RESILIENT BY DESIGN Resilience is not by chance, it is by design. A resilient structure is one that is built on a strong foundation. Our foundation is our core value – Putting Customers First. We have strengthened our organizational structure by investing significantly in digitizing every layer and process of the organization. In the last year, digital initiatives such as virtual customer engagement, Business Continuity Plan & remote working tools and e-Learning enabled our staff to deliver customer success effectively, even in times of extreme stress. As new technologies emerge and customer touch points increase, we will continue to invest in upgrading our systems and launching new initiatives with customer centric approach. Contents Contents Snapshot of Results 05 Company 06 Letter from Chairperson 07 Letter from Managing Director 08 Shared Mission of Delivering Efficient Micro-Credit to Rural India 09 Building Resilience in the time of COVID-19 11 Redefining Last Mile Connectivity in Challenging Times 13 Paradigm Shift in Learning 15 Focus on Health and Wellbeing of Rural Communities 17 Exposure to Microfinance changes Banking Behaviour 19 MADURA MICRO FINANCE (STANDALONE) Auditor’s Report 47 Balance Sheet 56 Prot & Loss 58 Cash Flow 61 Notes 63 MADURA MICRO EDUCATION Auditor’s Report 143 Balance Sheet 150 Prot & Loss 152 Cash Flow 153 Notes 155 MADURA MICRO FINANCE (CONSOLIDATED) Auditor’s Report 187 Balance Sheet 195 Prot & Loss 197 Cash Flow 200 Notes 202 3 Contents Shared mission of delivering efficient micro-credit to rural 09 India Building resilience in the time of COVID-19 11 Redefining last mile 13 connectivity Paradigm shift in learning 15 Focus on health & wellbeing of rural 17 communities Exposure to microfinance changes banking behaviour 19 Snapshot of Results FY 2018 FY 2019 FY 2020 Growth Gross Loan Portfolio (₹ Mn) 11,842 18,796 19,732 4.98% Revenue (₹ Mn) 2,331 3,861 4,755 23.15% Profit After Tax ₹( Mn) 398 855 796 -6.90% Net NPA% (PAR > 90 days) Nil 0.35% 0.58% Efficiency (OPEX/AUM) 6.19% 5.04% 5.65% Active Borrowers 688,546 956,712 1,215,315 Branches 276 357 464 Geographical Presence Tamil Nadu, Tamil Nadu, Tamil Nadu, Puducherry, Puducherry, Puducherry, Karnataka Karnataka Karnataka Maharashtra, Maharashtra, Maharashtra, Kerala, Kerala, Kerala, Bihar, Bihar, Bihar, Orissa and Orissa and Orissa and West Bengal Note: Figures for FY 2019 are as revised under Ind AS. GLP for FY2018 includes securitised portfolio Branch count includes branches under Business Correspondent model Gross Loan Portfolio (₹ Mn) REVENUE (₹ Mn) 19,732 4,755 18,796 3,861 11,842 2,331 8,226 1,794 5,531 1,187 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 5 Snapshot of Results Company DIRECTORS Dr. Tara Thiagarajan (Managing Director) Mr. N.C. Sarabeswaran (Independent Director) Mr. F. S. Mohan Eddy (Whole-time Director) Mr. George Joseph (Chairperson & Independent Director) Mr. Paolo Brichetti (Non-executive Director) Mr. Ram Diwakar Boddupalli (Non-executive Director) Mr. Manoj Kumar (Independent Director) Mr.Udaya Kumar Hebbar (Non-executive Director) Chief Executi ve Offi cer Auditors Debenture Trustee Mr. M. Narayanan PKF Sridhar &Santhanam Beacon Trusteeship Ltd. LLP KRD GEE GEE 4C & D, Siddhivinayak Chief Financial Offi cer Crystal, 7th Floor, 91-92, Chambers, Gandhi Nagar, Mr. V Balakrishnan Dr. Radhakrishnan Salai, Opp MIG Cricket Club Mylapore, Chennai 600 004 BandraEast,Mumbai – 400051 Registered Offi ce Corporate Offi ce Catalyst Trusteeship Limited Offi ce No. 83 - 87, 36, 2nd Main Road, 6th Floor, Karumuttu 8th Floor, B’ Wing, Mittal Kasturba Nagar, Adyar, Centre,634, Anna Salai, Tower, Nariman Point, Chennai - 600020. Nandanam, Chennai – Mumbai – 400021 600035 FINANCIAL INSTITUTIONS BANKS Bajaj Finance Limited Axis Bank Hero FinCorp Limited AU Small Finance Bank Hinduja Leyland Finance Bandhan Bank Mahindra Finance Bank of Baroda Micro Units Development and Refi nance Agency Ltd Catholic Syrian Bank Nabkisan Finance Limited City Union Bank National Bank for Agricultural and Rural Development DCB Bank Nabsamruddhi Dhanalakshmi Bank Northern Arc Capital Limited Federal Bank SIDBI HDFC Bank Shriram City Union Finance IDFC Bank Sundaram Finance Limited Indian Bank Tata Capital Financial Services Limited Kotak Mahindra Bank Lakshmi Vilas Bank RBL Bank Limited South Indian Bank Standard Chartered Bank State Bank of India Union Bank of India Yes Bank Company 6 LETTER FROM CHAIRPERSON Dear Shareholders, I have been associated with Madura Microfi nance only since April 30, 2020, when I was inducted on the Company’s board as an independent director. It is indeed a privilege to be the Chairman of this 14-year-old illustrious organisation, which has a rich pedigree, built on the bedrock of trust, values and ethics. I am greatly honoured by the trust and confi dence reposed in me by the Company’ shareholders and the Board. Over the last few months, as the country has been battling the Covid-19 pandemic, like every business in our country, we have been going through tough times. It is important for us all to stay safe and overcome this pandemic. I hope and pray that we all continue to live healthy lives. As you are aware, Madura Microfi nance has now been acquired by CreditAccess and as an entity under the common management, we believe will bring us more benefi ts and a newer, richer work culture, a larger client base and a whole lot of benefi ts that will make us stronger and a name to reckon with in the microfi nance industry. As a group entity, it will create opportunities for a larger client base and geographical diversifi cation, strengthen our competitive positioning as a leader and accelerate growth. In effect, we are adding a year of organic growth into our system with this liaison. CreditAccess and Madura Microfi nance will work towards greater synergies, combining effective work cultures, thought processes and technology to create a new healthy environment with greater productivity. As we start on this new journey together, I wish all of us a great and fruitful year ahead. Together we will scale greater heights, cross bigger barriers, serving a larger audience and make a difference to many more lives. Once again, I thank all the stakeholders of Madura Microfi nance, especially the honourable Board members, employees and clients for contributing to our success. George Joseph Chairperson 7 Letter from Chairperson LETTER FROM MANAGING DIRECTOR Dear Shareholders, This year marks a turning point in Madura’s journey in many ways. In March 2020 Madura was acquired by Credit Access Grameen Ltd (CAGL) and will merge with the company. Together they will represent the largest MFI platform in the country. CAGL shares many of the same values as Madura with respect to transparency, cost effi ciency, fi nancial prudence, a commitment to the betterment of its customers and a strong people orientation. CAGL as an NBFC-MFI maintains the focus fi rmly on rural microfi nance, which will allow Madura’s core strengths and markets to continue serving the rural population in line with its mission. Further both organizations have developed different areas of strength which provides a complementarity that can be leveraged to create a combined organization that is more than the sum of the parts. With the scale of the combined entity, the company will be in a much more competitive position with the opportunity to shape the course of the industry and mitigate risks associated with geographic concentration as well as funding, all factors that can be signifi cant concerns in distressed market environments. In addition, there are many economies of scale and cost advantages that translates into greater benefi ts to the customer. However, we entered this phase at an unprecedented time in history. The global Covid-19 pandemic has given rise to an enormous number of economic repercussions. The need for microfi nance will be greater than ever as the world fi nds its way through this pandemic to rebuild itself. Equally, the resilience of the organization will be put to test. The efforts put in to build a data and technology driven platform over the past years now serves it well, allowing many of its staff to work from home as well keep a pulse on the ground situation and stay in close touch with customers. Its CSR program, focused on health, has enabled needed information outreach on Covid-19 in addition to a number of other health issues that persist through the pandemic. Despite various setbacks from coming into the year on the heels of the devastation from multiple cyclones and fl oods across India and ending the year in lockdown due to Covid-19, this continued to be a year of growth for Madura. Madura’s GLP grew 4.98% to Rs. 1973.2 Crores and Profi t After Tax remained strong at Rs. 79.6 Crores. The company, as part of CAGL, remains committed to its mission to bring productive capital into rural India and looks optimistically to rebuilding after the Covid-19 lockdown. This also marks my last year as Chairman and Managing Director of Madura and I thank you all both personally, and on behalf of Madura, for your contributions to this journey. Tara Thiagarajan Managing Director Letter from Managing Director 8 SHAREDSHARED MISSION MISSION OF OF DELIVERINGDELIVERING AFF ORAFDFORABLEDABLE ANDAND PRODUCTIVE PRODUCTIVE MICRO-CREDITMICRO-CREDIT TO RURALTO RURAL INDIA INDIA Madura bMy Cadureditra AbcycCessredit GrAamcceessen GLtrdam (CeAenGL). Ltd M (CaduAGL).ra and Madu CArGa Land CAGL Madura MicMroaduFinanra MceicLrtdo wFinanas starce tLedtd wbyaserstarstwhileted bpyreomrstwhileoters opfrBomankotoefrMs oaduf Bankra ledofbMyaduourra led by our Founder ChairmanFounderDChairmanr. K M ThiagaDr. rKajan.M TIhiagan 2006,rajan.MaduIn 2006,ra receiMvadued thera relicceiensevedothef NBlicFenseC – of NBFC – microcreditmicto morocrreeditthanto12molakhre thanmembe12 lakhrs inmembeover 25,000rs in ovillaver g25,000es acrossvilla8gstesatacesrossof India.8 sta tes of India.