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VISION
Empowering communities by providing financial services and livelihood
opportunities.
MISSION
Empower 1,00,000 families through our Financial Services and Livelihood
opportunities.
OUR VALUES
|Integrity |Credibility |Excellence |Fairness |Enterprising
| Stewardship| Transparency |
BUSINESS MODEL
Shikhar is engaged in urban & rural micro finance lending activities
through Joint Liability Group (JLG) model with a vision and focus to provide
a range of financial products and services covering credit and insurance to
economically backward families living in slums, unauthorized colonies and
urban & rural villages across its area of operations.
ANNUAL REPORT 2015-16
Table of Contents
History of Establishment 1
Profile- Board of Directors 4
Message from CEO 6
Management Discussion and Analysis Report 7
Directors Report 13
Annexure 19
Operations at glance 27
Independent Auditors Report 29
Financial Statement 33
Note forming part of Financial Statement 37
Stories of Transformation 56
Page | 1
HISTORY OF
ESTABLISHMENT
Shikhar came into existence to extend financial services to protect livelihood and provide greater
economic stability to the unprivileged sections of our society which is vulnerable to decline in income as
well as the household crises that impacts them on regular basis. In achieving the vision of the
organization, Shikhar intends to offer microfinance services, strengthen the safety net, and contribute to
overall socio-economic development of the society.
Shikhar Development Foundation (SDF) got registered in September 2007 as a Trust, under the Indian
Trust Act 1882. Subsequently, the board of SDF in November 2008, decided to acquire a NBFC to
undertake microfinance operations. Accordingly Anup Leasing Private Limited (ALPL), a non-deposit
taking NBFC, incorporated on February 16, 1993 was acquired by Partners of Shikhar Trust (POST), (a
for-profit trust formed by promoters of Shikhar) and Dia Vikas Capital Pvt. Ltd. in March 2009. ALPL,
after acquisition was later renamed to Shikhar Microfinance Private Limited (Shikhar) after obtaining due
approvals from RBI and RoC in 2010. The microfinance operations been undertaken by SDF were
gradually transferred to SMPL.
Further, Shikhar got re-categorized into NBFC-MFI with effect from November 12, 2013.
PROMOTERS
Partners of Shikhar Trust
The private mutual benefit trust was registered to act as a Special Purpose Vehicle formed to
promote Shikhr Microfinance (P) Ltd.
Mr. Satyavir Chakrapani
A management graduate from the Entrepreneurship Development Institute of India (EDII), Mr. Chakrapani is the Managing Director & CEO of SMPL.
Mr. Vinoy Thomas
A B.tech and MBA in systems and finance, Mr.
Thomas holds more than 14 years of experience
with development financial institutions. He is the whole time Director
and CFO of SMPL.
Page | 2
CORPORATE
INFORMATION
Registered Office A-112, 1st Floor, Behind ICICI, Palam Extension,
Sector- 7, Dwarka, New Delhi- 110077
CIN Number U74899DL1993PTC052165
RBI Reg. No. B- 14.02362
Board of Directors
Mr. N. R. Rayalu, Chairman
Mr. Satyavir Chakrapani, MD & CEO
Mr. Anil Vidyarthi, Independent Director
Dr. Shantanu Dutta, Nominee Director
Mr. Javed Ahmad Siddiqui, Nominee Director
Mr. Saurabh Baroi, Nominee Director
Mr. Thomas Vinoy Thomas, Director & CFO
Auditor M/s Suri & Sudhir
Chartered Accountant,
Chief Finance Officer Mr. Thomas Vinoy Thomas
Company Secretary/ Compliance
Officer Mr. Ravi Shankar Kumar
Registrar and Transfer Agent M/s Big Share Services Ltd.
Page | 3
FUNDING PARTNERS
Page | 4
PROFILE: BOARD OF DIRECTORS
N R RAYALU Chairman Retired Deputy Comptroller and Auditor General of India Mr. Rayalu has been Former Chief Executive Officer of the National Pension System Trust and Former Joint Secretary and Financial Advisor in the Ministry of Finance. He also acts as Government nominee director on board of Syndicate Bank. Currently he is the delegate from Asia to ILO
ANIL VIDYARTHI Independent Director
He is currently Chairman of Investment Committee of Green India Venture
Fund and Director on Board of IFCI Venture Capital Ltd. He is Ex-GM, SIDBI
and CEO of India SME Technology Services Ltd. He has over 41 years of experience in private and public sector organizations.
SATYAVIR CHAKRAPANI Managing Director & CEO
He initiated the idea of founding Shikhar in 2007. Has varied experience
of more than 17 years in development sector and microfinance
initiatives. He has earlier worked with World Vision India and Shramik
Bharti. He holds degree in PG Dip. (NGO Mgmt.), LL.B, Licentiate for
Teaching (PG Prog.)and M.A. (Hist.).
He has been consultant with various e-governance projects and ICT initiatives during his career
with One World South Asia, Emmanuel Hospital Association and other developmental agencies.
Has been part of various task forces on policy & guidelines’ review. Has to his credit various
publications on developmental & community issues
He is on Board of various international and national developmental institutions like Opportunity
International Network, Delhi House Society (destitute home – Sewa Ashram), Aspire Prakashan
(Forward Press Magazine). He has been recipient of the NABARD scholarship during the
postgraduate program.
DR. SHANTANU DUTTA,
Nominee Director, Partners of Shikhar Trust
He is presently working as National Director – Advocacy, International
Justice Mission working in the area of trafficking and bonded labour. He is
Ex-Indian Air Force Medical Officer with rich experience in community
health and development. Has also served many development organizations in different strategic capacities over a period of two decades.
Page | 5
JAVED AHMAD SIDDIQUI Nominee Director, SIDBI Currently serving in SIDBI as Deputy General Manager, Mr. Javed has
worked in various departments of SIDBI since 1995. He has handled
business development, HR, Administration and headed the Okhla Branch, Ludhiana Branch and is currently designated at New Delhi branch.
SAURABH BAROI Nominee Director, Dia Vikas Capital Pvt. Ltd. He has expertise in various areas of MFI including assessment, ratings, due
diligence, planning and forecasting, capacity building needs assessment,
mentoring of MFIs, baseline and impact studies for microfinance projects. He
is currently serving as DGM, Dia Vikas Capital (Subsidiary of Opportunity
International Australia). He has been manager-Microfinance in ACCESS
Development Services and CARE India, CASHE Project in Bhopal and
Partnership coordinator for the CASHE Project in Kolkata.
VINOY THOMAS,
Director & Chief Finance Officer
He has been part of Shikhar’s founding team and is part of all
strategic initiatives of the institution. At Shikhar he has led the
finance function, primarily been responsible for setting up systems
and fund raising, overseeing IT & MIS and responsible for almost all
functions. Currently he is overseeing the operations in Shikhar. He
has overall working experience of more than 13 years.
His earlier roles and responsibilities include working with development financial institutions in the
areas of infrastructure consulting, advisory, financial modelling and analysis. He has also headed the
Tourism, Urban and Social sector portfolio in his assignment with IDFC’s advisory firm, Uttaranchal
Infrastructure Development Co. Ltd. (U-DeC). He has undertaken liaisoning with various technical
partners, state governments, state departments and agencies, local bodies helpful in efficient project
development. He has also been actively involved in the new projects, capacity enhancement projects in his stint with Hindustan Zinc Ltd. consequent to its takeover by Sterlite Industries Ltd.
Page | 6
MESSAGE FROM MD & CEO
Dear Stakeholders,
On behalf of the board, I take the opportunity in presenting the annual report of Shikhar Microfinance Pvt.
Ltd. At the outset of this new growth trajectory that Shikhar has embarked upon, I offer deep gratitude
and praise towards The Lord for ushering in strength and guiding us throughout the journey. I also
extend deep gratitude towards the learned members on the Board, people who were and are part of the
institution providing contribution through their various skill sets, organizations who have provided
assistance in various forms to make Shikhar grow to where it has reached today.
Holding true to its vision of empowering communities by providing financial services and livelihood
opportunities, Shikhar has been serving economically and financially excluded families with major focus
on urban and peri-urban families. The year 2015-16 has been a year of new endeavours’ for
Shikhar. Since its inception in 2007, the year 2015-16 can truly be regarded as a year of new
breakthroughs with gross loan portfolio crossing Rs. 50 cr. and client base of more than 40,000 mark.
Unlike in the past, when Shikhar was primarily funded by financial institutions, we have now been able to
source funds from top public sector banks which include Bank of Baroda, Corporation Bank, State Bank of
India, State Bank of Bikaner & Jaipur and Union Bank thereby bringing down the overall cost of raising
funds and has opened new avenues of funding from other sources.
With a robust outlook of the Reserve Bank of India, the industry on the whole is sure to witness a new era
of expansion. With emphasis on technology in microfinance operations, Shikhar too has set itself on the
process of procuring a new software that would provide us with increased efficiency of operations and
facilitate the tracking of financial and social performance on real time basis.
Introduction of concurrent audit and risk mitigation team has further strengthened the internal control
system. The major highlight of the year has been the introduction of disbursement to clients directly into
their bank accounts and Shikhar has been the first and the only MFI in India to achieve this long dreamt
milestone. These new systems and processes are sure to provide long term impact in the organization’s
growth in years to come.
Continuing the current pace of the growth, Shikhar plans to further expand its operations in Rajasthan
along with the current locations. With a projected portfolio of Rs. 90 crores by the end of the current
financial year, a broader range of cost efficient products and services would be made available to our
customers that would impact the lives of our clients and their families.
I am confident that under the able guidance and support of the Board and the stakeholders, Shikhar will
stand true to its stated objective and commitment towards transforming the lives of the poor and
disadvantaged in India.
Page | 7
MANAGEMENT DISCUSSION & ANALYSIS
MACRO-ECONOMIC BACKGROUND:
The Indian economy has weathered many challenges successfully in recent times. In the recent past, the
economy has faced headwinds on growth, inflation and current deficit fronts.
An increasing awareness about microfinance, need for timely financial support and aspiration for better
life present an opportunity for the sectors to attract more number of beneficiaries.
We firmly believe the improving economic profile, growing entrepreneurial drive as well as an increasing
penetration in our target market of economically weaker sections will be the underlying drivers for
realization of the latent demand for financial services from the aspiring and emerging economically active
customers in urban, semi-urban and rural areas.
The government initiatives on payment banks and small banks licences will give the sector a good run for
the money, while at the same time it opens opportunities for big players to aspire for universal banking
licence. Although many new players are coming into the sector only those with some serious social
objectives are making it big at the highest level. The encouragement from the Government and the
regulators to help financial services to reach the unbanked areas also comes as a catalysing factor. As the
players are getting bigger in size, there is widespread recognition of the growing role of technology,
digital media, e-commerce and similar internet-led platforms in the sector. Digital platforms for financial
transactions and marketing initiatives will be a game changer as the MFIs would be able to reach out to
potential customers across the country at low costs and in a hassle-free manner.
MICRO FINANCE INDUSTRY BACKGROUND:
In FY16, the MFI Industry witnessed a remarkable growth of 84% (as against 61% in FY15) resulting in a
Gross Loan Portfolio (GLP) of Rs. 53, 233 Cr. with over 3 Cr. Customers. The industry also had a significant
increase of 55% in funding to MFIs (as against 49% in FY14) pointing to high levels of concentration in
the sector amongst lenders and investors - which is further corroborated by strong policy and legislative
initiatives within the Financial Inclusion Space. Annual loan amount disbursed reached to Rs. 61,864 Cr.
representing increase of 65% compared to FY 2014-15 whereas total number of loan disbursed by MFIs
grew to 3.47 Cr, increase of 36% compared with FY 2014-15.
The coverage of MFIs is now geographically well dispersed with Gross Loan Portfolio in South is 35%,
east is 15%, north is 25% and west is 25%. In total, MFIs now cover 30 states / union territories. The top
five states, viz. West Bengal, Tamil Nadu, Karnataka, Maharashtra and Uttar Pradesh. The productivity
ratios for MFIs continued to move upwards. The GLP per loan officer and GLP per branch increased by
51% and 33% respectively, over FY 2014-15.
OPERATIONAL PERFORMANCE
The operations of the company are spread across 22 districts in 4 states, namely, Delhi, Uttar Pradesh,
Haryana and Uttarakhand. During the current financial year, operations have also been initiated in
Rajasthan. New branch has been opened in Jaipur and with the close of FY 2016-17 total of 30 branches
are expected to be in operation. Our loan portfolio has crossed Rs. 50 cr. in the month of March 2016.
Since inception, we have so far disbursed loans to more than 120,000 borrowers as on date with a
cumulative loan disbursement of Rs. 130 Cr. Shikhar has made a steady and sustained progress growing
to 22 Branches in 4 States and a Gross Loan Portfolio of Rs. 51.80 Cr. and active clients of more than
Page | 8
41000. Shikhar has put in place the necessary processes and systems to support the company’s growth in
a scalable and sustainable manner, which is also been continuously strengthened.
During the year, we have successfully implemented the cashless disbursement, direct disbursement in the
bank account of beneficiaries. This has been implemented across all 23 current branches.
The year 2015-16, proved to be a successful year for the company, as reflected in 72% growth in
disbursement and 72% growth in the portfolio over the previous year. Shikhar ended the financial on a
very positive note with outstanding gross loan portfolio of Rs. 51.80 Cr. against Rs. 29.86 Cr. in the
previous financial year i.e. growth of 72% YoY. Profit after tax has increased from Rs. 11.74 lakh to Rs.
27.31 lakh. The Company believes in prudent management of operating cost as a percentage of GLP. The
Operating Expense Ratio was at 14.47% for FY15 which has been reduced to 12% in FY16. Company
endeavours to reduce the same to below 10% during FY17.
During the fiscal year, the company saw an upgrade in its Grading to MFI 3+ and was assigned a Rating of
BB+ for bank borrowing by CARE Ratings.
OPERATIONAL HIGHLIGHTS
Indicator 14-Mar 15-Mar 16-Mar
Districts 16 22 22
Branches 22 22 22
States 4 4 4
Members 28100 31001 40927
Groups 5226 5844 8266
Borrowers at the end of the period 28100 31001 40927
Women clients to total clients (%) 91.26% 89.47% 94.16%
Loan Officers
68
Total Staff 125 116 156
Loan disbursed during the period (Rs. Crore) 34.94 35.62 60.88
Loan Outstanding - Total portfolio (Rs. Crore) 28.79 30.11 51.80
RESOURCE MOBILIZATION
We have continued to keep the sources of funding diversified during the year and raised more than Rs. 69
cr. from Banks and Financial Institutions by way of term loans. The key highlight of funding during the
year was term loans from 5 PSU Banks amounting to Rs. 21.80 cr.
Indicator 14-Mar 15-Mar 16-Mar
Debt funding partners (Nos.) Banks 2 2 7
NBFCs 4 4 4
Investors 2 2 2
Debt Fund Raised (Rs. Cr.) Banks 3.00 6.50 23.30
Page | 9
NBFCs 12.00 14.00 36.25
Investors 6.00 6.00 9.50
FUTURE OUTLOOK
Shikhar believes in enhancing the overall financial well-being of its customers and is working on a plan to
significantly graduate its customer base to provide better services by introducing new loan products. In
FY 2015-16, Shikhar planned to reach at gross portfolio of Rs. 45 cr. and the same has been achieved by
March with portfolio outstanding of Rs. 51.80 cr.
By 2017, Shikhar plans to reach Rs. 90 cr. portfolio with 70000 borrowers through 30 branches and by
2021 the aim is to reach at a portfolio of Rs. 600 cr. with 350000 borrowers through 70 branches.
REGULATORY COMPLIANCE:
The company is categorized as a systemically important non-deposit taking NBFC-MFI and has complied
with all applicable regulations of Reserve Bank of India. The Board of Directors hereby confirm that the
company did not accept any public deposits during the year and did not hold public deposits outstanding
at the end of the year. The company does not intend to accept deposits. The company is in compliance
with RBI notifications.
RISK MANAGEMENT AND MITIGATION
Company is following healthy Risk Management practices in its operational processes and procedures. An
inclusive Risk Management strategy is implemented thereby staff at all levels are associated in identifying
and managing risks.
Being a microfinance company, Shikhar is exposed to specific risks that are particular to its business and
the environment within which it operates, including interest rate volatility, economic cycle, credit risk
and market risk. Shikhar has laid down stringent credit norms through the Lending Policy Framework
approved by the Board.
The repayment rate is around 98.9% representing the robust quality of credit assessment and customer
service processes. Shikhar follows the conservative approach to manage the credit risk. Our credit risk is
contained through various credit assessment initiatives; the salient ones being credit policies focusing on
occupation, income levels and history of credit behaviour, mandatory credit bureau checks on all our
loans. To mitigate geographical concentration risk, we have expanded our operations to Rajasthan.
State 16- Mar 15-Mar 14-Mar
No of
Clients
GLP (in Cr.) No of
Client
GLP (in
Cr.)
No of
Client
GLP (in
Cr.)
Delhi 11721 15.41 10,050 9.79 10,133 9.71
Uttar Pradesh 20400 25.43 13,776 5.13 11,357 11.85
Haryana 5765 7.04 5,101 1.54 4,517 4.60
Uttarakhand 3041 3.52 2,074 13.40 2,093 2.63
Page | 10
GRIEVANCE REDRESSAL MECHANISM
During FY 15-16, Company has further strengthened its Grievance Redressal Mechanism for the
customers and staff members. A separate department has been established along with the separate staff
to coordinate resolution of the customer’s grievances. In line with the Supreme Court Judgement, a
system for prevention and dealing with sexual harassment of women employees is also implemented in
the company. The grievances, compliances and deficiency in services of customers & staff are addressed
at various tiers of management. A grievance redressal forum for staff is functioning under the HR
department. Dedicated telephone and mobile number are made operational for registering complaints/
suggestions. The Grievances Redressal Mechanism is headed by Senior Management functionary at the
Head Office.
HR POLICY
Shikhar has an HR Policy in place that specifically mentions employee benefits as well as rights related to
their wages, working conditions, safety at work, non-discrimination etc. The details are clearly mentioned
in the employee contract so that they can have complete knowledge about his/her rights and privileges
and also about the duties they are expected to perform. As 15% of the staff comprises of women, there is
a committee to specifically look into the cases of abuse against women workers, if any. Due care is taken
to ensure that there is fair and justified treatment to all the women and they are not discriminated on the
basis of gender. A Sexual Harassment Committee has been set up, for women to put further their
complaints and seek justice. Also, two wheeler loans are allocated to staff to support their mobility
especially in difficult terrains. Staff satisfaction survey & exit interviews are conducted to help the
management fix any issues with regard to staff dissatisfaction. Company has appointed Head Internal
Audit as Grievance Redressal Officer (Nodal Officer) of the company.
MEASURING SOCIAL IMPACT
The mission of Shikhar is driven by creating opportunities to the excluded class through financial and
allied services in the urban, semi-urban and rural parts of India. The aim is to help the poor to win over
poverty that keeps them in a perpetual state of backwardness. The organization has set its own social
target for its branch network. Shikhar follows an end-to-end process to keep track of the social goals.
Hence a set of key social indicators have been developed to measure the achievement of these goals over
a period of time.
PROGRESS OUT OF POVERTY INDEX (PPI)
In order to track the poverty status of our clients, Shikhar use Progress out of Poverty Index (PPI). We
validate the data collected through random checks conducted by Internal Audit Team and Branch Staff.
The service quality is verified through telephone interviews and household visits. The social data is
collected through the client profile forms. The client profile forms capture indicators related to socio-
economic transformation and access to financial and non-financial services. Going forward, since the data
analysis is not supported by current software, company is moving to new software to capture real time
data and analysing client information and evaluate against social goal set for the company which will be
reviewed regularly by the management and Board of Directors. The software implementation will
complete in the current financial year.
TRAINING OF STAFF
The branch staffs are trained on client protection policy compliances. The staffs are equipped to adopt a
problem solving approach and to extend support for the growth and development of the clients. During
training through simulation exercises, staff are trained in order to help in arriving at decision in
conflicting situation to manage portfolio without compromising on client protection principles and code
Page | 11
of conduct. They are regularly sensitised on matters of client protection principles, grievance redressal
mechanism, client relationship management, client data privacy etc.
CLIENT PROTECTION POLICY
Shikhar has client protection policies as a part of its Operational Manual that provides guidelines to the
staff and management to ensure that the products and services are in accordance with the client
protection principles. Entire staff is trained on the CPP and HR policies such as policies on fraud and
termination. It clearly mentions about punishment in case of irresponsible behaviour with clients, which
includes verbal and physical abuse, if any, that the staff may resort to in case of default.
CODE OF CONDUCT
A Code of Conduct is in place, which has been developed in line with the mandate set by the RBI. Each
staff is expected to sign and accept the CoC. Violation of the same can result in termination of the job.
CLIENT EDUCATION
Client education is given due emphasis as all the clients are given adequate information about the product
features prior to selling so that the client can make informed choice with regard to the purchase. They are
provided with educational materials, which are self-explanatory and illiteracy friendly.
AUDIT AND CONTROLS
The Company has well defined audit systems covering operational and financial aspect in place. Company
has well established Internal Audit Department, which support and helps the Management in identifying
risk and exercising adequate control over all the activities at the Branch level.
A Concurrent and Risk Mitigation (CARM) team has been put in place which is part of internal audit team.
CARM team has a whole new set of revised audit processes which includes surprise audits. Concurrent
audit is also undertaken instead of quarterly audit and grading is provided on various identified
benchmarks.
Audit observations are resolved through appropriate action plan or after receiving satisfactory
explanations. The Internal Audit Department submits reports to the Audit Committee of the Board on the
important audit observations at the branches. The audit observations have helped the Management to
streamline the branches and increase the efficiency, wherever required.
NEW INITIATIVES
Cash disbursement at branches has been eliminated. Disbursement is made into client’s individual bank
account. For this tie-ups for bulk disbursement have been done with Bank of Baroda and DCB Bank. This
has reduced cash handling risk and cost at field level.
Also collections obtained from clients are been deposited by our staff on the same day into nearby deposit
collection machines currently with Yes Bank. This has been an important step in reducing cash carrying
cost and risk.
Company is focused on looking at newer and innovative cash collecting solutions to drastically reduce
cash associated risk, costs and productivity leakages. In this regards, pilots interventions are proposed
with payment solutions vendors like, Vodafone M-Pesa Oxigen etc.
During the current financial year, company has got sanction from SIDBI for the technology fund to
implement the Craft Silicon’s BR.Net, a proven industry benchmarked solution. Further the company is in
Page | 12
process to migrate its loan management system into Craft Silicon’s BR.Net, which will help the company
track the entire loan lifecycle.
Further, the company is planning to integrated this system with the Credit Bureau such that credit
decisions are automated based on prescribed parameters and available within minutes.
By order of the Board
For Shikhar Microfinance Pvt. Ltd
Date: 09.08.2016 Sd/- Sd/-
Place: New Delhi (N. R. Rayalu) (Satyavir Chakrapani)
Chairman MD & CEO
Page | 13
DIRECTORS’ REPORT
To
The Members
Shikhar Microfinance Pvt. Ltd.
Your Directors have pleasure in submitting their Eighth Annual Report of the Company together with the
Audited Statements of Accounts for the year ended 31st March, 2016.
1. OVERVIEW
The Company was originally incorporated as Anup Leasing Private Limited on February 16, 1993 under the Companies Act, 1956 and renamed as Shikhar Microfinance Pvt. Ltd. as on March 25, 2009 after acquisition of ALPL. The Company was granted NBFC–Microfinance Institution ("NBFC–MFI") status by the RBI on November 12, 2013.
2. FINANCIAL RESULTS
The Company’s financial performance for the year under review along with previous year’s figures is
given hereunder:
Particulars For the year ended
31st March, 2016 (in Lakh)
For the year ended
31st March, 2015 (in Lakh)
Income 924.26 788.22
Other Income 64.19 36.91
Total Income 988.44 825.14
Less: Expenses 940.13 807.11
Profit/ (Loss) before Tax 48.88 18.03
Less: Provision for Tax 21.57 6.09
Profit after Tax 27.31 11.94
Share Capital 969.31 969.31
Debt (in Cr) 63.51 26.87
3. OPERATIONAL REVIEW
Shikhar has experienced different milestones as it continues to grow over the years, and at this stage
Shikhar is poised to move into diverse areas. While Shikhar sets high targets for itself, the strategy would
be to diversify the portfolio from urban to rural, to exploring new geographies, new products and new
partnerships. Operations in Uttar Pradesh have been expanded with two new branches in “Sadabad” and
“Kamlanagar” in districts of Hathras and Agra respectively Also, operations have been initiated in
“Rajasthan” with a new branch “Vidhyadharnagar” in Jaipur. Also five more branches are proposed to be
opened in coming months in Rajasthan and Uttar Pradesh.
Following is the brief highlight of the operations:
• Outstanding loan portfolio has increased from Rs. 29.86 Cr. to Rs. 51.80 Cr.
• Revenue from operations has increased from Rs. 7.88 Cr. to Rs. 9.24 Cr.
Page | 14
• Income from FDR and Other income have increased from Rs. 37.12 lakh to Rs. 64.17 lakh.
• Profit after tax has increased from Rs. 11.74 lakh to Rs. 27.31 lakh.
Particulars FY 2015-16 FY 2014-15 FY 2013-14 FY 2012-13
Areas of
operation
NCR, Delhi,
Haryana,
Uttar Pradesh &
Uttarakhand
NCR, Delhi,
Haryana,
Uttar Pradesh &
Uttarakhand
NCR, Delhi,
Haryana, Uttar
Pradesh &
Uttarakhand
NCR, Delhi,
Haryana & Uttar
Pradesh
Districts 21 21 19 13
Number of
Branches
22 22 22 14
Loan outstanding
(Rs. Lakhs)
5180.29 2986.11 2879.06 1760.37
Active borrowers 40927 30640 28100 17544
Total staff 156 116 125 79
PAR > 30 days 1.68% 2.49% 1.41% 1.41%
OSS 102.5% 101.5% 102% 114.43%
4. SHIFTING OF REGISTERED OFFICE
The Board, vide board resolution dated April 29th, 2016 passed a board resolution, approving the
shifting of the Registered Office (due to deteriorating maintenance conditions) within the local limits
from A-113, 2nd Floor, Sector-7, Dwarka, New Delhi-110077 to A-112, 1st Floor, Sector-7, Dwarka, New
Delhi-110077. The board had confirmed the shifting of the Registered Office. Further compliances
regarding shifting have been compiled with, timely.
5. SOURCES/ APPLICATION OF FUNDS
During the F.Y. 15-16 company raised Rs. 69.05 Cr. by way of debt out of which Rs. 21.80 Cr. was raised
from public sector banks, Rs. 1.50 Cr. from private sector banks and Rs. 45.75 Cr. from Financial
Institutions/NBFCs.
The details of the fund raised during the year under review are as under;
Sl.
No.
Partner/ Funder (Banks/FIs) Funds received during
FY 15-16 (Rs. Cr)
1. Union Bank of India 4.90
2. State Bank Of India 4.90
3. State Bank Of Bikaner & Jaipur 3.00
4. Corporation Bank 5.00
5. Bank Of Baroda 4.00
6. DCB Bank 1.50
7. SIDBI 4.50
8. MUDRA 2.00
Page | 15
9. MAS Financial Services Ltd. 14.50
10. Ananya Finance for Inclusive Growth 2.50
11. Maanveeya Development & Finance Pvt. Ltd. 6.00
12. Reliance Capital Limited 7.50
13. Dia Vikas Capital Pvt. Ltd. 8.75
TOTAL 69.05
6. REVISION OF FINANCIAL STATEMENT
There was no revision in the financial statements for the year under review.
7. CHANGE IN ACCOUNTING POLICY
There have been no material changes and commitments during the financial year of the Company but
company has changed its method of recognizing processing fees which is given on borrowed loans. The
same are now amortized over the period of loans, whereas earlier it was treated as expenses at the time
of sanction. This change will result in more appropriate presentation and recognition of the expense
incurred for which the economic benefits will be derived in the future years as well. Accordingly, the
impact of change in Accounting Policy has led to recognition of prior period income and creation of
unamortized processing cost. The same has been duly disclosed in the financial statement.
8. PARTICULARS OF MATERIAL ORDERS
During the year under review, neither any Regulator nor any Court or Tribunal has passed any significant
and material order impacting the going concern status and the Company’s operations in future.
9. NUMBER OF MEETINGS OF THE BOARD
A total of four Meetings of Board of Directors was held during the year under the review. As per Section
173 of the Companies Act, 2013, the Company has held at-least one Board Meeting in every three months.
The details of the Board Meeting held during the year under review are as under;
Sl. No. Date of Board Meeting Board Strength No. of Directors Present
1. June 24, 2015 7 5
2. July 16, 2015 7 7
3. November 6, 2015 7 7
4. March 3, 2016 7 7
10. DIRECTORS’ RESPONSIBILITY STATEMENT;
In pursuance of section 134(5) of the Companies Act, 2013, the Director’s hereby confirm that:
i. In the preparation of the Annual Accounts, the applicable accounting standards have been
followed along with proper explanation relating to material departures;
ii. The Directors 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
Page | 16
state of affairs of the Company at the end of the financial year 2015-16 and of the profit of the
Company for that period;
iii. The Directors have taken proper and sufficient care for the maintenance of adequate accounting
records in accordance with the provisions of the Companies Act, 1956 and Companies Act, 2013,
for safeguarding the assets of the Corporation and for preventing and detecting fraud and other
irregularities; and
iv. The Directors have prepared the annual accounts on a going concern basis.
v. The Directors had devised proper systems to ensure compliance with the provisions of all
applicable laws and such other system were adequate.
11. EXPLANATIONS OR COMMENTS BY THE BOARD ON EVERY QUALIFICATION, RESERVATION OR
ADVERSE REMARK OR DISCLAIMER MADE;
The reports of the Statutory Auditor for the year ended 31st March, 2016 are free from any
qualification, reservation or adverse remark by the auditor. The audit reports along with detailed audited
financials are attached in the report.
12. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186;
During the year, company has not given any loans, guarantees or investments under section 186.
13. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN
SUB-SECTION (1) OF SECTION 188 IN THE PRESCRIBED FORM;
During the reporting period, there have been no related party transactions as per the provisions of sub-
section (1) of section 188 of the Companies Act, 2013. However, a term loan of Rs. 25 lakh was given to
Shikhar Dairy Pvt. Ltd. for its agri - pilot project, Dairy Project, which is covered in the ordinary course of
business with the approval of board of directors, as two of the directors were common in both the
companies.
14. THE AMOUNTS, IF ANY, WHICH IT PROPOSES TO CARRY TO ANY RESERVES;
During the year, SMPL had transferred 20% of its Net Profit after Tax (Rs. 2,730,586/-) to the Statutory
Reserve in accordance with the provisions of Section 45-IC of Reserve Bank of India Act, 1934.
15. DIVIDEND;
Keeping in view the future fund requirement of the company, no dividend has been declared to equity
shareholders’ of the Company. However during the current Financial Year 2015 -16, an interim dividend
amounting to Rs. 6,75,000/- against the total dividend of Rs. 27 lakh at a fixed rate of 9% per annum on
30,00,000 (Thirty Lakhs) Optionally Convertible Preference Shares (OCPS) of Rs. 10 each of the company
has been paid to SIDBI.
16. THE CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS
AND OUTGO, IN SUCH MANNER AS MAY BE PRESCRIBED
There is no significant particular, relating to conversion of energy, technology absorption under the
Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988. During the period
under review, the company has no earnings and outgo in foreign exchange.
17. CORPORATE SOCIAL RESPONSIBILITY
As per Companies Act, 2013, the provision of CSR is not applicable on Shikhar Microfinance Pvt. Ltd.
Page | 17
18. BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL
The Board comprises of seven directors. During the year following changes had been made:
1. Mr. Cherian Thomas, Chairman resigned on July 31, 2015, as he undertook a new assignment
with World Vision India in Chennai. Subsequently Mr. N R Rayalu s taken on Board on October 6,
2015. He was appointed as the chairman of the company on March 3, 2016.
2. Further SIDBI and Dia Vikas Capital Pvt. Ltd. replaced their nominees on the Board of Shikhar.
Mr. Javed Ahmed Siddiqui, DGM- SIDBI and Mr. Saurabh Baroi, DGM- Dia Vikas Capital were taken
on Board.
3. All Directors / KMPs, members of Senior Management and all other employees shall abide by the
Code of Conduct. Directors/KMPs shall not acquire any disqualification and shall be persons of
sound integrity and honesty, apart from knowledge, experience etc. in their respective fields.
19. CHANGE IN THE NATURE OF BUSINESS, IF ANY;
Since 2009, Shikhar is engaged in urban & rural micro finance lending activities through Joint Liability
Group (JLG) model with a future focus to provide a range of financial products and services which covers
credit and insurance to economically backward families living in slums, unauthorized colonies and urban
& rural villages in the Delhi NCR region, Haryana, Uttarakhand and Uttar Pradesh. Shikhar provides
limited financial awareness, fiscal discipline and training and is looking forward to providing
comprehensive financial literacy programmers to its clients. It is also looking forward to facilitate direct
livelihood opportunities to its clients in the form of animal husbandry and agriculture interventions in the
geographical area of its operations. On account of the focus of the central government on financial
inclusion representatives and in surviving the unbanked and under privileged, there exists an
opportunity to partner with various players to leverage our client partnerships. There has been no
change in the nature of business during the year, however disbursement procedure has been made
changed from cash disbursement at branch offices to disbursement into the clients’ bank accounts.
20. CHANGES IN SHARE CAPITAL
During the period under review, company had merged the two classes of shares Class A and Class B into
one class. Different classes of shares had been converted into ordinary equity shares of Rs. 100/- each.
21. RATING & RATINGS
CRISIL had assigned grading of ‘mfR 4’ (the above average grading for MFI) which was applicable upto
December 2015. Further CAR assigned grading of 'MFI 3+' grading (second highest grading on the eight
point scale) on February 10, 2016. CARE assigned rating of BB+ (Moderate) as on April 19t, 2016 and
CARE also assigned a NSIC -CARE MSE Rating with rate SE 3B (Moderate performance capability).
22. CAPITAL ADEQUACY & QUALIFYING ASSETS
The Capital Adequacy Ratio and qualifying assets of the Company was 18.75% and 94% respectively as on
March 31, 2016 as against the minimum capital adequacy requirement and Qualifying assets of 15% and
85% respectively as per NBFC-MFI directions issued by RBI.
23. COMPLIANCE WITH RBI GUIDELINES
Your Company being an NBFC-MFI has complied with all applicable regulations of the Reserve Bank of
India for NBFC-MFIs. As per Non-Banking Finance Companies RBI Directions, 1998, the Directors hereby
report that the Company did not accept any public deposits during the year and did not have any public
deposits outstanding at the end of the year.
Page | 18
24. CODE OF CONDUCT, TRANSPARENCY AND CLIENT PROTECTION
The Company has fully implemented the Reserve Bank of India's Fair Practice Code and also
adopted the unified Code of Conduct of Sa-Dhan and Microfinance Institutions Network's (MFIN).
25. VARIOUS COMMITTEES
SMPL has three Board sub-committees viz.
1. Human Resource Committee:
The HRC Committee comprises of four directors, Dr. Shantanu Dutta, Mr. Saurabh Baroi, Mr.
Javed Ahmad Siddiqui and Mr. Thomas Vinoy Thomas.
2. Finance & Audit Committee:
The FAC Committee comprises of three directors, Mr. Anil Vidyarthi, Mr. Suarabh Baroi and Mr.
Thomas Vinoy Thomas.
3. Executive Committee:
The Executive Committee comprises of four directors, Dr. Shantanu Dutta, Mr. Anil Vidyarthi, Mr.
Satyavir Chakrapani and Mr. Thomas Vinoy Thomas.
The committees meet on regular basis and discuss and review various issues as referred in their
respective ToR.
26. AUDITOR:
Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Companies (Audit and
Auditors) Rules, 2014, M/s Suri & Sudhir, Chartered Accountants, (Firm Reg. No. 000601N), the Statutory
Auditors of the Company, will hold office upto the conclusion of the ensuing Annual General Meeting. The
consent of the Auditors along with certificate under Section 139 of the Act have been obtained from the
Auditors to the effect that their appointment, if made, shall be in accordance with the prescribed
conditions and that they are eligible to hold the office of Auditors of the Company. The Board
recommends the appointment of M/s Suri & Sudhir Chartered Accountants as the Statutory Auditors of
the Company.
Necessary resolution for reappointment of the said Auditors is included in the Notice of AGM for seeking
approval of members.
27. EXTRACT OF ANNUAL RETURN
In accordance with Section 134(3)(a) of the Companies Act, 2013, an extract of the Annual Return in the
prescribed format (MGT–9) is appended as "Annexure 1" to the Board's Report.
28. ACKNOWLEDGEMENT
The Directors wish to thank the customers, shareholders, bankers, and other service agencies for their
consistent support. The directors especially thank the employees for their substantial contribution to the
Company during the period under review.
By order of the Board
For Shikhar Microfinance Pvt. Ltd.
Sd/- Sd/-
Date: 09.08.2016 (N. R. Rayalu) (Satyavir Chakrapani)
Place: New Delhi Chairman MD & CEO
Page | 19
Annexure
FORM NO. MGT 9
EXTRACT OF ANNUAL RETURN
As on financial year ended on 31.03.2016
Pursuant to Section 92 (3) of the Companies Act, 2013 and rule 12(1) of the
Company (Management & Administration) Rules, 2014.
II REGISTRATION & OTHER DETAILS:
1. CIN U74899DL1993PTC052165
2. Registration Date 16.02.1993, renamed on 21.10.2010
3. Name of the Company Shikhar Microfinance Pvt. Ltd.
4. Category/Sub-category of
the Company
Private Company Limited by Shares
5. Address of the Registered
office & contact details
A-112, 1st Floor, (behind ICICI), Palam Extn., Sector-7, Dwarka, New
Delhi- 110077.
6. Whether listed company No,
7. Name, Address & contact
details of the Registrar &
Transfer Agent, if any.
M/s Bigshare Services Pvt. Ltd.
E-2/3, Ansa Industrial Estate,
Sakivihar Road, Saki Naka, Andheri(E),
Mumbai- 40072,
Contact No.: 022-28470652
III PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY (All the business activities contributing 10
% or more of the total turnover of the company shall be stated)
S.
No.
Name and Description of main products / services NIC Code of the
Product/service
% to total turnover
of the company
1 Microfinance Loans for income generation activity 99711352 100.00%
IIII PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES S.No. Name And Address
Of The Company
CIN/GLN HOLDING/SUBSIDIARY/ASSOCIATE % of
share
held
Applicable
Section
- - - - - -
IIV SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)
(1) Category-wise Share Holding
Category of
Shareholders
No. of Shares held at the beginning of
the year[As on 31-March-2015]
No. of Shares held at the end of the
year[As on 31-March-2016] %
Change
during
the
year
De
ma
t
Physical Total
% of
Total
Shares
Dema
t Physical Total
% of
Total
Shares
Page | 20
A. Promoters
(1) Indian
a) Individual/ HUF - 200 200 0.03 - 200 200 0.03 -
b) Central Govt - - - - - - - - -
c) State Govt(s) - - - - - - - - -
d) Bodies Corp. - - - - - - - - -
e) Banks / FI - - - - - - - - -
f) Any other - 54317 54317 5.60 - 54317 54317 5.60 -
Sub-Total A(1) - 54517 54517 5.63 - 54517 54517 5.63 -
(2) Foreign
a) NRI Individuals - - - - - - - - -
b) Other
Individuals - - - - - - - -
-
c) Bodies
Corporate - - - - - - - -
-
d) Banks/ FIs - - - - - - - - -
e) Any Other - - - - - - - - -
Sub-Total A(2) - - - - - - - - -
Total
shareholding of
Promoter (A)
- 54517 54517 5.63 - 54517 54517 5.63 0
B. Public
Shareholding
1. Institutions
a) Mutual Funds - - - - - - - - -
b) Banks / FI - - - - - - - - -
c) Central Govt - - - - - - - - -
d) State Govt(s) - - - - - - - - -
e) Venture Capital
Funds - - - - - - - -
-
f) Insurance
Companies - - - - - - - -
-
g) FIIs - - - - - - - - -
Page | 21
h) Foreign Venture
Capital Funds - - - - - - - -
-
i) Others (specify) - - - - - - - - -
Sub-total (B)(1):- - - - - - - - - -
2. Non-Institutions
a) Bodies Corp.
i) Indian - 674801 674801 69.62 - 674801 674801 69.62 -
ii) Overseas - - - - - - - - -
b) Individuals - - - - - - - - -
i) Individual
shareholders
holding nominal
share capital up to
Rs. 1 lakh
- - - - - - - -
-
ii) Individual
shareholders
holding nominal
share capital in
excess of Rs 1 lakh
- - - - - - - -
-
c) Others (specify) - - - - - - - - -
Non Resident
Indians - - - - - - - -
-
Overseas
Corporate Bodies - - - - - - - -
-
Foreign Nationals - - - - - - - - -
Clearing Members - - - - - - - - -
Trusts - 240000 240000 24.76 240000 240000 24.76 -
Foreign Bodies-DR
Sub-total (B)(2):- - 914801 914801 94.37 914801 914801 94.37 -
Total Public
Shareholding
(B)=(B)(1)+ (B)(2)
- 914801 914801 94.37 914801 914801 94.37 -
C. Shares held by
Custodian for
GDRs & ADRs
- - - - - - - - -
Grand Total
(A+B+C) - 969318 969318 100.00 - 969318 969318 100.00 -
Page | 22
B) Shareholding of Promoter-
Sl. No. Shareholder’
s Name
Shareholding at the beginning of
the year
Shareholding at the end of the
year
% change
in
sharehol
ding
during
the year
No. of
Shares
% of
total
Shares
of the
compan
y
%of Shares
Pledged /
encumbered
to total
shares
No. of
Shares
% of
total
Shares
of the
compan
y
%of
Shares
Pledged /
encumber
ed to total
shares
1 Mr. Sayavir
Chakrapani
100 0.015 0 100 0.015 0 0
2 Mr. Vinoy
Thomas
100 0.015 0 100 0.015 0 0
3 Partners of
Shikhar Trust
54317 5.600 0 54317 5.620 0 0
C) Change in Promoters’ Shareholding (please specify, if there is no change)
SN Particulars Shareholding at the
beginning of the year
Cumulative
Shareholding during the
year
No. of
shares
% of total
shares of
the
company
No. of
shares
% of total
shares of the
company
At the beginning of the year - - - -
Date wise Increase / Decrease in Promoters
Shareholding during the year specifying the
reasons for increase / decrease (e.g. allotment
/transfer / bonus/ sweat equity etc.):
- - - -
At the end of the year - - - -
D) Shareholding Pattern of top ten Shareholders:
(Other than Directors, Promoters and Holders of GDRs and ADRs):
SN For Each of the Top 10
Shareholders
Shareholding at the
beginning of the year
Cumulative
Shareholding during
the Year
No. of
shares
% of total
shares of the
company
No. of
shares
% of total
shares of
the
company
At the beginning of the year 969318 100 - -
Date wise Increase / Decrease in Promoters
Shareholding during the year specifying the
reasons for increase /decrease (e.g. allotment /
- - - -
Page | 23
transfer / bonus/ sweat equity etc):
At the end of the year 969318 100 - -
E) Shareholding of Directors and Key Managerial Personnel:
SN Shareholding of each Directors and each Key
Managerial Personnel
Shareholding at the
beginning of the year
Cumulative
Shareholding during
the Year
No. of
shares
% of total
shares of the
company
No. of
shares
% of total
shares of the
company
At the beginning of the year 200 0.015 - -
Date wise Increase / Decrease in Promoters
Shareholding during the year specifying the
reasons for increase /decrease (e.g. allotment /
transfer / bonus/ sweat equity etc.):
- - - -
At the end of the year 200 0.015 - -
V) INDEBTEDNESS -Indebtedness of the Company including interest outstanding/accrued but not due
for payment. In `
Secured Loans
excluding
deposits
Unsecured
Loans
Deposits Total
Indebtedness
Indebtedness at the beginning of the
financial year
i) Principal Amount 21,96,64,895 4,90,45,450 - 26,87,10,345
ii) Interest due but not paid 0.00 0.00 - 0.00
iii) Interest accrued but not due 0.00 0.00 - 0.00
Total (i+ii+iii) 21,96,64,895 4,90,45,450 - 26,87,10,345
Change in Indebtedness during the
financial year
* Addition 57,40,00,000 5,75,00,000 - 63,15,00,000
* Reduction 20,70,98,979 3,00,45,455 - 237143584
Net Change 366901021 2,74,54,545 - 394356416
Indebtedness at the end of the
financial year
i) Principal Amount 58,65,65,916 7,64,99,995 0.00 66,30,65,911
ii) Interest due but not paid 0.00 0.00 0.00
iii) Interest accrued but not due 0.00 0.00 0.00
Total (i+ii+iii) 58,65,65,916 7,64,99,995 0.00 66,30,65,911
Page | 24
VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL-
A. Remuneration to Managing Director, Whole-time Directors and/or Manager:
Sl. No. Particulars of Remuneration Name of MD/WTD/ Manager Total Amount
Mr. Satyavir Chakrapani Mr. Vinoy Thomas
1 Gross salary (In `) Rs.14,23,800/ Rs.13,43,040/ Rs.27,66,840/
2. Stock Option 0 0
3. Sweat Equity 0 0
4. Commission
- as % of profit
- others, specify…
0 0
5. Others, please specify
0 0
Total (A) (In `)
Rs.14,23,800/ Rs.13,43,040/ Rs.27,66,840/
Ceiling as per the Act
B. Remuneration to other directors
(In `)
S.
No.
Particulars of
Remuneration
Name of Directors Total
Amount
1. Independent Directors Mr. Anil Vidyarthi Mr. N. R.
Rayalu
Fee for attending board
meetings
6,000 - - 6,000
Fee for attending board
committee meetings
24,000 - - 24,000
Commission - - - -
Others, please specify - - - -
Total (1) 30,000 - 30,000
2. Other Non-Executive
Directors
Mr. Javed Ahmad
Siddiqui
Dr. Shantanu
Dutta
Mr. Saurabh
Baroi
Fee for attending board
committee meetings
- - - -
Commission - - - -
Others, please specify - - - -
Total (2) - - - -
Total (B)=(1+2) 30,000 - 30,000
Total Managerial
Remuneration
- - - -
Overall Ceiling as per
the Act
- - - -
C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD/MANAGER/WTD
(In `)
SN Particulars of Remuneration Key Managerial Personnel
CEO CS CFO Total
NAME Mr. Satyavir
Chakrapani
Mr. Ravi
Shankar
Mr. Vinoy
Thomas
Page | 25
Kumar
1 Gross salary NIL 3,69,600 NIL 3,69,600
2 Stock Option - - - -
3 Sweat Equity - - - -
4 Commission - - - -
- as % of profit - - - -
others, specify… - - - -
5 Others, please specify - - - -
Total NIL 3,69,600 NIL 3,69,600
VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:
Type Section of the
Companies Act
Brief
Description
Details of
Penalty /
Punishment/
Compounding
fees imposed
Authority
[RD / NCLT/
COURT]
Appeal made,
if any (give
Details)
A. COMPANY
Penalty - - - - -
Punishment - - - - -
Compounding - - - - -
B. DIRECTORS
Penalty - - - - -
Punishment - - - - -
Compounding - - - - -
C. OTHER OFFICERS IN DEFAULT
Penalty - - - - -
Punishment - - - - -
Compounding - - - - -
Page | 26
Annexure
Form No. 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 transactions under third proviso thereto 1. Details of contracts or arrangements or transactions not on an arm‟s length basis: N/A
All the transactions or contract or arrangements on an arm’s length basis (a) Name(s) of the related party and nature of relationship;
(b) Nature of contracts/arrangements/transactions;
(c) Duration of the contracts / arrangements/transactions;
(d) Salient terms of the contracts or arrangements or
transactions including the value, if any;
(e) Justification for entering into such contracts or
arrangements or transactions
(f) Date(s) of approval by the Board;
(g) Amount paid as advances, if any; and
(h) Date on which the special resolution was passed in
general meeting as required under first proviso to
section 188.
2. Details of material contracts or arrangement or transactions on an arm’s length basis:
(a) Name(s) of the related party and nature of
relationship;
Shikhar Dairy Pvt. Ltd.
Two directors of Shikhar Microfinance Pvt. Ltd.
namely, Mr. Satyavir Chakrapani and Mr.
Thomas Vinoy Thomas is holding directorship in
Shikhar Dairy Pvt. Ltd.
(b) Nature of
contracts/arrangements/transactions;
Term Loan for their Agri Pilot Project- Dairy
Project
(c) Duration of the contracts /
arrangements/transactions;
36 month
(d) Salient terms of the contracts or
arrangements or transactions including
the value, if any;
Rs. 15 Lakh
Bullet repayment at the end of 36 months.
(e) Date(s) of approval by the Board; June 24, 2015
(f) Amount paid as advances, if any; and Nil
Page | 27
OPERATIONS AT GLANCE
Mar-12 Mar-13 Mar-14 Mar-15 Mar-16
Gross Loan Portfolio(Rs.lakhs)
1269.1 1760.4 2879.1 2986.1 5140.29
Active Borrowers 14084 17544 28100 31001 40927
0
10000
20000
30000
40000
50000
Gross Loan Portfolio & Active Borrowers
Mar-12Mar-13
Mar-14Mar-15
Mar-16
247 418
540 608
602
1006 1097 1277 1409 1860
BORROWERS per FE and Branch
Borrowers per FE Borrowers per Branch
0.00%
10.00%
20.00%
30.00%
Mar-12Mar-13
Mar-14Mar-15
Mar-16
28.44% 20.84% 27.13%
26.66% 24.29%
Yield on Portfolio
Page | 28
96.00%
98.00%
100.00%
102.00%
104.00%
106.00%
108.00%
110.00%
Mar-12Mar-13
Mar-14Mar-15
Mar-16
105.48% 108.56%
102.02% 101.47% 102.50%
Operational Self Sufficiency (OSS)
Mar-12 Mar-13 Mar-14 Mar-15 Mar-16
FCR 6.54% 9.79% 14.71% 15.33% 14.16%
OCR 16.76% 11.94% 15.67% 13.05% 12.00%
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
16.00%
18.00%
Axi
s Ti
tle
FCR & OCR
Debt/ Equity0
2
4
6
Mar-12 Mar-13 Mar-14 Mar-15 Mar-16
Debt/ Equity 1.95 1.8 3.18 2.34 5.69
Debt Equity Ratio
Page | 29
INDEPENDENT AUDITOR’S REPORT
To
The Members of Shikhar Microfinance Pvt. Ltd.
Report on the Standalone Financial Statements
We have audited the accompanying financial statements of M/s Shikhar Microfinance Private Limited
(“the Company”), which comprise the Balance Sheet as at March 31, 2016, and the Statement of Profit and
Loss for the year, cash flow statement then ended, and a summary of significant accounting policies and
other explanatory information.
Management’s Responsibility for the Financial Statements
The Company’s Board of Directors is responsible for the matters in section 134(5) of the Companies Act,
2013 (“the Act”) with respect to the preparation of these 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 (Account) Rules, 2014. This responsibility also
includes the maintenance of adequate accounting records in accordance with the provision of the Act for
safeguarding of the assets of the Company and for preventing and detecting the frauds and other
irregularities; selection and application of appropriate accounting policies; making judgements and
estimates that are reasonable and prudent; and design, implementation and maintenance of internal
financial control, that were operating effectively for ensuring the accuracy and completeness of the
accounting records, relevant to the preparation and presentation of the financial statements that give a
true and fair view and are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We have
taken into account the provisions of the Act, the accounting and auditing standards and the matters which
are required to be included in the audit report under the provisions of the Act and the Rules made
thereunder.
We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of
the Act. Those standards require that we comply with the 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 disclosures in
the financial statements. The procedures selected depend on the auditor’s judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the Company’s
preparation and fair presentation of the financial statements that give true and fair view in order to
design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of the accounting estimates made by
Company’s Directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.
Page | 30
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the
financial statements give the information required by the Act in the manner so required and give a true
and fair view in conformity with the accounting principles generally accepted in India:
a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2016;
b) In the case of the Statement of Profit and Loss, of the Profit for the year ended on that date;
c) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.
Report on other Legal & Regulatory Requirements
1. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central
Government of India in terms of sub-section (11) of section 143 of the Act, we give in the
Annexure A, a statement on the matters specified in the paragraphs 3 and 4 of the Order.
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 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 appears from our examination of those books.
c) The Balance Sheet, the Statement of Profit and Loss, and Cash Flow Statement dealt with by this
Report are in agreement with the books of account.
d) In our opinion, the aforesaid financial statements comply with the Accounting Standards referred
to in 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, 2016, and
taken on record by the Board of Directors, none of the directors is disqualified as on March 31,
2016, 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”; and
g) With respect to the other matters included in the Auditor’s Report in accordance with the Rule 11
of the Companies (Audit & Auditors) Rules 2014, in our opinion and to our best of our
information and according to the explanations given to us:
i. The management has represented that the company does not have any pending
litigations and hence no provision/disclosure has been made against the same.
ii. That provision as required under the applicable laws or accounting standard for all the
material foreseeable losses as represented to us & identifiable from the financial
statements have been made in the books of accounts. The management has represented
that all loans/advances & recoverable termed as good are fully recoverable and
regarding loans/advances & recoverable termed as doubtful, due provision/disclosure
has been made against the same.
iii. There were no amount which was required to be transferred to Investor education &
Protection fund.
Place: New Delhi For Suri & Sudhir Date 30.05.2016 Chartered Accountants FRN: 000601N Sd/-
Anuj Arora (Partner) M. No: 504815
Page | 31
Annexure ‘A’ to the Auditors’ Report
The Annexure referred to in Independent Auditors’ Report of even date to the members of Shikhar
Microfinance Private Limited on the standalone financial statements for the year ended March 31, 2016;
i. we report that:
a) As per the information provided to us, The company has maintained proper records
showing full particulars, including quantitative details and situation of fixed assets.
b) As explained to us, All the assets have been physically verified by the management
during the year at regular intervals according to a regular program of verification which,
in our opinion, is reasonable having regard to the size of the company and nature of its
assets. No material discrepancies were noticed on such verification.
c) Since the company is not in the possession of any immovable property hence this clause
is not applicable.
ii. As the Company do not possess any Inventory therefore Para (ii) do not apply.
iii. The Company has granted unsecured loans to body corporate M/s Shikhar Dairy Pvt Ltd during
the Financial year amounting to Rs. 15,00,000/- covered in the register maintained under Section
189 of the Companies Act. The Maximum Amount outstanding during the year was Rs.40,00,000
and the year end balance of such loan amounted to Rs. 40,00,000.
iv. The company has not given any loans & advances to directors and parties covered under section
185 or loans and advances under section 186 of the Companies Act, 2013 and hence the
provisions of paragraph (iv) are not applicable to the company.
v. The company has not accepted any deposits and hence para (v) is not applicable.
vi. According to the information and explanations given to us, in our opinion the maintenance of cost
records have not been prescribed for the company by the Central Government under subsection
(1) of section 148 of the Companies Act.
vii. According to the information and explanation given to us and according to the books and records
as produced and examined by us, in our opinion, the company is fairly regular in depositing with
appropriate authorities undisputed statutory dues including Income Tax, Service Tax, Cess and
other statutory dues applicable to it. According to the information and explanations given to us,
no undisputed amounts payable in respect of provident fund, employees state insurance, income
tax, service tax, duty of customs, duty of excise, value added tax (VAT), cess and other statutory
dues were in arrears as at 31st March’2016 for a period of more than six months from the date
they become payable.
According to the information and explanation given to us, there are no dues of service tax,
income tax, cess and other statutory dues, which have not been deposited on account of any
dispute.
viii. In our opinion and according to the information and explanations given to us, the company has
not defaulted in repayment of dues to a financial institution or bank. In the absence of any
debentures, the reporting on the debenture dues is not applicable on the company.
ix. The company has not raised any money by way of Initial Public Offer (IPO) or further public offer
(including debt instruments). The term loans were applied for the purpose for which they were
obtained.
x. During the course of our examination of the books and records of the company, carried out in
accordance with the generally accepted auditing practices in India, and according to the
information and explanations given to us, we have neither come across any instance of material
fraud on or by the company, noticed or reported during the year, nor have we been informed of
such case by the management.
xi. Being a private limited company, the provisions of section 197 and likewise the reporting under
paragraph (xi) of the order are not applicable.
xii. The company is not a nidhi company & hence paragraph (xii) of the order is not applicable.
Page | 32
xiii. According to the information and explanations given to us and based on our examination of the
records of the company, transactions with the related parties are in compliance with sections
177 and 188 of the Act where applicable and details of such transactions have been disclosed in
the financial statements as required by the applicable accounting standard.
xiv. The company has not made any preferential placement of shares during the year under review
and thus the Clause is not applicable to the company.
xv. The company has not entered into non-cash transactions with directors or persons connected
with him. Accordingly, paragraph (xv) of the order is not applicable.
xvi. The company is required to hold Certificate of Registration under section 45-IA of the Reserve
Bank of India Act 1934, and they hold a Certificate of Registration under section 45-IA of the
Reserve Bank of India Act 1934 vide certificate no. RBI Reg No. NBFC MFI B- 14.02362 /
23/12/2010.
Place: New Delhi For Suri & Sudhir Date 30.05.2016 Chartered Accountants FRN: 000601N
Sd/- Anuj Arora
(Partner) M. No: 504815
Page | 33
SHIKHAR MICROFINANCE PVT LTD
CIN : U74899DL1993PTC052165
BALANCE SHEET AS ON MARCH 31, 2016
Notes on Financial
Statements
1 to 36
For Suri & Sudhir For and on behalf of the Board of Directors Of
Firm Reg No. 000601N Shikhar Microfinance Pvt Ltd. Chartered Accountants
(Anuj Arora ) Ravi Shankar Kumar Satyavir Chakrapani Thomas Vinoy
Thomas Partner Company Secretary Managing Director & Director & M.No. 504815 M. No.- A32681 Chief Executive Officer Chief Finance
Officer Place: New Delhi DIN 02422305 DIN 02571265 Date :30.05.2016
Note As on Mar 31, 2016 As on Mar 31, 2015
EQUITY AND LIABILITIES In Rs.
Shareholders’ funds
(a) Share capital 3 12,69,31,800 12,69,31,800
(b) Reserves and surplus 4 -60,98,202 -56,69,923
(c) Share Application Money 0 2,60,000
12,08,33,598 12,15,21,877
Share Application Money Pending Allotment - -
Non-current liabilities
(a) Long Term Borrowings 5 31,95,74,223 8,31,51,673
(b) Deferred tax liability (Net) 6 - 32,174
(c) Other Long Term Liabilities 7 10,00,794 5,09,376
(d) Long Term Provisions 8 13,750.00 -
Total Non Current Liabilities 32,05,88,767 8,36,93,223
Current liabilities
(a) Short Term Borrowings 9 34,34,91,688 18,55,58,672
(b) Other current liabilities 10 1,85,72,716 1,12,43,788
(c) Short-term provisions 11 57,55,035 30,41,456
Total Current Liabilities 36,78,19,439 19,98,43,916
TOTAL 80,92,41,805 40,50,59,016
ASSETS In Rs.
Non-current assets
(a) Fixed assets
(i) Tangible assets 12 19,21,531 14,72,708
(b) Long Term Loans & Advances 13 14,30,515 17,87,978
(c) Deferred tax Assets (Net) 6 1,49,721.04 -
(d) Loan Portfolio 15 9,70,83,007 5,67,38,279
(d) Other Non Current Assets 14 77,20,356 5,64,004
Total Non Current Assets 10,83,05,130 6,05,62,969
Current assets
(a) Cash and bank balances 16 26,28,66,854 8,86,40,040
(b) Loan Portfolio 15 42,09,46,328 24,43,72,924
(c) Short-term loans and advances 17 11,56,956 4,32,160
(d) Other current assets 18 1,59,66,537 1,10,50,923
Total Current Assets 70,09,36,675 34,44,96,047
TOTAL 80,92,41,805 40,50,59,016
Page | 34
SHIKHAR MICROFINANCE PVT LTD
CIN : U74899DL1993PTC052165
PROFIT & LOSS FOR THE YEAR ENDED MARCH 31, 2016
In Rs
PARTICULARS Note Year ended Mar 31, 2016
Year ended Mar 31, 2015
I Income
Revenue from operations 19 9,24,25,584 7,88,22,484
Other Income 20 64,18,731 36,91,423
TOTAL INCOME (I) 9,88,44,315 8,25,13,907
II Expenses
Employee benefit expenses 21 2,98,66,667 2,73,38,240
Finance Cost 22 4,71,20,992 3,94,43,323
Depreciation & Amortization expense 23 5,62,250 4,81,636
Provision for Loans 24 21,42,493 1,62,401
Other expenses 25 1,43,21,060 1,32,85,376
TOTAL EXPENSES (II) 9,40,13,462 8,07,10,976
III Profit before exceptional and extraordinary items and tax (I-II)
48,30,853 18,02,931
IV Exceptional items
Add : Unamortizated Processing Fee of earlier year ( Refer Note C )
3,49,145 -
Less : Prior Period Expense - Provision for Loans
6,250 -
Less : MAT Credit of earlier year written off
2,85,859 -
V Profit before extraordinary items and tax (III-IV)
48,87,889 18,02,931
VI Extraordinary Items
Excess provision of earlier years written back
- -
VII Profit Before Tax (V- VI)
48,87,889 18,02,931
VIII Tax expense:
Current tax
21,48,698 6,25,274
MAT Credit availed
1,90,500 -
Deferred tax
-1,81,895 -16,284
IX Profit After Tax (VII-VIII)
27,30,586 11,93,941
(ii) Interest Accrued but not due includes Rs Nil due to Managing Director & CEO of the Company.
Tax expense of discontinuing operations
Profit/(loss) from Discontinuing operations (after tax) (XII-XIII)
Profit (Loss) for the period (XI + XIV)
Earnings per equity share (face value Rs 100):
Basic and Diluted Earning Per Share 26 -0.44 -2.03
Notes on Financial
Statements
1 to 36
For Suri & Sudhir For and on behalf of the Board of Directors Of Firm Reg No. 000601N Shikhar Microfinance Pvt Ltd. Chartered Accountants
(Anuj Arora ) Ravi Shankar Kumar Satyavir Chakrapani Thomas Vinoy Thomas Partner Company Secretary Managing Director & Director & M.No. 504815 Chief Executive Officer Chief Finance Officer Place: New Delhi M.No. A32681 DIN 02422305 DIN 02571265 Date :30.05.2016
Page | 35
SHIKHAR MICROFINANCE PVT LTD
CIN : U74899DL1993PTC052165
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2016
In. Rs.
PARTICULARS
Year ended Mar 31, 2016
Year ended Mar 31, 2015
CASH FLOW FROM OPERATING ACTIVITIES
Net Profit before taxation and extra ordinary items 48,87,889 18,02,931
Adjustment for:
Depreciation 4,67,752 4,33,648
Preliminary Expenses Written Off 94,498 47,988
Unamortizated Processing Fee of earlier year -3,49,145 -
Less: Prior Period Expense Provision for Loans 6,250 -
Micro Finance Loan W/off 8,43,369 25,12,951
Prov.for Dividend on Preference Shares including DDT -31,58,865 -
Provision for Loan Loss 21,42,493 1,62,401
Operating Profit before working capital changes 49,34,241 49,59,919
Adjustments for:
Decrease/(Increase) in Loans Portfolio - 21,77,61,501 -1,32,18,608
Decrease/(Increase) in Current Assets and Loans & Advances - 56,40,410 -93,52,934
Increase/(decrease) in Short Term Provisions 5,78,586 -3,88,806
Increase/ (Decrease) in other Current Liabilities 58,02,144 26,91,425
Increase/ (Decrease) in Other Long Term Liabilities & Provisions 4,91,418 37,794
Decrease/(Increase) in Other Non Current Asset - 69,01,704
Decrease/(Increase) in Long Term Loans & Advances -12,12,649 -20,25,366
Cash generated from operations -21,97,09,875 -1,72,96,576
Less: Direct Taxes paid -15,70,112 -10,63,858
Net Cash Flow from operating activities Before extraordinary items -21,81,39,763 -1,62,32,718
Extraordinary items - -
Net Cash Flow from operating activities -21,81,39,763 -1,62,32,718
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of Fixed Assets -9,16,575 -4,18,656
Amount placed in bank deposits not considered as cash & cash equivalents(net) -15,19,50,000 -3,61,25,000
Net Cash Flow from Investing activities -15,28,66,575 -3,65,43,656
Page | 36
In. Rs.
PARTICULARS
Year ended Mar 31, 2016
Year ended Mar 31, 2015
CASH FLOW FROM FINANCING ACTIVITIES
Issue of Shares :
Equity Share Capital including Share Premium - 4,18,93,200
Equity Share Application Money -2,60,000 2,60,000
ROC Filing Fees - -4,32,000
Dividend Paid -8,12,414 -7,89,716
Secured Borrowings(Net) 36,69,01,021 1,73,26,773
Unsecured Borrowings(Net) 2,74,54,544 13,18,180
Net Cash Flow from Financing Activities 39,32,83,151 5,95,76,437
Net Increase in cash/ cash equivalents 2,22,76,813 68,00,064
Add: Cash and Cash equivalents at the beginning of the year 1,12,53,041 44,52,977
Cash & cash equivalents at end of period 3,35,29,854 1,12,53,041
Notes on Financial
Statements
1 to 36
For Suri & Sudhir For and on behalf of the Board of Directors Of Firm Reg No. 000601N Shikhar Microfinance Pvt Ltd. Chartered Accountants
(Anuj Arora ) Ravi Shankar Kumar Satyavir Chakrapani Thomas Vinoy Thomas Partner Company Secretary Managing Director & Director & M.No. 504815 Chief Executive Officer Chief Finance Officer Place: New Delhi M.No. A32681 DIN 02422305 DIN 02571265 Date :30.05.2016
Page | 37
Shikhar Microfinance Pvt Ltd
Notes to financial statements for the year ended March 31, 2016
1. Company Background
Shikhar Development Foundation (SDF) the not for profit Microfinance Institution registered as a
Trust in september 2007 under the Indian Trust Act, 1882 , came into existence with intent to develop
and implement community focused development interventions. SDF envisaged to leverage the benefits of
micro-lending to the marginalized rural and urban communities through sequential lending providing
both savings and loan facilities at various levels.
SDF in its Board Meeting held on November 22, 2008 decided to acquire a Non-Banking Finance Company
(NBFC) for undertaking its microfinance operations& it was decided that a SPV in the form of a for-profit
trust would be created to invest into the NBFC. Accordingly, Partners of Shikhar Trust (POST), a private
mutual benefit trust was registered to act as a Special Purpose Vehicle for acquiring shares of Anup
Leasing Pvt. Ltd., (ALPL),NBFC registered in Delhi and incorporated on February 16, 1993. The ownership
and control of NBFC was transferred on March 25, 2009 through transfer of shares of the previous
shareholders.
ALPL has also received approval from both RBI in December 2010 and Ministry of Corporate Affairs in
October 2010 for change of its name from Anup Leasing Pvt. Ltd. to Shikhar Microfinance Private Limited
(SMPL). SMPL has also been registered with the RBI as an NBFC-MFI with effect from November 12, 2013.
Shikhar operates in the Delhi NCR region, Haryana, Uttarakhand and western Uttar Pradesh providing
microcredit services (joint-liability-group model) and life insurance to economically backward
communities living in slums, unauthorized colonies, rural and urban villages. Shikhar has currently
extended operations to 4 States and 176 Location covered by 20 branches, and has more than 30,000
active loan clients.
The Authorized Share Capital of the company is Rs. 16.00 Cr divided into;
a) 13,00,000 ordinary equity shares of Rs. 100/- carrying one voting rights per shares at all times.
b) 30,00,000 Redeemable Optionally Convertible Preference Shares (OCPS) of face value of Rs. 10/-
each with option of cumulative and non-cumulative.
Nature of Operations
Shikhar Microfinance Pvt. Ltd. (“the Company”) is engaged in micro finance lending activities for
providing small loans to target clientele for income generation and livelihood purposes using the Joint
Liability Group (JLG) methodology. All financial transactions are conducted in the group meetings
organized near the habitats of these women. The operations in the initial stages of group formation,
involves efforts on development training on financial discipline, and constant monitoring through
fortnightly meetings and providing financial and support services at the doorsteps of the borrowers to
ensure high rates of recovery. The Company follows collection process for recovery of loans and interest
accrued thereon at the choice of the borrower, either, weekly, fortnightly or monthly. The Company has
provided insurance cover to all the borrowers in association with various insurance companies in line
with the loan amount extended to the target clients.
Page | 38
2. Significant Accounting Policies
A. Basis of Preparation of Financial Statements
The financial statements have been prepared to comply in all material respects with the accounting
standards notified by Companies (Accounting Standards) Rules,2006 (as amended), relevant
provisions of the Companies Act, 2013 and companies (Accounts) Rule,2013, amended from time to
time and the provisions of the Reserve Bank of India as applicable to a non banking financial
company. Financial Statements have been prepared under the historical cost convention on an
accrual basis of accounting.
B. Use of Estimates
The preparation of financial statements, in accordance with the generally accepted Accounting
Principles, require the management to make estimates and assumptions that effect the reported
amounts of assets and liabilities, disclosure of contingent liabilities at the date of financial
statements, reported amount of expenses and revenues of the year and the amortized amount of
preliminary expenditure of the year. Estimates and underlining assumptions are reviewed on
ongoing basis.Actual results could differ from these estimates. Any revision to accounting estimate is
recognized prospectively in current and future at the date of the financial statements.
C. Change in Accounting Policies
Effective from 01.04.2015, The Company has changed its method of recognizing Processing Fees on
Borrowing of Loans over the period of loans. Processing Fee on Borrowing of loans are now
amortised over the period of loan, whereas earlier it was expenses off at the time sanction. This
change will result in more appropriate presentation and recognition of the expense incurred for
which the economic benefits will be derived in the future years as well. Accordingly, the impact of
change in Accounting Policy has led to recognition of prior period income and creation of
unamortized processing cost the same has been duly disclosed in the financial statement.
Borrowing Cost
Borrowing cost which are directly attributable to the acquisition /construction of fixed assets, till
the time such assets are ready for intended use, capitalized as a part of cost of assets.
Borrowing cost consist of interest and other borrowing cost that the company incurred in
connection with borrowing of the funds. Interest cost is expensed off on accrual basis. Other
incidental borrowing cost namely processing fees are amortised over the period of loan. In case of
unamortized identified borrowing cost is outstanding at the year end, it is classified under loans and
advances as unamortized cost of borrowings.
D. Current-Non Current Classification
All assets and liabilities are classified into current and non-current.
Assets
An asset is classified as current when it satisfies any of the following criteria:
i. It is to be realized in, or is intended for sale or consumption in, the Company’s normal
operating cycle;
ii. It is held primarily for the purpose of being traded;
iii. It is expected to be realized within 12 months after the reporting date;or
iv. It is cash or cash equivalent unless it is restricted from being exchanged or used to settle a
liability for at least 12 months after the reporting date.
Page | 39
Current assets include current portion of non- current financial assets. All other assets are classified
as Non- current.
Liabilities
A liability is classified as current when it satisfies any of the following criteria:
i. It is expected to be settled in the Company’s normal operating cycle;
ii. It is held primarily for the purpose of being traded;
iii. It is due to be settled within 12 months after the reporting date;or
iv. The company does not have an unconditional right to defer the settlement of liability for
at least 12 months after the reporting date. Terms of liability that could, at the option of the
counterparty, result in its settlement by the issue of equity instruments do not affect its
classification.
Current liabilities include current portion of non- current financial liabilities. All other liabilities are
classified as non current.
Operating Cycle
Company has ascertained its operating cycle as 12 months that is the time gap between the
acquisition of assets for processing and their realization in cash or cash equivalents.
E. Cash & Cash Equivalents
Cash & cash equivalents for the purpose of cash flow statement comprises cash on hand, cash in
bank, fixed deposits and other short term highly liquid investments with an original maturity of
three months or less that are readily convertible into known amount of cash and which are subject
to an insignificant risk of change in value.
F. Cash Flow Statement
Cash flow are reported using the indirect method whereby cashflows from operating, investing &
financing activities of the company are segregated and profit before tax is adjusted for the effect of
transactions of non-cash nature or any deferrals or accruals of past or future cash receipts or
payments.
G. Fixed Assets
All fixed assets are stated at cost less accumulated depreciation and impairment loss. Cost is
inclusive of all costs relating to the acquisition, pre-operational expenses and installation of fixed
assets to bring the assets to working condition for intended use.
Subsequent expenditures related to an item of tangible fixed assets are added to its book value only
if they increase the future benefits from the existing assets beyond its previously assessed standard
of performance.
H. Depreciation
With effect from 1st April 2014, the management has re-assessed and revised the estimated useful
life of tangible fixed assets as per Schedule II of Companies Act 2013. Depreciation on all fixed assets
of the Company is provided on Straight Line method at the rates specified in schedule II of the
Companies Act, 2013.
Page | 40
I. Impairment of Assets
The Company identifies impairable assets based on individual assets or cash generating unit concept
at the year-end in terms of Para 5.13 of AS-28 issued by the ICAI for the purpose of arriving at
impairment loss thereon, if any, being the difference between the book value and recoverable value
of relevant assets. Impairment loss when crystallizes is charged against revenue of the year.
J. Revenue Recognition
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the
Company and the revenue can be reliably measured.
i. Interest income on all loans given which are standard is recognized under accrual basis. In
case of any default on loan repayment interest income is recognized only when realized.
ii. Interest income on deposits with banks is recognized on an accrual basis taking into account
the amount outstanding and rate applicable.
iii. Processing fees on loans are recognized on upfront basis.
iv. Interest on term deposits has been accrued on the time proportion basis, using the
underlying interest rates.
v. Dividend income is accounted when the right to receive dividend is established.
All other income is recognized on an accrual basis.
K. Classification of Loan Portfolio and provisioning policy
1. Classification of loan portfolio is currently governed in terms of the provisioning undertaken
as per Master Circular- Introduction of New Category of NBFCs - ‘Non-Banking Financial
Company-Micro Finance Institutions’ (NBFC-MFIs) – Directions, July 1, 2014.
Standard Asset: Asset in respect of which, no default in repayment of principal or payment
of interest is perceived and which does not disclose any problem nor carry more than
normal risk attached to a business.
Non performing Asset: Asset for which, interest/principal payment has remained overdue
for a period of 90 days or more.
2. Provisioning Policy for Portfolio Loans & Advances
Provision for MF Portfolio
Provisions for non-performing assets are made as per the Prudential Master Circular-
Introduction of New Category of NBFCs - ‘Non-Banking Financial Company-Micro Finance
Institutions’ (NBFC-MFIs) – Directions, July 1, 2014.
The aggregate loan provision maintained by the Company at any point is not less than the
higher of
a) 1% of the outstanding loan portfolio or
b) 50%of the aggregate loan installment which are overdue for more than 90days and less
than 180 days and 100% of the aggregate loan installments which are overdue for 180
days or more.
Provision for MF Portfolio
Provisions for Standard assets are made as per the Revised Regulatory Framework for
NBFC, November 10, 2014.
A provision for standard assets at 0.30% of the outstanding Portfolio is required to be made.
Page | 41
However the company does not make provisions for the cases in which death of a borrower has
occurred as the company gets all the borrowers insured and complete amount is recoverable from the
insurance companies.
L. Expenditure
The provision is made for all the known losses and liabilities.
M. Income Taxes
i. Current tax is the amount of tax payable on the taxable income for the year as determined in
accordance with the provisions of Income Tax Act, 1961.
ii. As per Accounting Standard (AS) 22 issued by The Institute of Chartered Accountants of India
(ICAI), Deferred Tax resulting from “Timing Difference” between accounting and taxable
profits/(losses) is accounted for using the tax rates and laws that have been enacted or
substantially enacted as on the Balance Sheet date. Deferred tax assets are recognized only to
the extent that there is a reasonable certainty that sufficient future taxable income will be
available against which such deferred tax assets can be realized In situations where the
company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are
recognized only if there is virtual certainty supported by convincing evidence that they can
be realized against future taxable profits.
iii. At each balance sheet date the Company re-assesses unrecognized deferred tax assets. It
recognizes unrecognized deferred tax assets to the extent that it has become reasonably
certain or virtually certain, as the case may be that sufficient future taxable income will be
available against which such deferred tax assets can be realized.
N. Employee Benefits
• Defined Contribution Plan
Company’s contribution to Provident Fund, ESIC are considered as defined contribution plans and
are charged to the Statement of Profit & Loss as they fall due, based on the amount of contribution
required to be made.
• Defined benefit plan
The company provides for gratuity, a defined retirement benefit plan covering eligible employees.
Provision for gratuity is calculated as per Gratuity Act and is recognized as a liability in Balance
Sheet. Payment of Gratuity made to eligible employees charged to the statement of Profit & Loss
for the year.
• Compensated Absences
Based on the leave rules of the company, employees are permitted to accumulate leaves. Provision
for any unavailed privilege leave to the extent encashable is recognized as a liability in Balance
Sheet. Any unavailed privilege leave to the extent encashable once paid to the eligible employee is
charged to the statement of Profit & Loss for the year.
Page | 42
O. Provisions
Provisions involving substantial degree of estimation in measurement are recognized when there is a
present obligation as a result of past events: it is probable that an outflow of resources will be
required to settle the obligation, in respect of which a reliable estimate can be made. Contingent
liabilities are not recognized, but are disclosed in the notes. Contingent assets are neither recognized
nor disclosed in the financial statements..
P. Earnings Per Share
Basic earnings per share are calculated by dividing the net profit / loss for the year attributable to
equity share holders by the weighted average number of equity shares outstanding during the year.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period
attributable to equity share holders and the weighted average number of equity shares outstanding
during the period are adjusted for the effects of all dilutive potential equity shares. Dilutive potential
equity shares are deemed to have been converted as of the beginning of the year, unless they have
been issued at a later time.
No interest has been paid/ payable by the Company during the year to the suppliers covered under
the Micro, Small and Medium Enterprises Development Act, 2006. The above information takes into
account only those suppliers who have responded to enquiries made by the Company for this
purpose.
3 Share Capital
Particulars As at March 31, 2016 As at March 31, 2015
Nos. In Rs Nos. In Rs
AUTHORISED
Equity Share Capital
Class "A" equity shares of `100 each - - 320,000 32,000,000
Class "B" equity shares of `100 each - - 380,000 38,000,000
Ordinary Class Shares of `100 each 1,300,000 130,000,000 600,000 60,000,000
1,300,000 130,000,000 1,300,000 130,000,000
Preference Share Capital
9% Redeemable Optionally Convertible
Preference Shares of `10 each
3,000,000 30,000,000 3,000,000 30,000,000
3,000,000 30,000,000 3,000,000 30,000,000
ISSUED, SUBSCRIBED AND PAID-UP
Equity Share Capital
Class "A" equity shares of `100 each - 250,001 25,000,100
Class "B" equity shares of `100 each - - 324,517 32,451,700
Ordinary Class Shares of `100 each 969,318 96,931,800 394,800 39,480,000
969,318 96,931,800 969,318 96,931,800
Page | 43
Preference Share Capital
9% Redeemable Optionally Convertible
Preference Shares of `10 each
3,000,000 30,000,000 3,000,000 30,000,000
3,000,000 30,000,000 3,000,000 30,000,000
i) Rights attached with shares :-
Current Year FY 2015-16:
All 1300000 equity shares of 100/- each carrying one vote per share.
Previous Year FY 2014-15:
Rights attached with different class of
shares were :
a) Class “A” equity shares total 320,000 equity shares of ` 100/- each, the total voting rights of all
Class A shares will be equal to 1.07 at all times.
b) Class “B” equity shares total 380,000 equity shares of ` 100/- each, the total voting rights of all
Class B shares will be equal to 0.93 at all times.
c) Ordinary Class equity shares total 600,000 equity shares of ` 100/- each, the total voting rights
of all Ordinary Class Equity shares will be equal to 1 at all times.
ii) Dividend on 9% Optionally Convertible Preference Shares (OCPS) is to be paid within 3 months from
the close of Financial Year. Dividend, if not paid, will be cumulative in nature. Dividend distribution
tax and other statutory charges and levies thereon would be borne by the company. In case, SIDBI
decides to convert outstanding OCPS into equity shares, either in full or in parts, OCPS would be
converted into Equity Shares at break-up value (book value) of MFI based on Last Financial Year’s
audited results. In case, SIDBI decides not to convert OCPS into equity shares or converts only part of
OCPS into equity, then OCPS would be redeemable as follows:
a) 50% of outstanding OCPS at the end of 4 years.
b) Remaining 50% outstanding OCPS at the end of 5 years.
Any dividend payable/ unpaid would also be paid along with redemption of OCPS.
3.1 Reconciliation of the number of shares outstanding at the beginning
and at the end of the year.
Particulars As at March 31, 2016 As at March 31, 2015
Number In Rs Number In Rs
Class "A" Shares
Equity Shares of ` 100 each
Outstanding at the beginning of the year 250,001 25,000,100 250,001 25,000,100
Issued during the year - - - -
Bought back during the year - - - -
Converted to Ordinary Shares (250,001) (25,000,100)
Class "A" Shares Outstanding at the
end of the year
- - 250,001 25,000,100
Page | 44
Class "B" Shares
Equity Shares of ` 100 each
Outstanding at the beginning of the
year
324,517 32,451,700 324,517 32,451,700
Issued during the year - - - -
Bought back during the year - - - -
Converted to Ordinary Shares (324,517) (32,451,700)
Class "B" Shares Outstanding at the
end of the year
- - 324,517 32,451,700
Ordinary Shares
Equity Shares of ` 100 each
Outstanding at the beginning of the year
394,800
39,480,000
394,800
39,480,000
Issued during the year
Bought back during the year
Converted from Class "A" Shares
250,001
25,000,100
Converted from Class "B" Shares
324,517
32,451,700
Ordinary Shares Outstanding at the
end of the year
969,318
96,931,800
394,800
39,480,000
9% Redeemable Optionally Convertible Preference Shares
Preference Shares of `10 each
Outstanding at the beginning of the year
3,000,000
30,000,000
3,000,000
30,000,000
Issued during the year - -
Bought back during the year - - - -
9 % Optionally con.Preference Shares
Outstanding at the end of the year
3,000,000
30,000,000
3,000,000
30,000,000
3.2 Details of the Shareholders Holding more than 5% of the Share capital
Equity Shares of ` 100 each
Name of Shareholder As at March 31, 2016 As at March 31, 2015
Number % of Holding Number % of Holding
Class "A" Shares
Dia Vikas Capital Pvt. Ltd. - 0.00% 250,001 25.79%
- 0.00% 250,001 25.79%
Class "B" Shares
Dia Vikas Capital Pvt. Ltd. - 0.00% 30,000 3.09%
Shikhar Development Foundation - 0.00% 240,000 24.76%
Partners of Shikhar Trust - 0.00% 54,317 5.60%
Page | 45
- 0.00% 324,317 33.46%
Ordinary Class Shares
Dia Vikas Capital Pvt. Ltd. 481,101 49.63% 201,100 20.75%
Shikhar Development Foundation 240,000 24.76% - 0.00%
Partners of Shikhar Trust 54,317 5.60%
Small Industries Development Bank of
India
193,700
19.98%
193,700
19.98%
969,118 99.98% 394,800 40.73%
Total 969,118 99.98% 969,118 99.98%
9% Redeemable Optionally Convertible Preference Shares of ` 10 each
Name of Shareholder As at March 31, 2016 As at March 31, 2015
Number % of Holding Number % of Holding
SIDBI (OCPS) 3,000,000 100.00% 3,000,000 100%
3,000,000 100.00% 3,000,000 100%
SHIKHAR MICROFINANCE PVT LTD
Notes to Financial Statements for the year ended March 31, 2016
4 Reserves & Surplus
Particulars As at March 31, 2016 (In Rs)
As at March 31, 2015 (In Rs)
(a) Statutory Reserve (As per Section 45-IC of RBI Act,1934)
Opening Statutory Reserve 238,788 -
20% out of Current year Profit 546,117 -
Reinstatement of Statutory Reserve of Rs 2,34,404 for FYR 2013-14 234,404 238,788
Closing Statutory Reserve 1,019,310 238,788
(b) Security Premium 2,413,200 2,413,200
(c) General Reserve
Opening Balance -8,321,911 -5,984,642
Add : Profit for the year 2,730,586 1,193,941
Less: Transfer to Staturory Reserve -780,521 -238,788
Net Profit 1,950,065 955,153
Less:Prov.for Dividend on Preference Shares including DDT -3,158,865 -3,158,865
Less: Under provision of depreciation now adjusted with retained earnings
- -133,557
Total Current Year Profit -1,208,800 -2,337,269
Net surplus in the statement of Profit & loss -9,530,711 -8,321,911
Total Reserves & Surplus -6,098,202 -5,669,923
Page | 46
5 Long Term Borrowings
Particulars As at March 31, 2016
(In Rs)
As at March 31, 2015
(In Rs)
Secured
(a) Term Loans:-
From Banks 148,745,759 21,660,000
From Other Parties 130,995,131 33,991,673
Unsecured Loans
(a) Loans and advances from related parties 39,833,333 27,500,000
Total 319,574,223 83,151,673
5.1 Secured Loans mentioned above are secured by way of charge on Loan Portfolio of the company
5.2 Secured Loans from Banks have been further guaranteed by Managing Director, Mr. Satyavir
Chakrapani and CFO, Mr.Thomas Vinoy Thomas.
5.3 Secured Loans mentioned above are further secured by way of Lien on Fixed Deposit of the
company.
6 Deferred tax Assets/liability (Net)
Particulars As at March 31, 2016
(In Rs)
As at March 31, 2015
(In Rs)
Deferred tax liability
Related to depreciation on fixed assets 2,091 10,729
Related to Preliminary Expenses 95,017 65,817
97,108 55,088
Deferred Tax Asset
Related to Performance Incentives Payable to Employees, Gratuity & Leave Encashment
246,829 22,914
Total Deferred Tax Assets (Net) -149,721 32,174
7 Other Long Term Liabilities
Particulars As at March 31, 2016
(In Rs)
As at March 31, 2015
(In Rs)
Trade Payables - -
Others * 1,000,794 509,376
Total 1,000,794 509,376
*Includes Staff Security Deposit
8 Long Term Provisions
Particulars As at March 31, 2016
(In Rs)
As at March 31, 2015
(In Rs)
Provision against Standard Assets 13,750 -
Total 13,750 -
Page | 47
9 Short Term Borrowings
Particulars As at March 31, 2016
(In Rs)
As at March 31, 2015
(In Rs)
Secured
(a) Term Loans:-
From Banks 100,715,042 26,319,719
From Other Parties 206,109,984 137,693,503
Unsecured Loans
(a) Loans and advances from related parties 36,666,662 21,545,450
Total 343,491,688 185,558,672
9.1 Secured Loans mentioned above are secured by way of charge on Loan Portfolio of the company
9.2 Secured Loans from banks have been further guaranteed by Managing Director, Mr. Satyavir
Chakrapani and CFO, Mr.Thomas Vinoy Thomas.
9.3 Secured Loans mentioned above are further secured by way of on Fixed Deposit of the company.
10 Other Current Liabilities
Particulars As at March 31, 2016
(In Rs)
As at March 31,
2015 (In Rs)
Statutory Remittances 859,952 590,329
Dividend Payable 7,874,465 5,528,014
Insurance payable to Clients 3,097,986 1,857,632
Provision for Employee Benefits 3,301,146 1,077,573
Others** 3,439,167 2,190,240
Total 18,572,716 11,243,788
** includes other expenses Payable.
11 Short Term Provisions
Particulars As at March 31, 2016
(In Rs)
As at March 31,
2015 (In Rs)
Provision against MF Portfolio 5,176,449 3,041,456
Provision on Income Tax 578,586
Total 5,755,035 3,041,456
Page | 48
12. Fixed Assets
Fixed Assets Gross Block
Balance as at April 1, 2015
Additions Balance as at March 31, 2016
Rs. Rs. Rs.
Tangible Assets
Furniture and Fixtures 1,121,694 196,585 1,318,279
Office equipment 1,101,311 134,009 1,235,320
Computers 1,344,092 585,981 1,930,073
Assets under lease
Assets under lease
Others (specify nature)
Total 3,567,097 916,575 4,483,672
Accumulated Depreciation Net Block
Balance as at April 1, 2015
Depreciation charge for the year
On disposals
Balance as at March 31, 2016
Adjusted with Retained Earnings
Balance as at March 31, 2016
Balance as at March 31, 2015
Rs. Rs. Rs. Rs. Rs. Rs.
445,270 94,358 - 539,628 - 778,651 676,424
541,076 196,305 737,381 - 497,939 560,235
1,108,043 177,089 - 1,285,132 - 644,941 236,049
2,094,389 467,752 - 2,562,141 - 1,921,531 1,472,708
13 Long Term Loans and Advances (Unsecured, Considered good)
Particulars
As at March 31, 2016 (In
Rs)
As at March 31, 2015 (In
Rs)
a) Security Deposits 340,718 190,572
b) Balance with Revenue Authorities (Net of provision)-Till Previous Year 1,089,797 682,463
c) Balance with Revenue Authorities (Net of provision)-for Current Year - 438,584
d) MAT Credit Entitlement - 476,359
Total 1,430,515 1,787,978
14 Other non-current assets
Particulars
As at March 31, 2016
(In Rs)
As at March 31, 2015
(In Rs)
Preliminary Expenses (to the extent not written off) 469,506 564,004
Unamortized Processing Fee * ( Refere Note C) (to the extent not written off)
7,250,850 -
Total 7,720,356 564,004
Page | 49
15 Loan Portfolio
Particulars
As at March 31, 2016
(In Rs)
As at March 31, 2015
(In Rs)
A. Portfolio Loans (Unsecured, Considered Good)
Joint Liability Group Loans 509,200,752 295,402,673
Individual Loans
-
B. Portfolio Loans (Unsecured, Considered Doubtful)
Joint Liability Group Loans 4,828,583 3,208,530
Individual Loans - -
C. Other Loans (Unsecured, Considered Doubtful) 4,000,000 2,500,000
Total 518,029,335 301,111,203
15.1 Bifurcation of Loan Assets
Particulars
As at March 31, 2016
(In Rs)
As at March 31, 2015
(In Rs)
A) Micro Finance Loan Portfolio
(i) Standard Assets(no default in repayment) 502,900,231 288,853,760
(ii) Standard Assets(overdue upto 90 days) 4,129,602 4,509,968
(iii) Non Performing assets
Portfolio Assets overdue more than 90 days & less than 180 days 2,170,919 2,038,945
Portfolio Assets overdue more than 180 days 4,828,583 3,208,530
Total Micro Finance Loan Portfolio 514,029,335 298,611,203
B) Other Loan Portfolio
(i) Standard Assets(no default in repayment) 4,000,000 2,500,000
(ii) Standard Assets(overdue upto 90 days)
-
(iii) Non Performing assets
-
Portfolio Assets overdue more than 90 days & less than 180 days
Portfolio Assets overdue more than 180 days
Total Other Loan Portfolio 4,000,000 2,500,000
Gross Loan Portfolio (A+B) 518,029,335 301,111,203
Less : Non Current Portion of Loan Portfolio 97,083,007 56,738,279
Current Portion of Loan Portfolio 420,946,328 244,372,924
Page | 50
16 Cash & Bank Balances
Particulars As at March 31, 2016
(In Rs)
As at March 31, 2015
(In Rs)
Cash and Cash Equivalents
Cash 547,682 182,486
Bank Balances 32,982,172 11,070,554
Total cash & cash equivalents 33,529,854 11,253,040
Other Bank Balances
Fixed Deposits
Fixed Deposits(with original maturity 6 months to 12 months)
153,500,000 33,000,000
Fixed Deposits(with original maturity more than 12 months)
5,000,000 5,000,000
Fixed Deposits (Under Lien) (with original maturity more than 12 months)
70,837,000 39,387,000
Other Fixed Deposits
Interest Accrued but not due
Total Other Bank Balances 229,337,000 77,387,000
Total Cash & Bank Balances 262,866,854 88,640,040
17 Short-Term Loans and Advances (Unsecured, Considered good)
Particulars As at March 31, 2016 (In Rs)
As at March 31, 2015 (In Rs)
i) Staff Advances 849,107 213,266
ii) Prepaid Expenses 289,508 209,783
iv) Balance with Revenue Authorities 18,341 9,111
Total Current Loans and Advances 1,156,956 432,160
18 Other current assets
Particulars As at March 31 2016 (In Rs)
As at March 31, 2015 (In Rs)
i) Interest accrued on Loan Portfolio 4,374,395 2,804,658
ii) Interest accrued on Term Deposits & Fixed Deposit 4,259,061 3,385,781
iii) Interest accrued on SDPL Loan 542,762 31,963
iii) Unamortized Processing Fee(to the extent not written off)
- -
iv) Recoverable from Insurance Company * 734,682 690,602
Less: Allowance for Non Recovery -340,602 -340,602
v) Net Recoverable from Insurance Company 394,080 350,000
vi) Recoverable from Staff against Theft 2,968,825 2,961,248
vii) PSIG Grant Receivable from SIDBI 465,699 -
Less: Share Payable to Shikhar Development Foundation - -
Net Grant Receivable 465,699 -
viii) Others 1,711,926 1,133,982
ix) Floater Deposits with PNB Metlife - 183,291
x) Floater Deposits with Bajaj Allianz 100,000 100,000
Page | 51
xi) Floater Deposits with Kotak Mahindra 300,000 100,000
xii) Recoverable from Bank for wrong NEFT Transactions
849,789
Total 15,966,537 11,050,923
* Recoverable from Insurance company includes Theft of cash from Kicha ( District Rudarpur ) uttarakhand of Rs 44,080/-)
19 Revenue from Operations
Particulars For year ended March 31, 2016
(In Rs)
For year ended March 31, 2015
(In Rs)
Interest Income (Note 19.1) 86,323,739 75,300,566
Other Financial Services (Note 19.2) 6,101,845 3,521,918
Total 92,425,584 78,822,484
19.1 Interest Income comprises the following :
Particulars For year ended March 31, 2016
(In Rs)
For year ended March 31, 2015
(In Rs)
Interest income on Loan Portfolio 81,949,344 72,495,908
Interest Accrued on Loan Portfolio 4,374,395 2,804,658
Total 86,323,739 75,300,566
19.2 Revenue from other financial services comprises the following :
Particulars For year ended March 31, 2016
(In Rs)
For year ended March 31, 2015
(In Rs)
Income from Processing Fee 6,101,845 3,521,918
Total 6,101,845 3,521,918
20 Other Income
Particulars For year ended March 31, 2016
(In Rs)
For year ended March 31, 2015
(In Rs)
Other Non Operating Income 6,418,731 3,691,423
Total 6,418,731 3,691,423
20.1 Other Non Operating Income comprises the following :
Particulars For year ended March 31, 2016
(In Rs)
For year ended March 31, 2015
(In Rs)
Interest on Fixed Deposits (Gross) - Lien marked under security*
3,485,887 1,948,533
Interest on Fixed Deposits (Gross) 2,319,619 1,675,632
Sale of Scrap 5,174 -
Interest on Staff Loan 34,496 16,239
Interest from Loan 567,554 35,515
Miscellaneous Receipts 6,001 15,504
Total 6,418,731 3,691,423
Page | 52
*Interest on fixed deposit kept with lenders ( Banks / FI) to raise fund for creation of financial assets against the condition mentioned in the sanction
21 Employee Benefit Expenses
Particulars For year ended March 31, 2016
(In Rs)
For year ended March
31, 2015 (In Rs)
Salaries & Allowances 26,624,361 24,100,992
Contribution to provident and other funds 2,073,248 2,330,560
Staff Group Life Insurance 122,252 31,210
Staff welfare expenses 1,046,806 875,478
Total 29,866,667 27,338,240
22 Finance Cost
Particulars For year ended March 31, 2016
(In Rs)
For year ended March 31, 2015
(In Rs)
Interest Expenses 46,094,911 38,257,823
Fund Raising Expenses* 394,854 -
Other Borrowing Cost** 631,227 1,185,500
Total 47,120,992 39,443,323
* Fund Raising Expenses Includes debt syndication charges, conveyance, social rating and other similar charges incurred for raising funds.
** Includes loan processing and documentation charges expensed during the year ( Refer Note C)
23 Depreciation & Amortization expense
Particulars For year ended March 31, 2016
(In Rs)
For year ended March 31, 2015
(In Rs)
Depreciation 467,752 433,648
Preliminary Expenses Written off 94,498 47,988
Total 562,250 481,636
24 Provision for Microfinance Loans
Particulars For year ended March 31, 2016
(In Rs)
For year ended March 31, 2015
(In Rs)
Provisioning against MF Loans 2,134,993 162,401
Standard Assets 7,500 -
Total 2,142,493 162,401
Page | 53
25 Other Expenses
Particulars For year ended March 31, 2016
(In Rs)
For year ended March 31, 2015
(In Rs)
Rent 2,701,192 2,303,072
Electricity and Water Charges 518,433 472,542
Repairs and Maintenance
-Buildings 108,499 111,243
-Equipments 244,628 215,766
Insurance Charges 129,439 135,741
Travelling and Conveyance 3,581,329 3,098,618
Printing and Stationery 858,974 712,209
Communication Costs 1,360,124 1,103,168
Microfinance Exp - MFI Reports 270,728 81,600
Legal & Professional Fees 898,670 544,447
Bank Charges 899,988 642,479
Hospitality Expenses 132,860 130,948
Royalty 212,000 250,000
Commission and Brokerage 40,000 5,000
Board Meeting Expenses 9,804 10,142
Interest and penalties on Statutory Dues 8,217 5,509
ROC Filling Fees 37,800 156,590
Office Expenses 304,491 304,787
Directors Sitting Fees 29,000 42,000
Other Operating expenses 985,821 326,414
Microfinances Loan Written Off 843,369 2,512,951
Auditors' Remuneration (refer Note 24.1 below) 120,150 120,150
Swachh Bharat Cess 25,544
Total 14,321,060 13,285,376
25.1 Break up of Auditors’ Remuneration:
Particulars For year ended March 31, 2016
For year ended March 31, 2015
(In Rs) (In Rs)
Audit Fees 120,150 120,150
Tax Audit Fees - -
Taxation Matters - -
Out of Pocket Expenses - -
Service Tax - -
Less: Service tax set off claimed - -
1234 - -
Total 120,150 120,150
Page | 54
26 Contingent Liabilities & Commitments
Particulars
For year ended March 31, 2016
(In Rs)
For year ended March 31, 2015
(In Rs)
Contingent Liabilities - -
Commitments - -
Total - -
27 Earning Per Share In Accordance with Accounting Standard-20
Particulars For year ended March 31, 2016
For year ended March 31, 2015
(In Rs) (In Rs)
Net Profit After Tax 2,730,586 1,193,941
Less: Adjustment of Dividend and DDT on OCPS 3,158,865 3,158,865
Net Amount Available for Equity Shares - 428,279 - 1,964,924
Weighted Average Number of Equity Shares 969,118 969,118
Basic & Diluted EPS* - 0.44 - 2.03
* As at 31.03.2016, the outstanding potential equity shares had an anti-dilutive effect on EPS. Hence there was no dilution of EPS for the year.
28. The balances receivables and payables are subject to confirmation and reconciliation. Pending
such confirmation and reconciliation, the impact on accounts is not ascertainable at this stage.
29. The company is a Small and Medium sized Company (SMC) as defined in the General Instructions
in respect of Accounting Standards notified under the Companies Act, 2013. Accordingly, the
company has complied with the Accounting Standards as applicable to Small & Medium Sized
Company. Segment Reporting as per AS 17 is not mandatory for the Company being an SMC
company.
30. The Company has been sanctioned grant vide sanction letter no.10068/PSIG-33 dated 04.03.2013
by SIDBI for Capacity Building activities under the Poorest States inclusive Growth Programme of
PSIG Project. The objectives of the grant, inter alia, are to undertake Capacity building of
Institution subject to fulfilment of conditions. An amount of Rs. 4,65,699/- as Grant is receivable in
the Financial year 2015-16.
31. The entity is having the Secured and Unsecured loan balances with respective parties as on 31st
march 2016. Annexure A is attached.
32. Employee Benefits
The Company has recognized the following amounts in the Profit and Loss Account towards
contribution to defined contribution plans which are included under Contribution to Provident
Fund-
Page | 55
(Amount in Rs.)
Particulars 2015-16 2014-15
Provident Fund 14,35,908 17,17,051
The Company makes annual contribution to the Employee’s State Insurance. The Company has
recognized following amounts in the Profit & Loss Account towards contribution to ESI –
(Amount in Rs.)
Particulars 2015-16 2014-15
ESI 6,36,890 6,12,119
The Company has recognized the following amounts in the Profit and Loss Account towards
Gratuity-
(Amount in Rs.)
Particulars 2015-16 2014-15
Gratuity Paid - 1,69,038-
Provision for Gratuity 2,09,343 7,93,577-
The Company has recognized the following amounts in the Profit and Loss Account towards Staff
Group Life Insurance
(Amount in Rs.)
Particulars 2015-16 2014-15
Staff Group Life Insurance 1,22,252 31,210
The company has paid and provided for performance incentive to eligible employees. The
Company has recognized in the Profit and Loss Account Rs.2,59,132/-towards Performance
Incentives and Rs. 5,69,925/- towards Leave Encashment for the FY 2015-16.
Page | 56
CLIENTS’ TESTIMONIALS
Poverty and Unemployment continues to persist in India despite 66 years of
development. There is consensus that over 350 million people live below the Poverty
Line in India and in this race women’s condition is worst.
These are the few stories of the Trials and Triumphs of those Women who had been
struggling to eke out a living for themselves and their families. They were once groping
in dark, searching for some income generating activity that could provide them
sustenance. All that they had was labour to sell and a few unfulfilled dreams. These are
the stories of those women who were groomed as Entrepreneurs through Shikhar
Microfinance.
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SHIKHAR MICROFINANCE PRIVATE LIMITED