monthly

Monthly

Monthly

Monthly

400,000,000

366,000,000

500,000,000

6,666,666

4,166,659

2,083,340

2,083,333

9,555,403

9,555,403

16,970,282

11,066,666

3,333,300

8,333,333

100,000,000

1,515,151

35,714,285

5,000,000

13,333,333

1,934,998

2,857,143

1,678,685

4,166,667

4,166,666

5,000,000

25,000,000

1,666,667

2,223,000

2,800,000

4,170,000

5,600,000

4,166,667

3,098,801

4,742,449

19,047,619

35,714,285

400,000,000

366,000,000

500,000,000

13,333,332

4,166,659

2,083,340

50,000,000

81,354,204

98,347,247

82,161,969

265,600,000

6,600,274

83,328,897

100,000,000

13,508,695

214,285,715

50,000,000

386,666,667

1,934,998

34,285,711

35,473,274

37,502,500

83,328,000

15,000,000

100,000,000

9,999,990

26,648,000

66,400,000

124,980,000

100,000,000

33,333,332

22,466,056

77,325,147

190,476,172

400,000,000

Name of the

Bank

Rate of

interest

Tenor of

Loan

Mode of

Repayment

Instalment Bal. o/s as on

31.03.17

Notes


NotesNotes





IDFC Bank

IDFC Bank

Indian Bank

Indian Bank

Kotak Mahindra Bank

Lakshmi Vilas Bank

Lakshmi Vilas Bank

MUDRA

NABARD

NABARD

NABARD

NABARD

NABARD

NABARD

RBL Bank Limited

RBL Bank Limited

South Indian Bank

South Indian Bank



State Bank of India



Tata Capital Financials Limited

Union Bank of India

Union Bank of India

Vijaya Bank

14.25%

14.25%

13.75%

12.75%

12.75%

12.90%

11.50%

10.40%

13.05%

12.25%

10.25%

10.50%

11.50%

11.50%

11.50%

11.00%

11.00%

12.80%

11.25%

12.80%

12.15%

13.00%

13.00%

12.15%

12.15%

12.15%

12.10%

12.10%

10.25%

12.90%

24

24

24

24

24

36

39

24

36

36

36

36

36

36

60

60

60

24

24

36

36

36

36

35

39

36

24

36

36

36

Monthly

Monthly

Monthly

Monthly

Monthly

Quarterly

Monthly

Monthly

Monthly

Monthly

Monthly

Half yearly

Half yearly

Half yearly

Half yearly

Half yearly

Half yearly

Quarterly

Monthly

Quarterly

Quarterly

Monthly

Monthly

Monthly

Monthly

Monthly

Monthly

Monthly

Monthly

Monthly

6,040,902

5,792,497

4,297,467

7,142,857

4,761,905

4,166,667

5,555,555

2,083,333

2,777,781

2,121,219

10,600,000

16,666,667

25,000,000

33,333,333

37,500,000

75,000,000

60,000,000

6,250,000

2,272,727

9,090,910

4,545,500

1,685,000

1,685,000

16,607,000

2,800,000

4,545,000

4,166,000

5,455,000

7,576,000

2,500,000

24,412,037

36,053,908

40,774,864

92,857,144

80,952,380

17,417,455

200,000,000

50,000,000

41,666,530

50,908,249

180,400,000

49,999,999

100,000,000

166,666,667

212,500,000

425,000,000

400,000,000

12,500,000

50,000,000

54,545,450

50,000,000

34,128,501

40,494,955

397,786,928

94,443,171

150,000,000

58,859,999

147,272,730

50,000,000

22,500,000

Name of the

Bank

Rate of

interest

Tenor of

Loan

Mode of

RepaymentInstalment

6. OTHER LONG TERM LIABILITIES

Flexi Grant

7. OTHER LONG TERM PROVISIONS



Provision for Impairment on investment in subsidiary Company



8. SHORT TERM BORROWINGS

CASH CREDIT FROM BANKS :

Secured

SOUTH INDIAN BANK - CASH CREDIT

6,909,735

4,510,717

14,900,000

7,412,091

24,112,233

57,844,776

51,814

585,736

585,736

5,083,501

3,246,208

-

7,412,091

21,756,130

37,497,930

683,104

585,736

585,736

Bal. o/s as on

31.03.17

Unsecured

CITY UNION BANK - OVERDRAFT

The Cash Credit/OD facility is renewable every year and carries

interest at 12.75% per annum.

ICICI BANK

Represents cheques issued in excess of balance as per books

9,583,072

32,396

10,298,572

The above limit is secured by a charge on the loans granted to Self Help Groups out of the proceeds of the Loan.

The Cash Credit/OD facility is renewable every year and carries interest at 13% per annum.

11,147,921

303,001

11,502,736


Current maturities of Long Term Debt (Refer Note No.4 for Security

and repayment) Sundry Creditors



Provision for Leave Encashment

Provident Fund and ESI contribution

Provision for Bonus

Provision for staff related expenditure

Provision for Assest Derecognised



11. NON CURRENT ASSETS

(a) Fixed Assets - (i) Tangible Assets

COST BLOCK

Computers

Office Equipments

Plant and Machinery

Motor Vehicles


Electrical Fittings


DEPRECIATION BLOCK

Computers

Office Equipments

Plant and Machinery

Motor Vehicles


Electrical Fittings


3,994,871,929

154,044,665

4,148,916,594

1,225,549

2,030,835

3,758,859

6,444,604

14,469,187

260,567

34,592,440

43,130,172

105,912,213

Cost as at

1.4.2016 Additions

28,221,064

11,636,397

1,850,757

4,537,347

5,320,386

1,388,963

-

52,954,914

13,346,099

1,146,607

49,464

-

2,716,555

-

14,408,016

31,666,741

16,482,940

11,189,877

601,022

3,964,126

3,076,332

333,244

-

35,647,541

9,099,251

747,589

255,169

383,365

2,121,386

275,157

14,408,016

27,289,933

Upto

31.03.2016

For the

Year

2,047,612,977

195,321,225

2,242,934,202

928,961

1,554,027

2,792,862

4,317,576

4,831,091

2,957,476

30,475,954

6,107,590

53,965,637

41,567,163

12,783,004

1,900,221

4,537,347

8,036,941

1,388,963

14,408,016

84,621,655

25,582,191

11,937,466

856,191

4,347,491

5,197,718

608,401

14,408,016

62,937,474

As at

31.03.2017

Notes


As at

31.03.2017

NotesNotes

NET BLOCK

Computers

Office Equipments

Plant and Machinery

Motor Vehicles


Electrical Fittings


15,984,972

845,538

1,044,030

189,856

2,839,223

780,562

-

21,684,181

As at

31.03.2017

As at

31.03.2016

11,738,124

446,520

1,249,735

573,221

2,244,054

1,055,719

-

17,307,374

COST BLOCK

Software


Educational Content on digital media

Cost as at

1.4.2016 Additions

As at

31.03.2017

2,352,440

-

1,346,340

3,698,780

13,394,505

9,618,959

20,324,923

43,338,387

DEPRECIATION BLOCK

Software



Upto

31.03.2016

For the

Year

As at

31.03.2017

NET BLOCK

Software



As at

31.03.2017

As at

31.03.2016

906,343

962

6,575,288

7,482,593

10,958,653

9,618,959

18,021,346

38,598,958

2,435,852

-

2,303,577

4,739,429

989,755

962

7,532,525

8,523,242

12. (a) FIXED ASSETS - Intangibles

11,042,065

9,618,959

18,978,583

39,639,607

10,052,310

9,617,997

11,446,058

31,116,365

13. NON CURRENT INVESTMENTS

Trade Investments

In other Companies 200000 Equity Shares of Rs.10/- each in Alpha

Micro Finance Consultants Pvt. Ltd 2,000,000 2,000,000

2,000,000 2,000,000

14. DEFERRED TAX ASSETS (NET)

30,754,700

1,535,983

32,290,683

(I) Deferred Tax Asset

On account of provision made allowable on basis of payment

On Account of depreciation

24,813,995

2,051,141

26,865,136

2,175,613,000

2,175,613,000

15. LONG TERM LOANS AND ADVANCES

2,411,223,289

2,411,223,289

Microfinance Other Loans

Unsecured Considered Good - repayable after 12 months


7,856,550

14,200

358,000

9,389,911

17,618,661

8,280,571

-

358,000

10,181,430

18,820,001

-

50,000,000

8,891

146,373,464

306,822,024

654,601,271

1,107,805,650

5,788,886,449

5,788,886,449

5,748,409,418

40,477,031

-

50,720,826

50,720,826

34,426,865

34,426,865

61,841

55,674,448

343,373,770

240,905,205

640,015,264

3,059,925,549

3,059,925,549

3,047,710,369

12,215,180

-

54,096,981

54,096,981

50,000,000 -


Rent advance

Deposits

Preliminary Expenses

Tax payments pending adjustment (net of provision)

Cash on hand

Bank balances in current account

Bank Balance in earmarked Deposit account under lien to

banks for various credit facilities granted

Other deposits with Bank

17. CURRENT INVESTEMENT

Investment in Units of Mutual Fund - unquoted (Previous year

33770.182 units) of UTI Liquid Fund - Dividend Plan

18. CASH AND CASH EQUIVALENTS

Microfinance and other loans repayable within 12 months -

Unsecured - Considered good

Considered Good

Considered Doubtful (representing Non-Performing assets as

per RBI's provisioning norms)

19. SHORT TERM LOANS AND ADVANCES

Advances recoverable in cash or in kind or for value to be

received - Unsecured Considered good

Due by others

20. OTHER CURRENT ASSETS

Investment in Units of Mutual Fund - unquoted18,779.023 units

(Previous year NIL) of UTI Liquid Fund - Growth Plan

Interest on loans

Own Portfolio

Securitised Portfolio

Processing and other charges

Bad debts recovered

Interest from Banks

Course fees received

21. REVENUE FROM OPERATIONS

1,629,278,379

17,577,060

76,479,433

15,322,400

29,729,043

9,536,850

1,777,923,165

1,060,237,549

12,483,577

55,232,616

9,946,716

30,118,683

5,997,000

1,174,016,141

Notes


Notes

Dividend received

Others

Interest on bank deposits

22. OTHER INCOME

16,377,304

3,304,850

1,231,238

20,913,392

Salaries and wages

Honororium paid


Contribution to Employees State Insurance

Contribution to Labour Welfare fund



Staff welfare Expenses

23. EMPLOYEE BENEFIT EXPENSES

133,254,844

17,742,784

11,399,760

2,860,323

19,284

2,283,895

1,743,825

2,535,397

171,840,112

Interest on cash credit

Processing Charges

Interest on Non Convertible Debentures

Interest on Term Loans

Other Interest

Upfront fee for ECB from WBC

Bank charges

24. FINANCE COST

93,944

10,186,440

85,571,926

410,384,185

78,679

11,077,837

5,218,723

522,611,734

Office Rent

Rates and Taxes

Subscription

Electricity charges

Filing Fees

Insurance

Auditors' Remuneration

For Audit

For Certification and other services

Vehicle Maintenance

Office Maintenance

Bad Debts written off


Professional Fees


SHG Formation Expenses

Impairment of investment in Subsidiary Company

Provision on assets derecognised

Directors Sitting Fees

Travelling expenses

Corporate Social Responsibility Expenses (See Note No.37 )

Other Expenses

25 . OTHER EXPENSES

15,005,492

37,636

145,000

1,831,889

60,152

764,106

765,265

446,453

349,077

4,561,530

33,498,317

16,832,597

54,907,588

3,285,528

1,801,061

-

1,479,243

140,000

27,106,655

-

31,414,648

194,432,237

8,973,306

17,595,618

477,311

27,046,235

219,416,606

19,934,966

18,099,297

4,425,537

23,729

2,036,823

2,457,437

4,000,471

270,394,866

285,042

31,221,000

126,757,088

584,758,981

69,300

-

2,936,952

746,028,363

17,193,896

57,818

-

2,853,172

332,419

1,272,329

1,009,500

342,000

303,358

7,167,827

39,263,561

6,472,589

69,088,443

37,022,582

909,764

14,900,000

-2,696,909

3,139,509

26,922,222

2,029,913

41,426,383

269,010,376

Notes


Notes

26. The Company is registered with Reserve Bank of India as a Non Banking Finance Company under the

category of NBFC - MFI.

27. CONTINGENT LIABILITIES

a) Income tax demand disputed in appeal not provided for 2,742,160 NIL

28. The penalty of Rs.71,01,923/- levied by the Assessing Officer, which was deleted by the Commissioner of Income Tax

(Appeals) has been restored by the Income Tax Appellate Tribunal. Against the order of Income Tax Appellate

Tribunal, the Company has filed an appeal before the High Court of Judicature’at Madras. The appeal filed by the

Company has been admitted and the Honble High Court has granted interim stay. Based on professional advice, no

provision is considered necessary for the penalty. The Company had filed an appeal before the Income Tax Appellate

Tribunal against the order of the Commissioner of Income Tax (Appeals) confirming the addition and the appeal has

been admitted after condonation of the delay in filing and the addition made by the Assessing Officer and confirmed

by the Commissioner of Income Tax (Appeals), has been deleted. In view of the decision of the Hon'ble ITAT. Chennai,

provision for the income tax and penalty is not considered necessary.

Apart from the above, there are no other pending litigations by/against the Company which might have a material

impact on the financial statements.

29. During the year, the Company has paid an additional amount of Rs.173.04 lakhs towards Advance Tax for the

assessment year 2017-18. The same has been included in the provision made for Current Tax. Based on legal advice,

the Company intends to claim refund of the same. As and when the refund is granted by the Income Tax

Department, the same will be credited to the Profit and Loss Account.

30. The appointment and payment of remuneration to the Managing Director for the period from 26th Feb'2012 to 31st

Mar'2017 is suject to the approval of the Central Government.

31. Till last year, the Company was making a provision of 1% on Standard Advances in addition to making provision for

assets over due for more than 90 but less than 180 days and write off of advances overdue for more than 180 days.

This year, the method of working has been changed based on the directives of Reserve Bank of India as mentioned

in Accounting Policies [Note No.1(e)]. However there is no impact in the Profit and Loss Statement on account of

such change.

NAME OF THE RELATED PARTIES

i) Microcredit Foundation of India

ii) Ms.Tara Thiagarajan - Key Managerial Personnel

iii) Mr.Mohan Eddy - Whole Time Director

v) Scimergent Analytics and Education Private Limited

vi) Scisphere Analytics India Private Limited

vii) Midland Rubber and Produce Company Limited

viii) A.V.Thomas and Co. Limited


DETAILS OF TRANSACTIONS WITH RELATED PARTIES

Remuneration to Key Managerial Personnel

I) Ms.Tara Thiagarajan

ii) Mr.Mohan Eddy - Whole Time Director

iii) Directors Sitting Fees

iv) Professional fees paid Scimergent Analytics and Education P Ltd

v) Professional fees paid Scisphere Analytics India Private Limited

6,000,000

5,000,000

140,000

16,891,130

2,250,000

6,488,844

6,000,000

2,885,000

18,945,000

4,157,625

33. The Group operates in two primary segments, viz., micro financing - lending to Self Help Groups and Micro

Education. These are the reportable segments and the information is furnished below


Notes

31.3.2017

1,777,917,629

484,763,269

27,046,235

484,763,269

193,074,453

291,688,816

9,509,281,261

7,766,242,287

35,365,521

34,772,526

-

31.3.2017

9,536,850

-10,438,092

10,476,259

28,935,999

4,098,429

7,178,369

-

31.3.2016

1,168,019,141

269,879,985

6,039,092,950

4,979,721,325

16,557,948

14,776,522

-

Mirco Financing Mirco Education Total

31.3.2017 31.3.2016 31.3.2016

1,768,380,779

495,201,362

5,997,000

-13,004,583

1,174,016,141

256,875,402

20,913,392

277,602,319

97,513,418

180,088,901

9,498,805,002

7,737,306,288

31,267,092

27,594,157

-

21,071,144

21,680,701

3,265,608

6,254,618

-

6,060,164,094

5,001,402,026

19,823,556

21,031,140

-

Segment Revenue

External Sales/Income

Segment Result

Other Income

Profit before tax

Income tax

Profit after tax

Other Information

Segment Assets

Segment Liabilities

Capital Expenditure during

the year

Depreciation

Other non cash expenses

Currency Nature of Transaction

USD

External

Commercial Borrowing

Foreign

Currency

Indian

Rupees

31.3.2016

USD 4 million 265,600,000

Foreign

Currency

Indian

Rupees

31.3.2017

265,600,000 USD 4 million









Interest cost





Discount Rate



Attrition rate


Leave Encashment






-

6,012,462

-

-6,012,462

4,386,618

1,743,825

-117,981

6,012,462

7.60%

Not applicable

10%

20%

-

4,800,235

-

-4,800,235

-

8,135,284

-

-8,135,284

6,012,462

2,457,437

-334,615

8,135,284

6.80%

Not applicable

10%

22%

-

6,541,552

-

-6,541,552

The above exposure is hedged fully by a Currency Swap Agreement with the Bankers of the Company.

34. Foreign Currency exposures recognised by the Company that have been hedged are as under:


Notes

Nil

Change in present value of Other Defined Benefit Plan


Interest cost





Discount Rate



Attrition rate


2,592,430

-

2,283,895

-73,136

4,803,189

7.60%

Not applicable

10%

20%

10%

4,803,189

-

2,036,823

-274,425

6,565,587

7.60%

Not applicable

10%

20%

10%

i) Provision for Standard Assets



Amounts used (i.e., incurred and charged against the provision)


ii) Provision for Non Performing Assets






iii) Provision for assets derecognised






36 . PROVISIONS AND CONTINGENCIES

Provision is recognised in the Balance Sheet when, the Company has a present obligation as a result of a

past event and it is probable that an outflow of economic benefits will be required to settle the obligation

and a reliable estimate of the amount of the obligation can be made.

35,399,487

16,832,597

-

52,232,084

2,822,062

3,285,528

-

-

6,107,590

1,478,233

-

-

1,479,243

2,957,476

37 . Earnings in Foreign Exchange

38. Expenditure in Foreign Currency

Travelling Expenses

Professional Charges

Interest and Finance charges

Nil

1,287,502

17,245,676

39. As required under Section 138 of the Companies Act, 2013, the Company has set up a Corporate Social

Responsibility Committee. The Committee has evolved policies for CSR spending. The Company is required to

spend Rs. 45.39 lakhs on CSR during the year. (Up to 31-3-2016 Rs.51.24 lakhs). during the year, the Company has

spent a sum of Rs.20,29,913/- during the year on projects identified by the Corporate Social Responsibility

Committee.

52,232,084

6,472,589

-

58,704,673

6,107,590

37,022,582

-

-

43,130,172

2,957,476

-

-

2,696,909

260,567

Nil

Nil

1,138,069

13,565,711


Details of cash transactions between 8th November 2016 and 30th December 2016.


NotesNotes


2,032,000

-

136,057,500

-

138,089,500

-

Other

denominations


Notes (SBN)

372,218

675,692,500

-

424,772

673,774,581

1,865,365

2,404,218

675,692,500

136,057,500

424,772

811,864,081

1,865,365



(+) Other Receipts




Other receipts represents the repayment of loans by members of SHGs, including Specified Bank Notes in rural and semi

urban areas immediately after the announcement of demonetisation for a period of two to three days after such

announcement. In view of the fact that other denomination currency was not available adequately in rural areas,

predominantly serviced by the Company, and in view of there being no clarity on receipt of SBNs for repayment of loans

granted prior to demonetisation the Company accepted SBNs from Self Help Group members who were KYC compliant.

These repayments were made in the ordinary course of business of the Company and there is no abnormal change in the

pattern of repayment on account of demonetisation. Though the term Permitted Receipt has not been defined in the

Notification issued by the Ministry of Corporate Affairs, but having regard to the spirit and purpose of demonetisation, the

Company has been legally advised that the Company is not prohibited from accepting SBNs towards repayment of loans by

SHG members till 30th December, 2016. Hence the same has been disclosed under Other receipts.

41. Earnings per Share - Basic and Diluted

Profit after Tax

Weighted average of number of Equity Shares of face value of Rs.10/- each

Earnings per share - Basic

Earnings per share - Diluted

291,688,816

6,697,521

43.55

43.55

180,088,901

5,557,517

32.40

32.40

a) Debentures - Secured

b) Debentures - Unsecured

c) Deferred Credits

d) Term Loans

e) Intercorporate Loan and borrowing

f) Commercial Paper

g) Public deposits

h) Other Loans - Overdraft

Amount

Outstanding

(Rs. in lakhs)

Amount

Overdue

(Rs. in lakhs)

Amount

Outstanding

(Rs. in lakhs)

Particulars

42. Details Required Under Reserve Bank Of India, NBFC Directions

Sl.

No

Amount

Overdue

(Rs. in lakhs)

I) Loans and Advances availed byNBFCs inclusive of

interest accruedthereon but not paid Nil

7,660.00

5,000.00

Nil

61,629.40

Nil

Nil

Nil

115.03

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

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

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

ii) Break up of 1(g) above (Outstanding public deposits

inclusive of interest accrued thereon but not paid)

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

31-3-2017 31-3-2016

Nil

7,660.00

Nil

Nil

39,175.24

Nil

Nil

Nil

102.66

LIABILITIES SIDE

Notes


(i) Leased assets including lease rentals under sundry

debtors

a) Financial Lease

b) Operating LeaseNil

Nil

Nil

Nil

Nil

Nil

(ii) Stock on hire including hire charges under sundry

debtors

a) Asset on hire Nil Nil Nil

a) Secured

b) Unsecured

Nil

82,001.10

Nil

Nil

Nil

52,355.39

iii) Break up of Loans and Advances including bills

receivable (other than those included in 4 below)

(Net of NPA Provision)

ASSETS SIDE

iv) Break up of Leased Assets and stock on hire and

hypothecation loans counting towards EL/HP

activities

b) Repossessed assets

(iii) Hypothecation Loans counting towards EL/HP

activities

a) Loans where assets have been repossessed

b) Loans other than (a) above

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

v) Break up of Investments

Current Investments

1. QUOTED


(b) Preference




v) Others

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

2. UNQUOTED


(b) Preference




v) Others

Nil

Nil

Nil

500.00

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Long Term Investments

1. QUOTED


(b) Preference

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

344.27

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Notes





v) Others

2. UNQUOTED


(b) Preference




v) Others

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

20.00

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

20.00

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

vi) Borrower group-wise classification of all leased assets, stock-on-hire and loans and advances

CATEGORYAmount net of NPA provisions




1. Related Parties

a) Subsidiaries




TOTAL

Nil

Nil

Nil

-

Nil

Nil

Nil

82,001.10

82,001.10

Nil

Nil

Nil

82,001.10

82,001.10

Nil

Nil

Nil

-

vii) Investor group-wise classification of all investments (current and long term in shares and securities

(both quoted and unquoted)

CATEGORY

31-3-2017

1. Related Parties

a) Subsidiaries




TOTAL

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

520.00

520.00

Market Value /

NAV or face Value

Book Value Net of

provisions

31-3-2016

Nil

Nil

Nil

Nil

Nil

Market Value /

NAV or face Value

Book Value Net

of provisions

viii) Other InformationAmount net of NPA provisions



Secured Unsecured Total(i) Gross Non-Performing Assets

(a) Related Parties


(ii) Net Non-Performing Assets

(a) Related Parties


(iii) Assets acquired in satisfaction

of debts

Nil

Nil

Nil

Nil

Nil

Nil

404.77

Nil

202.39

Nil

Nil

404.77

Nil

202.39

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

52,355.39

52,355.39

Nil

Nil

Nil

52,355.39

52,355.39

Nil

Nil

Nil

364.27

364.27

31-3-2017 31-3-2016

Nil

122.15

Nil

61.08

Nil

Nil

122.15

Nil

61.08

Nil

Notes

ix) Customer Complaints

a) Number of Complaints pending as the beginning of the year

b) Number of Complaints received during the year

c) Number of Complaints redressed during the year

d) Number of Complaints pending as at the end of the year

x) Details of Registration with Financial Regulators

a) Ministry of Corporate Affairs

b) Reserve Bank of India

c) Microfinance Institutional Network

CIN No.U65929TN2005PLC057390

N.07.00754

20

31.3.2017 31.3.2016

Nil

50

50

Nil

Nil

62

62

Nil

Not applicable

Not applicable

(ICRA) BBB Stable

(CARE) BBB+ Stable

(ICRA) BBB Stable

(ICRA) BBB Stable

(ICRA) BBB Stable

M2

Not applicable

Percentage of NPAs to total

advances in that sector

31-3-2017

45.77%

54.23%

0.00%

12,215,175

40,477,036

12,215,175

40,477,036

6,107,585

3,454,454

12,215,175

-

xi) Ratings assigned by Credit Rating Agencies

Commercial Paper

Working Capital Facility (Cash credit/WCDL)



14.84% Non-Convertible Debentures (allotted in May 2015)

14.15% Non-Convertible Debentures (allotted in August 2015)

14.84% Non-Convertible Debentures (allotted in March 2017)

MFI Grading

Perpetual Debt

xii) Concentration of Advances, Exposures and NPAs

xiii) Sector wise NPAs as at the end of the year

a) Agriculture and Allied Activities

b) MSME

xiv) Movement of NPAs

a) Net NPAs to total Advances (%)

b) Movement of NPAs (Gross)

i) Opening Balance



iv) Closing balance

c) Movement of Net NPAs

i) Opening Balance



iv) Closing balance

The Company operates primarily in the business of microfinance providing collateral free loans for fixed

amounts ranging from Rs. 20,000/- to Rs. 58,000/-predominantly to rural and semi urban women. As on

31st March 2017, the Company provided loans to more than 3.23 lakhs women and hence the disclosure

relating to concentration of Advances, Exposures and NPAs are not applicable to the Company.

Not applicable

Not applicable

(ICRA) BBB Stable

Nil

(ICRA) BBB Stable

(ICRA) BBB Stable

Nil

M2

Not applicable

31-3-2016

21.79%

78.21%

0.12%

6,237,185

11,385,271

5,407,281

12,215,175

3,415,123

8,099,743

5,407,281

6,107,585


Notes

xv) Disclosure relating to Securitisation

The information on securitisation activity of the Company as an originator is furnished below:

6,107,590

37,022,582

-

43,130,172

d) Movement of provision for NPAs excluding standard assets

i) Opening Balance

ii) Provision made during the year

iii) Write off/write back of excess provisions

iv) Closing balance

2,822,062

3,285,528

-

6,107,590

a) Total number of loans securitised or assigned

b) Total book value of loans securitised or assigned

c) Total book value of loans securitised or assigned including loans placed as

collateral

d) Sale consideration received for loans securitised/assigned

e) Excess interest spread recognised in the Statement of Profit and Loss

f) Credit enhancements provided and outstanding (gross)

i) Interest subordination

- for PTC Series A1

- for PTC Series A2

ii) Principal subordination

- for PTC Series A1

- for PTC Series A2

iii) Cash collateral

Number of SPVs sponsored by the Company for securitisation during the year

Total amount of securitised assets as per the books of the SPVs sponsored by the

Company as on the date of balance sheet

Total amount of exposure retained by the Company to comply with minimum

retention requirement as at the date of the balance sheet

a) Off balance sheeet exposures

i) First Loss

ii) Others


i) First Loss

ii) Others

Amount of Exposures to other than MRR

a) Off Balance sheet exposures

i) Exposure to own securitisations

ii) Exposure to third party securitisations


i) Exposure to own securitisation

ii) Exposure to third party securitisation

5,902

260.57

260.57

-

-

9.52%

9.14%

9.00%

7.00%

6.00%

Nil

Nil

Nil

Nil

197.14

Nil

Nil

Nil

Nil

Nil

Nil

39,235

2,923.53

2,923.53

3,143.58

-

9.52%

9.14%

9.00%

7.00%

6.00%

1

3,143.58

Nil

Nil

188.62

Nil

Nil

Nil

Nil

Nil

Nil

xvi) Information on instances of Fraud reported during the year

Embezzlement of Cash 651,000 Nil


Notes

xvii) Information on net interest margin

Average interest

Average effective cost of borrowing

Net interest margin

23.80%

13.85%

9.95%

24.44%

14.68%

9.76%

xviii) Information required by Reserve Bank of India Prudential Norms

1) Capital Adequacy Ratio Items

i) CRAR (%)

ii) CRAR - Tier I Capital (%)

iii) CRAR - Tier II Capital (%)

26.99%

20.46%

6.53%

20.12%

19.15%

0.97%

iv) Amount of subordinated debt raised as Tier II Capital (Rs. In Lakhs)

v) Amount raised by issue of Perpetual Debt Instruments

2) Exposure to Real Estate Sector Category

A. DIRECT EXPOSURE

i) Residential Mortgages -

Lending fully secured by mortgages on residential property that is or will

be occupied by the borrower or that is rented; (Individual housing loans

up to Rs.15 lakh may be shown separately)

ii) Commercial Real Estate -

Lending secured by mortgages on commercial real estates (office

buildings, retail space, multipurpose commercial premises, multi-family

residential buildings, multi-tenanted commercial premises, industrial or

warehouse space, hotels land acquisition, development and construction,

etc.). Exposure would also include non-fund based (NFB) limits;

iii) Investments in Mortgage Backed Securities (MBS) and other

securitised exposures-

a. Residential

b. Commercial Real Estate.

B. INDIRECT EXPOSURE

Fund based and non-fund based exposures on National Housing Bank (NHB)

and Housing Finance Companies (HFCs)

5,000

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

xix) Details of Financial Assets sold to Securitisation / ReconstructionCompany for Asset Reconstruction

The Company has not sold financial assets to securitisation/reconstruction companies for asset

reconstruction in the current and previous year.

xx) Details of Assignment transactions undertaken by NBFCs

The Company has not undertaken assignment transaction in the current and previous year.

xxi) Details of non-performing financial assets purchased / sold

The Company has not purchased/sold non performing financial assets during the current and previous year.

xxii) Details of penalties imposed by RBI and other Regulators

No penalties have been imposed by RBI and other Regulators during the current and previous year.

xxiii) Exposure to Capital Market

The company does not have any exposure to Capital Market

xxiv) Details of Financing of Parent company products

Not Applicable


Notes

xxv) Details of Single Borrower Limit (SGL) / Group Borrower Limit (GBL) exceeded by applicable NBFC

The Company has not given any loan exceeding Single Borrower Limit / Group Borrower Limit

xxvi) Provisions and Contingencies

Breakup of "Provisions and Contingencies" shown under the head

Expenditure in Profit and Loss Account

a) Provisions for depreciation on Investment 14,900,000 Nil

31.3.2017 31.3.2016

b) Provision towards NPA

c) Provision made towards Income Tax

d) Other Provision and Contingencies (with detail)

Impairment of Advance to Subsidiary Company

e) Provision for Standard Assets

37,022,582

198,500,000

-

6,472,589

3,285,528

107,850,000

7,412,091

16,832,597

xxvii) Draw Down from Reserves

The company has not done any Draw down from Reserves

xxviii) Concentration of Deposits (for deposit taking NBFCs)


xxix) Overseas Assets (for those with Joint Ventures and Subsidiaries abroad)


xxx) Off- Balance Sheet SPVs Sponsored

The company does not have any Off-Balance Sheet SPV

xxxi) Investments

Particulars

(1) Value of Investment (Permanent and Current Investments)

(i) Gross Value of Investment

(a) In India (see Note below)

(b) Outside India

(ii) Provision for Depreciation

(a) In India

(b) Outside India

(iii) Net Value of Investments

(a) In India

(b) Outside India

(2) Movement of Provisions held towards depreciation on Investments

(i) Opening Balance

(ii) Add : Provisions made during the year (see Note below)

(iii) Less: Write-Off / Write-back of excess provisions during the year

(iv) Closing balance

52,000,000

Nil

36,426,865

Nil

Nil

Nil

Nil

Nil

52,000,000

Nil

36,426,865

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

xxxii) Derivatives

31.3.2017 31.3.2016

At the time of consolidation, the Investment is netted off against the Capital of Subsidiary in the Books. The

provision made for Impairment is not considered in the above.

(1) Forward Rate Agreement / Interest Rate Swap

Particulars

(i) The notional principal of swap agreements

(ii) Losses which would be incurred if counter parties failed

to fulfil their obligations under the agreements

(iii) Collateral required by the NBFC upon entering into

swaps (Book Debts)

265,600,000

20,854,980

66,000,000

265,600,000

15,307,948

66,000,000


The Company has entered into a full currency swap agreement with RBL Bank Ltd to hedge the interest

and currency risk relating to the external commercial borrowing (ECB) of USD 40 lakhs from World

Business Capital. The swap agreement covers the total principal and interest payment due on the ECB at

a USD-INR spot reference rate of 66.40 and interest rate of 12.80% p.a. The principal and interest receipts

and payments are recorded at the actual amount of the INR amount received or paid.

(iv) Concentration of credit risk arising from the swapping

(v) The fair value of the swap book

-

20,854,980

-

15,307,948

2) Exchange Traded Interest Rate (IR) Derivatives

The company does not have any Interest Rate (IR) Derivatives

3) Disclosures on Risk Exposure in Derivatives

Qualitative Disclosures

The Company has entered into cross currency and Interest rate swap derivative transaction to hedge

the foreign currency exposure on the principal and interest repayment of dollar denominated

borrowings as required by Master Circular on External Commercial Borrowings and Trade Credits

issued by Reserve Bank of India dated 1st July 2013. The Company does not trade in derivatives.

Outstanding derivative contracts are monitored by the management and any new contracts entered

into or modifications to an existing contract requires approval from Board of Directors. The Company

has not adopted Accounting Standard (AS) 30 and accordingly, has not assessed hedge effectiveness.

Quantitative Disclosures

Derivatives (Notional Principal Amount) For hedging

Marked to Market Position [1]

Asset (+)

Liabilities (-)

Credit Exposure [2]

Unhedged Exposures

265,600,000

300,068,927

(320,923,907)

20,854,980

-

265,600,000

318,102,520

(333,410,467)

15,307,947

-

Currency and Interest rate derivatives

31.3.2017 31.3.2016

Notes


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6 m

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it

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1

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4.6

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(83

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9)

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90

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(91

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12

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(8.8

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5.3

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1,6

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(7

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)

94

7.5

8

(9

99

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) - -

9.3

3

(8.5

6)

5

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5.0

3

(2

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5.9

8) - -

37

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(1

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6.3

1)

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(9

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)

85

0.7

0

(9

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) - -

9.3

3

(8.5

6)

5,1

72

.78

(2

,89

3.4

4) - -

1

64

.90

(13

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1)

6

,00

1.8

0

(3,0

53

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5

,89

3.5

8

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45

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2

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5.6

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15

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) - -

18

2.6

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(

54

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2.4

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5

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8.2

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5

6.0

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9.8

8

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81

9.3

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(

74

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71

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1

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7,6

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7,6

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1,6

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1

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Madura Micro Finance Ltd, # 36, 2nd Main Road, Kasturba Nagar Adyar,

Chennai 600 020.

www.maduramicrofinance.com

www.maduramicroeducation.com

www.teach70.com

Ph: +91 44 4205 4369

Fax: +91 44 2441 3841

Date post:	24-Apr-2018
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