2015-16 REPCO MICRO FINANCE LIMITED Annual Report th 9
9th Annual Report 2015-16
1
Upscaling under privileged through financial innovative and creation of first generation entrepreneurs
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CONTENTS Page No.
CORPORATE INFORMATION...... 7
CORPORATE SOCIAL RESPONSIBILITY...... 10
BOARD’S REPORT...... 13
AUDITORS’ REPORT...... 35
BALANCE SHEET...... 45
STATEMENT OF PROFIT AND LOSS...... 46
CASH FLOW STATEMENT...... 58
AGM NOTICE...... 73
LIST OF BRANCHES...... 77
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2015-16 CORPORATE INFORMATION
Board of Directors (As on 30.06.2016 ) Annual Report th 9
Smt. R.S. ISABELLA Managing Director
Shri. R. VARADARAJAN Smt. SRIPRIYA KUMAR Shri. V. MOHANDOSS Non- Executive Director Independent Director Independent Director
Shri. P. MAHALINGAM Shri. P. NATRAJAN Shri. A. G. VENKATACHALAM Non-Executive Director Non-Executive Director Non-Executive Director
7 2015-16 COMMITTEES OF THE BOARD (As on 31st March, 2016)
AUDIT COMMITTEE
• Smt. R.S Isabella
• Shri. V.Mohandoss
• Smt. Sripriya kumar Annual Report
th CORPORATE SOCIAL RESPONSIBILITY COMMITTEE 9 • Smt. R.S Isabella
• Shri. A.G.Venkatachalam
• Shri. V.Mohandoss
NOMINATION AND REMUNERATION COMMITTEE
• Smt. R.S Isabella
• Shri. V.Mohandoss
• Smt. Sripriya kumar
KEY MANAGERIAL PERSONNEL (As on 30.06.2016 )
• Smt. R.S Isabella
Managing Director
• Shri. V. Balasubramanian
Chief Financial Officer
• Shri. Anup Kumar Gupta
Company Secretary
AUDITORS
M/s R. Subramanian and Company
No. 6(36), Krishnaswamy Avenue, Luz,
Mylapore, Chennai-600 004
REGISTERED OFFICE: Repco Tower,No. 33, North Usman Road, T. Nagar, Chennai - 600 017 Telephone: 044-28340715 Facsimile: 044-28344037
8 CORPORATE OFFICE: 2015-16 No. 635, Karumuttu Center, 2Nd Floor , North Wing Annasalai, Nandanam, Chennai - 600 035 Telephone: 044 24310212 Email – [email protected] Annual Report
BANKERS th 9 REPCO Bank HDFC Bank Syndicate Bank Dena Bank City Union Bank IDBI Bank Central Bank of India Karur Vysya Bank Shinhan Bank Indian Bank Canara bank Bank of India
CREDIT INFORMATION COMPANIES (CIC) CRIF High Mark EQUIFAX CIBIL EXPERIAN
REGULATOR Reserve Bank of India Department of Non- Banking supervision Chennai- 600001
9 2015-16 CSR Activities Toilet Construction for Jaigopal Garodia Govt., Girls Higher Secondary School , Chennai. Annual Report th 9
The Jaigopal Garodia Govt. Girls Higher Secondary School at Choolaimedu, Chennai, has strength of about 2000. The students have been provided with 40 toilets which is very less compared to the strength of students. Under CSR activities, 6 toilets were constructed.
10 2015-16 Annual Report th 9 New Premises Opening in RMFL Our MD Inagurate New Loan Schme Tiruvannamalai Branch Annai Sakthi at RMFL Tiruvannamalai
Loan Distribution to SHG Members, Our MD Interaction with RMFL Tiruvannamalai SHG Members
Salem RMFL New Premises Opening Royapuram RMFL New Branch Opening
Royapuram RMFL New Branch Opening Loan Distribution to SHG Members, RMFL Royapuram 11 SHG Activities
12 DIRECTOR’S REPORT 2015-16 To The Members Your Directors are pleased to present the Ninth Annual Report with the Audited Statement of Accounts and the Auditor’s Report of your company for the financial year ended 31st March 2016.
Overview: Annual Report th Your Directors are glad to state that your company has shown increase 9 in revenue from operations. The Company has earned a total income of Rs. 5435.91 lakhs and net profit of Rs. 1256.92 lakhs for the year ended 31st March 2016 as against a total income of Rs. 3472.45 lakhs and a net profit of Rs. 713.23 lakhs for the year ended 31st March 2015 amounting to an increase of 76.23 % in net profit. During the year under review, company has not issued any securities. The amount of Gross NPA was Rs. 94.48 lacs which was 0.84 % of the MF Loan Portfolio as on 31st March, 2016. The Company has created necessary provisions in pursuance to guidelines issued by the Reserve Bank of India, after which net NPA stood NIL. During the year, company has availed term loan of Rs.65 Crores (Rupees Sixty Five Crore Only ) from various commercial banks. Company is expecting more funds from other commercial banks in the current financial year. The Company currently operates only in state of Tamilnadu with 65 branches as on 31st March 2016 compared to 47 in previous year. The Company proposed to open more branches at the unbanked areas to provide financial assistance to the Self Help Groups. The Capital Adequacy Ratio of the company as on 31st March, 2016 was 17.53 % of risk weight assets, as against the minimum requirement of 15 % and the qualifying assets is more than 85% of the net assets as required by the Reserve Bank of India for NBFC-MFI. Your Directors are confident that the micro finance sector will continue to grow in coming years.
14 FINANCIAL HIGHLIGHTS 2015-16
Authorised Capital : 60 Crore Subscribed Capital : 39.20 Crore Paid up Capital : 39.20 Crore (Rs. In Lakhs) Annual Report
Particulars As at 31.03.2016 As at 31.03.2015 th 9 Interest Income 5044.54 3270.76 Other Income 391.36 201.69 Total Income 5435.90 3472.45 Interest & other Financial Charges 2071.81 1402.29 Administration & Other Costs 1139.42 598.40 Provision for Standard Assets 110.39 16.90 Provision for Non -Performing Assets 94.49 261.97 Depreciation 83.31 95.86 Profit before tax 1936.48 1097.03 Provision for tax and others 679.56 383.80 Net Profit after tax 1256.92 713.23 CRAR 17.53% 23.13 %
Business Highlights: • 18 new branches in FY 2015-16. • Total number of borrowers as on 31st March, 2016 was 1,79,458. • Disbursement during the year was Rs.354.54 Crore, 42 percent over previous year. State of Company’s affairs: RMFL is a registered NBFC-MFI Company based in Chennai , providing micro finance loans to SHG’s through its 65 branches across Tamilnadu covering 29 districts. The number of branches increased to 65 from 47 from the previous FY. As on March 31, 2016, the Company’s present borrower base is 179,458. The Company’s mission is “Up scaling under privileged through financial inclusion and creation of first generation entrepreneurs”.
15 2015-16 Operation : There was no change in nature of operation of the company during the year under review.
Share Capital: The paid up share capital as on 31st March, 2016 was Rs 39.20 Crore Annual Report and authorised capital was 60.00 Crore as on that date. th 9 Dividend: Your Directors have recommended a dividend of 10 percent on the paid up capital of the Company for the financial year 2015-16. The dividend payout is subject to the approval of members at the ensuing AGM. The dividend will be paid to the members, whose names appear in the register of members as on 6th June, 2016. Fixed Deposits: The Company has not accepted any deposit within the meaning of Section 76 of the Companies Act, 2013, since incorporation.
Reserves : The company proposes to transfer Rs.7, 85,11,794.00 ( Rupees Seven Crore Eight Five lakhs Eleven Thousand Seven Hundred Ninty Four Only) General Reserve , out of which further statutory appropriations will be made.
Compliances with RBI Guidelines / Directions Your Company was classified as NBFC-MFI on December, 2013. Your Company has complied with all applicable regulations of the Reserve Bank of India. As per Non- Banking Finance Companies, RBI Directions, 1998, the Directors hereby report that the company did not accept any public deposits since inception.
Annual Return: The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and administration) Rules, 2014 is furnished in Annexure- A and is attached to this Report.
16 Corporate Social Responsibility: 2015-16 As per section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014, the board has constituted a Corporate Social Responsibility (CSR) Committee as under: Smt. R. S Isabella , Chairperson
Mr. V. Mohandoss , Independent Director Annual Report th 9 Mr. A G Venkatachalam , Non- Executive Director The Board of Directors of the Company has approved a CSR Policy. The Company has initiated activities in accordance with the said policy, the details of which have prescribed in Annexure – B. The CSR policy of the Company is available on the Company’s website and can be accessed in the link www.repcomicrofin.co.in
Contracts and Arrangements with related parties: There was no contract or arrangements made with related parties as defined under Section 188 of the Companies Act, 2013 during the year under review.
Adequacy of Internal Financial Controls: The Company has put in place an adequate internal control system to safeguard all assets and ensure operational efficiency. The Company also has an independent internal auditor to conduct ongoing internal audits; covering all aspects of operations. The Company also has a team of inspection who visit the branches on regular interval. Apart from these, Tele Call- Monitoring Mechanism is put in place. Through this Mechanism borrowers are contacted and enquire about end utilization of loan availed. This mechanism has provided more control to the company.
Risk Management: The company has in place a risk management policy framework which has been approved by the Board of Directors. The framework codifies the various risks and the methodologies to ensure such risks are mitigated.
17 2015-16 Particulars of Loans, Guarantee or Investments:
The Company has not given any loans or guarantees covered under provisions of section 186 of the Companies Act, 2013.The Company has not made any Investments.
Particulars of Employees : Annual Report th 9 The Company does not have any employee whose particulars are required to be furnished under Rule 5 of Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014.
Conservation of Energy & Technical Absorption:
The Company is not a manufacturing company, hence, the particulars relating to conservation of energy and technology absorption stipulated in section 134(3)(m) of the Companies Act, 2013, are not applicable.
Foreign Exchange Earnings and Out-Go:
During the period under review there was no foreign exchange earnings or out flow.
Human Resources :
The number of employees as on 31st March, 2016 was 175. The company has provided a wide range of benefits to its employees such as Education Aid, Birthday Gift, Cremation Expenses etc.
Vigil Mechanism / Whistle Blower:
The Company in pursuance to sub section 9 of Section 177 of the Companies Act, 2013 has framed Vigil Mechanism / Whistle Blower policy for directors and employees to report genuine concerns about unethical behaviour, actual or suspected frauds a violation of the Company code or ethics policy. The policy was approved by the board and is posted on the Website of the Company.
18 Directors / Key Managerial Personnel : 2015-16
The details of directors and key managerial personnel who were appointed or have resigned during the year;
S.No. Name of Director/ KMP Designation Appointed / Date of Cessation Appointment/
Cessation Annual Report
1. Mr. K. Rajendran Director Cessation 30th June, 2015 th 9 2. Smt. R. S Isabella Nominee Director Appointed 11th Aug, 2015
3. Smt. V. V. D Kotha CFO Cessation 30th Nov, 2015
4. Mr. V. Balasubramanian CFO Appointed 8th December, 2015
Mr. R.Varadarajan was re-designated as Non-Executive Director w.e.f 1st March, 2016.
Evaluation of Board , Committees & Independent Directors : Board evaluated its performances as a whole, its various committees and was satisfied with its performance and committees. The board (excluding the independent director being evaluated) also evaluated the performance of all the independent directors.
Declaration of Independence by Independent Directors: The Independent Directors have submitted their disclosures to the Board that they full fill the entire requirement as stipulated in section 149(6) of the companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules.
Separate Meeting of Independent Director : The Independent Directors of the company at their separate meeting held on 23rd February, 2016 in full attendance, made an objective assessment and evaluation of the performance (a) Executive Managing Director (b) Non- Independent Director of the Company.
Number of Meeting : During the period under review four board meeting and three audit committee were held and convened. Details of the Directors as on 31st March, 2016 and their attendance at the Board Meeting during the financial year ended 31st March, 2016 are given below:
19 2015-16 Name of Director No of Meeting Held No of Meeting Attended
R.Varadarajan 4 4
R.S.Isabella* 4 3
K.Rajendran** 4 1
Sripriya kumar 4 3 Annual Report th V.Mohandoss 4 4 9 P.Mahalingam 4 3
P.Natarajan 4 4
A.G.Venkatachalam 4 4
* Appointed on 11th August, 2015
** Resigned on 30th June, 2015.
Composition of Committees. (A s on 31st March , 2016): a) Audit Committee The audit committee was reconstituted as per section 177 of the Companies Act, 2013 read with rule 6 and 7 of the Companies (Meeting of the Board and its Powers) rules, 2013. The Audit Committee consist of the following members as on 31.03.2016. a) Smt. R.S.Isabella Chairperson b) Shri. V. Mohandoss Independent Director c) Smt. Sripriya Kumar Independent Director
The above composition of the Audit Committee consists of Independent Directors viz, Shri. V. Mohandoss and Smt. Sripriya Kumar., forming the majority.
20 Nomination and Remuneration Committee 2015-16 The Nomination & Remuneration Committee consists of following directors a) Smt. R.S.Isabella Chairperson b) Shri V. Mohandoss Independent Director c) Smt Sripriya Kumar Independent Director Annual Report th
Corporate Social Responsibility 9 The Corporate Social Responsibility Committee consists of following directors as on 31.03.2016
a) Smt. R. S. Isabella Chairperson b) Shri V. Mohandoss Independent Director c) Shri A.G. Venkatachalam Independent Directo
Remuneration Policy: The Company pursuant to section 178 of the Companies Act, 2013 has formulated and adopted nomination and remuneration policy which in disclosed on our website.
Directors Responsibility Statement: In accordance with the provisions of Section 134(5) of the Companies Act, 2013 the Board hereby submit its responsibility Statement:- a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; b) The directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period; c) The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
21 2015-16 d) The directors had prepared the annual accounts on a going concern basis e) The directors had laid down internal financial control to be followed by the company and that such internal financial controls are adequate and were operating effectively; and f) The directors had devised proper systems to ensure compliance with Annual Report
th the provisions of all applicable laws and that such systems were 9 adequate and operating effectively.
Subsidiaries, Joint Ventures and Associate Companies: The Company does not have any Subsidiary, Joint Venture or Associate Company.
Statutory Auditors: “R. Subramanian and Company LLP” Auditors of the Company retire at the forthcoming Annual General Meeting (AGM) and are eligible for re-appointment. The Company has received a letter from them, stating that they satisfy the criteria provided in section 141 of the Companies Act, 2013 and the appointment, if made, will be in accordance with the conditions prescribed under Companies (Audit and Auditors) Rules, 2014. The Directors recommended the re-appointment of “R.Subramanian and Company LLP” as Auditors of the Company for FY 2016-17. The Notes to Accounts forming part of the financial statements are self explanatory and need no further explanation. There are no qualifications or adverse remarks in the Auditors Report which require any clarification / explanation.
Material Changes and Commitment affecting the financial position of the company between 31st March and the date of Board’s Reports : There has been no material change and commitments, affecting the financial position of the company which has occurred between the end of financial year to which the financial statements relate and the date of the report.
Penalty No penalty has been paid to any statutory bodies during the period under review.
22 Disclosures under the Sexual Harassment of Women at Workplace (Prevention , 2015-16 Prohibition and Redressal ) Act, 2013. The Company has constituted Internal complaints Committee in line with the requirement of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. The following is a summary of sexual harassment complaints received and disposed of during the year 2015-16. Annual Report th 9 No of complaints received: NIL No of complaints disposed of: NA (No complaints received).
Grading and Rating During the year, company is rated by ICRA, rating agency. They re-affirmed “M3” for MFI grading and “BBB-“rating to the bank facilities. The grading indicates that company’s ability to manage its micro finance activities in a sustainable manner is moderate.
Acknowledgment Yours Directors would like to express their heartful appreciation and support received from all its stakeholders – borrowers, bankers, Repco Foundation for Micro Credit, REPCO Bank , Repco Home Finance Limited, Sa-Dhan, Department of Company Affairs and other authorities and the regulator Reserve Bank of India. By order of the Board of Directors
For, Repco Micro Finance Limited
Shri. A.G Venkatachalam Smt. R. S. Isabella Director Managing Director DIN- 05289154 DIN - 06871120
Place: Chennai Date: 02.09.2016
23 2015-16 FORM NO. MGT 9 Annexure -A
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. Annual Report th 9 I REGISTRATION & OTHER DETAILS:
i CIN U74900TN2007PLCO64126
ii Registration Date 27.06.2007
iii Name of the Company REPCO MICRO FINANCE LIMITED
iv Category/Sub-category of the Company Company having Share Capital
v “Address of the Registered office & contact details” Repco Towers,No.33, North Usman Road ,T.Nagar, Chennai-17
vi Whether listed company No
vii Name , Address & contact details of the Registrar & Transfer Agent, if any. N.A
II PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY
All the business activities contributing 10% or more of the total turnover of the company shall be stated.
SL No. Name & Description of main “NIC Code of the “% to total turnover products/services Product /service” of the company”
1. Granting Loans to Individuals 64990 100%
III PARTICULARS OF HOLDING , SUBSIDIARY & ASSOCIATE COMPANIES
Sl No Name & Address CIN/GLN “HOLDING/ “% OF “APPLICABLE of the Company SUBSIDIARY/ SHARES SECTION” ASSOCIATE” HELD”
1 NIL NIL NIL NIL NIL
24 2015-16
% change Nil Nil Nil during the year 68 68 Nil Annual Report % of Total Shares th 9
Nil Total 26,800,000 26,800,000
Nil No. of Shares held Physical 26,800,000 26,800,000 at the beginning of year 0 Nil Nil Demat
68 68 Nil % of Total Shares
Nil Total 26,800,000 26,800,000 Nil No. of Shares held Physical 26,800,000 26,800,000 at the beginning of year
0 Nil Nil Nil Nil Nil Nil Nil 26,800,000 Nil Nil 26,800,000 Nil Nil 68 Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil 26,800,000 Nil 26,800,000 Nil Nil Nil Nil Nil Nil 68 Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil SHAREHOLDING PATTERN (Equity Share capital Break up as % to total Equity) Demat IV
Category of Shareholders A. Promoters (1) Indian a) Individual/HUF b) Central Govt.or State Govt. c) Bodies Corporates d) Bank/FI e) Any other Nil SUB TOTAL:(A) (1) (2) Foreign Nil a) NRI- Individuals b) Other Individuals c) Bodies Corp. Nil d) Banks/FI Nil e) Any other… Nil SUB TOTAL (A) (2) Nil Nil “Total Shareholding of Promoter Nil (A)= (A)(1)+(A)(2) Nil Nil Nil Nil Nil Nil Nil Nil Nil
25 2015-16
% change during the year Annual Report % of Shares th 9
Total
No. of Shares held Physical at the beginning of year Demat Total % of Shares
Total No. of Shares held Physical at the beginning of year Total
Nil Nil 12,400,000 Nil Nil 12,400,000 Nil 32 Nil Nil Nil Nil Nil Nil Nil 12,400,000 Nil Nil 12,400,000 Nil Nil Nil Nil 68 Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil
Demat
Category of Shareholders
B. PUBLIC SHAREHOLDING (1) Institutions a) Mutual Funds b) Banks/FI C) Cenntral govt d) State Govt. e) Venture Capital Fund f) Insurance Companies Nil g) FIIS h) Foreign Venture Nil Capital Funds” Nil i) Others (specify) Nil Nil SUB TOTAL (B)(1): Nil Nil (2) Non Institutions Nil a) Bodies corporates Nil i) Indian Nil ii) Overseas Nil Nil b) Individuals Nil i) Individual shareholders Nil holding nominal share capital Nil Nil upto Rs.1 lakhs Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil
26 2015-16
% change Nil Nil during the year 32 100 Annual Report % of Total Shares th 9
Total 12,400,000 39,200,000 No. of Shares held Physical 12,400,000 39,200,000 at the beginning of year Nil Nil Demat
32 % of Total 100 Shares
Total 12,400,000 39,200,000 No. of Shares held Physical 12,400,000 39,200,000 at the beginning of year
Nil Nil Nil 12,400,000 12,400,000 32 Nil Nil Nil Nil 12,400,000 Nil Nil 12,400,000 32 Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Demat
Category of Shareholders ii) Individuals shareholders holding nominal share capital in excess of Rs. 1 lakhs c) Others (specify) Nil SUB TOTAL (B)(2): Nil Total Public Shareholding (B)= (B)(1)+(B)(2) Nil C. Shares held by Custodian for Nil GDRs & ADRs Nil Grand Total (A+B+C) Nil Nil Nil Nil
27 2015-16 (ii) SHARE HOLDING OF PROMOTERS
Shareholding at the Shareholding at the begginning of the year end of the year
Sl No.
Annual Report Shareholders total shares total shares th Name % change in share No. of shares No. of shares 9 encumbered to encumbered to holding during the year of the company of the company % of total shares % of total shares % of shares pledged % of shares pledged 1. REPCO BANK LTD 26,800,000 68 Nil 26,800,000 68 Nil Nil
Total 26,800,000 68 Nil 26,800,000 68 Nil Nil
(iii) CHANGE IN PROMOTERS’ SHAREHOLDING ( SPECIFY IF THERE IS NO CHANGE)
Share holding at the Cumulative Share holding beginning of the Year during the year Sl No. Name & Address No. of % of total No. of % of total of the company Shares shares Shares shares
1 At the beginning 26,800,000 68% 26,800,000 68% of the year Date wise increase/decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/sweat equity etc)
Sl No. Name of the Increase / Reason Number of % of total Pomoter Decrease shares shares of the company Repco Bank Ltd - - - -
Total - - - -
At the end of the year - - - -
(iv) Shareholding Pattern of top ten Shareholders (other than Direcors, Promoters & Holders of GDRs & ADRs) Share holding at the Cumulative Share For Each of the Top 10 beginning of the Year holding during the year Sl No. Shareholders No. of % of total No. of % of total Shares shares Shares shares
1 Repco Home Finance Ltd 12,400,000 32 12,400,000 32
28 (v) Shareholding of Directors & KMP 2015-16 Share holding at the Cumulative Share holding beginning of the Year during the year Sl No. For Each of the No. of % of total shares No. of % of total Directors & KMP Shares of the company Shares shares
------Annual Report th
* Few Directors are holding equity shares on behalf of Repco Bank 9
V. INDEBTEDNESS
Indebtedness of the Company including interest outstanding/accrued but not due for payment (Amounts in Rs.) Secured Loans Unsecured Total Deposits excluding deposits Loans Indebtedness
i) Principal Amount 1,390,063,065 444,614,903 0 1,834,677,968
ii) Interest due but not paid 0 0 0 0
iii) Interest accrued but not due 929,349 0 0 929,349
0
Total (i+ii+iii) 1,390,992,414 444,614,903 0 1,835,607,317
Change in Indebtedness during the financial year Additions 863,475,607 0 0 863,475,607
Reduction 0 54,226,220 0 54,226,220
Net Change 863,475,607 54,226,220 0 917,701,827
Indebtedness at the end of the financial year i) Principal Amount 2,254,166,864 390,388,683 0 2,644,555,547
ii) Interest due but not paid 0 0 0 0
iii) Interest accrued but not due 0 0 0 0
Total (i+ii+iii) 2,254,166,864 390,388,683 0 2,644,555,547
29 VI REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL 2015-16 A. Remuneration to Managing Director, Whole time director and/or Manager: ( Rs. in lacs) Name of the MD/WTD/ Particulars of Remuneration Total Amount Manager 1 Gross salary R. Varadarajan, MD * (a) Salary as per provisions contained in section 17(1) of the Income Tax. 1961. Nil Nil
Annual Report (b) Value of perquisites u/s 17(2) of the th Income tax Act, 1961 Nil Nil 9 (c ) Profits in lieu of salary under section 17(3) of the Income Tax Act, 1961 Nil Nil 2 Stock option Nil Nil 3 Sweat Equity Nil Nil 4 Commission Nil Nil as % of profit Nil Nil others (specify) Nil Nil 5 Others, please specify Nil Nil Total (A) Nil Nil Ceiling as per the Act 5% of N.P. * Remuneration paid by parent organisation, Repco Bank Ltd. *Redesignated as Non- Executive Director w.e.f 1st March, 2016 B. Remuneration to other directors: ( Amounts in Rs.) Particulars of Total Name of the Directors Remuneration Amount 1 Independent Directors Sripriyakumar V.Mohandass Total (a) Fee for attending board committee meetings 25,000 30,000 55,000 (b) Commission Nil Nil Nil (c) Others, please specify Nil Nil Nil Total (1) 25,000 30,000 55,000 2 Other Non Executive Directors P.Mahalingam R.S.Isella P.Natarajan A.G.Venkatachalam* K.Rajendran Total (a) Fee for attending board committee meetings” 15,000 Nil Nil Nil Nil (b) Commission Nil Nil Nil Nil Nil (c) Others, please specify. Nil Nil Nil Nil Nil Total (2) 15000 Nil Nil Nil Nil Total (B)=(1+2) 40,000 30,000 Nil Nil Nil Total Managerial Remuneration 70,000 Overall Celing as per the Act. 1% of N.P. * Remuneration paid by parent organisation, Repco Bank Ltd. * *Resigned on 1st June 2015. 30 C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD/MANAGER/ 2015-16 WTD (Amount in Rs.)
Particulars of Remuneration Name of the MD/WTD/Manager 1 Gross Salary CEO Company CFO CFO Secretary- V.V. Dhanalakshimi V. Balasubramanian Anup Gupta Kotha *
kumar Annual Report th
(a) Salary as per provisions 9 contained in section 17(1) of the Income Tax Act, 1961. 611,538 272,021 151,000 (b) Value of perquisites u/s 17(2) of the Income Tax Act, 1961 0 0 0 (c ) Profits in lieu of salary Not under section 17(3)of the Applicable Income Tax Act, 1961 0 0 0 2 Stock Option 0 0 0 3 Sweat Equity 0 0 0 4 Commission 0 0 0 as % of profit 0 0 0 others, specify 0 0 0 5 Others, please specify Sodex 51,750 34,500 17,550 Incentive 55,500 44,500 Total 718,788 351,021 168,550
*Resigned on 30th November , 2015
*Appointed on 8th December, 2015.
31 2015-16 VII PENALTIES/PUNISHMENT/COMPPOUNDING OF OFFENCES
Details of Section Penalty/Pun- Appeall Type of the Brief Authority ishment/ made if any Companies Description (RD/NCLT/ Compounding Court) (give details) Act fees imposed A. COMPANY Penalty NIL Annual Report th
9 Punishment
Compounding
B. DIRECTORS
Penalty NIL NIL Punishment
Compounding
C. OTHER OFFICERS IN DEFAULT
Penalty NIL
Punishment
Compounding
Shri. A.G Venkatachalam Smt. R. S. Isabella Director Managing Director DIN- 05289154 DIN - 06871120
Place: Chennai Date: 02.09.2016
32 Corporate Social Responsibility (CSR) 2015-16 [Pursuant to clause (0) of sub.section (3) of section 134 of the Act and Rule 9 of the Companies (Corporate social Responsibility) Rules, 2014] 1. A brief outline of the company’s CSR policy, including overview of projects or programs proposed to be undertaken and a reference to the web-link to the CSR policy and projects or programs: Annual Report th
http://repcomsme.co.in/wp-content/uploads/2015/10/CSR-policy.pdf 9 2. The composition of the CSR Committee as on 31”March, 2016 is as follows: 1. Smt. R.S.Isabella 2. Shri. V. Mohandoss 3. Shri .A.G.Venkatachalam 3. Average net profit of the company for last three financial years Particulars Rs in lakh Profit - 2014-15 097.02 Profit - 2013-14 731.58 Profit - 2012-13 412.56 Average PROFIT for CSR purpose 747.05 2% of average Profit for last three years 14.94 4. Prescribed CSR Expenditure (two percent of the amount as in item 3 above) 2% of average profit for last 3 years Rs.14.94 lakhs (Rupees Fourteen lakhs Ninety Four Thousand only) 5. Details of CSR contribution made by the Company during the Financial Year Particulars Rs in lakh CSR Expenditures - Between April 2015 and March 2016 3.53 TOTAL 3.53 a) Total amount spent by Company in CSR activities during the financial year : 3.53 Lakhs
33 2015-16 b) Amount unspent, if any: Rs.11.41 Lakhs (c) Manner in which the amount spent during the Financial Year is detailed below. (Rs in Lakhs) Sector in Projects or Amount Cumulative Amount CSR project or Amount out- which the programs spent on the expenditure spent: Direct S.No activity iden- lay (budget) Project is projects or upto the or through Annual Report tified project or covered (1) local area programs sub. reporting Implementing
th program-wise or other heads: period (FY Agency’ 9 2015 -16 (2) Specify (1) Direct the State and expenditure district where on projects or projects or programs programs were under- (2) Overheads taken Construction 1. of Sanitations Sanitation Chennai 3.00 3.00 3.00 Direct for Government School
Providing 2. utensils for Flood Health Chennai 0.53 0.53 0.53 Direct victims
6. In case the Company has failed to spend the two per cent of the average net profit of the last three financial years or any part thereof, the Company shall provide the reasons for not spending the amount in its Board report:- As the company has not found suitable project for CSR initiatives, the entire amount could not spent during the year. 7. A responsibility statement of the CSR Committee that the implementation and monitoring of CSR Policy, is in compliance with CSR objectives and Policy of the Company. We hereby confirm, on behalf of the CSR Committee, that the implementation and monitoring of CSR Policy is in compliance with the CSR objectives and Policy of the Company. Sd/ Chairman of Committee
34 INDEPENDENT AUDITOR’S REPORT 2015-16 INDEPENDENT AUDITORS’ REPORT To,
REPCO MICRO FINANCE LIMITED (Formerly Repco MSME Development and Finance Limited) Chennai
Report on Financial Statements
Annual Report We have audited the accompanying standalone financial statements of Repco Micro th
9 Finance Limited ( formerly Repco MSME Development and Finance Limited) (‘the Company’), which comprise the balance sheet as at 31 March 2016, the statement of profit and loss and the cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information.
Management’s Responsibility for the Standalone Financial Statements
The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these standalone financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
36 An audit involves performing procedures to obtain audit evidence about the amounts 2015-16 and the disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made Annual Report
by the Company’s Directors, as well as evaluating the overall presentation of the financial th statements. 9
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:
a) In the case of the Balance sheet of the state of affairs of the Company as at 31 March 2016,
b) In the case of profit and loss account of the profit for the year ended on that date and
c) In the case of Cash flow statement of the cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure A, a statement on the matters specified in the paragraph 3 and 4 of the order.
2. As required by Section 143 (3) of the Act, we report that:
(a) we have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
(b) in our opinion proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;
(c) the balance sheet, the statement of profit and loss and the cash flow statement dealt with by this Report are in agreement with the books of account;
(d) in our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;
37 2015-16 (e) on the basis of the written representations received from the directors as on 31 March 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 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 under Annexure B; and Annual Report
th (g) with respect to the other matters to be included in the Auditor’s Report in accordance 9 with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
(i). the Company has no pending litigations as at the end of the year, accordingly disclosing of the impact of pending litigations on its financial position in its financial statements does not arise.
(ii). the Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses,
(iii). There were no amounts which were required to be transferred to the Investor Education and Protection Fund of the company.
for R.Subramanian and Company Chartered Accountants Firm’s registration number: ICAI FR No:004137S
R. Prakash Partner M.No:205869
Place : Chennai Date : 06/06/2016
38 Annexure - A to the Auditors’ Report 2015-16 The Annexure referred to in Independent Auditors’ Report to the members of the Company on the standalone financial statements for the year ended 31 March 2016, we report that: 1. (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b )The Company has a regular programme of physical verification of its fixed assets Annual Report
by which fixed assets are verified in a phased manner over a period of two years. In th 9 accordance with this programme, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. (c ) No Immovable properties are held by the company, hence reporting on this clause is not applicable. 2. The company is a Non-Banking finance company, and it does not hold any inventories. Thus, paragraph 3(ii) of the Order is not applicable to the Company. 3. The Company has not granted any loans, secured/unsecured, to corporate, firms or other parties covered in the register maintained under section 189 of the Companies Act, 2013 (‘the Act’). Thus, paragraph 3(iii) of the Order is not applicable to the Company. 4. There are no loans granted, investments made under the provisions of section 185 and 186 of the Companies Act, 2013 Thus, paragraph 3(iv) of the Order is not applicable to the Company. 5. The Company has not accepted any deposits from the public. 6. The Central Government has not prescribed the maintenance of cost records under section 148(1) of the Act, for any of the services rendered by the Company. 7. (i)According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including provident fund, income-tax, sales tax, value added tax, duty of customs, service tax, cess and other material statutory dues have been regularly deposited during the year by the Company with the appropriate authorities.. According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, income tax, sales tax, value added tax, duty of customs, service tax, cess and other material statutory dues were in arrears as at 31 March 2016 for a period of more than six months from the date they became payable (ii) According to the information and explanations given to us, and based on the records of the company examined by us, there are no dues of sales tax, income tax, excise
39 2015-16 duty ,cess , customs duty , service tax and value added tax which have not been deposited by the Company on account of dispute as at 31st March 2016 8. According to the records of the company examined by us and based on the information and explanations given to us, the company has not defaulted in repayment of any dues to financial institutions or banks as at balance sheet date. 9. The Company did not raise any money by way of initial public offer or further public offer (including debt instruments) during the year. Term loans availed during the year Annual Report were applied for the purposes for which those are raised. th 9 10. According to the information and explanations given to us, no fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit. 11. Paragraph 3(xi) of the order on managerial remuneration is not applicable since the company has not paid Managerial remuneration during the year. 12. In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable. 13. 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 standards. 14. According to the information and explanations give to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. 15. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable. 16. The Company is required to be registered under section 45-IA of the Reserve Bank of India Act 1934, and necessary registration has been obtained from Reserve bank of india. for R.Subramanian and Company Chartered Accountants Firm’s registration number: ICAI FR No:004137S R. Prakash Partner M.No:205869 Place : Chennai Date : 06/06/2016
40 The Annexure referred to in Independent Auditors’ Report to the 2015-16 members of the ANNEXURE “B” to The Independent Auditor’s Report of even date on the Standalone Financial Statements Repco Micro finance Limited (Formerly Repco MSME Development and Finance limited)
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)
We have audited the internal financial controls over financial reporting of Repco Annual Report
Micro finance Limited (Formerly Repco MSME Development and Finance limited) th 9 (“the Company”) as of March 31, 2016 in conjunction with our audit of the Standalone Financial Statements of the Company for the year ended on that date.
Management’s Responsibility for Internal Financial Controls
The Company’s Management is responsible for establishing and maintaining internal financial controls based on “the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditor’s Responsibility
Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and
41 2015-16 their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the Auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
Annual Report We believe that the audit evidence we have obtained is sufficient and appropriate th
9 to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that :
(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and Directors of the company; and
(iii) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls
42 over financial reporting were operating effectively as at March 31, 2016, based on 2015-16 the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
For M/s R.SUBRAMANIAN AND COMPANY Annual Report
(Chartered Accountants) th 9 (Firm Registration No.004137S)
R Prakash Partner Membership No.205869
Place : Chennai Date : 06/06/2016
43 FINANCIAL STATEMENTS REPCO MICRO FINANCE LIMITED 2015-16 Promoted by Repco Bank (Formerly Repco MSME Finance & Development Ltd) No. 33, North Usman Road, T. Nagar, Chennai- 17 CIN:U74900TN2007PLC064126 BALANCE SHEET AS AT 31ST MARCH 2016 (in Rs.)
Figures as at the Figures as at the Annual Report
Particulars Note No end of current end of current re- th reporting year porting year 9 March 31, 2016 March 31, 2015 I. EQUITY AND LIABILITIES (1) Shareholders funds (a) Share Capital 2 392,000,000 392,000,000 (b) Reserves and Surplus 3 198,876,721 120,364,927 (2) Non current liabilities (a) Long Term Borrowings 4 673,160,877 575,717,295 (b) Deferred Tax Liabilities (Net) - - (c) Long term Provisions 5 44,643,489 24,155,097 (3) Current Liabilities (a) Short Term Borrowings 6 1,543,671,692 1,090,126,312 (b) Other Current Liabilities 7 450,546,651 175,602,241 (c ) Short Term Provisions 8 47,180,336 17,003,689 TOTAL 3,350,079,766 2,394,969,561 II. ASSETS (1) Non Current Assets (a) Fixed Assets 9 (i) Tangible Assets 18,084,148 11,881,825 (ii) Intangible Assets 129,238 258,475 (b) Deferred tax assets (Net) 10 14,001,974 7,932,891 (c) Long term loans and advances 11 1,507,213,941 1,180,907,695 (2) Current Assets (a) Cash and Bank Balances 12 3,117,500 209,242,365 (b) Short-Term Loans and Advances 13 1,807,231,808 983,816,961 (c) Other Current Assets 14 301,157 929,349 TOTAL 3,350,079,766 2,394,969,561 Significant Accounting Policies 1 Notes Forming Part of Accounts 19
For R. Subramanian And Company Chartered Accountants
R. PRAKASH A.G. Venkatachalam R.S. Isabella Partner Director Managing Director Membership No.205869 Place : Chennai V. Balasubramanian Anup Kumar Gupta Date : 06th June 2016 Chief Financial Officer Company Secretary
45 2015-16 REPCO MICRO FINANCE LIMITED Promoted by Repco Bank (Formerly Repco MSME Finance & Development Ltd) No. 33, North Usman Road, T. Nagar, Chennai- 17 CIN:U74900TN2007PLC064126 Statement of Profit and Loss For The Year ended 31st March, 2016
(in Rs.) Annual Report Figures as at the Figures as at the th 9 Particulars Note No end of current re- end of current porting year reporting year March 31, 2016 March 31, 2015 III INCOME Revenue From Operations 15 504,454,606 327,075,858 Other Income 16 39,136,425 20,169,317 Total Revenue 543,591,031 347,245,175 IV EXPENDITURE Employee Benefit Expenses 17 85,298,664 44,586,608 Finance Costs 18 207,180,484 140,026,729 Depreciation 9 8,331,072 9,586,035 Other Expenses 19 28,643,522 15,456,088 Provision for Non-Performing Assets 9,448,781 26,197,219 Provision for Standard Assets 11,039,611 1,689,622 Total Expenses 349,942,134 237,542,302 V Profit Before Taxation (III-IV) 193,648,897 109,702,873 VI. Tax Expense: (1) Current Tax 74,000,000 44,400,000 (2) Tax expense of earlier years 25,850 - (3) Deferred Tax (6,069,083) (6,020,457) VII Net Profit/(Loss) for the period 125,692,130 71,323,330 VIII Earnings per equity share Weighted Average Number of Shares Outstanding during the Period 39,200,000 28,122,740 Basic and Diluted Earnings per share (Rs.) 3.21 2.54 Nominal value per Equity Share (Rs.) 10 10 Significant Accounting Policies 1 Notes Forming Part of Accounts 19
For R. Subramanian And Company Chartered Accountants R. PRAKASH A.G. Venkatachalam R.S. Isabella Partner Director Managing Director Membership No.205869
Place : Chennai V. Balasubramanian Anup Kumar Gupta Date : 06th June 2016 Chief Financial Officer Company Secretary
46 REPCO MICRO FINANCE LIMITED 2015-16 Promoted by Repco Bank (Formerly Repco MSME Finance & Development Ltd) No. 33, North Usman Road, T. Nagar, Chennai- 17 CIN:U74900TN2007PLC064126 NOTES TO BALANCE SHEET
As at March 31, 2016 As at March 31, 2015 Particulars Note No. Number Amount (Rs) Number Amount (Rs) Annual Report th
Shareholders funds 9 Note 2: SHARE CAPITAL 2 Authorised Capital Equity shares of Rs.10/- each 60,000,000 600,000,000 60,000,000 600,000,000 Issued, Subscribed & Paid up Capital Equity shares of Rs.10/- each fully paid up. 39,200,000 392,000,000 39,200,000 392,000,000 As per Balance Sheet 39,200,000 392,000,000 39,200,000 392,000,000 The company has only one class of shares referred to as equity shares having a par valueof Rs.10/- each. Each holder of equity share is entitled to one vote per share. (a) Reconciliation of Share outstanding at the beginning and at the end of the year Shares outstanding at the beginning of the year 39,200,000 392,000,000 28,000,000 280,000,000 Shares issued during the year - - 11,200,000 112,000,000 Shares bought back during the year - - - - Shares outstanding at the end of the year 39,200,000 392,000,000 39,200,000 392,000,000 Out of the above, shares held by Repco Bank Limited (Promoter) 26,800,000 268,000,000 26,800,000 268,000,000 b) Shareholder holding more than 5% of share capital Name of Shareholder Repco Bank Limited 26,800,000 68% 26,800,000 68% Repco Home Finance Limited 12,400,000 32% 12,400,000 32% 39,200,000 100% 39,200,000 100% c) Shares allotted for consideration other than cash Out of the above, 74,99,940 Equity shares are allotted to Repco Bank on 31/03/2010 for consideration other than cash. “(d)Terms/rights attached to Equity Shares: The Company has only one class of Equity Share having a par value of Rs.10/- per share.
47 2015-16 As at March 31, 2016 As at March 31, 2015 Particulars Note No. Number Amount (Rs) Number Amount (Rs) Each holder of Equity Share is entitled to one vote per share. Dividend (if any) proposed by the board of directors is subject to the approval of the shareholders at the ensuing annual general meeting, except in the case of interim dividend. Annual Report In the event of liquidation the equity th
9 shareholders are eligible to receive the remaining assets of the company after distribution of all preferential amounts in proportion to their shareholding.” Note 3: RESERVES AND SURPLUS 3 a) Statutory Reserve (Under Section 45IC of RBI Act) Opening Balance 34,000,000 18,000,000 (+) Current Year Transfer 30,000,000 16,000,000 (-) Written Back in Current Year - - Closing Balance 64,000,000 34,000,000 b) General Reserve Opening Balance 55,000,000 25,000,000 (+) Current Year Transfer 30,000,000 30,000,000 (-) Written Back in Current Year - - Closing Balance 85,000,000 55,000,000
c) Surplus In Statement of Profit and Loss Opening balance 31,364,927 23,045,285 (+) Net Profit / (Loss) for the year 125,692,130 71,323,330 (-) Appropriations (-) Transfer to Statutory Reserve 30,000,000 16,000,000 (-) Transfer to General Reserve 30,000,000 30,000,000 (-) Transfer to Proposed Dividend 10% (5%) 39,200,000 14,061,370 (-) Transfer to Dividend Distribution tax 7,980,336 2,942,318
Closing balance 49,876,721 31,364,927
Total of Reserves and Surplus (a+b+c) 198,876,721 120,364,927
48 As at March 31, 2016 As at March 31, 2015 2015-16 Particulars Note No. Number Amount (Rs) Number Amount (Rs) Note 4: Non-Current Liabilities LONG TERM BORROWINGS 4 Secured Term Loan from Banks * 338,885,183 187,296,157
* Long Term Borrowings and current maturities Annual Report of long term borrowings from Banks are th 9 Secured by Hypothecation of Micro finance Receivables Unsecured Term Loans from Repco Bank 334,275,694 388,421,138 As per Balance Sheet 673,160,877 575,717,295 Note 5: LONG TERM PROVISIONS: 5 Provision Towards Non Performing advances 28,260,643 18,811,862 Contingent Provision for Standard advances 16,382,846 5,343,235 As per Balance sheet 44,643,489 24,155,097 Note 6: SHORT TERM BORROWINGS: 6 Secured Loans repayable on Demand From Related parties - SODL from Repco Bank * 1,543,671,692 1,090,126,312 As per Balance Sheet 1,543,671,692 1,090,126,312 *Short Term Borrowings from Repco Bank is Secured by Hypothecation of Micro finance Receivables Note 7: OTHER CURRENT LIABILITIES 7 Current Maturities of Long Term Borrowings Secured Term Loans from Banks 371,609,989 112,640,566 Unsecured Term Loans from Repco Bank 56,112,989 56,193,765 Other Liabilities* 22,823,673 6,767,910 *There are no Micro and Small Enterprises to whom the company owes dues, which are outstanding for more than 45 days as of 31st March 2016. This information as required to be disclosed under Micro Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.
As per Balance sheet 450,546,651 175,602,241
49 2015-16 As at March 31, 2016 As at March 31, 2015 Particulars Note No. Number Amount (Rs) Number Amount (Rs)
Note 8: SHORT TERM PROVISIONS 8 Provisions:- Provision for Income Tax (Net of Advance Tax) - Proposed Dividend 39,200,000 14,061,370 Annual Report
th Dividend Distribution Tax 7,980,336 2,942,319 9 As per Balance Sheet 47,180,336 17,003,689 Note 10: DEFERRED TAX 10 Deferred Tax Assets: Provision towards Non performing advances/Standard Advances 15,450,219 8,359,596 Gross Deferred Tax Asset (A) 15,450,219 Deferred Tax Liabilities: Difference Between Written Down Value of Fixed Assets as per Companies act and as per Income tax Act. 1,448,245 426,705 Gross Deferred Tax Liability (B) 1,448,245 Net Deferred tax Asset/(Liability) (A-B) 14,001,974 7,932,891 As per Balance sheet 14,001,974 7,932,891 Note 11 LONG TERM LOANS & ADVANCES 11 (Un Secured & Considered Good excepting Non performing advances ) Micro Finance Loans to Self Help groups 1,499,292,691 1,176,510,695 Rent Deposit 7,921,250 4,397,000 In the opinion of the Management, the current assets, Loans and Advances as stated in the Balance Sheet are realizable in the normal course of business As per Balance Sheet 1,507,213,941 1,180,907,695 Note 12: CASH AND BANK BALANCES: 12 Cash and Cash Equivalents Cash in Hand 132 132 Balances with Banks - Current Account 3,085,199 109,237,747 - Savings Bank account 32,168 4,486 In Fixed Deposits with original maturity upto 3 months - 100,000,000 As Per Balance Sheet 3,117,500 209,242,365
50 As at March 31, 2015 As at March 31, 2015 2015-16 Particulars Note No. Number Amount (Rs) Number Amount (Rs) Note 13 SHORT TERM LOANS & ADVANCES 13 (Un Secured, considered good excepting Non performing advances) Current Maturities of Micro finance Loan 1,805,537,187 979,595,084 Prepaid expenses 375,457 917,021 Annual Report th
Other Advances 57,967 200,000 9 Advances recoverable in Cash or in Kind or value to be received 482,868 339,961 Advance Tax/TDS (Net of provision for Income tax) 778,329 600,000 Inocme tax refund due - 2,164,895 In the opinion of the Management, the current assets, Loans and Advances as stated in the Balance Sheet are realizable in the normal course of business. As per Balance sheet 1,807,231,808 983,816,961 Note 14 OTHER CURRENT ASSETS 14 Interest Accrued on Fixed Deposits - 23151 Interest Accrued on Micro Finance Loans 301,157 906,198 As per Balance sheet 301,157 929,349
For R. Subramanian And Company Chartered Accountants
R. PRAKASH A.G. Venkatachalam R.S. Isabella Partner Director Managing Director Membership No.205869
Place : Chennai V. Balasubramanian Anup Kumar Gupta Date : 06th June 2016 Chief Financial Officer Company Secretary
51 2015-16 REPCO MICRO FINANCE LIMITED Promoted by Repco Bank (Formerly Repco MSME Finance & Development Ltd) No. 33, North Usman Road, T. Nagar, Chennai- 17 CIN:U74900TN2007PLC064126 (in Rs.) For the period For the period Particulars Note No ended ended Annual Report March 31, 2016 March 31, 2015 th
9 Amount(Rs) Amount(Rs) Income Note 15 Revenue from operations 15 Interest from Micro Finance Loan 504,454,606 327,075,858
Total 504,454,606 327,075,858
Note 16 Other income: 16 Recovery of bad debts written off 2,703,409 6,528 Interest on Bank Deposits 1,041,963 23,809 Interest on Income tax refund 398,790 - Evaluation Fee received & Other income 34,992,263 20,138,980
Total 39,136,425 20,169,317
Expenses
Note 17 Employee Benefit Expenses 17 Salaries & allowances 82,315,658 43,590,893 Staff Welfare 2,983,006 995,715
Total 85,298,664 44,586,608
Note 18 Finance Costs 18 Interest on Term Loans 117,297,924 67,614,656 Interest on SODL/ Cash Credit 89,882,560 72,333,763 Interest others - 78,310
Total 207,180,484 140,026,729
Note 19 Other expenses : 19 Printing and Stationery 3,196,385 477,127 Office Expenses, Postage & Telegraph 1,629,433 643,654 Rent 10,572,682 6,004,519
52 (in Rs.) 2015-16 For the period For the period Particulars Note No ended ended March 31, 2016 March 31, 2015 Amount(Rs) Amount(Rs) Repairs and Maintenance - Others 838,353 619,000 Telephone Charges 966,010 891,945
Electricity Charges 1,229,617 764,061 Annual Report th
Advertisement Expenses 52,470 101,921 9 Remuneration to Auditors towards - Statutory audit 214,500 159,270 - Tax audit and Tax representation 375,375 79,635 - Other Services 82,877 98,370 For Expenses - 9,200 Professional & Legal Charges 3,299,757 1,744,049 Expenses incurred towards Self Help Group (SHG) promotion and monitoring 161,275 361,945 Bad debts written off 2,385,345 - Leased Line Charges 1,661,219 560,772 Bank Charges 26,561 202,321 Rates & Taxes 19,678 2,258,600 CSR Activities 353,130 - Donations to Chief Minister Relief Fund 1,000,000 - Miscellaneous Expenses 578,856 479,699
Total 28,643,522 15,456,088
For R. Subramanian And Company Chartered Accountants
R. PRAKASH A.G. Venkatachalam R.S. Isabella Partner Director Managing Director Membership No.205869
Place : Chennai V. Balasubramanian Anup Kumar Gupta Date : 06th June 2016 Chief Financial Officer Company Secretary
53 2015-16 5,771,676 11,881,825 12,140,300 As on 31st March 2015
NET BLOCK Annual Report 18,084,148 18,213,386 12,140,301 As on 31st March 2016 th 9
As on 31st March 2016 23,261,735 23,882,790 15,551,717 - - 621,055 621,055 129,238 129,238 258,475 258,475 - 1,419,541 - 3,264,321 10,114,666 - 2,308,260 - 487,345 301,497 - 213,385 324,479 313,639 10,864,439 - 12,389,847 577,048 - 348,207 90,677 8,049,071 401,916 1,041,110 718,262 - Deletions
8,201,835 8,331,072 9,586,035 For the year
DEPRECIATION BLOCK As on 1st 5,965,682 April 2015 15,059,900 15,551,718 Rate
Promoted by Repco Bank CIN:U74900TN2007PLC064126 41,345,884 42,096,177 As on 31st 27,692,018 March 2016 REPCO MICRO FINANCE LIMITED REPCO MICRO No. 33, North Usman Road, T. Nagar, Chennai- 17 - - 750,293 750,293 491,818 491,818 129,237 129,237 - 4,683,862 - - 10,602,010 1,081,497 - 625,976 338,044 - 6,814,300 790,433 3,300,366 - 23,254,286 - 260,039 1,389,317 159,825 6,543,662 41,458 4,320,777 53,560 200,577 147,630 - (Formerly Repco MSME Finance & Development Ltd) Deletions
- - GROSS BLOCK Additions 14,404,159 14,404,159 15,954,658
2015 918,839 470,478 750,293 750,293 14,592,733 8,661,553 26,941,725 27,692,018 11,737,360 As on 1st April
PARTICULARS Furniture and fittings Furniture and fittings- 3,389,757 1,294,105 Temporary Structures 7,127,939 Office Equipments 3,474,071 Electrical Equipments 350,716 Computer 561,741 275,260 228,692 Vehicles Total INTANGIBLE ASSETS: Software Total Total Previous year TANGIBLE ASSETS:
54
2015-16 the For WDV Closing 1,077,597 3,546,006 1,417,556 1,013,815 6,973,690 14,028,664 assets. the of Total 148,651 357,583 155,268 4,136,058 6,139,961 10,937,520
value Annual Report th 35,286 32,776 20,095 9 Days > 180 down 1,417,556 1,728,230 Depreciation written Days 113,366 324,806 135,173 > 180 2,718,502 4,411,732 opening the Deletions 5,553,613 1,226,248 3,903,589 1,169,083 24,966,184 13,113,651
regarding ------Asset Sale of Deletions information 470,477 503,950 Total the 3,474,070 1,294,104 8,661,552 14,404,153 for - Days 638,959 638,577 236,020 < 180 Promoted by Repco Bank Additions 2,900,787 Company CIN:U74900TN2007PLC064126 the of Days 470,477 655,527 267,930 < 180 REPCO MICRO FINANCE LIMITED REPCO MICRO 5,760,765 2,835,111 No. 33, North Usman Road, T. Nagar, Chennai- 17 (Formerly Repco MSME Finance & Development Ltd) records tax WDV 2,079,543 10,562,031 Opening
Income 10% 2,609,485 15% 665,133 the Rate 100% upon
relied have auditors PARTICULARS The Plant & Machinery (Vehicles) 15% Furniture & Fixtures 755,771 Electrical Fittings,Electronic Equipments and Office Equipments Computer and Software Temporary Structure 60% Total 4,452,099 Note: 1. classification of additions to assets, the auditors have relied upon management’s classification. 2. There are no adjustments on account of any Cenvat credit, foreign exchange fluctuation, subsidy/grant, receipt during the year. 3. In relation to additions fixed assets, the date of installation and asset put use are as certified by Company.
55 2015-16 REPCO MICRO FINANCE LIMITED Promoted by Repco Bank (Formerly Repco MSME Finance & Development Ltd) No. 33, North Usman Road, T. Nagar, Chennai- 17 CIN:U74900TN2007PLC064126
CALCULATION OF DTA Annual Report
th Particulars Amount (INR) 9 Particulars Provision for NPA 28,260,643.00 Provision for Standard Advances 16,382,846.00 44,643,489.00 13,393,046.70 30% Deferred tax asset(DTA) 15,450,218.67 1,607,165.60 12% 450,006.37 3% WDV as per Companies Act 18,213,375.00
WDV as per IT Act 14,028,664.00
Difference 4,184,711.00
Deferred tax Liability (DTL) 1,448,244.78 1,255,413.30 30% 150,649.60 12% Net Deferred tax asset 14,001,973.89 42,181.89 3% DTA as at 31-3-15 7,932,891.00 Additional DTA to be created for the Year 2015-16 6,069,082.89
56 2015-16
REPCO MICRO FINANCE LIMITED Promoted by Repco Bank (Formerly Repco MSME Finance & Development Ltd) No. 33, North Usman Road, T. Nagar, Chennai- 17 CIN:U74900TN2007PLC064126
PROVISION FOR NPA AS AT 31-3-16 Annual Report th 9
Particulars Amount (INR)
More than 90 days and less than 180 days 2,424,843.00 More than 180 days 76,464,591.00 Total NPA 78,889,434.00 Less: Balance in Technical Written off accounts after OTS as at 31-3-16 50,628,791.00 Balance NPA as at 31-3-16 28,260,643.00 Provision required for FY 2015-16 100% 28,260,643.00 Provision available as at 31-3-15 18,811,862.00 Balance Provision required 9,448,781.00 Provision for Standard Assets Total Advances as at 31-3-16 3,355,458,669.00 Less: NPA Advances 78,889,434.00 Standard Advances 3,276,569,235.00 Provision Required @ 0.5% 16,382,846.18 Provision Available as at 31-3-15 5,343,235.00 Balance Provision required for Standard Advances as at 31-3-16 11,039,611.18
57 2015-16 REPCO MICRO FINANCE LIMITED Promoted by Repco Bank (Formerly Repco MSME Finance & Development Ltd) No. 33, North Usman Road, T. Nagar, Chennai- 17 CIN:U74900TN2007PLC064126
CASH FLOW STATEMENT FOR THE YEAR ENDING MARCH 31, 2015
Annual Report (in Rs.) th
9 Particulars For the year ended For the year ended March 31, 2015 March 31, 2014 A. CASH FLOW FROM OPERATING ACTIVITIES NET PROFIT BEFORE TAX 193,648,897 109,702,873 Adjustment For: Depreciation 8,331,072 9,586,035 (Profit)/Loss on Sale of Fixed Asssets 0 0 Interest Earned On Deposits 1,440,753 -20,138,980 Provision for Non- Performing Assets/ Standard Assets 20,488,392 30,260,217 27,886,841 17,333,896 Operating Profit Before Working Capital Changes 223,909,114 127,036,769
Adjustment For: Current Assets/Short Term and Long Term Loan and Advances 818,665 19,017 Current Liabilities and Other Employee Benefits 274,944,410 1,558,054
Cash Generated From Operations 499,672,189 128,613,840 Direct Taxes Paid -74,100,000 -52,100,000 Net Cash From Operating Activities (A) 425,572,189 76,513,840
B. Cash Flow From Investing Activities
Purchase of Fixed Assets 0 0 Sale of Fixed Assets 0 0 Interest Earned On Deposits 1,440,753 20,138,980 Net Cash Used In Investing Activities (B) 1,440,753 20,138,980
58 (in Rs.) 2015-16 Particulars For the year ended For the year ended March 31, 2015 March 31, 2014 C. Cash Flow From Financing Activities
Proceeds from Issue of Share Capital (Net of Issue Expenses) Nil 112,000,000
Increase in Secured and Annual Report Unsecured Loan (Net) 550,988,962 628,526,905 th 9 Increase in Micro Finance Loans(Net) 510,105,222 -702,045,901 Dividend Paid (Including Dividend Distribution Tax) -47,200,000 -10,882,138 Net Cash used in Financing Activities (C) 1,013,894,184 27,598,866
Net Increase/Decrease in Cash and Cash equivalents (A+B+C) 1,440,907,126 124,251,686
Cash and Cash Equivalents - Opening Balance (D) 209,242,365 100,945,338 Cash and Cash Equivalents - Closing Balance (E) 3,117,500 209,242,365 Net Increase /(Decrease) in Cash and Cash Equivalents (E-D) -206,124,865 108,297,027
For R. Subramanian And Company Chartered Accountants
R. PRAKASH A.G. Venkatachalam R.S. Isabella Partner Director Managing Director Membership No.205869 V. Balasubramanian Anup Kumar Gupta Place : Chennai Chief Financial Officer Company Secretary Date : 06th June 2016
59 2015-16 REPCO MICRO FINANCE LIMITED Promoted by Repco Bank (Formerly Repco MSME Finance & Development Ltd) No. 33, North Usman Road, T. Nagar, Chennai- 17 CIN:U74900TN2007PLC064126
Current and Non-current of SHG loans-MF Particulars Amount (Rs) Amount (Rs) Annual Report
th Technically written off MF 9 Technically written off MF - 65,008,398 MICROFINANCE MICRO FINANCE 2,205,231,092 - Youth SHG1 YOUTH SHG1 6,194,113 - Youth SHG2 YOUTH SHG2 9,688,972 - 2,221,114,177 65,008,398
Balance for other than technical writen off accounts 2156105779.00
Breakup Amount (Rs) Current 979595084.00 Non-current 1176510695.00 Total MF loan after technical writen off 2156105779.00
Provision for Standard Assets Amount (Rs) Total advances portfolio 2,221,114,177 Less: NPA 83,820,260 Standard Assets 2,137,293,917 Percentage 0.25%
Provision for Standard Assets 5,343,235
Provision Provided in Previous Year 3653613
Provision for Standard Assets to be Provided 1,689,622
60 REPCO MICRO FINANCE LIMITED 2015-16 Promoted by Repco Bank (Formerly Repco MSME Finance & Development Ltd) No. 33, North Usman Road, T. Nagar, Chennai- 17 CIN:U74900TN2007PLC064126
NOTE 1:
COMPANY OVERVIEW Annual Report th 9 Repco Micro Finance Limited (“RMFL” / the company) was incorporated on 27th June 2007. The Company is a Non-Banking Finance Company - Micro Finance Institution (NBFC- MFI).
RMFL is predominantly engaged in the business of providing financial and other related support service to Self Help Group (SHG) with a view to enhance their income generation capabilities.
The company provides collateral free loans to self help groups and the repayment of the loans are by way of equated monthly installments.
The company continues to undertake the business of NBFC-MFI requiring the holding of Certificate of Registration (COR) under section 45-IA of the RBI act, 1934 and the company also fulfilled all conditions stipulated to be classified as NBFC-MFI.
Significant Accounting policies:
A. Basis of Preparation of Financial Statements
The financial statement are prepared under the historical cost convention method in accordance with the Generally Accepted Accounting Principles (GAAP) and the provisions of the Companies Act 2013 and Mandatory Accounting Standards as prescribed under section 133 of the Companies Act 2013 read with Rule 7 of the Companies (Accounts) Rules 2014 .
The Company is a Non - Banking Finance Company - Micro Finance Instution (NBFC-MFI). The Company follows the prudential norms fo income recognition, asset classification and provisiong as prescribed by the Reserve Bank of India for NBFC-MFI’s.
B. Income Recognition:
I. Interest income on Loans given is recognized under effective rate of interest method. Income on Non – Performing assets is recognized only when realized in accordance with the Reserve Bank of India Guidelines.
II. Interest income on deposits is recognized on a proportionate basis taking into account the amount outstanding and the rates applicable.
III. All other income is recognized on an accrual basis.
IV. Evaluation fee is recognized upfront when it becomes due.
61 2015-16 C. USE OF ESTIMATES The preparation of the financial statements in conformity with Indian GAAP reuires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prdent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialise. Annual Report th D. PROVISION FOR NON-PERFORMING ASSETS/PERFORMING ASSETS 9 Cash flow are reported using the indirect method, whereby profit before estraordinary items and tax is adusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash dlows from operating, investing and financing activities of the Company are segregated based on the available information. E. PROVISION FOR NON-PERFORMING ASSETS/PERFORMING ASSETS Advances are classified into Performing and Non- Performing Assets. Provision for Performing and Non-performing assets are made in accordance with the Reserve Bank of India Guidelines. D. Fixed Assets and Depreciation: Fixed Assets are stated at cost less accumulated depreciation. Cost includes taxes, duties and other incidental expenses related to the acquisition and installation of the assets. Depreciation on Fixed assets is provided on the straight line method over the useful life of assets estimated by the management. The Management estimates useful life of the Fixed Assets as follows:- Nature of the Asset Useful life ( In Years) Furniture and Fittings 10 Office Equipments 5 Electrical equipments 10 Computer Software and electronic equipment 3 Temporary Structure (Partition work) 1 Vehicles 6.66 G. Impairment of Assets Impairment loss, if any, is provided to the extent the carrying amount of assets exceeds their recoverable amount. H. Borrowing Costs Borrowing costs include interest and ancillary costs that the Company incurs in connection with the borrowings. Costs in connection with the borrowing of funds to the extent not directly related to the acuisition of qualifying assets are charged to the Statement of Profit and Loss.
62 I. Segment Reporting 2015-16 The Company identifies primary segments based on the dominant source, nature of risks and returns and the internal organisation and management structure. J. Earnings Per Share: Basic earnings per share are computed by diving the profit after tax (including the post-tax effect of extraordinary items, if any) by the weighted average number ofeuity shares outstanding the year. Diluted earnings per share is computed by dividing the profit after tax
(including the post - tax effect of extraordinary items, if any) as adjusted for dividend, interest Annual Report and other charges to expense or income relating to the dilutive potential equity shares, by th the weighted average number of equity shares considered for derving basi earnings per share 9 and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversation to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemd to tbe converted as at the beginning of the period, unless they have been issued at a later date. K. Income Taxes: Current tax is the amount of tax payable on the taxable income for the year and is determined in accordance with the provisions of the Income tax Act, 1961. Deferred Tax is recognized on timings difference being the difference between the taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantially enacted by the balance sheet date. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each balance sheets date for their realisability. L. Employee Benefits: The company’s contribution towards Employees Provident Fund Scheme is remitted to the Regional Provident Fund Commissioner and is charged to the profit & Loss Account on accrual basis. M. Provisions and Contigencies A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which are liable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimates required to settle the obligation at the Balance Sheet Date. These are reviewed at each Balance Sheet date adjusted to reflect the current best estimates. Contigent liabilities are disclosed in the Notes to the Financial Statements. N. Operating Cycle Based on the nature of its activities, the company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current.
63 2015-16 Note 19 Other Notes
a) CRAR
Items Current Year Previous Year
i) CRAR (%) 17.53 23.13
II) CRAR-Tier I capital (%) 17.53 23.13
Annual Report iii) CRAR-Tier II capital (%) ------th 9 b) Exposures (i) Exposure to Real Estate Sector
Category Current Previous Year Year a) (i) Direct exposure Nil Nil Residential Mortgages- Nil Nil Lending fully secured by mortgages on residential property that is or will be occupied by the borrower or that is rented ; (individual housing loans upto to Rs.15 lakh may be shown separately) Nil Nil (ii) Commercial Real Estate- Nil Nil Lending secured by mortgages on commercial real estate (office buildings, retail space, multipurpose commercial premises, multi-family residential buildings, multi-tenanted commercial premises, industrial or warehouse space, hotels, land acquisition, development and construction, etc.) Exposure would also include non-fund based (NFB) limits; Nil Nil (iii) Investment in Mortgage Backed Securities (MBS) and other securitised exposures – Nil Nil a. Residential, Nil Nil b. Commercial Real Estate. Nil Nil b) Indirect exposure Fund based and non-based exposures on National Housing Bank (NHB) and Housing Finance companies (HFCs) Nil Nil
64 c) Asset Liability Management 2015-16
1 day to Over
Over 2 Over 3 Over 6 Over 1 Over 3 30/31 one months months months year years days month TOTAL
up to 3 up to 6 to to to Over
(one to 2 5 years months months 1 year 3 years 5 years month) months
Liabilities Annual Report
Borrowings 351.93 352.51 353.57 1065.22 2153.60 5484.60 1247.39 Nil 11008.80 th from Bank 9
Assets
Micro Finance Loans 1602.29 1581.14 1577.19 4598.73 8418.54 15270.41 Nil Nil 33048.30
Investments ------d) other disclosures as per Reserve Bank Guidelines
Particulars Liabilities side: Amount Amount Rs. In Lakhs Rs. In Lakhs Amount Amount outstanding overdue (1) Loans and advance availed by the non-banking financial company inclusive of interest accrued thereon but not paid: (a) Debentures : Secured Nil NIL :Unsecured Nil NIL (other than falling within the meaning of public deposits) (b) Deferred Credits Nil NIL (c) Terms Loans 11008.80 7450.87 (d) Inter - corporate loans and borrowing Nil NIL (e) Commercial paper Nil NIL (f) Other Loans (specify nature) (SODL from Repco Bank ltd) 15436.72 10901.26 Please see Note 1 below
65 2015-16 Asset Side: Amount Rs, In Lakhs Amount Outstanding (2) Break - up of Loans and Advances including bills receivable (other than those included in (4) below): (a) Secured NIL (b) Unsecured 33048.30 (21561.06) Annual Report
th (3) Break up of Leased Assets and stock on hire and 9 other assets counting towards AFC activities (i) Lease assets including lease rentals under NIL sundry debtors: (a) Financial lease NIL (b) Operating lease NIL (ii) Stock on hire including hire charges under sundry debtors: NIL (a) Assets on hire NIL (b) Repossessed Assets NIL (iii) Other loans counting towards AFC activities NIL (a) Loans where assets have been repossessed NIL (b) Loans other than (a) above NIL (4) Break- up of Investments: NIL (5) Borrower group - wise classification of assets financed as in (2) and (3) above: please see Note 2 below
Amount net Provisions Category Secured Unsecured Total 1. Related parties Nil Nil Nil (a) Subsidiaries Nil Nil Nil (b) Companies in the same group Nil Nil Nil (c) other related parties Nil Nil Nil 2. Other than related parties Nil Nil Nil Total Nil Nil Nil
66 (6) Investors group- wise classification of all investments ( current and long term) in 2015-16 shares and securities ( both quoted and unquoted): please see note 3 below
Category Market value/ Break up Book value (Net of or fair value or NAC provisions)
1. Related parties NIL NIL (a) Subsidiaries NIL NIL Annual Report
(b)Companies in the same group NIL NIL th 9 (c) Other related parties NIL NIL 2. Other than related parties NIL NIL Total NIL NIL
(7) Other information
Particulars Amount
(1) Gross Non - Performing Assets 282.61 188.11 (a) Related Parties NIL NIL (b)Other than related parties 282.61 188.11 (2) Net Non - Performing Assets NIL NIL (a) Related Parties NIL NIL (b)Other than related parties NIL NIL (3) Assets acquired in satisfaction of debt NIL NIL
The total advances amount and Gross non performing advances is net off of advances techni- cally written off aggregating to Rs.506.29 (650.08) Lakhs
67 2015-16 Note 19: Related Party Disclosure
KEY MANAGEMENT PERSONNEL KEY MANAGEMENT PERSONNEL : Shri R. VARADARAJAN Managing Director Shri A.G.VENKATACHALAM
Annual Report Director th PROMOTERS : REPCO BANK LIMITED 9
Key management Promoters Nature of Personnel Transactions Executive Director Repco Bank Repco Home Finance Limited 2015-16 2014-15 2015-16 2014-15 2015-16 2014-15 Remuneration - - Share Capital Equity Shares - - 2680.00 1,560.00 1240.00 1,240.00 Balance in savings Bank account maintained with the promoter - - 0.32 0.04 - - Balance in SODL/Cash Credit account maintained with the promoter - - 15436.71 10901.26 - - Unsecured Loans availed from the promoter/ Balance outstanding - - 3903.87 4446.15 - - Remuneration* Reimbursement of establishment cost - 6.65 Interest Income received from the promoter - - - - - Savings Bank - - 0.0018 0.01 - - - Fixed Deposit - - - - - Interest paid to promoters - - - - Cash Credit/SODL - - 898.83 723.34 - - - Unsecured Loans - - 461.51 523.34 - -
* No Remuneration has been paid to the Managing Director during the current year and also in the previous year.
68 Key Management Personal Transactions 2015-16
Managing Director - NIL f. Disclosure Pursuant to RBI Notification DNBR (PD) CC No.002/03.10.001/2014-15 dated November, 2014:
A. Customer Complaints :
No. of complaints pending as on 01.04.2015 0 Annual Report th
No. of complaints received during the year 0 9
No. of complaints redressed during the year 0
No. of complaints pending as on 31.03.2016 0
B. Details of Registarion with Regulations
S.No. Name of Registration Authority Registration No.
1. Reserve Bank of India N-07-00780
2. Ministry of Company affairs U74900TN2007PLC64126
C. Ratings assigned by Credit rating agencies
Particulars As at 31 MArch 2016 As at MArch 2015
Commercial paper NA NA
Working Capital Facility ICRA - “BBB” ICRA - “BBB”
(Cash Credit / WCDL)
Long-Term bank facilities ICRA - “BBB” ICRA-”BBB”
Long-Term Non-Convertible Debentures NA NA
MFI Grading ICRA - “M#” ICRA - “M3”
Subordinated Debt NA NA
Perpetual Debt NA NA
69 2015-16 D. Concentration of Advances, Exposures & NPA’s
Particulars As at 31 March 2016 As at March 2015
Total Advances nd Exposures to twenty largest borrowers Refer Notes below Refer Note below
Total Exposure to top four NPA Accounts Refer Notes belwo Refer Note below Percentage of Advances and Exposures to Annual Report th
9 twenty largest borrowwes to Refer Notes below Refer Note below Total Advances of the NBFC
The Company operations in the business of micro finance providing collateral free loans for fixed amounts ranging from Rs.20,000 to Rs.60,000 to women engaged in various income generating activities. As at 31 MArch 2016, the Company has provided loans to more than 1.81 lakhs women and hence, the disclosure relating to concentration to advances, exposures and NPA’s are not applicable to the Company.
E. Sector-wise NPAs as on March 31, 2016
Sl.No. Sector Percentage of Percentage of NPAs to Total NPAs to Total Advances in that Advances in that sector as at sector as at 31-March-2016 31-March-2015 1. Agriculture & allied activits NA NA 2. MSME 100 100 3. Corporate borrowers NA NA 4. Services NA NA 5. Unsecured personal loans NA NA 6. Auto loans (commercial vehicles) NA NA 7. Other Loans NA NA
F. Movement of NPA :
Particulars As at 31 MArch 2016 As at MArch 2015 (Rs. In Lakhs) (Rs. in Lakhs)
(i) Net NPAs to Net Advances (%) NIL NIL
(II) Movement of NPAs (Gross)
(a) Operating balance 188.11 22.54
70 (b) Additions during the year 2015-16
(Net off of reductions) 94.50 165.57
(c) Closing Balance 282.61 188.11
(iii) Movement of Net NPAs
(a) Operating balance 0 0 Annual Report
(b) Additions during the year 0 0 th 9 (c) Reductions during the year 0 0
(d) Closing balance 0 0
G. Disclosures of Fraud Pursuant to Reserve Bank of India Notification DNBS.PD.CC. No.256/03.10.042 / 2011-12 dated 2 March 2012 :
NIL h. Expenditure towrds Corporate Social responsibility :
The Gross amount required to be spent by the company during the year 2015-16 as CSR expenditure under section 135 of the Companies Act of 2013 is Rs.14.94 lakhs / being 2% of the average profit of past three financial years. The amount is required to be spent on activities qualifying as CSR expenditure as per schedule VII of the Companies Act 2013.
During the financial year 2015-2016 the company has spent sums aggregating to Rs.353 lakhs towards CSR activities. The details of disclosure as per the Guidance issued by the Institute of Chartered Accountants of India are as follows:
(a) Gross amount required to be spent by the Company during the year Rs.14.94 Lakhs.
(b) Amount spent during the year:
Sl.No. Particulars In Cash Yet to be paid Total (Rs. In Lakhs) in Cash (Rs. In Lakhs) (Rs. In Lakhs)
(i) Construction or acquisition Nil Nil Nil of any asset
(ii) On purposes other than (i) 3.53 Nil 3.53
TOTAL 3.53
71 2015-16 I. Segment Reporting
The Company is primarily engaged in the business of Micro Finance in India. All the activities of the Company revolve around the main business. As such there are no separate business and geographic reportable segments as per AS-17 “Segment Reporting”
J. Earnings per Share
Particulars For the year ended For the year ended Annual Report
th 31/03/2015 31/03/2016 9 Profit after Tax - Rs. in Lakhs 1256.92 713.23
Weighted Averages 392,00,000 281,22,740 Number of Equity Shares (Nos.)
Earnings Per Share
Basic - in (Rs.) 3.21 2.54
Diluted - in (Rs.) 3.21 2.54
Face Value Per Share (Rs.) 10.00 10.00
K. Commitments and contigencies NIL L. Statutory Reserve As per Section 45-JC of the Reseve Bank of India Act, 1934, the Company is required to create as reserve fund at the rate of 20% of the net profit after tax of the Company every year. Accordingly, the Company has transferred an amount of Rs.300 Lakhs (Previous Year - Rs.160.00 Lakhs), out of the net profit after tax for the year ended 31 March 2016 to Satutory Reserve. M. There is no Expenditure incurred in Foregin Currency. N. There is no amount to be reflected under payable to Invester Protection Fund. O. Previous year’s figures have been regrouped and rearranged wherever necessary to confirm to current year’s classification.
For R. Subramanian And Company Chartered Accountants
R. PRAKASH A.G. Venkatachalam R.S. Isabella Partner Director Managing Director Membership No.205869
Place : Chennai V. Balasubramanian Anup Kumar Gupta Date : 06th June 2016 Chief Financial Officer Company Secretary
72 REPCO MICRO FINANCE LIMITED 2015-16 (Formerly Repco MSME Finance & Development Ltd) No. 33, North Usman Road, T. Nagar, Chennai- 17 Website: www.repcomicrofin.co.in, [email protected] CIN:U74900TN2007PLC064126
To,
Members, Directors and Auditors Annual Report th 9 Dear Sirs,
SUB: NOTICE CONVENING 9th ANNUAL GENERAL MEETING OF THE COMPANY.
NOTICE is hereby given that 9th Annual General Meeting of the members of Repco Micro Finance Limited will be held at “No. 634 , 2nd Floor, Karumuttu Centre, Anna Salai, Nandanam, Chennai-600035 on 29th September 2016, at 11.00 AM to transact the following business:-
Ordinary Business
1. To receive, consider and adopt the Audited Financial Statement of the company for the Financial Year ended 31st March, 2016 , the Reports of Directors and Auditor’s thereon.
2. To declare dividend on the equity shares of the Company for the financial year ended 31st March, 2016.
3. To appoint a director in place of Mr. R. Varadarajan who retires by rotation and being eligible , offers himself for re-appointment.
4. Appointment of Auditors.
To consider and if thought fit , to pass with or without modification(s), the following resolution as ordinary resolution, pursuant to section 139 to 142 of the Companies Act, 2013 read with Companies (Audit and Auditors ) rules, 2014:
“RESOLVED THAT pursuant to the provisions of the section 139 to 142 and other applicable provisions,if any of the Companies Act, 2013 and the rules framed there under , as amended from time to time , R.Subramanian & Company LLP, Chartered (Firm No: 004137s), be and hereby re-appointed as Auditors of the Company for the financial year 2016-17 on remuneration of Rs.3,00,000/- (Rupees Three lakhs Only) towards statutory audit fee”
B y o r d e r o f t h e B o a r d ,
Sd/- Date : 2nd September , 2016 Anup Kumar Gupta Place : Chennai Company Secretary
73 2015-16 NOTES:-
a) As there is no special business to be transacted , the explanatory statement is not required.
b) A member entitled to attend and vote is entitled to appoint a proxy to attend and vote instead of himself / herself and the proxy need not be a member. The proxies should, however , be deposited at the registered office of the company not later than 48 hours before the commencement of the meeting. Annual Report th
9 c) The dividend, after declaration, will be paid to those members of the Company whose names stand on the register of members on 6th June 2016.
d) Shareholders desiring any information as regards the Accounts are required to write to the company at least seven days in advance of the meeting so that the information, to the extent practicable, can be made available at the meeting.
By order of the Board,
Sd/-
Company Secretary
Place: Chennai
Date: 2nd September 2016
74 REPCO MICRO FINANCE LIMITED
(Formerly Repco MSME Finance & Development Ltd) 2015-16 No. 33, North Usman Road, T. Nagar, Chennai- 17 Website: www.repcomicrofin.co.in, [email protected] CIN:U74900TN2007PLC064126 PROXY FORM [Pursuant to Section 105 (6) of the Companies Act, 2013 read with Rule 19 (3) of the Companies (Management and Administration) Rules, 2014] NINETH ANNUAL GENERAL MEETING
Name of the member(s) : ...... Annual Report th
Registered Address : ...... 9 Email id : ...... Folio No.: ...... I/We, being the member(s) of ...... shares of the above named Company, hereby appoint 1. Name: ...... Address: ...... Email Id: ...... Signature: ...... , or failing him/her 2. Name: ...... Address: ...... Email Id: ...... Signature: ...... , or failing him/her As my / our proxy to addend and vote (on a poll) for me / us and on my/ our behalf at the Nineth Annual General Meeting of the Company, to be held on Thursday, September 29, 2016 at 11.00 A.M. at No. 634 , 2nd Floor, Karumuttu Centre, Anna Salai, Nandanam, Chennai-600035, any adjournment thereof in respect of such resolutions as are indicated below:
Resolution Description of Resolution No. Ordinary Business For Against 1 To receive, consider and adopt the Audited Financial Statement of the company for the Financial Year ended 31st March, 2016, the Reports of Directors and Auditor’s thereon. 2 To declare dividend on Equity Shares for FY 2015-16 3 To appoint a Director in the place of Mr. R. Varadarajan, who retires by rotation and eligible, offer himself for re-appointment. 4 Appointment of Auditors Signed this ...... Day of ...... , 2016 Signature of Shareholder:...... Affix ...... Revenue Signature of First Proxy holder Signature of Second Proxy holder Stamp
NOTE: 1. THIS FORM OF PROXY, IN ORDER TO BE EFFECTIVE, SHOULD BE DULY COMPLETED AND DEPOSITED AT THE REGISTERED OFFICE OF THE COMPANY, NOT LESS THAN FORTY-EIGHT (48) HOURS BEFORE THE COMMENCEMENT OF THE MEETING.
75 2015-16 REPCO MICRO FINANCE LIMITED (Formerly Repco MSME Finance & Development Ltd) No. 33, North Usman Road, T. Nagar, Chennai- 17 Website: www.repcomicrofin.co.in, [email protected] CIN:U74900TN2007PLC064126
Annual Report ATTENDANCE SLIP: 9th ANNUAL GENERAL MEETING th 9 I/We hereby record my/our presence at the 9th Annual General Meeting of the Company held on Thursday, September 29, 2016 at 11 A.M, at Corporate Office: No.634, Karumuttu Centre, 2Nd Floor, North Wing Annasalai, Nandanam, Chennai - 600 035
Name of the Shareholders ......
(In Capital Letters)
Name of the Proxy or Company Representative......
(In Capital Letters)
Signature of Shareholder(s) OR......
Proxy or Company’s Representative
Notes:
1. A Proxy attending on behalf of Shareholder(s) should write the name of the Shareholder(s) from whom he holds Proxy.
2. Members are requested to bring their copy of the Annual Report to the Meeting as additional Copies of the same will not be made available at the Meeting.
Reg. Folio No......
No. of shares held......
76 LIST OF BRANCHES 2015-16 As on 31-03-2016
S.NO NAME OF THE BRANCH S.NO NAME OF THE BRANCH 1 TANJORE 35 ARIYALUR 2 TRICHY 36 PORUR Annual Report
3 COIMBATORE 37 HOSUR th 4 PUZHAL 38 THENI 9 5 SAMAYAPURAM 39 DINDIGUL 6 SEMBANAR KOIL 40 PATTUKOTTAI 7 MANNARGUDI 41 KARAIKUDI 8 THIRUVOTTIYUR 42 THOOTHUKUDI 9 OOTY 43 PUDUKKOTTAI 10 COONOOR 44 THIRUVANNAMALAI 11 NAGAPATTINAM 45 TAMBARAM 12 MANALI 46 KUMBAKONAM 13 ENNORE 47 THIRUPPUR 14 RASIPURAM 48 TENKASI 15 ATTUR 49 GUDALUR 16 POLLACHI 50 KARUR 17 VIRUDHUNAGAR 51 TONDIARPET 18 CHENGALPATTU 52 ERODE 19 NAGARCOIL 53 ADAYAR 20 GOBICHETTIPALAYAM 54 VALPARAI 21 METTUPALAYAM 55 PADI 22 PERAMBALUR 56 TIRUNELVELI 23 SIVAGANGAI 57 RED HILLS 24 TIRUCHENGODE 58 KOTAGIRI 25 MAYILADUTHURAI 59 PALLAVARAM 26 KOVILPATTI 60 VYASARPADI 27 RAJAPALAYAM 61 VELLORE 28 MADURAI SOUTH 62 SALEM 29 CUDDALORE 63 T.NAGAR 30 VILLUPURAM 64 NAMAKKAL 31 KANCHEEPURAM 65 PANDALUR 32 TIRUVARUR 33 DEVAKOTTAI 34 THIRUVALLUR
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